Butler v. Advanced Drainage Systems, Inc.

PATIENCE DRAKE ROGGENSACK, J.

¶ 1. The circuit court granted summary judgment of dismissal to the defendants on the plaintiffs' negligence and nuisance claims.1 The court of appeals affirmed. Because we conclude that the plaintiffs' negligence and nuisance *405claims are precluded by public policy and were properly dismissed, we affirm the court of appeals, albeit on different grounds than those employed by the court of appeals.

I. BACKGROUND

¶ 2. This action arises out of a project to design and install a system to lower the water level (the Project) of Shell Lake (the Lake). The Lake is a bowl-shaped lake, covering approximately 2500 acres. It is located entirely within the boundaries of the City of Shell Lake, Wisconsin (the City). There are more than 400 properties abutting the Lake. The plaintiffs and intervening plaintiffs (collectively, plaintiffs) own properties on the Lake.

¶ 3. The surface water elevation of the Lake has fluctuated significantly over the past century. In the most recent several decades, the water level of the Lake has been rising. As a result, in 1977, the City entered into an agreement with the Wisconsin Department of Natural Resources (DNR) to raise the ordinary high water mark of the Lake. This agreement was developed to aid the City with adoption and administration of a shoreland zoning ordinance, with the understanding that a surface water drain would be installed in order to maintain the water level at or below the ordinary high water mark set by the DNR.

¶ 4. In the meantime, property development surrounding the Lake continued. The water level continued to rise. In 1987-1988, the U.S. Army Corps of Engineers conducted an investigation of the problem and issued a report that suggested plans for water diversion and associated costs. The report showed that the water level had risen in the 1980s and 1990s, and predicted that the water level would continue to rise. It *406noted a drop in water level from 1986-1987 due to record low precipitation, but it noted:

Realizing the potential for flooding of their properties, area residents continue to be concerned despite the fact that the lake level has dropped during the past year. Accordingly, city officials continue to express a need for the development of measures to alleviate the flooding problem.

U.S. Army Corps of Engineers, Reconnaissance Report, Flood Control section 205 at 11 (March 1988 draft).

¶ 5. The 1988 report ultimately concluded:

The level of Shell Lake is presently down from the [] high level of elevation 1221.99 feet msl reached in 1986. However, historical accounts indicate that the lake has the potential for rising to much higher levels. With the return of normal precipitation or precipitation at levels experienced during the period 1977-1986, rising lake levels can once again be expected. Any appreciable rise in the lake level above the high recorded in 1986 could result in catastrophic losses to existing developments.

Id. at 29.

¶ 6. The water level appeared to stabilize in the years immediately following the Army Corps of Engineers report, and plans to install a drain were put on hold. By 1994, the surface water drain that was to have been installed as a result of the 1977 agreement between the DNR and the City was not in place. The DNR investigations of the water level determined that the ordinary high water mark, based on erosion and analyses of vegetation changes, had risen again. Accordingly, the DNR declared an even higher ordinary high water mark. The DNR's report noted that a substantial amount of *407development had occurred on the Lake in low areas, with much of the development occurring below the 100-year floodplain boundary.

¶ 7. In 1997, after the water level had reached 1222.24 feet, mean sea level (msl), then a record high, the City petitioned the DNR to divert water into Sawyer Creek. However, the DNR denied the City's permit application because of the expected negative ecological effects the proposed plan would have on Sawyer Creek.

¶ 8. In 2000, the City met with the DNR staff to review several new options for water diversion. In 2001, the City applied to the DNR for a new permit, this time to divert lake water into the Yellow River. The Project involved placing structures on the bed of the Lake and in the Yellow River that would facilitate the diversion. The Project also called for the construction and installation of drainage pipe along an approximately 4.5 mile route from the Lake to the Yellow River. The intent of the Project was to maintain the Lake near the ordinary high water mark set in 1994. The DNR granted the City's petition for the Project. The estimated cost exceeded $1,600,000. The City intended to fund the project, in part, through $650,000 of special assessments on riparian property owners. In the meantime, emergency pumping was undertaken to temporarily lower the water level.

