Opinion ID: 1034410
Heading Depth: 2
Heading Rank: 2

Heading: Governmental Contractor Immunity

Text: ¶22 The City and Musson assert that, under Wis. Stat. § 893.80(4),12 Musson is entitled to immunity from liability for Showers' claims. In order to address that claim, we must interpret § 893.80(4). We therefore begin with the language of 12 The statutory immunity afforded under Wis. Stat. § 893.80(4) has been referred to as municipal or governmental immunity, and is distinct from the sovereign immunity that the Wisconsin Constitution grants the State. See Anderson v. City of Milwaukee, 208 Wis. 2d 18, 28 n.11, 559 N.W.2d 563 (1997). Nonetheless, we have acknowledged that there is overlap in the principles governing whether a governmental entity or officer is entitled to immunity. See C.L. v. Olson, 143 Wis. 2d 701, 716 n.9, 422 N.W.2d 614 (1988). Therefore, although the immunity that Musson claims in this case could be the sovereign immunity conferred upon the DOT as a state agency (because of Musson's contract with the DOT), principles of governmental contractor immunity under § 893.80(4) have been raised as being applicable here. Neither the State nor the DOT was sued, so the right of a sovereign to consent to suit was never at issue. See Holytz v. City of Milwaukee, 17 Wis. 2d 26, 41, 115 N.W.2d 618 (1962). 12 No. 2011AP1158 that statute. Section 893.80(4) provides, in pertinent part, that [n]o suit may be brought against any [governmental entity] . . . or against its officers, officials, agents or employees for acts done in the exercise of legislative, quasi-legislative, judicial or quasi-judicial functions. ¶23 Our task when interpreting a statute is to discern the statute's meaning, which we presume is expressed in the language chosen by the legislature. Richards, 309 Wis. 2d 541, ¶20. If the meaning of the language is plain, we apply that meaning. State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning. Id. Our analysis of statutory language also may be aided by considering prior decisions examining the relevant statutory provisions. See DeHart v. Wis. Mut. Ins. Co., 2007 WI 91, ¶15, 302 Wis. 2d 564, 734 N.W.2d 394. ¶24 Wisconsin Stat. § 893.80(4) was enacted in response to our decision in Holytz v. City of Milwaukee, 17 Wis. 2d 26, 39, 115 N.W.2d 618 (1962). See Coffey v. City of Milwaukee, 74 Wis. 2d 526, 532, 247 N.W.2d 132 (1976) (recognizing that what is now § 893.80(4) is the codification of Holytz). In Holytz, 17 Wis. 2d at 39, we abrogated the common law rule of governmental immunity for governmental entities, and stated that henceforward, so far as governmental responsibility for torts 13 No. 2011AP1158 is concerned, the rule is liability [and] the exception is immunity. ¶25 Holytz excepted from that abrogation the acts of a governmental entity exercising its legislative, quasilegislative, judicial or quasi-judicial functions. See id. at 40. That language carving out an exception to governmental liability now appears in Wis. Stat. § 893.80(4), with the addition of immunity for governmental officers, agents and employees, thereby including those individuals for whose acts the governmental entity would be liable under the doctrine of respondeat superior. See id.; see also Kettner v. Wausau Ins. Cos., 191 Wis. 2d 723, 729-30, 530 N.W.2d 399 (Ct. App. 1995) (limiting the type of agents for which § 893.80 may provide immunity). ¶26 When analyzing and applying Wis. Stat. § 893.80(4), we often have used the term discretionary as a shorthand to refer to decisions of a governmental entity that are legislative, quasi-legislative, judicial or quasi-judicial. See, e.g., Willow Creek Ranch, L.L.C. v. Town of Shelby, 2000 WI 56, ¶25, 235 Wis. 2d 409, 611 N.W.2d 693; C.L. v. Olson, 143 Wis. 2d 701, 710 n.5, 422 N.W.2d 614 (1988); Lifer v. Raymond, 80 Wis. 2d 503, 511–12, 259 N.W.2d 537 (1977); see also Lyons, 207 Wis. 2d at 453–54. Legislative and quasi-legislative functions generally refer to those policy choices made in an official capacity, e.g., when a governmental entity chooses one project design over another. See Lyons, 207 Wis. 2d at 453. Quasi-judicial functions generally refer to those acts that involve the 14 No. 2011AP1158 exercise of discretion in coming to a judgment; the availability of a public hearing on the judgment before a specialized board; and the imposition by a board of an appropriate final decision. See Coffey, 74 Wis. 2d at 534-35. ¶27 In the present case, the parties' arguments center on the application of Wis. Stat. § 893.80(4) in regard to a governmental contractor who claims immunity derived from the governmental entity with which the contractor has a contractual relationship.13 The court of appeals addressed a similar situation in Lyons. There, the court examined whether a governmental contractor was entitled to immunity under § 893.80(4) when the contractor implemented a bridge design that had been