Peavler v. Board of Com'rs of Monroe County

• Decision Date: 09 September 1988
• Docket Number: Nos. 36S01-8809-CV-817,43S03-8809-CV-818,s. 36S01-8809-CV-817
• Citation: 528 N.E.2d 40
• Parties: Richey Wayne PEAVLER, Appellant (Plaintiff Below), v. BOARD OF COMMISSIONERS OF MONROE COUNTY, Appellee (Defendant Below). BOARD OF COMMISSIONERS OF the COUNTY OF STEUBEN, Appellant (Defendant Below), v. Ronald HOUT and Pamela Hout, Appellees (Plaintiffs Below).
• Court: Indiana Supreme Court

Page 40

528 N.E.2d 40

Richey Wayne PEAVLER, Appellant (Plaintiff Below), v. BOARD OF COMMISSIONERS OF MONROE COUNTY, Appellee (Defendant Below).

BOARD OF COMMISSIONERS OF the COUNTY OF STEUBEN, Appellant (Defendant Below), v. Ronald HOUT and Pamela Hout, Appellees (Plaintiffs Below).

Nos. 36S01-8809-CV-817, 43S03-8809-CV-818.

Supreme Court of Indiana.

Sept. 9, 1988.

James R. Fisher, Robert B. Clemens, Ice Miller Donadio & Ryan, Indianapolis, for Richey Wayne Peavler.

William E. Borror, Hunt Suedhoff Borror & Eilbacher, Ft. Wayne, for Board of Comrs. of County of Steuben.

Michael C. Cook, Dale W. Eikenberry, Wooden McLaughlin & Sterner, Indianapolis, Thomas J. Lantz, Montgomery Elsner & Pardieck, Seymour, for Board of Com'rs of Monroe County.

Sherrill Wm. Colvin, John O. Feighner, Snouffer, Haler & Colvin, Ft. Wayne, for Ronald Hout and Pamela Hout.

SHEPARD, Chief Justice.

Two cases before us on petitions for transfer require that we construe the provision in the Indiana Tort Claims Act which provides governmental immunity for discretionary acts.

Richey Wayne Peavler filed suit against the Monroe County Board of Commissioners, alleging "negligence in the failure to place or maintain a curve warning sign, and/or reduced speed limit sign or advisory speed limit sign on a portion of a county road." Peavler v. Board of Commissioners of Monroe County (1986), Ind.App., 492 N.E.2d 1086, 1087. The jury returned a verdict for the county. The Court of Appeals found that the trial court erred in instructing the jury that any duty on the part of the county to post warning signs was discretionary. The Court of Appeals concluded that the county was not immune as a matter of law and held the jury should decide the question of immunity. The court remanded the cause for a new trial. Id. at 1090.

In a separate action, Ronald and Pamela Hout sued the Board of Commissioners of Steuben County, alleging that it negligently failed to place a warning sign for motorists approaching a "T" intersection. The county moved for summary judgment on the basis of governmental immunity for discretionary functions. The trial court denied the motion. In an interlocutory appeal, the Court of Appeals determined that such a decision was discretionary and directed entry of summary judgment for the county. Board of Commissioners of County of Steuben v. Hout (1986), Ind.App., 497 N.E.2d 597.

We grant transfer to resolve the conflict between districts.

I. History of Governmental Immunity

Governmental immunity developed as a common law doctrine of deference to the English monarchy. The doctrine had a dual basis in procedure and substance. Procedurally, allowing the king to be sued in his own courts was a contradiction of the king's sovereignty. Substantively, the divine right of kings proclaimed that "the king can do no wrong." Together, these formed the basis for the doctrine of sovereign immunity. Prosser and Keeton on Torts, Sec. 131 at 1033 (5th Ed.1984).

The explanation for the initial acceptance of sovereign immunity in the United States is obscure. Early in the country's history, the U.S. Supreme Court noted that no suit may be commenced against the United States without its consent. Osborn v. Bank of the United States, 22 U.S. (9 Wheat) 738, 842-43, 6 L.Ed. 204, 229 (1824). This principle was also recognized by American states, resulting in the rule that a suit may not be maintained against a state without its consent.

Several reasons for governmental immunity have been advanced: the absurdity of a wrong committed by an entire people, the idea that whatever the government did must be lawful, the theory that any government agent committing a wrongful act must have acted outside his authority, a reluctance to divert public funds to compensate for private injuries, and the inconvenience and embarrassment to the government if subjected to suit. W. Prosser, The Law of Torts, Sec. 131 at 975 (4th Ed.1971).

Immunity for local governments such as cities, towns and counties, derived from a slightly different source. The municipal corporation had a dual character as both a subdivision of the state with governmental powers and a corporate body functioning as a private corporation. Prosser and Keeton on Torts, supra, at 1051. In its governmental capacity, the municipal corporation was traditionally immune from liability.

