Minnesota Cities Magazine
More from Nov-Dec 2016 issue

From the Bench: Is Engineering Contractor Entitled to Official Immunity?

Official Immunity
Nathan and Sanna Kariniemi sued the City of Rockford, claiming that its negligence in designing and overseeing the construction of a stormwater drainage system created a nuisance that resulted in the flooding of their property. The city made a motion for summary judgment, Illustration of house floodingclaiming it was entitled to vicarious official immunity because the city engineer’s decisions in designing and overseeing the system’s construction were discretionary decisions requiring the exercise of professional judgment. The Kariniemis argued that official immunity did not apply because the city engineer was not a city employee, but was a private engineering firm that performed engineering services under a contract.

The district court granted summary judgment in the city’s favor on the negligent design claim, but did not address the nuisance claim. The Minnesota Court of Appeals reversed in part and granted summary judgment in the city’s favor on both claims. The Minnesota Supreme Court affirmed and held that the city was entitled to vicarious official immunity on both claims because the private engineering firm performed discretionary governmental functions in close coordination with the city, and therefore, qualifies as a public official eligible for official immunity. The Supreme Court noted that the contract between the city and the engineering firm provided that the firm would act as the city’s agent and perform the official functions of “city engineer” on the city’s behalf regarding the feasibility, design, and progress of the system’s construction. Kariniemi v. City of Rockford, 863 N.W.2d 430 (Minn. 2016). The League of Minnesota Cities Insurance Trust represented the city.

Road acquisition
In 2003, as part of a project to upgrade trunk highway 169, the Minnesota Department of Transportation (MnDOT) condemned a strip of property and constructed a new road, Hanlon Drive. The state later conveyed Hanlon Drive to Belle Plaine Township under Minnesota Statutes, section 161.16, subdivision 4(b), which authorizes MnDOT to convey to a county, city, or other political subdivision all or part of the right of way of an existing road that is no longer part of the trunk highway system by reason of MnDOT order.

In 2014, the owner of J&W Asphalt, which abuts Hanlon Drive, sued the township, seeking: (1) a declaratory judgment providing that Hanlon Drive is a public road, and (2) temporary and permanent injunctive relief ordering the township to maintain Hanlon Drive. The township argued that Minnesota Statutes, section 161.16, subdivision 4(b) contains an implicit acceptance requirement, and that because the township had never formally accepted Hanlon Drive, it is not responsible for its maintenance. The district court issued an order concluding that the township is responsible for maintaining Hanlon Drive. The Minnesota Court of Appeals affirmed and held that the statute is unambiguous and does not contain a requirement that a political subdivision must accept MnDOT’s conveyance of a road for it to be effective. The Court of Appeals also held that Hanlon Drive is a public road and ordered the township to maintain it. J & W Asphalt, Inc. v. Belle Plaine Township, N.W.2d (Minn. Ct. App. 2016).

Settlement agreement
After injuring her back at work, Virgenia Ryan entered into a “full, final, and complete settlement” of her claims for workers’ compensation benefits related to the injury with her employer, Potlatch Corporation in 2003. In 2013, Ryan filed a petition seeking additional benefits, claiming her back injury had resulted in depression and anxiety and the need for bariatric surgery. Potlatch moved to dismiss the petition on the grounds that Ryan was required to first bring a motion to set aside the 2003 settlement agreement before bringing a new claim for additional benefits.

The workers’ compensation judge denied the motion, reasoning that the 2003 settlement agreement does not foreclose claims for the same incident that are not mentioned in the agreement unless there is evidence that those claims were contemplated by the parties at the time they entered into the agreement. The Workers’ Compensation Court of Appeals affirmed. The Minnesota Supreme Court reversed and remanded the case, holding that Ryan must petition to vacate the 2003 settlement agreement before proceeding with her current claim. The Supreme Court reasoned that a workers’ compensation settlement agreement may close out not only the benefits claim for the compensable injury, but also claims for conditions and complications arising out of that injury that the parties reasonably anticipated at the time of the settlement agreement. Ryan v. Potlatch Corp., 882 N.W.2d 220 (Minn. 2106).