¶ 9. The City contracted with engineer Daniel Kling (Kling) and his company, Envirosystems Consulting Group, Inc. (Envirosystems), for design and engineering; with Advanced Drainage Systems, Inc. (Advanced Drainage) for the supply of pipes; and with Bob Thompson & Sons and Thompson Sand & Gravel (Thompson) for installation and general contractor services.

¶ 10. Envirosystems created the plans and specifications for the Project. The plans called for 24,000 feet of light-weight high-density polyethylene pipe rated to *408withstand 10.8 pounds per square inch (psi) of pressure. Other types of high-density pipe that could withstand more pressure were considered, but ultimately were rejected.

¶ 11. The Project construction proceeded in the late summer and fall of 2002 when the water level ranged between 1223.91 and 1224.44 feet msl.2 When the pipeline opened for the first time in November 2002, leaks immediately developed and it was shut down for repair. Subsequently, Advanced Drainage found that gaskets on the pipeline had been displaced and that dirt and debris had entered the pipeline. Six attempts were made at a minimum flow rate, and all failed. From November of 2002 to June of 2003, Envi-rosystems, Advanced Drainage, and Thompson attempted to repair the pipeline.

¶ 12. While the attempted repair was underway, the City hired an engineering firm to investigate the Project and to propose solutions. The resulting report concluded that the pipeline's failure stemmed from design and material defects, failure to test the materials and problems with installation. The report suggested several alternative solutions to appropriately accommodate the water pressure, including reconstruction of the pipeline, the use of new types of piping made of different materials, and the insertion of a "slip-line" within the existing pipe.

¶ 13. The City ultimately chose to insert a slip-line of solid wall 80 psi pipe. By March 2004, after the new system of pipe had been in place and iunctioning for several months, the water level had receded to 1222.18 feet msl.

*409¶ 14. A group of riparian property owners filed this action. They sued the City, Envirosystems, Advanced Drainage, Thompson, and their insurers.3 They alleged the following claims for relief that are before us on this appeal:4 (1) Advanced Drainage, Kling, Envirosystems, Thompson, and the City were negligent in performing their contractual obligations for the Project, causing property damage, loss of property value and loss of enjoyment; and (2) the defendants' negligent actions and inactions created and maintained a nuisance, which nuisance unreasonably impaired the plaintiffs' right of enjoyment and right of reasonable use of their property.

¶ 15. The plaintiffs moved for class certification, pursuant to Wis. Stat. § 803.08, and the defendants moved to change venue, pursuant to Wis. Stat. § 801.52. On October 14,2003, the circuit court denied the request to certify and changed the venue to Burnett County. It also dismissed the City from the lawsuit.5 Subsequently, the remaining defendants moved for summary judgment, pursuant to Wis. Stat. § 802.08. The circuit court granted their motion and dismissed the lawsuit.

¶ 16. The court of appeals affirmed the circuit court. Butler v. Advanced Drainage Sys., Inc., 2005 WI App 108, ¶ 2, 282 Wis. 2d 776, 698 N.W.2d 117. It declined to address the issues of class certification and venue change. Id., n.l. In reaching its decision, the court of appeals concluded that Restatement (Second) of Torts *410§ 324A (1965) was the framework for analyzing the plaintiffs' negligence claims.6 Id., ¶ 22. It concluded that summary judgment was appropriate because, based on the undisputed facts, "none of the three alternative conditions for liability under § 324A [had] been met." Id., ¶ 2. The court of appeals also concluded that an action based on nuisance should be dismissed because it was based on allegedly negligent conduct and the defendants' conduct is not "otherwise actionable under the rules governing liability for negligent conduct." Id., ¶¶ 40-41 (citing Milwaukee Metro. Sewerage Dist. v. City of Milwaukee, 2005 WI 8, ¶ 63, 277 Wis. 2d 635, 691 N.W.2d 658). The plaintiffs petitioned for review of the court of appeals decision and we granted their petition.

