Lyle E. Schneider, Paul S. Kurtz And Shirley J. Kurtz, Gene J. Peters, Sterling Tops, Inc., Robert W. Bonorden And Deann M. Bonorden, Gerald W. Petersen, Richard R. Kane And Debra K. Kane, Mark A. Doepke And Michelle L. Doepke, Gloria M. Knapp Freilinger, Rudy Busch D/b/a Rudy's Sales And Service, Paul R. Beem And Stacie L. Beem, David J. Fink And Deb Fink, Davik's Auto Body/denver Oil Company, Randall-marta Bender D/b/a Bender Enterprises, Inc., Tommie Brettmann D/b/a Denver Mill, Byron D. Davis And Jane P.Davis, Davis Farm And Auto, Inc., William Buss D/b/a Denver Construction, Inc., And Mike Wooldrik, As Of The Estate Of Robert Wooldrik, Vs. State Of Iowa , 789 N.W.2d 138 ( 2010 )

IN THE SUPREME COURT OF IOWA
No. 07–0887
Filed September 3, 2010
LYLE E. SCHNEIDER, PAUL S. KURTZ and
SHIRLEY J. KURTZ, GENE J. PETERS,
STERLING TOPS, INC., ROBERT W. BONORDEN
and DEANN M. BONORDEN, GERALD W. PETERSEN,
RICHARD R. KANE and DEBRA K. KANE,
MARK A. DOEPKE and MICHELLE L. DOEPKE,
GLORIA M. KNAPP FREILINGER, RUDY BUSCH
d/b/a RUDY’S SALES AND SERVICE, PAUL R. BEEM
and STACIE L. BEEM, DAVID J. FINK and DEB FINK,
DAVIK'S AUTO BODY/DENVER OIL COMPANY,
RANDALL-MARTA BENDER d/b/a BENDER
ENTERPRISES, INC., TOMMIE BRETTMANN
d/b/a DENVER MILL, BYRON D. DAVIS and JANE P.
DAVIS, DAVIS FARM AND AUTO, INC., WILLIAM
BUSS d/b/a DENVER CONSTRUCTION, INC., and
MIKE WOOLDRIK, as Executor of the Estate of
ROBERT WOOLDRIK,
Appellants,
vs.
STATE OF IOWA,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Bremer County, Stephen P.
Carroll, Judge.
Landowners appeal from a summary judgment in an action against
the State alleging negligent design and construction of a highway project
in a floodway. DECISION OF COURT OF APPEALS VACATED;
DISTRICT COURT JUDGMENT AFFIRMED IN PART, REVERSED IN
PART, AND REMANDED.
2
John J. Hines of Dutton, Braun, Staack, Hellman, P.L.C.,
Waterloo, for appellants.
Thomas J. Miller, Attorney General, and Robin G. Formaker and
Richard E. Mull, Assistant Attorneys General, for appellee.
3
HECHT, Justice.
Landowners sued the State of Iowa alleging its negligent design
and construction of a highway project caused a flood and resulting
damages. The State moved for summary judgment asserting the district
court lacked subject matter jurisdiction over the claims of some of the
plaintiffs who failed to exhaust their administrative remedies and
advancing statutory immunities against all of the plaintiffs’ claims. The
district court granted the motion based on the State’s statutory
immunity for discretionary functions. The landowners appealed, and the
court of appeals affirmed the district court’s ruling. On further review,
we conclude the defense of immunity for discretionary functions is not
available to the State under the circumstances of this case. We vacate
the decision of the court of appeals, affirm in part and reverse in part the
district court’s judgment, and remand for further proceedings.
I. Factual Background and Proceedings.
When viewed in the light most favorable to the plaintiffs, the
summary judgment record could establish the following facts. In the late
1980s, the Iowa Department of Transportation (DOT) developed a plan to
relocate a portion of Highway 63 to bypass the city of Denver, Iowa. The
plan called for the construction of a four-lane divided highway along the
west side of the city and a bridge spanning Quarter Section Run Creek, a
stream flowing through Denver. The original construction of the bypass
project commenced in 1993 and concluded in 1994.
In a flood insurance study commissioned by the city in 1990, the
creek was designated as a “regulatory floodway.” A floodway “ ‘is the
channel of a stream plus any adjacent flood plain areas that must be
kept free of encroachment so that [a] 100-year flood can be carried
4
without substantial increases in flood heights.’ ” 1 K & W Elec., Inc. v.
