Opinion ID: 1238237
Heading Depth: 2
Heading Rank: 2

Heading: the inspection powers exception

Text: 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]