This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-96-1915

Josephine Peterson-White, a minor,

by and through her parent and

next friend, Brenda Peterson, and

Brenda Peterson, individually,

Respondents,

vs.

Duluth Housing and

Redevelopment Authority,

Appellant.

Filed March 4, 1997

Affirmed and remanded

Amundson, Judge

St. Louis County District Court

File No. 69-C3-95-601531

Fred R. Jacobberger, Lisa R. Micallef, Jacobberger, Micallef & Associates, P.A., 1150 Capitol Centre, 386 North Wabasha, St. Paul, MN 55102 (for Respondents)

Charles E. Gillin, Karen R. Cote, Jardine, Logan & O'Brien, P.L.L.P., 2100 Piper Jaffray Plaza, 444 Cedar Street, St. Paul, MN 55101 (for Appellant)

Considered and decided by Short, Presiding Judge, Amundson, Judge, and Harten, Judge.

U N P U B L I S H E D O P I N I O N

AMUNDSON, Judge

The Duluth Housing and Redevelopment Authority appeals from the district court's order denying its immunity claims. We affirm and remand.

FACTS

In December 1989, respondent Brenda Peterson moved into 1916 Gearhart Street, a two-bedroom single-family home in Duluth. This property is public housing owned by appellant Duluth Housing and Redevelopment Authority (the Housing Authority). On December 19, 1989, Peterson signed a document to indicate that she had received a copy of a brochure entitled "Watch Out for Lead-Based Paint Poisoning Notification." On June 27, 1990, the house was inspected and determined to have lead paint.

On August 7, 1990, Dennis Zimmerman, the Director of Housing Management of the Housing Authority, wrote Peterson advising her of the lead paint hazard, including with his letter a second brochure entitled "Watch Out for Lead Paint Poisoning." Nine days later, on August 16, 1990, Josephine Peterson-White was born.

In September 1991, after reading an article about blood lead poisoning, Peterson had Josephine's blood lead level tested and lead was found in her blood. The day she got the test results, Peterson notified the Housing Authority and they offered to move respondents immediately. Within a few days, respondents moved to another unit that did not contain lead paint.

In March 1995, respondents sued the Housing Authority, alleging five counts: Count I--landlord liability; Count II--strict liability; Count III--rent abatement; Count IV--negligent breach of covenant to repair; Count V--negligence--third party beneficiary; and Count VI--negligence. In the negligence claim, respondents alleged that

[d]efendant DHRA owed plaintiffs a duty to use reasonable care in conducting its inspections of 1916 Gearhart, including but not limited to a duty to use reasonable care in identifying and assuring correction of deteriorated paint surfaces with respect to said dwelling.

The Housing Authority moved for summary judgment on various grounds, including immunity. The district court granted summary judgment to the Housing Authority on the strict liability and negligence--third party beneficiary claims, but denied summary judgment as to the other claims. The district court determined that the Housing Authority was not entitled to statutory immunity, reasoning that the Housing Authority's duty to remove the lead paint "was a mandatory, ministerial act. Whether Defendant removed the lead-based paint from Plaintiffs' unit in a 'reasonable time' or 'when it [was] found' is a question of fact for the jury to decide." The district court concluded that official immunity does not apply in this case because respondents did not sue an individual. This appeal followed.

D E C I S I O N

An order denying summary judgment on governmental immunity grounds is immediately appealable. See Anderson v. City of Hopkins, 393 N.W.2d 363 (Minn. 1986). Whether government entities and public officials are protected by statutory immunity and official immunity is a legal question that this court reviews de novo. See Snyder v. City of Minneapolis, 441 N.W.2d 781, 786 (Minn. 1989).

I. Statutory Immunity

The Housing Authority argues that respondents' claims are barred by statutory immunity.

Statutory immunity protects a municipality from liability for "[a]ny claim based upon the performance or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused." Minn. Stat. § 466.03, subd. 6 (1994). The supreme court has distinguished between "planning" (discretionary and protected) and "operational" (nondiscretionary and unprotected) decisions. Planning-level decisions involve questions of public policy, including the evaluation of factors such as the political, economic and social effects of a given plan or policy. Holmquist v. State, 425 N.W.2d 230, 232 (Minn. 1988). Operational decisions relate to ordinary day-to-day operations of the government. Id.

The critical inquiry is whether the challenged governmental conduct involved a balancing of policy objectives. Nusbaum v. County of Blue Earth, 422 N.W.2d 713, 722 (Minn. 1988). "Government conduct is protected only where the state produces evidence that the conduct was of a policy-making nature involving social, political, or economical considerations." Id. It is the state's burden to prove that it is immune. Id. at 724, n.6.

The Housing Authority relies on two letters in support of its claim that its decisions regarding the lead paint involved the balancing of social and economic concerns.

One letter, dated August 7, 1990, sent to public housing residents from Dennis Zimmerman, the Housing Authority's Director of Housing Management, indicated that scattered-site homes had been tested for lead-based paint; the homes were found to contain lead-based paint; funding was being requested for abatement of the hazardous areas as quickly as possible; families, especially those with children, should be tested for elevated blood levels; and if a member of the household was determined to have elevated blood lead levels, the resident should contact the Housing Authority and it would arrange to move them into a unit that did not contain lead paint.

The second letter, dated November 6, 1991, from Barbara Demming, the Executive Director of the Housing Authority stated:

Enclosed, per your request, please find a packet of various warnings, pamphlets, notices, and internal memo's that have been transmitted to our tenants concerning lead poisoning.

The Housing Authority has given the warnings and pamphlet "Watch Out For Lead Paint Poisoning" for several years as part of a regulatory briefing packet.