State, 712 N.W.2d 107, 110 (Iowa 2006) (quoting 1984 Federal
Emergency Management Agency flood insurance study). The bridge and
related structures were designed to accommodate a 50-year flood event. 2
The new bridge, consisting of twin structures 168 feet in length, spanned
the creek, but not the entire floodway. The embankment constructed for
the roadway encroached upon the floodway and impeded the drainage of
water from it.
In May 1999, Denver experienced an extraordinary rain event and
resulting flood which damaged thirty-five homes and thirty-four
businesses. The intensity of the rain produced a volume of rainwater in
the floodway consistent with the magnitude of a 250-year flood. A
1Iowa law prohibits the erection, use, or maintenance of a structure, dam,
obstruction, deposit, or excavation in or on a floodway without a permit issued by the
Iowa Department of Natural Resources (DNR). See generally Iowa Code § 455B.275
(2009). (Because there have been no amendments to the relevant statutory provisons,
all citations will be to the 2009 Iowa Code unless otherwise noted.) The DNR assists
communities in developing and administering local floodplain management programs
and coordinates the National Flood Insurance Program. See National Flood Insurance
Program Coordination/Local Floodplain Programs, http://www.iowadnr.gov/water/
floodplain/nfip.html. At the time the bridge and related embankment structures were
designed, the DOT was not aware that the regulatory floodway had been designated.
2As the project was planned for construction just outside the city limits before
the floodway was designated, the DOT sized the bridge to comply with a Q50 (50-year
flood) standard. A higher Q100 (100-year flood) standard was typically used by the
DOT when sizing bridges in flood insurance study areas and in other locations where
the risk of high damage would be created for upstream businesses and homes. The
State’s expert conceded the higher standard would have been utilized in the design of
the bridge had it been designed for construction in a floodway, but noted the State did
not learn the site had been designated as a floodway until after the bridge was built.
The expert also acknowledged that if the State employees responsible for the design of
the bridge had been aware the structure would be built in a floodway, applicable
regulations would have required compliance with a Q100 standard. Under the Q100
standard, the bridge and related structures would have been designed to achieve a no-
rise condition on insurable structures in Denver upstream from the bypass for a 100-
year flood. In other words, the bridge would have been designed so that it would not
cause insurable structures upstream from the bridge to experience an increase in the
depth of floodwaters as a consequence of a 100-year flood event.
5
resource assessment and flood study undertaken by the United States
Department of Agriculture Natural Resources Conservation Service
concluded the embankment constructed for the bypass “cut[] off a large
portion of the floodway,” causing water moving through it to “back up”
during the 1999 event. Computer models prepared for the study
illustrated that the bypass structures increased the depth of the 1999
flood waters by as much as three feet in certain areas of the city and
caused flooding in a part of the city that would not have flooded but for
the construction of the bypass. The models also produced evidence
tending to prove the bridge and related structures would have caused
flood waters in a 100-year flood event to rise higher in some parts of
Denver upstream from the bridge than would have been the case had the
bridge and related structures not been placed in the floodway.
In the aftermath of the flood, the city formed a task force to explore
potential remedial measures to diminish the risk of future flooding.
Following a lengthy period of study and investigation of a range of
options, the State chose to redesign and extend the bridge. The
reconstruction of the bridge and the reconfiguration of the floodway in
2004 and 2005 modified the elevation of the floodway along the creek
and substantially enhanced the capacity of the floodway to convey water
away from the city. The summary judgment record includes testimony
and an affidavit of the State’s expert tending to prove the reconstruction
brought the bridge and related structures 3 into substantial compliance
with the Q100 standard. 4
3For ease of reference, we will refer to the bridge and related structures,
including the original twin structures spanning the creek, the embankment, the
reconstructed bridge, and the reconfiguration of the floodway, as “the bridge.”
