Have you ever made a great presentation to the wrong audience—one for which you were well-prepared with all the right facts, quotes, and notes, but you found that despite your best efforts and intentions, your argument fell on deaf ears?
This sort of thing happened to private landowners when they sued the Kentucky DOT’s Department of Highways (KDH). To make matters worse, KDH dragged the contractor into the dispute seeking indemnity for the landowners’ alleged damages. The contractor spent over two years dealing with this litigation when it could have been focusing on other projects. Savvy contractors can help to reduce such losses by working with, not against, public entities. In the case of Commonwealth of Kentucky Department of Transportation, Department of Highways v. Surber and Bizzack Construction, LLC, No. 2016-ca-80 (Ky. Ct. of Appeals, June 23, 2017), the interests of both parties were aligned. So, when the department won, the contractor also won.
KDH appealed the lower court’s denial of its motions to dismiss on grounds of sovereign and governmental immunity. The Court of Appeals of Kentucky agreed that KDH was immune from this lawsuit. KDH sought highway improvements including a new bridge. Before issuing the RFP, KDH acquired the necessary land by contracts from two different parties owning land adjacent to the project. Subsequent to the land acquisition and before the project began, the sellers died, and their children inherited the remaining property adjacent to the project.
After the project began, the landowners were “displeased with the sound, sand, dust, eyesore issues, proximity, size of the bridge, and the property’s post-construction appearance.” The landowners sued KDH alleging, among other things, negligence, filing in Circuit Court, where negligence claims would typically be filed. Later, however, the landowners would learn they were well-prepared for a meeting in the wrong location and for an audience (i.e., court) that could not hear their complaints.
Nearly a year after the landowners filed suit, KDH sought indemnity from the contractor in the Circuit Court. A few months later, KDH sought dismissal of the landowners’ lawsuits by arguing sovereign and governmental immunity. The Circuit Court denied KDH’s arguments “without explanation.” KDH appealed to the Court of Appeals.
Under the doctrine of sovereign immunity, a public entity is not liable without that entity’s consent or waiver. Such consent or waiver by a public entity is typically found in applicable statutes or by contracting with the public entity. Governmental immunity provides that “a state agency is entitled to immunity from tort liability ... when performing an essential government function [and] [m]aintaining the infrastructure of roads and bridges is among those public acts [essential] to state government.”
No statute waived KDH’s immunity to lawsuits in the Circuit Court. No part of any court’s opinion related to the disputes between landowners and KDH discussed the contracts for sale of the land before the project began, so I assume there were no good arguments for consent or waiver by KDH through those contracts. The landowners argued KDH waived its immunity by seeking indemnity from the contractor in the Circuit Court.
In finding for KDH, the Kentucky Court of Appeals relied upon the Kentucky Supreme Court in stating, “[this] Court will find waiver only where stated by the most express language or by such overwhelming implications from the text [of legislation] as [will] leave no room for any other reasonable construction.” To the extent that the landowners alleged mere negligence by KDH, the Court of Appeals held KDH is “shielded by governmental immunity.”
The Court of Appeals further held that the landowners “were not without a remedy [as] the [Kentucky] Board of Claims Act offers a limited waiver of immunity [for] negligence claims involving the performance of ministerial acts.” However, although actions by public entities, ministerial acts are narrowly prescribed tasks performed without exercising any independent judgment. So, it is doubtful that a contract for sale would be considered a ministerial act since independent judgment or decision-making is inherent in contracting.
