Wednesday, February 17, 2016

Must the county inform a purchaser of the base flood elevation?

In an interesting case involving governmental immunity, Gibbs v Gilleland, (Tenn Apps. 2014), the issue was whether Rutherford County had a duty to inform the purchaser of property which is below the base flood elevation of that fact prior to purchase. The purchasers bought the property, obtained building permits, and started construction. The week after the construction began, the county informed them that the property was below the base flood elevation and that modifications were necessary to comply with the county storm water regulations. The cost of the modifications was alleged to be significant, to the point that construction might be financially prohibitive.

The plaintiffs carefully avoided suing the county based on the issuance of the permits; the Tennessee Governmental Tort Liability Act, Tenn. Code Ann. § 29-20-101 et seq., specifically immunizes local governments for the negligent issuance of building permits, or for that matter any other kind of permit or license. So the plaintiffs alleged that the county had a duty to inform them that the property was below the base flood elevation, and that the county’s failure to so inform them was a breach of that duty for which the county was liable.

The Court of Appeals (as well as the trial judge, who was Senior Judge Ben Cantrell) concluded that there was an immunity because this was a discretionary function, even if the plaintiffs could prove that there was some duty owed. The court noted that the Rutherford County Zoning Regulations did not impose such a duty on the county. Relying on the “planning – operational test” where planning involves consideration regarding a particular policy, and operational decisions implement pre-existing laws and regulations, the Court of Appeals concluded that the county’s decision to refrain from notifying plaintiffs that the property was located in a flood prone area was a discretionary decision entitled to immunity.

Given the breadth of the Tennessee Governmental Tort Liability Act, this result seems eminently reasonable. It is very difficult to sue a local government or indeed an employee of a local government under the terms of the act. The Tennessee General Assembly has concluded that retaining local government immunity is important to the continued vitality of local governments, and the statute is drafted broadly to cover many different kinds of governmental activities and immunize those from potential tort liability.

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