Industrial Indemnity Co. v. State, 669 P.2d 561

Industrial Indemnity Co. v. State

669 P.2d 561

Alaska

1983

Check Treatment

*1 INDEMNITY INDUSTRIAL

COMPANY, Appellant, Alaska, Appellee.

STATE

No. Court of Alaska.

Supreme 9, 1983.

Sept. Holmes, An- Biss & Waggoner,

Paul W. chorage, appellant. Jacobus, Huddleston, P. Kenneth

Joe M. Gantz, Thorsness, Klasen, Hughes, James F. Brundin, appellee. Anchorage, Powell & RABINOWITZ, C.J., BURKE, Before COMPTON, JJ., and DI MATTHEWS MOND, Justice.* Senior * Dimond, Justice, sitting by assignment of Alaska. Constitution Senior IV, pursuant section 16 of to article *2 Peterson, in- original project proposal the

OPINION a of cluded number WITZ, RABINO Justice. of fund- plan excluded in the final because acting while in the January On ing constraints. Richey John scope employment, of his Indemnity opposed the motion. Industrial near killed when his vehicle left road indicating that evidence submitted High- of the Long Lake at Mile 86.4 Glenn called for installation original proposal of way. Indemnity Company Industrial and in the area of the accident benefits paid compensation Alaska workers’ agreed that various officials had brought and this action Richey’s wife suggested appro- that the installations were against the of Alaska under AS 23.- also sub- Industrial priate. Act, 30.0151and Alaska Tort Claims AS from a federal offi- mitted a letter 09.50.250-.300. Highway guard- stating cial Glenn complaint alleged the state’s in an abnor- rail had been handled Ri- negligence proximate was the cause of Following argument, mal fashion. oral chey’s specific death. Various acts and the state’s motion. superior granted constituting omissions were referred to Indemnity appeals.3 negligence complaint, actionable in- Alaska created a cause of The State of install a cluding protective failure to against tort claims action for contract and guardrail at the accident site.2 Alaska Tort Claims Act of the state in the partial summary The state moved for In the area of 1962. 09.50.250-300. AS judgment, claiming that its admitted fail- however, suits, grant the state did not tort protective guardrail ure to install a arising claims out of a cause of action for product location in was the of dis- or the failure performance “the exercise or cretionary decisions state agents. a func- perform to exercise or of support agency its motion the state submitted of a state or part tion or Peterson, state, not the sworn affidavits of DeVerl a whether or employee of ” safety engineer traffic and with the De- involved is abused .... AS discretion 09.50.250(1).4 We have termed this statuto- partment Transportation. According part part: Alaska on the of the State of 1. AS 23.30.015 states in guardrails.” Judge Moore failure install for (b) Acceptance compensation under an stipulation approved a final and entered compensation in a order filed award July judgment on operates assignment board as an to the em- ployer rights person of all of the entitled to part: provides in 4.AS 09.50.250 compensation personal representa- and the employee against the state. A per- tive of a deceased to recover dam- Actionable claims ages person person contract, from having quasi- the third unless the corporation or son representative compensation may contract, against entitled to claim or tort against per- supe- commences an action bring against third state in the an action year may son within one after an person award. his rior court. A who may claim under AS 44.77.010 —44.77.060 (i) employer except If the is insured and the carrier bring under this section an action payment However, compensation, 44.77.040(c). has assumed the AS as set out in subrogated brought the carrier shall be to all section if under this action rights employer. of the claim tort, upon (1) is based is an action for Indemnity alleged part, that the employee of the of an an act or omission dangerous had notice of the and slick care, state, exercising due in the execution highway; repair condition of the failed to regulation, or not statute or highway’s design; failed known defects in the valid; regulation action or is an statute warning guardrails; and failed to tort, per- upon the exercise or and based signs. per- the failure to exercise or formance or on the form parties stipulated agency employee without 3. The dismiss of a state or an state, aspects plaintiffs complaint prejudice involved “all whether or not the discretion alleges except aspect ... save and is abused .... ry immunity “discretionary (1968) (en function ex- banc). The courts will refrain ception” of the tort claims act. second-guessing legislative executive policy. branches on issues of basic The state contends that it is entitled to system separation Under our of powers, failure place