April 11, 2017 – A private construction company that severed a sewer line is not liable because it has immunity as a government contractor, the Wisconsin Supreme Court has ruled.

Various commercial property owners sued Pro Electric Contractors for negligence after its excavation project severed a sewer lateral line and caused flooding damage.

Pro Electric admitted to severing the line but asserted immunity as a defense, arguing the Wisconsin Department of Transportation (DOT) made the construction design decisions and Pro Electric was merely implementing DOT’s decisions.

In Melchert v. Pro Electric Contractors, 2017 WI 30 (April 7, 2017), a four-justice majority concluded that Pro Electric is immune “because it acted in accordance with reasonably precise design specifications adopted by a governmental entity in the exercise of its legislative, quasi-legislative, judicial, or quasi-judicial functions.”

The majority also ruled that immunity would not apply if Pro Electric violated the Digger’s Hotline statute when backfilling the excavation without inspecting it for damage, but concluded that Pro Electric did not violate the statute.

Justice Shirley Abrahamson wrote a concurring opinion. Justice Rebecca Bradley dissented, joined by Justice Daniel Kelly, concluding governmental immunity did not extend to Pro Electric’s actions even as a government contractor.

DOT Approved the Plan

DOT approved a 1,000-page plan to improve a state highway in Brookfield. The plan included detailed diagrams and special provisions on different aspects, including the requirements regarding underground utilities near the highway to be improved.

After bidding, DOT awarded the project to Payne & Dolan, which subcontracted with Pro Electric to install traffic signals, including the concrete bases to support them.

The DOT-approved plan identified the type of concrete base to use, and specified use of a circular auger to drill a 14-foot hole that was 30 inches wide.

Pro Electric called Digger’s Hotline three days before beginning the excavation, as required in the plan, so transmission line owners could properly mark the area.

DOT hired an engineering firm to supervise the digging to ensure compliance with the plan and authorized the engineer to alter digging locations if Pro Electric encountered an unexpected utility line. However, the engineer did not alter the digging location.

Pro Electric completed the project as planned, without any indication of problems. But after completion, sewage backed up at nearby commercial properties. The cause was determined to be a severed sewer line in the location of Pro Electric’s excavation.

The negligence complaint followed. The circuit court granted summary judgment to Pro Electric on the grounds of immunity under Wis. Stat. section 893.80(4), which grants immunity to “agents” of the government “for acts done in the exercise of legislative, quasi-legislative, judicial, or quasi-judicial functions.” An appeals court affirmed.

Majority Affirms

The majority noted that legislative, quasi-legislative, judicial, or quasi-judicial functions are policy decisions and would include DOT’s construction design decisions.

The majority also noted that immunity extends to contractors acting as government agents if the agent can show it properly implemented the government’s plan.

“For a private entity such as Pro Electric that is contracting with a government entity, this is where immunity ends,” wrote Justice Michael Gableman.

“A contractor is not immune from liability if the government entity did not direct the injury-causing conduct with reasonable precision in the exercise of its legislative, quasi-legislative, judicial, or quasi-judicial functions.”

Pro Electric did not diverge from DOT’s plan, and petitioners conceded that Pro Electric complied with the DOT’s specifications with reasonable precision, the majority noted.

No Liability Under Digger’s Hotline Statute

Although Pro Electric was immune from any damage caused by the implementation of DOT’s construction plan with reasonable precision, the supreme court majority noted that Pro Electric still had a statutory duty to inspect the site before backfilling it.

Wis. Stat. section 182.0175(2)(am) of the Digger’s Hotline statute requires an inspection of transmission facilities exposed during excavation to determine if the facility was damaged, and refrain from backfilling before any necessary repairs are made.

The petitioners argued that Pro Electric failed to inspect the area before backfilling, and immunity does not bar liability for this alleged negligence. The majority agreed that “Pro Electric was not acting as DOT’s agent in this regard, and immunity would not shield Pro Electric from liability.” But the majority also ruled that Pro Electric was not liable.

Pro Electric was required to inspect a transmission “exposed during excavation,” but there was no indication that the sewer line became exposed during the digging process.

In addition, it was a clay sewer line amidst clay soil. Pro Electric’s president testified that it would be highly unlikely for workers to distinguish pieces of a damaged clay sewer line from the surrounding soil when mixed together and pulverized through augering.

And since the augured hole was so narrow and deep, it would be nearly impossible for the auger operator or anyone else to see into the hole for discernable damage.

“Pro Electric did what it was supposed to do under the statute, and based on the record before us, Petitioners’ attempts to suggest that the sewer lateral was exposed to Pro Electric during the excavation amount to mere speculation,” Justice Gableman wrote.

Concurrence/Dissent

Like the majority, Justice Abrahamson voted to affirm, but for different reasons. She said the petition for review should have been dismissed as “improvidently granted.”

Justice R. Bradley dissented, joined by Justice Kelly, arguing that the court continues to resurrect problematic case law in the area of governmental immunity law.

R. Bradley concluded that immunity, under section 893.80(4), only applies to actions “pertaining to making or enacting laws, actions involving an exercise of judgment in an adjudicative sense, or actions otherwise resembling lawmaking or adjudication.”

“Characterizing the installation of a traffic light pole as a legislative or quasi-legislative act is the latest absurdity generated by the misapplication of the governmental immunity doctrine,” R. Bradley wrote. “This court should not persist with an interpretation of [§ 893.80(4)] that artificially prohibits redress for wrongs committed by the government.”

The dissent also disagreed with the majority’s conclusion that Pro Electric could not be liable for negligence under the Digger’s Hotline statute, based on the record.

The facts, Justice R. Bradley explained, did not show Pro Electric conducted a required inspection of the excavation before backfilling. “[W]hether an inspection occurred before backfilling presents a genuine issue of material fact,” she wrote.