Building Permits and the Public Duty Doctrine:
The South Dakota Supreme Court rules that a local government did not owe a duty to an individual class of persons to enforce local ordinances and state historic regulations.
By: Dave Pfeifle, Executive Director, South Dakota Public Assurance Alliance
Each year tens of thousands of building permits are issued by local governments across South Dakota as part of an effort to gain compliance with local building codes. A recent lawsuit illustrated the potential liability exposure with the permitting process. The adjacent property owners to a new home constructed in the historic district of the McKennan Park area of Sioux Falls, SD commenced a lawsuit against the new home owners and the City of Sioux Falls, alleging that the new home violated state historic district regulations and local ordinances. As a Member of the SDPAA, the City of Sioux Falls was provided a defense to the lawsuit. The Circuit Court, Second Judicial Circuit of South Dakota, granted an injunction requiring modification or reconstruction of the new home. The Circuit Court also held that the City of Sioux Falls owed a duty to the adjacent property owners to properly enforce local building codes and state historic district regulations. On appeal, the South Dakota Supreme Court affirmed the issuance of an injunction as to the new home owners, but reversed the Circuit Court’s ruling on the duty conclusion for the City of Sioux Falls. The SD Supreme Court ruled in favor of the municipality due to the public duty doctrine, which holds that governmental entities generally owe a governmental duty only to the public at large, not to individuals or a particular class of persons. The SD Supreme Court held:
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[The] primary purpose of building permits . . . is to secure to local government consistent compliance with construction, zoning and land use ordinances. Building codes, the issuance of building permits, and building inspections are devices used by municipalities to make sure that construction within the corporate limits of the municipality meets the standards established. But by issuing a permit, municipalities do not imply that the plans submitted are in compliance with all applicable codes. Local governments should not, for the particular benefit of individual persons, bear the burden of ensuring that every single building constructed within its jurisdiction fully complies with applicable codes. The duty to ensure compliance rests with the individuals responsible for construction. Permit applicants, builders and developers are in a better position to prevent harm to a foreseeable plaintiff than are local governments. McDowells v. Sapienzas & City of Sioux Falls, 2018 SD 1 at ¶ 39 (citations and quotations omitted).
The public duty doctrine avoids the unreasonable burden that would be placed on local governments if they were required to ensure that all state and local laws are followed by building permit holders and their chosen private contractors. Many South Dakota communities may have hundreds or even thousands of permits issued and pending at any given time. Numerous open permits could not all be inspected on a regular basis with the limited governmental resources available. An analogy often used is that law enforcement cannot attain full compliance with the speed limit laws despite their noble efforts.
SOUTH DAKOTA MUNICIPALITIES
