Tuffy's, Inc. v. City of Oklahoma City

• Decision Date: 20 January 2009
• Docket Number: No. 105,705.,105,705.
• Citation: 212 P.3d 1158,2009 OK 4
• Parties: TUFFY'S, INC., an Oklahoma Corporation, and Ellen Cunningham, president/owner of Tuffy's Corporation, Plaintiffs/Appellants, v. The CITY OF OKLAHOMA CITY, a municipal corporation, Defendant/Appellee.
• Court: Oklahoma Supreme Court

212 P.3d 1158

2009 OK 4

TUFFY'S, INC., an Oklahoma Corporation, and Ellen Cunningham, president/owner of Tuffy's Corporation, Plaintiffs/Appellants, v. The CITY OF OKLAHOMA CITY, a municipal corporation, Defendant/Appellee.

No. 105,705.

Supreme Court of Oklahoma.

January 20, 2009.

CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION 3; Honorable Barbara G. Swinton, Trial Judge

¶ 0 On November 9, 2007, Tuffy's, Inc. and its president, Ellen Cunningham, (collectively, the appellants) brought an action against the City of Oklahoma City (the City) seeking damages for negligence and tortious interference with a business relationship. The appellants' claims arose from an incident at a nightclub owned by the appellants. The appellants allege that Oklahoma City police officers entered the nightclub in an attempt to remove the customers and, using mace and dogs, attacked, harassed, and assaulted customers. The City moved to dismiss, arguing that: 1) the appellants lack standing; 2) under the Governmental Tort Claims Act (GTCA), the City can not be liable for tortious interference with a business relationship; and 3) under the GTCA, the City is exempt from liability for a claim arising from the enforcement of a law. The trial court granted the motion to dismiss. The Court of Civil Appeals affirmed. On certiorari, we hold that: 1) the appellants have standing to bring the claim; 2) a political subdivision is immune as a matter of law from a claim of tortious interference with a business relationship committed by its employees; and 3) a municipality's immunity from liability for claims resulting from the enforcement of a law does not extend to abuses of lawful power by its police officers.

CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT REVERSED AND CAUSE REMANDED.

Ari Varshosaz, Oklahoma City, OK, for Plaintiffs/Appellants.

Amanda Carpenter, Richard C. Smith, Oklahoma City, OK, for Defendant/Appellee.

KAUGER, J.

¶ 1 The issue presented is whether the trial court erred by granting the City of Oklahoma City's motion to dismiss. We hold that it did and remand the cause.

FACTS

¶ 2 On November 9, 2007, Tuffy's Inc. and its president, Ellen Cunningham (collectively, the appellants) filed a petition seeking an award of actual and punitive damages against the City of Oklahoma City (the City) and the Oklahoma City Police Department (OCPD) for intentional infliction of emotional distress, negligence, and tortious interference with a business relationship. The appellants' claims arose from a November 26, 2006, incident at City Nights, a south Oklahoma City nightclub owned by the appellants. The appellants allege that police officers "... physically and verbally attacked, harassed, and assaulted numerous customers (and) used mace on customers and ordered their dogs to bite customers inside the building."¹ The appellants also allege that Oklahoma City police officers had harassed the appellants' customers on unspecified prior occasions. There is no further evidence in the record regarding the circumstances surrounding the alleged incident of November 26th or the alleged pattern of harassment.

¶ 3 On December 3, 2007, the City filed two motions to dismiss for failure to state a claim upon which relief could be granted,² one on behalf of the OCPD and one on behalf of the City. On December 10, 2007, the appellants filed their first amended petition, in which they voluntarily dismissed their claims against the OCPD and withdrew their request for punitive damages against the City.³ The City filed a third motion to dismiss on December 17, 2007. On January 10, 2008, the appellants filed their second amended petition, in which they dismissed their claim for intentional infliction of emotional distress against the City.⁴ The appellants' claim then consisted of a request for an award of actual damages against the City for negligence and tortious interference with a business relationship. On January 17, 2008, the City filed a fourth motion to dismiss, arguing that: 1) the appellants did not have standing to assert a claim on behalf of employees or customers; 2) tortious interference with a business relationship is not a viable cause of action against a municipality under the Governmental Tort Claims Act (GTCA);⁵ and 3) the GTCA exempts a political subdivision⁶ from liability for any claim resulting from the enforcement or non-enforcement of any law or statute.⁷

¶ 4 On March 7, 2008, the trial court, without discussion, entered its journal entry of judgment granting the City's motion to dismiss with prejudice.⁸ The appellants filed a petition in error on March 26, 2008. We assigned the cause to the Court of Civil Appeals. On July 2, 2008, the Court of Civil Appeals affirmed, finding that political subdivisions are immune from liability for the intentional torts of their employees and for any claim arising out of the enforcement of a law. The appellants petitioned for certiorari, and we granted certiorari on November 24, 2008.

