State’s high court rules in contractor immunity case (UPDATE)

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After 5-½ years of legal battles, Mark Showers has a state Supreme Court opinion supporting his argument that contractors should not have lawsuit immunity simply because they are working on public projects.

Showers, the owner of an Oshkosh appraisal and real-estate company, now must show that a particular company, Rhinelander-based Musson Brothers Inc., was negligent when work it performed resulted in the flooding of his business’ basement. The Supreme Court’s decision in the case of Showers Appraisals LLC v. Musson Bros. Inc., released Thursday, established the principle that contractors cannot receive governmental immunity from lawsuits without proving they were acting in accordance with “reasonably precise instructions” when an alleged mishap occurred.

Showers said the ruling is a first step in his quest to prove Musson Brothers botched a sewer project and caused his business’ basement to be flooded with 7 feet of water.

“I believe that what they did was wrong,” he said. “This was the only angle that they had. They said they had immunity, which was a false premise.”

The case concerns a storm-sewer replacement Musson Brothers undertook in 2008 for the state and the city of Oshkosh. The roughly $4.4 million project occurred on the city’s Ohio Street, which also is Wisconsin Highway 44.

After winning the contract, Musson Brothers tore up the entire length of Ohio Street, rather than going block-by-block. According to the Supreme Court, some of the parties in the case said removing the roadway and underlying storm-sewer system all at once violated a previous agreement, although that contention was not supported by documentary evidence.

According to court documents, city officials expressed concerns about the way the project was proceeding, saying the absence of the sewers could lead to flooding. A Wisconsin Department of Transportation engineer who kept a log of the project’s progress responded by saying that a department specification gave the contractor sole responsibility “for the means, methods, techniques, sequences, and procedures of construction.”

On June 12, 2008, four days after a storm had led to some flooding, heavy rains caused about 7 feet of water to rise up in the basement of the building where Showers ran two businesses, Showers Appraisals LLC and Real Marketing LLC. The resulting pressure ruptured the basement’s floor.

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Showers ran a sump pump throughout the storm. But because the sewers were disconnected, the device merely forced water into the roadbed, from where it could seep back into his building.

The damage to his property was estimated at $140,000, and he was forced to move his businesses so his building, which had been completed about six months before, could be cleaned.

In deciding that Musson Brothers was not entitled to governmental immunity, the Supreme Court overturned decisions made by circuit and appellate courts. The Supreme Court also sent the case back to the circuit court, where Showers can try to show Musson Brothers’ negligence.

The majority opinion in the case, attributed to Justice Pat Roggensack, said Musson Brothers failed two tests of whether it was entitled to governmental immunity. Besides not proving it was acting on “reasonably precise instructions,” the company did not show that its acts were “done in the exercise of legislative, quasi-legislative, judicial or quasi-judicial functions.”

The latter language protects governments from the consequences of “discretionary decisions,” which, in this case, could have concerned the choice of one sewer design over another, according to the majority opinion. In tearing up the roadway all at once, though, and making similar choices, Musson Brothers was acting under the WisDOT specification that made the company responsible for the means and methods of construction, the court ruled.

“In future cases,” according to the majority opinion, “governmental contractors seeking immunity should include in their pleadings sufficient facts to demonstrate that the governmental entity from which the contractor would derive immunity was engaged in one of the functions for which immunity is available.”

A concurring opinion in the case, attributed to Justice Patrick Crooks, raised concerns that the majority’s language leaves unclear what contractors must do to prove they are entitled to governmental immunity.

But Martha Heidt, a lawyer who filed an amicus brief in the case on behalf of the Wisconsin Association of Justice, said the decision merely adheres to what is spelled out in state statutes.

“I think it’s pretty clear that as long as the contract says [contractors] are responsible for the means and manner in which the job was done,” she said, “they are going to be responsible for the accidents.”

She said the ruling will make it harder for construction companies to claim immunity in cases involving anything but accusations of faulty design.

Showers said he is glad those sorts of legal matters are behind him and he can now pursue his claims against Musson Brothers. He said about 20 other similarly harmed Oshkosh property owners at one time also had lawsuits against the company, but they all bowed out because of the expense, leaving him by himself.

“It’s been a long road,” he said. “I’m really happy about the decision.”