Government Immunity for Professional Independent Contractors
By Jeffrey L. Janik & W. Wayne Siesennop
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In a case of first impression, the Wisconsin Court of Appeals
extended governmental immunity to an independent contractor, insulating
it from liability for injuries alleged to have been caused by defective
design work performed on a public roadway and bridge project.1 This decision provides protection to professional
independent contractors performing work on public improvement projects
for state and local governments when reasonably precise aspects of the
work are directed by the government principal after reviewing potential
dangers. To avail themselves of this defense, however, contractors must
properly document and inform the government principal of their concerns
at the time of the project.
A professional independent contractor
implementing a reasonably precise governmental directive can document
its concerns with the government principal and enjoy the same immunity
given the government officer. By merely implementing an otherwise immune
governmental decision, the contractor will not have to risk liability
solely because of its status as a private entity. |
The Lyons claim
In Estate of Lyons v. CNA
Insurance Companies the plaintiffs were victims of an
automobile accident that occurred when an uninsured driver failed to
stop at a stop sign and collided with the Lyons' vehicle in an
intersection in Walworth County. Theresa Lyons suffered serious injuries
and died after an extended period in a coma. Her estate and her widower
brought a tort action against the other driver, the State of Wisconsin,
and the municipal subdivisions. All of the governmental defendants were
dismissed, leaving the uninsured driver as the sole defendant.
Plaintiffs were granted leave to amend their complaint and implead
Strand Associates Inc., a private engineering and design firm that had
designed the replacement roadway and bridge in 1978-79. Plaintiffs
argued that Strand negligently designed the bridge that the uninsured
driver crossed just before the intersection where the accident occurred.
Plaintiffs' expert opined that the bridge design was contrary to
standards promulgated by the American
Association of State Highway and Transportation Officials (AASHTO)
concerning vertical curves and lines-of-sight. Plaintiffs contended that
the design of the bridge's vertical curve a measurement
reflecting an engineered hill's length and height was too short
and high for its proximity to the intersection, thereby blocking the
uninsured driver's view of the intersection.
Strand denied the allegations of negligence, denied that the cited
standard was applicable to the intersection, affirmatively alleged it
was entitled to governmental immunity for the alleged design flaw, and
entitled to immunity under Wisconsin law as an agent of the government
as that term is used in the statute.2
The design work
Strand was hired by the municipal subdivisions in 1978 to design a
bridge and roadway to replace a dilapidated bridge that spanned a set of
railroad tracks. Evidence showed that the existing bridge was severely
in need of replacement. The municipalities secured federal highway money
for the project, which was administered and distributed by the Wisconsin Department of
Transportation (DOT). Strand's contract defined it as an independent
contractor and required it to abide by existing design standards,
wherever feasible, and DOT requirements.
The design of the bridge height initially was constrained by the
requirements for spanning the railroad tracks. A variance was secured
allowing a bridge 18 feet above the tracks instead of the 22 feet
required under the existing standard.
Following the variance, Strand submitted its initial design to the
DOT and municipalities. This design provided a bridge with a 150-foot
vertical curve. To effect this design, portions of the roadway and
adjacent intersection would have needed razing, filling, and
repaving.
In May 1979 Strand met with DOT and municipal government officials at
the proposed construction site. The DOT recognized that the 150-foot
vertical curve bridge design would have resulted in significant
additional costs associated with raising the elevation of the adjoining
roadways. To control
taxpayer expense, the DOT directed Strand to
submit a new bridge design with a shorter vertical curve, thereby
eliminating the need for elevating the adjacent roadways. Strand
responded by reminding the DOT that it followed the 150-foot vertical
curve criteria for the roadway, and, with the nearby intersection, a
reduced roadway speed from 40 m.p.h. to 25 m.p.h. was
appropriate. Strand also indicated that it was submitting a new design
with a 70-foot vertical curve, based on the directives of DOT officials,
and as a further exception to design criteria.
The DOT approved the revised plans, and the bridge was constructed
with a 70-foot vertical curve an engineered hill with a shorter
length and steeper grade than the 150-foot original design.
Immunity
Strand moved for summary judgment at the trial court, arguing that it
should be immune for merely implementing in a nonnegligent manner a
governmental decision made by immune state officials entrusted with the
duty to make such discretionary decisions for the good of the citizens.
In the alternative, Strand argued that it should be afforded statutory
immunity as a government agent for performing a quasi-judicial or
quasi-legislative function, 3 and should be
dismissed for plaintiffs' failure to name Strand in the requisite Notice
of Claim. 4
Plaintiffs argued that, as a professional designer, Strand had a
professional duty to design the bridge and roadway to then-existing
standards. Plaintiffs' expert opined that Strand had a duty "not to
proceed" with a design that did not comply with professional standards.
