Liability of State Departments of Transportation for Design Errors (2017) / Chapter Skim
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3LIABILITY OF STATE DEPARTMENTS OF TRANSPORTATION FOR DESIGN ERRORS By Larry W Thomas, Washington, DC I
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4transportation department's acceptance of the work. Although the acceptance of the work doctrine generally precludes claims, there are important exceptions to the doctrine.
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5immunity but includes certain exceptions or exclusions from liability.7 Delaware retains its sovereign immunity, including for highways.8 On the other hand, the State of New York "waives its immunity from liability and action and hereby assumes liability and consents to have the same determined in accordance with the same rules of law as applied to actions in the supreme court against individuals or corporations, provided the claimant complies with the limitations of this article."9 In New York, however, there is still immunity for a claim arising out of the government's exercise of its discretion.10 Georgia's statute provides for a limited waiver of sovereign immunity: "The state waives its sovereign immunity for the torts of state officers and employees while acting within the scope of their official duties or employment…provided, however, that the state's sovereign immunity is waived subject to all exceptions and limitations set forth in this article."11 South Carolina and a few other states waive their immunity when a claim is covered by insurance; thus, in South Carolina, [t] o the extent such liability insurance is purchased pursuant to [S.C.
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6district court dismissed a claim against a county because Pennsylvania's Sovereign Immunity Act did not include a waiver for the negligent design and installation of guardrails next to a Commonwealth highway.14 The plaintiff's pro se complaint alleged that Mercer County entered into a contract with the Pennsylvania Department of Transportation (PennDOT) for the maintenance and repair of a portion of I-80 where the accident occurred and further alleged that both defendants' negligence caused a hazardous roadway condition of which the defendants were or should have been aware.15 In part, the plaintiff 's claims were based on an alleged defective design of a guardrail.16 The name of the device, manufactured by Trinity Industries, Inc., and Trinity Products, LLC (collectively Trinity)
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7with accepted safety standards, as well as a review of construction plans for such compliance."29 First, the court held that because "DOT employees reviewed and approved Comanche's traffic control plan, then inspected the detour route after Comanche installed the detour signs," their "conduct falls squarely within the inspection powers exception in OCGA [Official Code of Georgia Annotated]
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8that their exercise of discretion was a defense,43 but six stated that they did not have a discretionary defense for claims involving a defective plan or design.44 Eight departments did not respond to the question. Appendix A collects state statutes, as well as some cases that provide that the state and government agencies are not liable for the exercise or performance of their discretionary acts or functions, i.e., a discretionary function exemption.45 At least 34 function or duty on the part of a state officer or employee, whether or not the discretion involved is abused")
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9states have a tort claims act or similar legislation that includes a discretionary function exemption similar -- if not identical in some states -- to the one in the Federal Tort Claims Act.46 For example, Iowa Code Section 669.14(1)
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10 every municipality is subject to liability for its torts and those of its officers, employees and agents acting within the scope of their employment or duties whether arising out of a governmental or proprietary function…[except for]
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11 (1) Does the challenged act, omission, or decision necessarily involve a basic governmental policy, program, or objective?
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12 (1) the failure of a governmental unit to perform an act that the unit is not required by law to perform; or (2)
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13 does not cause a roadway to be out of conformity with its design or with state standards "unless a change in traffic volume changes the state standards that apply."86 Whether a change in conditions will cause a plan or design to be no longer in conformity with approved standards is also discussed in Section IV. In Sadler v.
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14 cause' of the accident."104 Furthermore, the court found that the curve had been a dangerous curve ever since the traveling public had begun using the roadway, and that at least since 1953, the State had known that the curve exceeded the design standards in existence since 1943 and 1946.105 Finally, as decided in Ginsburg v. City of Ithaca,106 in some cases compliance with generally accepted engineering and design standards may not suffice to absolve a transportation department of responsibility for an accident.
