Iowa Supreme Court Rules Property Owners Can Sue State Over Floods

May 24, 2010

Residents and businesses in a northeast Iowa town can sue the state for flood damage caused by a highway project, the Iowa Supreme Court ruled last Friday.

The court overturned district court and appeals court decisions dismissing the lawsuit filed after flooding in Denver. In the earlier decisions, the courts had ruled the state was immune from damages under state code.

Telephone messages for attorneys in the case were not immediately returned.

The lawsuit was filed by 26 residents and business owners who claimed construction of a U.S. Highway 63 bypass around the town of about 1,600 obstructed a floodway and diverted water from a creek into the community during a rainstorm in May 1999. Landowners claimed the state was negligent in the design and construction of a bridge that spans Quarter Section Run Creek, which flows through the community just north of Waterloo.

The original project was finished in 1994. An engineering study done after the 1999 flood included models that showed an embankment constructed as part of the project cut off a large portion of the floodway and caused water to back up during the storm, damaging nearly 70 homes and businesses, court records show.

The models showed the bridge and embankment increased the depth of the floodwaters by up to 3 feet in areas of the city that would not have flooded before the project.

As a result, the state redesigned and extended the bridge in 2004 and 2005.

Residents sought damages from the 1999 flood and permanent decreases in property values.

The state claimed it was immune from liability under Iowa code, and a district court in Bremer County agreed, ruling the project was built according to a generally recognized engineering or design theory. The court also rejected landowners’ claims that the project violated state code by diverting the natural flow of water. The appeals court agreed and the property owners sought review by the Iowa Supreme Court.

The Supreme Court said the state’s argument was insufficient because state code “prohibits all floodway obstructions or encroachments, including fill, new construction, or any development within a floodway without approval of the DNR.”

“The state’s employees could not choose to ignore these prohibitions,” the court wrote in its decision. “As there was no such choice available, the employees of the state who designed and built the bridge did not perform … functions for which (state code) would offer immunity.”

But the court said the state did have immunity when it came to the claim about loss of property value because the redesign and reconstruction of the bridge met specific design standards with Department of Natural Resources approval.

The court ordered the case back to district court for further proceedings.

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