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r <br />I * <br />708 Minn. 422 NORTH WESTERN REPORTER, 2d SERIESDavid CHABOT. Respondent, <br />® V. <br />CITY OF SAUK RAPIDS. <br />Petitioner. Appellant. <br />Noe. C5-d«-2212. C7^7-357. <br />Supreme Court of Minnesota. <br />April 22. 1988. <br />Homeowner brought suit against city <br />for property damage resulting from flood­ <br />ing from holding pond which was part of <br />city's storm drainage system. The District <br />Court, Benton County. Bernard E. Boland. <br />J., entered judgment in favor of home- <br />owner, and city appealed. The Court of <br />Appeals, 412 N.W.2d 371, affirmed in part, <br />reversed in part, and remanded, and city <br />appealed. The Supreme Court, Yetka, J.. <br />held that: (1) city's decision not to make <br />major capital improvements to existing <br />drainage system was an immune discretion­ <br />ary function; (2) any immunity was waived <br />by city's purchase of liability insurance; <br />but (3) city was not liable for failure to <br />divert or hold back natural flow water de­ <br />spite its earlier receipt of report suggest­ <br />ing improvements to the holding pond in <br />question as well as ct'' ■ storm water ar­ <br />eas in the dQr. <br />Reversed and remanded with instruc­ <br />tions. <br />1. Municipal Corporations ^728 <br />Where policy making involves a bal­ <br />ancing of social, political or economic con­ <br />siderations, government conduct is immune <br />as a discretionary function. M.S.A. <br />} 466.08, subd. 6. <br />2. Municipal Corporations ^829 <br />City's decision not to make a major <br />capital improvement to existing drainage <br />system was immune as a discretionary <br />function. M.S.A. § 466.03, subd. 6. <br />3. Municipal Corporations ^829 <br />City's purchase of liability insurance <br />waived immunity with respect to its discre­ <br />tionary function in deciding not to make <br />major capital improvement to existing drainage system, but waiver of immunity did not create tort liability if none existed <br />previously. M.S.A. 9 466.06. <br />4. Municipal Corporations <^831 <br />City was not liable to homeowner for <br />failure to divert or hold back the natural <br />flow of water from a natural ditch, desig­ <br />nated a holding pond in city's drainage <br />system, despite city's receipt some four <br />years earlier of a report proposing im­ <br />provement to the holding pond and other <br />storm water areas of the city. <br />5. Municipal Corporations ^83K1) <br />City has duty to repair and maintain <br />sewer system, but failure to install a sys­ <br />tem that is adequate to take care of all <br />water is not the basis of tort liability. <br />6. Municipal Corporations ^835 <br />City can be liable for trespass or nui­ <br />sance caused by increased flow of water or <br />by change in flow of water which affects <br />its normal and natural flow, as by approval <br />of additional building permits. <br />Syllabtts by the Court <br />Although the city's decision not to <br />make major capital improvements to an <br />existing drainage system is immune as a <br />discretionary function, any immunity is <br />waived under Minn.Stat § 466.06 (1982) by <br />the citj s purchase of liability insurance. <br />However, where there is no evidence of <br />negligent maintenance or operation of the <br />city’s storm sewer system, the city is not <br />liable, as a matter of law, for failing to <br />build an adequate drainage system. <br />Scott B. Lundquist, Minneapolis, for ap­ <br />pellant <br />Thomas A. Janson, St Cloud, for respon­ <br />dent <br />Thomas L. Grundhoefer, Clifford M. <br />Greene, St Paul, amkua curiae. <br />Heard, considered and decided by <br />the court en banc.