Most claims are barred by some sort of governmental immunity and also face strict procedural hurdles, but it isn't impossible that the defectively installed storm drains could give rise to some liability for property damage if the suit were brought swiftly in the proper manner.
Also, even if there is liability this will almost certainly not extend to lost property value, only to direct property damage, because while the direct property damage might be caused by something that the government has waived sovereign immunity for, the lost property value is almost entirely due to its discretionary regulatory decisions about land use and whether it should provide storm drainage at all.
There are several potential theories of municipal liability that need to be considered.
One is that the township has liability because it approved development that foreseeably caused this problem. This claim is probably without merit although there might be a claim against the homeowners who inadequately drained their properties in a way that impacted their neighbors. This is because land use regulation is a discretionary governmental action.
A second is that the township has liability because it had a duty to an individual property own to provide adequate storm drainage and failed to do so. This claim is probably also without merit. This is also a discretionary governmental action and even if it was not, would not meet New York State's "special relationship" test set forth below.
A third theory is that the township has liability because once it undertook to install storm drains the workmanship of the storm drains that it installed fell below the standard of reasonable care in workmanship that applies to all construction work that foreseeable causes injuries to persons or property. This is a much closer call and might prevail, although it would still be subject to the strict procedural limitations of the New York Court of Claims Act including a 90 day statute of limitations under Section 10(3) of the Act and a notice requirement. There would also be no right to a jury trial in the case.
Once the storm drain is actually built, there is arguably a non-discretionary duty to build it in a workman-like manner and the location of the particular defective drain may trigger New York's "special relationship" test.
Also, it might be possible to sue the private contractor that defectively installed the storm drain for the township.
When municipalities are sued in tort, two of the most powerful bars to
recovery are the public duty principle and the governmental function
immunity defense. When these two principles are applicable, the City
will not be made to pay compensation even if a City employee had been
negligent and caused an injury. . . . An injured person alleging an
injury caused by the City’s failure to perform a public duty cannot
recover unless the injured person alleges and establishes, as an
element of his or her claim, a special relationship by which the City
assumed a specific duty with respect to the injured person. . . . the
plaintiff, to present a prima facie case for recovery, must first
successfully establish a special duty. If the plaintiff cannot get
past the special duty hurdle, there is no need for the court to
address the applicability of the governmental function immunity
defense, which provides absolute immunity for discretionary
determinations where discretion has been exercised.
The often-repeated policy reason for limiting governmental tort
liability is that government would not be financially viable if it
were made the insurer of the safety of the public for injuries caused
principally by third parties. Governmental entities could have a
disincentive from providing important governmental services if they
knew that doing so could seriously jeopardize the public treasury. The
courts do not limit recovery, however, when a municipality acts in a
proprietary capacity — when its activities essentially substituted for
or supplemented those undertaken by a private enterprise, such as
property ownership, operation of a motor vehicle, or providing
hospital services.
When a municipality acted in its governmental capacity, sovereign
immunity historically protected the municipality against tort recovery
by injured persons. That absolute protection against tort recovery
lasted in New York until the State Legislature, in 1929, waived New
York State’s sovereign immunity as part of the Court of Claims Act.
Although the waiver by the State Legislature only mentioned the State
of New York, the Court of Appeals in 1945, in Bernardine v. City of
New York, 294 N.Y. 361 (1945), interpreted the waiver to apply as
well to municipal entities like New York City. But as the Court of
Appeals subsequently held, the waiver did not eliminate all
governmental immunities or other bars to governmental liability.
In the years since 1945, courts wrestled with sorting out when
liability was appropriate and when it was not. For example, courts
generally refused to hold municipal governments liable for failing to
prevent fires or crime. Municipal governments undertake all sorts of
public duties like police protection, fire protection, child
protection, education, building inspections, and the like. Were a
municipality liable every time a crime was committed that governmental
actors had failed to prevent, or an inspector made a mistake, or a
student was not sufficiently educated, it would be under a crushing
financial burden that could result in bankruptcy. At the same time,
courts created exceptions that allowed negligence claims to proceed
even where municipalities performed quintessential governmental
functions. Special duty was one such exception. Another exception
allowed for liability where the governmental action was ministerial
rather than discretionary. . . .
In October 2011 the Court of Appeals [*ed. the highest court in the
state of New York called a state supreme court in most other states]
in Valdez v. City, 18 N.Y.3d 69 (2011) clarified 70 years of
jurisprudence and articulated an analysis to be applied when
considering whether an individual may sue a municipal government for
negligent performance of, or failure to perform, governmental
functions. The decision in Valdez must now be the starting point in
analyzing liability in any negligence tort suit against the government
or governmental actors.