II. DISCUSSION

A. Standard of Review

¶ 17. This case requires us to review summary judgment dismissing the plaintiffs' claims against the defendants. Whether summary judgment was properly *411granted is a question of law. Fortier v. Flambeau Plastics Co., 164 Wis. 2d 639, 651-52, 476 N.W.2d 593 (Ct. App. 1991). We independently review a grant or denial of summary judgment, applying the same methodology as the circuit court, although benefiting from the opinions of both the circuit court and the court of appeals. See Cole v. Hubanks, 2004 WI 74, ¶ 5, 272 Wis. 2d 539, 681 N.W.2d 147. Whether public policy precludes liability based on a negligence claim is also a question of law. Gritzner v. Michael R., 2000 WI 68, ¶ 27, 235 Wis. 2d 781, 611 N.W.2d 906.

B. Summary Judgment Principles

¶ 18. Every decision on a motion for summary judgment begins with a review of the complaint to determine whether, on its face, it states a claim for relief. Hoida, Inc. v. M&I Midstate Bank, 2006 WI 69, ¶ 16, 291 Wis.2d 283, 717 N.W.2d 17 (citing Westphal v. Farmers Ins. Exch., 2003 WI App 170, ¶ 9, 266 Wis. 2d 569, 669 N.W.2d 166). If it does, we examine the answer to see if issues of fact or law have been joined. Hoida, 291 Wis.2d 283, ¶ 16. After we have concluded that the complaint and answer are sufficient to join issue, we examine the moving party's affidavits to determine whether they establish a prima facie case for summary judgment. Id. When they do so, we review the opposing party's affidavits to determine whether there are any material facts in dispute, or inferences from undisputed material facts, that would entitle the opposing party to a trial. Id. "We will affirm a grant of summary judgment when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Baumeister v. Automated Prods., Inc., 2004 WI 148, ¶ 11, 277 Wis. 2d 21, 690 N.W.2d 1. "[T]he mere *412existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment," so long as there is no disputed fact that is material to the claim or defense made. Id. (quoting City of Elkhorn v. 211 Centralia Corp., 2004 WI App 139, ¶ 18, 275 Wis. 2d 584, 685 N.W.2d 874).

C. Public Policy Factors

¶ 19. When liability for negligence is established, we may preclude liability based on public policy factors. Coffey v. City of Milwaukee, 74 Wis. 2d 526, 541, 247 N.W.2d 132 (1976). We do so as a matter of law. See Alvarado v. Sersch, 2003 WI 55, ¶¶ 16-17, 262 Wis. 2d 74, 662 N.W.2d 350 (citing Bowen v. Lumbermens Mut. Cas. Co., 183 Wis. 2d 627, 644, 517 N.W.2d 432 (1994); A.E. Inv. Corp. v. Link Builders, 62 Wis. 2d 479, 484-85, 214 N.W.2d 764 (1974)). The six public policy factors we have employed are: "(1) [t]he injury is too remote from the negligence;... (2) the injury is too wholly out of proportion to the culpability of the negligent tortfea-sor; ... (3) in retrospect it appears too highly extraordinary that the negligence should have brought about the harm; .. . (4) . . . allowance of recovery would place too unreasonable a burden on the negligent tort-feasor; ... (5) [to allow recovery] would open the way for fraudulent claims; or (6) [to allow recovery] would enter a field that has no sensible or just stopping point." Coffey, 74 Wis. 2d at 541.