guardrail politically such decisions are vested in the Richey’s at the site of John accident under responsive coordinate branches. of AS *3 09.50.250(1). agree. We the test for applying discretionary function 09.50.250, immunity under AS we will “iso We have held that discretionary func late decisions sufficiently those sensitive so exception tion applies government deci as to justify judicial abstention.” Wain entailing sions planning policy formation. scott, 642 P.2d at 1356. State, 1355, Wainscott v. 642 P.2d 1356 (Alaska 1982); State, Japan Air Lines v.Co. addition, In courts must not intrude into 628 (Alaska 1981); P.2d 936 v. exceeding realms of their institution policy I’Anson, 188, 193-94 (Alaska 1974). 529 P.2d al competence. judicial The branch lacks act, In brought suits under the tort claims the fact-finding ability legislature, of the we have employed “planning level-opera special expertise and the of the executive tional level” distinguish test to between de departments. consistently We have held cisions involving the formulation of basic the courts of Alaska should not at policy, immunity, entitled to and decisions tempt compet to balance detailed and regarding only implemen execution or executive ing legislative elements of de tation of that policy, entitled to immu Wainscott, 1356; 642 P.2d at I'An cisions. nity. State, Rapp (Alaska v. 648 P.2d 110 20; son, Abbott, 529 at 193 n. 498 P.2d P.2d 1356-57; 1982); Wainscott, 642 P.2d at Ja Reynolds, Discretionary at 721. The See 936; pan Lines, Air 628 P.2d at v. Jennings Exception Function of the Federal Tort State, (Alaska 1977); 566 P.2d 1311 Act, 81, 121-23, 128-31 Claims 57 Geo.L.J. I'Anson, 193; Abbott, 529 P.2d at Jaffe, (1968); Against Governments Suits 498 P.2d 1972). 721 Actions, Damage and Officers: 77 Harv.L. planning The level-operational level (1963). Rev. 235-36 test must be applied in consideration of the hand, superior to the case at Turning policies underlying func ground court ruling rested its on tion of Alaska’s Tort Claims Act. install a the state had never decided to I'Anson, (Alaska 1974); 529 P.2d at 193 Ab Hill. The court bott, Wainscott, 498 P.2d at 721. See 642 question of whether or reasoned P.2d at 1356. The principal policy underly not to install a at the accident site ing the tort judicial is to limit was one of and that an affirmative policy,5 re-examination of decisions properly en with the installation go ahead trusted to other government. branches of at the level in had be made Wainscott, 1356; Japan P.2d Air Lines, order to advance the chain of events to 936; I'Anson, 628 P.2d at 529 P.2d at with both State, operational stage.6 agree also We See Johnson v. 69 Cal.2d Cal.Rptr. analysis. 447 P.2d court’s parts superior zone, reaching its decision the trial relied and whether or not to undertake school upon Jennings any safety the intersection other measures at Road, College 1977), upheld summary judgment at other areas of in which we governmental have against decisions which favor the claim that rightly been characterized as level negligent failing had been to erect an over- decisions, the ambit of the and thus within pass elementary at an intersection area near an statutorily ex- created school. Id at 1311. ception liability. to the state’s tort view, hold, are of the and so that deci- [W]e omitted). (footnote at 1311-12 P.2d sions whether or not to build one or more overpasses in the area of the intersection of hearing summary judgment, 6. At the Street, College Joy that, case, Road and or not was no court said “In this there designate subject one, they intersection area as a decided not decision. ifOr there was Rapp prevent. In our decisions in traffic con- recent selection of a (Alaska 1982), P.2d trol New device Seward —O’Mal- Wainscott 1355 (Alaska ministe- ley purely intersection not a 1982), this court held that the state’s failure rial implementing preexisting sequential signals traffic at two rather decision that called policy, but planning-level intersections were decisions exercise judgment and the policy immune liability. discretion. Wainscott, that: observed Accord, Rapp, at 1357. 648 P.2d at undoubtedly There are numerous inter- 110; Jennings, 566 P.2d at 1311-12. We sections state where throughout think state’s to install a failure traffic be signifi- known hazards could at mile of the Glenn 86.4 cantly reduced the installation of more analogous to its failure to Highway is sophisticated traffic control devices. Rapp traffic signals intersections however, funding, requires Available *4 and Wainscott. Both decisions in- types of the Department Transportation of select planning, competing volve an assessment of among these locations in where deciding budgetary con- priorities, weighing and a of improvements

