K & W Electric, Inc. Vs. State Of Iowa

IN THE SUPREME COURT OF IOWA
No. 47 / 04-0643

Filed April 7, 2006

K & W ELECTRIC, INC.,

Appellant,

vs.

STATE OF IOWA,

Appellee.

Appeal from the Iowa District Court for Black Hawk County,

Leonard D. Lybbert, Judge.

Property owner appeals dismissal of tort and inverse condemnation

claims against State. AFFIRMED.

John J. Hines of Dutton, Braun, Staack, Hellman, P.L.C., Waterloo,

for appellant.

Thomas J. Miller, Attorney General, and Noel C. Hindt and Richard E.

Mull, Assistant Attorneys General, for appellee.
 2

TERNUS, Justice.

The appellant, K & W Electric, Inc., appeals an adverse summary

judgment ruling on its damage claims against the appellee, State of Iowa. K

& W sued the State on theories of negligence, violation of Iowa Code section

314.7 (1999), and inverse condemnation, claiming a highway construction

project undertaken by the Iowa Department of Transportation (DOT) in the

vicinity of the plaintiff’s premises caused flooding that damaged the

plaintiff’s property. The district court held the plaintiff’s claims were time

barred, see Iowa Code § 614.1(4), and the defendant was immune from tort

liability under Iowa Code section 669.14(8). We affirm.

I. Facts and Prior Proceedings.

The plaintiff is an electrical contractor whose place of business is at

1127 Lincoln Street in Cedar Falls, Iowa. Its business premises include a

large steel building that houses an office, shop, and storage facilities. The

plaintiff’s property is located in the 100-year flood plain of the Cedar River

near a diversion channel of the river.

The Cedar River has a long history of flooding in Cedar Falls, with the

highest recorded flood prior to the events giving rise to this litigation

occurring in 1961. In 1984, the Federal Emergency Management Agency
(FEMA) prepared a flood insurance study of the city to investigate the

existence and severity of flood hazards and to assist the community in

promoting sound flood plain management. The study included a flow-

frequency analysis, flood profiles, and floodways for each channel. A

floodway, according to the FEMA report, “is the channel of a stream plus

any adjacent flood plain areas that must be kept free of encroachment so

that the 100-year flood can be carried without substantial increases in flood

heights.” Under federal standards, a substantial increase is an increase in

excess of one foot.
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In the early 1990s, the DOT undertook an extensive highway

construction project involving multiple interchanges between highways 218,

58, and 57 over and near the Cedar River and the Cedar River diversion

channel. Some of these structures were just a short distance from the

plaintiff’s property. Using data from the FEMA report, engineers designed

the bridges and structures crossing the river and diversion channel to span

the floodway without increasing a 100-year flood by more than one foot.

The designs were approved by the Iowa Department of Natural Resources,

and the project was constructed according to design.

In April 1993 heavy rainfall and snowmelt caused a flood that

matched the record 1961 flood. During this flood, the plaintiff’s land was

covered by floodwaters of substantial depth. Only the building, which had

been built on an elevation approximately one foot above the 100-year flood

level established by the Cedar Falls flood plain maps, remained above flood

level, but barely so. A second flood occurred in August 1993, but the flood

crest was about two feet less than the April flood.

In the aftermath of the extensive flooding in 1993, the DOT sponsored

a flood study conducted by Rust Environment and Infrastructure, Inc. The

purpose of the study was to review the flooding characteristics of the Cedar
River in light of data collected from the 1993 floods and to determine the

effects of highway construction in the area. (The report stated that at the

time of the April 1993 flood, “the majority of the highway improvements

were in place.”) The “Cedar River Flood Plain Study,” hereinafter “the Rust

report,” was published on January 25, 1994. The report asserted that the

availability of “actual flood high-water elevations and discharge

measurements” from the 1993 floods had “resulted in the most reliable

computer model ever developed for the Cedar River study area.”
 4

Of significance to the present lawsuit, the report found that the

effects of construction were significant in the diversion channel and its

vicinity, an area that included the plaintiff’s business. Three factors were

identified as leading to an increased water flow in the diversion channel: (1)

backwater created by the highway 218 bridge over the diversion channel; (2)

backwater created by bridges on the main channel; and (3) construction of

West Lake, which removed a portion of Big Woods Road, creating a less

resistant flow path for water to enter the diversion channel. The report

concluded, however, that “[a]ll highway structures were sized based on

information available at the time of the specific project.” It noted the

structures for highway 58 and highway 218 through the diversion channel

spanned the floodway as identified in the FEMA report. In addition, the

Rust report stated that based on the model in use when the improvements

were designed, the increase in the floodways was anticipated to be

approximately one foot. In actuality, the increase was greater, particularly

in the area of the plaintiff’s business.