The Authority began testing 75 homes in June, 1990. Results of those tests were received by the HRA in July of 1990. On August 7, 1990 a letter was sent to all involved tenants indicating the potential of a hazard. Work immediately began on the preparation of bid specifications for the abatement of lead in the units which is a lengthy process involving Architectural and Engineering drawings, specifications writing, obtaining HUD approvals, and bidding procedures. The above process took until May, 1991.

The public controversy as to whether to abate or not lasted through July, 1991. Coincidentally, we were awaiting funds to test the last 50 units. Those funds arrived and we finished all testing in July, 1991. We began to relocate families with children under the age of seven immediately thereafter.

We contacted our testing company and requested they send to us the results specifying exactly where lead occurred in each specific house. On October 1, 1991, a letter went to each tenant still living in a home containing lead, no matter what ages their children were, stating specifically where lead occurred.

Besides carrying out relocation, we are also meeting individually and in groups with those tenants still living in homes containing lead. We will be informing them about the hazards of lead poisoning and obtaining their input about potential relocation. We will also be handing out and discussing the last pamphlet "What everyone should know about lead poisoning".

It is a policy of the Authority that homes containing lead, owned by the Housing Authority, will be rehabbed and rented to families with children over the age of seven with their knowledge either indefinitely or until such time as the lead is abated.

We recognize that other courts have held that a governmental entity was entitled to statutory immunity from claims for damages by people whose minor children were exposed to lead-based paint while residing in government housing. See Lancaster v. United States, 927 F. Supp. 887 (D.Md. 1996) (VA hospital staff housing); see also Angle v. United States, 931 F. Supp. 1386 (W.D. Mich. 1994) (military family housing), aff'd, 89 F.3d 832 (6th Cir. 1996). Based on the record before us, however, we conclude that the Housing Authority has not met its burden of proving that its decisions regarding the lead paint problem in respondents' home were based on social and political factors and thus, entitled to statutory immunity. The Housing Authority is, of course, free to offer further proof on remand.

II. Official Immunity

The district court determined that official immunity does not apply in this case because no government official was named in this lawsuit. The Housing Authority claims that a government official does not have to be named in order for official immunity to apply. We disagree.

Under the official immunity doctrine, "a public official charged by law with duties which call for the exercise of his judgment or discretion is not personally liable to an individual for damages unless he is guilty of a willful or malicious wrong." Susla v. State, 311 Minn. 175, 247 N.W.2d 907, 912 (1976). Here, no public official can be personally liable to an individual for damages, even if official immunity is not applied, because no public official has been sued. See Rico v. State, 472 N.W.2d 100, 106 n.4 (Minn. 1991) ("Although the discretionary function exception in the Tort Claims Act protects from liability 'the state and its employees,' a public official sued individually for his or her own torts still may be subject to liability unless entitled to protection under the common law doctrine of official immunity.").

The purpose of official immunity is to protect officials from "the fear of personal liability that might deter independent action and impair effective performance of their duties." Elwood v. County of Rice, 423 N.W.2d 671, 678 (Minn. 1988). In this case, this purpose would not be served--there is no official who fears personal liability because no official has been sued personally.

The supreme court addressed a similar but distinguishable argument regarding official immunity:

There is no merit to plaintiffs' argument that Officer Barrott is not being sued in his "individual capacity," whatever that means. See the court of appeals' disposition of this argument.

Pletan v. Gaines, 494 N.W.2d 38, 44 (Minn. 1992) (injuries resulting from a high-speed chase). This court rejected the argument that official immunity did not apply because plaintiffs "did not sue the officer in his individual capacity and the officer has no personal exposure," reasoning

Under the indemnification statutes, there is no absolute guarantee the officer will avoid personal liability. See Minn. Stat. §§ 3.736, subd. 9a; 466.07, subd. 1 (1986). Also, indemnification and defense by a government agency does not preclude a finding of official immunity. See Rico v. State of Minnesota, 472 N.W.2d 100 (Minn. 1991).

Pletan v. Gaines, 481 N.W.2d 566, 569 (Minn. App. 1992), aff'd, 494 N.W.2d 38 (Minn. 1992). In Pletan, plaintiff sued the officer and the city for negligence, but in this case, plaintiff only sued the city, i.e. the Housing Authority. See id. at 568 ("The parents commenced this action against the officer and the city for negligence in conducting a high speed chase * * *."). Thus, in this case, unlike in Pletan, there is an "absolute guarantee the [employee] will avoid personal liability" because no employee has been sued personally. Cf. id. at 569.

Thus, we conclude that the district court properly determined that the Housing Authority was not entitled to official immunity.

Because of our determinations regarding immunity, we do not reach the non-immunity issues that the Housing Authority raises.

III. Motion to Strike

The Housing Authority moved to strike pages 4 and 5 of respondents' brief, i.e. the argument that there is no immunity for claims arising from contractual duties, because respondents did not raise the issue below. Respondents argue that they raised the issue by arguing negligent breach of covenant to repair. However, that is a tort claim, not an ordinary contract claim, as is the one in the case they cite. See McDonough v. City of Rosemount, 503 N.W.2d 493 (Minn. App. 1993) (alleged breach of contract to buy land), review denied (Minn. Sept. 10, 1993). Respondents concede that "[t]he argument currently raised by Respondents, that this duty is not covered by Minn. Stat. § 466.03 because based on contract, was not briefed by Respondents below because Respondents had no opportunity to do so." Therefore, we grant the Housing Authority's motion and note that even if respondents' argument is true, nothing prevented them from asserting a contract claim in their complaint, or amending the complaint to add a contract claim.

Affirmed and remanded.