State immune from liability for damages from highway project

One fundamental principle of the law governing surface water is that it is wrongful for a landowner to disturb the existing pattern of drainage and, as a result, obstruct the flow of water from someone else’s property, or cast upon someone else’s property more water than would naturally flow on it, or cause an unusually high concentration of water in the course of drainage. That’s a big issue for rural landowners owning land next to a tract that is being developed or, as in this case, owning land near a highway construction project. An important point to remember is that if the State is engaged in a highway construction project, Iowa law gives the State a defense against damage claims brought by landowners disaffected by State road construction projects.

This case involved a business in Cedar Falls that was located in the 100-year flood plain of the Cedar River. The Iowa DOT began a highway project nearby in the early 1990s. The State’s engineers designed bridges and structures for the project in accordance with design specifications contained in a FEMA report. The designs were also approved by the Iowa DNR. After most of the highway improvements were in place, a flood in 1993 resulted in the plaintiff’s land being flooded substantially. As a result, the DOT sponsored a study of the flooding characteristics of the Cedar River to determine the effects of highway construction in the area. The study showed that the construction project had significantly increased the water flow in a diversion channel and its vicinity which impacted the plaintiff’s property. After the report was released, the plaintiff filed a claim with the State for damages to a truck used in the business. The claim was denied and the plaintiff did not pursue further damages against the State. The property again flooded in 1999 and the plaintiff filed a claim against the State for property damage, basing their claim that the State was negligent largely on the 1993 study. The State appeal board denied the plaintiff’s claim and the plaintiff filed suit in 2001. The plaintiff claimed that the State was negligent in designing and constructing the highway improvements and was also liable for their loss of property value (an inverse condemnation claim).

The trial court ruled for the State on its motion for summary judgment. The trial court noted that while contractors must use strict diligence in draining surface water from public roads into a natural channel, the State has a “state of the art” defense with respect to design and construction of highways and roads under Iowa law. Because the design complied with generally accepted engineering standards and the highway was constructed in accordance with design specifications, the State was immune from a claim for negligent design or negligent construction. The trial court also granted the State’s summary judgment motion on the plaintiff’s inverse condemnation claim on the basis that the claim was barred by the 5-year statute of limitations. Because the plaintiff had knowledge of its claim after the 1993 flood, the statute began running at that time.

On appeal the Iowa Supreme Court affirmed. The Court noted that the State did not lose immunity when new design standards were developed (in accordance with the 1993 study) after the construction project was substantially completed. The Court also held that the plaintiff’s inverse condemnation claim was time-barred. Under Iowa law, when a claim involves flooding of property caused by a permanent public improvement, the cause of action accrues the first time damage occurs, and the landowner must seek all damages (future and present) in a single action. That is a different rule than is applied to nuisances that are intermittent - a property owner may bring successive actions to recover damages for each injury. So, the key question in this case was when the 5-year statute began running - when did the plaintiff know that it had been permanently injured? On that point, the Court agreed with the trial court that the plaintiff should have known as of the 1993 flood that they had been permanently damaged. In addition, the Court opined that the plaintiff had imputed knowledge that the 1993 study made it clear that the plaintiff’s property was greatly at risk of flooding as a result of the construction project. Because the suit was not filed until 2001, it was time-barred. K & W Electric, Inc., v. State, 712 N.W.2d 107 (Iowa Sup. Ct. 2006).