to make .... There is that dispute siderations.7 installa- proposed Highway guardrail Glenn If we were assess the propriety to of tions of a lack of were cut back because decision, engaging we would be in Department Transpor- of funding from just type judicial review of that exception regarding seeks to tation.8 Decisions allocation guardrail] put way to in. Either it still conclude that a cause of action arose from the [the gotten point operational negligently performed to hasn’t where was acts. Id. there at anything operating further in terms of done 1312 30. In Wainscott v. n. ” (Alaska 1982), although that decision The court .... concluded that we held the state Long guardrail place the issue of a Hill Lake immune from suit for its failure to a intersection, beyond planning stage: sequential light never went “It at traffic an we get stage any operational might doesn’t to an because noted cause of lie for that a action guardrail.” operational negligence designing position- no ... there’s installation of a ing lights flashing had been built at which that, In other cases it has been held where Id. at 1357 n. 4. intersection. planning the state made the level decision to duty, assume a certain it becomes liable for the Peterson, Department Transporta- DeVerl operational employees negligence of its in the Safety Engineer for the Central tion Traffic and carrying duty. ministerial tasks of out that Region, procedure determin- described the Abbott, in State v. 498 P.2d 712 ing guardrails which would be built: 1972), we held that when the state determined guard- install install or not [T]he highways it would it maintain the rendered Region is made responsible rails in the Central daily itself for the decisions Deputy executing Commissioner Commissioner policy. that Id. at 722. See also Depart- upon I’Anson, based recommendations of P.2d 193-94 per- Transportation by planning 1974). Japan level ment of Air Lines Co. v. (Alaska 1981), is made sonnel .... [T]he the state under- had or, among airport taxiway an Director after evaluation [sic] taken the pable to build an ca- needs, budget, servicing widebody jets. aspects, alter- Id. n. other alternate at 937 subject priorities, held the funds from either 2. We to for its nate available suit alleged designing taxiway. of Alaska or the Federal Govern- Staté analysis other cases where it was found that and of warrants as the state ment and review posited they applied had not assumed this court a facts to the needs are different might system. Highway have altered its decision. In Jen- nings (Alaska 1977), Department Transportation Engineer Pe- was held that the state could not found be overpass terson in his affidavit that “the stated liable for its failure build an at funding elementary reduced because lack intersection near an school. We noted, however, To obtain this Commissioner’s office. that had the school board compete funding designate other dis- we must with all made the level decision to zone,” tricts the State of Alaska.” the intersection as of a “school and within factors, negligent Indemnity responds placing that had the state then “[e]conomic been cross-walk, signs availability equipment, constructing might of men and will such as foreclose designed usually are discretion of scarce resources the wisdom of the inquire if we were to into judicial inquiry. immune from ary, and thus in this case. guardrail policy state’s Wainscott, n. 6. 642 P.2d at 1357 See States, F.2d Bearce v. United Although foregoing discussion 837, 101 denied, (7th Cir.1980), cert. 449 U.S. bar, at dispose of the case adequate (1980).9 The state 66 L.Ed.2d S.Ct. argument raises an additional appellant a calculation that produced Industrial Indem that warrants comment. Lake Hill would now cost Long that an affirmative nity does not claim Peterson, $425,000.00. De at least DeVerl made to decision was ever Transportation Traffic and partment of maintains, however, Hill. Region, Safety Engineer for the Central carry out a that the state undertook “this partic stated in his first affidavit that Highway, on the Glenn “guardrail project” ular mile and one-half stretch of Glenn engineers the state commissioned the instal Highway unique is not installations determine where sections of guardrails lation of on similar engineers these appropriate, would alone Highway on the Glenn upon based project proposal formulated of several require expenditure standards, warrant empirical There is a tens of millions of dollars.” many state did build dispute concerning fig factual the state’s original project propos recommended ures, maintains Indemnity and Industrial claims that some al. (when in 1969 the cost of of events sequence where in this *5 first under Highway project the Glenn guardrails to erect certain duty assumed consideration) was one-fifth