1e. Tort Liability Limits4
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
MEMORANDUM
TO: Todd Gerhardt, City Manager
FROM: Laurie Hokkanen, Assistant City Manager
DATE: January 4, 2012:''
SUBJ: Tort Liability Limits
1(Z.
PROPOSED MOTION
The City of Chanhassen does not waive the monetary limits on municipal tort
liability established by Minnesota Statutes 466.04.
A majority vote is required to approve.
BACKGROUND
Finance
Under state statute, city liabilities for their torts and those of the
Phone: 952.227.1140
employees /officers are limited to $500,000 per claimant and $1.5 million per
Fax: 952.227.1110
incident. The purpose of these caps is to protect and preserve limited public
resources.
Park & Recreation
Phone: 952.227.1120
Cities have the ability to waive tort cap liability limits. The City of Chanhassen
Fax: 952.227.1110
has historically NOT waived these limits.
Recreation Center
2310 Coulter Boulevard
The City has changed insurance carriers for 2012 and is now insured by the
Phone: 952.227.1400
League of Minnesota Cities Insurance Trust. The League has requested that the
Fax: 952.227.1404
City Council take action with regards to tort cap liability limits. A fact sheet,
including examples, is attached.
Planning &
Natural Resources
Phone: 952.227.1130
STAFF RECCOMENDATION
Fax: 952.227.1110
Staff recommends that the City NOT waive our tort liability limits.
Public Works
7901 Park Place
ATTACHMENTS
Phone: 952.227.1300
Fax: 952.227.1310
1. Risk Management Information: Torts, Immunities & Damages Under the
Senior Center
Municipal Tort Claims Act
Phone: 952.227.1125
2. Liability Coverage Waiver Form
Fax: 952.227.1110
Web Site
www.ci.chanhassen.mn.us
G:\Admin \LH \City Council \Tort Liability.doc
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
LEAGUE OF MINNESOTA CITIES INSURANCE TRUST
LIABILITY COVERAGE - WAIVER FORM
;ties obtaining liability coverage from the League of Minnesota Cities Insurance Trust must decide
whether or not to waive the statutory tort liability limits to the extent of the coverage purchased. The
decision to waive or not to waive the statutory limits has the following effects:
U If the city does not waive the statutory tort limits, an individual claimant would be able to recover no
more than $500,000.on any claim to which the statutory tort limits apply. The total which all claimants
would be able to recover for a single occurrence to which the statutory tort limits apply would be
limited to $1,500,000. These statutory tort limits would apply regardless of whether or not the city
purchases the optional excess liability coverage.
If the city waives the statutory tort limits and does not purchase excess liability coverage, a single
claimant could potentially recover up to $1,500,000. on a single occurrence. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would
also be limited to $1,500,000., regardless of the number of claimants.
If the city waives the statutory tort limits and purchases excess liability coverage, a single claimant
could potentially recover an amount up to the limit of the coverage purchased. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would
also be limited to the amount of coverage purchased, regardless of the number of claimants.
Claims to which the statutory municipal tort limits do not apply are not affected by this decision.
This decision must be made by the city council. Cities purchasing coverage must complete and
return this form to LMCIT before the effective date of the coverage. For further information, contact
LMCIT. You may also wish to discuss these issues with your city attorney.
CA- t t ak Wahha accepts liability coverage limits of .�0 0-" from the
Lea - ul of Minnesota Cities Insurance Trust (LMCIT).
Check one:
The city DOES NOT WAIVE the monetary limits on municipal tort liability established by
Minnesota Statutes 466.04.
❑ The city WAIVES the monetary limits on tort liability established by Minnesota Statutes 466.04,
to the extent of the limits of the liability coverage obtained from LMCIT.