Plaintiffs also contended that no governmental immunity should be
available to Strand. Citing A.E. Investment Corp. v. Link Builders
Inc., 5 plaintiffs argued that Strand
was a private entity with a professional duty to the public, and its
status as a professional independent contractor took it out of the realm
of a master-servant relationship with the government. Plaintiffs cited
the fact that no previous Wisconsin decision has ever extended
governmental immunity to a private independent contractor.
The Hon. John R. Race, Walworth County circuit court judge, granted
summary judgment to Strand, finding no dispute on the material fact that
plaintiffs' only criticism of Strand's design work involved the use of a
70-foot rather than a 150-foot vertical curve. The court also found no
dispute concerning the fact that Strand submitted an original design
with a 150-foot vertical curve, but was directed by the DOT to redesign
the bridge with a shorter vertical curve.
The trial court explored Wisconsin precedent holding government
officials immune for discretionary decisions made in the course of their
government employment. The court cited Pavlik v. Kinsey 6 for the rule that public officers are immune for
injuries resulting from their discretionary official acts. The immunity
rationale, the court reiterated, is to avoid influencing government
officials' performance with the threat of lawsuits, avoid the deterrent
effect for those considering public service, avoid having public
officials use their official time responding to and defending lawsuits,
unfairness in subjecting government officers to liability for their
subordinates' actions, and that the ballot box is the proper forum for
dealing with official misconduct. 7
The trial court held that the decision to design the bridge with a
shorter vertical curve was an immune discretionary decision made by a
government official, and plaintiffs were attempting to impute onto
Strand this allegedly negligent discretionary governmental decision.
Therefore, the court held, Strand was entitled to immunity "when
faithfully executing the discretionary act of the state." 8
Plaintiffs appealed the granting of summary judgment and Strand
cross-appealed on the undecided issue of whether it was a government
agent for purposes of the statutory Notice of Claim requirements.
Three-part test
The Wisconsin Court of Appeals affirmed the trial court. In doing so,
it adopted for Wisconsin a three-part test similar to that annunciated
by the U.S. Supreme Court in Boyle v. United
Technologies Corp., 9 under federal
tort statutes. Strand had cited to Boyle as persuasive authority in both
the trial court and court of appeals.
In Boyle plaintiff attempted to sue the designer of a
military helicopter after an accident in which a helicopter crashed into
water. The occupant could not extract himself because the escape hatch
opened outward and was blocked by the water's pressure. The defendant
designer argued that it should be entitled to immunity for the design
decision because the military dictated the specifications of the escape
hatch. Instead of announcing a blanket rule extending immunity to all
aspects of work performed by government contractors, the court set forth
a three-part test that contractors must meet to be conferred with
governmental immunity under federal tort statutes: 1) the U.S. approved
reasonably precise specifications; 2) the equipment conformed to those
specifications; and 3) the supplier warned the U.S. about dangers in the
use of the equipment that were known to the supplier but not to the
United States. 10
Following the rationale of Boyle, the District II Wisconsin
Court of Appeals, in an opinion written by Judge Richard Brown,
"adopt[ed] a form of governmental contractor immunity applicable to
parties who contract with municipal or state authorities and are
directed to perform certain tasks under that contract." 11 The court held that "an independent professional
contractor who follows official directives is an 'agent' for the
purposes of § 893.80(4),
Stats., or is entitled to common law immunity" 12 provided the professional contractor can meet a
three-part test similar to that used for claims against federal
contractors. To avail themselves of the defense, contractors must show
that: 1) the governmental authority approved reasonably precise
specifications; 2) the contractor's actions conformed to those
specifications; and 3) the contractor warned the supervising
governmental authority about the possible dangers associated with those
specifications that were known to the contractor but not to the
government officials. 13 The court affirmed
the summary judgment granted to Strand.
Cause and effect
During the various arguments in Estate of Lyons, the
parties, including the DOT as amicus curiae, discussed the effect of
granting the design firm immunity rather than having it answer in court
for the decision to reduce the length of the vertical curve for the
bridge design.
The DOT objected to a blanket holding that contractors performing
work for governmental entities are always "agents" as that term is used
in the governmental immunity statute. The DOT expressed concerns that a
broad ruling that contractors are agents would implicate the government
and taxpayers with duties to both represent and indemnify independent
contractors in civil suits. Having hired an independent firm to exercise
and implement these governmental decisions, the government would, in a
sense, be insuring the contractor's work. This was a duty the taxpayers
did not want to assume.
However, the DOT supported Strand on its argument that immunity
should apply in this case. To hold Strand liable for merely facilitating
a governmental directive for which the directing state officer was
immune could effectively remove the benefits of governmental immunity
granted to the governmental officers making a discretionary decision.