4The expert acknowledged that even after the reconstruction of the bridge and
reconfiguration of the elevation in parts of the floodway, the State did not achieve a no-
rise condition for all upstream properties in Denver. However, the State received DNR
6
Owners of several properties damaged in the 1999 flood filed suit
alleging the State negligently designed and constructed the bridge. The
landowners alleged the State breached a common-law duty by designing
and constructing the bridge in a manner that obstructed the floodway
and increased the depth of floodwater during the 1999 event. 5 The
landowners further alleged the State breached a duty derived from Iowa
Code section 314.7 proscribing disruption of the natural drainage of
surface water when improving or maintaining a highway. The State’s
answer asserted immunity from liability under Iowa Code section 669.14
because the design and construction of the project were discretionary
functions and because the project conformed with a generally recognized
engineering or safety standard, criteria, or design theory prevailing at the
time of its design and construction or reconstruction.
The State filed a motion for summary judgment asserting the
district court lacked subject matter jurisdiction over the cases of some of
the plaintiffs who, after filing their claims with the state appeal board as
required under Iowa Code chapter 669, failed to respond to the attorney
general’s requests for additional information and documentation of the
claims. The motion also sought summary judgment in the State’s favor
as to all of the plaintiffs’ claims based on the immunity defenses asserted
in the answer. The district court concluded it had subject matter
jurisdiction because the plaintiffs’ administrative filings were minimally
_____________________
approval for the reconstruction because the State obtained easements from the owners
of some of those properties and there are no insurable structures on the others.
5The landowners claim regulations controlling the construction of floodway
obstructions at the time the by-pass project was designed and constructed prescribed a
pertinent standard of care. This standard dictated that obstructions of a floodway must
not increase the floodwaters for upstream structures in the event of a 100-year flood
and is described in the summary judgment papers as a “no-rise standard.” The extent
to which the original by-pass project deviated from this standard is disputed by the
parties.
7
sufficient to achieve exhaustion, but granted the motion, reasoning the
State is immune under Iowa Code section 669.14(1) from liability to the
plaintiffs because the design and construction of the bypass were
discretionary functions based on “considerable planning” and a
“balancing of governmental priorities and competing governmental
demands.” The district court further concluded the State was entitled to
summary judgment on the plaintiffs’ claims for damages for permanent
devaluation of their properties under section 669.14(8) because the
bridge was constructed or reconstructed in accordance with a generally
recognized engineering or design theory. The summary judgment ruling
also rejected the plaintiffs’ legal theory that the construction of the bridge
diverted the natural flow of water and caused the 1999 flooding in
violation of Iowa Code section 314.7.
The landowners appealed, contending the district court erred in
granting summary judgment in favor of the State based on the
discretionary immunity and state-of-the-art defenses. The landowners
further challenged on appeal the district court’s determination that they
failed to engender a fact question in the summary judgment record as to
whether the State violated Iowa Code section 314.7 in the course of the
design and construction of the bridge. We transferred the appeal to the
court of appeals.
The court of appeals affirmed the summary judgment in favor of
the State on the ground that the plaintiffs’ claims are barred because
they are based upon the negligent exercise or performance of a
discretionary function or duty by a State agency or employee under
section 669.14(1). We granted further review to determine whether the
State’s immunity for discretionary functions is applicable under the
circumstances presented in this case.
8
II. Scope of Review.
We review for correction of errors at law a district court’s ruling
granting a motion for summary judgment. Kolarik v. Cory Int’l Corp., 721
N.W.2d 159, 162 (Iowa 2006). We examine the record to determine
whether a material fact is in dispute. Robinson v. Fremont County, 744
N.W.2d 323, 325 (Iowa 2008). In performing this function, we “ ‘view the
entire record in a light most favorable to the nonmoving party [and]
indulge in every legitimate inference that the evidence will bear’ in favor
of the nonmoving party.” Cubit v. Mahaska County, 677 N.W.2d 777,
779 (Iowa 2004) (alteration in original) (quoting Crippen v. City of Cedar
Rapids, 618 N.W.2d 562, 565 (Iowa 2000)). We also review for correction
of errors at law the district court’s interpretation of the applicable
statutes. In re Inspection of Titan Tire, 637 N.W.2d 115, 128 (Iowa 2001).
III. Discussion.
A. Subject Matter Jurisdiction. As we have noted, the district
court rejected the State’s contention that some of the plaintiffs failed to
exhaust their administrative remedies. The State again raises the
exhaustion doctrine on appeal, contending the summary judgment
against those plaintiffs must be affirmed even if the immunity defenses
are without merit because the district court lacked subject matter
jurisdiction. We shall therefore first address the jurisdictional question.
