MACDC Intercounty Drain Procedures Training Flooding Liability (PA 222 of 2001) John Brennan Fahey Schultz Burzych Rhodes PLC February 15, 2017 macdc.us

Flooding Liability (PA 222 of 2001) Part of the Governmental Immunity Act “Liability for Sewage Disposal System Event” Generally, local units of government are immune from liability for injuries to persons or damages to real property. The Governmental Immunity Act (MCL 691.1401 et seq.) provides general immunity, but also lays out certain narrow exceptions. One exception—known as a Public Act 222 In practice, however, many claims under Public Act 222 of 2001 (“PA 222”) are filed seeking compensation for flooding damages following a heavy rain event. Claim—is intended to hold governmental units liable for injuries or damages relating to a sewage disposal system (including storm water system) back up or overflow under limited circumstances. macdc.us

Some definitions Sewage Disposal System – includes storm sewers, including a “storm water drain system” Appropriate governmental agency – means a governmental agency that owns or operates the “sewage disposal system” that causes the damage involved Generally, local units of government are immune from liability for injuries to persons or damages to real property. The Governmental Immunity Act (MCL 691.1401 et seq.) provides general immunity, but also lays out certain narrow exceptions. One exception—known as a Public Act 222 In practice, however, many claims under Public Act 222 of 2001 (“PA 222”) are filed seeking compensation for flooding damages following a heavy rain event. Claim—is intended to hold governmental units liable for injuries or damages relating to a sewage disposal system (including storm water system) back up or overflow under limited circumstances. macdc.us

Sewage disposal system event “Overflow” or “Backup” onto real property But NOT if caused by: An obstruction in service lead not caused by drainage district A connection to the drain located on the property (e.g. sump pump) Or…… Generally, local units of government are immune from liability for injuries to persons or damages to real property. The Governmental Immunity Act (MCL 691.1401 et seq.) provides general immunity, but also lays out certain narrow exceptions. One exception—known as a Public Act 222 In practice, however, many claims under Public Act 222 of 2001 (“PA 222”) are filed seeking compensation for flooding damages following a heavy rain event. Claim—is intended to hold governmental units liable for injuries or damages relating to a sewage disposal system (including storm water system) back up or overflow under limited circumstances. macdc.us

An Act of WAR

Exclusive statutory remedy Claimant must prove: ICDD was the “appropriate governmental agency” Part of established ICD had a defect ICDD knew, or with reasonable care should have known about defect ICDD failed to take “reasonable steps” within a “reasonable time” to repair/remedy Defect was “substantial cause” of the event and subsequent harm Generally, local units of government are immune from liability for injuries to persons or damages to real property. The Governmental Immunity Act (MCL 691.1401 et seq.) provides general immunity, but also lays out certain narrow exceptions. One exception—known as a Public Act 222 In practice, however, many claims under Public Act 222 of 2001 (“PA 222”) are filed seeking compensation for flooding damages following a heavy rain event. Claim—is intended to hold governmental units liable for injuries or damages relating to a sewage disposal system (including storm water system) back up or overflow under limited circumstances. macdc.us

Cross Reference: Section 196 Sec. 196(1) An annual inspection may be made of a drain established under this act. For intercounty drains, the inspection shall be caused to be made by the drainage board. QUESTION Is the failure to conduct an annual inspection a problem under Act 222? Generally, local units of government are immune from liability for injuries to persons or damages to real property. The Governmental Immunity Act (MCL 691.1401 et seq.) provides general immunity, but also lays out certain narrow exceptions. One exception—known as a Public Act 222 In practice, however, many claims under Public Act 222 of 2001 (“PA 222”) are filed seeking compensation for flooding damages following a heavy rain event. Claim—is intended to hold governmental units liable for injuries or damages relating to a sewage disposal system (including storm water system) back up or overflow under limited circumstances. macdc.us

ANSWER: IT DEPENDS! History of drain Complaints from property owners Recent weather events Resources of drainage district Existence of inspection plan Observations

