|Legal Opinion: |
Text of Document: MEMORANDUM
TO: MTAS Utilities Consultant
FROM: Sid Hemsley, Senior Law Consultant
DATE: March 25, 2011
RE: Liability for sewer back-ups
You have the following question: Is a municipality liable for sewer back-ups that cause damage to private property?
The answer is yes, but only with respect to back-ups caused by problems in the municipal sewer system. Where the sewer problem lies in the property owner’s sewer lines (except where that problem might be caused by problems in the municipal sewer system), the property owner would be liable for such problems. But as will be seen below, even where the sewer back-up problem at issue occurs in the municipal sewer system, municipalities are immune from suit except where that immunity has been removed under the Tennessee Governmental Tort Liability Act (TGTLA), and under that Act, municipal liability for sewer back-ups is limited by the terms of that Act, and those limitations are quite strict.
As far as I can determine, there are two provisions of the TGTLA under which municipal liability for sewer back-ups is possible:
- Tennessee Code Annotated, § 29-20-204 (Removal of immunity for injury from dangerous structures).
- Tennessee Code Annotated, § 29-20-205 (removal of immunity for injury caused by negligent act or omission of employees).
Sewer back-ups have also produced cases based on allegations of nuisance and the taking of property.
There are few cases involving liability for sewer back-ups that have made their way up to the Tennessee Court of Appeals and the Tennessee Supreme Court. Those that have made it that far have been treated quite roughly by those courts, generally because of the failure of those cases to comply with basic TGTLA legal principles, such as notice and the statute of limitations, or by selecting the wrong remedy. Presumably, many sewer back-up incidents cases are routinely handled by local governments, or the “cases” they become are otherwise disposed of by the trial courts.
Proper notice of the problem to the city is required under § 29-20-204
In Smith v. City of Covington, 734 S.W.2d 327 (Tenn. Ct. App. 1987), Smith sued the city for an injunction to abate an alleged nuisance caused by intermittent sewerage back-up in his restaurant, and for the damages the back-ups caused his restaurant, including its loss of profits, etc. The back-ups had started before April 12, 1983, but Smith had appeared before the Covington Board of Mayor and Aldermen on that date to discuss the sewer back-up problem on his property. The trial court dismissed Smith’s claims against the city, holding that Smith had failed to give written notice to the city of the sewer back-up problems, as required under the Tennessee Governmental Tort Liability Act (TGTLA).
The Court of Appeals upheld the trial court, declaring that suits against governments on the basis of nuisance are encompassed by the TGTLA. What the Court said about the application of the TGTLA is worth repeating at length:
The Tennessee Governmental Tort Liability Act expressly provides that except as allowed by the Act all governmental entities are immune from suit from any injuries resulting from the activities of the entity in the exercise of any of its functions. [The Court’s emphasis.] T.C.A. § 29-20-201 (980) Actions against governmental entities for damages on the theory of liability historically labeled nuisance are included in and covered by the act. Collier v. Memphis Light, Gas & Water Division, 657 S..2d 771 (Tenn. App. 1983).
The case at bar falls into the category of cases covered by T.C.A. § 29-20-204 which states...:
(a) Immunity from suit of a governmental entity is removed for any injury caused by the dangerous or defective condition of any public building, structure, dam, reservoir or any public building improvement owned and controlled by such governmental entity.
(b) Immunity is not removed from latent defective conditions, nor shall this section apply unless constructive and/or actual notice to the governmental entity of such condition be alleged and proved in addition to the procedural notice required by § 29-20-302.
Paragraph (b) of the statutes mentions two types of notice in cases coming under this statute, one of which is the procedural notice referred to in T.C.A. § 29-20-302, which was the basis of the trial court’s judgment for the city. [This statute was repealed by Public Acts 1987, Chapter 407, but the notice requirement below is still a part of § 29-20-204(b)].
The other provision of paragraph (b) involves the knowledge of the governmental entity that there is a dangerous or defective condition of its instrumentality. The legislature specifically made the removal of immunity under this statute conditional upon allegation and proof that the entity knew or should have known of the condition of its instrumentality causing the damages complained of. Thus, if the plaintiff is unable to prove that the entity had actual or constructive notice of the defective condition the entity is immune from suit. In this case the trial court found that there was no notice to the city prior to the April 12, 1983, Board of Mayor and Aldermen meeting ....Thus, the removal of immunity provided by 29-20-204 does not apply “for any injury caused by the ... defective condition” of the sewer prior to April 12, 1983.