First, the Court of Appeals confirmed the basic tenet that although
sovereign immunity was waived in the Court of Claims Act, tort
liability will generally not attach to governmental entities or
government employees performing governmental functions, regardless of
whether the function is discretionary or ministerial. Where statutory
or regulatory mandates require a government to act for the benefit of
the public as a whole, the government and its actors cannot be sued
for failing to provide or negligently providing such services. The
Court articulated this principle as the “public duty” rule, not as
“immunity.”
In order to overcome the public duty bar, an individual as a threshold
issue must show that there existed a special duty running in favor of
the claimant as an individual. The Valdez Court held that for a
litigant to proceed successfully with a tort suit against a
municipality, a plaintiff must first plead a “special duty” running
specifically to him or her. A special duty can be formed when a
municipality or its employee:
• violates a statutory duty enacted for the benefit of a particular
class of persons; • assumes positive direction and control in the face
of a known, blatant, and dangerous safety violation; or • voluntarily
assumes a duty that generated justifiable reliance by the person
through the employee’s actions or promises to the person.
The Valdez Court also held that whether the facts are legally
sufficient to establish a special duty is an objective question of law
for the court.
The Court of Appeals made clear, therefore, that special duty is
neither an exception to immunity nor a defense, but instead is an
initial and essential element of any tort claim against the government
and governmental actors. The Court of Appeals also made clear that,
even if a plaintiff succeeds in articulating a viable special duty,
tort liability may still be barred by the “governmental function
immunity defense.” Valdez, 18 N.Y.3d at 75-76. That defense shields
governmental entities from liability for discretionary actions taken
during the performance of governmental functions. This discretionary
defense is qualified in that the municipality must establish that the
governmental action related to the incident was both a discretionary
one and that discretion was, in fact, exercised.
A government employee’s failure to perform a ministerial action, on
the other hand, may subject the government to liability if a special
duty has been established.
In late 2012 and mid-2013, the Court of Appeals issued two additional
opinions which reconfirmed Valdez’s analysis of when the government
may be sued in tort. In Metz v. State, 20 N.Y.3d 175 (2012), twenty
people were killed and many others injured when a tour boat on Lake
George capsized. Plaintiffs claimed that State inspectors had
negligently inspected the vessel and had failed to exercise any
discretion in fixing the number of passengers who could safely travel
on the tour boat. They argued, therefore, that the State was not
entitled to immunity for their actions.
The Appellate Division, Third Department, ruled that the inspection
function was governmental and found that plaintiffs had failed to
establish a special duty. However, the Third Department went on to
find a viable claim against the State because the State could not
demonstrate that it exercised discretion in certifying the vessel as
seaworthy. The Court of Appeals reversed and rejected the Third
Department’s analysis. The Court, relying on Valdez, ruled that, since
inspections are a governmental function, the Appellate Division’s
analysis should have ended with the finding that plaintiffs had not
established a special duty. Insofar as the plaintiffs did not and
could not articulate a special duty, no liability could be imposed
against the State and the nature of the governmental conduct –
discretionary or ministerial – was not relevant. There was no reason
to address the immunity defense since the plaintiff had not
established the initial requirement of a special duty.
In Applewhite v. City, 21 N.Y.3d 420 (2013), plaintiff, a
12-year-old child living at home and cared for by a private nurse,
went into cardiac arrest after being administered certain medications.
The plaintiff’s mother called 911 and an ambulance arrived within
minutes. The plaintiff child and mother sued the nurse and the City,
claiming that the child suffered severe brain damage as a result of
negligent treatment at the scene. Plaintiffs argued that, although
maintaining the 911 system and ambulance services are governmental
functions, once the EMTs cross the threshold and tend to the patient,
the function becomes a proprietary one. The City responded that the
function continues as a governmental one and that no special duty was
created.
The Court of Appeals agreed with the City’s argument that the
emergency rescue function is a governmental police protection function
both before and after the emergency medical personnel arrived. Because
these were governmental and public duties, the plaintiffs needed to
articulate a special duty in order to state a viable tort claim. The
Court then ruled that there existed a question of fact as to whether
the City assumed a special duty under the unique circumstances of the
case and remanded the case for trial.
For litigants against the City, step one in developing a claim is to
distinguish the City’s proprietary activities from the governmental.
If proprietary, then there generally is no issue of a public duty bar
and the claim may proceed.
If the activity is governmental, however, the public duty bar must
first be overcome. As an element of the plaintiff’s claim, the
plaintiff must allege and establish the existence of a special duty.
Assuming a plaintiff successfully overcomes the special duty hurdle,
the government will still not be liable if the challenged conduct was
discretionary and it exercised discretion. If plaintiff overcomes the
public duty principle and the immunity bar, the plaintiff’s tort claim
may then proceed.
