Certification of class action appropriate in suit for nuisance, trespass and negligence against grain processor

by Gary Taylor

Freeman, et al., v. Grain Processing Corp.
Iowa Supreme Court, May 12, 2017

Residents who live near Grain Processing Corporation’s (GPC) corn wet milling plant in Muscatine brought an action for nuisance, trespass and negligence against GPC for its manner of operation of the plant and the resulting “haze, odor, and smoke” emanating from the plant.  The residents moved to treat the claim as a class action suit on behalf of all residents suffering the effects of the plant’s operation.  GPC resisted the motion to certify the case as a class action, arguing that the claims of the residents were “inherently individual, and as such, individual issues predominated over those common to the class.”  The district court granted class certification.  Noting its authority to modify or decertify the class at any time, the court divided the class into two subclasses: one for members in close proximity to GPC, and the other for those in peripheral proximity.  GPC appealed.  Certification of the class action suit was the sole issue before the Iowa Supreme Court (in an earlier case, posted here, these same parties litigated the applicability of the Clean Air Act to local claims for nuisance).

Under Iowa Rules of Civil Procedure 1.261 – 1.263 a district court may certify a class action if “the class is so numerous…that joinder of all members…is impracticable” and “there is a question of law or fact common to the class.”  In addition, a class action should be permitted for the “fair and efficient adjudication of the controversy” and “the representative parties fairly and adequately will protect the interests of the class.”  The Court of Appeals first noted that caselaw requires that “a failure of proof on any one of the prerequisites is fatal to class certification,” but also that, at this stage, “the proponent’s burden is light.”  The Court of Appeals does not review the decision to certify the class itself, but simply whether the district court abused its discretion in doing so.

GPC argued that the district court erred because the requirement of commonality was not met, and that in this case individual issues predominate over common questions of law or fact.

Commonality.  It is not sufficient that class members have all suffered a violation of the same provision of law.  Rather, claims must depend on a common contention of an issue that central to the validity of each one of the claims.  GPC argued that the named plaintiffs did not suffer the same injury of other class members; particularly in the types of harm suffered and the degree of proof needed to prove causation.  The district court initially agreed, noting that two of the plaintiffs –the one closest to GPC and the one furthest – suffered significantly different “concentration totals” of particulates tested in the air.  The Court resolved this disparity, however, by creating the two subclasses and grouping the plaintiffs accordingly.  Thus the plaintiffs within each subclass had identified common questions of extensiveness of emissions, what caused them, what precautions were taken, and economic impact.

Predominance.  A common question does not end the inquiry.  Courts consider class actions appropriate “only where class members have common complaints that can be presented by designated representatives in the unified proceeding.”  It “necessitates a close look at the difficulties likely to be encountered in the management of a class action.”  The district court spent considerable time addressing the predominance question in its ruling.  It concluded “While variations in the individual damage claims are likely to occur and other sources of emissions may pose unusual difficulties, common questions of law and fact regarding defendant’s liability predominate over questions affecting only individual class members such that the subclasses should be permitted for the fair and efficient adjudication of the controversy.”  After going through the standards of proof for negligence, trespass, and nuisance claims, the Court of Appeals agreed with the district court that common questions of law, with common evidentiary findings required of each, will predominate the action, and that therefore class action treatment is appropriate.

Class action certification was affirmed by the Court of Appeals.

Landowner negligent in discharge of stormwater over neighbor’s property

by Hannah Dankbar

A.D., L.L.C. v 2004 SC Partners L.L.C.
(Iowa Court of Appeals, November 26, 2014)

2004 SC Partners L.L.C. is the current owner of Morning Hills Apartments.  A.D., L.L.C. bought property adjoining Morning Hills Apartments in 2009 and the two parties have had many conflicts since then. Starting in 2009 A.D. began to receive notices from the city of Sioux City and the Iowa Department of Natural Resources to solve a public nuisance relating to soil erosion and silting. The hillside between Partners and A.D. is highly erodible. A.D. filed an equity action in July 2011 petitioning to have Partners help solve this problem. A.D. sought money judgments for past damages and an order for Partners to abate the issue. Partners answered by saying this issue was already addressed in court and solved privately with A.D. saying they would solve the problem and that the damage was their fault. Partners filed a counter claim that A.D. had failed to comply with the settlement agreement and that they should stabilize the slope and to compensate Partners for the damage to their land from the prior suit.

In 2012 Partners filed a motion for summary motion, which A.D. resisted. A.D. said that the water damage is a result of Partners’ water drainage system that changed the natural flow of water and that they have failed to maintain the system. The district court cited the “general rule” that the dominant estate is entitled to drain surface water in a natural water course of the servient owner’s land, and if damage results the servient landowner is without remedy, unless there is a substantial increase in drainage that results in actual damage. Citing Oak Leaf Country Club v. Wilson, the court also observed, “A corollary of the rule is an overriding requirement that one must exercise ordinary care in the use of his property so as to not injure the rights of neighboring landowners.”