Each of the plaintiffs filed a claim on a form promulgated by the
state appeal board. See Iowa Code § 669.3 (authorizing the state appeal
board to “adopt rules and procedures for the handling, processing, and
investigation of claims” against the State). The claim forms filed by the
plaintiffs on May 15, 2001, disclosed the amount of each claim for
property damage and generally described the legal theories asserted
against the State. Several weeks later, a claims manager employed by
9
the State sent a letter to the plaintiffs’ counsel requesting supporting
documentation for the claims. A second letter was sent by the claims
manager to the plaintiffs’ counsel on April 24, 2002, citing Iowa
Administrative Code rule 543—1.4. 6 This letter noted no supporting
documentation had been supplied for a majority of the plaintiffs’ claims,
and asserted only “conclusory” information had been provided in support
of the others. The claimants did not supply the additional information
requested by the State’s claims manager.
On August 5, 2004, a special assistant attorney general sent
letters to the plaintiffs’ counsel announcing the appeal board’s decision
to deny all of the claims. The letters informed each claimant that “after
considering the facts and circumstances forming the basis of [the]
claim[s],” the state appeal board had “made a final determination to deny
payment.”
The plaintiffs filed suit alleging tort claims against the State.
Contending certain plaintiffs who failed to supply information required
by the state appeal board’s administrative rules had failed to exhaust
administrative remedies, the State’s motion for summary judgment
6Rule 543—1.4(4) promulgated by the state appeal board and in effect at the
time the plaintiffs’ claims were filed provides:
All claims shall set forth information as follows:
....
b. Other property.
(1) Nature and description of such other property or items of property
separately listed.
(2) Method by which such property was acquired. If purchased, then the
name of the person or place from which purchased, the price, date and usage
made of the property.
(3) Depreciated value at date of damage or loss.
(4) Costs estimates for repairs or actual costs thereof with copies of cost
estimates made or of bills paid.
(5) Names and addresses of any and all persons having personal
knowledge of any facts relating to the claim.
Iowa Admin. Code r. 543—1.4(4)(b).
10
challenged the district court’s subject matter jurisdiction over the claims
of those plaintiffs. 7 The district court rejected the State’s jurisdictional
challenge, concluding the plaintiffs’ claims submissions included
“sufficient notice of the nature and cause of the damages sought, along
with a certain statement of the value of the damages” and were minimally
adequate in this case to achieve exhaustion of the administrative remedy.
The filing of a claim with the state appeal board is a prerequisite to
suit under the Iowa Tort Claims Act. See Iowa Code § 669.5 (providing
suit against the State is not permitted until the attorney general has
made final disposition of a claim). We have characterized this claim
process as an “administrative remedy” that must be exhausted. Swanger
v. State, 445 N.W.2d 344, 347 (Iowa 1989). The process “is intended to
allow a prompt investigation of claims against the State and facilitate an
early settlement when possible.” In re Estate of Voss, 553 N.W.2d 878,
881 (Iowa 1996). “[T]he doctrine of exhaustion may be invoked where
tort claimants have not properly submitted their claims to the [appeal]
board for consideration and disposition.” Swanger, 445 N.W.2d at 347.
“Exhaustion of the administrative process is jurisdictional, and a suit
commenced without complying with this process is subject to dismissal.”
Id. We have noted that the doctrine requiring a plaintiff to exhaust
administrative remedies “is designed to promote orderly procedures
within the judicial system by requiring a preliminary administrative
sifting process.” Charles Gabus Ford, Inc. v. Iowa State Hwy. Comm’n,
224 N.W.2d 639, 648 (Iowa 1974). Courts employ the doctrine, “a
product of the exercise of judicial restraint,” as a means of “withholding
7The State’s jurisdictional challenge was raised against only those plaintiffs who
supplied no documentation supporting their written claim forms.
11
judicial action until the administrative process has been undertaken and
has run its entire course.” Id.