State and local governments make widespread use of independent
contractors to execute certain governmental functions. The immunity for
government officers making discretionary decisions could effectively be
removed if independent contractors facilitating such decisions can be
held liable in tort. As the appeals court noted, if the contractors
facilitating a governmental directive can be held liable for a
discretionary governmental act, the contractors would be subjected to
increased risks and associated costs, and ultimately would pass those
costs on to the contracting government, effectively eliminating the
taxpayer benefits secured by the immunity statutes. 14 The court also cited the fact that it would be
"fundamentally unfair" to hold a contractor liable for injuries caused
by a defective design when the governmental authority was responsible
for its development. 15
In practice
Attorneys should advise clients doing work as government contractors
to document well any deviation from existing standards or practices.
This would include identifying the existing standard or practice,
identifying the specific deviation from the standard or practice
requested by the government principal, outlining potential costs and
risks associated with such deviation, and obtaining a written directive
from the government principal for the deviation.
![](/SiteCollectionImages/WisconsinLawyer/1998/03/pair2.jpg)
Jeffrey L. Janik (left), U.W. 1994, is an associate at Godfrey, Braun
& Frazier, Milwaukee. W. Wayne Siesennop (right), Marquette 1978, is
a partner in the law firm of Hannan, Siesennop & Sullivan,
Milwaukee, and is a registered professional engineer in Wisconsin. They
were attorneys of record for both the professional design firm and its
insurer in Estate of Lyons v. CNA Ins. Cos.
|
In Lyons the claim involved problems with the vertical curve
standards and lines-of-sight. There, the cost issue concerned additional
fill and work on the adjoining roadways. In other instances the need to
condemn additional real estate may be required to design a roadway for
the "proper" travel speed, or, with respect to jails, the "best" prison
locks/doors may be prohibitively expensive. These may be costs
government representatives do not wish the public to incur. A designer
in that situation should work closely with the government and carefully
document its files to show consideration of alternatives. If the
government chooses a less expensive alternative in writing, the designer
will have a well-documented file to show that different alternatives
were explored, and government officials entrusted with the power to make
decisions in their quasi-legislative capacity made the discretionary
(and immune) decision to deviate from the standard or state-of-the-art.
This documentation also will alert the government principal to take
safety precautions, such as a sign warning drivers that an upcoming
curve must be negotiated at a slower than normal travel speed for that
roadway.
Most design decisions involve costs and benefits. To implement the
"safest" design may be cost-prohibitive. This is especially true for
public improvements. Certainly, topography and land ownership constrain
the government's ability to have the "safest" possible road, with no
hills or curves. Thus, safety benefits must necessarily be traded for
making the project cost-feasible. A contractor involved with such a
project should thoroughly document the standards, alternatives, and
safety concerns at the time of the project to avail itself of this
extension of immunity.
Conclusion
For the first time under Wisconsin law, governmental immunities were
extended to shield a professional independent contractor from liability
for work performed on a government project. Government officers
entrusted to make cost-benefit decisions for the good of the citizens
have immunity for their official acts as a matter of law. A professional
independent contractor implementing a reasonably precise governmental
directive can document its concerns with the government principal and
enjoy the same immunity given the government officer. By merely
implementing an otherwise immune governmental decision, the contractor
will not have to risk liability solely because of its status as a
private entity.
Endnotes
1 Estate of Lyons v. CNA Ins. Cos.,
207 Wis. 2d 448 (Ct. App. 1996), rev. denied.
2Wis. Stat. §
893.80(4).
3 Wis. Stat. §
893.80(4). ("No suit may be brought against . . . [government]
officers, officials, agents or employees for acts done in the exercise
of legislative, quasi-legislative, judicial or quasi-judicial
functions.") (Emphasis and bracketed material added.)
4See Wis. Stat. §§
893.80(l) (a), 893.82(3); Smith v. Wisconsin Physician's
Serv., 152 Wis. 2d 25 (Ct. App. 1989).
5 52 Wis. 2d 479 (1974).
681 Wis. 2d 42 (1977).
7 Lister v. Bd. of
Regents, 72 Wis. 2d 282, 299 (1976).
8 Slip Op. at 11, Circuit Court of
Walworth Co., Case No. 93-CV-122.
9 487 U.S. 500
(1988).
10 Id. at 512.
11 Estate of Lyons,
supra note 1 at 459.
12 Id. at 459-60.
13 Id.
14 Id. at 457 (citing
Vanchieri v. New Jersey Sports and Exposition Auth., 104 N.J.
80, 514 A.2d 1323 (1986)).
15 Id.
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