¶ 20. We have cautioned against applying public policy factors to preclude liability where the facts are too complicated and warrant development of the factual *413basis for the negligence claim. Alvarado, 262 Wis. 2d 74, ¶¶ 18, 20-26 (citations omitted). However, we have also said that a reviewing court may preclude liability even when liability for negligent conduct has not been fully developed, e.g., on a motion to dismiss for failure to state a claim. Stephenson v. Universal Metrics, Inc., 2002 WI 30, ¶ 42, 251 Wis. 2d 171, 641 N.W.2d 158 (citing Miller v. Wal-Mart Stores, 219 Wis. 2d 250, 265, 580 N.W.2d 233 (1998)); see also Coffey, 74 Wis. 2d at 541-42. When we do so, we assume for purposes of our decision that the defendant is liable for negligent conduct, "but for reasons of public policy, we prevent the claim from proceeding." Cole, 272 Wis. 2d 539, ¶ 7 (citing Gould v. Am. Family Mut. Ins. Co., 198 Wis. 2d 450, 460, 543 N.W.2d 282 (1996)); see also Smaxwell v. Bayard, 2004 WI 101, ¶ 39, 274 Wis. 2d 278, 682 N.W.2d 923; Gritzner, 235 Wis. 2d 781, ¶ 26.

D. Public Policy Application

¶ 21. Here, the complaint states a claim for relief and the answer joins issue. The relevant facts relating to the attempted water abatement are not disputed. They show that the City contracted with the defendants to lower the water level in the Lake and that the defendants' efforts were not successful. Therefore, we conclude that the facts of record are sufficiently developed for us to undertake a public policy analysis. When we do so, "we assume there is negligence and that the negligence was a cause of the injury, but for reasons of public policy, we prevent the claim from proceeding."7 Cole, 272 Wis. 2d 539, ¶ 7.

*414¶ 22. Although several of the six public policy factors could apply in this case, the sixth public policy factor, that imposing liability would enter a field that has no sensible or just stopping point, is the factor that compels us to preclude liability. Rockweit v. Senecal, 197 Wis. 2d 409, 541 N.W.2d 742 (1995), provides a framework for our discussion.

¶ 23. In Rockweit, we determined, based on public policy, that a friend who visited a family around a campfire and was the last to leave the campfire could not be held liable for injuries sustained by a young child, who later fell into the un-extinguished fire's hot coals. In explaining our decision, we noted that the child's injuries could have occurred in exactly the same manner even if the friend had not been present at the campground. Id. at 428. We also noted that the child's parents were aware of the open hazard the fire's coals presented, yet they had not secured the child's safety. Id. We concluded that if liability could be imposed on the visiting friend for failing to extinguish the campfire, there would be no sensible or just stopping point as to whom could be held liable for a known hazard. Id. at 428-29. We noted the appropriateness of the question asked by the court of appeals:

. . . [Wjhen it comes to fires ... is it the last adult to leave, the last person to put a log in the fire? Or is it the owner of the campsite? Or the person who started the campfire?

Id. at 428.

*415¶ 24. The principles of Rockweit are similar to those we employ to preclude the defendants' liability in this case. For example, the natural hazard, flooding caused by the rising water level of the Lake, has been known for decades. Just as the plaintiffs in Rockweit were aware of the fire hazard, the plaintiffs in this case were aware of the flooding hazard surrounding the Lake; yet they continued to place themselves in harm's way, often by building dwellings below the 100-year floodplain for the Lake. When the potential for damage from the Lake's flooding was known and of an ongoing nature, should an unsatisfactory abatement effort serve as the source of recoverable damages? Just as we determined in our public policy analysis in Rockweit, it is probable that absent any act by the defendants, the plaintiffs, nevertheless, would have suffered damages.

¶ 25. If we were to permit liability against the defendants before us, we would be opening the door to property owners' claims against any contractor who contracts with a municipality to remediate a naturally occurring hazard, when the contractor fails to completely abate the hazard's effects. This broad exposure to liability would chill municipalities' efforts in attempting abatement projects. It could also chill contractors from bidding on those types of municipal projects; where in addition to being subject to a breach of contract action by the municipality8 for not performing as they had contracted to perform, the contractors would be subject to litigation by any property owner who would have benefited from a successfully performed municipal contract.

