Nathan KARINIEMI, et al., Appellants, v. CITY OF ROCKFORD, Respondent.
No. A14-0796.
Supreme Court of Minnesota.
July 27, 2016.
883 N.W.2d 593
Paul A. Merwin, Patricia Y. Beety, League of Minnesota Cities, Saint Paul, MN, for respondent.
Joseph J. Langel, Nathan B. Shepherd, Ratwik, Roszak & Maloney, P.A., Minneapolis, MN, for amicus curiae Association of Minnesota Counties.
George C. Hoff, Justin Templin, Hoff, Barry & Kozar, P.A., Eden Prairie, MN, for amicus curiae City Engineers Association of Minnesota.
Daniel J. Cragg, Jared M. Reams, Eckland & Blando LLP, Minneapolis, MN, for amicus curiae Minnesota Association for Justice.
Paul D. Reuvers, Jason J. Kuboushek, Iverson Reuvers Condon, Bloomington, MN, for amicus curiae Minnesota Association of Townships.
Kenneth H. Bayliss, Dyan J. Ebert, Cally Kjellberg-Nelson, Quinlivan & Hughes, P.A., Saint Cloud, MN, for amicus curiae Minnesota Defense Lawyers Association.
OPINION
GILDEA, Chief Justice.
The question presented in this case is whether a municipality is entitled to vicarious official immunity for the allegedly negligent acts that its non-employee City Engineer—a private engineering firm—performed under a contract with the municipality. Homeowners brought this action, alleging that the non-employee City Engineer was negligent and caused a nuisance. The district court awarded summary judgment to the municipality on the negligence claim based on vicarious official immunity. But the district court denied summary judgment on the nuisance claim. The court of appeals affirmed in part and reversed in part, holding that vicarious official immunity applied to both the negligence and the nuisance claims. Kariniemi v. City of Rockford, 863 N.W.2d 430, 436 (Minn.App.2015). Because we conclude that the municipality is entitled to vicarious official immunity for both claims, we affirm.
This case arises from the development of land located within the City of Rockford. As reflected in an agreement (the Agreement) between the City and the developer, the developer agreed to design and construct a grouping of townhomes named “Marsh Run.” Under the Agreement, the City agreed to design, construct, and install “improvements,” including “storm sewer mains,” “catch basins,” and “storm sewer retention ponds and structures.” The Agreement reserved a large amount of oversight to the City for the improvements at Marsh Run and stated that the City would act through the “City Engineer.”1
The Rockford City Council (the City Council) approved the construction of Marsh Run. In doing so, the City Council confirmed that “the design of all public and private streets,” as well as “all grading, drainage, utilities and easements” at Marsh Run, would be subject to the “review and approval of the City Engineer.”
The City does not have an employee designated as the “City Engineer.” The City instead contracts with a private firm for the provision of those services. For several years, including during the Marsh Run project, Bonestroo, Rosene, Anderlik and Associates (Bonestroo) performed the functions of “City Engineer” under the terms of a Professional Services Agreement (PSA)2 with the City. The purpose of the PSA was to permit the “City to obtain engineering and architectural services in a cost-effective and timely manner.” More specifically, the City “desire[d] to retain [Bonestroo] from time to time to provide such professional services for general engineering needs as well as for the planning, design, and construction of public works, all as may be directed by the City.” Under
Under the PSA, Bonestroo was required to perform “Basic Services” in three general phases: (1) the Feasibility Report Phase; (2) the Design Phase; and (3) the Construction Phase. For example, in the Feasibility Report Phase, Bonestroo prepared a feasibility report with six elements, submitted that report to the City Clerk 5 days before review by the City Council, and then presented the data contained in the report to the City Council at a public hearing. In the Design Phase, Bonestroo designed and prepared “detailed plans and specifications for the Project,” while “periodically consult[ing] with the City to ensure that the City‘s desires with respect to the Project [were] being satisfied.”3 Additionally, following the approval of the designs at a public hearing, and “[u]pon receipt of the City Council authorization to proceed,” Bonestroo “assist[ed] the City in obtaining and analyzing bids” and prepared a recommendation for the award of the Construction Contract. Finally, in the Construction Phase, Bonestroo organized, attended, and assisted the City at the preconstruction conference with the successful bidder; visited the Project site as necessary; and conducted “in the presence of the City‘s Representative, a final inspection of the Project.”4
The PSA also provided for “Additional Services,” including, for example, assisting “the City in preparing applications necessary for approvals, permits and licenses,” attending neighborhood meetings and public hearings, and completing “[d]esign revisions resulting from ... changes due to coordination of multi-agency reviews (e.g., City/County/MnDOT/etc.).” With respect to the provided-for services, the PSA noted, “[Bonestroo] ... act[ed] as the City‘s agent.” (Emphasis added.)
