Gibson v. Housing Authority

RAYMOND G. THIEME, Jr., Judge, Retired, Specially Assigned. The above captioned cases involve lead poisoning actions brought on behalf of minor children that have been consolidated on appeal. In Housing Authority of Baltimore City v. Berris, Housing Authority of Baltimore City v. Smalls, Housing Authority of Baltimore City v. Jones, and Housing Authority of Baltimore City v. Lyles, appellant, the Housing Authority of Baltimore City (HABC), appeals the various denials of motions for summary judgment in the Circuit Court for Baltimore City to present the following question for review: Did the circuit court err in denying the HABC’s Motion(s) for Summary Judgment when it determined that HABC was not immune from suit in these lead-based paint cases even though HABC has no statutorily approved means to pay a possible judgment when its comprehensive general liability insurance did not cover the instant claim and HABC was a local government agency performing a governmental function? Gibson v. Housing Authority of Baltimore City presents the inverse case, as the HABC motion for summary judgment was granted by the Circuit Court for Baltimore City.

Thus, the minors appeal to present the following parallel question: Was the circuit court incorrect as a matter of law in granting a motion for summary judgment, holding that the HABC has governmental immunity from personal injury liability arising out of the operation of rental properties in Baltimore City and HABC has not waived its immunity because Article 44A does not mandate the purchase of insurance covering all risks and hazards? In reviewing these cases as a whole, we are faced -with the more general question: ¹²⁵ Does the HABC as a matter of law have governmental immunity under Article 44A from liability arising out of claims for the negligent operation of properties? Facts The various cases all present situations in which children, either residing or visiting subsidized housing operated by HABC, experienced elevated blood lead levels. In each instance, evidence was presented to show that the child or children were exposed to lead paint on the property due to the HABC’s negligence.

Though HABC carries liability insurance for the properties it maintains, the rider dealing with lead paint liability was terminated by the insurance carrier on April 18, 1996. HABC did not obtain additional liability coverage to address this deficiency but did negotiate to have a fifteen-month reporting tail in which claims brought due to lead paint exposure would be covered under the old rider. The cases at bar, however, were brought after that fifteen-month period expired. As HABC does not have insurance to cover the liabilities raised by these cases, it claims that it will be unable to satisfy any judgment issued against it and thus is immune from suit.

As a result of this rationale, in each of the various cases HABC made a motion for summary judgment claiming the defense of governmental immunity. These consolidated interlocutory appeals were brought as a result of the Circuit Court of Baltimore City’s subsequent rulings on those motions. Discussion Standard of Review Maryland Rule 2-501(e) provides, in relevant part: The court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law. ¹²⁶ When ruling on a motion for summary judgment, we must view the facts, including all inferences, in the light most favorable to the opposing party. Williams v. Mayor & City Council of Baltimore, 359 Md. 101, 114 , 753 A.2d 41 (2000).

The standard of our review is whether the trial court was legally correct, thus we must consider the inferences and facts in light of the minor children. Pence v. Norwest Bank Minn., N.A., 363 Md. 267, 279 , 768 A.2d 639 (2001). The standard will consequently not differ as a result of the posture of the different appeals. Governmental Immunity Generally, the State and its agencies are immune from tort liability based upon causes of action arising out of state law.

Harford County v. Town of Bel Air, 348 Md. 363, 372 , 704 A.2d 421 (1998) (quoting Board v. Town of Riverdale, 320 Md. 384, 389-90 , 578 A.2d 207 (1990)); Md.-Nat’l Capital Park and Planning Comm. v. Kranz, 308 Md. 618, 622 , 521 A.2d 729 (1987); Austin v. City of Baltimore, 286 Md. 51, 53 , 405 A.2d 255 (1979). Localities and their agencies share in this immunity when tortious conduct arises out of governmental, rather than proprietary or corporate, functions. Housing Authority of Baltimore City v. Bennett, 359 Md. 356, 359 , 754 A.2d 367 (2000); DiPino v. Davis, 354 Md. 18, 47 , 729 A.2d 354 (1999); Harford County, 348 Md. at 372 , 704 A.2d 421 (quoting Town of Riverdale, 320 Md. at 389-90 , 578 A.2d 207 ); Kranz, 308 Md. at 622 , 521 A.2d 729 ; Baltimore v. State, 173 Md. 267, 271-72 , 195 A. 571 (1937). The Court of Appeals in Housing Authority of Baltimore City v. Bennett, 359 Md. 356 , 366 n. 6, 754 A.2d 367 (2000), noted that the General Assembly defined housing authorities, as created under Md.Code (1957, 1998 Repl.Vol.), Art. 44A, as local governments for the purposes of the Local Government Tort Claims Act (LGTCA).

