Brennen v. City of Eugene

569 P.2d 1083, 30 Or. App. 1093, 1977 Ore. App. LEXIS 2884

• Court: Court of Appeals of Oregon
• Decided: September 26, 1977
• Docket: 76-0235, CA 7874
• Status: Published

Opinions

TANZER, J.

The issue in this civil case is whether plaintiff has stated a cause of action against the City of Eugene. Plaintiff appeals from a judgment on the pleadings entered by the circuit court after it sustained defense motions to strike both counts of plaintiffs second amended complaint and plaintiff refused to plead further.

Plaintiff alleged the following facts which, for purposes of this appeal, we assume to be true. The Eugene Municipal Code requires any taxicab operator to obtain a license before doing business within the city limits. The code also requires an applicant for such a license to submit a certificate evidencing public liability insurance coverage of not less than $100,000 per person.¹

Terminal Taxi Service applied for a taxicab license and submitted a certificate of public liability insurance showing only $10,000 per person in insurance coverage. On or about July 1,1972, the defendant city issued a business license to Terminal Taxi Service.

Four months later, plaintiff, while a paying passenger in a taxicab operated by Terminal Taxi Service, was injured when the taxicab collided with another automobile. Plaintiff recovered a judgment against the taxi service and its driver for $41,719.62. The taxi service’s insurer has paid its policy limit of $10,000 to plaintiff. The taxi service and its driver have less than $4,500 of net leviable assets.

Plaintiff seeks to recover from the city the difference between the unsatisfied amount of his judgment and the leviable assets of the taxi service and its driver. The first count of plaintiff’s second amended complaint alleged that the city was strictly liable for this amount because it licensed Terminal Taxi Service in contravention of the insurance provisions of its licensing ordinances. The second count alleged that the city was negligent in licensing Terminal Taxi Service. Both counts are predicated upon plaintiff’s theory that, by virtue of its licensing ordinances, the city owed a duty to all prospective holders of judgments for negligence against licensed taxicab companies, to assure that such companies maintain the required minimum amount of liability insurance. Plaintiff contends that the city’s breach of this duty was the proximate cause of his inability to recover fully on his judgment against the Terminal Taxi Service.

Plaintiff may recover only if the city owed him a duty which it violated, regardless of whether plaintiffs theory is negligence or strict liability. Klerk v. Tektronix, Inc., 244 Or 10, 415 P2d 510 (1966). Therefore the basic inquiry of this case is: What is the nature of the duty to an individual, if any, assumed by a municipal corporation which adopts a regulatory ordinance controlling its own conduct?

Oregon law provides no direct answer. Numerous cases from other jurisdictions hold that such ordinances create a duty only to the public at large, the breach of which provides no basis for an individual’s suit for damages. See, e.g., Gerneth v. City of Detroit, 465 F2d 784 (6th Cir) cert den 409 US 1109 (1972); Duran v. City of Tucson, 20 Ariz App 22, 509 P2d 1059 rev den (1973); Leger v. Kelley, 142 Conn 585, 116 A2d 429 (1955); Stigler v. City of Chicago, 48 Ill 2d 20, 268 NE2d 26 (1971); Chambers v. Palaggi, 88 Ill App 2d 221, 232 NE2d 69 (1967); Georges v. Tudor, 16 Wash App 407, 556 P2d 564 (1976). There is little logic in the "public duty” analysis which holds that a duty to the general public is not also a duty to the individual members of the public. Ordinarily, a duty is owed to a class of "foreseeable plaintiffs” which has identifiable limits. Thus, for example, the duty to obey a stop sign at a busy intersection is owed to those persons who may be in the immediate vicinity of that intersection at the time. See Prosser, Law of Torts, 254 (4th ed 1971). Where a governmental body enacts legislation for the benefit of the general public, the "duty” which it thereby assumes is, by definition, for the benefit of everyone who may be affected by it. Every member of the public is therefore a foreseeable plaintiff and the distinction between public and private duty cannot be logically or arithmetically drawn. Rather, the cases seem to define the universe of protected persons by resort to considerations of public policy. The tacit underlying principle is that enactment of legislation for the public welfare should not be discouraged by subjecting the governmental body which enacts it to almost unlimited liability. See, Stigler v. City of Chicago, supra.