Date of city council meeting
Signature /Date Pos
Return this completed form to LMCIT, 145 University Ave. W., St. Paul, MN. 55103 -2044
LMCIT (I1 /00)(Rev.07 /09) Page i of I
L,EAGUEoF CONNECTING & INNOVATING
MINNESOTA. SINCE 1913
CITIES
RISK MANAGEMENT INFORMATION
TORTS, IMMUNITIES & DAMAGES
UNDER THE MUNICIPAL TORT CLAIMS ACT
This memo discusses the required elements of a negligence claim against a city and the unique
defenses available to the city, including statutory and common law immunity defenses. We'll
also cover the application of the tort damage caps under the Municipal Tort Claims Act as well as
the relevant case law.
When reviewing this information, cities should be aware effective July 1, 2009, the statutory tort
liability limits will increase to $500,000 per claimant and $1.5 million per occurrence for claims
occurring after this date.
Cities, like other non - governmental defendants, are
generally subject to liability for their torts and those of
their officers, employees and agents acting within the
scope of their employment or duties. However, cities have
specific statutory and common law immunities afforded to
them in addition to other general affirmative tort defenses
under the law.
Additionally, cities have specific statutory caps on
damages for these torts, which limit their liability in huge
damage claims. The purpose behind both the immunity
defenses and the tort damage caps are to protect and
preserve limited public resources.
Elements of a Negligence Claim
Under Minnesota law, in order to prevail on a negligence
claim, a plaintiff must establish all of these four elements
proximate cause, and damage or injury.
Definition
Under the Municipal Tort Claims
Act (Minn. Stat. §466.01 -15), cities
are vicariously liable for the torts of
their employees or agents acting on
the city's behalf.
Definition
A tort is a civil wrong or injury
which arises out of a violation
(breach) of a duty owed by the city
to an injured or damaged plaintiff.
Duty of care, breach of duty of care,
Duty of Care
Did the city owe the plaintiff a duty of care? Duty is a crucial element because if the city can
establish no duty owed to plaintiff = no negligent cause of action = no lawsuit. This issue
oftentimes comes down to whether the city owns, maintains or controls property where plaintiff
was injured. This can be determined by reviewing deeds, contracts, or other documents.
Public Duty Doctrine
The public duty doctrine precludes a negligence claim against a city. It states that the city does not
owe a duty to an individual citizen when performing certain municipal functions, but to the public
as a whole. Under this doctrine, even if the city may have done something that constitutes a breach
of duty of care, there is no negligent claim available to the plaintiff against the city. Cracraft v.
City of St. Louis Park 279 N.W.2d 801 (Minn. 1979). This doctrine has been applied to such
activities as fire fighting and building inspections.
Breach of Duty of Care
In order to show a breach of duty, one must show that
the city had notice.
Proximate Cause
Was the city's negligence the cause or substantial factor
in the Plaintiff's injuries or damages?
Damage or Injury
To establish the damage element, plaintiff must prove
actual loss or injury. Plaintiff cannot simply speculate
or surmise as to his /her loss or injury.
Municipal Immunities
Cities have a variety of statutory immunities available
to them under the Municipal Tort Claims Act Minn.
Stat. §466.01 -15. Cities also have common law official
and vicarious official immunity available to them as a
bar to suit. These immunities bar a lawsuit, even if city
is potentially negligent.
Statutory Immunities
Definitions
Actual Notice is when a city is
aware of dangerous or defective
conditions through complaints; the
area has been recommended for
repair or replacement; or other
accidents, injuries, or preexisting
city created conditions.
Constructive Notice is established
through evidence that the
dangerous or defective condition
was present for such a period of
time that it constitutes notice. This
exists if it can be proven that if the
city was exercising reasonable care,
it should have known of the
dangerous condition.
The statutory immunities are set forth within the Municipal Tort Claims Act, at Minn. Stat.
§466.03. The most common statutory immunities are:
• Snow and Ice Immunity, Minn. Stat. §466.03, Subd. 4
• Statutory Discretionary Immunity, Minn. Stat. §466.03, Subd. 6
• Parks and Recreation Immunity, Minn. Stat. §466.03, Subd. 6e
• Municipal Authorizations Standard Immunity (Permit), Minn. Stat. §466.03, Subd. 10
• Road or Highway Right -of -Way Immunity, Minn. Stat. §466.03, Subd. 22
Snow and Ice Immunity, Minn. Stat. §466.03, Subd. 4
This immunity is most often applied in slip and falls and automobile accidents where the presence
of snow and ice was a contributing factor to the accident. The claim must be based on snow and
ice conditions on public highway or sidewalk which does not abut the publicly owned building or
parking lot is necessary for this immunity to apply.