Each of the plaintiffs in this case filed an administrative claim on a
form promulgated by the appeal board. The question presented in this
case is whether those plaintiffs who thereafter declined the board’s
request for additional documentation failed to exhaust the available
administrative remedy and thereby deprived the district court of subject
matter jurisdiction. Although some of the plaintiffs failed to submit any
documentation to augment their administrative claim forms, and others
submitted documentation the State’s claims manager deemed
conclusory, each of the challenged claims disclosed the type of claim
(tort) asserted, stated the amount of property damage claimed, and
provided a general statement of the relevant legal theory supporting it. If
the board believed evaluation of any of the claims could not be completed
without access to additional documentation mandated by the appeal
board’s rule, the board had a remedy readily available to it. Under the
appeal board’s rule 543—1.7, a special assistant attorney general is
directed to investigate claims filed with the board. Iowa Admin. Code r.
543—1.7. The special assistant attorney general is authorized under the
rule to administer oaths; take testimony in the form of affidavits,
depositions or interrogatories; and seek contempt orders in furtherance
of the investigation of claims. Id. If the board or its representatives
believed they could not approve or deny any of the plaintiffs’ claims on
the information supplied, they could have sought to compel the
production of documentation under the board’s rule. Notwithstanding
the availability of these means of inducing the plaintiffs to provide
supporting documentation, the appeal board elected to make a final
12
administrative determination on all of the plaintiffs’ claims. 8 Under
these circumstances, we conclude the board had available to it the
information it believed it needed to make its administrative
determination. As the board made a final determination on all of the
plaintiffs’ claims, we believe the administrative process ran its course.
See Charles Gabus, 224 N.W.2d at 648. Under the circumstances
presented here, invocation of the exhaustion doctrine is not required to
avoid interference with the administrative process. The district court
correctly concluded it had subject matter jurisdiction over all of the
plaintiffs’ claims.
B. Discretionary Function Immunity. The Iowa Tort Claims Act
prescribes procedures governing tort claims against the State for the
negligent acts of its officers, agents, or employees. See generally Iowa
Code ch. 669. The Act preserves, by excepting certain claims from its
scope, aspects of sovereign immunity. Among the excepted claims are
those “based upon the exercise or performance or the failure to exercise
or perform a discretionary function or duty on the part of a state agency
or an employee of the state, whether or not the discretion be abused.”
Iowa Code § 669.14(1). As the immunity for discretionary functions in
our statute has its genesis in the federal tort claims act, we have been
8We note that the board’s letters to the plaintiffs’ counsel denied all of the
claims—those for which some supporting documentation was provided and those for
which no supporting documentation was provided—for the same reason. The letters
uniformly announced that “after considering the facts and circumstances forming the
basis of [the plaintiff’s] claim and the applicable law, [the board] has made a final
determination to deny payment of this claim.” Thus, the board’s explanation for the
denial of the claims appears to have rested on liability considerations rather than the
plaintiffs’ failure to sufficiently document their claims. See Allendorf v. Langman
Constr., Inc., 539 N.W.2d 370, 372 (Iowa 1995) (noting a similarly worded denial letter
“purport[ed] to have been based on a consideration of the liability issues” and
concluding plaintiff’s failure to demand a sum certain in his administrative claim did
not defeat the court’s subject matter jurisdiction).
13
guided by federal decisions applying the doctrine. Shelton v. State, 644
N.W.2d 27, 30 (Iowa 2002).
We apply a two-part test in determining whether section 669.14(1)
shields the State from liability. Id. at 29. First, the State must show
there was an element of judgment or discretion involved in the design or
construction of the bypass project. Graber v. City of Ankeny, 656 N.W.2d
157, 161 (Iowa 2003). If judgment or discretion was involved in the
design or construction of the project, the State must show the judgment
or discretion was of the type the legislature intended to shield from
liability. Messerschmidt v. City of Sioux City, 654 N.W.2d 879, 881 (Iowa
2002).
The State asserts decisions requiring judgment and discretion were
made throughout the duration of the project, beginning at the time the
bypass was first conceived. Hearings were held to solicit public input as
to whether the project should be undertaken in view of its expected cost
and its relative priority in relationship to other projects throughout
Iowa’s statewide primary highway system. Numerous other decisions
were required in the design and planning of the project, including most
notably the route the roadway should take around the city and the
proper design and location of the bridge over the creek. The plaintiffs
contend, however, that the discretionary function doctrine has no
application in this case because the State had no discretion or choice in
determining whether the bridge could be designed and built to encroach
on the floodway. We agree.