At common law, courts drew distinctions based on the dual character of the municipal corporation as both a government and a corporation. A municipal corporation acted as a government when its exercised traditional governmental functions. Those acts performed by the municipality which were analogous to acts exercised by a private corporation were proprietary functions. E. McQuillan, Municipal Corporations, Sec. 53.02 (3rd Ed.1984). A municipality was immune when exercising its governmental functions but was not immune when acting in its proprietary capacity. See City of Kokomo v. Loy (1916), 185 Ind. 18, 112 N.E. 994.

Though arising from municipal law, this distinction was applied to state immunity as well. To determine whether the act was a corporate or governmental undertaking, the manner in which the power was conferred, the obligations which naturally flowed from proprietorship and the purpose for which the power was granted and exercised were considered. Aiken v. City of Columbus (1906), 167 Ind. 139, 78 N.E. 657. Duties administered solely for public benefit, such as public health, charities, schools, protection of property against fire and maintenance of the peace were governmental undertakings.

The classification of functions as governmental or proprietary was elusive and uncertain and often led to inconsistent results. This Court abandoned the governmental/proprietary distinction in Campbell v. State (1972), 259 Ind. 55, 284 N.E.2d 733. In addressing the vitality of the doctrine of sovereign immunity in Indiana, this Court determined that the purpose for which the doctrine existed had long since vanished. Id. at 57-58, 284 N.E.2d at 736. The Court held the defense of sovereign immunity was no longer available to the state for either governmental or proprietary functions. Id. at 63, 284 N.E.2d at 737. The Court noted that while certain common law immunities, such as those for judicial and legislative decisions must remain, other instances giving rise to state liability should be considered by the legislature. Id. at 61-62, 284 N.E.2d at 737. Two years later, the General Assembly enacted the Indiana Tort Claims Act. 1974 Ind.Acts, P.L. 142 Sec. 1.

II. Indiana Tort Claims Act

The Indiana Torts Claims Act (ITCA) provides that governmental entities may be liable for torts committed by its agencies and its employees. Ind.Code Secs. 34-4-16.5-1 to 20 (Burns 1986 Repl.). The ITCA protects governments from liability in certain circumstances. Among other more specific exceptions, "[a] government entity or an employee acting within the scope of his employment is not liable if a loss results from: (6) The performance of a discretionary function." Ind.Code Sec. 34-4-16.5-3(6). Each of the cases at bar turns on the meaning of discretionary function.

III. Approaches to Discretionary Function

Governmental immunity has generated a great deal of discussion in state and federal jurisdictions. Out of this debate, several approaches have emerged to determine whether an act is discretionary and thus entitled to immunity. While these approaches are instructive, the purpose and policy underlying governmental immunity must be the cornerstone for evaluating any claim of governmental immunity.

A. The Ministerial/Discretionary Distinction. Courts have attempted to distinguish immune governmental functions from those which expose the government to liability by describing activities as ministerial or discretionary.

A duty is discretionary when it involves on the part of the officer to determine whether or not he should perform a certain act, and if so in what particular way, and in the absence of corrupt motives, in the exercise of such discretion, he is not liable. His duties, however, in the performance of the act, after he has once determined that it shall be done, are ministerial, and for negligence in such performance, which results in injury, he may be liable in damages.

Adams v. Schneider (1919), 71 Ind.App. 249, 255-56, 124 N.E. 718, 720.

This common law distinction has found favor within our Court of Appeals since the ITCA passed. A duty is discretionary when the officer must determine whether he should perform a certain act, and, if so, in what manner. Mills v. American Playground Device Co. (1980), Ind.App., 405 N.E.2d 621. Performance of a discretionary function requires judgment and choice and involves what is proper and just under the circumstances. Rodman v. City of Wabash (1986), Ind.App., 497 N.E.2d 234. A ministerial act is performed in a prescribed manner, in obedience to the mandate of legal authority, without the exercise of judgment upon the propriety of the act. Coghill v. Badger (1981), Ind.App., 418 N.E.2d 1201, 1211 n. 9; Galey v. Board of Commissioners (1910), 174 Ind. 181, 183, 91 N.E. 593, 594; Flowney v. Jeffersonville (1861), 17 Ind. 169, 174. Ministerial acts "are those done by officers and employees who are required to carry out the orders of others or to administer the law with little choice as to when, where, how or under what circumstances their acts are to be done." Restatement, supra Sec. 895D comment h. Under this dichotomy any governmental act involving choice, judgment or decision-making is discretionary and immune from tort liability. Only those acts which require no judgment are ministerial and subject to tort liability.

This Court has recognized that the application of this standard is unclear. Loy, 185 Ind. at 23, 112 N.E. at 996. This difficulty has also been noted by scholars and commentators.

It seems almost impossible to draw any clear and definite line, since the distinction, if one...