Opinion ID: 1238237
Heading Depth: 1
Heading Rank: 6

Heading: exceptions to waiver of immunity

Text: Respondents alleged that Department, after receiving reports of substantial modifications, was grossly negligent in failing to inspect or investigate the amusement ride and in failing to suspend or revoke the crawlevator license. Department contends the trial judge erred in rejecting its directed verdict and post-trial motions in which it asserted immunity from suit under several exceptions to the waiver of sovereign immunity contained in S.C.Code Ann. § 15-78-60 (Supp.1998). We disagree. The South Carolina Tort Claims Act, which provides the exclusive remedy in tort against Department, is a limited waiver of governmental immunity. Moore v. Florence School Dist. No. 1, 314 S.C. 335, 444 S.E.2d 498 (1994); S.C.Code Ann. § 15-78-20(a) (Supp.1998). The Act provides that, subject to limitation, a governmental entity is liable for [its] torts in the same manner and to the same extent as a private individual under like circumstances. Id.; S.C.Code Ann. § 15-78-40 (Supp.1993). The burden of establishing a limitation upon liability or an exception to the waiver of immunity under the Tort Claims Act is upon the governmental entity asserting it as an affirmative defense. Strange v. South Carolina Dep't of Highways and Pub. Transp., 314 S.C. 427, 445 S.E.2d 439 (1994). Provisions establishing limitations upon and exemptions from liability of a governmental entity must be liberally construed in favor of limiting liability. S .C.Code Ann. § 15-78-20(f) (Supp.1998); Baker v. Sanders, 301 S.C. 170, 391 S.E.2d 229 (1990).
Department contends it is immune from suit under Section 15-78-60(12). Under that section, a governmental entity is not liable for a loss resulting from licensing powers or functions, including, but not limited to, the issuance, denial, suspension, renewal, or revocation of or failure to issue, deny, suspend, renew, or revoke any permit, license, certificate, approval, registration, order, or similar authority except when the power or function is exercised in a grossly negligent manner. The trial judge instructed the jury on this exception. Department asserts the exception applies only to a licensee or potential licensee, not to a third party allegedly injured by the government's licensing decision. Nothing in the statutory language of the provision limits it as Department suggests. A potential licensee, licensee, or an injured third party may seek relief under the exception. See Parsons v. Uniroyal-Goodrich Tire Corp., 313 S.C. 394, 438 S.E.2d 238 (1993) (in construing statute, words must be given their plain and ordinary meaning without resorting to subtle or forced construction to limit or expand statute's operation). Department also argues it could not be grossly negligent because it did not have any authority to license a bungee jumping operation in 1993. See S.C.Code Ann. §§ 52-19-10 to -380 (Supp.1998) (statutes regulating bungee jumping effective in July 1994). We conclude the trial judge correctly reasoned that respondents' action pertained to modifications of the crawlevator used to carry bungee jumpers and spectatorswhich Department had licensed as an amusement devicenot to the actual jumps that were made. Department further argues there was no license for Department to revoke because the licensed crawlevator was not in use when the accident occurred. Accepting this argument would mean Department could avoid its duty simply by claiming it was powerless in the face of an unauthorized and unlicensed modification. That would subvert the clear purpose of the licensing exception, which is to hold the governmental entity liable when it is grossly negligent in failing to investigate whether it should suspend or revoke a license after learning of potentially dangerous modifications to the subject of the license. See Adams v. Texfi Industries, supra (in construing a statute, the reviewing court looks to its language as a whole in light of its manifest purpose); Resolution Trust Corp. v. Eagle Lake and Golf Condominiums, 310 S.C. 473, 427 S.E.2d 646 (1993) (purpose of the statute and public policy are aids in construction of a statute). Finally, Department argues that respondents Steinke are barred by the doctrines of collateral estoppel and judicial estoppel from asserting the winch and cable system was licensed by Department because they asserted it was not licensed in a federal lawsuit against Beach Bungee's owners. See Steinke v. Beach Bungee, Inc., 105 F.3d 192 (4th Cir.1997) (discussing verdict form in which the jury determined by special interrogatory that the winch and cable system was operated without a license from Department). The Steinkes' position in the two cases is consistent. In the federal lawsuit, the Steinkes asserted and the jury found that the winch and cable system was not licensed. In this case, the Steinkes asserted the crawlevator was licensed, and Department was grossly negligent in failing to suspend or revoke that license after learning the crawlevator may have been replaced by the unlicensed winch and cable system. We have defined gross negligence as the failure to exercise slight care. We also have defined it as the intentional, conscious failure to do something which it is incumbent upon one to do or the doing of a thing intentionally that one ought not to do. Gross negligence is a relative term, and means the absence of care that is necessary under the circumstances. Hollins v. Richland County School Dist. One, 310 S.C. 486, 490, 427 S.E.2d 654, 656 (1993) (citations omitted). Under any of those definitions, the trial judge properly denied Department's directed verdict and post-trial motions when the facts are viewed in the light most favorable to respondents. The record shows Department received three credible reports of a suspected problem or hazard at a licensed amusement device, yet Department gave the matter no more than a cursory glance.