selected by the contracting governmental entity. Because the court of appeals' decision in Lyons was grounded in the United States Supreme Court's decision in Boyle v. United Technologies Corp., 487 U.S. 500, 510–13 (1988), it is necessary to understand Boyle to place Lyons in proper perspective. ¶28 In Boyle, a governmental contractor was sued based on its sale of a helicopter to the United States Marine Corps. Id. at 502. The helicopter was alleged to have a design defect in the co-pilot's escape system, which prevented the opening of the 13 Musson does not specify whether the immunity it seeks is legislative, quasi-legislative, judicial or quasi-judicial in nature. We need not make that determination because we conclude that Showers' allegation that Musson negligently performed its construction responsibilities does not implicate any of the governmental entity functions excepted from liability pursuant to Wis. Stat. § 893.80(4). 15 No. 2011AP1158 escape hatch when the helicopter was submerged. Id. at 503. The alleged design defect resulted in the death of a pilot who survived a crash into water, but drowned because he could not escape from the helicopter. Id. at 502. ¶29 In analyzing whether the contractor's governmentalcontractor defense had merit, the Supreme Court focused on whether the government contract required the contractor to deliver helicopters with the sort of escape-hatch mechanism shown by the specifications of the helicopter that the Marine Corps had chosen. Id. at 509. The Supreme Court reasoned that the selection of the appropriate design for military equipment to be used by our Armed Forces is assuredly a discretionary function. Id. at 511. The Court then concluded by setting out a three-part test to determine whether the relationship between the governmental contractor and the governmental entity was such that the contractor should be immune from liability for design defects in military equipment chosen by the Armed Forces: (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States. Id. at 512. ¶30 In explaining its test, the Supreme Court said, [t]he first two of these conditions assure that the suit is within the area where the policy of the 'discretionary function' would be frustrated——i.e., they assure that the design feature in question was considered by a Government officer, and not merely 16 No. 2011AP1158 by the contractor itself. Id. (emphasis added). In so explaining, the Supreme Court made clear that a discretionary act of a governmental officer is a necessary component to potential immunity for the governmental contractor. Accordingly, a governmental contractor's own discretionary actions would not have sufficed to afford the contractor immunity for its actions in Boyle. ¶31 In Lyons, the court of appeals also focused on a design defect that allegedly was a cause of an accident. Lyons, 207 Wis. 2d at 449. It is important to note that, as was the case in Boyle, it was the governmental entity in Lyons that made the choice of design that allegedly was a cause of the accident. Id. This design choice was made in the exercise of a legislative or quasi-legislative function of the governmental entity. Id. at 453. Because the governmental contractor performed its contractual tasks under reasonably precise specifications pursuant to the governmental entity's quasilegislative design decision, the contractor functioned as a Wis. Stat. § 893.80(4) agent of the governmental entity when carrying out the entity's design decision. See id. at 457–58, 461. Therefore, the governmental contractor was entitled to the same level of immunity as would be accorded to the governmental entity had it been sued directly for its design choice. Id. at 454 (explaining the court's reliance on the rationale of Boyle where the governmental contractor defense precluded suit if the challenged design choice was made by military officials). 17 No. 2011AP1158 ¶32 Lyons adopted Boyle's three-part test. Id. at 457-58. The court of appeals explained that a governmental contractor that follows governmental specifications is an agent within the meaning of Wis. Stat. § 893.80(4) when the contractor meets the three-part test of Boyle. Id. This three-part test will ensure that state and municipal government, and the public at large, is able to make the best use of professional design assistance, but that professional contractors are not unfairly burdened by lawsuits when they follow governmental directives. Id. at 458. ¶33 Subsequent court of appeals decisions have affirmed the Lyons court's rationale regarding contractor immunity, stating, for example, that [i]n Lyons, we expressly held that an independent contractor meeting the three-part test was an agent within the meaning of § 893.80(4). Jankee v. Clark Cnty., 222 Wis. 2d 151, 165, 585 N.W.2d 913 (Ct. App. 1998), rev'd on other grounds, 2000 WI 64, 235 Wis. 2d 700, 612 N.W.2d 297. The language