City of Memphis v. Bettis

• Decision Date: 03 June 1974
• Citation: 512 S.W.2d 270
• Parties: CITY OF MEMPHIS and Robert R. Roberts v. John M. BETTIS et al.
• Court: Tennessee Supreme Court

Page 270

512 S.W.2d 270

CITY OF MEMPHIS and Robert R. Roberts v. John M. BETTIS et al.

Supreme Court of Tennessee.

June 3, 1974.

Frierson M. Graves, Jr., Arthur J. Shea, Joseph B. Dailey, Memphis, for petitioners.

Don Owens, Memphis, for respondents.

OPINION

McCANLESS, Justice.

This case arose out of a collision of two automobiles and an ambulance owned and operated by the City of Memphis and presents the question whether the operation of the ambulance was a governmental or a proprietary function. The Court of Appeals upheld the trial court and held that under the facts the ambulance service was of a proprietary nature, thus depriving the defendant city of governmental immunity. The case is in this Court on the city's petition for certiorari. A brief amicus curiae was filed by the City of Chattanooga in support of the petitioner's position.

The accident in question occurred on July 22, 1971, on Interstate Highway 55 inside the Memphis city limits. The city owned ambulance service had received an emergency call from the home of Margaret I. Nelson, who had become suddenly ill with what appeared to be a heart attack. Miss Nelson's two sisters, Frances N. Bettis and Ruth N. Robinson, accompanied her in the ambulance. The ambulance was in the left lane of the highway with its siren and flashing lights in operation when it came upon a car driven by Susan D. Taylor. The ambulance was forced to slow down to allow time for the Taylor vehicle to move over. Shortly thereafter the brake lights on the Taylor car came on, and the ambulance collided with the rear of the car. Immediately thereafter a car trailing he ambulance, and being driven by Emma Conner, crashed into the rear of the ambulance. All three sisters were injured in the collision and all are plaintiffs in this suit against the city and the ambulance driver, Robert R. Roberts. John M. Bettis, husband of Frances N. Bettis, joins as a plaintiff seeking damages for loss of services, companionship, and consortium, and for medical expenses occasioned by the injury to his wife.

The case was heard on December 11, 1972, in the Circuit Court of Shelby County, Division Four. Motions for directed verdict made by defendants on the basis of governmental immunity were denied, both at the conclusion of the plaintiffs' proof, and at the conclusion of all the proof. The jury returned a verdict for the plaintiffs, awarding damages totalling $57,000.00. The court denied defendants' motion for a new trial. The Court of Appeals affirmed the judgment. We granted the defendants' petitions for certiorari and briefs have been filed and oral arguments heard.

We observe, first, that the question whether the law of governmental immunity should be retained in Tennessee is not before us in this case. That issue arose in Coffman v. City of Pulaski, 220 Tenn. 642, 422 S.W.2d 429 (1967), in which we upheld the principle of municipal tort immunity and observed that if the immunity were to be abolished, that would be for the legislature and not for the courts to do. The legislature has since passed the Tennessee Government Tort Liability Act (Section 23--3301 et seq., T.C.A.), but it had not become law until after Memphis instituted its ambulance service, and after the suit in this case was filed and tried. While the new statute indicates a willingness on the part of the legislature to alter the law of sovereign immunity, we are bound in this instance by the long established case law.

The issue presented in the case before us, then, is whether the ambulance service in question is 'governmental' or 'proprietary' in nature. The rule in Tennessee is that a municipality is immune from liability arising from the acts of its agent while carrying out a governmental function; but there is no immunity when the agent commits a tort while carrying out a private or 'proprietary' function. Johnson v. City of Jackson, 194 Tenn. 20, 250 S.W.2d 1 (1952).

The distinction between a 'governmental' and a 'proprietary' function is difficult, and this Court has in the past found that each case must be decided on its own facts. Williams v. Town of Morristown, 32 Tenn.App. 274, 222 S.W.2d 607, modified 189 Tenn. 124, 222 S.W.2d 615 (1949); Nashville Electric Service v. Luna, 185 Tenn. 175, 204 S.W.2d 529 (1946). In Williams v. Morristown, supra, we held that 'each case must be decided upon its own facts. The purpose and character of the undertaking, and the method of its operation, determine whether it is public or private.' 222 S.W.2d at page 610.

The City of Memphis created the emergency ambulance service in 1966. The proof shows that the reason for instituting the service was the failure of private ambulance firms to meet the needs of the citizens for emergency transportation. The ordinance stipulates that city owned ambulances are to be used for emergency calls only. The city charges a fee for each trip, but the balance sheet indicates the service is operating at a loss. Figures for fiscal year, 1971--72, show that the city had twelve units operating at an average cost of each unit of $82,994.57 and that seventy-two men were employed with an average salary of $10,656.00. The total aggregate salary, including benefits, was $909,333.76. Collections on fees during that year, however, totalled only $196,745.75, leaving substantial accounts receivable and a deficit of $798,598.17. The city appropriated $995,334.92 in public funds to meet the cost of operation during that fiscal year.

In looking to the character of the operation, the Court of Appeals placed emphasis on the charging of fees for the service, noting that since the city provided ambulance service 'for hire', then the city had gone into 'the ambulance business'. In short, the collection of revenues from private citizens had rendered this a 'proprietary' function of city government.

Tennessee case law, however, is to the contrary. This Court has long held that the mere collection of fees from a given service does not Per se transform an otherwise public function into a private one. E.g., Nashville Trust Co. v. City of Nashville, 182 Tenn. 545, 188 S.W.2d 342 (1944). Notable among these cases is McMahon v. Baroness Erlanger Hospital, 43 Tenn.App. 128, 306 S.W.2d 41 (1957), cert. denied August 19, 1957. There, the court held that the City of Chattanooga was immune from liability for torts arising out of the operation of a city owned public hospital. The significant factor for purposes of this case is that most of the operating revenue was generated from fees charged to patients and from other sources. Observing this fact, the court said:

'It is clear that this hospital was not operated for profit but at a loss to the City of Chattanooga and Hamilton County, which were required to absorb an annual operating deficit. It is true that about 87% Of its operating cost was derived from private pay patients and the operation of Coca-Cola vending machines, the tea room, etc., but that does not deprive it of its character or take away its immunity.' 306 S.W.2d at page 45.

This was not the first instance in which the public character of a governmental undertaking had been upheld, despite the charging of fees by the government to support the service rendered. Examples are Johnson v. City of Jackson, supra (maintenance of parking meters held to be a governmental function); Vaughn v. City of Alcoa, 194 Tenn. 449, 251 S.W.2d 304 (1951) (maintenance of city swimming pool for which fees were charged, and which was highly advertised, held to be public, not private); Town of Pulaski v. Ballentine, 152 Tenn. 393, 284 S.W. 370 (1925) (operation of public cemetary held to be governmental function, even though the individuals paid fixed prices for lots). See, generally, 57 Am.Jur.2d, Municipal Corporations, Section 34, page 48.

In Nashville Trust Co. v. City of Nashville, supra, the Court characterized the supplying of water for fire fighting purposes to individual businesses as governmental, even though a fee was charged. 'An incidental charge for a public service does not render the service private or corporate', the Court said, adding that the test is 'whether the city has undertaken work of a commercial character from which it sought to derive profit.'

The pecuniary test, then, fails to strip the governmental character from this activity. At the same time, we find positive reasons for holding this particular function to be public rather than private. Like the services rendered by a public hospital (see discussion of McMahon v. Erlanger Hospital, supra), the ambulance...