The PSA additionally mandated that Bonestroo “maintain a professional liability insurance policy, insuring payment of damage for legal liability arising out of the performance of professional services for the City, in the insured‘s capacity as Engineer, if such legal liability is caused by negligent acts, errors, or omissions of the insured.” It also required that Bonestroo maintain other insurance, including comprehensive general liability insurance coverage.
Pursuant to the PSA, the City tasked Bonestroo with designing and overseeing the construction of the Marsh Run improvements. Accordingly, acting as “City Engineer,” Bonestroo designed and oversaw the construction of the storm-water drainage system at Marsh Run.
Appellants Nathan and Sanna Kariniemi, whose home is located at Marsh Run, contend that Bonestroo‘s professional services with respect to the storm-water drainage system were negligent and caused a nuisance.5 Because of Bonest-
The City moved for summary judgment, arguing that it is entitled to statutory immunity for the City Council‘s discretionary decisions and vicarious common law official immunity for Bonestroo‘s discretionary decisions in its capacity as City Engineer.6 Regarding official immunity, the City noted that “Plaintiffs allege that the design decisions of [Bonestroo] regarding storm water drainage at Marsh Run were negligent and the cause of their alleged nuisance.” The City then argued that because “[its] only role was to design and supervise construction of the public improvements,” and “because the design decisions required the exercise of professional judgment by the City‘s contract engineers,” the “City has [vicarious] official immunity.”
The Kariniemis opposed the City‘s request for summary judgment, contending that common law official immunity did not apply to Bonestroo‘s design decisions because it is an “independent contractor,” not a full-time City employee. The Kariniemis also filed a cross-motion for summary judgment, arguing that there were no genuine issues of material fact regarding the City‘s liability for the design, approval, and construction of the storm-water drainage system, which “created a nuisance and constituted negligence.”
The district court, ruling first on the City‘s motion, granted summary judgment to the City on the negligence claim. The court concluded that the City‘s contract City Engineer, Bonestroo, is entitled to official immunity for its discretionary design decisions and that the City, in turn, is entitled to vicarious official immunity for the negligent design claim. The court did not address the nuisance claim; instead, the court reasoned that due to the City‘s failure to address the nuisance claim until its reply brief,7 it would consider the nuisance claim only in addressing the Kariniemis’ cross-motion.
Turning to the cross-motion, the district court denied summary judgment on the nuisance claim, reasoning that there were genuine issues of material fact for trial, including whether the “City‘s engineer ... consider[ed] the Kariniemi property in his calculations and design.” The court made
The parties cross-appealed, and the court of appeals affirmed in part and reversed in part. Kariniemi v. City of Rockford, 863 N.W.2d 430, 432 (Minn.App.2015). First, the court of appeals affirmed the district court‘s conclusion that the City is entitled to vicarious official immunity for the negligent design claim. Id. at 435. Second, the court of appeals reversed the denial of summary judgment on the nuisance claim, reasoning that the alleged nuisance arose from the same discretionary—and immune—conduct as the alleged negligence, and therefore vicarious official immunity also applied to the nuisance claim. Id. at 436. We granted the Kariniemis’ petition for review to consider whether the City is entitled to vicarious official immunity.
I.
The Kariniemis argue that the courts below erred in concluding that the City is entitled to vicarious official immunity. The City disagrees. It contends that Bonestroo is entitled to common law official immunity and that the City, in turn, is entitled to vicarious official immunity. The applicability of immunity is a legal question that we review de novo. Sletten v. Ramsey Cty., 675 N.W.2d 291, 299 (Minn.2004).