of some of these cases may be read to suggest that the relevant question is merely whether a contractor satisfies the three-part test and is therefore an agent entitled to immunity. See id.; see also Woychik v. Ruzic Constr. Co., 2001 WI App 280, ¶8, 248 Wis. 2d 983, 638 N.W.2d 18 No. 2011AP1158 394 (unpublished decision).14 Indeed, the court of appeals' decision in the case at hand suggests that satisfaction of the elements of the Lyons test will be sufficient to immunize governmental contractors' conduct. See Showers Appraisals, 343 Wis. 2d 623, ¶22; see also Bronfeld v. Pember Cos., 2010 WI App 150, ¶12, 330 Wis. 2d 123, 792 N.W.2d 222. ¶34 However, analyzing whether the conduct of a governmental contractor was undertaken as a statutory agent within the scope of the immunity accorded by Wis. Stat. § 893.80(4) solely by reference to the three-part Lyons test may lead a court to err. Rather, an equally dispositive question in the § 893.80(4) immunity analysis is whether the relevant decision of the governmental entity that the governmental contractor implements is, itself, entitled to immunity under § 893.80(4) because it was made through the exercise of a legislative, quasi-legislative, judicial or quasi-judicial function of the governmental entity. Stated otherwise, only certain types of acts fall within the immunity shield of § 893.80(4). It was on such a foundation that both the Lyons and Boyle decisions stand because the governmental decision in 14 Wisconsin Stat. § 809.23(3) does not prohibit this court's discussion of unpublished decisions when such discussion relies on the opinion solely to demonstrate that courts have used particular language from other cases, and does not rely on the decision for authoritative or persuasive value. See State v. Higginbotham, 162 Wis. 2d 978, 996–97, 471 N.W.2d 24 (1991). Moreover, because such use of unpublished decisions has such longstanding acceptance, see id., we need not decide now whether § 809.23(3) imposes any other limitations on this court's use of unpublished decisions in its opinions. 19 No. 2011AP1158 each case, i.e., the choice of design, was made by a governmental entity in the exercise of its legislative or quasilegislative function. ¶35 Immunity is available to a governmental entity only for those governmental decisions that are made as an exercise of legislative, quasi-legislative, judicial or quasi-judicial functions as set out in Wis. Stat. § 893.80(4). Any statutory immunity to which an agent of the governmental entity may be entitled is dependent upon the immunity of the governmental act or decision that the agent was implementing when it caused an injury. This immunity inquiry under § 893.80(4)——examining whether a governmental entity's conduct was an exercise of a legislative, quasi-legislative, judicial or quasi-judicial function——gives effect to the legislature's prerogative regarding the circumstances in which immunity may be available under § 893.80(4). Although some of our cases have equated § 893.80(4)'s legislative, quasi-legislative, judicial or quasi-judicial standard with the term discretionary, see, e.g., Olson, 143 Wis. 2d at 710 n.5; Lifer, 80 Wis. 2d at 511– 12, and although our decision is not intended in any way to alter that standard, we do emphasize that the legislatively selected policy decision regarding immunity under § 893.80(4) is best honored by applying the legislature's chosen plain language, rather than a judicial distillation thereof. This approach comports with fundamental principles of statutory interpretation, under which the plain language of a statute is 20 No. 2011AP1158 presumed to most directly convey what the legislature means. See Kalal, 271 Wis. 2d 633, ¶44. ¶36 From the foregoing, when a governmental contractor seeks immunity under Wis. Stat. § 893.80(4), the contractor must show both that the contractor was an agent as that term is used in § 893.80(4), i.e., as is expressed in the Lyons test, and that the allegedly injurious conduct was caused by the implementation of a decision for which immunity is available for governmental entities under § 893.80(4). As discussed below, Musson has failed to show that it is an agent in accordance with Lyons. Nonetheless, because the plain language of § 893.80(4) demonstrates that the immunity analysis requires an element in addition to what is required by Lyons' agency test (namely, allegations that the injury-causing act was legislative, quasilegislative, judicial or quasi-judicial in character), we set forth the applicable standard so that litigants and courts may engage in a complete analysis of whether immunity may be available in future cases. ¶37 The first and second requirements of the Lyons test, i.e., whether the governmental entity approved reasonably precise specifications that the governmental contractor adhered to when engaging in the conduct that caused the injury, limit when a