of the only engi the appropriate in determined to be state. by estimates made the present-day was creat neering survey.10 duty Once this in a manner resolving Even ed, place where to the ultimate decision of Indemnity, to Industrial it most favorable by project was made guardrails individual expensive, remains clear that are guardrails among to choose engineers, who had by incomplete and that a decision the state to to installations due proposed would that guardrails along Highway Indemnity argues the Glenn funding. Industrial opera to were necessarily ability pro affect the state’s final selections engineers’ implement gen We made to governmental vide other services. tional decisions and that guardrail project, type policy eral engaging precisely would be their held liable for thus be that policy evaluation claim, prevail always against funding. negligence To cases be factors Indemnity presumably be suc- every have to would immunize the State ... but that does not Long showing judicial cessful in involving such factors from instead of a been built Lake Hill should have guardrail review.” actually another site. was built at engineers’ substitute an- (Alas- The state Morris, Long Lake Hill the one at other 1976), ka we said that: unjustifiable as to been so have to have would legisla- It is the executive and negligence. basic flaws One of the constitute government, and not the tive branches of argument Indemnity’s is that of Industrial judiciary, money, personnel and to allocate suggest the courts could criteria which can no departments, the various other resources to guardrails actual- whether use to determine and to them in their various tasks to instruct wrong right ones. ly ones or the built were priorities competing govern- determine Hill, appellant Long respect to Even with general policies le- in the absence of mental sup- allegations would specific which makes gal mandates. negligence. Appel- port of ministerial its claim simply it does not entirely lant’s contention In- 10. is not clear which to omit the was reached Indemnity the decision know how believes the state became dustrial guardrail, it should be and that Lake Hill obligated does to build. out. Once go in order to find engineers to to trial project allowed again, were claim that inquiry that such an accomplish impossible we think task of bound to ultimately weighing of factors original involve the erecting guardrails in the all of the equipped to consider. spite the courts are not proposal cut-back in project respect determinations with We conclude that the decision whether or of this necessary installations. A extension of John not to build a site argument is that vulnerable Richey’s Highway accident on the Glenn high- suit with site on the respect every was within the ambit of the way original project where the proposal 09.50.250(1). exception function of AS called for a where no guardrail, guard- but granting summary the decision below rail was ever installed. We think that In- judgment to the State of Alaska is AF- dustrial Indemnity’s theory cannot co-exist FIRMED. with the rule of law that budgetary deci- sions are immune from suit under the dis- MATTHEWS, Justice, BURKE, joined by cretionary exception of the tort Justice, dissenting. Chief Department claims statute. The does not guardrail-by-guardrail make decisions on a deciding basis, necessary consequence but of its applies, 09.50.250 AS money determination to allocate less to the it seems to me that should assume was that fewer would be negligence on the of the state exists. built. We do not think that a decision doing guard against this we can By the Department only portion to fund to confuse the absence of easy tendency proposed project renders the state vulnera- as a reason for with respect every ble to lawsuits with propos- decision. confusion can have the ef- Such al not out. carried This would be the result fect of erroneous creating precedents. of allowing private individuals to claim that appears of this nature to be Confusion specific product omissions of im- Jennings proper decision-making. We therefore hold (Alaska 1977), where we held that that, once it is determined that the decision provide state’s failure to a crosswalk sever- type issue is of the entrusted al from an near hundred feet intersection government, level of a claimant came grade school was located must assumption show that an affirmative discretionary function exception. within the has been the state in order *6 We noted at the intersection nearest alleged to have a claim for relief for that opera- built, tional in negligence performing duty.11 that the school a crosswalk had been disagree Rapp argues 11. We therefore with the contention that this case differs from Indemnity Industrial that the burden Wainscott because evidence to be state, upon