We need not here adopt the "public duty” analysis which founds cases from elsewhere. The result of traditional tort analysis of the facts in this case, however, is harmonious with the prevailing public policy. If the city owes a duty to each member of the public, it arises not from the city’s dangerous conduct, but from its gratuitous effort to safeguard the public interest against the dangerous conduct of others. The city has no legal obligation to license taxicabs or to condition issuance of a license upon proof of financial responsibility. Having undertaken to do so, the city is in the position of a person who acts where there is no duty to do so.

The person who voluntarily undertakes to aid another, absent a duty to do so, assumes only a duty to avoid making the situation worse than it was prior to his undertaking. He does not become legally bound to successfully complete the rescue, see Prosser, Law of Torts, 343 (4th ed 1971), but only to avoid causing harm by his attempt. One who negligently attempts to protect a person from.harm caused by another is liable only for the harm caused by the attempt itself; the attempt to prevent harm does not convert the actor into an insurer against harm from the acts of the other.

Similarly, the city, by undertaking to regulate the taxi industry and to require minimum liability insurance coverage, assumed the duty in doing so to avoid causing harm to any member of the public. However, it did not thereby become obligated to itself insure each member of the public against injury caused by insufficiently insured taxicab operators.

For plaintiff to state a cause of action against the city, questions of sovereign immunity aside, he must allege that, in some way, the city’s improper licensing of the Terminal Taxi Service placed him in a worse position than he would have been in had the city not acted to require licenses at all, i.e., that there was harm to plaintiff arising directly by virtue of the city’s action. This usually takes the form of an allegation of reasonable reliance or of inhibition of protective acts by others. Absent such an allegation, the city’s error did not itself cause injury to plaintiff; it merely rendered ineffective the city’s voluntary effort to aid and protect him. We hold, therefore, that plaintiff has failed to allege facts indicating that the city breached the duty owed to plaintiff to cause him no harm and thus no cause of action was stated. Klerk v. Tektronix, Inc., supra.

Because we conclude that the city is not liable to the plaintiff, we need not consider whether it is immune under the Tort Claims Act, ORS 30.260 to 30.300.

Affirmed.

1 Plaintiff pleaded Eugene Municipal Code §§ 3.010, 3.025, 3.050 and 3.065, which provide in pertinent part:

"3.010 Licenses Required. No person shall engage in an activity or operate a device listed in Column A of the following table without first obtaining a license therefor from the finance officer as provided in this chapter.

[Columns Column F

Column A B-E Liability

_Licensed Business omitted] Insurance

Taxicab

Operator....... ......Yes” "3.025 Liability Insurance Required. Applicants for licenses for which public liability insurance is required according to Column F, section 3.010, shall submit certificates of insurance, with a 30-day notice of cancellation clause, to the finance officer prior to the issuance of the license. Public liability insurance shall include limits of coverage of not less than $100,000 per person for bodily injury, $300,000 per occurrence for bodily injury, and $50,000 per occurrence for property damage, and shall be extended to cover completed operations.” "3.050 Application Review. The finance officer shall refer each application to any persons, departments or agencies designated by this Code or the city manager to review it. In reviewing the qualifications of an applicant, the following shall be considered when appropriate:

(a) Conformity of the proposed activity or device to this Code and to state and federal law.

(b) Applicant’s ability to perform a licensed activity which requires special knowledge or skill.

(c) Financial responsibility of applicant to protect against losses to members of the public resulting from the licensed activity.

(d) Unreasonable dangers to public health, safety or property which may result from the proposed activity or device.

(e) Past violations of laws or ordinances.

(f) Other considerations specifically required by this chapter.” "3.065 Denial of Application. If, on the basis of the application review

under section 3.050, the finance officer determines that the applicant does not qualify for issuance of a license, the finance officer shall notify the applicant in writing that the application has been denied. The notice shall state the reason for denial and inform the applicant of the provisions of this Code providing for appeal to the council.”