Limits of exposure Generally, claimants get paid for “economic damages” only Exceptions:  death, serious impairment of body function, or permanent serious disfigurement Interesting note: judge, not jury, decides whether injury is “permanent serious disfigurement”

Claim Under PA 222, when a claimant is seeking compensation for flooding damages, they must notify the appropriate Drain Commissioner or Drainage Board and the notice must be made in writing and contain: Claimant's name Address Telephone number Address of the affected property Date of discovery of any property damages or physical injuries A brief description of the claim macdc.us

Notice of Claim Claimant must comply with notice and procedure rules of statute or claim is void Written claim must be made to drainage district within 45 days of when damage or physical injury was or should have been discovered Notice (verbal or written) to any member drain office is sufficient notice to require that claimant be given information on how to make a formal notice to drainage board

Notice of Claim Public Notice of Claim Procedure is Required Notices should be specific to intercounty drainage district Must give claimants this information if they contact drain office about a claim

Contents of written notice of claim Detailed explanation of notice requirements Name and address of person to receive notice for drainage board Claimant(s) name, address, phone number Address for damaged property Date of discovery of property damage/physical injury Brief description of claim

Question What happens if claimants are not given this information when they contact your office?

Answer They may be able to file suit for their claim even though they didn’t comply with the statute’s notice requirements.

PA 222 Claim – Step 1: Receiving Notice and Authorizing Action Notify drainage board Provide copies of notice Request meeting Starts the 45-day timeline before a claimant can file an action in circuit court If a Drain Commissioner receives a Notice of Claim and discovers that the claimed damages relate to an intercounty drain, the Drain Commissioner should: Notify the Drainage Board as soon as possible Provide copies of the Notice of Claim to all members of the Drainage Board Request a meeting of the Drainage Board Since the Drain Commissioner is a member of the Drainage Board, the receipt of the Notice of Claim by a Drain Commissioner starts the 45-day timeline before a claimant can file an action in circuit court macdc.us

PA 222 Claim – Step 2: First Drainage Board Meeting Determine: Legal Counsel Engineering Consultant Scope of Investigation Acknowledge Receipt of Claim After receiving a Notice of Claim, the Drainage Board should hold a meeting and discuss the following items: Whether the Drainage Board should retain legal counsel to assist in the review and evaluation of the Claim Whether the Drainage Board should retain an engineering firm to assist in the review and evaluation of the Claim. Whether to Deny the Notice of Claim and Who will be Responsible for Responding. macdc.us

PA 222 Claim – Step 3: Second Drainage Board Meeting Review & Evaluate Report from Engineering Consultant or Staff Legal opinion from counsel Discuss and vote on offer to settle or deny claim If the Notice of Claim is not denied outright, the Drainage Board should have a full review and evaluation of the claim before responding. Review and evaluation of the claim may include the following: Review of the Notice of Claim and any supporting evidence by legal counsel. Legal memorandum to the Drainage Board evaluating sufficiency of the Notice of Claim based on the statutory requirements. On-site visit by an engineering firm. macdc.us

PA 222 Claim – Step 4: Issue Decision of the Drainage Board Review Opinions Approve Deny Response Response Review any legal opinion provided by legal counsel and any reports provided by the engineering firm. The Open Meetings Act allows the Drainage Board to go into closed session to (MCL 15.268(h)) for purposes of discussing the legal opinion. Decide whether to approve or deny the Notice of Claim. Decide who is responsible for responding to the Notice of Claim. If the Notice of Claim will be approved, the Drainage Board should: Approve an amount of compensation. Require a release of liability. Release of Liability Compensation macdc.us

Civil Action After 45 days from receipt of written notice to drainage board, claimant may file suit None of the procedural limitations apply to cases where claimant seeks only noneconomic damages

Questions? John Brennan Fahey Schultz Burzych Rhodes PLC 4151 Okemos Road, Okemos, MI 48864 Email: jbrennan@fsbrlaw.com Tel: (517)381-0100 Website: www.fsbrlaw.com   macdc.us