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15 give rise to liability, even when the alleged condition relates to a plan or design decision.117 For example, a Missouri statute provides that a public entity's immunity is waived for: Injuries caused by the condition of a public entity's property if the plaintiff establishes that the property was in [a] dangerous condition at the time of the injury, that the injury directly resulted from the dangerous condition, that the dangerous condition created a reasonably foreseeable risk of harm of the kind of injury which was incurred, and that either a negligent or wrongful act or omission of an employee of the public entity within the course of his employment created the dangerous condition or a public entity had actual or constructive notice of the dangerous condition in sufficient time prior to the injury to have taken measures to protect against the dangerous condition.118 A transportation department may have immunity, however, for a latent condition.
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16 to prove that the State's alleged negligence was the proximate cause of the accident.125 Finally, in responding to the survey the South Carolina Department of Transportation (SCDOT) stated that the department has design immunity for highways pursuant to the Code of Laws of South Carolina Annotated Section 15-78-60(15)
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17 Plan- or design-immunity statutes, however, as discussed in the next sections, tend to fall within one of the following categories: • Plan- or design-immunity statutes that require prior approval of a plan or design or compliance with previously approved or prevailing standards. • Plan- or design-immunity statutes that require both prior approval of a plan or design and compliance with previously approved or prevailing standards.
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18 property where such plan or design is prepared in substantial conformance with engineering or design standards in effect at the time of preparation of the plan or design or approved in advance of the construction by the legislative body of the governmental entity or by some other body or administrative agency, exercising discretion by authority to give such approval.144 The New Jersey plan- or design-immunity statute similarly provides two bases on which plan or design immunity will attach. Neither the public entity nor a public employee is liable under this chapter for an injury caused by the plan or design of public property, either in its original construction or any improvement thereto, where such plan or design has been approved in advance of the construction or improvement by the Legislature or the governing body of a public entity or some other body or a public employee exercising discretionary authority to give such approval or where such plan or design is prepared in conformity with standards previously so approved.145 As discussed in the following Subsection C, although other state plan- or design-immunity statutes implicitly may authorize a court to make a factual determination of whether a public entity has complied with the required elements of the statute, the California statute arguably is more rigorous in requiring what a public entity must prove before immunity will be found to have attached to a plan or design prior to a construction project.
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19 design of the wall caused the plaintiffs' injuries, but also that there was no "substantial evidence of any independent cause."157 The County established the first prong of the statutory immunity defense because the County board of supervisors exercised its discretion to approve the plans for the project.158 Alvis argued that because the board was unaware of one consultant's concerns, the board's exercise of discretion could not have been a "knowing and informed" one.159 The court held, however, that Section 830.6 does not require that the public agency's approval has to be a knowing or informed one.160 Significant facts for the court were that the board approved the plans on the recommendation of a registered professional civil engineer, whose recommendation was "backed by other professional consultants."161 Furthermore, the court held that there was "ample evidence" to support the design's reasonableness.162 In Arreola v. County of Monterey,163 the court found that the state's Design Planning Manual required that the highway drainage structure be able to accommodate a 100-year storm.
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20 government had not presented substantial evidence upon which "a reasonable public employee could have approved a design that did not take flooding into account."174 The court stated that although the State presented evidence that the original design was reasonable, the court was "troubled by the conclusory nature of that evidence."175 State's engineers testified that the design was reasonable, but the only foundation offered for their conclusion was the presumption that someone or something else would take care of flooding. Such evidence lacks the solid value necessary to constitute substantial evidence.
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21 there is immunity for an injury arising out of a plan or design "for [the] construction or maintenance of or improvement to highways, roads, streets, bridges, or rights-of-way if the plan or design is prepared in conformance with generally accepted engineering or design standards in effect at the time of the preparation of the plan or design…."184 The statute also requires, however, "reasonably adequate warning" of "any unreasonably dangerous hazards…."185 F
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22 the circumstances set forth in § 12-820.03…."194 The court held that "the affirmative defense in [the plan or design immunity statute] is available when material changes to travel over roadways or roadway features have rendered the original plans or designs substandard and no other plans have succeeded them."195 In the event of an unreasonably dangerous hazard, the State may invoke its affirmative defense under Section 12-820.03 if it proves that it provided "reasonably adequate warning" to allow the public to take suitable precautions.196 The court held that an injury may "arise" out of a plan or design if the injury results or proceeds from the plan or design of a highway.197 In this case there was no evidence suggesting that the construction of the relevant stretch of I-10, including the median, changed since 1967.