But as the Court took care to point out, “The city would not be immune for suit for the subsequent recurrences [of the sewer back-ups] because of their knowledge acquired on April 12, 1983.” [At 329] [Emphasis is mine.]
The same result was reached in Lee v. City of Cleveland, 859 S.W.2d 347 (Tenn. Ct. App. 1993) (Permission to appeal to Tennessee Supreme Court denied July 6, 1993). There, a sewer back-up also caused damage to Lee’s business. Citing Smith v. City of Covington, above and other cases, the court held that there was no allegation in Lee’s complaint that the city had actual or constructive notice of the defective sewer.
Negligence of municipal employee/s must be alleged for suit brought under § 29-20-205
In Lee v. City of Cleveland, above, Lee’s suit alleged that the city “failed to exercise due care to maintain the [sewer] system....”, and that the city had failed “to adequately design, install or maintain the sewer system...” [At 348] But the Court declared that Tennessee Code Annotated, § 29-20-205 provides that:
Immunity of suit for all governmental entities is removed for injury proximately caused by a negligent act or omission of any employee within the scope of his employment ... [At 348] [Emphasis is the Court’s.]
The complaint was defective on this point, declared the Court, because:
In Gentry v. Cookeville General Hosp., 734 S.W.2d 337 (Tenn. App. 1987), the Middle Section of this Court stated:
A complaint against a governmental entity for tort must overtly allege that the tort was committed by an employee or employees of the governmental entity within the scope of his or their employment. A complaint which does not so state a claim for which relief can be granted because the action is not alleged to be within the class of cases exempted by the statute from governmental immunity. [At 348]
However, apparently notice to the local government of a defective sewer would not be necessary when the plaintiff complaining of damages from a sewer back-up alleges the sewer back-up was caused by the negligence of a local government employee or employers. It was held in Morrow v. Town of Madisonville, 737 S.W.2d 547 (Tenn. Ct. App. 1987), with respect to Morrow’s injury by falling when the meter cover over which she was walking tilted, that the notice requirement contained in § 29-20-203 [notice requirement for injuries from defective, unsafe or dangerous streets] was not applicable because “The evidence establishes plaintiff’s injuries were due to a city employee’s negligence and not a dangerous or defective condition of the sidewalk. The applicable statute is T.C.A., § 29-20-205 ....” [“Immunity from suit ... is removed for injury proximately caused by the negligent act or omission of any employee within the scope of his employment...”] [At 547]
One Year statute of limitations under TGTLA generally
Another business was damaged by a sewer back-up in Shaw v. Cleveland Utilities Water Division, 2009 WL 4250157 (Tenn. Ct. App.), on August 30, 2005. Shaw did not sue Cleveland Utilities until almost three years later, on August 6, 2008. By the time Shaw filed suit against Cleveland Utilities, the city’s insurance company, GAP, had already paid a part of the claims, including some clean-up costs by Servpro. The Court noted that, “The plaintiff’s affidavit asserted that both Cleveland Utilities and GAB [Cleveland Utilities insurer] held GAB out as the insurer. The plaintiff also asserted, “‘they approved my claim.’” The plaintiff later argued that his complaint was that, “They [GAP] had made an agreement. It’s a lawsuit to enforce their agreement to meet the damages in this case.” [At 3]
While the Court complimented the plaintiff on that “brilliant legal argument,” it rejected it, declaring that there was no contract in the case, the only cause of action being under the TGTLA. The Court declared that
As a governmental entity, Cleveland Utilities is immune from suit except as expressly provided for in the TGTLA. Tenn. Code Ann. § 29-20-201 (Suppl 2009); Doe v. Coffee County Board of Edu, 852 S.W.2d 899, 906 (Tenn. Ct. App. 1992). To the extent a claim can be brought against Cleveland Utilities, it must be “brought in strict compliance with the terms of the GTLA....” [At 4]
There were two defects in the plaintiff’s suit continued the Court. The first defect was that:
To the extent the complaint is construed to allege liability on the part of Cleveland utilities for damages after the fact of the sewer overflow based upon persons who were the “agents” of Cleveland Utilities but not the employees of Cleveland Utilities, immunity is not removed and the complaint fails as a matter of law. See Lee v. City of Cleveland, 859 S.W. 2d 347, 348 (Tenn. Ct. App. 1993) (must overtly allege that the sewer overflow was the result of the negligent act of an employee acting within the scope of employment to place the claim with the “class of cases excepted by the statute) ....” [At 4]
The second defect was that:
To the extent the complaint is construed to allege that the damage was caused by the negligent act of an employee of Cleveland Utilities, it was untimely unless “commenced within twelve (12) months after the cause of action [arose.].” Tenn. Code Ann. § 29-20-305(b). [At 4]
The only employee mentioned in the plaintiff’s complaint was a David Orr, who had acted as a go-between for Cleveland Utilities, Shaw and GAP, the last time apparently in early May, 2007, when he promised Shaw he would call GAP and make it resolve Shaw’s claim. But on May 7, 2007, Shaw received GAP’s letter explaining that it had closed its file on the claim. That date, concluded the Court, was the last date any cause of action for Shaw arose, which was still past the one year statute of limitation.