The court found the essential issue in this case to be whether Partners is discharging water in an unnatural manner, has changed the method of drainage in such a way that it has become liable for damages, or, stated another way, whether it is exercising ordinary care in the use of its property so as not to injure the rights of neighboring landowners.

It concluded there were questions of fact as to whether or not “Partners has violated a duty to use ordinary care in the maintenance of [its] property, and whether or not a private nuisance has been established.” The district court therefore denied the motion for summary judgment.

Both sides testified that they attempted to address the problem. A.D. built a retaining pond to accommodate the water and Partners asserted they would add piping, but were waiting for payment from the 2009 suit. A variety of engineers testified that the structure was not functioning to its’ maximum capacity. The court concluded A.D.’s petition had sufficient facts to plead an alternative claim of negligence. The court decided that Partners had a duty to be aware of dangerous property conditions (the degraded drainage system) and failed to fix the problem given a reasonable amount of time.

The trial court decided that A.D. suffered $92,800 in damages, but that it had purchased the property knowing there was a problem with the drainage system and had no plans to remedy the situation. The court decided that A.D. was 65%, and Partners 35%, at fault for the property damage. Under Iowa’s Comparative Fault Act Partners argued that A.D. therefore could not recover damages; however, the court found it could not conclude that something other than Partners’ failure to abate the drainage system was the only cause of damage to A.D.’s property. The court also ruled that the easement a dominant estate has on a servient estate cannot provide a defense to a negligence claim.

The court enjoined Partners from continuing to allow its drainage system to function without repair and order it to take whatever action is necessary to ensure that its drainage system is properly functioning at its own cost. The court ordered Partners to allow A.D.  access to Partners’ property, if required, to tie into a properly functioning drainage system, which will allow storm water to safely traverse A.D.’s property.

Iowa DOT cannot claim discretionary immunity from flood damages resulting from Highway 63 bridge

by Gary Taylor

Schneider, et. al. v. State of Iowa
(Iowa Supreme Court, September 3, 2010)

In the late 1980s, the Iowa Department of Transportation (DOT) developed a plan to relocate a portion of Highway 63 to bypass the city of Denver, Iowa. The plan called for the construction of a four-lane divided highway along the west side of the city and a bridge spanning Quarter Section Run Creek, a stream flowing through Denver. The original construction of the bypass commenced in 1993 and concluded in 1994.
In a flood insurance study commissioned by the city in 1990, the creek was designated as a “regulatory floodway.” A floodway “‘is the channel of a stream plus any adjacent flood plain areas that must be kept free of encroachment so that [a] 100-year flood can be carried without substantial increases in flood heights.’” The bridge and related structures were designed to accommodate a 50-year flood event.  A higher, 100-year flood standard was typically used by the DOT when sizing bridges in flood insurance study areas and in other locations where the risk of high damage would be created for upstream businesses and homes. The State’s expert conceded the higher standard would have been utilized in the design of the bridge had it been designed for construction in a floodway, but noted the State did not learn the site had been designated as a floodway until after the bridge was built.

In May 1999, Denver experienced an extraordinary rain event and resulting flood which damaged thirty-five homes and thirty-four businesses. The intensity of the rain produced a volume of rainwater in the floodway consistent with the magnitude of a 250-year flood.  A flood study undertaken by the United States Department of Agriculture Natural Resources Conservation Service concluded the embankment constructed for the bypass “cut off a large portion of the floodway,” causing water moving through it to “back up” during the 1999 event. Computer models prepared for the study illustrated that the bypass structures increased the depth of the 1999 flood waters by as much as three feet in certain areas of the city and caused flooding in a part of the city that would not have flooded but for the construction of the bypass. The models also produced evidence tending to prove the bridge and related structures would have caused flood waters in a 100-year flood event to rise higher in some parts of Denver upstream from the bridge than would have been the case had the bridge and related structures not been placed in the floodway. Following a lengthy period of study and investigation of a range of options, the State chose to redesign and extend the bridge. The reconstruction of the bridge and the reconfiguration of the floodway in 2004 and 2005 modified the elevation of the floodway along the creek and substantially enhanced the capacity of the floodway to convey water away from the city.  The reconstruction brought the bridge and related structures into substantial compliance with the 100-year flood standard.