Iowa Code section 455B.275(1) prohibits all floodway obstructions
or encroachments, including fill, new construction, or any development
within a floodway without the approval of the DNR. This statutory
prohibition of floodway encroachments advances the General Assembly’s
14
policy determination that “the protection of life and property from floods
. . . is of paramount importance to the welfare and prosperity of the
people of the state.” Iowa Code § 455B.262(1). In furtherance of this
broad statement of policy, certain activities are expressly prohibited in a
floodway or flood plain. A civil penalty of $500 per day may be imposed
against those who erect, use, or maintain structures adversely affecting
the efficiency, or unduly restricting the capacity, of a floodway without
the permission of the DNR. Iowa Code §§ 455B.275(1), 455B.279(2).
The State asserts, however, the plaintiffs did not cite chapter 455B
in the district court proceedings and failed to preserve error on this
point. While the plaintiffs concede they did not cite the provisions of
chapter 455B in support of their resistance to the State’s motion for
summary judgment, they did cite and attach to their resistance an
analogous federal regulation, 44 C.F.R. § 60.3(d)(3) (prohibiting
encroachments including fill, new construction, substantial
improvements and other development within the adopted regulatory
floodway unless it has been demonstrated that the proposed
encroachment would not result in any increase in flood levels).
We are persuaded the plaintiffs preserved this subject for appellate
review by citing the corollary federal regulation and by including in the
summary judgment record an email message authored by the State’s
expert acknowledging that “[t]he construction of the bypass in 1993
encroached upon the established floodway,” “increased the 100 year
flood elevations both upstream and downstream of the bypass project,”
and constituted “a violation of FEMA and DNR regulations.” The district
court’s conclusion that the design and construction of the bypass within
the floodway constituted discretionary functions supporting a claim of
immunity under section 669.14(1) implicitly rejected the plaintiffs’ claim
15
that the State had no discretion to design and build the bridge in the
floodway in violation of state and federal law. Having determined the
issue was preserved for our review, we proceed to a discussion of the
merits of the issue.
Given the clear statutory and regulatory prohibitions against the
creation of floodway encroachments causing increased risk of loss to
upstream properties in the event of a 100-year flood, we conclude the
discretionary function defense has no application in this case. The
State’s employees could not choose to ignore these prohibitions, and they
therefore did not have available to them a choice to design and build
encroaching, noncompliant structures in the floodway. As there was no
such choice available, the employees of the State who designed and built
the bridge did not perform discretionary functions for which section
669.14(1) would offer immunity. See United States v. Gaubert, 499 U.S.
315, 324, 111 S. Ct. 1267, 1274, 113 L. Ed. 2d 335, 347 (1991) (stating
the discretionary function doctrine offers the government no shelter from
liability arising from its employee’s violation of a “mandatory regulation”);
Berkovitz v. United States, 486 U.S. 531, 536, 108 S. Ct. 1954, 1958–59,
100 L. Ed. 2d 531, 540–41 (1988) (stating “the discretionary function
exception will not apply when a . . . statute, regulation, or policy
specifically prescribes a course of action for [a government] employee to
follow”).
Accordingly, we conclude the district court erred in concluding the
State is entitled to immunity under section 669.14(1).
C. Design and Construction Immunity. Having concluded the
discretionary function defense under Iowa Code section 669.14(1) is not
available to the State under the circumstances of this case, we next
consider whether the district court erred in concluding an alternative
16
statutory immunity is available to the State in this case. The State’s
sovereign immunity is also preserved for
[a]ny claim based upon or arising out of a claim of negligent
design or specification, negligent adoption of design or
specification, or negligent construction or reconstruction of a
highway . . . that was constructed or reconstructed in
accordance with a generally recognized engineering or safety
standard, criteria, or design theory in existence at the time of
the construction or reconstruction.
Iowa Code § 669.14(8). This statute establishes a state-of-the-art
defense against ordinary negligence claims arising from the design and
construction of highways and roads. K & W Elec., 712 N.W.2d at 113.