claiming discretionary is when presented at trial would show that state immunity, an individual show how carry out current traffic condition failed to Indemnity decision was made. Industrial cites tests and that the criteria set forth in the jurisdictions require cases from other which evaluating Alaska Traffic Manual for traffic policy the state to show that a eval- considered sequential control devices indicated that a City King place. actually See of uation took signal traffic was needed at the intersection Seattle, 84 Wash.2d 525 P.2d Lights of Muldoon Road and Northern Boule- (1974) (en banc), (discretionary immu- assuming Rapp prove vard. Even that could nity specifically provided by statute); John- not sequential signal at trial would have that a son v. Cal.Rptr. 69 Cal.2d however, appropriate, we hold that been (1968) (en banc). 361 n. 8 What- upgrade the traffic control state’s failure rule, ever the merits of such a think it is planning a device at the intersection was precluded present wording in Alaska of liability. immune level decision from “[N]o 09.50.250(1). AS While we have remarked oc- brought upon based ... action ... casionally past upon in the the varied elements perform a the failure to exercise or discre- policy weighed by legislature reaching in tionary part function or on the of a state decision, only protected we have done so state, agency employee whether or an of the competing illustrate the kinds of factors which or not the discretion involved is abused.” AS policy, lie behind determinations of and to dem- See, e.g., 09.50.250(1) (emphasis supplied). inappropriate onstrate that the courts are an Jennings 1311-12 P.2d in determina- forum which to re-evaluate those Wainscott, 1977). tions. See 642 P.2d at 1357. Rapp regard above, to the see (Alaska 1982) where we n. 3 observed: had electronically signal allegations sup- controlled traffic no which would specific negligence. its claim of ministerial crossing guards port placed, been school Id. at 1307. We usually present. were 10) statements n. These (Maj. op. 565 stated: negligence the absence suggest strongly view, significance, in our controlling Of presented. facts as under the fact that the struck ... at child was however, Assume, evi- that there was three point away some blocks Long Lake in unique dence that Hill was nearest the school at [intersection because of especially it was unsafe crossing safety had been measures taken]. shoulders, combination of narrow some Id. at 1312. The fact the state had curves steep dropoffs, usage and traffic provided passage busy safe across the road also there had been patterns. Assume point significant nearest the school fatalities on hill of which the numerous to the issue of whether the state fulfilled its notice and that the other locations state had safe provide to use reasonable care to Highway guardrails on the Glenn where However, crossings. it is diffi- pedestrian as a placed fact were cult to see how this at all on fact bears were hazards project places special where whether the state’s not to build a decision not exist and no of fatal acci- history did crosswalk where the happened accident circum- present. dents was Under such operational be, rather than an there would use the terms of stances nature. opinion, which could majority criteria guardrails be used to determine that the opinion case majority’s in the in the guardrail project were built negli- also seems to confuse the absence place. though argu- even wrong gence opinion with Thus the immunity. discretionary nature of the decision ably quotes highway engineer’s affidavit Hill is the place guardrails involved stretch of the facts actually presented same under unique.” here “is not (Maj. op. 565). may question my hypothetical, it is in one Further, the opinion notes: majority conclude that would entirely is not clear which if a apply Industrial believes Indemnity presented. had been clear case In- obligated became to build. does not immune discre- demnity my opinion, only claim that case was engineers accomplish were decision involved in this tionary bound to all of the impossible erecting task to own maintain made the that decision was original project proposal system. Once fail to use To had discretion to spite funding. longer cutback claim, highways in its prevail due care to assure *7 I’Anson, 529 In State v. presumably to be successful safe. reasonably have 1974) Long (Alaska held that the showing guardrail the at P.2d 188 we to care duty Lake Hill should have been built instead is under a use reasonable state for condition guardrail actually keep highways was built its safe Id. at 195. prudent site. The deci- traveler. engineers’ reasonably another the may be to substitute for In order to fulfill sion another signs paint or Long required place appropriate the one