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24 be necessary."225 Notwithstanding Woodworth's argument, the court held that the plaintiff 's complaint did arise out of the intersection's plan or design. The engineering study that Woodworth argues should have been performed would not have been necessary, but for the inferior design of the intersection based on the: (1)
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25 the State was based on the negligent design of the highway and therefore was cognizable under the Massachusetts Tort Claims Act, General Laws, Chapter 258. The court held that the defect statute, General Laws, Chapter 84, Section 15, was the plaintiff 's sole remedy against the town, as well as against the Commonwealth, for injuries on state highways.242 Under the Massachusetts statute, a defect includes "‘anything in the state or condition of the way that renders it unsafe or inconvenient for ordinary travel'" [emphasis in original]
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26 specifications.253 Rodarte alleged that Reno was negligent because it failed to install the guardrails in accordance with the contract's specifications and that faulty construction was partly responsible for her injuries.254 Ashland Inc. (Ashland)
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27 failure of those levees was a result of the negligent and improper backfilling and compaction of the excavated locations by WGI in violation of a statelaw duty of care."267 WGI claimed federal GCI based on Boyle, supra. The court explained that [t]
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28 (1) the governmental authority approved reasonably precise specifications; (2)
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29 functioning as the agent of the governmental entity when implementing the latter's design decision.293 The court elaborated on what a government contractor must show to establish that it is an agent of the government with which it contracted: 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.
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30 not decide "whether some degree of control by the government would extend its immunity protection to a private party," the court held that Brown & Gay "was independently negligent in designing the signs and traffic layouts for the Tollway."312 In this case Brown & Gay could not claim governmental immunity because "the Authority did not tell Brown & Gay how to do the work."313 In a Missouri case that involved the design of a bridge that collapsed, In re: Individual 35W Bridge Litigation,314 discussed in Section VII.D, an appellate court held that the contractor's successor in interest was not entitled to claim sovereign immunity as an agent of the state government.315 In summary, there is federal and some state judicial authority that a government contractor may claim immunity for a defective plan or design when "the contractor acted as a ‘servant' for the purposes of the challenged conduct"316 and when it was the government that "negligently selected a design that a contractor implemented for a government project."317 Next, the digest discusses claims by transportation agencies against design consultants and contractors for their plan or design errors and omissions, as well as whether FHWA, pursuant to 23 C.F.R Part 172, will participate in the recovery by transportation agencies of their costs and damages caused by a contractor's design errors or omissions on a federal-aid project.
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31 of engineering and design related services under 23 U.S.C. 112" and the requirements that "apply to federally funded contracts for engineering and design related services for projects subject to the provisions of 23 U.S.C.
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32 their policies and procedures, which are included in Appendix F of the digest. Under the Florida Standard Professional Services Agreement terms, a consultant agrees to "use that degree of care and skill ordinarily exercised by other similar professionals in the field under similar conditions in similar localities.
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33 care,348 whereas 14 reported that they had not.349 Although 2 departments reported that within the past 5 years they had made a claim against a contractor for the contractor's failure to comply with design standards,350 15 advised that they had not done so.351 Although the case did not involve a transportation department, in Gee & Jenson Engineers, Architects, and Planners v. United States,352 the U.S.
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34 The court held that Baltimore could not sue for unjust enrichment when there is "an express contract between the parties."367 Even when there is an express contract, however, there are two exceptions that allow a claim for unjust enrichment. One exception is when "the plaintiff adduces evidence of fraud or bad faith on the part of the defendant"; the other exception is when the contract between the parties does not govern the entire subject matter of the case.368 Neither exception applied.
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35 was entitled to the benefit of the State's sovereign immunity.381 The court denied Jacobs' motion, as Sverdrup's successor-in-interest, to dismiss the DOT's cross-claims for common-law contribution and indemnity and contractual contribution and indemnity, as well as for reimbursement pursuant to the State's compensation statutes, because of Sverdrup's negligent design of the bridge that collapsed.382 E Compliance with the Standard of Care and Design Standards A firm or individual skilled in design work is held to a higher standard of care.