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What are the issues to consider when dealing with a snow
and ice condition?
• Duration (how long was condition present)
• Characteristics of condition (glare ice, black ice,
bumps, ridges)
• Causation (was the condition a causal factor or did
it contribute to the accident and injury).
Was the condition caused or created by city?
• Look to city plowing /snow removal
policy /procedure.
• What actually caused condition, i.e. drainage issues,
freeze /refreeze?
• Was the condition naturally caused or artificially
(i.e. awnings, overhangs, drain pipes)?
Remember: The highway /sidewalk cannot abut a publicly
owned building or parking lot in order to assert the
snow /ice immunity. Also, check the ownership of adjacent
properties.
Definition
The Mere Slipperiness Doctrine is a
common law or case law rule
whereby the Minnesota appellate
courts have held, "A city is not liable
for the mere slipperiness resulting
from the natural accumulation of
ice and snow on streets and
sidewalks. However, the rule has its
exceptions and does not protect the
city in the case where the
accumulation of ice and snow is
negligently permitted to remain for
such a period of time as to cause
the formation of `slippery and
dangerous ridges, hummocks,
depressions, and other irregularities
that develop there."
Refer to Doyle v. City of Roseville,
524 N.W.2d 461 (Minn. 1994).
Statutory Discretionary Immunity Minn. Stat. § 466.03,
(Subd. 6)
Cities are immune from "any claim based upon the performance or failure to exercise or perform a
discretionary function or duty, whether or not the discretion is abused." This immunity is to protect
policy or planning level decisions made by the city, not day -to -day or "operational" decisions. This
policy or planning level decision must be based upon social, economic and political factors. The
reviewing court analyzes the following factors to determine if immunity applies:
• Budget
Personnel
Safety
Priority of other projects
These factors are often present in policies (i.e., snow
plowing, sidewalk, sewer inspection or maintenance), city
council or planning minutes, memorandums, contracts that
the city has in its records. Use model policies available
from LMCIT for your client cities.
Something to Think About
Self- serving conclusory affidavits
from city employees have been
rejected by the Minnesota appellate
courts. See Conlin v. City of St. Paul,
1999 WL 2096045 (Minn. App. 1999).
Generally, the actual implementation of the policy /plan may be deemed "operational" and may not
be protected by immunity. However, if the claim involves an "attack" upon the policy /plan itself,
the Minnesota appellate courts have refused to separate or set forth a "bright line rule" and have
afforded statutory immunity for the enactment as well as the implementation of the policy /plan.
See, Zank v. Larson 552 N.W.2d 719 (Minn. 1996).
Park and Recreational Use Immunity (Subd. 6e)
If the property is owned or leased by city and is intended or designated for use as a "recreational
facility ", and the plaintiff is injured while using the facility, the actual use by plaintiff is irrelevant.
Examples include:
• Stiele v. City of Cry 646 N.W.2d 251 (Minn. App. 2002). (young child climbing tennis
fence in park who fell and was injured).
• Doyle v. City of Roseville 524 N.W.2d 461 (Minn. 1994) (plaintiff slipped and fell while
walking in parking lot of public ice rink).
• Habeck v. Ouverson 699 N.W.2d 907 (Minn. App. 2003) (plaintiff injured while being
transported by a hay wagon from parking lot to fairgrounds).
• Hinnenkamp v. City of Columbia Heights 2002 WL 233824 (Minn. App. 2002) (plaintiff
injured when coffee pot in community center tipped over).