*416¶ 26. Furthermore, permitting this claim to go forward could encourage lawsuits for any number of potentially negligent participants who have tried unsuccessfully to prevent flooding, over the long history of the Lake's rising water levels. This is a natural hazard that was amplified by development on the Lake. Should every failed effort at controlling the flooding bring a lawsuit? For example, if a retaining wall had been constructed in the hope of holding off rising water and the property flooded nevertheless, should that contractor also be held responsible for the damage to the plaintiffs or to neighboring residents' properties because the efforts were unsuccessful?

¶ 27. As in Rockweit, we conclude that to open the door for this type of claim would be to enter a field with no just or sensible stopping point. Therefore, we conclude that the defendants may not be held liable for their unsatisfactory abatement efforts and the dismissal of the plaintiffs' negligence claim was proper.

E. Nuisance

¶ 28. The plaintiffs also bring a nuisance claim against the defendants. "Liability for a nuisance may be based upon either intentional or negligent conduct" and may be grounded in either creating or maintaining a nuisance. Milwaukee Metro, 277 Wis. 2d 635, ¶ 33. "Nuisances come in two varieties, public and private, which are distinguished by the nature of the interest invaded." Id., ¶ 27. A private nuisance involves interference with or disturbance of the use and enjoyment of an individual's land. Id. Those who have property rights or privileges with regard to the use or enjoyment of land impacted by a nuisance may maintain a claim for *417private nuisance. Id. "A public nuisance is an unreasonable interference with a right common to the general public," and does not necessarily involve the interference with the use or enjoyment of land. Id., ¶ 28 (citations omitted). "In sum, a nuisance exists if there is a condition or activity that unduly interferes with the private use and enjoyment of land or a public right." Id., ¶ 30.

¶ 29. When we review an alleged nuisance claim, our first step is to determine whether nuisance exists. Physicians Plus Ins. Corp. v. Midwest Mut. Ins. Co., 2002 WI 80, ¶ 27, 254 Wis. 2d 77, 646 N.W.2d 777. Nuisance arises when a particular type of harm is suffered, i.e., nuisance refers to the particular interest that is invaded. Milwaukee Metro, 277 Wis. 2d 635, ¶¶ 25-26. If nuisance is present, our second step is to determine whether the complained of conduct was a cause of creating the nuisance. Id., ¶ 64. Proof that the underlying conduct was tortious is necessary to liability predicated on nuisance. Id., ¶ 32. If the underlying conduct is not a cause of the nuisance, no claim for relief will stand. Id. As the third step, we decide whether the "defendant's conduct is otherwise actionable under the rules governing liability for negligent conduct." Id., ¶ 63.

¶ 30. The plaintiffs' complaint does not label their claim as one for a private or a public nuisance. However, it does refer to the use and enjoyment of their private property, implying that it is a private nuisance claim. The plaintiffs use the same conduct as the basis for their nuisance claim, as they employed for their negligence claim. When a nuisance claim is predicated on negligent acts, it is necessary for the court to separately analyze the nuisance claim for relief from the negli*418gence claim for relief. See id., ¶ 45. We have analyzed the plaintiffs’ negligence claim above.

¶ 31. In Physicians Plus, we held that due to the analogous relationship between negligence and nuisance, liability for maintaining a public nuisance can be limited on public policy grounds traditionally used to preclude liability for general negligence claims. Physicians Plus, 254 Wis. 2d 77, ¶ 2. Although Physicians Plus addressed a public nuisance, we have held that the Physicians Plus reasoning applies to claims of private nuisance as well:

Since all the underlying rules of negligence are applicable to a claim of nuisance based on negligence, logically then, the prerequisites for liability should not vary depending upon whether the interest invaded by the defendant's negligent conduct is public or private.

