Bullard v. Wake Cnty.

• Decision Date: 17 July 2012
• Docket Number: No. COA11–1022.,COA11–1022.
• Citation: 729 S.E.2d 686
• Court: North Carolina Court of Appeals
• Parties: Dennis E. BULLARD, M.D. and Wendy W. Bullard, Plaintiffs, v. WAKE COUNTY, a body politic and Corporate, Troy Howard Parrott, in his official capacity as a Wake County Building Inspector, John Dipetrio, in his official capacity as a Wake County Building Inspector, Steven Aden Branch, in his official capacity as a Wake County Building Inspector, and Edward Langston Savage, in his Official capacity as a Wake County Building Inspector, Defendants.

729 S.E.2d 686

Dennis E. BULLARD, M.D. and Wendy W. Bullard, Plaintiffs,

v.WAKE COUNTY, a body politic and Corporate, Troy Howard Parrott, in his official capacity as a Wake County Building Inspector, John Dipetrio, in his official capacity as a Wake County Building Inspector, Steven Aden Branch, in his official capacity as a Wake County Building Inspector, and Edward Langston Savage, in his Official capacity as a Wake County Building Inspector, Defendants.

No. COA11–1022.

Court of Appeals of North Carolina.

July 17, 2012.

Appeal by plaintiffs from order entered 24 August 2010 by Judge Paul G. Gessner in Wake County Superior Court. Heard in the Court of Appeals 11 January 2012.

Troutman Sanders, LLP, Raleigh, by Gary S. Parsons and D. Kyle Deak, for plaintiffs-appellants.

Office of the Wake County Attorney, by Wake County Attorney Scott W. Warren and Deputy County Attorney Roger A. Askew, for defendants-appellees.

GEER, Judge.

Plaintiffs Dennis E. Bullard, M.D. and Wendy W. Bullard (“the Bullards”) appeal from the trial court's grant of summary judgment in favor of defendants Wake County, Troy Howard Parrott, John Dipetrio, Steven Aden Branch, and Edward Langston Savage (“the County”) ¹ on the grounds of sovereign immunity and the statute of limitations. We hold that because the County did not, during the pertinent time frame, have insurance that would cover the claims in this case, there was no waiver of sovereign immunity under N.C. Gen.Stat. § 153A–435 (2011). The trial court, therefore, properly granted the motion for summary judgment.

Facts

In 1991, the Bullards bought 5.28 acres of land in North Raleigh on which to build a home. The Bullards contracted with Tall House Building Company to serve as the general contractor for the construction of a French Chateau-style single family residence. Structural drawings for the project were approved by the Wake County Inspections Department on 6 November 2002.

Construction of the house started in April 2003 and continued until the issuance of the certificate of occupancy on 15 December 2004. During construction, the County performed inspections of the foundation, footings, foundation slab, framing, plumbing systems, electrical systems, and insulation. At the final inspection, the County approved energy, life safety, and structural elements. The certificate of occupancy issued for the house asserted that “all required building code inspections [had] been completed” and that “code violations discovered during such inspections [had] been duly noted, ordered corrected and [had] been re-inspected.”

At some point after the certificate of occupancy was issued, although the precise date is disputed, plaintiffs began to discover problems with the construction that they have described as “major construction deficiencies.” Plaintiffs arbitrated their claims against Tall House, and an arbitration panel issued an award in plaintiffs' favor on 4 August 2006.

During the course of the repairs ordered by the arbitration panel, the Bullards learned that the house also had significant floor framing issues. The Bullards had not discovered those issues earlier because the defective work was covered by floor sheathing. Since then, the Bullards have continued to uncover structural deficiencies in the house that collectively are so severe that the house has been deemed not fit for human habitation.

The Bullards returned to arbitration with Tall House. The second arbitration panel issued an order on 9 April 2009 requiring Tall House to pay $2,626,452.45 for repair and damages associated with the faulty construction of the Bullards' house, as well as fees and costs. Following that award, Tall House declared bankruptcy.

On 7 April 2009, the Bullards filed suit against the County, asserting claims for negligent inspection and negligent misrepresentation in connection with the County's inspection of the Bullards' house. The County filed an answer including, among other affirmative defenses, the statute of limitations and sovereign immunity.

On 30 April 2010, the County filed a motion for summary judgment. On 24 August 2010, the trial court entered an order granting the motion on the grounds that “there are no genuine issues of material fact as to the issue of sovereign immunity [and] the Court concludes that the [sic] all of the plaintiff's claims raised herein are barred by sovereign immunity....” The court further concluded that summary judgment should also be granted based on the statute of limitations. The Bullards timely appealed to this Court.