Thus, it is necessary that we determine whether HABC was conducting a governmental or proprietary function in order to determine whether immunity may be asserted. ¹²⁷ In Anne Arundel County v. McCormick, 323 Md. 688 , 594 A.2d 1138 (1991), the Court of Appeals reaffirmed the test for determining whether a municipal activity is a governmental function. The test as originally established in Baltimore v. State, 173 Md. at 276 , 195 A. 571 , states: Where the act in question is sanctioned by legislative authority, is solely for the public benefit, with no profit or emolument inuring to the municipality, and tends to benefit the public health and promote the welfare of the whole public, and has in it no element of private interest, it is governmental in its nature. See also McCormick at 695, 594 A.2d 1138; Tadjer v. Montgomery County, 300 Md. 539, 546 , 479 A.2d 1321 (1984); Austin, 286 Md. at 59 , 405 A.2d 255 . Though the test has been consistently upheld, it has been noted that the distinction between governmental and proprietary function is so untidy that the temptation to straighten it up is very strong, but the results are always illusory and as logical as those governing French irregular verbs. “However, the fact that the doctrine is beyond the scope of clear interpretation has not prevented its application.

As Professor Davis has noted, “[the] distinction is probably one of the most unsatisfactory known to the law, for it has caused confusion not only among the various jurisdictions but almost always within each jurisdiction.” 3 K. Davis, Administrative Law Treatise, § 25.07, at 460 (1958); Austin, 286 Md. at 83 , 405 A.2d 255 (citation omitted); see also McCormick, 323 Md. at 695 , 594 A.2d 1138 ; Tadjer, 300 Md. at 546 , 479 A.2d 1321 . Despite these deficiencies, the test is definitive for the case at bar. The HABC was maintaining and operating subsidized housing. The authority to act in such a manner is conveyed to housing authorities by the legislature under Article 44A § 1-301: An authority shall constitute a public body corporate and politic, exercising public and essential governmental functions, and having all the powers necessary or convenient to ¹²⁸ carry out and effectuate the purposes and provisions of this article,....

The operation of subsidized housing was necessitated by a shortage of sanitary and safe dwellings available at rents which persons of low and moderate income can afford and the presence of families living in inadequately sized housing. Art. 44A § 1-102(2), (3). These conditions cause an increase in and spread of disease and crime and constitute a menace to health, safety, morals, and welfare of the residents. Art. 44A § 1-102(4).

These conditions necessitate excessive and disproportionate expenditures of public funds. The legislature therefore saw the necessity to create decent, subsidized housing to resolve these problems. ' Art. 44A § 1-102(5), (8), (10). Article 44A further prohibits the housing authorities from operating at a profit. Art. 44A § 1^401(a).

It is clear that HABC, in operating subsidized housing, was conducting a governmental function. Waiver Accepting that HABC was conducting a governmental function, immunity still may be waived by the legislature. Indeed, the legislature in Article 44A § 1-301(1) granted to the housing authorities the power “[t]o sue and be sued.... ” Despite such language, the Court of Appeals in Katz v. Washington Suburban Sanitary Commission, 284 Md. 503 , 397 A.2d 1027 (1979), created a two-pronged test for determining the validity of a legislative waiver of governmental immunity. The Court stated that such a waiver “is ineffective unless specific legislative authority to sue the agency has been given, and unless there are funds available for the satisfaction of the judgment, or power reposed in the agency for the raising of funds necessary to satisfy a recovery against it.” Id. at 513 , 397 A.2d 1027 .

The Court further stated that “[t]he mere legislative authorization for a State Agency to ‘sue or be sued’ does not alone constitute a general waiver of immunity. Rather, it is limited to such matters ... necessary to carry out the purpose for which the agency was created.” Id. ¹²⁹ Indeed, the Court of Appeals has adequately addressed the first prong for the purposes of this