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36 Furthermore, two transportation departments stated that in the past 5 years their department had a products liability claim that involved, for example, an allegedly defective safety appliance or other product.393 Nineteen departments answered "No" to the question.394 Five departments did not respond to the question.395 As the treatise on products liability explains, regardless of whether a products liability claim is predicated on negligence, implied warranty, or strict liability in tort, the essential elements of the claims are "first, the existence of a defect; second, the attribution of that defect to the seller; and third, a causal relationship between the defect and the injuries sustained by the plaintiff."396 There may be no products liability claim against a manufacturer, however, that builds its product in compliance with a government agency's design specifications.397 An example of a case that involved a claim for a defective product used on highways is All-Iowa Contracting Company v. Linear Dynamics, Inc.398 All-Iowa Contracting Company (All-Iowa)
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37 As discussed in the following Section VIII.B, some exceptions to the general rule are that the completed work has an inherently or imminently dangerous condition, includes conditions that are "reasonably certain to endanger third persons," has "a latent defect that is either deliberately concealed by the contractor or not reasonably discoverable by the owner," or "results in a public nuisance."406 B Exceptions to the Acceptance Doctrine 1.
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38 Two requirements must be satisfied before the doctrine will isolate a contractor from liability. First, the defect must be patent.
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39 Mangum, Inc. (Mangum)
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40 Next, the digest discusses whether a contractor has a claim against a transportation department when the department has made a material misrepresentation in its plan or design for a project or failed to disclose material information, as well as whether clauses in a department's contract with a contractor will absolve the department of a material misrepresentation or of a failure to disclose material information.
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41 does not prevent the party from bringing an action against the State.464 C Claims by Contractors Against Transportation Departments for Undisclosed Material Information or Material Misrepresentations in a Plan or Design 1.
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42 In a case decided by the Illinois Court of Claims, Arcole Construction Company v. State,479 the plans for the reconstruction of a section of Roosevelt Road in Chicago failed to disclose the foundation of an abandoned street car track.
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43 As for IDOT's disclaimers, although a disclaimer of an estimate provides "a flexibility sufficient to accommodate actual deviations from the estimate," disclaimers may not be used "to excuse the estimator from using relevant information that is reasonably available to him."498 Because the DOT provided a positive representation of the number of T1 locations,499 contractual disclaimers could not be used to "shield" the department from liability when it negligently misrepresented the number of T1 locations.500 In another case involving misrepresentations, J.L. Simmons Co., Inc.
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44 The court held that Dickerson exercised little if any independent discretion in the construction of the beams.516 5. Third-Party Beneficiary Claims by Subcontractors Against Transportation Departments for a Defective Plan or Design Defective plans and specifications may furnish a basis for a claim by a purported third-party beneficiary against a transportation department that prepared or contracted with a design consultant or contractor to prepare a plan or design for a project.
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45 Likewise, in Buckley & Company v. State,535 a New Jersey court stated that "general clauses cannot fairly be read to supersede or render harmless the violation of [one's]
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46 Two DOTs that responded to the survey stated that design–build contracts have resulted in fewer claims by their department against contractors for a defective plan or design of a highway or other public improvement,551 whereas 12 DOTs stated that design– build contracting had not resulted in fewer claims against contractors for defective plans or designs.552 As for claims by contractors against transportation departments, three DOTs stated that design– build contracts have resulted in fewer claims by contractors against their department for a defective plan or design of a highway or other public improvement.553 Nine DOTs said that design–build contracting had not resulted in fewer claims.554 As for third-party claims against the departments, one DOT stated that design–build contracts have resulted in fewer claims by third parties (such as motorists) against the department for a defective plan or design.555 Thirteen DOTs reported, however, that there had not been a reduction in such thirdparty claims.556 As for whether the use of design–build contracts has resulted in fewer claims by third parties against contractors, 1 DOT said that it had,557 but 12 DOTs said that it had not.558 Cases discussed in the digest in Sections VII.C through VII.F hold that design consultants and contractors who were responsible for preparing a plan or design may be held liable for breach of contract or warranty or for professional negligence when a transportation department or other owner had little or no responsibility for the defective plan or design at issue.
