Lucas v. Swain County Bd. of Educ.

• Decision Date: 03 December 2002
• Docket Number: No. COA02-253.,COA02-253.
• Citation: 573 S.E.2d 538,154 NC App. 357
• Court: North Carolina Court of Appeals
• Parties: Sharon LUCAS, Plaintiff, v. SWAIN COUNTY BOARD OF EDUCATION, and Farley Construction Co., Inc., Defendants.

573 S.E.2d 538

154 NC App. 357

Sharon LUCAS, Plaintiff, v. SWAIN COUNTY BOARD OF EDUCATION, and Farley Construction Co., Inc., Defendants.

No. COA02-253.

Court of Appeals of North Carolina.

December 3, 2002.

Bridgers & Ridenour, PLLC, by Ben Oshel Bridgers and Eric Ridenour, Sylva, for plaintiff-appellee.

Roberts & Stevens, P.A., by Sarah Patterson Brison Meldrum, Asheville, for defendant-appellant Swain County Board of Education.

Yates, McLamb & Weyher, L.L.P., by Barbara B. Weyher; and Allison Schafer, Raleigh, for the North Carolina School Boards Association, amicus curiae.

Ferguson Stein Chambers Wallas Adkins Gresham & Sumter, P.A., by S. Luke Largess, Charlotte, for the North Carolina Academy of Trial Lawyers, amicus curiae.

MARTIN, Judge.

Swain County Board of Education ("defendant") appeals an order granting partial summary judgment in favor of Sharon Lucas ("plaintiff") on the issue of defendant's governmental immunity. For reasons stated herein, we affirm in part, reverse in part, and remand.

The facts pertinent to this appeal are as follows: plaintiff was injured on 18 September 1999 when she allegedly fell down concrete steps at the Swain County High School Football Stadium, located on land owned by defendant. On 12 June 2000, plaintiff filed a complaint against defendant and the construction company which had constructed the steps, alleging their negligence caused her injuries. The construction company's motion to dismiss plaintiff's complaint was granted on 18 April 2001. On 20 September 2001, plaintiff moved for partial summary judgment against defendant, asserting defendant had waived its governmental immunity pursuant to G.S. § 115C-42 through the purchase of insurance from the North Carolina School Boards Trust ("the Trust"). The statute provides, in relevant part:

Any local board of education, by securing liability insurance as hereinafter provided, is hereby authorized and empowered to waive its governmental immunity from liability for damage by reason of death or injury to person or property caused by the negligence or tort of any agent or employee of such board of education when acting within the scope of his authority or within the course of his employment. Such immunity shall be deemed to have been waived by the act of obtaining such insurance, but such immunity is waived only to the extent that said board of education is indemnified by insurance for such negligence or tort.

Any contract of insurance purchased pursuant to this section shall be issued by a company or corporation duly licensed and authorized to execute insurance contracts in this State or by a qualified insurer as determined by the Department of Insurance ....

N.C. Gen.Stat. § 115C-42 (2001) (emphasis added). The evidence showed that at the time of plaintiff's accident, defendant had entered into a General Liability Trust Fund Agreement ("Agreement") with the Trust wherein the Trust agreed to pay damages resulting from claims against defendant for bodily injury up to $100,000. The Agreement also provided for excess insurance coverage for claims between $100,000 and $1,000,000.

In support of her motion, plaintiff filed an affidavit in an unrelated case from Peter Kolbe of the Department of Insurance, which had been given prior to plaintiff's injury. In the affidavit, Mr. Kolbe stated that he considers the Trust to be engaged in the business of insurance. In addition, plaintiff offered the deposition testimony of Edwin Dunlap, Jr., Executive Director of the North Carolina School Boards Association, and Treasurer of the Trust. Dunlap's deposition established that under the agreement with the Trust, defendant's excess coverage for claims between $100,000 and $1,000,000 was provided by a commercial insurer, not the Trust itself.

In response to plaintiff's motion, defendant filed the affidavit of William Hale, Deputy Insurance Commissioner, stating that Mr. Kolbe's opinion that the Trust is an insurer does not represent the official position of the Department of Insurance, and that the Trust is neither licensed and authorized to execute insurance contracts in this State, nor a qualified insurer as determined by the Department of Insurance. In addition, defendant moved to strike Mr. Kolbe's affidavit as not having been given for the case at issue.