Requirements of Trespassers Standard of Care
The plaintiff must meet all requirements in order to
survive the immunity. This must be a condition created or
maintained by city and it must be likely to cause death or,
serious bodily harm (i.e., high voltage lines, razor wire,
bodies of water, excavations, etc.). Also, the city must
have actual notice that the condition in question is likely
to cause death or serious bodily harm (i.e., prior accidents,
injuries, or complaints). Upon a brief inspection, the
condition must be visible. This doesn't mean the plaintiff
didn't see the condition, it just confirms it was visible
upon a quick inspection.
Something to Think About
City is immune unless the plaintiff
can meet trespasser standard of care
set forth in Restatement of Torts 2d
§335. Only in rare circumstances will
child trespass standard set forth in
§339 be used.
LMCIT has been able to successfully defend these cases at both the trial and appellate court level
so that the current law is very favorable toward municipalities.
Official Immunity and Vicarious Official Immunity
Overview of Official Immunity Doctrine
The common law doctrine of official immunity protects
government officials from suit for their discretionary
actions taken in the course of their official duties.
Official immunity applies when the official's conduct
involves the exercise of judgment or discretion, but
malicious conduct is not immunized. Official immunity
is designed to protect public officials from the fear of
personal liability that might deter independent action and
impair effective performance of their duties.
Definitions
A discretionary act requires the
exercise of individual judgment in
carrying out the official's duties.
A ministerial act is an absolute,
certain, and imperative, involving
merely execution of a specific duty
arising from fixed and designated facts.
M
In the absence of malice, the critical issue in a claim of official immunity is whether the public
official's conduct is discretionary or ministerial. Discretion has a much broader meaning in the
context of official immunity than it does under the state and municipal tort claims statutes.
Whether discretion was involved and official immunity applies turns on the facts of each case.
Courts focus on the discretion exercised by the city official when making a decision.
Application of Official Immunity
• Police/Pursuit /Emergency Response: Pletan v.
Gaines 494 N.W.2d 38 (Minn. 1992).
• Fire & Ambulance: Kari v. Maplewood 582
N.W.2d 921 (Minn. 1998); Bailey of St.
Paul 678 N.W.2d 697 (Minn. App. 2004); Nisbet
v. Hennepin County 548 N.W.2d 314 (Minn.
App. 1996); Woehrle v. City of Mankato 647
N.W.2d 549 (Minn. App. 2002).
• Snowplowing Decision - making: In re: Alexandria
Accident of Feb. 8, 1994 561 N.W.2d 543 (Minn.
App. 1997)
• Traffic Engineering Decision - making: Ireland v.
Crow's Nest Yachts, Inc. 552 N.W.2d 269 (Minn.
App. 1996)
• Employment Decision - making: Rico v. State 472
N.W.2d 100 (Minn. 1991).
Official Immunity and Vicarious Immunity
Vicarious official immunity protects the governmental
employer from liability when its public official is entitled
to official immunity. The rationale behind extending
immunity to the governmental employer is that the threat
of liability against the employer would influence the
governmental employee and hinder them from exercising
independent judgment and discretion. It is very rare for a
court to find official immunity but to deny the
government employer vicarious official immunity.
Municipal Tort Caps
Minnesota Statutes §466.04 addresses the tort liability of
municipalities, limiting the financial liability of any
municipality to $500,000 to any one claimant, and up to
$1,500,000 for all claimants per incident. No award for
damages on any tort claim shall include punitive damages
The damages awarded are limited to compensatory
damages.
Learn More
For further information on specific
cases, please refer to:
Janklow v. Minnesota Bd. of
Examiners for Nursing Home
Adm'rs, 552 N.W.2d 711 (Minn.
1996). (This is a discretionary act)
-And-
Elwood v. Rice County 423 N.W.2d
671 (Minn. 1988).
Learn More
For more information on Official
versus Vicarious immunity, please
refer to: Pletan v. Gaines, 494
N.W.2d 38 (Minn. 1992).
Learn More
For more information on municipal
tort caps, please refer to: Minn. Stat.
§466.04, subd. 1(a)(1)(2)(3).
What claims are covered by the cap?
Any tort liability claims.
• Wrongful death.
• Personal injury.
• Negligence.
• Dram shop.