at Lake Hill would have to stripes and unjustifiable have been so as to constitute barrier on passing no was do either negligence. One of the basic flaws we held that the failure to discretionary the func- is that under argument protected not Indemnity’s Id. Similarly, no which the courts tion 193-94. suggest exception. it can criteria 1981) v. 636 47 Johnson the could use determine failure a “non-stan- actually right were the we held that the built crossing wrong with re- to warn that a railroad sign ones or the ones. Even dard” was Hill, bicyclists appellant makes hazards to spect posed is rea- railing barrier discretionary function said: the by not shielded “[WJhere security Japan necessary In Airlines exception. sonably Id. at 66.1 Co., street, P.2d 934 its which from Ltd. travelers on failure of 1981) alleged held that the unsafe, and be nature would otherwise having a airport taxiway state to build pre- would have of which the erection was safety standards meeting width certain negli- it is actionable injury, vented the not immune. We stated: such and maintain to construct gence not case, state undertook In the of lia- possibility The or barrier.” railing traveling public providing the task of was not in that case city bility by designed for use wide- taxiway with a to construct on its failure predicated doing In so also assumed body jets. but plan, with a in accordance construct- designing, responsibility The one at all. failure to construct on its taxiway safely. ing, maintaining to construct a city failure to build made the decision Once the state in this case of the State ... as the failure discretionary function taxiway, entrance guard a cattle possible it from protect did not came at freeway, access to the controlled operational negligence liability level, after discretion- operational policy-planning out of the basic carrying Where a made. had been ary decision taxiway. decision to build the necessary for reasonably guard cattle is Id. at 937 n. 2. on a traveling public security distin my this case cannot be opinion the failure to freeway, controlled access I’An way from guished any principled amenable to the State install it renders son, Johnson, Lines. Just as it Japan Air suit. passing money signs, paint costs to erect P.2d at 1319. Id. 504 taxiways, it also stripes, and build wider two cases. are California Also instructive How guardrails. to construct money costs Co., 25 Cal.3d Argo Sales Ducey ever, to own once the state undertakes (1979) the Cal.Rptr. obligation its highway system, maintain a held that of California Supreme Court highways keep to use reasonable care to failing to was liable for of California appro areas in safe condition. In certain freeway. busy on a a median barrier stripes, priate signs, highway was This conclusion P.2d at 759-63. Id. 602 duty. to fulfil this required in order Baldwin authority so, precautions largely If such reached the failure to take Cal.Rptr. not func immunized 6 Cal.3d exception. design tion that the (1972), which held P.2d 1121 Govern- of California immunity provision A case is State v. Web- closely analogous the state’s not shield 830.6 did ment Code § ster, (1972). P.2d 1316 88 Nev. left turn lane at a needed provide failure to There, held Supreme of Nevada Court opinion Baldwin The busy intersection. the state to construct a the failure of under design immunity it clear that makes have served to guard cattle which would consid- on the same law is based California con- straying onto a prevent livestock gov- erations protected by trolled access P.2d at Id. 491 ernmental functions. exception. 6, 1128, n. 9. In Baldwin n. court stated: danger- to correct noted that the *8 Reno, v. 50 Nev. City In Pardini encompass could conditions highway ous (Nev.1928) P. (Alaska v. examples 65 n. 38 Johnson 636 P.2d In Johnson we also noted certain 1. Abbott, nondiscretionary 1981) (quoting action in- 498 P.2d cluding: 1972)). (Alaska 29n. office at to establish location, negligently fail but not to handrails; to establish ... bar- “warning signs, lights, as such devices ” Id. 491 P.2d at guardrails.... ricades or State,

Wainscott from the

1982) distinguishable decision was

case because a highway

made there that traffic.2 It through

was to be utilized for with such a obviously be inconsistent the construction of a require Rapp v. 648 P.2d

stop signal. 1982) curiam) can be distin- (per the same basis.

guished on I above reasons would reverse

For the court and remand superior

decision of the

this case for trial. WILSON, Appellant, E.

Arthur ANCHORAGE,

MUNICIPALITY OF

Appellee.

No. 6822.

Supreme Court of Alaska.

Sept. Columbia, (D.C.Cir.1963) (per type cu 316 F.2d what 2. The decision as to Webster, commonly riam); Nev. recognized will be is (1972). discretionary. See, e.g., Urow v. District of