Showers Appraisals, LLC v. Musson Bros., Inc.

• Decision Date: 18 July 2013
• Docket Number: No. 2011AP1158.,2011AP1158.
• Citation: 2013 WI 79,350 Wis.2d 509,835 N.W.2d 226
• Parties: SHOWERS APPRAISALS, LLC, Real Marketing, LLC and Mark W. Showers, Plaintiffs–Appellants–Petitioners, v. MUSSON BROS., Inc. and West Bend Mutual Insurance Company, Defendants–Respondents–Cross–Appellants, League of Wisconsin Municipalities Mutual Insurance and City of Oshkosh, Defendants–Cross–Respondents.
• Court: Wisconsin Supreme Court

350 Wis.2d 509

835 N.W.2d 226

2013 WI 79

SHOWERS APPRAISALS, LLC, Real Marketing, LLC and Mark W. Showers, Plaintiffs–Appellants–Petitioners,

v. MUSSON BROS., Inc. and West Bend Mutual Insurance Company, Defendants–Respondents–Cross–Appellants,League of Wisconsin Municipalities Mutual Insurance and City of Oshkosh, Defendants–Cross–Respondents.

No. 2011AP1158.

Supreme Court of Wisconsin.

Argued March 13, 2013.

Decided July 18, 2013.

For the plaintiffs-appellants-petitioners, there were briefs by Daniel J. Posanski and Gerardo Medina Jr. and Dempsey Law Firm LLP, Oshkosh, and oral argument by Daniel J. Posanski.

For defendant-cross-respondents, there was a brief by Bree A. Madison and Richard J. Carlson, and Silton Seifert Carlson S.C., Appleton, with oral argument by Bree A. Madison.

For the defendants-respondents-cross-appellants, there was a brief by David G. Dudas and Joseph P. Putzstuck, and McCanna, Dudas & Kewley, S.C., Appleton, with oral argument by David G. Dudas.

An amicus curiae brief was filed by Martha H. Heidt and Bye, Goff & Rohde, Ltd., River Falls, on behalf of the Wisconsin Association of Justice.

PATIENCE DRAKE ROGGENSACK, J.

[350 Wis.2d 514]¶ 1 This is a review of a published decision of the court of appeals ¹ that affirmed the Winnebago County Circuit Court's ² grant of summary judgment in favor of Musson Bros., Inc. (Musson). This case arises from flood damage to Mark Showers' property in the City of Oshkosh, where Musson was conducting sewer removal and installation as a contractor for the Wisconsin Department of Transportation (DOT). In granting and affirming summary judgment, the circuit court and court of appeals concluded that Musson was a governmental contractor entitled to immunity under Wis. Stat. § 893.80(4) (2011–12),³ based on the court of appeals' decision in Estate of Lyons v. CNA Insurance Cos., 207 Wis.2d 446, 558 N.W.2d 658 (Ct.App.1996).

¶ 2 We conclude that where a third party's claim against a governmental contractor ⁴ is based on the allegation that the contractor negligently performed its work under a contract with a governmental entity, the governmental contractor must prove both that the contractor meets the definition of “agent” under Wis. Stat. § 893.80(4), as set forth in Lyons, and that the contractor's act is one for which immunity is available under § 893.80(4). Specifically, we conclude that for a contractor to come within § 893.80(4)'s shield of immunity, the contractor must prove it was acting as the governmental entity's agent in accordance with reasonably precise specifications, as set forth in Lyons. In this case, Musson has not shown that it was acting as a governmental entity's agent for purposes of the alleged injury-causing conduct because Musson was not acting pursuant to “reasonably precise specifications.”

¶ 3 Moreover, pursuant to the plain language of Wis. Stat. § 893.80(4), we also conclude that a governmental contractor seeking to assert the defense of immunity should clearly allege in the pleadings why the injury-causing conduct comes within a legislative, quasi-legislative, judicial or quasi-judicial function as set out in § 893.80(4). In the context of this case, a governmental contractor would be required to assert that it was implementing a decision of a governmental entity that was made within the scope of the governmental entity's legislative, quasi-legislative, judicial or quasi-judicial functions.⁵ Adherence to these statutory requirements for immunity under § 893.80(4) will avoid extending blanket immunity for claims of negligently performed work against governmental contractors when the sole basis for immunity is that the work was performed pursuant to a contract with a governmental entity. Allowing governmental contractors to claim immunity in such instances would vastly expand the doctrine of governmental immunity.