The State supported its motion for summary judgment in this case
with the affidavit of an engineer whose responsibility includes the design
of the State’s bridges. The affiant opined the State’s reconstruction of
the bridge and floodway elevations after the 1999 flood (1) eliminated the
risk that the plaintiffs will experience future flooding as a consequence of
a flood having a magnitude not greater than a 100-year flood and (2) was
accomplished in accordance with generally accepted engineering criteria
existing at the time of the reconstruction. The plaintiffs offered no
evidence rebutting these expert opinions, and the district court granted
the State’s motion “on the issue of permanent devaluation” of the
plaintiffs’ properties. 9
9We interpret this aspect of the district court’s summary judgment ruling as an
adjudication of only part of the plaintiffs’ damage claims. The ruling rejected the
plaintiffs’ claims that the State’s negligence caused a “permanent devaluation” of their
real estate, concluding the uncontroverted summary judgment record established that
the reconstruction of the bridge eliminated the risk of future flood damage in the event
of a 100-year flood and thus brought the project in compliance with the engineering
standard prevailing at the time of the reconstruction. The summary judgment ruling
did not, however, adjudicate as a matter of law the plaintiffs’ claims for other damages
alleged by the plaintiffs to have been caused by the State’s negligence, if any, in the
original design and construction of the project. The State’s defense under section
669.14(8) will not defeat the plaintiffs’ claims for damages suffered by the plaintiffs
before the reconstruction of the bridge if the plaintiffs prove (1) the State breached a
17
The plaintiffs contend on appeal the State is not entitled to
immunity under section 669.14(8) because the bridge still encroaches on
the floodway even after the reconstruction. This contention, standing
alone, is insufficient to preclude summary judgment because the
uncontroverted summary judgment record demonstrates the
reconstruction design satisfied the Q100 design standard and achieved
the approval of the DNR. The plaintiffs failed at the summary judgment
stage to produce evidence tending to prove the reconstructed bridge does
not comply with the Q100 standard, the generally accepted engineering
standard in existence at the time of the reconstruction.
Whether the plaintiffs’ negligence claims are based on an alleged
breach of a common-law duty to exercise reasonable care in the design
and construction of the bridge, or an alleged breach of Iowa Code section
455B.275(1) and related state or federal regulations proscribing the
erection of obstructions in floodways, they are based upon or arise out of
the design or construction of a highway. The state-of-the-art defense
applies to all such claims. We therefore find no error in the district
court’s summary judgment determination that the plaintiffs’ claims for
permanent devaluation are barred by Iowa Code section 669.14(8).
Accordingly, we affirm the district court’s determination that the State
established its immunity defense under section 669.14(8) against the
“permanent devaluation” damage claims of plaintiffs who did not sell
their properties prior to the reconstruction of the bypass bridge. 10
_____________________
common law or statutory duty and (2) such damages are within the relevant scope of
liability.
10A fact issue remains for trial on the question of whether the original design
and construction of the bridge as a floodway encroachment violated prevailing
engineering standards in existence at the time of the original design and construction of
the project. As we have noted, our affirmance of the district court’s ruling as to the
State’s immunity for permanent devaluation of the plaintiffs’ properties under section
669.14(8) preserves for trial the plaintiffs’ claims for other pre-reconstruction damages
18
D. Liability Under Section 314.7. Iowa Code section 314.7
provides in relevant part:
Officers, employees, and contractors in charge of
improvement or maintenance work on any highway shall not
. . . turn the natural drainage of the surface water to the
injury of adjoining owners. It shall be their duty to use strict
diligence in draining the surface water from the public road
in its natural channel. To this end they may enter upon the
adjoining lands for the purpose of removing from such
natural channel obstructions that impede the flow of such
water.
Iowa Code § 314.7.
The plaintiffs’ petition alleged in part that the State’s “highway
construction activities were carried out in violation of section 314.7 in
that the construction changed the natural drainage of the surface water”
and damaged the plaintiffs’ property. The State requested summary
judgment as to this legal theory, positing the plaintiffs produced no
evidence supporting a finding that the flood waters affecting their
properties were diverted from the surface of the road. The district court
concluded our decision in Connolly v. Dallas County, 465 N.W.2d 875
(Iowa 1991), permitted a finding of liability against the State under
section 314.7 only if the flood water was diverted from the surface of the
roadway to the plaintiffs’ property. Finding no evidence in the record
supporting a determination that the floodwater affecting the plaintiffs’
property was diverted from the roadway, the district court granted
summary judgment in favor of the State on this issue.
