Johnson v. VT Dept. of Health

Johnson v. State  (95-383); 165 Vt 588; 682 A.2d 961

[Opinion Filed 3-Jul-1996]


                               ENTRY ORDER

                      SUPREME COURT DOCKET NO. 95-383

                             MARCH TERM, 1996


John Johnson and Marion Johnson      }     APPEALED FROM:
                                     }
                                     }
     v.                              }     Windsor Superior Court
                                     }
State of Vermont Department          }
of Health, Julia Schmitz and         }     DOCKET NO. S0129-93WrC
Al Burns                             }


       In the above-entitled cause, the Clerk will enter:

       Plaintiffs brought a tort action under the Tort Claims Act, 12 V.S.A.
  § 5601, against the State Department of Health (Department) and two of its
  employees, alleging that the Department negligently issued a lodging
  license for a motel that plaintiffs purchased.  Defendants moved for
  summary judgment, arguing that sovereign immunity protects the State from
  suit, and qualified immunity protects the individual defendants from suit. 
  The trial court granted the motion, and plaintiffs appeal.  We affirm.

       The material facts are undisputed.  Plaintiffs entered into a purchase
  and sale agreement to purchase a motel in July of 1987.  Under the
  agreement, their obligation to purchase the motel was contingent on receipt
  of necessary state and local licenses.  Plaintiffs applied for a lodging
  license from the Department.  Defendant Julia Schmitz, at the time an
  employee of the Department, conducted an inspection of the motel.  Schmitz
  discovered that the owner of the motel had installed a new septic system
  without a permit.  She contacted the Agency of Natural Resources, and was
  told that the system required a permit.

       Schmitz first informed the owner and plaintiffs that she could not
  approve the license because of the problem with the septic system.  The
  owner of the motel, however, assured Schmitz that if she approved the
  license he would personally guarantee that the system was in compliance, or
  that he would bring it into compliance.  Schmitz contacted her supervisor,
  defendant Al Burns, who told her that she could issue the permit if the
  owner put his guarantee in writing.  The owner wrote on the inspection
  report that he "agree[d] to be responsible for the submission of plans and
  specifications to the District Environmental Office and the repair, if
  necessary, to receive State approval of the septic system repairs." 
  Schmitz then issued the lodging license to plaintiffs.

       After plaintiffs purchased the motel, the previous owner failed to
  carry through on his promise to apply for a permit and repair the septic
  system if necessary.  Plaintiffs claim that the cost to repair the septic
  system exceeds $100,000.

       Plaintiffs challenge the trial court's holding that the State is
  protected by the doctrine of sovereign immunity.  We conclude that the
  grant of summary judgment was proper, because the State owed no duty of
  care to plaintiffs under these circumstances.

       To determine whether a governmental body has assumed a duty of care
  toward specified

 

  persons above and beyond its duty to the public at large, we consider
  four factors:

    (1) whether a statute sets forth mandatory acts for the protection of
    a particular class of persons; (2) whether the government has knowledge
    that particular persons within that class are in danger; (3) whether those
    persons have relied on the government's representations or conduct; and (4)
    whether the government's failure to use due care would increase the risk of
    harm beyond what it was at the time the government acted or failed to act.

  Sabia v. State, ___ Vt. ___, ___, 669 A.2d 1187, 1191 (1995).  In Sabia we
  emphasized the first factor, noting that the Department of Social and
  Rehabilitation Services (SRS) had a statutory mandate to investigate
  reports of child abuse and render appropriate services and that the stated
  purpose of the statute was to "`protect children whose health and welfare
  may be adversely affected through abuse or neglect.'"  Id. at ___, 669 A.2d 
  at 1192 (quoting 33 V.S.A. § 4911).  We concluded that it was "beyond
  dispute" that SRS had a duty "to assist a particular class of persons to
  which plaintiffs belong and to prevent the type of harm suffered by
  plaintiffs."  Id.

       In this case, we cannot perceive any duty that the Department owed to
  persons such as plaintiffs, as distinct from the public at large.  The
  license statute, 18 V.S.A. § 4353, does not establish any procedures or
  standards with which the Department must comply; rather, the only mandate
  is that persons such as plaintiffs, who intend to operate a lodging
  establishment, obtain a permit from the Department.  Moreover, the general
  mandate placed on the Commissioner of Health is to "take cognizance of the
  interest of the life and health of the inhabitants of the state." 18 V.S.A.
  § 107(a).

       The Commissioner's obligation to protect the public from health
  hazards is analogous to the obligation of the Commissioner of Banking,
  Insurance, and Securities to conduct examinations of foreign insurers to
  protect policyholders, and more generally to protect the public from unfair
  insurance practices.  See 8 V.S.A. §§ 1, 3564.  In Denis Bail Bonds, Inc.
  v. State, 159 Vt. 481, 489, 622 A.2d 495, 500 (1993), we concluded that any
  duty created by that statutory scheme "was for the protection of the
  general public," and did not run to the plaintiff, an insurer who had hired
  an untrustworthy agent.  Similarly, here, the Department has no duty of
  care running to the particular class of persons to which plaintiffs belong,
  namely those who purchase motels that do not comply with public health
  regulations.

       The other factors similarly weigh against finding a duty of care in
  this case.  Plaintiffs did not rely upon the State's representations, nor
  did the conduct at issue increase the risk of harm to plaintiffs. 
  Plaintiffs had full knowledge that the septic system was faulty and still
  chose to purchase the motel.  Whether or not they received a lodging
  license for the motel, they knew that the problem with the septic system
  had to be addressed.  If anything, the Department's inspection should have
  benefitted plaintiffs, because it brought this problem to their attention.
  When they chose to ignore the problem, they did so with full knowledge of
  the risk.

       The court also held that the individual defendants were protected from
  suit by the doctrine of qualified immunity.  "[L]ower-level government
  employees are immune from tort liability when they perform discretionary
  acts in good faith during the course of their employment and within the
  scope of their authority."  Hudson v. Town of East Montpelier, 161 Vt. 168,
  171, 638 A.2d 561, 563 (1993); see also Libercent v. Aldrich, 149 Vt. 76,
  81, 539 A.2d 981, 984 (1987) (discussing doctrine of qualified immunity). 
  We acknowledged in Hudson that the distinction between
  discretionary-decisional acts and ministerial-operational acts cannot be
  reduced to literal or dictionary definitions of the terms, but must be
  based on a "case-by-case examination of the act" in question.  Hudson, 161
  Vt. at 171-72, 175, 638 A.2d  at 564, 566.

 

       Here, we agree with the trial court that the employees of the
  Department of Health were carrying out a discretionary function.  The
  decision to issue a lodging license is based on the inspector's subjective
  evaluation of a number of factors.  The inspection report reveals no
  "bright-line rules" for rating any of the twenty categories, which range
  from "building condition" to "food handling" and "rodent and insect
  control," or for weighing the results in coming to a final decision.  
  After inspecting this motel, the inspector noted two problems: that the
  shower stalls needed refurbishing, and that the septic system had been
  worked on and needed to be approved.  She consulted with her superior and
  together they decided that the license could be issued based on the owner's
  written promise.  In hindsight, that decision may have been unwise.  It
  was, however, within the discretion of the employees, and they are
  therefore protected from suit by the doctrine of qualified immunity.

       Affirmed.






     BY THE COURT:



     _______________________________________
     Frederic W. Allen, Chief Justice

     _______________________________________
     Ernest W. Gibson III, Associate Justice

     _______________________________________
     John A. Dooley, Associate Justice

     _______________________________________
     James L. Morse, Associate Justice

     _______________________________________
     Denise R. Johnson, Associate Justice