¶ 4 Therefore, based on Musson failing to meet the standard for a Wis. Stat. § 893.80(4) agent, Musson is not entitled to immunity under § 893.80(4). Additionally, we conclude that the facts set out in support of summary judgment would not support a claim of governmental contractor immunity because Musson has failed to assert that the acts for which it claims immunity were “acts done in the exercise of legislative, quasi-legislative, judicial or quasi-judicial functions,” as required under § 893.80(4). Accordingly, Showers' claims should be analyzed no differently than negligence claims against other contractors.

¶ 5 Musson may therefore be liable if Showers is able to show that in performing its work under the government contract, Musson had a duty of due care to Showers, that Musson breached that duty, and that such breach was a cause of Showers' damages. Accordingly, we reverse and remand to the circuit court for further proceedings on Showers' claims against Musson consistent with this opinion. Additionally, because Musson's and the City's cross-claims were not fully litigated in the circuit court and were not addressed by the court of appeals, those claims should be addressed on remand.

I. BACKGROUND

¶ 6 In September 2007, the DOT and the City of Oshkosh entered into a state-municipal agreement for a sewer improvement project along a stretch of Ohio Street in Oshkosh, which is also State Highway 44. Under the agreement, the State (through the DOT) would provide substantial financing for the project, although the City was responsible for funding and construction of sanitary sewers and water mains, as well as the sealing of concrete joints. The DOT would remain involved in the project, including overseeing the bidding process and being onsite during construction.

¶ 7 The DOT opened the Ohio Street project for bidding, informing potential bidders that, as contractors, they would be “responsible for any damages to property or injury to persons occurring through their own negligence or that of their employees or agents, incident to the performanceof work under this contract, pursuant to the Standard Specifications for Road and Bridge Construction applicable to this contract.” The specifications applicable to the project were the State of Wisconsin Standard Specifications for Highway and Structure Construction. These Standard Specifications consist of hundreds of pages of directions and specifications regarding how governmental contractors are to perform certain aspects of contracted projects.

¶ 8 After completion of the bidding process, the DOT awarded the contract to Musson, and the two entered into the Contract for Highway Work, which provided that DOT would pay Musson $4,393,833.15 for its work. Musson began work on the Ohio Street project in spring 2008.

¶ 9 Prior to the commencement of the Ohio Street project, Mark Showers had contracted for the construction of a new building on the property he owned on the corner of Ohio Street and Sixth Avenue in Oshkosh. As part of that construction, Showers was required by city code to connect his downspouts, sump pump, and parking lot drainage to the municipal storm sewer. The construction of Showers' building was completed on or about November 30, 2007, and Real Marketing, LLC and Showers Appraisals, LLC,⁶ began conducting their business at that location.

¶ 10 When the Ohio Street sewer project commenced in spring 2008, the City, the DOT, and Musson discussed certain aspects of how the project would proceed, one of which was whether the roadway was to be removed all at once, or whether it should be removed and repaired on a block-by-block basis. The parties purportedly agreed that the block-by-block approach would be best; however, there is no formal documentation of the parties' alleged agreement on this aspect of the project, and indeed, Musson has at times disputed whether there was such an agreement.

¶ 11 Whatever the parties did or did not agree to, Musson removed the entire roadway along Ohio Street, from the storm sewer's outlet at the Fox River to the end of the project, around Ninth Street; disconnected the storm sewers in that reach; and placed a bladder at the discharge at the Fox River so that water would not flow from the river into the non-operational sewer system. Musson's decision to proceed in this manner caused some disputes between City officials and Musson, based on the City's concern that by removing the entire storm sewer, Musson would compromise the City's ability to manage storm water.

¶ 12 The DOT concluded that Musson's decision to remove the storm sewer along the project's reach, rather than on a block-by-block basis, was allowed under a provision in the Standard Specifications, referred to as the “means and methods” provision.⁷ That provision states, in pertinent part, that the contractor “is solely responsible for the means, methods, techniques, sequences, and procedures of construction. The contractor is not responsible for the negligence of others in the design or specification of specific means, methods, techniques, sequences, or proceduresof construction described in and expressly required by the contract.”

¶ 13 On June 8, 2008, rain storms inundated the Ohio Street project site, dropping approximately 4.25 inches of rain in the area of the project site. The storm left water standing in the exposed roadbed outside Showers' property, and a manager with Musson reported that Musson's pumps were unable to maintain drainage for the amount of rain that had fallen. After viewing the project site outside his property, Showers noted multiple conditions that potentially impeded drainage (as well as other conditions that he alleged were contrary to the Standard Specifications), including mounds of soil in the roadbed and drainage inlets clogged with soil and debris. When Showers spoke with employees from the City and Musson regarding the standing water and the potential for damage from another large storm that was predicted, Showers was told that there was nothing that either entity could do to remedy the situation.

¶ 14 Following the...