In March 1994, shortly after the Rust report was released, K & W filed

a claim with the state appeal board, seeking recovery for damage to a truck

caused by the April 1993 flood. In relevant part, its claim stated:

Our construction business, located at 1127 Lincoln
Street, Cedar Falls, was completely surrounded by flood waters
on April 2, 1993. The flood waters were caused by highway
construction in the area.
In order to keep our business in operation, we used our
big heavy duty trucks to transport employees and material
from our place of business, thru the flood waters, to our job
sites and to our customers. We used the International Truck
to go thru the flood water and it developed engine and rear end
trouble.

K & W claimed approximately $5600 in damages. The claim was denied,

however, and K & W did not pursue further litigation against the State.
 5

On July 22, 1999, heavy rains hit northern Iowa, causing a flood on

the Cedar River. K & W’s property was again flooded. This time, however,

water entered the plaintiff’s building, causing extensive damage and

necessitating significant cleanup efforts. On January 31, 2000, K & W filed

a tort claim against the State for property damage in excess of $32,000.

The plaintiff again claimed the flooding and resultant damages were caused

by the effects of highway construction. K & W alleged the State was

negligent, and it specifically referred to the Rust report and the three

construction-related factors identified there as having increased the water

flow in the diversion channel. In addition to damages, the plaintiff asked

that a plan be developed to protect its property and that the State pay for

construction of the solution. The appeal board denied K & W’s claim.

This lawsuit was filed on June 11, 2001. The plaintiff reasserted its

negligence claim, alleging the DOT failed to exercise due care in the design

and construction of the highway projects in the vicinity of the plaintiff’s

facility. In addition, K & W contended the DOT’s construction activities

violated Iowa Code section 314.7, which requires that contractors must “use

strict diligence in draining the surface water from the public road in its

natural channel” when improving any highway. Finally, the plaintiff
claimed a permanent devaluation of its property, resulting in an inverse

condemnation.

The State subsequently filed a motion for summary judgment on

several grounds, but only two are pertinent to this appeal: (1) the design-

and-construction immunity of Iowa Code section 669.14(8) applies to the

plaintiff’s tort claims because the project design complied with generally

accepted engineering standards, and the highways were constructed in

accordance with the design specifications; and (2) the plaintiff’s inverse

condemnation claim is barred by the statute of limitations contained in
 6

Iowa Code section 614.1(4) because K & W was aware of the potential for

increased flooding since at least the April 1993 flood. Accepting both

arguments, the district court granted the State’s motion for summary

judgment. The plaintiff has appealed.

II. Scope of Review.

The district court’s ruling on a motion for summary judgment is

reviewed for correction of errors of law. See Christy v. Miulli, 692 N.W.2d

694, 699 (Iowa 2005).

Summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.”

Id. (citation omitted). A genuine factual issue “is generated if reasonable

minds can differ on how the issue should be resolved.” Id. A fact is

material only if its existence would affect the outcome of the suit. Faeth v.

State Farm Mut. Auto. Ins. Co., 707 N.W.2d 328, 331 (Iowa 2005).

To obtain summary judgment, “the moving party must affirmatively

establish the existence of undisputed facts entitling that party to a

particular result under controlling law.” Griglione v. Martin, 525 N.W.2d

810, 813 (Iowa 1994). In considering whether the moving party has

satisfied this requirement, we accord the nonmoving party every legitimate

inference that may be drawn from the record. Faeth, 707 N.W.2d at 331. If

the moving party has met its burden, “[t]he resisting party must set forth

specific facts showing that a genuine factual issue exists.” Grabill v. Adams

County Fair & Racing Ass’n, 666 N.W.2d 592, 594 (Iowa 2003).

III. Design-and-Construction Immunity.

We begin with the State’s claim that its statutory waiver of sovereign

immunity does not apply to the plaintiff’s negligence claims by virtue of the
 7

exception contained in section 669.14(8). This statute provides that the

state tort claims act does not apply to

[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, secondary road, or street . . . that was constructed or
reconstructed in accordance with a generally recognized
engineering or safety standard, criteri[on), or design theory in
existence at the time of the construction or reconstruction. A
claim under this chapter shall not be allowed for failure to
upgrade, improve, or alter any aspect of an existing highway,
secondary road, or street, to new, changed, or altered design
standards.