Minnesota law recognizes two forms of governmental immunity: statutory immunity and common law official immunity. Elwood v. Rice Cty., 423 N.W.2d 671, 678 (Minn.1988) (contrasting the two forms of immunity).8 Although both forms of immunity are couched in terms of whether “discretion” or judgment was exercised by the relevant actor in performance of the relevant conduct, the import and rationale of each form of immunity are “entirely different,” and we have “stressed the importance of distinguishing between” them. Id. Common law official immunity is the type of immunity at issue in this case.
Common law official immunity applies to “individual government[] actors.” Janklow v. Minn. Bd. of Exam‘rs for Nursing Home Adm‘rs, 552 N.W.2d 711, 716 (Minn.1996); Watson v. Metro. Transit Comm‘n, 553 N.W.2d 406, 415 (Minn.1996) (“Official immunity protects employees or agents of the government entity.“). We first recognized common law official immunity for judicial actors. Stewart v. Cooley, 23 Minn. 347, 350 (1877). Since Cooley, we have applied common law official immunity in a number of situations.9 But the purpose of granting
In general, official immunity “turns on: (1) the conduct at issue; (2) whether the conduct is discretionary or ministerial ...; and (3) if discretionary, whether the conduct was willful or malicious.” Majeski, 842 N.W.2d at 462. There is no dispute that the conduct at issue—the design of the storm-water drainage system—was discretionary. There is likewise no allegation of malice. And at oral argument, the Kariniemis conceded that had Bonestroo been a City employee, rather than acting under a contract with the City, official immunity would apply. The only issue before us, therefore, is whether the City loses vicarious official immunity solely because its City Engineer was not an employee of the City, but was instead working for the City under a contract.
We have not previously considered the precise issue presented here. But our precedent on official immunity provides the roadmap for the analysis. We have said that official immunity “protects public officials from the fear of personal liability that might deter independent action and impair effective performance of their duties.” Elwood, 423 N.W.2d at 678 (emphasis added). The threshold question in this case, therefore, is whether Bonestroo properly qualifies as a “public official.”
Generally, the designation of “public official” is limited to employees of a governmental entity, and a mere contract with the government does not transform an independent commercial actor into a “public official.” But in this case, based on the function performed and the special relationship between the City and Bonestroo, we conclude that Bonestroo qualifies as a “public official” eligible for official immunity.
That the duties and responsibilities of municipal engineers have a firm grounding in Minnesota statutes further supports the application of official immunity to these types of municipal officials. Although the employment of a permanent, city specific engineer is not statutorily mandated in Minnesota, the position—and the services provided by like professionals—is essential to the proper functioning of municipal government. For example, a number of statutes reference the city engineer position and impose specific duties and responsibilities upon city engineers and county highway engineers, as well as other similarly qualified professionals, who design and plan municipal infrastructure. See, e.g.,
Having determined that the function Bonestroo performed supports the grant of official immunity, the remaining question, then, is whether official immunity should also apply to a city engineer retained via contract rather than through a traditional employment relationship. The particular relationship and close coordination between the City and Bonestroo here convince us that official immunity should apply to Bonestroo.
The relationship between the City and Bonestroo is defined in the PSA. The PSA makes clear that the City did not contract with Bonestroo to independently perform for-profit tasks. On the contrary, the City contracted with Bonestroo to perform the official functions of “City Engineer” on the City‘s behalf. Bonestroo, which acted through its engineers, performed these essential governmental tasks, as the City Engineer, in conjunction with City employees and officials. And in performing these functions, the PSA provided that Bonestroo acted as the City‘s agent. That the City imbued Bonestroo with the formal title of office, coupled with the authority to bind the City, confirms that the City considered Bonestroo and its agent engineers to be, in effect, City officials. This conferred power and authority further supports the grant of official immunity in this case.