governmental contractor is a statutory agent under Wis. 21 No. 2011AP1158 Stat. § 893.80(4).15 Stated otherwise, the governmental entity must have had the right to control the tasks performed by the contractor with reasonably precise specifications and the contractor must have followed those specifications. When these facts are proved, the contractor is a § 893.80(4) agent of the governmental entity. See, e.g., Kettner, 191 Wis. 2d at 733–37 (explaining that not all conduct of agents comes within the scope of § 893.80; rather, only that conduct that may be imputed to a governmental entity as the act of the entity's servant comes within § 893.80).16 ¶38 The principles of immunity for particular types of agents under Wis. Stat. § 893.80, as discussed in Kettner, should be read in harmony with the Lyons test and with the principles of governmental immunity enunciated in § 893.80(4). For example, the allegation in Lyons that the bridge was improperly designed by the governmental contractor, who undertook the design at the direction of the governmental entity, was the act of a § 893.80(4)–type agent because the 15 We note that the third criterion for statutory agency set out in Lyons, that the contractor warned the governmental entity about dangers known to the contractor but unknown to the governmental entity, does not bear on whether statutory agency is present. Rather, it is grounded in a concern that the immunity accorded does not cut off information highly relevant to governmental decisions. Boyle v. United Techs. Corp., 487 U.S. 500, 512-13 (1988). 16 The primary consideration in determining whether an act was undertaken by one who acts in the capacity of a servant is whether the principal had the right to control the conduct of the agent. Pamperin v. Trinity Mem'l Hosp., 144 Wis. 2d 188, 198-99, 423 N.W.2d 848 (1988). 22 No. 2011AP1158 governmental entity controlled the design choice and design choices are legislative or quasi-legislative functions. See Lyons, 207 Wis. 2d at 452–58; see also Chart v. Dvorak, 57 Wis. 2d 92, 100–01, 203 N.W.2d 673 (1973) (recognizing that the decision to undertake a project, or how to design the project, may be immunized as the exercise of a legislative or quasilegislative function). ¶39 However, if the allegation in Lyons were not that the design was a cause of the accident, and were instead that the contractor did not construct the bridge in a workman-like manner and thereby caused injury, such an allegation would not implicate a legislative, quasi-legislative, judicial or quasijudicial function under Wis. Stat. § 893.80(4). Accordingly, an allegation of negligent workmanship would not have the potential for immunity under § 893.80(4) for that specific injury-causing conduct, and no Lyons inquiry (to determine whether the contractor was a § 893.80(4)-type agent) would be necessary. This conclusion is based on the scope of immunity contemplated by this court in Holytz, and by the legislature's codification of Holytz in what is now § 893.80(4). ¶40 Some cases applying Kettner's agency principles in the context of immunity inquiries could be read to suggest that agent may be interpreted broadly to afford immunity to all governmental contractors' conduct. However, in light of Wis. Stat. § 893.80(4)'s explicit language limiting the scope of governmental immunity, immunity will be extended to governmental contractors only where the contractor acted as a servant for 23 No. 2011AP1158 the purposes of the challenged conduct. See Kettner, 191 Wis. 2d at 734–36. Indeed, as we explained above, this definition of agent is manifest in the Lyons test, which requires that a governmental contractor adhere to reasonably precise specifications. Cf. Arsand v. City of Franklin, 83 Wis. 2d 40, 45–46, 264 N.W.2d 579 (1978) (defining servant as one employed to perform service for another in his affairs and who, with respect to his physical conduct in the performance of the service, is subject to the other's control or right to control). ¶41 Other cases following Lyons also illustrate that care in analysis is needed when a claim of governmental contractor immunity is made. For example, in Bronfeld, the court of appeals addressed an allegation that a subcontractor negligently erected barricades and failed to maintain the construction site so as to protect public safety. The plaintiff claimed that the contractor was therefore liable for the plaintiff's injuries, which occurred when she tripped over a barricade that the contractor had placed at the site. See Bronfeld, 330 Wis. 2d 123, ¶¶10, 12. ¶42 In Bronfeld, the government's general contractor had provided a detailed traffic control plan that the City of River Falls approved, and the subcontractor followed that plan. Id., ¶6. The court of appeals began by noting that placement of barricades is a discretionary duty, and therefore, if the City had placed the barricades itself, it