On 21 September 2001, defendant moved for summary judgment on the ground that it is immune from suit under the doctrine of governmental immunity. Defendant offered two affidavits in support of its motion, one from Patsy Earley, defendant's finance officer, and the other from Edwin Dunlap. Both affidavits established the Trust is not authorized and licensed to execute insurance contracts in this State and that it is not considered a qualified insurer as determined by the Department of Insurance. In addition, the trust fund coverage agreement was in evidence and provided:

[t]he NCSBT Coverage Agreement is not a contract of insurance by a company or corporation duly licensed and authorized to execute insurance contracts in this State or by a qualified insurer as determined by the Department of Insurance. Therefore, the NCSBT Coverage Agreement expressly is not considered a waiver of governmental immunity as provided in G.S. 115C-42.

On 15 November 2001, the trial court entered an order denying defendant's motion and granting plaintiff's motion for partial summary judgment, holding that defendant had waived its governmental immunity to the full extent of the coverage, $1,000,000, provided by this Agreement. Defendant appeals.

Although defendant's appeal is interlocutory in nature, it is well-established that the denial of a motion for summary judgment grounded on governmental immunity affects a substantial right and is immediately appealable; thus, defendant's appeal is properly before us. See Craig v. Asheville City Bd. of Educ., 142 N.C.App. 518, 543 S.E.2d 186 (2001)

. By two of its three assignments of error, defendant argues the trial court erred in denying its motion for summary judgment and in granting plaintiff's motion for partial summary judgment where plaintiff's claims are barred by governmental immunity as a matter of law. The standard for ruling upon a motion for summary judgment is well-settled: summary judgment should only be granted where "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. Gen. Stat. § 1A-1, Rule 56(c) (2002). We first address whether a genuine issue of fact exists as to whether defendant waived its immunity by entering into the Agreement for coverage provided directly by the Trust for claims of up to $100,000.

"`As a general rule, the doctrine of governmental, or sovereign immunity bars actions against, inter alia, the state, its counties, and its public officials sued in their official capacity.'" Herring ex rel. Marshall v. Winston-Salem/Forsyth County Bd. of Educ., 137 N.C.App. 680, 683, 529 S.E.2d 458, 461 (citation omitted), disc. review denied, 352 N.C. 673, 545 S.E.2d 423 (2000). "`A county or city board of education is a governmental agency, and therefore is not liable in a tort or negligence action except to the extent that it has waived its governmental immunity pursuant to statutory authority.'" Seipp v. Wake County Bd. of Educ., 132 N.C.App. 119, 121, 510 S.E.2d 193, 194 (1999) (citation omitted). That statutory authority is established by G.S. § 115C-42, set forth above. Under the plain language of G.S. § 115C-42, a school board such as defendant can only waive its governmental immunity where it procures insurance through (1) a company or corporation licensed and authorized to issue insurance in this State; or (2) a qualified insurer as determined by the Department of Insurance. This requirement was reiterated by this Court in Hallman v. Charlotte-Mecklenburg Bd. of Educ., 124 N.C.App. 435, 477 S.E.2d 179 (1996). In that case, the plaintiff sued the defendant board of education for an injury she sustained while on the property of a county school. The evidence showed the board had liability coverage for claims of up to $1,000,000 through its participation in the City of Charlotte's Division of Insurance and Risk Management ("DIRM") program. Id. at 436, 477 S.E.2d at 180. The board moved for summary judgment, asserting it had not purchased insurance, and was therefore protected from liability by governmental immunity. Id. In support of its motion, the board filed an affidavit from DIRM's manager to the effect that DIRM was not licensed and authorized to execute insurance contracts in this State and was not regulated or supervised in any respect by the Department of Insurance. Id. at 438-39, 477 S.E.2d at 181. The plaintiff did not offer evidence in opposition to the board's motion.

We rejected the plaintiff's argument that the board's participation in DIRM constituted a waiver of immunity under G.S. § 115C-42. Noting that our courts have strictly construed G.S. § 115C-42 against waiver, we emphasized that the board's supporting affidavit established that DIRM did not meet either of the two criterion under G.S. § 115C-42, and that the plaintiff had failed to contradict this evidence. Id. Thus, we held summary judgment should have been granted for the board, as its "participation in the City of Charlotte's risk management agreement [was] not tantamount to the purchase of liability insurance as authorized by G.S. § 115C-42 and does not constitute a waiver of its governmental immunity pursuant to the statute for claims not covered by insurance." Id. at 439, 477 S.E.2d at 181.

Plaintiff argues Hallman is not controlling, and that we should follow this Court's opinion in Vester v. Nash/Rocky Mount Bd. of Educ., 124 N.C.App. 400, 477 S.E.2d 246 (1996), filed the same date as Hallman. The plaintiff in Vester was injured while being...