Case Name: Donald Hillerby v. Town of Colchester
Court: Vermont Supreme Court
Jurisdiction: Vermont
Decision Date: 1997-11-26
Citations: 167 Vt. 270
Docket Number: No. 96-243
Parties: Donald Hillerby v. Town of Colchester
Judges: Present: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
Reporter: Vermont Reports
Volume: 167
Pages: 270–294

Head Matter:
Donald Hillerby v. Town of Colchester
[706 A.2d 446]
No. 96-243
Present: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
Opinion Filed November 26, 1997
Richard R. Goldsborough and Corinne P. Wadhams of Jarvis & Kaplan, Burlington, for Plaintiff-Appellee.
Richard C. Whittlesey of Roesler, Whittlesey, Meekins & Amidon, Burlington, and Frederick S. Lane III, Of Counsel, Winooski, for Defendant-Appellant.

Opinion:
Allen, CJ.
The following question has been certified for review by this Court pursuant to V.R.A.E 5(b): "Whether the traditional governmental/proprietary distinctions in municipal tort immunity law should be replaced with the so-called private-analog test as now employed in state tort claims under 12 V.S.A. § 5601?" Because of the Legislature's approval of the governmental/proprietary distinction and the complex policy issues involved, we hold that the abrogation and replacement of the distinction are matters for the Legislature, not the courts.
Plaintiff was riding his bicycle across a grassy area in the Town of Colchester when a manhole cover, over which he was crossing, collapsed. He sued the Town and others for injuries allegedly sustained during the occurrence. The Town filed a motion for summary judgment claiming sovereign immunity. In deciding the motion, the Chittenden Superior Court abandoned the established governmental/proprietary distinction in favor of the private-analog test, a test used to determine the liability of the State in tort actions. See 12 V.S.A. § 5601(a). It found that plaintiff satisfied the requirements of the test and denied the Town's motion. The court then granted a motion by the Town requesting permission to appeal the court's interlocutory order to this Court.
Municipal immunity is a common-law doctrine dating back in Vermont to the mid 1800s. See Baxter v. Winooski Turnpike Co., 22 Vt. 114, 123 (1849) (law does not provide remedy where individual sustains injury due to negligence of town). The immunity of a municipality, however, is not unlimited. Traditionally, courts have held municipalities liable only where the negligent act arises out of a duty that is proprietary in nature as opposed to governmental. The rationale for this is that municipalities perform governmental responsibilities for the general public as instrumentalities of the state; they conduct proprietary activities only for the benefit of the municipality and its residents. See Marshall v. Town of Brattleboro, 121 Vt. 417, 422, 160 A.2d 762, 765 (1960). This Court has applied the governmental/proprietary distinction for decades. See, e.g., Roman Catholic Diocese of Vt., Inc. v. City of Winooski Hous. Auth., 137 Vt. 517, 520, 408 A.2d 649, 651 (1979) (municipal housing project is proprietary activity not entitled to immunity); Lemieux v. City of St. Albans, 112 Vt. 512, 516, 28 A.2d 373, 375 (1942) (construction of public playground is governmental function, thus precluding municipal liability). Yet it has also criticized the doctrine and acknowledged its abandonment by other jurisdictions. See, e.g., Hudson v. Town of E. Mont pelier, 161 Vt. 168, 177-78 n.3, 638 A.2d 561, 567 n.3 (1993) (Vermont is in minority of states that follows distinction widely denounced as unworkable, unsound, and arbitrary); Marshall, 121 Vt. at 423-24, 160 A.2d at 766-67 (distinction produces anomalous results in factually similar cases). But see Kelly v. Town, of Brattleboro, 161 Vt. 566, 567, 641 A.2d 345, 346 (1993) (mem.) (applying distinction in same year that Hudson was decided).
In the present case, the Town argues that this Court should not abandon the governmental/proprietary distinction because the Legislature has explicitly and implicitly endorsed the doctrine. Plaintiff, however, urges this Court not to "shirk its duty and retreat into the safe haven of deference to the legislature." (Quoting Hay v. Medical Ctr. Hosp. of Vt., 145 Vt. 533, 543-44, 496 A.2d 939, 945 (1985)). He claims that the argument that "the issue is more appropriate for legislative resolution is wholly unpersuasive; such an argument ignores [this Court's] responsibility to face a difficult legal question and accept judicial responsibility for a needed change in the common law." (Quoting id. at 543, 496 A.2d at 945.) Plaintiff points out that municipal immunity and the governmental/proprietary distinction are common-law doctrines that a variety of courts have abrogated without legislative action. Yet this Court's ability to act does not turn on whether the doctrines in question are judicially created, but on whether the Legislature has expressed approval of these doctrines since their formulation. Such approval precludes judicial action. See Town of Milton v. Brault, 132 Vt. 377, 380, 320 A.2d 630, 632 (1974) (refusing to abolish municipal immunity because of Legislature's endorsement; distinguishing abandonment of doctrine by other state courts following legislative silence).
The Legislature first recognized sovereign immunity in 1960 when it adopted 29 V.S.A. § 1403, which waived immunity to the extent of coverage whenever the state, a county, or a municipality purchased liability insurance. See 1959, No. 328 (Adj. Sess.), § 14 (when governmental entity purchases liability insurance "it waives its sovereign immunity from liability to the extent of the coverage of the policy and consents to be sued"). The Legislature amended the statute in 1982 and 1989, eliminating the state from its coverage with the second amendment. See 1981, No. 213 (Adj. Sess.), § 1; 1989, No. 114, § 7. The enactment and amendments of § 1403 are an explicit acknowledgment of municipal immunity and an implicit recognition of the governmental/proprietary distinction. They also demonstrate the Legislature's intent to treat state and local governments differently, as well as its desire to ameliorate the possible harsh consequences of governmental immunity. See Marshall, 121 Vt. at 424, 160 A.2d at 767; cf. Ark. Code Ann. § 21-9-303 (Michie 1996) (softening impact of municipal immunity by including insurance-waiver provision). Given the Legislature's acknowledgment and modification of municipal immunity and the governmental/proprietary distinction, we cannot drastically alter the manner by which courts decide issues of local liability. See Roman Catholic Diocese, 137 Vt. at 519-20, 408 A.2d at 650-51 (because Legislature recognizes municipal immunity in § 1403, Court is bound to accept its continuance).