would have been immune from suit pursuant to Wis. Stat. § 893.80(4). Id., ¶19. This 24 No. 2011AP1158 cursory determination of whether the governmental entity would have been entitled to immunity under the language of § 893.80(4) highlights the need for a more thorough immunity analysis for claims of governmental immunity. ¶43 After making this primary determination, the court in Bronfeld applied the Lyons test to determine whether the contractor was an agent. The court concluded that the test was satisfied, and that the contractor was entitled to immunity, because (1) the City had provided reasonably precise specifications regarding traffic control and barricade placement by requiring and approving the traffic control plan the general contractor submitted; (2) the subcontractor complied with the those specifications; and (3) the subcontractor had not been aware of any dangers posed by the reasonably precise specifications. See id., ¶¶24–33. ¶44 Bronfeld's cursory analysis of governmental contractor immunity under Wis. Stat. § 893.80(4) may be attributable to Brown, where the language used to apply Lyons' reasoning could be construed to afford immunity to governmental contractors' actions where the alleged injury did not arise from the contractor's implementing a governmental entity's decision that was made pursuant to a legislative, quasi-legislative, [etc.] function, such as the adoption of a design or plan. In Brown, the court seemed to emphasize the importance of whether there existed reasonably precise specifications, without acknowledging that, for such specifications to afford immunity to a governmental contractor, the contractor's alleged injury25 No. 2011AP1158 causing actions must have been due to its implementation of a governmental entity's exercise of one of the functions for which immunity is accorded under § 893.80(4). See Brown, 313 Wis. 2d 497, ¶11 (stating that [t]he question is not what other safety precautions might have been taken, but whether the safety requirements provided by DOT were reasonably precise specifications, without analysis of whether the allegedly injurious conduct had been undertaken pursuant to a legislative or quasi-legislative function of the governmental entity). ¶45 In sum, in addition to satisfying the Lyons test for governmental contractor immunity, a contractor asserting immunity must be able to demonstrate that the conduct for which immunity is sought was the implementing of a governmental entity's decision made during the exercise of the entity's legislative, quasi-legislative, judicial or quasi-judicial functions. To apply Lyons without analyzing the applicability of immunity under Wis. Stat. § 893.80(4) to the particular act for which liability is alleged could grant a governmental contractor broader immunity than the governmental entity itself would be entitled to under the statute. Accordingly, in the future, when a governmental contractor asserts that it is entitled to immunity under § 893.80(4), we encourage litigants and courts to adhere to the statutory standard to determine whether the alleged immunity-supporting functions are legislative, quasi-legislative, judicial or quasi-judicial. ¶46 Our conclusion regarding the intersection of the agency principles embodied in the Lyons test and the type of 26 No. 2011AP1158 acts for which governmental immunity may be afforded under Wis. Stat. § 893.80(4) is well-supported nationwide. For example, other jurisdictions have concluded that while governmental contractors will not be liable for injuries alleged to have arisen from defects in a design the government chose, it is well settled that this rule of non-liability does not exempt a contractor from liability where the injury arises from the contractor's negligent performance of the work. Gaunt & Haynes, Inc. v. Moritz Corp., 485 N.E.2d 1123, 1126 (Ill. App. Ct. 1985); Rodriguez v. New Jersey Sports & Exposition Auth., 472 A.2d 146, 149 (N.J. App. Div. 1983) (A public contractor may . . . be held liable when negligent in the execution of the contract.). Furthermore, a legal encyclopedia notes that the courts are practically unanimous in support of the proposition that a governmental contractor is not entitled to governmental immunity for injuries arising from negligent performance of the contract work. A.E. Korpela, Annotation, Right of contractor with federal, state, or local public body to latter's immunity from tort liability, 9 A.L.R. 3d 382 §§ 2(a), 5 (1966); see also 64 Am. Jur. 2d, Public Works and Contracts § 109 (2013 update) (discussing contractors' negligence in performing work; neglect or failure to comply with contract). This understanding of the doctrine of governmental contractor immunity has been echoed by legal commentators. See, e.g., Richard Ausness, Surrogate Immunity: The Government Contract Defense and Products Liability, 47 Ohio St. L.J. 985, 995 (1986). 27 No. 2011AP1158