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47 standards was not the cause of the claim or claims.564 The Colorado Department of Transportation advised that the department had not made claims against contractors either for violating the standard of care or for failing to comply with design standards. As stated in Kishwaukee Community Health Services Center v.
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48 the weighing of social and economic considerations."578 Moreover, without expert testimony that established the standard of skill and care by which M&M was to be judged, "the jury was clearly wrong in finding that M&M was negligent."579 Finally, MRBA had no duty to the public to modify the bridge to meet current AASHTO standards.580 B A Professional's Duty to Exercise Due Care with Respect to Other Project Parties As held in Eastern Steel Constructors, Inc.
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49 Notwithstanding the absence of privity of contract between the contractor and the design professional, an architect, engineer, or other design professional owes a duty of care to a contractor "who has been employed by the same project owner as the design professional and who has relied upon the design professional's work product in carrying out his or her obligations to the owner, due to the special relationship that exists between the two."594 A design professional's duty may be affected by provisions in the other parties' contract, as well as by professional rules of conduct applicable to his or her profession.595 In West Virginia, when an owner has engaged a design consultant and a contractor to work on the same project in situations such as Eastern's, there is no requirement of privity of contract for an action against a design professional for breach of an express or implied warranty.596 Even in cases not involving design professionals and contractors in which there was no privity of contract, it has been held that there may be a cause of action for negligence. In Diaz Contracting, Inc.
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50 neither had a plausible claim of a protected property interest nor a "cognizable liberty interest" in KDOT's action.606 The appeals court held that KDOT did not violate any Martin Marietta rights of procedural due process, nor had the DOT made any defamatory statements about the company. A case of interest, although not concerning a DOT's decision to place an item on or to remove one from an approved products list, is Eastside Sand & Gravel, Inc.
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51 An example of a controversy concerning a defective safety appliance is the guardrail manufactured by Trinity Highway Products (Trinity) , a subdivision of Trinity Industries in Dallas, Texas.622 Trinity manufactured a guardrail end known as the ETPlus® that was sold both domestically and abroad.623 FHWA initially approved the ET-Plus in 2000 and then again in 2005 when an updated version was created.624 FHWA may approve a product after verifying that the product was crash-tested according to AASHTO standards.625 Once approved by FHWA, state transportation agencies may be reimbursed when they use the product in their construction projects.626 Trinity decided to change the ET-Plus in 2005 to make it less expensive by reducing the width of the extruder head by an inch.627 Trinity allegedly was untruthful in regard to the alteration of its guardrail in 2005.628 For example, in 2006 Trinity informed the State of Vermont that the ET-Plus was identical to the product that already had been approved by FHWA and the Vermont Agency of Transportation.629 According to one source, 42 states no longer use the ET-Plus, and Trinity has had to pay the federal government approximately $175 million for fraud.630 Moreover, in an accident in Virginia, a woman suffered multiple fractures and her child received brain and pelvic injuries.631 In South Carolina a man's legs were amputated after hitting a guardrail end,632 and An Alabama case in 2000, Ex parte Alabama Department of Transportation,614 involved a decision by the Alabama Department of Transportation (ALDOT)
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52 and to be eligible for federal-aid reimbursement for their roadside safety hardware products."640 D Claims Against Suppliers and Vendors Under the FCA United States ex rel.
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53 [C] onsultant firms generally are required to have several forms of insurance when performing project design for state agencies, including General Liability (which may cover subsequent failure of the facility being designed, among other mishaps)
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54 defend "is not dependent on the probable liability to pay based on the facts ascertained through trial."667 Third, "[t] he duty to defend is determined by comparing the language of the insurance policy with the allegations in the complaint.
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55 Arizona Department of Transportation provided a document entitled "Design-Build Package" that is included in Appendix F.677 Some transportation agencies have implemented Owner-Controlled Insurance Programs (OCIP) that also apply to design–build projects, with some OCIPs including E&O coverage.678 An OCIP may cover the owner, designer, construction manager, contractors, and consultants in one policy.679 Some of the reasons to implement an OCIP are to enable a safer job site and lower the cost of construction.680 The Arizona Safety Incentive Program OCIP provides: The Design–Builder shall work with the Owner and the Owner Controlled Insurance Program (hereafter referred to as OCIP)
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