Sioux Falls Const. Co. v. City of Sioux Falls, 12905

• Decision Date: 08 October 1980
• Docket Number: No. 12905,12905
• Parties: SIOUX FALLS CONSTRUCTION COMPANY, a corporation, Plaintiff and Appellant, v. CITY OF SIOUX FALLS, a Municipal Corporation, and Lester J. Hash, Defendants and Appellees.
• Court: South Dakota Supreme Court

Page 454

297 N.W.2d 454

SIOUX FALLS CONSTRUCTION COMPANY, a corporation, Plaintiff and Appellant, v. CITY OF SIOUX FALLS, a Municipal Corporation, and Lester J Hash, Defendants and Appellees.

No. 12905.

Supreme Court of South Dakota.

Argued April 18, 1980.

Decided Oct. 8, 1980.

Lyle J. Wirt, of Davenport, Evans Hurwitz & Smith for plaintiff and appellant; Michael L. Luce of Davenport, Evans, Hurwitz & Smith, Sioux Falls, on brief.

William P. Fuller of Woods, Fuller, Shultz & Smith, Sioux Falls, for defendants and appellees.

MORGAN, Justice.

The principal issue in this appeal arises from the trial court's entries of summary judgment against the plaintiff-appellant, Sioux Falls Construction Company (contractor), on two counts of negligence, which decisions were based on the trial court's determination that the defendants-appellees, City of Sioux Falls (city), and Lester J. Hash (Hash), were clothed with governmental immunity while engaged in a governmental function, i. e., flood control, when the injuries of which contractor complained occurred. We affirm in part, reverse in part, and remand.

Contractor entered into two contracts with city in December 1976 and February 1977 for construction of a bridge spanning the Big Sioux diversion channel and installation of two wellpoint systems situated in the channel. At the time the contracts were let, and when the construction began on the respective projects, the channel was dry as a result of drought conditions in the area. The fact situation will be discussed as appropriate to the issues; but in brief, several pieces of contractor's construction equipment were damaged when runoff water from rains and the melting snow upstream flowed into the area of the channel where contractor was working. Contractor filed a claim against city which was denied, so contractor instituted a suit against city. One amended complaint was served and filed, and then a second amended complaint was served and filed naming Hash, Superintendent of the Sioux Falls Water Department, as an additional defendant.

The complaints generally alleged two causes of action. The first, in breach of contract; and the second, in tort. City, and later Hash, both answered the pleading: (1) Failure to state a claim; (2) governmental immunity; (3) denial of agreement to divert water; (4) failure of consideration for any such agreement; (5) unenforceability of an oral agreement, if any; (6) waiver; (7) payment in full; (8) contributory negligence; and (9) assumption of the risk. On motion of city the trial court granted summary judgment against contractor's second cause of action on the grounds of governmental immunity. On motion of Hash the trial court likewise granted summary judgment on contractor's second cause of action on the grounds that Hash was acting in his official capacity and thereby was also immune.

The case went to trial on the breach of contract cause of action and the jury returned a verdict in favor of city. Contractor claims that the jury was not properly instructed and appeals from the final judgment entered on the verdict in addition to the summary judgments previously entered.

We first address ourselves to the issue of the immunities raised by appellees' pleadings and as found by the trial court. Contractor's claim of negligence is founded not on any obligation arising out of the original contracts, but out of an alleged subsequent agreement that in the event of high water conditions in the Sioux River upstream, city would divert the water away from the construction area for a sufficient period of time to permit contractor to remove its equipment and materials. This diversion was to be accomplished by opening the floodgates into another channel situated upstream from the construction site. The alleged negligence on the part of appellees was that they failed to keep abreast of conditions upriver; to anticipate runoff water; and to timely open the floodgates or to warn contractor that they were not diverting the water. Some four to five feet of water began to flow through the channel during the night. City workers later attempted to open the floodgates, but most of them were rusted shut so that only a couple could be opened, and then only partially. Contractor's employees, when told of the situation, were able to remove only one or two pieces of equipment and some materials. The claim for damages to the balance amounted to some $17,000 plus approximately $7,000 for other losses.

City moved for summary judgment on the following grounds: (1) Failure to state a claim; (2) no genuine issue of fact; and (3) governmental immunity. The trial court determined that: (1) City, as a municipality and political subdivision of the state, has sovereign and governmental immunity from liability and actions for liability except in those situations where a specific remedy is allowed by statute or the municipality is engaged in a proprietary function; (2) no statutory remedy is provided for damages caused by the negligence as alleged in contractor's complaint; and (3) contractor's second cause of action arises from city's activities while engaged in a governmental function, that being flood control; therefore city is immune from liability.

In Brasel v. Myers, 89 S.D. 114, 117, 229 N.W.2d 569, 570 (1975), this court reiterated the summary judgment guidelines which were first delineated in Wilson v. Great Northern Railway Company, 83 S.D. 207, 157 N.W.2d 19 (1968), as follows:

(1) The evidence must be viewed most favorably to the nonmoving party;

(2) The burden of proof is upon the movant to show clearly there is no genuine issue of material fact and that he is entitled to judgment as a matter of law;

(3) It was never intended to be used as a substitute for a trial by jury where any genuine issue of material fact exists;

(4) A surmise that a party will not prevail upon trial is not sufficient basis to grant the motion on issues which are not shown to be sham, frivolous or so insubstantial that it is obvious that it would be futile to try them;

(5) Summary judgment is an extreme remedy and should be awarded only when the truth is clear, and reasonable doubts touching the existence of a genuine issue as to material fact should be resolved against the movant;

(6) Where, however, no genuine issue of fact exists, it is looked upon with favor and is particularly adapted to expose sham claims and defenses.

The trial court's determination that there is no specific remedy provided by statute that would afford contractor relief is not challenged. We look then to the determination that city was engaged in a governmental function, i. e., flood control. Contractor attacks the validity of the governmental immunity doctrine and urges that we overturn it in spite of our previous holdings in Conway v. Humbert, 82 S.D. 317, 145 N.W.2d 524 (1966), and several cases subsequently. As we most recently held in High Grade Oil Company et al. v. Sommer, 295 N.W.2d 736, 738 (S.D.1980), "(W)hile we agree that the doctrine is 'judge made law,' we are reminded that it is a doctrine of long standing; so long in fact, that it antecedes the federal and state constitutions." While High Grade Oil was restricted to the question of governmental immunity as applied to the state, as opposed to local governmental units, we adopt its rationale and that of our previous decisions and decline to abrogate the doctrine of governmental immunity outright.

We next consider the general question of whether flood control is a governmental or proprietary function. As this court stated in Bucholz v. City of Sioux Falls, 77 S.D. 322, 326-327, 91 N.W.2d 606, 608-609 (1958) (citations omitted),

While the distinction between governmental and corporate or proprietary functions is in nearly all jurisdictions recognized in determining the tort liability of municipalities difficulty often arises in the application of the rule and holdings have not been uniform and consistent.... "... Recovery is denied where the act or omission occurs in the exercise of what are deemed to be governmental powers, and is permitted if it occurs in a proprietary capacity. The basis of the distinction is difficult to state, and there is no established rule for the determination of what belongs to the one or the other class. It originated with the courts. Generally it is applied to escape difficulties, in order that injustice may not result from the recognition of technical defenses based upon the governmental character of such corporations."

In determining whether a certain activity is governmental or proprietary, this court has said that "(i)t is the nature of the activity that determines whether it is ministerial or proprietary, and not the location, nor the fact that the facility may also be used for...