Davis v. City of Detroit, Docket No. 78-3580

• Decision Date: 22 July 1980
• Docket Number: Docket No. 78-3580
• Citation: 98 Mich.App. 705,296 N.W.2d 341
• Parties: Joe DAVIS and Mattie Davis, Plaintiffs-Appellees, v. CITY OF DETROIT, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 341

296 N.W.2d 341

98 Mich.App. 705

Joe DAVIS and Mattie Davis, Plaintiffs-Appellees, v. CITY OF DETROIT, Defendant-Appellant.

Docket No. 78-3580.

Court of Appeals of Michigan.

July 22, 1980.

Rehearing Denied Sept. 19, 1980.

Released for Publication Sept. 24, 1980.

Dane A. Lupo, Detroit, for defendant-appellant.

Robert E. Swickle, Detroit, for plaintiffs-appellees.

Before MacKENZIE, P. J., and V. J. BRENNAN and WALSH, JJ.

MacKENZIE, Presiding Judge.

Plaintiff Joe Davis sustained an injury on March 3, 1973, while working in a tunnel under the Clinton River in Macomb County on a construction project involving defendant City of Detroit's sewer facilities. After plaintiffs filed suit for damages, defendant moved for summary judgment based on the defense of governmental immunity. On September 8, 1977, defendant's motion was denied by the trial court. Defendant appeals by leave granted on October 13, 1978.

Defendant argues that the trial court erred in denying summary judgment on the ground of governmental immunity. The statutory provision that deals with tort liability of a governmental agency, M.C.L. § 691.1407; M.S.A. § 3.996(107), provides in part:

"Except as in this act otherwise provided, all governmental agencies shall be immune from tort liability in all cases wherein the government agency is engaged in the exercise or discharge of a governmental function."

In Beauchamp v. Saginaw Twp., 74 Mich.App. 44, 253 N.W.2d 355 (1977), a panel of this Court held that the construction of sewers as a public health measure is a governmental function. However, in light of the recent construction of the term "governmental function" by the Michigan Supreme Court in Parker v. Highland Park, 404 Mich. 183, 273 N.W.2d 413 (1978), and Perry v. Kalamazoo State Hospital, 404 Mich. 205, 273 N.W.2d 421 (1978), it is necessary to reexamine this issue. ¹

In Parker, the Michigan Supreme Court, in three separate opinions, dealt with the construction of the term "governmental function". Justice Fitzgerald, with Justices Kavanagh and Levin concurring, stated that the term was limited to activities that are "of essence to governing"; he was unable to conclude that the operation of a public hospital was a governmental function since it was not an activity that could be performed only by the government.

In a separate opinion, Justice Moody reached the following conclusion:

"To delineate a complete and balanced definition of governmental function within a simplistic format would be presumptuous. However, as a basic guideline, the crux of the governmental essence test should be founded upon the inquiry whether the purpose, planning, and carrying out of the activity, due to its unique character or governmental mandate, can be effectively accomplished only by the government. Unless liability would be an unacceptable interference with government's ability to govern, activities that fall outside this perimeter, although performed by a government agency, are not governmental functions and therefore not immune." 404 Mich. 183, 200, 273 N.W.2d 413, 419.

Justice Moody agreed that the operation of a public general hospital is not a governmental function. However, in Perry, he disagreed with Justices Fitzgerald, Levin, and Kavanagh and concluded that the operation of a public mental hospital was a governmental function. He noted the pervasive role of the government in the mental health area and stated that mental hospitals perform a unique activity mandated by the Legislature. He did not find it determinative that private mental hospitals perform a similar function. Rather, he stressed that the number of private mental health facilities was inadequate to deal effectively with the substantial institutional needs of the public and to process probate and circuit court commitment proceedings. 404 Mich. 205, 214, 273 N.W.2d 421.

Recently, in Rubino v. Sterling Heights, 94 Mich.App. 494, 290 N.W.2d 43 (1979), a panel of this Court, relying on Parker, held that a municipal water system was not a governmental function. The Court reasoned that the public's demand for water could be met by the private sector; citizen participation in the activity was not mandatory; and potential tort liability could be taken into consideration as a cost of doing business. See also Ross v. Consumers Power Co., 93 Mich.App. 687, 287 N.W.2d 319 (1979), where construction of a drain was held not to constitute a governmental function.

However, due to the magnitude and public importance of the sewer project in question, we believe its construction constituted a governmental function. The project was begun in 1962 as the result of a study done for the Inter-County Drain Committee representing the counties of Macomb, Monroe, Oakland, St. Clair, Washtenaw and Wayne in Southeastern Michigan. It was recommended that the City of Detroit's sewage disposal project be expanded to cover the larger metropolitan area.

By 1966, increased pollution of the Clinton River prompted the Michigan Water Resources Commission (MWRC) to deny disposal permits. This directly affected Macomb County, which had previously dumped its effluent into the river, and the City of Detroit, as the river emptied into the Great Lakes upstream, polluting the city's raw water intake. Soon thereafter, the City of Detroit entered into a contract with Macomb County to provide sewage disposal with the express goals of serving the public and enhancing the water quality of the Great Lakes.

The project was funded by Federal grants (55 per cent), state grants (25 per cent), and a bond issue by the City of Detroit (20 per cent). It involved a total expenditure of $100,700,000 and was designed to handle the effluent of all six counties.

Like mental health, sewage treatment is an area subject to pervasive state regulation. See generally, M.C.L. § 46.171 et seq.; M.S.A. § 5.2767(1) et seq., M.C.L. § 123.241 et seq.; M.S.A. § 5.2661 et seq., M.C.L. § 323.151 et seq.; M.S.A. § 5.2769(81) et seq., and M.C.L. § 325.151 et seq.; M.S.A. § 14.1008(1) et seq. Under those provisions, the Legislature has authorized local government units to own, acquire, construct, equip, operate, and maintain sewage treatment facilities, subject to inspection and certification by the state health commissioner. It is possible for local government units to grant franchises to private individuals to own and operate sewage treatment facilities, M.C.L. § 123.245; M.S.A. § 5.2665. However, the size of the project herein, in terms of costs, volume of effluent, and water pollution control, convinces us that it could not be effectively coordinated by a private individual or company in the best interests of the public.

Plaintiffs also argue construction of the project constituted a "proprietary function" such that defendant was not entitled to immunity pursuant to M.C.L. § 691.1413; M.S.A. § 3.996(113):

"The immunity of the state shall not apply to actions to recover for bodily injury or property damage arising out of the performance of a proprietary function as herein defined. Proprietary function shall mean any activity which is conducted primarily for the purpose of producing a pecuniary profit for the state, excluding, however, any activity normally supported by taxes or fees."

Charges imposed by the City of Detroit herein are based upon the cost of the system and are used to pay current expenses of administration and operation, with the remainder to be applied toward principal and interest on bonds outstanding. No amount is permitted to leave the sewer system to...