Iowa Code § 669.14(8). This statute gives the DOT “a state-of-the-art

defense with respect to design and construction of [highways and roads].”

Connolly v. Dallas County, 465 N.W.2d 875, 877 (Iowa 1991) (discussing

comparable exception in municipal tort claims act). It also establishes

that the extent of the public agency’s duty for purposes of
establishing nonconstitutional torts is measured by the
“generally recognized engineering or safety standard, criteri[on],
or design theory” in existence at the time of the construction or
reconstruction.

Id. (quoting Iowa Code § 613A.4(7), (8) (now found at Iowa Code § 670.4(7),

(8))).

To demonstrate the applicability of this immunity, the State

submitted the affidavit of David Claman, a civil engineer employed by the

DOT. Claman stated in his affidavit that the hydraulic analysis and the

design of the highway projects in question were based upon data from the

1984 FEMA study. He further stated:

Based on this analysis, the bridges and structures crossing the
main channel of the Cedar River, and the Cedar River diversion
channel were sized to span the floodway, defined as the area
that must be kept free of encroachments so that a 100-year
flood could be carried without a substantial increase, defined
as one foot, in flood heights. . . . The project was constructed
according to design, in accordance with these recognized,
 8
generally accepted engineering criteria existing at the time of
the design and construction.

These statements were corroborated by the Rust report, which stated “[a]ll

highway structures were sized based on information available at the time of

the specific project,” the highway structures “through the diversion channel

were sized to span the . . . floodway,” and “[t]he floodways developed for

both the diversion channel and the main channel of the Cedar River

produced approximately 1 foot of increase, as computed by the HEC-2

hydraulic model” developed from the data compiled in the 1984 FEMA

study.
In resistance to the State’s motion for summary judgment, K & W

submitted the affidavit of William Kehe, a professional engineer with

experience in hydraulic analysis for the design of bridges, highways, and

waterways. Kehe did not dispute the findings and conclusions stated in the

Rust report and the Claman affidavit. Rather, he stated that after reviewing

the 1994 Rust report, he “[felt] that K & W ha[d] merit in its claim for

damages against the DOT.” Kehe gave the following explanation for his

opinion:

The [Rust] study uses nationally accepted modeling
methodology validated against the 1993 floods to conclude that
recent highway construction has raised the level of the Q100
flood event in nearly all locations. . . . [T]he study clearly
states that Lincoln Street was most adversely affected with a
rise of 1.9 feet above the current Flood Insurance Map
elevation. The study also concludes the major rise in the
controlling flood elevation was caused by the removal of a
portion of Big Woods Road thus eliminating an existing
temporary detention basin along the Diversion Channel.
Raising any flood elevation by construction more than
one foot is typically a violation of state and federal laws.

(Emphasis added.)

We agree with the district court that Kehe’s affidavit is not sufficient

to prevent summary judgment on the State’s design immunity defense. A
 9

review of the record, including the affidavits submitted by the parties,

reveals the following facts pertinent to the DOT’s state-of-the-art defense are

essentially undisputed. The highway project was designed so that flood

levels would rise by no more than one foot. This design was based on a

hydraulic model that utilized the most current data available at the time of

the design and construction. The one-foot increase projected by this

hydraulic analysis was within acceptable parameters for flood plain

improvements. The DOT constructed the highway improvements in

accordance with the design. A more accurate hydraulic model was

developed in 1994 based on the 1993 flood data, data that was not available

at the time of the design and substantial completion of the DOT project.

The 1994 model shows the highway project has, in fact, raised the 100-year

flood level in the vicinity of the plaintiff’s business by more than the one-

foot rise projected by the models in use prior to 1994. The actual increase

in flood levels caused by the highway project exceeds federal standards.

These facts establish the applicability of section 669.14(8) as a matter

of law. The plaintiff’s claim is “based upon . . . negligent design or

specification, negligent adoption of design or specification, or negligent

construction or reconstruction of a highway.” Iowa Code § 669.14(8). The
highway “was constructed or reconstructed in accordance with a generally

recognized engineering . . . standard, criteri[on], or design theory in

existence at the time of the construction or reconstruction.” Id. (emphasis

added). There is no dispute as to these determinative facts. We think this

case presents a classic scenario for application of the design-and-

construction immunity.