Claims addressing the 1993 bridge.  Owners of several properties damaged in the 1999 flood filed suit alleging the State negligently designed and constructed the first bridge. The landowners alleged the State breached a common-law duty by designing and constructing the bridge in a manner that obstructed the floodway and increased the depth of floodwater during the 1999 event. The landowners further alleged the State breached a duty derived from Iowa Code section 314.7 proscribing disruption of the natural drainage of surface water when improving or maintaining a highway. The State’s answer asserted immunity from liability under Iowa Code section 669.14 because the design and construction of the project were discretionary functions and because the project conformed with a generally recognized engineering or safety standard, criteria, or design theory prevailing at the time of its design and construction or reconstruction. The district court found in favor of the DOT, and the Court of Appeals affirmed based on the immunity provisions in 669.14(1). The Iowa Supreme Court granted further review to determine whether the State’s immunity for discretionary functions was applicable under the circumstances presented in this case.

After addressing several procedural matters, the Iowa Supreme Court focused on the issue of discretionary function immunity.  The Court disagreed with the conclusions of the lower courts.  “Given the clear statutory and regulatory prohibitions against the creation of floodway encroachments causing increased risk of loss to upstream properties in the event of a 100-year flood, we conclude the discretionary function defense has no application in this case. The State’s employees could not choose to ignore these prohibitions, and they therefore did not have available to them a choice to design and build encroaching, noncompliant structures in the floodway. As there was no such choice available, the employees of the State who designed and built the bridge did not perform discretionary functions for which section 669.14(1) would offer immunity.”  Because a fact issue remains on the question of whether the original design and construction of the bridge as a floodway encroachment violated prevailing engineering standards in existence at the time of the original design and construction of the project, and/or violated the DOT’s responsibility to keep from diverting natural drainage waters onto adjoining landowners, this portion of the case was remanded. 

Claims addressing the reconstructed bridge.  The landowners claimed permanent devaluation of their properties by the reconstruction of the bridge and rechanneling of the floodway, saying that the reconstructed bridge still encroaches upon the floodway.  However, the Court concluded that the record demonstrates the reconstruction design satisfied the 100-year design standard and achieved the approval of the DNR. The plaintiffs failed to produce evidence tending to prove the reconstructed bridge does not comply with the 100-year standard, the generally accepted engineering standard in existence at the time of the reconstruction.  Therefore, the DOT was entitled to immunity under Iowa Code 669.14(8) which grants immunity if construction was “in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction.”

Claim allowed against city for negligent reconnection of severed sewer line in 1978.

by Gary Taylor

 

ST. PAUL’S EVANGELICAL LUTHERAN CHURCH v. WEBSTER CITY (link to case here)

(Iowa Supreme Court, June 12, 2009)

 

Statute of repose did not bar church’s claim against city for negligent severing, then reconnection of sewer line during 1978 water main installation project.

 

The City’s liability turned on the interpretation of whether the water main installation project was an “improvement to real property” under Iowa Code 614.1(11). This provision is a statute of repose that bars a claimant from bringing “an action arising out of the unsafe or defective condition of an improvement to real property . . . more than fifteen years after the date on which occurred the act . . . [that] cause[d] . . . the injury. . . .”  Thus, regardless of when an injury occurs, this statute of repose terminates any right of action fifteen years after the date of the improvement.  If the statute applies, St. Paul’s claim would be barred since the reconnection of St. Paul’s sewer line occurred twenty-seven years before sewage backed up into the church and this action was commenced.  The City argued that work on St. Paul’s sewer line should be considered part of the water main improvement project because cutting St. Paul’s sewer line would have not been done but for the water main installation project. St. Paul’s, on the other hand, argued that the reconnection of its sewer line was not an improvement, but rather a repair resulting from the water main project that improved neither the function nor the value of the sewer line.

 

The district court found in favor of the city, reasoning that the retrofit of the Church’s sewer line was a collateral step in and a consequence of the new water main’s installation.  Further, and because of the faulty retrofit, the water main improvement project was defective at that time and at that location.  It was because of that defect

that the Church eventually incurred its damages.

 

The Supreme Court reversed.  Relying on the testimony of a building official and inspector employed by Webster City for over forty-one years who is also a licensed plumber, the Court determined that it would have been possible to complete the water main project without touching St. Paul’s sewer line and therefore the negligent reconnection of St. Paul’s sewer line was not part of the project to improve the City’s water main. It further found that the reconnection of the sewer line (and not the water main project) also was not an “improvement to real property” as set forth in case law.  While it was “a permanent addition to or betterment of real property that involved the expenditure of labor or money,’ it did not “enhance the property’s capital value,” nor was it “designed to make the property more useful or valuable.” Rather than an improvement to real property, the reconnection of the sewer line was more appropriately characterized as an ordinary repair.  Therefore, the statute of repose did not bar St. Paul’s claim.

 

 

In 1978, during Webster City’s water main installation project, a city contractor severed and then negligently reconnected St. Paul’s Evangelical Lutheran Church’s gravity flow sewer line. Twenty-seven years later, in 2005, sewage backed up into the church resulting in $30,000 in damages. St. Paul’s brought a suit against the City to recover damages.

 

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