Under the common law, lawsuits against the state are barred unless the state consents to be sued by waiving its sovereign immunity. Denis Bail Bonds, Inc. v. State, 159 Vt. 481, 484-85, 622 A.2d 495, 497 (1993). In 1961, the Legislature enacted the Vermont Tort Claims Act (VTCA), waiving the state's immunity in specified tort actions. 1961, No. 265, § 1-5 (codified as amended at 12 V.S.A. § 5601-5606). Although some states have passed legislation that limits both state and municipal immunity, see, e.g., Or. Rev. Stat. § 30.260 - 30.300 (1995), the Vermont Legislature chose to address only the liability of the state in its legislation. See, e.g., 12 V.S.A. § 5601(a) ("The state of Vermont shall be liable for . . . ."). Had the Legislature intended to alter the governmental/proprietary distinction, it could have included municipalities in the VTCA or enacted a separate statute relating only to municipalities. We see its failure to do so as an endorsement of the distinction.
In 1986, the Legislature again indicated approval of the distinction with its enactment of 24 V.S.A. § 4941-4946, a statute relating to intermunicipal insurance agreements. See 1985, No. 237 (Adj. Sess.), § 1. Section 4946 states that "the implementation of this subchapter by any municipality . . . shall constitute essential governmental functions." (Emphasis added.) It also states that participation by a municipality in an agreement shall not "constitute a waiver of sovereign immunity under 29 V.S.A. § 1403." 24 V.S.A. § 4946 (emphasis added). Both references demonstrate the Legislature's recognition and acceptance of the governmental/proprietary distinction.
The Town also argues that complicated public policy issues preclude the Court from abandoning the governmental/proprietary distinction and replacing it with the private-analog test. This Court adopted the distinction specifically to address the dual character of municipalities. See Town of Stockbridge v. State Highway Bd., 125 Vt. 366, 369-70, 216 A.2d 44, 46-47 (1965) (municipality is liable for acts exercised for private advantage, not liable for acts discharged on behalf of state). The Legislature, on the other hand, adopted the private-analog test to determine only issues of state liability. According to the statute, the state is "liable for injury . . . caused by the negligent or wrongful act or omission of an employee of the state while acting within the scope of employment, under the same circumstances, in the same manner and to the same extent as a private person would be liable to the claimant." 12 V.S.A. § 5601(a). Different policy considerations, especially financial concerns, must be examined to decide the scope of state as compared to municipal liability. In adopting the private-analog test, the Legislature addressed and responded to issues of public policy only in the context of state sovereign immunity. Simply because the private-analog test appears to be an adequate solution regarding state liability does not mean that similar results will occur where municipalities are involved.
It is also important to note that the Legislature tailored the private-analog test with exceptions and limitations that this Court is in no position to define and compel in the area of municipal immunity. See Denicore v. City of Burlington, 116 Vt. 138, 144, 70 A.2d 582, 586 (1950) ('"Where the legislature has declared no limitations the courts are without power to write them into the law. . . . The legislature alone can prescribe limitations.'") (quoting State ex rel. Saylor v. Walt, 278 N.W 12, 15 (S.D. 1938)). Not only has the Legislature limited the amount of damages that an individual or group of plaintiffs may receive from the state, see 12 V.S.A. § 5601(b) (maximum liability of state is $250,000 for individual plaintiff and $1,000,000 in the aggregate regarding each occurrence), but it has also excepted from liability claims arising out of the execution of a statute or regulation, those involving the assessment or collection of taxes, and a variety of others. See id. § 5601(e)(l)-(8). In addition, the Legislature has addressed the areas of settlement, payment, and indemnification of state employees. See id. § 5603, 5604, 5606. By adopting the private-analog test for municipalities, this Court would expose towns to increased liability without the protections that the Legislature carefully adopted for the state. Although stated in relation to the abolishment of state sovereign immunity, the words of Maryland's highest court are equally applicable to the abrogation of municipal immunity:
[I]t is desirable and in the public interest that any change in the doctrine of sovereign immunity should come from the legislative branch of the State Government rather than from the judicial branch inasmuch as there are fiscal considerations, administrative difficulties and other problems in balancing the rights of the State and its agencies with new possible rights of the individual citizens, which can far better be considered and resolved by the legislative branch than by the judiciary of the State.
Jekofsky v. State Roads Comm'n, 287 A.2d 40, 42 (Md. 1972).
Our refusal to abolish the governmental/proprietary distinction should not be read as an endorsement of that distinction. We point out, as we did in Hudson, 161 Vt. at 177-78 n.3, 638 A.2d at 567 n.3, that many courts, legislatures, and commentators have strongly criticized this method of determining municipal liability. Yet we believe that our role in addressing this issue, at this time, is not to reform the rules of municipal immunity, but to give the Legislature the initial opportunity to fashion a more reasonable and workable doctrine. Its fact-finding and problem-solving process is better suited for the task in this area of the law.
The certified question is answered as follows: the abrogation and replacement of the governmental/proprietary distinction is a matter for the Legislature.