The plaintiff contends that even if the highway project was designed

in accordance with engineering standards, criteria, and design theory

generally recognized at the time of the design, the DOT was obligated to
 10

revise its plans when it received the Rust report in January of 1994. The

record shows the majority of the work on the highway project had been

completed at the time of the April 1993 flood. Another season of

construction passed before the Rust report was issued nine months later.

We do not think the DOT loses its design immunity when new design

standards are developed after the majority of the project has been

completed, particularly in view of the legislature’s express statement that

“[a] claim under this chapter shall not be allowed for failure to upgrade,

improve, or alter any aspect of an existing highway, secondary road, or

street, to new, changed, or altered design standards.” Iowa Code §

669.14(8).

In interpreting statutes, we attempt to avoid an interpretation that

would lead to absurd or impractical results. See State v. Tesch, 704 N.W.2d

440, 451 (Iowa 2005). Under the plaintiff’s suggested interpretation of

design immunity, this statutory protection would be lost if one intersection

remained to be constructed when additional data became available. This

interpretation of design immunity would require the DOT to redesign an

improvement after the work is substantially completed, an impractical

result given the cost and complexity of such projects. We cannot believe
this was the legislature’s intent.

Accordingly, we hold the district court did not err in ruling the DOT

was immune under section 669.14(8) as a matter of law. The district court

properly dismissed the plaintiff’s negligence and section 314.7 theories on

this ground. Because these claims were properly dismissed on the basis of

design immunity, we do not consider the State’s alternative argument that

these claims were also barred by the applicable statute of limitations.
 11

IV. Inverse Condemnation Claim and Statute of Limitations.

A. Issue. We now consider the district court’s ruling that the

plaintiff’s constitutional takings claim was time barred under Iowa Code

section 614.1(4), which establishes a five-year statute of limitations for

“injuries to property . . . and all other actions not otherwise provided for in

this respect.” Iowa Code § 614.1(4); see also Scott v. City of Sioux City, 432

N.W.2d 144, 147 (Iowa 1988) (holding inverse condemnation claims are

subject to five-year statute of limitations). The district court ruled K & W

had constructive knowledge of its claim after the 1993 flood, and so the

limitations period commenced at that time. The plaintiff contends the

statute of limitations did not begin to run until the 1999 flood. At the very

least, it asserts, there is a factual issue for the jury on when it discovered

its claim. Alternatively, K & W argues the damage to its property “was in

the nature of a continuing injury for which recovery was permissible for any

damages occurring within five years of filing suit.” Before addressing the

plaintiff’s arguments, it is helpful to understand the nature of an inverse

condemnation claim.

B. General principles of inverse condemnation. Inverse condemnation

is an action pursued by a property owner who claims a governmental entity
has appropriated all or part of the owner’s property interest without a

formal condemnation proceeding. Kingsway Cathedral v. Iowa Dep’t of

Transp., ___ N.W.2d ___, ___ (Iowa 2006); Harms v. City of Sibley, 702

N.W.2d 91, 97 (Iowa 2005); 9 Patrick J. Rohan & Melvin A. Reskin, Nichols

on Eminent Domain § 34.03[1], at 34-45 (rev. 3d ed. 2005). Generally, a

taking does not occur unless the invasion of the property is permanent. 1

1 There is an exception to this general statement for regulatory takings when the
offending legislation can be invalidated. See Bormann v. Bd. of Supervisors, 584 N.W.2d
309, 321 (Iowa 1998). The remedy for such “temporary” takings is to declare the legislation
invalid, thereby restoring the property owner’s future use and enjoyment of the property,
and to compensate the property owner for damages occurring before the statute is
 12

See Kingsway Cathedral, ___ N.W.2d at ___ (“The continuance or permanency

of the government action sufficient to support the finding of a creation of a

servitude has been the determining factor for a finding of a taking. . . .

