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Kent Holland, J.D.
ConstructionRisk, LLC

Where a city retained a private engineering firm to perform the services of “City Engineer,” including to “provide planning, design, and construction related services for public improvement projects.” Acting as city engineer, the firm designed and approved storm-drainage improvements for a town house development. About ten years after construction, a severe rainstorm caused damage to the home of a property owner adjacent to the town houses. The Owners sued the city, alleging negligence in designing, approving and constructing the storm-drainage system. The trial and appellate courts found that the city was “vicariously immune to the [ ] negligent design claim because [the engineer] was immune under the common-law doctrine of official immunity for its design while acting as the city engineer.” Kariniemi v. City of Rockford, 863 N.W. 2d 430 (Minnesota 2015).

In analyzing whether the official immunity doctrine would be applied, the court looked to a United States Supreme Court decision for guidance (Filarsky v. Delia, 132 S.Ct. 1657 (2012). In that decision, the Supreme Court reviewed the common-law doctrine of the official immunity doctrine, noting that in the nineteenth-century, local governments were to a significant extent administered by members of society who temporarily or occasionally discharged public functions. Accordingly, the Supreme Court noted that “the common law did not draw a distinction between public servants and private individuals engaged in public service in according protection to those carrying out government responsibilities.”

In applying the reasoning of the Filarsky decision, the Minnesota court in this case concluded that because the engineering firm was functioning as the city’s engineer, it enjoyed official immunity for discretionary acts in the role, including its design of the storm-drainage system. Official immunity, notes the court, “protects the kind of discretion that is exercised on an operational rather than policymaking level.” “Design involves the application of expertise and discretion, balancing the often-competing considerations of cost, quality, and aesthetics….”

It did not matter to the court that the particular engineering firm in question could also be tasked under its contract with construction activities since it was not defective construction that was at issue in this case but rather the design decisions that went into the construction.

With regard to whether the immunity would extend to contractors doing construction work, the court said, no – it would not. The court stated, “For example, an architect prepares blueprints, and a builder executer the ‘specific duty arising from’ the design specified by those blueprints. Although the role of builder undoubtedly involves application of considerable skill and expertise, it cannot be said to be the same kind of discretion vested in the architect. The architect’s role is professional., the builder’s ministerial. Accordingly, armoring the architect with official immunity does not require also armoring the builder.… Similarly, holding that a road-construction contractor functioning as city engineer would be protected by official immunity for the design of a roadway does not in itself foreclose liability for defects in the same contractor’s construction of the roadway.” For these reasons, the court concluded that the plaintiff’s “argument about destroying Minnesota’s Municipal Tort Liability Statute by extending official immunity to contractors performing city functions is therefore overblown.”

Lesson Learned: It seems that an increasing number of contracts between design firms and municipalities that we have been reviewing lately have included a provision requiring the designer to waive any right to claim the type of immunity described in this decision that it might otherwise have at common-law. I don’t understand why governmental bodies who are contracting their discretionary functions to consultants would want to deprive those consultants of the protection afforded by the immunity laws. This decision shows the importance of negotiating to strike such a waiver of rights from the contract.

 

About the author: Article written by J. Kent Holland, Jr.,  a construction lawyer located in Tysons Corner, Virginia,  with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 17, No. 6 (September 2015).

Copyright 2015, ConstructionRisk, LLC