Herman v. City of Detroit, Docket No. 243107.

Decision Date29 January 2004
Docket NumberDocket No. 243107.
Citation680 N.W.2d 71,261 Mich. App. 141
PartiesKathleen HERMAN, Personal Representative of the Estate of James Francis Herman, Plaintiff-Appellee, v. CITY OF DETROIT, Defendant-Appellant.
CourtCourt of Appeal of Michigan — District of US

Ruth C. Carter, Corporation Counsel, and Sheri L. Whyte, Assistant Corporation Counsel, for the defendant.

Bendure & Thomas (by Mark R. Bendure), Detroit, for the plaintiff. Before: OWENS, P.J., and SCHUETTE and BORRELLO, JJ.

PER CURIAM.

Defendant appeals by leave granted from an order denying its motion for summary disposition, brought pursuant to MCR 2.116(C)(7), (8), and (10), in this wrongful death action. We reverse.

Plaintiff's decedent, an electrician employed by defendant for twenty years, was killed on October 15, 1999, when he was struck by an arc of electricity at the Mistersky Power Plant. Plaintiff, decedent's widow, filed suit as personal representative of his estate. Defendant asserts that the trial court erred in finding that the operation of the public lighting department constituted a proprietary function, and by rejecting defendant's defense of governmental immunity on this basis. We agree.

The applicability of governmental immunity is a question of law that is reviewed de novo on appeal. Baker v. Waste Mgt. of Michigan, Inc., 208 Mich.App. 602, 605, 528 N.W.2d 835 (1995). Also, the decision to grant or deny a motion for summary disposition is reviewed de novo. Maiden v. Rozwood, 461 Mich. 109, 118-119, 597 N.W.2d 817 (1999). We review the record in the same manner as the trial court to determine whether the movant was entitled to judgment as a matter of law. Morales v. Auto-Owners Ins. Co., 458 Mich. 288, 294, 582 N.W.2d 776 (1998); Michigan Ed. Employees Mut. Ins. Co. v. Turow, 242 Mich.App. 112, 114-115, 617 N.W.2d 725 (2000).

"The purpose of summary disposition is to avoid extensive discovery and an evidentiary hearing when a case can be quickly resolved on an issue of law." Shepherd Montessori Center Milan v. Ann Arbor Twp., 259 Mich.App. 315, 324, 675 N.W.2d 271 (2003). "MCR 2.116(C)(7) tests whether a claim is barred because of immunity granted by law, and requires consideration of all documentary evidence filed or submitted by the parties." Glancy v. City of Roseville, 457 Mich. 580, 583, 577 N.W.2d 897 (1998). When deciding a motion for summary disposition under MCR 2.116(C)(7) or (10), a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence submitted in the light most favorable to the nonmoving party. Ritchie-Gamester v. City of Berkley, 461 Mich. 73, 76, 597 N.W.2d 517 (1999); Maiden, supra at 119-121, 597 N.W.2d 817.

Tort immunity is broadly granted to governmental agencies in MCL 691.1407(1), which provides:

Except as otherwise provided in this act, a governmental agency is immune from tort liability if the governmental agency is engaged in the exercise or discharge of a governmental function. Except as otherwise provided in this act, this act does not modify or restrict the immunity of the state from tort liability as it existed before July 1, 1965, which immunity is affirmed.

"A governmental function is `an activity that is expressly or impliedly mandated or authorized by constitution, statute, local charter or ordinance, or other law.'" Maskery v. Univ. of Michigan Bd. of Regents, 468 Mich. 609, 613-614, 664 N.W.2d 165 (2003), quoting MCL 691.1401(f). This definition is to be broadly applied. Maskery, supra at 614, 664 N.W.2d 165. It "only requires that there be some constitutional, statutory, or other legal basis for the activity in which the governmental agency was engaged." Hyde v. Univ. of Michigan Bd. of Regents, 426 Mich. 223, 253, 393 N.W.2d 847 (1986). "Tort liability may be imposed only if the agency was engaged in ultra vires activity." Adam v. Sylvan Glynn Golf Course, 197 Mich.App. 95, 97, 494 N.W.2d 791 (1992), citing Hyde, supra at 252-253, 393 N.W.2d 847. A determination of whether an activity was a governmental function must focus on the general activity and not the specific conduct involved at the time of the tort. Tate v. Grand Rapids, 256 Mich.App. 656, 661, 671 N.W.2d 84 (2003). However, a governmental agency can be liable for damages for bodily injury or property damage caused by the performance of a proprietary function. MCL 691.1413.