• Nuisance.
• Trespass.
Indemnification
Subject to the tort cap limits in Minn. Stat. §466.04, a city must defend and indemnify any
employee or official whether elected or appointed, for damages claimed against the employee or
official, provided that the employee or official was:
• Acting in the performance or scope of the duties of the position.
• Not guilty of malfeasance, willful neglect of duty, or bad faith.
City employees or officials are often personally named as defendants in lawsuits, as well as the
city. Subject to the above limitations, the city must indemnify and defend the employee or official.
Which Claims are Not Covered by the Cap?
Non -tort claims
• Breach of contract.
• Eminent domain /condemnation.
• Constitutional claims.
• Any federal claims based upon federal statute or the constitution (e.g. Section 1983, ADA).
Liability Insurance and Waiver of Statutory Cap
Procurement of Liability Insurance
Excess coverage. The governing body of any municipality may procure insurance against liability
of the municipality and its officers, employees, and agents for damages .... resulting from it torts
... The insurance may provide protection in excess of the limit of liability imposed by Section
466.04 .... The procurement of such insurance constitutes a waiver of the limits of governmental
liability under Section 466.04 only to the extent that valid and collectible insurance ... exceeds
those limits and covers the claim. Procurement of commercial insurance, participation in a self -
insurance pool pursuant to Minn. Stat. §471.981, or
provision for an individual self - insurance plan ... shall not Highlight
constitute a waiver of any governmental immunities or
exclusions. Minn. Stat. §466.04. Minn. Stat. §471.981 allows for
Membership in Self- Insurance Pool and Waiver of Tort
Cap
Minn. Stat. §471.981, subd. 1. specifically provides a [city]
may, by ordinance or resolution of its governing body,
0
cities to by ordinance or
resolution to self- insure or join
a self- insurance pool such as
LMCITto provide insurance
coverage for damages resulting
from its torts.
extend the coverage of its self insurance to afford protection in excess of any limitations on
liability established to law. Unless expressly provided in the ordinance or resolution extending the
coverage, the statutory limitation on liability shall not be deemed to have been waived.
The Minnesota Federal District Court has held even if
cities do not enact an ordinance or resolution indicating
that they are self - insured or members of a self - insurance
pool, if the evidence establishes membership in LMCIT or
other self - insurance pool, then the statutory tort caps are
applicable unless expressly waived by the city.
Learn More
See Reimer v. City of Crookston
and Crookston Public School
District #593, 2003 WL
22703218 (D. Minn. 2003) for
The LMCIT policy documents specifically state that more information.
although the city may have elected to purchase coverage
in excess of the statutory limits [to cover non -tort or federal claims], the city has opted to not
waive the tort cap limits. Thus, unless city expressly waives tort cap liability limits, purchase of
excess or additional coverage will not affect the statutory tort cap limit. Please refer to the
attachment entitled " LMCIT Liability Coverage Options, Liability Limits, Coverage Limits and
Waiver" for complete discussion on these issues.
Multiple Claimants and the Municipal Tort Caps
35 W Bridge Collapse
On August 1, 2007, the I35W Bridge spanning the
Mississippi River near downtown Minneapolis collapsed,
resulting in the death of 13 people and injuring over 100
others.
Learn More
See McCarty, et. al. v. City of
Minneapolis, et. al., 654 N.W.2d
353 (Minn. App. 2002) for more
information.
The Minnesota Legislature deemed, "the collapse was a
catastrophe of historic proportions... No other structure owned by the state has ever fallen with
such devastating physical and psychological impact on so many."
Since the state owned and maintained the I35W Bridge, it was the primary target defendant.
However, the state was protected by an individual tort cap of $300,000 per individual claimant as
well as a $1 million per occurrence cap. There was simply no way to adequately compensate the
179 claimants from that tort cap pool.
To avoid a potential constitutional challenge to the tort cap
limits and to attempt to provide compensation for the
victims of the I35W Bridge collapse, the Minnesota
Legislature enacted special legislation to deal with this
tragedy.