The PSA also contemplated close collaboration between the City and Bonestroo. Specifically, the City charged Bonestroo with aiding, advising, and working directly with the City regarding the feasibility, design, and progress of the City‘s public projects, including the storm-water drainage system at issue here. While the PSA was in effect, the City still maintained a vested interest in the planning of its public infrastructure. And as we stated in Wilbrecht, these types of public works engineering decisions are “performed solely for the benefit of the public.” 179 Minn. at 264, 228 N.W. at 916 (emphasis added). In effect, Bonestroo operated as an extension of the City government, rather than as an independent commercial actor. That the City did not remove itself from the public work at issue, but instead required active collaboration between Bonestroo and City representatives, also supports the application of official immunity. Cf. Chisolm v. Miss. Dep‘t of Transp., 942 So.2d 136, 141-42 (Miss.2006) (concluding that the state department of transportation was not liable for the acts of its contractor in building a bridge, as the contractor retained control over the means of meeting the contract specifications); Brown & Gay Eng‘g, Inc. v. Olivares, 461 S.W.3d 117, 126 (Tex.2015) (declining to extend governmental immunity to a private engineering company that designed a highway because “the government‘s right to control” the contractor‘s work was “utterly absent“).
Finally, the relationship between the City and Bonestroo, and the required collaboration between those doing the work and the City, convince us that we ought not exalt form over substance by focusing solely on the contractual basis by which Bonestroo exercised its authority as the City Engineer. Bonestroo, although a private firm retained by contract, performed discretionary functions that required the exercise of judgment for the benefit of the public. The PSA required that Bonestroo work in close coordination with the City, specifically designated Bonestroo as the City‘s “agent,” and explained that it was more prudent for the City to use its limited resources to retain engineering help on a periodic and contractual basis. We re-
less [of] whether the individual state actor works full-time or on some other basis.” Filarsky v. Delia, 566 U.S. 377, 132 S.Ct. 1657, 1665, 182 L.Ed.2d 662 (2012) (quoting Scheuer v. Rhodes, 416 U.S. 232, 240, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)).15
The Kariniemis argue, however, that Bonestroo‘s mandated liability insurance coverage entirely negates the need for immunity here. We disagree and refuse to limit the application of immunity under these facts solely because the City required Bonestroo to procure liability insurance. Although the Supreme Court identified the procurement of liability insurance as one of the reasons why there was no need for
For the foregoing reasons, we hold that Bonestroo is entitled to common law official immunity for its discretionary conduct as City Engineer and that the City, in turn, is entitled to vicarious official immunity.17
II.
We next turn to the question of whether the district court properly denied summary judgment with respect to the nuisance claim. On appeal from summary judgment, we assess whether “there are genuine issues of material fact and whether the district court erred in applying the law.” Sletten, 675 N.W.2d at 299.
The court of appeals reasoned that the district court erred by concluding that the City had not “timely raised” immunity with respect to the nuisance claim because immunity involves the subject matter jurisdiction of courts and, therefore, can be raised at any time. Kariniemi, 863 N.W.2d at 436. We need not reach this timeliness issue, however, because the record before us indicates that, from the very beginning, the City pleaded immunity with respect to all claims arising out of the conduct at issue. In its answer, the City alleged: “Defendant City‘s actions are immune from liability under the doctrines of official immunity and vicarious official immunity.” And the conduct that forms the basis for both the negligent design and nuisance claims is the same conduct. In Sletten, we explained that “our analysis does not focus on the nuisance but rather on the nature of the underlying governmental activity that caused the nuisance.” 675 N.W.2d at 304 (emphasis added). Here, the activity that allegedly caused the nuisance is activity that official immunity covers. Accordingly, we hold that the district court erred by failing to grant the City immunity with respect to the nuisance claim when that claim was based on the
Affirmed.
CHUTICH, J., took no part in the consideration or decision of this case.
LORI S. GILDEA
CHIEF JUSTICE
Notes
In Filarsky, the Court held that a private attorney, temporarily retained by a city to act as its internal affairs investigator, was not foreclosed from invoking the protections of qualified immunity under
In Richardson, the Court held that two prison guards working for a private prison management firm were not entitled to qualified immunity. 521 U.S. at 401, 117 S.Ct. 2100. But the Filarsky Court explained that the combination of circumstances in Richardson—“a private firm systematically organized to assume a major lengthy administrative task, (managing an institution) with limited direct supervision by the government, undertak[ing] that task for profit and potentially in competition with other firms“—worked “to mitigate the [policy] concerns underlying recognition of governmental immunity” under section 1983. Filarsky, 566 U.S. at 390, 132 S.Ct. at 1667 (quoting Richardson, 521 U.S. at 413, 117 S.Ct. 2100) (internal quotation marks omitted). The close coordination and agency relationship between the City and Bonestroo here make this case much different than Richardson.