The proprietary function exception to governmental immunity is set forth in MCL 691.1413, which provides:

The immunity of the governmental agency shall not apply to actions to recover for bodily injury or property damage arising out of the performance of a proprietary function as denied in this section. Proprietary function shall mean any activity which is conducted primarily for the purpose of producing a pecuniary profit for the governmental agency, excluding, however, any activity normally supported by taxes or fees. No action shall be brought against the governmental agency for injury or property damage arising out of the operation of proprietary function, except for injury or loss suffered on or after July 1, 1965.

Therefore, to be a proprietary function, an activity: "(1) must be conducted primarily for the purpose of producing a pecuniary profit; and (2) it cannot be normally supported by taxes and fees." Coleman v. Kootsillas, 456 Mich. 615, 621, 575 N.W.2d 527 (1998).

The first prong of the proprietary function test has two relevant considerations. First, whether an activity actually generates a profit is not dispositive, but the existence of profit is relevant to the governmental agency's intent. Id. An agency may conduct an activity on a self-sustaining basis without being subject to the proprietary function exemption. Hyde, supra at 258-259, 393 N.W.2d 847; Codd v. Wayne Co., 210 Mich.App. 133, 136, 537 N.W.2d 453 (1995). Second, where the profit is deposited and where it is spent indicate intent. If profit is deposited in the general fund or used on unrelated events, the use indicates a pecuniary motive, but use to defray expenses of the activity indicates a nonpecuniary purpose. Coleman, supra at 621-622, 575 N.W.2d 527. To be excluded from the proprietary function exception to immunity, an activity need not actually be supported by taxes or fees if it is a kind normally supported by taxes or fees. Hyde, supra at 260 n. 32, 393 N.W.2d 847. However, immunity for an activity that is a governmental function can still be forfeited if conducted for profit in such a scope as to render it a private profit-making enterprise. Kootsillas v. City of Riverview, 214 Mich.App. 570, 573, 543 N.W.2d 356 (1995), aff'd sub nom Coleman v. Kootsillas, supra.

The operation of the public lighting department is a governmental, and not a proprietary, function. First, this Court has already considered this question in Taylor v. Detroit, 182 Mich.App. 583, 587-588, 452 N.W.2d 826 (1989), and concluded that, because the lighting department of the city of Detroit was not involved in a commercial business serving the general population, and because there was nothing in the record to indicate that the lighting department's primary purpose was to make a profit, the operations constituted a governmental function.

In this case, the budget documents submitted by defendant state that the mission of the lighting department is to "provide reliable, economic, high quality lighting and energy services that light the streets for safety and are responsive to the needs of the citizens, business and visitors of the City of Detroit." The budget documents further indicate that expenditures for the lighting department exceeded revenues from 1998 through 2000. The budget documents also indicated that the lighting department was a general fund agency. Because the general fund's primary revenue sources are the general tax levy, and because the lighting department's expenditures come out of the general fund, the operation of the lighting department is supported by taxes. This fact, together with the uncontradicted evidence that the lighting department operates at a loss, establishes the governmental nature of the lighting department's functions. Defendant was therefore entitled to summary disposition on this issue.

Defendant also contends that plaintiff failed to present facts establishing that decedent's injuries were the result of an intentional tort; therefore, the exclusive remedy provision of the Worker's Disability Compensation Act (WDCA),1 MCL 418.101 et seq., applies, MCL 418.131(1);2 and plaintiff is barred from bringing suit against defendant. We agree.

"[W]hether the facts alleged by plaintiff are sufficient to constitute an intentional tort is a question of law for the trial court, while the issue of whether the facts are as plaintiff alleges is a jury question." Gray v. Morley (After Remand), 460 Mich. 738, 743, 596 N.W.2d 922 (1999). A trial court's grant or denial of summary disposition is reviewed de novo. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998).3

To avoid the exclusive remedy provision through the intentional tort exception, there must be a deliberate act by the employer and a specific intent that there be an injury. Travis v. Dreis & Krump Mfg. Co., 453 Mich. 149, 169, 551 N.W.2d 132 (Boyle, J.), 191 (Riley, J.); 453 Mich. 149, 551 N.W.2d 132 (1996); Palazzola v. Karmazin Products Corp., 223 Mich.App. 141, 149, 565 N.W.2d 868 (1997). A deliberate act may be one of commission or one of omission, and a specific intent exists if an employer has a purpose to bring about certain consequences. Travis, supra at 169, 171, 551 N.W.2d 132. Specific intent is also established if the employer had actual knowledge that an injury was certain to occur and willfully disregarded that knowledge. MCL 418.131(1). "To support such conclusions, a plaintiff must be able to allege...

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