Inspect the Uninspected: Current Pennsylvania Law Regarding Tort Liability Under the Tort Claims Act for Third-Party Municipal Building Inspectors

Pennsylvania municipalities are required to adopt the Universal Construction Code (UCC) as their municipal building code under Section 501 of the PCCA, 35 P.S. § 7210.501. The Pennsylvania Supreme Court has determined that municipalities have several options regarding the administration and enforcement of the PCCA. First, the municipality may designate an employee to serve as a municipal code official to enforce the act, 35 P.S. § 7210.501(b)(1). Under clear Pennsylvania law, this traditional employee is entitled to governmental immunity under the Tort Claims Act, which states: “[n]o local agency shall be liable for any damages on account of any injury to a person or property caused by any act of the local agency or an employee thereof or any other person.”

However, a municipality may also “administer and enforce” the PCCA “[b]y the retention of one or more construction code officials or third-party agencies to act on behalf of the municipality for administration and enforcement of this act.” Allegheny Inspection Serv. v. N. Union Twp., 964 A.2d 878, 881-882 (Pa. 2009). In a string of recent Pennsylvania and Third Circuit decisions, the courts have consistently held that these construction code officials are also entitled to the same immunities.

In Higby Development, LLC v. Sartor, 954 A.2d 77, 80 (Pa. Commw. Ct. 2008), vacated and remanded on other grounds, 991 A.2d 305 (Pa. Super. Ct. 2010), a real estate developer sued several employees of Schuylkill Township and Yerkes Associates Inc., a private company hired by Schuylkill Township to serve as its code enforcement officer. Higby Development alleged that the defendants engaged in tortious conduct to impede its real estate development. The trial court granted Yerkes’ preliminary objections, holding that it was entitled to governmental immunity under the Tort Claims Act. The Commonwealth Court upheld this decision. Although this decision was overturned on other grounds, Higby remains the basis for later Pennsylvania court decisions.

In Cornell Narberth, LLC v. Borough of Narberth, 167 A.3d 228, 231 (Pa. Commw. Ct. 2017), the plaintiff, a real estate developer, brought suit against the Borough of Narberth and its building inspector, Yerkes Associates, Inc. It was alleged that Yerkes failed to inform the plaintiff of the requirement to install automatic sprinklers. The trial court granted summary judgment to the defendants. The court found that the plaintiff’s breach of contract, negligent misrepresentation and promissory estoppel claims were all barred by governmental immunity under the Torts Claim Act. Specifically, the court stated: “Despite being couched as contractual or quasi-contractual claims,” the allegations in Cornell’s complaint were “clearly based upon negligence” and, thus, barred by the Tort Claims Act. The plaintiff appealed to the Commonwealth Court.

The Commonwealth Court examined Section 8501 of the judicial code, which defines the term “employee” in relevant part as, “[a]ny person who is acting or has acted on behalf of a governmental unit. . . .” The court held that this definition “does not require a person to be ‘an employee in the traditional sense, but only that the employee is acting on behalf of the governmental agency.’”

The court also noted that Section 403.3(a) of the Uniform Construction Code requires that a building code official be appointed to enforce the Construction Code Act. 34 Pa. Code § 403.3(a). In light of these facts, the Commonwealth Court held: “Yerkes, in carrying out its responsibilities as a building code official, acted on behalf of the Borough. Consistent with our decision in Higby, we conclude that Yerkes acted as an ‘employee’ of the Borough for purposes of the Tort Claims Act.” The court also rejected the plaintiff’s claim that Bilt-Rite provided a legal basis for a negligent representation claim and affirmed the trial court’s granting of summary judgment in favor of Yerkes.

The Commonwealth Court again found that a township code enforcement official is entitled to governmental immunity in its unpublished opinion in Spencer v. Grill, 2018 Pa. Commw. Unpub. LEXIS 211 (Pa. Commw. Ct. Apr. 10, 2018). In that case, the Commonwealth Court held that a private company that had been contracted by Cranberry Township to perform construction code enforcement was acting as a non-traditional employee. The Commonwealth Court affirmed the trial court’s entry of summary judgment in favor of the construction code enforcement official.

Finally, in July of 2018, in Great N. Ins. Co. v. Whipple-Allen Real Estate, 2018 U.S. Dist. LEXIS 126658 (W.D. Pa. Jul. 30, 2018), the District Court for the Western District of Pennsylvania found that Building Inspection Underwriters of Pennsylvania, Inc. (BIUPA), an entity that had contracted with the City of Erie to act as a building code inspector, was entitled to immunity under the Tort Claims Act. The allegations in the third-party complaint against BIUPA alleged that BIUPA “contracted with the City of Erie to review and approve construction plans for compliance with Erie’s laws, codes, ordinances, and regulations and to inspect and approve ongoing construction for compliance with Erie’s laws, codes, ordinances and regulations.”

The court held that “the allegations against [BIUPA] in this action relate entirely to actions taken by [BIUPA] while acting as a building code inspector on behalf of the City of Erie. Under such circumstances, [BIUPA] is an ‘employee’ within the meaning of the Tort Claims Act and, as such, is entitled to immunity.” Put concisely: “[e]very Pennsylvania court to have considered the issue has concluded that a private entity acting in its official capacity as a municipal building inspector is entitled to immunity under the Tort Claims Act.”

In light of these precedential and persuasive opinions, a code enforcement official acting on behalf of a municipality will be entitled to governmental immunity under the umbrella of the Tort Claims Act. This should not be an “uninspected” result.

*Doug, a shareholder, and Ben, an associate, work in our Pittsburgh, Pennsylvania office. Doug can be reached at dclasota@mdwcg.com or 412.803.3466. Ben can be contacted at brwright@mdwcg.com or 412.803.3470.

_{Defense Digest, Vol. 25, No. 3, September 2019. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2019 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}