Absence of such continuance or permanency leaves the property owner with

nothing but an action in tort.”); cf. Kelley v. Story County Sheriff, 611

N.W.2d 475, 482 (Iowa 2000) (holding damage to residence door caused by

police officer executing arrest warrant was not a taking, distinguishing

cases where there has been “a permanent deprivation of property, or

creation of a permanent property interest, as contemplated by [the Takings

Clause in the Iowa Constitution]” (emphasis added)). Thus, when flooding

results from a government project, “the flooding has been held compensable

[as a taking] if there is ‘a permanent condition of continual overflow’ or a

permanent ‘liability to intermittent but inevitably recurring overflows.’ ” 4A

Julius L. Sackman, Nichols on Eminent Domain § 14.01[2], at 14-6 (rev. 3d

ed. 2005) (emphasis added); accord Phelps v. Bd. of Supervisors, 211 N.W.2d

274, 277 (Iowa 1973); 4 Julius L. Sackman, Nichols on Eminent Domain §

13.16[5], at 13-149 (rev. 3d ed. 2005). When the flooding is intermittent

rather than continual, the fee remains in the property owner, subject to an

easement in the governmental entity to overflow the property with water.

Phelps, 211 N.W.2d at 276; cf. Bormann v. Bd. of Supervisors, 584 N.W.2d

309, 316 (Iowa 1998) (holding statutory nuisance immunity for farm

operation created “an easement in the property affected by the nuisance” in

favor of the operator, and constituted a taking).

Consistent with the permanent character of a taking, the injury

caused by such governmental action is measured by the diminution in the

value of the property. See Kingsway Cathedral, ___ N.W.2d at ___ (“What

must be compensated is diminishment of the value of the land.”); 9 Nichols
______________________________________
invalidated. Id.
 13

on Eminent Domain § 34.03[3][b], at 34-57. Accordingly, compensation for

the taking of an easement is the difference in market value of the property

before and after imposition of the easement. Connolly, 465 N.W.2d at 878

(stating damages under theory of inverse condemnation include “loss

caused by the first flooding and future damages, ordinarily determined by

the difference in the value of the land prior to and after the completion of

the public improvement”); accord Gacke v. Pork Xtra, L.L.C., 684 N.W.2d

168, 174-75 (Iowa 2004); 4 Nichols on Eminent Domain § 13.16[5], at 13-

150; 9 Nichols on Eminent Domain § 34.03[3][b], at 34-57.

K & W’s inverse condemnation claim is consistent with these

principles. K & W alleged the DOT “permanently raised the flood levels of

the diversion channel near [the] plaintiff’s property making it more

susceptible to overflow into the plaintiff’s plant for an indefinite period of

time into the future.” The plaintiff claimed that, “[a]s a result of the

highway improvements,” its property had lost half its value. K & W sought

to recover “an amount sufficient to fully compensate [it] for the permanent

loss in value of its property.” We now consider whether this claim is barred

by the five-year statute of limitations.

C. General principles governing application of statute of limitations.
The five-year limitations period begins to run upon accrual of the

claim. See Iowa Code § 614.1(4). Generally, a claim accrues when “the

wrongful act produces injury to the claimant.” Scott, 432 N.W.2d at 147.

This principle is tempered by our discovery rule. See Borchard v. Anderson,

542 N.W.2d 247, 250 (Iowa 1996). Under the discovery rule,

commencement of the limitations period is delayed “ ‘until the plaintiff

knows or in the exercise of reasonable care should have known both the

fact of the injury and its cause.’ ” Rieff v. Evans, 630 N.W.2d 278, 291

(Iowa 2001) (quoting Woodroffe v. Hasenclever, 540 N.W.2d 45, 47 (Iowa
 14

1995)). In other words, the injured party must have “ ‘actual or imputed

knowledge of the facts that would support a cause of action.’ ” Id. (quoting

State v. Wilson, 573 N.W.2d 248, 253 (Iowa 1998)).

“Knowledge is imputed to a claimant when he gains
information sufficient to alert a reasonable person of the need
to investigate. As of that date he is on inquiry notice of all
facts that would have been disclosed by a reasonably diligent
investigation.”

Perkins v. HEA of Iowa, Inc., 651 N.W.2d 40, 44 (Iowa 2002) (quoting Ranney

v. Parawax Co., 582 N.W.2d 152, 155 (Iowa 1998)).

D. Accrual of inverse condemnation claim. The State asserts K & W’s

inverse condemnation claim accrued at the time of the 1993 flood because

the plaintiff knew of its injury and the cause of its injury at that time. The

plaintiff argues its inverse condemnation claim did not accrue until the

1999 flood because (1) it did not discover its claim until then, and (2) it was

entitled to bring separate, successive actions for each flooding event. Before

addressing the issue of what K & W knew or should have known after the

1993 flood, we consider the plaintiff’s contention that each flood gave rise to

a new claim at which time the statute of limitations began anew.

