When water unexpectedly inundates your property—flooding your basement, washing out your driveway, or destroying your crops—it’s only natural to investigate the source and seek retribution from the responsible party, if possible. Your municipal government might be responsible if the water is attributable to recent road work, but seeking retribution from the town can present certain legal complications.

Claims against municipalities are sometimes foreclosed by the doctrine of sovereign immunity, which is a centuries-old concept that protects governments from liability. As the name suggests, it bars an individual from raising a claim against the sovereign, even in circumstances where the government undeniably caused harm to the individual. See Baxter v. Winooski Turnpike Co., 22 Vt. 114, 123 (1849) (explaining that the law does not provide a remedy where an individual sustains injury due to negligence of town). Over time, however, both the courts and the legislature have curtailed the scope of immunity to avoid its sometimes harsh and inequitable results.

For example, the Vermont General Assembly has circumscribed the doctrine of sovereign immunity in two ways. First, when a municipality purchases liability insurance “it waives its sovereign immunity from liability to the extent of the coverage of the policy and consents to be sued.” 29 V.S.A. § 1403. Similarly, municipalities are liable for up to $75,000 (or the maximum policy limits of any liability insurance) for damage caused “by reason of the insufficiency or want of repair of a bridge or culvert which the town is liable to keep in repair.” 19 V.S.A. § 985.

The Vermont Supreme Court has likewise abolished the defense of sovereign immunity when a municipality is performing a proprietary function, as compared to a governmental function. According to the Court, a municipality should be liable for its conduct when acting in a corporate or private capacity for the benefit of its residents (i.e., proprietary function), but not when acting in a governmental, public or legislative role as an instrumentality of the state (i.e., governmental function). Town of Stockbridge v. State Highway Bd., 125 Vt. 366, 369–70 (1965). The difficulty, however, is determining precisely when a municipality is acting in either role. Indeed, the distinction has been criticized for being arbitrary and unworkable. Hudson v. Town of East Montpelier, 161 Vt. 168, 177 n.3 (1993).

Few circumstances better exemplify this gray area of the law than property damage caused by runoff from town roads, where damage can result from a town acting in a private capacity or performing a governmental function. On one hand, the maintenance of streets and sidewalks, and their associated stormwater drainage systems, are considered governmental functions. Sanborn v. Village of Enosburg Falls, 87 Vt. 479, 482 (1914). The maintenance of water and sewer lines beneath municipal roads, on the other hand, is considered a proprietary function. Kelly v. Town of Brattleboro, 161 Vt. 566, 567 (1993). Because sewer or water line maintenance can sometimes resemble road maintenance, the purpose of the road work determines the nature of the action; road work done to repair sewers is a proprietary function. Fuller v. City of Rutland, 122 Vt. 284, 287 (1961); see also Dugan v. City of Burlington, 135 Vt. 303, 304 (1977) (requiring a trial to determine whether a catch-basin was part of a sewer or part of the street drainage system).

As if this distinction was not subtle enough, the Vermont Supreme Court also recognizes an exception to municipal immunity in certain circumstances involving the maintenance of culverts that may be part of a stormwater drainage system. A town may be liable for failing to repair a culvert necessary to allow a natural stream to pass unimpeded under a public roadway. Haynes v. Town of Burlington, 38 Vt. 350, 362 (1865). Because a town has the duty to “maintain a passage for a natural stream,” it is liable for damage caused by the impounded water if it fails to take remedial action after receiving notice that the passage is blocked. Graham v. Town of Duxbury, 173 Vt. 498, 499–500 (2001).

When road work near your property changes the flow of surface water onto your property, you may have a legitimate claim against your municipality. Understanding the parameters of sovereign immunity will help determine the strength of your claim. It will also better position you to negotiate a reasonable outcome, even if proof of causation remains elusive. Consider retaining an attorney and an engineer to fully examine your particular situation.