Milwaukee Metro, 277 Wis. 2d 635, ¶ 47 (citations omitted). We further explained, citing our prior ruling in Schiro v. Oriental Realty Co., 272 Wis. 537, 76 N.W.2d 335 (1956), that "when a nuisance is premised on negligent conduct, failing to allow [a] defendant the same defenses as he would have in a negligence action would render liability dependent on the label the plaintiff used on the pleading and not the defendant's underlying conduct." Milwaukee Metro, 277 Wis. 2d 635, ¶ 48.

¶ 32. The plaintiffs assume the existence of a nuisance when they claim that the use and enjoyment of their property is invaded by the flooding waters of the Lake. They also assert that a cause of this invasion is the defendants' unsuccessful abatement actions. However, there is no dispute that the defendants did nothing to cause the Lake's rising water level; the plaintiffs claim against the defendants because they did not succeed in causing the water level to recede. There*419fore, it is the defendants' unsatisfactory abatement efforts that the plaintiffs assert as a cause of the nuisance.

¶ 33. We have explained that cause-in-fact (a substantial factor) and the public policy factors are both used when we determine liability. Fandrey v. Am. Family Mut. Ins. Co., 2004 WI 62, ¶ 14, 272 Wis. 2d 46, 680 N.W.2d 345.

Even though a jury has found negligence and that such negligence was a "cause" (or substantial factor) in producing a plaintiffs damages, liability may be denied under factors that we have termed public policy considerations.

Id. (quoting Beacon Bowl, Inc. v. Wis. Elec. Power Co., 176 Wis. 2d 740, 761, 501 N.W.2d 788 (1993)).

¶ 34. We have concluded, as a matter of law, that the plaintiffs' negligence claim should not go forward because to permit the claim would enter a field with no just or reasonable stopping point. When we did so, we were deciding that as a matter of law, the defendants' actions were not sufficient to support liability for the plaintiffs' damage. See Fandrey, 272 Wis. 2d 46, ¶¶ 30-34. The plaintiffs' nuisance claim is based on the same allegedly negligent abatement of the flooding around the Lake. Therefore, according to the principles set forth in Physicians Plus and Milwaukee Metro, we conclude that even if we assume, arguendo, that the plaintiffs were able to prove all of their allegations with regard to the private nuisance claim, it is appropriate to preclude liability for the nuisance claim based on the same public policy factors that limit liability in the underlying negligence claim. Were we not to do so, we would cause the potential for liability to be tied to the label the plaintiffs applied to each claim. Permitting the *420nuisance claim to proceed would also be inconsistent with the public policy factors on which we have limited liability.

¶ 35. Accordingly, we conclude that the court of appeals correctly affirmed the circuit court's grant of summary judgment in favor of the defendants, although we base our holding on different reasoning than the court of appeals employed.

III. CONCLUSION

¶ 36. We conclude that the plaintiffs' negligence and nuisance claims are precluded by public policy, and were properly dismissed. Therefore, we affirm the court of appeals, albeit on different grounds than that employed by the court of appeals.

By the Court. — The decision of the court of appeals is affirmed.

Judge Norman L. Yackel presided in the Washburn County Circuit Court.

According to the Army Corps of Engineers Report, the highest recorded water level was 1228.55 feet msl in 1900.

Cincinnati Insurance Company and Gulf Underwriters Insurance Company are named as intervening defendants.

The complaint also asserted an inverse condemnation claim and claims for declaratory and injunctive relief, which are not before us.

The decision to dismiss all claims against the City has not been appealed.

Restatement (Second) of Torts § 324A (1965) provides;

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of rebanee of the other or the third person upon the undertaking.

The dissent takes issue with applying a public policy analysis when causation and damages remain. Dissent, ¶ 84. *414However, because we assume negligence, cause and injury, determining whether there is cause and damages is not necessary to a public policy analysis. Smaxwell v. Bayard, 2004 WI 101, ¶ 39, 274 Wis. 2d 278, 682 N.W.2d 923.

Here, the contractors were sued by the City for breach of contract, and the suit was settled to the satisfaction of the City of Shell Lake. Therefore, the contractors have not escaped liability for failing to create and install a system to lower the water level in the Lake.