Department asserts that, regardless of the licensing powers exception, it is immune pursuant to Section 15-78-60(13). Under that section, a governmental entity is not liable for a loss resulting from regulatory inspection powers or functions, including failure to make an inspection, or making an inadequate or negligent inspection, of any property to determine whether the property complies or violates any law, regulation, code, or ordinance or contains a hazard to health and safety. The trial judge instructed the jury on this exception, which does not contain a gross negligence standard. This Court and the Court of Appeals previously have recognized that the correct approach, when a governmental entity asserts various exceptions to the waiver of immunity, is to read exceptions that do not contain the gross negligence standard in light of exceptions that do contain the standard. Duncan v. Hampton County School Dist. # 2, 335 S.C. 535, 517 S.E.2d 449 (1999) (reading discretionary immunity exception in light of exception to immunity in which governmental entity exercises its duty in a grossly negligent manner, such that discretionary immunity will not protect the government if it exercises that discretion in a grossly negligent manner); Etheredge v. Richland School Dist. I, 330 S.C. 447, 463, 499 S.E.2d 238, 246 (Ct.App.1998) (when an action is brought alleging gross negligence by a governmental entity pursuant to an exception contained in Section 15-78-60, all other applicable exceptions must be read in light of the exception containing the gross negligence standard), cert. granted on other grounds, April 8, 1999. The principles expressed in Duncan and Etheredge are drawn from Jackson v. South Carolina Dep't of Corrections, 301 S.C. 125, 390 S.E.2d 467 (Ct.App. 1989), aff'd, 302 S.C. 519, 397 S.E.2d 377 (1990). While provisions establishing limitations upon and exemptions from liability of a governmental entity must be liberally construed to limit liability, we also must presume in construing a statute that the Legislature did not intend to perform a futile thing. See Gaffney v. Mallory, 186 S.C. 337, 195 S.E. 840 (1938). We are constrained to avoid a construction that would read a provision out of a statute, and must reconcile conflicts if possible. Ballard v. Ballard, 314 S.C. 40, 443 S.E.2d 802 (1994). We hold the inspection powers exception must be read in conjunction with the key exception at issue in this case, Section 15-78-60(12), the licensing powers exception. Department must inspect an amusement device before deciding whether to issue, suspend, or revoke a license. S.C.Code Ann. §§ 41-18-70 and 41-18-80. Department also has an implicit duty to investigate potentially hazardous substantial modifications when it learns of them. It would make no sense to say Department may be found grossly negligent in a licensing decision, yet allow Department to escape liability because the inspection powers exception does not contain a gross negligence standard. The logical way to read these closely related provisions when both are at issue is that a governmental entity may be liable if it is grossly negligent in licensing or inspecting a particular device or activity. The dissent asserts that Duncan, Etheredge, and Jackson simply stand for the proposition that a specific exception applies over a more general one. We agree the three cases generally illustrate that proposition, although none contains any language indicating that was the underlying rationale. The circuit court and the parties certainly should focus their analysis and jury instructions upon the most pertinent and specific exceptions that apply in a given case. But to unduly emphasize the distinction between specific and general exceptions ultimately could reduce defenses available to a governmental entity if the court opted to charge only the most specific exceptions. Accordingly, we conclude the better practice is to allow the government to assert all relevant exceptions, and apply the gross negligence standard to all when it is contained in one applicable exception. Our holding is faithful to the legislative intent to limit liability and allow ample defenses, while not allowing a governmental entity to eviscerate the impact of one exception by asserting another. [4]
Department asserts it is immune pursuant to Section 15-78-60(5) (governmental entity is not liable for performing or failing to perform discretionary acts); Section 15-78-60(4) (governmental entity is not liable for adoption or enforcement, or failing to adopt or enforce, a law or regulation); and Section 15-78-60(20) (governmental entity is not liable for loss resulting from act or omission of person other than an employee, including but not limited to the criminal actions of third persons). None of these exceptions contains a gross negligence standard. The trial judge instructed the jury on discretionary immunity, but ruled the other exceptions did not apply in this case. To prevail under the discretionary immunity provision, the governmental entity must show that when faced with alternatives, it actually weighed competing considerations and made a conscious decision to act or not to act, and that it used accepted professional standards appropriate to resolve the issue before it. Strange v. South Carolina Dep't of Highways & Pub. Transp., 314 S.C. 427, 445 S.E.2d 439 (1994); Niver v. South Carolina Dep't of Highways & Pub. Transp., 302 S.C. 461, 395 S.E.2d 728 (Ct.App.1990). The record contains scant evidence Department officials exercised their discretion. Regardless, the jury considered the provision and rejected it. An appellate court will not reverse the trial court's decision to strike an insufficient or irrelevant allegation or defense unless the trial court abuses its discretion. Mayes v. Paxton, 313 S.C. 109, 115, 437 S.E.2d 66, 70 (1993); Williams v. South Carolina Nat'l Bank, 284 S.C. 346, 326 S.E.2d 187 (Ct.App.1985). An abuse of discretion arises where the trial court was controlled by an error of law or where its order is based on factual conclusions that are without evidentiary support. Tri-County Ice and Fuel Co. v. Palmetto Ice Co., 303 S.C. 237, 242, 399 S.E.2d 779, 782 (1990). We conclude the trial judge did not abuse his discretion because the enforcement of law and third party exceptions were not directly at issue in this case. Furthermore, the same reasoning explained above applies to all three exceptions. It would make no sense to say Department may be found grossly negligent in a licensing decision, yet allow Department to escape liability under one of these exceptions. See Duncan v. Hampton County School Dist. # 2, supra ; Etheredge v. Richland School Dist. 1, supra; Jackson v. South Carolina Dep't of Corrections, supra . In sum, we recognize the trial court often faces Tort Claims Act cases in which at least one of the asserted exceptions contains the gross negligence standard while other asserted exceptions do not. We hold that when an exception containing the gross negligence standard applies, that same standard will be read into any other applicable exception. Otherwise, portions of the Act would be a nullity, which the Legislature could not have intended. In addition, we will overturn the trial court's refusal to charge irrelevant exceptions only for an abuse of discretion.