Learn More
See Minn. Stat. 3.7391 -7394
signed by Governor Pawlenty on
May 8, 2008.
The essential terms of the bridge fund are as follows:
• Non - liability based fund determined claimants didn't need to establish fault.
• State individual tort cap retroactively adjusted to $400,000 effective August 1, 2007.
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• State waived per occurrence tort cap for this specific incident.
• State appropriated $36.5 million for fund to compensate victims. A three person panel was
created to determine compensation.
• Victims who accepted the offer of compensation had to sign a release to the State of
Minnesota.
• All 179 claimants accepted settlement offers.
The Holidazzle Case
On December 4, 1998, at the Holidazzle parade in downtown Minneapolis, Minneapolis Police
Officer, Thomas Sawina accidentally depressed the accelerator rather than the brake pedal on a
police van. The van lurched into a crowd of parade goers, causing two deaths and numerous
serious injuries. One girl, age seven, was severely injured, which required the amputation of her
right arm at the elbow.
The injured girl's family brought suit against the city, Ford Motor Co. (the manufacturer of the
van) and Federal Signal Corp. (the manufacturer of a flasher system installed on the van which
failed to properly work when Officer Sawina accidentally pressed the accelerator rather than the
brake).
The Hennepin County jury apportioned liability as follows:
13% 0%
87%
® City of
Minneapolis
Federal Signal
❑ Ford Motor Co.
The jury awarded damages to the injured girl of $3.815 million, $30,000 to her injured brother, and
$172,455.06 to her father.
The district court limited the city's liability under the municipal tort cap statute (Minn. Stat.
§466.04) to $750,000 for all claimants in a single occurrence. Thus, the district court awarded the
injured girl $300,000 (limit for a single plaintiff) and her brother $7,522 and her father $14,185.
As to Federal Signal, the district court apportioned liability to it pursuant to the existing joint and
several liability statute, (Minn. Stat. §604.02) to 50% of the total verdict amount under the "15 x
4" rule, Federal Signal's 12.5% liability (12.5% x 4).
Appeal by Plaintiffs
Plaintiffs appealed the district court's apportionment, but the Court of Appeals affirmed the district
court's decision. In their holding, the Court of Appeals specifically held that the "liability cap on
municipal liability is rationally related to the legitimate government objective of insuring fiscal
stability to meet and carry out the manifold responsibilities of government." Thus, the tort cap is
constitutional.
The St. Paul Gas Explosion Case (In Re: Maria Avenue Natural Gas Explosion, 1999 WL
417345) (Minn. App. 1999)
On July 22, 1993, a City of St. Paul public works crew was working at the corner of Third and
Maria Avenue and struck a gas line. The city notified the gas company and began evacuating
residents. Approximately 20 minutes later, an explosion occurred and three people were killed and
several others were seriously injured. Additionally, several buildings were destroyed.
The Plaintiff sued the city and argued that the statutory tort caps were unconstitutional. The city
moved for summary judgment, which was granted by the district court.
The Minnesota Court of Appeals affirmed the district court's grant of summary judgment to the
city. The court held that the application of the "rational basis" test to the tort liability limits has a
legitimate purpose of maintaining a municipality's fiscal integrity and that the legislature could
have reasonably believed that the enactment of the liability caps would promote this legitimate
purpose. The court also rejected Plaintiff's argument that the statutory tort limits were
unconstitutional because the legislature had prospectively raised the caps during the course of the
litigation. The court held that, "By simply adjusting the tort limits, the legislature has continued to
examine the opposing policies of making victims of municipal torts whole while balancing the
municipal fiscal integrity."
Conclusion
Notwithstanding these unique defenses (immunities) and
tort damage caps available to cities, every city should
attempt to actively prevent and limit potential lawsuits by
utilizing loss control and risk management methods, and
should vigorously investigate and be prepared to defend
these cases when they arise.
Brian Gaviglio 03/10
Your League Resource
Questions regarding this
information? Contact Brian Gaviglio,
Litigation Management Attorney at
(651) 281 -1200 or (800) 925 -1122.
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