Appeal from Superior Court, Snohomish County; 91-2-04498-6 Honorable Larry E. McKeeman, Judge. Judgment Date: 9-15-93. Original Opinion of March 13, 1996,
Authored by: Barbara A. Madsen. Concurring: Barbara Durham, James M. Dolliver, Richard P. Guy, Gerry L. Alexander. Dissenting: Charles W. Johnson, Richard B. Sanders, Charles Z. Smith, Philip A. Talmadge
The opinion of the court was delivered by: Madsen
MADSEN, J. -- In November 1990, flood waters twice overflowed the Stillaguamish River and overtopped dikes surrounding the City of Stanwood's sewage treatment lagoon, resulting in floodwaters and sewage flowing out of the lagoon and onto adjacent property owned or rented by plaintiffs. Plaintiffs sued the City, asserting a number of claims, including claims that the City negligently allowed the lagoon to overflow, and negligently designed, constructed, and maintained the sewage plant, pump station, and sewage treatment lagoon. At issue is whether the trial court erred in allowing the City to introduce evidence of its efforts to obtain federal and state grant funds to improve the sewage lagoon as part of an overall flood control plan. The City used the evidence in an attempt to show that it acted reasonably and was not negligent by failing to raise the level of the dikes surrounding the lagoon at an earlier time, when, plaintiffs argue, the City had sufficient funds to do so. We affirm the Court of Appeals' holding that the trial court did not abuse its discretion by admitting the evidence.
Since 1962, the City has operated a 40-acre sewage treatment facility and oxidation lagoon on a floodplain near the Stillaguamish River. Sewage pumped from the City is treated and then discharged into the river. Lagoon dikes surround the facility. The parties dispute the height of the lagoon dikes, with plaintiffs' claiming the dikes are as low as 6 1/2 feet in some places and the City maintaining the dikes are 9 1/2 -10 1/2 feet. The parties also dispute the height of a 100-year flood, with plaintiffs claiming the 100-year flood level is 11-12 feet and the City maintaining the level is 9 1/2 feet. Plaintiffs properties are on a peninsula surrounded by a horseshoe-shaped section of the Stillaguamish River, and are adjacent to the land where the sewage treatment facility is located.
Periodic flooding has occurred in the City and surrounding area as a result of high tides and high Stillaguamish river flows. The City knew that high floods could result in flooding of the lagoon. In the late 1970's an engineering firm recommended that the City raise the dikes surrounding the lagoon to 12 feet because floodwaters had nearly breached the dikes during floods. In 1982, a private engineer providing engineering services to the City estimated that the dikes could be raised at a cost of about $50,000.00. An application was submitted to the Department of Ecology for funding, which turned down the application. During the early and mid-1980's, the City considered plans for flood control. Following a flood in 1986, engineers prepared a report recommending that during a five-year period ending in 1992 the City raise the level of the dikes and make other improvements to handle floodwaters, including building a dam across a nearby slough and placing floodgates on the Stillaguamish River. In 1987, an application for a federal Housing and Urban Development (HUD) block grant was submitted in connection with a proposed flood improvement control plan, which included raising the lagoon dikes. HUD agreed to provide funds beginning in 1989. Prior to, and following this agreement, permitting, land acquisition, and design were undertaken by the City and its engineer.
In November of 1990, before the lagoon dikes were raised, heavy rains and warm temperatures caused severe flooding along rivers throughout western Washington, including the Stillaguamish. Twice, floodwater flowed over the top of the lagoon dikes into the lagoon, and then out, spilling sewer effluent and floodwaters across plaintiffs' properties. The November 10, 1990, flood peaked at 10.51 feet, and the November 24, 1990, flood peaked at 10.63 feet. Early in 1991 the City raised the height of the dikes to 12 feet.
Plaintiffs sued the City of Stanwood, alleging their properties were damaged as a result of the floods. They claimed the City was negligent in designing, constructing, and maintaining the sewage treatment lagoon and facility, and also asserted nuisance and inverse condemnation claims. The City moved for summary judgment on several grounds. The trial court granted the City's motion on the inverse condemnation claim, a claim of negligence in fighting the floods, and a claim of negligence in design, construction, and maintenance of the adjacent slough. Later, the City moved for summary judgment on the remaining negligence and nuisance claims, asserting the defense of discretionary immunity and that the public duty doctrine barred plaintiffs' action. This motion was denied.
Plaintiffs then moved in limine to preclude the City from presenting evidence that it had insufficient funds to make repairs or changes in the dikes to prevent floodwaters from overtopping the dikes. The City's counsel argued that evidence of efforts to obtain grant funds and the lengthy process involved was relevant to the reasonableness of the City's response to the perceived need to raise the dikes. She explained that the City did not intend to claim that it lacked funds to raise the dikes. The trial court denied the motion, stating that the question of reasonable efforts was for the jury. Later, the court reaffirmed this ruling, but stated that if the City presented evidence of its efforts to obtain grant funds, plaintiffs' would be permitted to show that the City had sufficient funds of its own to raise the dikes. At trial, the City presented evidence of its efforts to obtain grant funds, and the process involved in the HUD funding. Plaintiffs presented uncontroverted evidence that the City had sufficient funds to raise the level of the dikes before the HUD grant application process, and well before the 1990 floods.
The jury was instructed on the City's duty, in connection with the sewer lagoon and treatment facility, to adjacent property holders. Plaintiffs proposed additional instructions on the City's duty, which the trial court refused to give. The trial court also refused to give plaintiffs' proposed instructions directing the jury that it could not consider the evidence of the City's efforts to obtain grant funds.
The jury returned a verdict in favor of the City on the negligence and nuisance claims. The trial court denied plaintiffs' motion for a judgment notwithstanding the verdict or a new trial. With regard to the evidence of the City's grant application process, the court reasoned that this evidence is relevant to the cost-benefit analysis that a municipality goes through in reacting to concerns about the height of the dikes . . . as well as the timing of raising the dikes. . . . It was a question for the jury whether the dikes were properly designed to begin with and also whether the timing of the decision to raise the dikes was reasonable.
Plaintiffs' appealed directly to this court, which transferred the appeal to the Court of Appeals. That court affirmed in a partially published opinion. Bodin v. City of Stanwood, 79 Wash. App. 313, 901 P.2d 1065 (1995), review granted, 128 Wash. 2d 1025 (1996). Plaintiffs then sought discretionary review by this court, which was granted.
Initially, we note that while the City cross-appealed the issues of discretionary immunity and the public duty doctrine, it asks that these issues be addressed only if this court holds that the evidence of attempts to procure grant funds is inadmissible. Because we hold the evidence admissible on the question of negligence, we do not decide whether the City would be otherwise entitled to discretionary immunity or whether this action would be barred under the public duty doctrine.
RCW 4.92.090 provides that tort immunity of cities and towns is abolished whether they are acting in a governmental or proprietary capacity, and that cities and towns will be liable "to the same extent as if they were a private person or corporation." *fn1 Plaintiffs asserted that the City of Stanwood was negligent in the construction, design, and maintenance of the sewer lagoon, tide gate and pump station. They argue that the City negligently failed to raise the level of the lagoon dikes after it had knowledge ...