Discussion

Summary judgment is properly granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C.R. Civ. P. 56(c). This Court reviews the trial court's grant of summary judgment de novo. Nationwide Mut. Fire Ins. Co. v. Mnatsakanov, 191 N.C.App. 802, 805, 664 S.E.2d 13, 15 (2008).

Our Supreme Court has explained the burdens applicable to a motion for summary judgment:

The party moving for summary judgment bears the burden of establishing that there is no triable issue of material fact. This burden may be met by proving that an essential element of the opposing party's claim is non-existent, or by showing through discovery that the opposing party cannot produce evidence to support an essential element of his claim or cannot surmount an affirmative defense which would bar the claim.

DeWitt v. Eveready Battery Co., 355 N.C. 672, 681, 565 S.E.2d 140, 146 (2002) (internal citations and quotation marks omitted).

Once the moving party meets its burden, “then the nonmovant must produce a forecast of evidence demonstrating that the plaintiff will be able to make out at least a prima facie case at trial.” Roumillat v. Simplistic Enters., Inc., 331 N.C. 57, 63, 414 S.E.2d 339, 342 (1992) (internal quotation marks omitted), overruled in part on other grounds by Nelson v. Freeland, 349 N.C. 615, 507 S.E.2d 882 (1998). In order to meet this burden, the nonmoving party “ ‘may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in [Rule 56] must set forth specific facts showing that there is a genuine issue for trial.’ ” Id. (quoting N.C.R. Civ. P. 56(e)).

We consider first whether the trial court erred in granting summary judgment based upon sovereign immunity. Under North Carolina law, counties are entitled to sovereign immunity unless the county waives immunity or otherwise consents to be sued. Dawes v. Nash Cnty., 357 N.C. 442, 445, 584 S.E.2d 760, 762 (2003). See also Meyer v. Walls, 347 N.C. 97, 104, 489 S.E.2d 880, 884 (1997) (“Under the doctrine of governmental immunity, a county is immune from suit for the negligence of its employees in the exercise of governmental functions absent waiver of immunity.”).

The General Assembly has provided that a county may waive immunity through the purchase of insurance:

A county may contract to insure itself and any of its officers, agents, or employees against liability for wrongful death or negligent or intentional damage to person or property or against absolute liability for damage to person or property caused by an act or omission of the county or of any of its officers, agents, or employees when acting within the scope of their authority and the course of their employment. The board of commissioners shall determine what liabilities and what officers, agents, and employees shall be covered by any insurance purchased pursuant to this subsection.

Purchase of insurance pursuant to this subsection waives the county's governmental immunity, to the extent of insurance coverage, for any act or omission occurring in the exercise of a governmental function.

N.C. Gen.Stat. § 153A–435(a) (emphasis added).

The Bullards, however, first argue that the County failed to properly plead the affirmative defense of sovereign immunity because the answer did not set out the specific policy language on which the County was relying. The County's Fourth Affirmative Defense alleged:

For and as a Fourth defense, the answering defendants move the court to dismiss the plaintiffs' complaint as said complaint alleges negligent acts, actions or omissions arising out of governmental functions and/or duties of these answering defendants and all claims are barred by the doctrine of governmental or sovereign immunity. It is also specifically alleged that these defendants have not waived any immunity defense by the purchase of liability insurance coverage or otherwise as by law allowed. The foregoing Affirmative defense of sovereign immunity or governmental immunity is hereby pleaded as a complete bar to this action.

(Emphasis omitted.)

In Patrick v. Wake Cnty. Dep't of Human Servs., 188 N.C.App. 592, 593, 655 S.E.2d 920, 922 (2008), the defendant asserted as an affirmative defense that “ ‘[a]ll claims of Plaintiff against all Defendants are barred by sovereign immunity as there has been no waiver of immunity by the purchase of insurance.’ ” This Court, in affirming the trial court's order granting summary judgment based on sovereign immunity held that “[d]efendants did not waive sovereign immunity through the purchase of this policy and properly asserted this affirmative defense in their answer.” Id. at 597, 655 S.E.2d at 924 (emphasis added). Since there is no meaningful distinction between the articulation of the affirmative defense in Patrick and the affirmative defense in this case, we hold that the County sufficiently pled the affirmative defense of sovereign immunity.

Turning to the merits of that affirmative defense, it is well established that the mere purchase of insurance standing alone does not waive a county's sovereign immunity. “[I]f the action brought against [the county] is excluded from coverage under [its] insurance policy,” then there is no waiver...