_____________________
which were not adjudicated by the summary judgment ruling. The plaintiffs’ appeal
brief asserts two of the plaintiffs sold their properties and suffered the economic loss
occasioned by the flood-related dimunition in value prior to the reconstruction. Our
decision also leaves for determination by the fact finder the question of whether these
two plaintiffs suffered such a loss within the scope of liability when they sold their
properties.
19
The plaintiffs contend the district court’s flawed understanding of
Connelly led to an incorrect interpretation of section 314.7. We agree.
The plaintiffs in Connelly sued Dallas County, alleging the removal of a
bridge abutment and the widening of a creek channel in the course of the
reconstruction of a secondary highway caused flood damage. 465
N.W.2d at 876. The plaintiffs in that case based their claim for damages
on an alleged violation of the common-law duty owed by an upstream or
dominant riparian owner to a downstream or servient owner to protect
the status quo. Id. at 877. Although the plaintiffs in Connelly did not
allege the county had violated section 314.7 in diverting flood water to
their property, we made passing reference to the statute in a footnote as
we distinguished Rosendahl Levy v. Iowa State Highway Commission,
171 N.W.2d 530 (Iowa 1969), a case in which the statute was applied.
Id. at n.2. The passing reference suggested in dicta that section 314.7
“regulated diversion of water from roadways” and noted there was no
evidence in Connelly that the flooding “was in any way due to waters
diverted from a public roadway.” Id. The clear language of section 314.7
imposes on those who undertake highway improvements a duty to use
strict diligence in draining surface water from the road to its natural
channel in conformity with general riparian principles. The statute also
separately and more broadly proscribes “turn[ing] the natural drainage of
the surface water to the injury of adjoining owners” as they improve or
maintain any highway. This proscription clearly addresses more than
water from the surface of the roadway and mandates that road
improvement projects shall not divert the natural drainage of water in
the vicinity of a road improvement project. We therefore disavow the
dicta in Connelly insofar as it may be interpreted to confine the reach of
20
section 314.7 to only the diversion of water from the surface of a
roadway.
The plaintiffs’ failure to present evidence that they were damaged
exclusively or even primarily by water diverted from the surface of the
roadway does not vitiate their broader claim under section 314.7. The
summary judgment record viewed in the light most favorable to the
plaintiffs includes evidence tending to prove the construction of the
bridge obstructed the natural flow of water through the floodway and
thus changed the natural drainage of surface waters to the detriment of
upstream landowners. Accordingly, the district court erred in concluding
the plaintiffs failed to engender a fact question as to the State’s liability
under section 314.7.
Although we have concluded a fact question exists as to whether
the State violated section 314.7, the practical significance of this
determination in the final analysis may be slight. The State contends the
defense under Iowa Code section 669.14(8) is available against
negligence claims based on violations of a statutory duty derived from
section 314.7. We agree. See K & W Elec., 712 N.W.2d at 115.
Accordingly, the district court’s ruling granting the State’s summary
judgment motion on the plaintiffs’ other negligence theories applies
coextensively to their claims for permanent property devaluation based
on the alleged violation of section 314.7.
IV. Conclusion.
We conclude the district court correctly concluded it had subject
matter jurisdiction because the plaintiffs exhausted their administrative
remedy. The district court erred, however, in granting summary
judgment in favor of the State based on the defense of discretionary
immunity under section 669.14(1). The district court also erred in
21
concluding the plaintiffs’ claim based on the alleged violation of section
314.7 must fail as a matter of law because the plaintiffs failed to present
evidence supporting a finding that the flood water was diverted to their
properties from the surface of the roadway. We affirm the district court’s
summary judgment determination that the negligence claims for
permanent devaluation of the plaintiffs’ properties based on alleged
violations of common-law and statutory duties are barred by the state-of-
the-art defense under Iowa Code section 669.14(8) because the
uncontroverted record establishes the bridge was reconstructed in
compliance with an engineering standard prevailing at the time of the
reconstruction. Our affirmance of the summary judgment ruling leaves
standing the plaintiffs’ claims for other damages sustained prior to the
reconstruction of the bridge. We therefore vacate the decision of the
court of appeals, affirm in part and reverse in part the judgment of the
district court, and remand for further proceedings consistent with this
decision.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.