In a case involving the flooding of property caused by permanent

public improvements, this court stated:

a cause of action for inverse condemnation accrues the first
time damage occurs to lands or chattels real which was in fact
caused by the improvement. . . . [T]he person owning the land,
crops, or either at that time . . . must seek all damages both
present and future in a single action.

Connolly, 465 N.W.2d at 878; accord Thomas v. City of Cedar Falls, 223 Iowa

229, 237-38, 272 N.W. 79, 83 (1937) (holding because injury to land caused

by dam was permanent, “an action therefore should have been commenced

within five years after the completion of the dam or at least within five years

after the first injury to the property”). The plaintiff claims this statement is
 15

dicta and contrary to the rule that “flood damage is a continuing wrong in

which the limitations period runs from the occurrence of each such injury.”

K & W relies on our decision in Anderson v. Yearous, 249 N.W.2d 855 (Iowa

1977), a flood case in which we stated: “Where resultant injuries are

recurring and successive actions will lie, the limitation period runs from the

occurrence of each such injury.” 249 N.W.2d at 860 (emphasis added). As

an examination of our nuisance cases will illustrate, this rule does not

apply to actions for inverse condemnation because successive actions will

not lie for a taking.

Initially, we note that Anderson was a nuisance case, not an inverse

condemnation case. In Anderson, the plaintiffs obtained damages and

injunctive relief from their neighbor—a private landowner—who had

repaired a levee so as to obstruct the natural water flow, resulting in

intermittent flooding of the plaintiffs’ land. Id. at 858. The Anderson case is

one in a series of decisions by this court discussing when a nuisance or

injury is temporary or permanent and the ancillary questions of when a

claim for damages accrues and what the appropriate measure of damages

is. See, e.g., Weinhold v. Wolff, 555 N.W.2d 454 (Iowa 1996); Hegg v.

Hawkeye Tri-County REC, 512 N.W.2d 558 (Iowa 1994); Mel Foster Co.
Props., Inc. v. Am. Oil Co., 427 N.W.2d 171 (Iowa 1988); Earl v. Clark, 219

N.W.2d 487 (Iowa 1974); Patz v. Farmegg Prods., Inc., 196 N.W.2d 557 (Iowa

1972); Eppling v. Seuntjens, 254 Iowa 396, 117 N.W.2d 820 (1962); Miller v.

Town of Ankeny, 253 Iowa 1055, 114 N.W.2d 910 (1962); Riter v. Keokuk

Electro-Metals Co., 248 Iowa 710, 82 N.W.2d 151 (1957); Nall v. Iowa Elec.

Co., 246 Iowa 832, 69 N.W.2d 529 (1955); Thomas, 223 Iowa 229, 272 N.W.

79; Wapsipinicon Power Co. v. Waterhouse, 186 Iowa 524, 167 N.W. 623

(1918). A review of these cases reveals some basic principles that are

helpful in resolving the statute-of-limitations issue in this case.
 16

Whether an injured party is entitled to bring successive actions for

damages or must seek compensation for all injuries in one suit depends on

the nature of the injury, and to some degree, the nature of the nuisance.

Where injuries from the nuisance are intermittent rather than continual, a

property owner may bring successive actions to recover damages for each

intermittent injury. See Eppling, 254 Iowa at 404, 117 N.W.2d at 825. In

such cases, “the measure of damages is the diminution in rental value

caused by the nuisance together with such special damages, as for

discomfort and annoyance, as may result therefrom.” Miller, 253 Iowa at

1062, 114 N.W.2d at 914.

In contrast,

“[i]f injuries from a nuisance are of a permanent character and
go to the entire value of the estate, there can be but one action,
and all damages—past, present, and future—are recoverable
therein; in such a case, one recovery is a grant or license to
continue the nuisance, and there can be no second recovery for
its continuance.”

Weinhold, 555 N.W.2d at 462 (quoting 58 Am. Jur. 2d Nuisances § 273

(1989)); accord Mel Foster Co. Props., Inc., 427 N.W.2d at 175; Nall, 246 Iowa

at 840, 69 N.W.2d at 533; Wapsipinicon Power Co., 186 Iowa at 527, 167

N.W. at 624. The measure of damages in such a case is the difference in

market value of the property immediately before and immediately after the

injury-producing nuisance. See Weinhold, 555 N.W.2d at 465 (noting

special damages may also be recovered); Mel Foster Co. Props., Inc., 427

N.W.2d at 175; Wapsipinicon Power Co., 186 Iowa at 527, 167 N.W. at 624.

