Authors: Attorney John C. Mitby & Law Clerk Elizabeth L. Spencer
The Wisconsin Supreme Court in Melchert v. Pro Elec. Contractors, 2017 WI 30, 892 N.W.2d 710 again addressed the concept of governmental immunity for private contractors who perform work on behalf of a government entity. Private contractors should take note of the case as it clearly illustrates what is needed to receive governmental immunity
In 2011, the DOT approved a plan for improvement of a five-mile stretch of State Highway 190. The plan included requirements for underground utilities, specifications, and detailed diagrams for the installation of new traffic signals. The private general contractor hired Pro Electric to perform work on parts of the project, including the installation of the traffic signals. Melchert at ¶¶ 6-7. During the process of installing the traffic signals, the project plan directed Pro Electric to install a concrete base to support a traffic signal pole and to use an auger to drill the hole in the ground for the base. Id. at ¶ 9. Pro Electric contacted the Digger’s Hotline and then a few days later began augering the hole. Id. at ¶ 11.
After completion of the project, it was discovered that a sewer lateral was severed leading to water damage to the lot owned by the plaintiffs. The plaintiffs brought suit alleging that Pro Electric was negligent in its excavation and violated Wis. Stat. §182.0175, the Digger’s Hotline Statute, by failing to inspect the sewer lateral for any damage. Id. at ¶¶3-4.
Pro Electric argued that it was acting as the DOT’s agent while performing the work and thus, should be protected from claims of negligence by governmental immunity. The relevant portion of Wisconsin Statute § 893.80(4) states that no suit may be brought against a governmental agency for the intentional torts of its agents nor may any suit be brought against its agents for acts done in the exercise of legislative, quasi-legislative, judicial, or quasi-judicial functions.
The majority, authored by Justice Gableman, acknowledged that there is a longstanding principle that a governmental entity is immune from liability for acts “done in the exercise of its legislative or judicial or quasi-legislative or quasi-judicial function” which has been codified in Wis. Stat. § 893.80(4). Id. at ¶ 18. These functions include “when a governmental entity chooses one project design over another.” Id. Further it is also well established that governmental entity immunity may extend to private contractors. Id. at ¶ 19. As recognized in Estate of Lyons v. CNA Ins., 207 Wis. 2d 446, 558 N.W.2d 658 (Ct. App. 1996), a contractor asserting governmental immunity must prove two elements. Id. at ¶19. First, that it was an agent of the governmental entity by showing that “the governmental entity approved reasonably precise specifications that the governmental contractor adhered to when engaging in the conduct that caused the injury.” Id. at ¶19. Additionally, a contractor “must be able to demonstrate that the conduct for which immunity is sought was the implementation of the governmental entity’s legislative, quasi-legislative, judicial or quasi-judicial functions.” Id. at ¶20. Here, the Court applied the two elements to the conduct allegedly causing the plaintiff’s damages: the severing of the sewer lateral and in backfilling the excavation without inspecting the sewer lateral for damage.
The Court concluded that Pro Electric was immune from liability for severing the sewer lateral, because the DOT plan provided reasonably precise specification for the augering, Pro Electric adhered to those plans, and those plans were “legislative, quasi-legislative, judicial, or quasi –judicial functions.” Id. at ¶24 Plaintiffs conceded, and the court agreed, that the DOT’s specifications for the augering were reasonably precise and that Pro Electric complied with the specifications. Id. at ¶¶ 25-26. The Court analyzed whether the DOT plan was an exercise of its legislative or quasi-legislative functions. Comparing this case to Allstate Insurance v. Metropolitan Sewerage Commission of County of Milwaukeee, 80 Wis. 2d 10, 258 N.W.2d 148 (1977). The Court stated that the DOT was exercising its legislatively delegated authority to “direct, undertake and expend state and federal aid for planning, promotion and protection activities in the areas of highways, motor vehicles, [and] traffic law enforcement…” Melchert at ¶29. Since both elements were satisfied Pro Electric had governmental immunity under § 893.80(4).
Next, the court concluded that Pro Electric was not immune from liability for backfilling the excavation without inspecting the sewer lateral. The DOT plan assigned responsibility to Pro Electric to “coordinate construction activities” by calling the Digger’s Hotline or the utilities that had facilities in the area. Id. at ¶33. The plan did not provide reasonably precise specification for how to fulfill these responsibilities and there was “ample room for Pro Electric’s discretion.” Id. Thus, Pro Electric was not acting as an agent of the DOT. The court ended its analysis about governmental immunity here, and then applied the traditional summary judgment standards. All parties agreed that noncompliance with Wis. Stat. § 182.0175(2) (am) would result in negligence. The Court concluded that the undisputed facts on the record establish that Pro Electric complied with its duties under Wis. Stat. § 182.0175(2) (am). Consequently, the claim was dismissed.
Justice Abrahamson concurred but believes that the Court should have dismissed the petition for review as being improvidently granted as the issues raised were decided by the court of appeals consistently with previous case law and the majority does not in any way develop the law of the state.
The dissent, authored by Justice R. Bradley and joined by Justice Kelly, argued that the majority leaves in place a judicial distortion of the statutory language found in § 893.80(4) that instead ties immunity to a “discretionary” versus a ”ministerial duty” test created by the judiciary perpetuating a non-textual interpretation of the statute. Further, the dissent argues that there was a genuine issue of material fact as whether the hole was inspected prior to filling thus, the decision should be reversed and remanded for further proceedings.
Governmental entities that use contractors and subcontractors should all be aware of the potential for those contractors and subcontractors to have immunity from torts that result from contracted work but, that this immunity is limited based on whether the governmental entity was acting within it is legislative, quasi-legislative, judicial, or quasi-judicial functions and whether the specifications of the government’s plan was precise. If the conduct of either party falls outside of the scope of the entity’s powers or the plan does not provide precise instructions, there will be no immunity under Wis. Stat. § 893.80(4). A contractor, engineer, or sub-contractor should thoroughly review any governmental project plan for contracted work prior to accepting it to determine the extent of the specifications and consider evaluating in advance whether immunity may be available. Being proactive forward thinking will help in the instance that a claim is filed. If there is any gray area as to specification, obtain clarification in writing that your actions are within the government’s direction and scope. That is best insurance for no liability one can have.