The Court also held that the one year statute of limitations that applies to cases brought under the TGTLA does not apply to other parties, in this case to GAP and to Servpro, but held that it was one year under other statutes. The statute of limitations also applied to Servpro and to GAP, held the Court.
Nuisance and taking of property
We saw in Smith v. City of Covington, above, that it has been held that sewer back-ups that have been brought on nuisance grounds are handled under the TGTLA. However, that appears not to be true where the suit is brought as an inverse condemnation or as a nuisance type taking. In Edwards v. Hallsdale-Powell Utility District, 15 S.W.3d 461 (Tenn. 2003), two property owners whose homes were flooded by sewer-back-ups at least twice claimed their value of their homes had been reduced to zero and had resulted in a taking of their property.
The Court rejected their claims. It acknowledged that Tennessee had an eminent domain and inverse condemnation statutes, found at Tennessee Code Annotated, §§ 29-16-101 to 29-16-127, and 29-17-101 to 29-17-1201, and that:
“Inverse condemnation” is the popular description for a cause of action brought by a property owner to recover the value of real property that has been taken for public use by a governmental defendant even though no formal condemnation proceedings under the government’s power of eminent domain have been instituted.... [At 465]. [Citations omitted by me.]
There were two such kinds of inverse condemnations, continued the Court: “Physical occupation takings,” and “nuisance type takings.”
The reason the Court rejected the Edwards’ claim was that:
To constitute a taking under either line of cases, however, some action on the part of the governmental defendant is required. As we have held, a taking occurs when a governmental defendant with the power of eminent domain performs “any action ... which destroys, interrupts or interferes with the common and necessary use of real property of another.” Vrandenberug, 545 S.W.2d at 735 emphasis added [by Court]. In each of the cases in which this Court has found that a taking has occurred, the governmental defendant performed a purposeful or intentional act for the public good that resulted in damage to a plaintiff’s property or property rights.... [At 466]
Citing case law from Tennessee and other states, the Court concluded that:
In the present case, the damage to the plaintiff’s property was not caused by a purposeful or intentional act of HPUD. In their claim for inverse condemnation, the plaintiffs allege that the “defendant has ruined and therefore taken their homes as a result of the sewerage overflow.” The plaintiffs do not allege, however, that HPUD performed any purposeful act that resulted in damage to their homes. The backup was most likely caused by tree roots entering the line, not by any purposeful or intentional act on the part of HPUD. If the backup was caused by the failure of HPUD to meet its obligation to operate and maintain its sewer system as alleged, its failure would constitute negligence, not a taking. [At 466] [Emphasis is mine.]
Indeed, this case was “remanded to the trial court on the plaintiff’s remaining claims under the Governmental Tort Liability Act.” [At 467]
The above cases reflect sewer back-up cases that have been resolved by the Tennessee Supreme Court and the Tennessee Court of Appeals. They may give one a distorted view of the ultimate fate of most sewer back-up cases. Most of them may be resolved by local governments before they ever reach the courts, and many of those that become cases may be finally resolved by the trial courts. What the above cases probably do show is that most cases brought under the TGTLA generally, and most sewer back-up cases in particular, are resolved by Tennessee’s higher courts by a strict reading and application of the TGTLA. If that is true, that fact is bound to influence how local governments and their insurers themselves approach such cases.