Heeran v. Long Island Power Auth.

• Decision Date: 13 July 2016
• Citation: 36 N.Y.S.3d 165,141 A.D.3d 561,2016 N.Y. Slip Op. 05486
• Parties: William HEERAN, etc., et al., respondents, v. LONG ISLAND POWER AUTHORITY (LIPA), et al., appellants, et al., defendants.
• Court: New York Supreme Court — Appellate Division

141 A.D.3d 561

36 N.Y.S.3d 165

2016 N.Y. Slip Op. 05486

William HEERAN, etc., et al., respondents,

v.LONG ISLAND POWER AUTHORITY (LIPA), et al., appellants, et al., defendants.

Supreme Court, Appellate Division, Second Department, New York.

July 13, 2016.

Lazer, Aptheker, Rosella & Yedid, P.C., Melville, NY (David Lazer and Zachary Murdock of counsel), for appellant Long Island Power Authority (LIPA), and Hammill, O'Brien, Croutier, Dempsey, Pender & Koehler, P.C., Syosset, NY (William J. Croutier, Jr., Erin N. Mackin, and Anton Piotroski of counsel), for appellant National Grid Electric Services, LLC, incorrectly sued herein as Keyspan Electric Services, LLC (one brief filed).

Sullivan & Galleshaw, LLP (Keith M. Sullivan of counsel), and Godosky & Gentile, P.C. (Anthony P. Gentile of counsel) (Pollack, Pollack, Isaac & De Cicco, LLP, New York, NY [Brian J. Isaac ], of counsel), for respondents.

RUTH C. BALKIN, J.P., LEONARD B. AUSTIN, ROBERT J. MILLER, and SYLVIA O. HINDS–RADIX, JJ.

In an action, inter alia, to recover damages for negligence, the defendant Long Island Power Authority (LIPA) appeals, and the defendant National Grid Electric Services, LLC, incorrectly sued herein as Keyspan Electric Services, LLC, separately appeals, from an order of the Supreme Court, Queens County (Siegal, J.), entered July 9, 2014, which denied their joint motion pursuant to CPLR 3211(a)(7)

to dismiss the amended complaint insofar as asserted against them.

ORDERED that the order is affirmed, with costs.

The plaintiffs, who sustained property damage in the wake of Hurricane Sandy, seek to hold the defendants responsible in negligence. According to the amended complaint, the plaintiffs were owners of real and personal property on the Rockaway Peninsula in Queens. They also were customers of the defendants Long Island Power Authority (LIPA) (hereinafter LIPA), a public authority (see Public Authorities Law § 1020 et seq.

), and National Grid Electric Services, LLC (hereinafter NGES), incorrectly sued herein as Keyspan Electric Services, LLC, a private entity. NGES operated LIPA's electrical transmission and distribution system under a management services agreement.

On October 26, 2012, as Hurricane Sandy approached, the Governor of the State of New York declared a “State Disaster Emergency” (hereinafter the Declaration of Emergency). Two days later, the Mayor of the City of New York issued a “Proclamation of a State of Emergency and Evacuation Order” (hereinafter the Evacuation Order) with respect to the evacuation of “Zone A,” which included the Rockaway Peninsula. The plaintiffs allege that LIPA and NGES (hereinafter together the appellants) should have foreseen, among other things, that salt water from the storm surge would come into contact with electrical transmission lines, that fires would result if the electrical transmission lines were live, and that the fires would cause property damage. The plaintiffs allege that salt water from the storm surge indeed came into contact with live transmission lines, that fires resulted, and that the fires damaged their property. The plaintiffs allege that in light of what was foreseeable, the appellants were negligent in their preparation for and reaction to the hurricane, including, in particular, their failure to de-energize the Rockaway Peninsula.

The appellants jointly moved pursuant to CPLR 3211(a)(7)

to dismiss the amended complaint insofar as asserted against them. They contended that LIPA is immune from liability under the doctrine of governmental function immunity because its response to the hurricane—most specifically its decision not to de-energize the Rockaway Peninsula after the Declaration of Emergency and the Evacuation Order were issued—amounted to the performance of a discretionary governmental action. They further insisted that NGES likewise was entitled to the benefit of that doctrine because, under NGES's agreement with LIPA, NGES was providing an essential governmental function on behalf of LIPA. The Supreme Court denied the motion. LIPA and NGES appeal.

In determining a motion to dismiss a complaint for failure to state a cause of action (see CPLR 3211[a][7]

), the court must read the complaint liberally and assume that the plaintiffs' allegations are true. If the allegations, as supplemented by any affidavits, fit within any cognizable legal theory, the court must deny the motion to dismiss (see

Leon v.

Martinez,

84 N.Y.2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511 ; Matter of Long Is. Power Auth. Hurricane Sandy Litig.,

134 A.D.3d 1119, 1120, 24 N.Y.S.3d 313 ; East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc., 66 A.D.3d 122, 125, 884 N.Y.S.2d 94, affd. 16 N.Y.3d 775, 919 N.Y.S.2d 496, 944 N.E.2d 1135 ; Breytman v. Olinville Realty, LLC, 54 A.D.3d 703, 703–704, 864 N.Y.S.2d 70 ).