As we noted in Weinhold, “[t]his measure of damages compensates the

injured landowner for an interference that is tantamount to a permanent

taking.” 555 N.W.2d at 465.
It is at once apparent that conduct resulting in inverse condemnation

is analogous to a nuisance causing permanent injury because the injury for
 17

which compensation is sought in an inverse condemnation case—loss of the

plaintiff’s interest in the property—is also permanent in nature. See

Kingsway Cathedral, ___ N.W.2d at ___. Furthermore, the measure of

damages in an inverse condemnation case—diminution in market value—is

the same as the measure of damages in a permanent-injury nuisance case.

In the latter situation, this court has consistently held that all damages

must be sought in one suit. See, e.g., Connolly, 465 N.W.2d at 878; Mel

Foster Co. Props., Inc., 427 N.W.2d at 175; Nall, 246 Iowa at 840, 69 N.W.2d

at 533-34; Wapsipinicon Power Co., 186 Iowa at 527, 167 N.W. at 624. The

same conclusion, that only one action will lie, is equally applicable to

inverse condemnation actions because the resulting injury—a taking of the

plaintiff’s property interest—can only happen once. Therefore, it is not the

type of injury for which successive actions will lie. Cf. Scott, 432 N.W.2d at

148 (holding adverse impact on market value of plaintiff’s property caused

by city zoning ordinance “constituted a single injury”). Thus, this court was

correct when it stated in Connolly that in an inverse condemnation case, all

damages must be sought “in a single action.” 465 N.W.2d at 878.

Because the successive-actions rule does not apply here, the five-year

statute of limitations for the plaintiff’s inverse condemnation claim did not
automatically begin anew when the plaintiff’s property was flooded for a

second time in 1999. Therefore, the pertinent inquiry in this case is: when

did K & W discover its claim for inverse condemnation? We turn now to a

discussion of that issue.

E. Application of discovery rule. In order to succeed on its defense

that the plaintiff’s inverse condemnation claim is barred by the statute of

limitations as a matter of law, the State must demonstrate there is no

dispute that K & W had actual or imputed knowledge of “ ‘the fact of [its]

injury and its cause’ ” prior to June 11, 1996. See Rieff, 630 N.W.2d at
 18

291. The summary judgment record reveals the plaintiff had actual

knowledge by March 1994 that the April 1993 flood that invaded its land

was “caused by highway construction in the area.” K & W made this

allegation in the claim it filed with the state appeal board on March 14,

1994 for damage to its truck. Thus, by that date, the plaintiff knew of an

injury to its real property and its cause.

The plaintiff argues, however, that although it knew the DOT’s work

had caused flooding on its land, it did not know it had been permanently

injured. See 3 Julius L. Sackman, Nichols on Eminent Domain § 8.01[4][c],

at 8-60 (rev. 3d ed. 2005) (stating it has been held landowner must institute

action within prescribed period “after he or she realizes or should

reasonably realize that his or her property has sustained an injury that is

permanent in nature” (emphasis added)). We question whether this

argument has any validity under Iowa law. This court has held that “[w]hen

an incident occurs causing minor injuries and later more serious injuries

appear,” the plaintiff’s claim for all injuries accrues for purposes of the

statute of limitations upon discovery of the first injury. See LeBeau v.

Dimig, 446 N.W.2d 800, 802-03 (Iowa 1989). We have also held “that once

claimants have knowledge of facts supporting an actionable claim they have

no more than the applicable period of limitations to discover all the theories

of action they may wish to pursue in support of that claim.” Sparks v.

Metalcraft, Inc., 408 N.W.2d 347, 352 (Iowa 1987). Whether these

authorities preclude the plaintiff’s argument is a question we need not

answer because we are persuaded K & W had imputed knowledge of its

permanent injury long before June 11, 1996, five years before it commenced

this action.

The district court concluded the plaintiff “should have known that as

a result of [the 1993] flood, the value of its land had been significantly
 19

lessened.” The court explained the mere fact “the land had been inundated

by the 1993 flood” would “substantially reduce the overall value of the

property” in the eyes of prospective buyers. We agree. But even more

importantly, we also think K & W is charged with knowledge of the

information set forth in the Rust report, information that made it clear the

plaintiff’s property was at a greatly increased risk of flooding as a result of

the DOT’s highway construction.

