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Howrey LLP
The
Lowes entered into a contract with Donna Lynn under which
Lynn was to perform carpentry, painting, electrical and
foundation work on a residence owned by the Lowes. Lynn
claimed to be licensed and bonded but was not. The Lowes
became dissatisfied with Lynn's work and sued the Lowndes
County Building Inspection Department, alleging that it
was negligent in issuing a building permit when it knew
that Lynn did not posses the license required for such work
from the Mississippi State Board of Contractors.
The
Lowes also alleged that the Building Inspection Department
issued a permit, upon application by Lynn, to Housing, Inc.,
an unrelated entity to Lynn, knowing that Housing, Inc.
had lent its license to Lynn so that she could make the
application, but that Housing Inc. was not to perform any
work on the residence. The Lowes alleged that the department
failed to inform them or the Licensing Board.
The
trial court dismissed the Lowes' claim with prejudice, holding
that the Building Inspection Department was protected by
a qualified sovereign immunity, granted by Miss. Code Ann.
§11-46-9 (Supp. 1999), which states in part:
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(1)
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A
governmental entity and its employees acting within
the course and scope of their employment or duties shall
not be liable for any claim: |
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(h)
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Arising
out of the issuance, denial, suspension, or revocation
of, or the failure or refusal to issue, deny, suspend
or revoke any privilege, ticket, pass, permit, license,
certificate, approval, order or similar authorization
where the governmental entity or its employees is authorized
by law to determine whether or not such authorization
should be issued, denied, suspended, or revoked unless
such issuance, denial, suspension or revocation, or
failure or refusal thereof, is of a malicious or arbitrary
and capricious nature. [emphasis added] |
The
Mississippi Supreme Court reversed the dismissal, holding
that the Building Inspection Department's conduct, if proven,
would fall within the "arbitrary and capricious conduct"
exception set out in Miss. Code Ann. §11-46-9 (h).
Lowe v. Lowndes County Building Inspection Department,
760 So. 2d 711 (Miss. 2000). The Supreme Court reasoned
that taking the allegations in the complaint as true, the
department knew that Lynn was not duly licensed to perform
the work and, despite this knowledge, issued a permit. Such
conduct would be "arbitrary and capricious" behavior,
thereby denying the defendant immunity.
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For more information about the issues covered in this report, please contact Paul Berning in our San Francisco office at 415-848-4996 or at paulberning@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2001 Howrey LLP
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