Governmental entities perform a variety of functions. Some of these functions are purely proprietary, others are purely governmental, and others have characteristics of both. The distinction between proprietary and governmental functions is important because the governmental function immunity doctrine applies, as its name suggests, only to the actions of a governmental entity that are properly categorized as governmental functions (see Sebastian v. State of New York, 93 N.Y.2d 790, 793, 698 N.Y.S.2d 601, 720 N.E.2d 878

; Granata v. City of White Plains, 120 A.D.3d 1187, 1188, 993 N.Y.S.2d 47 ; Kochanski v. City of New York, 76 A.D.3d 1050, 1051, 908 N.Y.S.2d 260 ). Governmental entities acting in furtherance of a proprietary function will be subject to liability under ordinary principles of tort law (see

Miller v. State of New York, 62 N.Y.2d 506, 511, 478 N.Y.S.2d 829, 467 N.E.2d 493 ).

“[Q]uintessential governmental functions” include police and fire protection; these functions are “acts ... ‘undertaken for the protection and safety of the public pursuant to the general police powers' ” (Applewhite v. Accuhealth, Inc., 21 N.Y.3d 420, 425, 972 N.Y.S.2d 169, 995 N.E.2d 131

, quoting Sebastian v. State of New York, 93 N.Y.2d at 793, 698 N.Y.S.2d 601, 720 N.E.2d 878 ). By contrast, a “government entity performs a purely proprietary role when its ‘activities essentially substitute for or supplement traditionally private enterprises' ” (Applewhite v. Accuhealth, Inc., 21 N.Y.3d at 425, 972 N.Y.S.2d 169, 995 N.E.2d 131, quoting Sebastian v. State of New York, 93 N.Y.2d at 793, 698 N.Y.S.2d 601, 720 N.E.2d 878 ; see

Wittorf v. City of New York, 23 N.Y.3d 473, 479, 991 N.Y.S.2d 578, 15 N.E.3d 333 ). Proprietary functions include, for example, the maintenance of roads and highways in a reasonably safe condition (see

Wittorf v. City of New York, 23 N.Y.3d at 480, 991 N.Y.S.2d 578, 15 N.E.3d 333 ).

In New York, electric utilities have been “traditionally private enterprises” (Sebastian v. State of New York, 93 N.Y.2d at 793, 698 N.Y.S.2d 601, 720 N.E.2d 878

[internal quotation marks omitted] ). Moreover, the Legislature enacted the Long Island Power Authority Act (Public Authorities Law § 1020 et seq. ) for the express purpose of “replacing” the Long Island Lighting Company (hereinafter LILCO), a private utility, with LIPA (Public Authorities Law § 1020–a ; see Public Authorities Law § 1020–g[n] ). The Legislature cited a “lack of confidence” in LILCO (Public Authorities Law § 1020–a ). It also expressed its expectation that LIPA would do a better job than LILCO of providing electricity: “the replacement of such investor owned utilities by [LIPA] will result in an improved system and reduction of future costs and a safer, more efficient, reliable and economical supply of electric energy” (Public Authorities Law § 1020–a

). Thus, the Legislature clearly intended that LIPA “substitute for [a] traditionally private enterprise[ ]” in the performance of a proprietary function (Sebastian v. State of New York, 93 N.Y.2d at 793, 698 N.Y.S.2d 601, 720 N.E.2d 878 [internal quotation marks omitted] ).

We conclude that under the analysis long utilized by the Court of Appeals (see Applewhite v. Accuhealth, Inc., 21 N.Y.3d at 425, 972 N.Y.S.2d 169, 995 N.E.2d 131

; Matter of World Trade Ctr. Bombing Litig., 17 N.Y.3d 428, 446–447, 933 N.Y.S.2d 164, 957 N.E.2d 733 ; Sebastian v. State of New York, 93 N.Y.2d at 793, 698 N.Y.S.2d 601, 720 N.E.2d 878 ; Miller v. State of New York, 62 N.Y.2d at 511–512, 478 N.Y.S.2d 829, 467 N.E.2d 493 ; Riss v. City of New York, 22 N.Y.2d 579, 581–582, 293 N.Y.S.2d 897, 240 N.E.2d 860 ), the provision of electricity is properly categorized as a proprietary function. The provision of electricity has traditionally been a private enterprise in this State, and the Legislature clearly created LIPA as a public authority to substitute for a private enterprise (see

Applewhite v. Accuhealth, Inc., 21 N.Y.3d at 425, 972 N.Y.S.2d 169, 995 N.E.2d 131 ; Sebastian v. State of New York, 93 N.Y.2d at 793, 698 N.Y.S.2d 601, 720 N.E.2d 878 ).

Our dissenting colleague posits that a “governmental entity's preparation for a natural disaster or for some other external emergency, and its response during such an event, are generally deemed to be governmental functions.” The underlying premise of this assertion is that the governmental entity is acting in a dual role. When the entity is acting in a dual role, its activities may implicate a “continuum of responsibility” ranging from the most purely proprietary to the most complex governmental (Miller v. State of New York, 62 N.Y.2d 506, 511, 478 N.Y.S.2d 829, 467 N.E.2d 493

; see

Marilyn S. v. City of New York, 134 A.D.2d 583, 584, 521 N.Y.S.2d 485, affd. for reasons stated below 73 N.Y.2d 910, 539 N.Y.S.2d 293, 536 N.E.2d 622 ). In those situations, “[i]t is the specific act or omission out of which the injury is claimed to have arisen and the capacity in which that act or failure to act occurred which governs liability” (Weiner v. Metropolitan Transp. Auth., 55 N.Y.2d 175, 182, 448 N.Y.S.2d 141, 433 N.E.2d 124 ; see

Marilyn S. v. City of New...