60-Day Rule
John Perschbacher applied to Freeborn County for a Illustration of 60-day calendarconditional use permit (CUP) to construct a barn capable of housing 2,490 swine. On Feb. 3, 2015, the county voted on a resolution “to approve the conditional use request,” and the resolution failed on a 2-3 vote. That same day, the planning and zoning administrator wrote a letter to Perschbacher stating that “the board voted and did not approve your conditional use permit request” and that the “board will notify you in writing of their decision after the next scheduled meeting.” The letter also notified Perschbacher that the county was exercising its right under state law to extend the 60-day statutory period for completing the CUP application process by an additional 60 days. At its meeting on Feb. 17, 2015, the county unanimously voted to approve a statement of reasons for the CUP denial that summarized the comments that had been made against the application at the meeting on Feb. 3. Perschbacher appealed, claiming two things: (1) that his application was automatically approved under the 60-Day Rule because the county failed to contemporaneously state the reasons for the denial on the record at the Feb. 3 meeting, and (2) that the county’s decision was arbitrary, capricious, and unreasonable. The 60-Day Rule provides in part that “when a vote on a resolution … to approve a request fails for any reason, the failure shall constitute a denial of the request provided that those voting against the motion state on the record the reasons why they oppose the request.” The Minnesota Court of Appeals ruled in the county’s favor, holding that the 60-Day Rule does not require that board members who vote against a resolution to approve a request state their reasons for opposing the request on the record at the same time of the vote. The Court of Appeals also concluded that the county had a rational basis for denying the application. Perschbacher v. Freeborn County Bd. of Comm’rs, N.W.2d (Minn. Ct. App. 2016).

Conflicting data classifications
Michael Harlow was fired from his job as a psychiatrist at the Minnesota Security Hospital after an incident with a patient. Harlow sued the Minnesota Department of Human Services (DHS); David Proffitt, the hospital administrator; and Ann Barry, DHS deputy commissioner, Illustration of secure dataalleging violations of the Minnesota Government Data Practices Act (MGDPA) and defamation based on statements Proffitt and Barry made about the incident and Harlow’s termination. The DHS conducted both an employment investigation and a licensing investigation. Under Minnesota Statutes, section 13.43, subdivision 2a, “the final disposition of any disciplinary action together with the specific reasons for the action and data documenting the basis of the action” are public data. But under Minnesota Statutes, section 13.41, subdivision 4, “active investigative data relating to the investigation of complaints against any licensee” is confidential data. The district court denied the summary judgment motion made by the DHS, Proffitt, and Barry. The Minnesota Court of Appeals reversed, holding that the data in the employment investigation became public at the time of Harlow’s firing, regardless of the ongoing licensing investigation.

The Court of Appeals also held that Proffitt and Barry were entitled to absolute immunity from the defamation claim. The Minnesota Supreme Court affirmed in part, and remanded in part. The Supreme Court held that personnel data consisting of an employment investigation report that is reclassified as public upon the final disposition of an employee disciplinary action remains public, even though the data is duplicative of data that is part of a licensing investigation. The Supreme Court also held that Barry, as DHS deputy commissioner, is entitled to absolute privilege when making statements within the scope of her statutory authority because a deputy commissioner functions as a top-level, cabinet-equivalent official. However, the Supreme Court concluded that Proffitt, as hospital administrator, was not entitled to absolute immunity and remanded the case to the Court of Appeals for a determination of whether Proffitt is entitled to qualified immunity. Harlow v. Minnesota Dept. of Human Servs., N.W.2d (Minn. 2016).

Written by Susan Naughton, research attorney with the League of Minnesota Cities. Contact: snaughto@lmc.org or (651) 281-1232.

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