¶ 5 BECAUSE THE APPELLANTS HAVE PLED A CLAIM FOR WHICH RELIEF IS LEGALLY POSSIBLE, THE TRIAL COURT ERRED BY GRANTING THE CITY'S MOTION TO DISMISS.

¶ 6 An order dismissing a case for failure to state a claim upon which relief can be granted is subject to de novo review.⁹ When reviewing a motion to dismiss, the Court must take as true all of the challenged pleading's allegations together with all reasonable inferences which may be drawn from them.¹⁰ The purpose of a motion to dismiss is to test the law that governs the claim in litigation, not the underlying facts.¹¹ A pleading must not be dismissed for failure to state a legally cognizable claim unless the allegations indicate beyond any doubt that the litigant can prove no set of facts which would entitle the plaintiff to relief.¹² The burden to show the legal insufficiency of the petition is on the party moving for dismissal.¹³ Motions to dismiss are usually viewed with disfavor under this standard, and the burden of demonstrating a petition's insufficiency is not a light one.¹⁴

¶ 7 The GTCA is the exclusive remedy for an injured plaintiff to recover against a governmental entity in tort.¹⁵ Subject only to the GTCA's specific limitations and exceptions, governmental immunity is waived under the GTCA.¹⁶ Governmental accountability is extended to torts for which a private person would be liable, unless they are committed outside of the course and scope of employment or unless they are committed in bad faith or in a malicious manner.¹⁷ The doctrine of respondeat superior is applicable under the GTCA.¹⁸ Under the theory of respondeat superior, one acts within the scope of employment if engaged in work assigned, or if doing that which is proper, necessary and usual to accomplish the work assigned, or doing that which is customary within the particular trade or business.¹⁹

¶ 8 The GTCA defines a "tort" as a legal wrong involving a violation of a duty imposed by general law or otherwise resulting in a loss as the proximate result of an act or omission of a political subdivision or employee acting within the scope of employment.²⁰ "Scope of employment" is defined as performance by an employee acting in good faith within the duties of his office or employment or of tasks lawfully assigned by a competent authority.²¹ Except in cases where only one reasonable conclusion can be drawn, the question of whether an employee has acted within the scope of employment at any given time is a question for the trier of fact.²² An employee of a political subdivision is relieved from private liability for tortious conduct committed within the scope of employment.²³ A political subdivision is relieved from liability for tortious conduct committed by employees outside the scope of employment.²⁴

A.

The Appellants Have Standing To Bring Their Claims.

¶ 9 The City first argues that the appellants lack standing to bring any claim on behalf of customers and employees of City Nights because the petition does not allege that either Tuffy's Inc. or Ellen Cunningham were harassed or attacked. The appellants respond that they are not bringing an action on behalf of employees or customers, but instead are bringing an action to recover for damages sustained by the corporation and its owner.

¶ 10 Standing is the legal right of a litigant to challenge the conduct of another in a judicial forum.²⁵ A party whose standing is challenged must show a concrete, particularized, actual, or imminent injury in fact for which some relief can be given, and that the interest to be protected is within a statutorily or constitutionally protected zone.²⁶ The interest must be direct, immediate, and substantial, and the litigant must have a personal stake in the outcome.²⁷

¶ 11 It is clear from the pleadings that the appellants do not seek to recover on behalf of employees or customers. Instead, the appellants seek recovery for financial injury to their business based on the allegedly malicious, intentional, or negligent actions of the police officers.²⁸ The appellants have standing to bring this cause because they have alleged that the actions of the police officers resulted in financial injury to their business.

B.

Under the GTCA, the City is Immune from Liability for Claims of Tortious Interference with a Business Relationship Committed By its Employees.

¶ 12 The City argues that, under the GTCA, it is immune as a matter of law from liability for any claim of tortious interference with a business relationship because bad faith is a necessary element of the tort. The appellants respond that neither malice nor bad faith is a requisite element to the cause of action, and the City is not immune from claims of tortious interference with a business relationship.

¶ 13 When a tort cause of action sued upon requires proof of an element that necessarily excludes good faith conduct on the part of employees, there can be no liability against a political subdivision in a suit...