In K & W’s 1994 claim filed with the state appeal board, it asserted,

“The flood waters were caused by highway construction in the area.” We

conclude it is indisputable that a reasonably diligent investigation of this

claim would have led the plaintiff to the Rust report. See Perkins, 651

N.W.2d at 44 (stating injured party is assumed to have knowledge of “ ‘all

facts that would have been disclosed by a reasonably diligent investigation’ ”

(citation omitted)); Chrischilles v. Griswold, 260 Iowa 453, 462, 150 N.W.2d

94, 100 (1967) (“The question in any case is . . . What might [the plaintiff]

have known, by the means of information within his reach, with the

vigilance which the law requires of him?”). This report was prepared for the

DOT, the entity responsible for the construction, and was published on

January 25, 1994, more than six weeks before K & W filed its claim with the

state appeal board and more than a year before the two-year statute of

limitations on its tort claim expired. See Iowa Code § 669.13 (requiring tort

claim against state to be filed within two years of its accrual). Therefore, the

information in the Rust report must be imputed to K & W to determine

whether it discovered its claim for inverse condemnation more than five

years prior to filing this suit.

The Rust report detailed how the highway construction project altered

the flooding potential in the area of the plaintiff’s business. It stated the

water levels in the diversion channel, which is close to the plaintiff’s
 20

property, had been increased by the DOT project, an increase that in turn

resulted in higher flood profiles. Of particular significance here, the study

concluded the flood elevation had increased the most at Lincoln Street

where the level was 1.9 feet higher than prior to the highway construction.

(K & W’s property is located on Lincoln Street.)

The importance of this information to the plaintiff’s discovery of its

permanent injury is illustrated by a comparison of the contents of the Rust

report to the takings claim made in the present lawsuit. The factual

assertions made in K & W’s petition in support of its inverse condemnation

claim are derived from and substantiated by the Rust report. In addition,

the plaintiff’s expert witness relied principally on the Rust report to support

his conclusion that “K & W is faced with an increase in flood depth of 33%”

and an increase in flood duration of greater than 33%.

K & W seeks to minimize the Rust report conclusions, arguing the

highway project was not completed when the report was published in 1994,

and as a result, the plaintiff could not have known that future flooding

would occur once the highway project was finished. But the Rust report

assumed the completion of the project as designed and made projections of

flood elevations on that basis. Consequently, the plaintiff could easily have
discovered as early as January 1994 that the completion of the project

would exacerbate rather than diminish the flooding potential on its

property.

In summary, had the plaintiff undertaken a reasonably diligent

investigation preparatory to the filing of its March 1994 claim and its later

decision not to file suit against the State, it would have uncovered the Rust

report. Therefore, the information contained in that report must be

imputed to the plaintiff. K & W would have learned from a review of the

Rust report that the 1993 flood was not an anomaly but was the result of a
 21

permanent and significant increase in flood elevations caused by the DOT’s

project. Because this information would have informed the plaintiff of the

permanent nature of the injury to its property as well as its cause, the

plaintiff is deemed to have discovered its inverse condemnation claim more

than five years prior to filing this lawsuit. The district court did not err in

granting summary judgment to the defendant on this basis. See Estate of

Montag v. TH Agric. & Nutrition Co., 509 N.W.2d 469, 471 (Iowa 1993)

(affirming summary judgment for defendant based on plaintiff’s inquiry

notice of claim); Franzen v. Deere & Co., 377 N.W.2d 660, 661 (Iowa 1985)

(same).

V. Summary.

The State has established as a matter of law that it is immune from

tort liability for its design and construction of the highway project in

question because the highways were constructed “in accordance with a

generally recognized engineering . . . standard, criteri[on], or design theory

in existence at the time of the construction.” Iowa Code § 669.14(8).

Therefore, the district court correctly granted summary judgment to the

State on the plaintiff’s tort claims.
When a property owner seeks recovery for the diminution in value of
its property resulting from intermittent but inevitably recurring flooding
caused by a government project, the landowner must file its action for
inverse condemnation within five years of the date upon which it discovers
the injury to its land and the cause of the injury. Here, the plaintiff was on
inquiry notice of its claim after its property was first flooded in 1993.
Because this lawsuit was filed more than five years later, its inverse
condemnation claim is barred by the statute of limitations. Therefore, the
district court correctly granted summary judgment to the State on the
plaintiff’s takings claim.
AFFIRMED.