Martinez v. City of Wilson

• Decision Date: 20 December 2022
• Docket Number: COA22-344
• Citation: 2022 NCCOA 865
• Parties: PEDRO M. MARTINEZ, Plaintiff, v. CITY OF WILSON, Defendant.
• Court: North Carolina Court of Appeals

2022-NCCOA-865

PEDRO M. MARTINEZ, Plaintiff, v. CITY OF WILSON, Defendant.

No. COA22-344

Court of Appeals of North Carolina

December 20, 2022

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

Heard in the Court of Appeals 18 October 2022.

Appeal by Defendant from order entered 1 October 2021 by Judge William D. Wolfe in Wilson County, No. 20 CVS 794 Superior Court.

Law Offices of James Scott Farrin, by Rosa A. Boatwright, for Plaintiff Appellee.

Lewis Brisbois, Bisgaard &Smith, LLP, by Seth M. Friedman, and Cauley Pridgen, P.A., by James P. Cauley, III, and Emily C Cauley, for Defendant Appellant.

INMAN Judge

¶ 1 The City of Wilson (the "City") appeals from an order of the trial court denying the City's motion for summary judgment on the issue of governmental immunity. The City's sole contention on appeal is that the trial court improperly concluded the City waived its governmental immunity by purchase of an insurance policy subject to a self-insured retention. After careful review of the record we reverse the trial court's order.

I. FACTUAL &PROCEDURAL HISTORY

¶ 2 The record tends to show the following:

¶ 3 Plaintiff-Appellee Pedro M. Martinez filed suit against the City on 19 March 2020, alleging negligence and seeking damages for injuries he sustained during the construction of a municipal dog park. Mr. Martinez was on the construction site placing rebar in holes for cement reinforcement on 17 July 2019 while City employees operated a digger truck to move a steel pole. The pole fell from the truck and landed on Mr. Martinez's left foot.

¶ 4 At the time of Mr. Martinez's injury, the City was covered by a commercial general liability insurance policy with Travelers Indemnity Company ("Travelers"). The policy included a $500,000 self-insured retention-the amount the City must pay before there is any potential coverage under the Travelers policy. The policy also included an immunity endorsement entitled "Preservation of Governmental Immunity - North Carolina," which provided:

PROVISIONS

1. The following is added to each Section that provides liability coverage:

This insurance applies to the tort liability of any insured only to the extent that such tort liability is not subject to any defense of governmental immunity under North Carolina law. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

2. The following is added to the CONDITIONS section:

Preservation of Governmental Immunity

Your purchase of this policy is not a waiver, under North Carolina General Statute Section 160A-485 or North Carolina General Statute Section 153A-435 or any amendments to those sections, of any governmental immunity that would be available to any insured had you not purchased this policy.

¶ 5 Mr. Martinez originally filed suit in Cumberland County, but the case was transferred to Wilson County with the consent of the parties. The City raised its defense of governmental immunity under N.C. Gen. Stat. §§ 160A-350, et seq., -485 (2021) in its answer to Mr. Martinez's complaint.

¶ 6 The City filed a motion for summary judgment, alleging it was immune from suit under the doctrine of governmental immunity. The City argued that building the dog park was a governmental function authorized by N.C. Gen. Stat. § 160A-351 (2021), so it was entitled to governmental immunity up to $500,000 under its selfinsured retention as well as any amount in excess of $500,000 because the policy's immunity endorsement applied.

¶ 7 At a hearing on the City's motion, Mr. Martinez conceded that building the dog park was a proper governmental function^[1] and that the City is entitled to governmental immunity for its self-insured retention up to $500,000. The only remaining issue was whether the City had waived its immunity by purchasing insurance for any liability in excess of $500,000. The trial court commented during the hearing, "I don't attribute a whole lot of significance to the paragraph in the policy saying that the city hasn't waived [immunity] by purchasing [insurance], I think the act of purchasing it constitutes [waiver.]" The trial court ultimately denied the City's motion for summary judgment because "[the City] purchased liability insurance, and by doing so [it] waived its governmental immunity[.]" The City appeals.

II. ANALYSIS

A. Standard of Review

¶ 8 "[I]t is well-established that the denial of a motion for summary judgment grounded on governmental immunity affects a substantial right and is immediately appealable." Butterfield v. Gray, 279 N.C.App. 549, 2021-NCCOA-523, ¶ 8 (citation and quotation marks omitted). We review an order denying summary judgment de novo. Id. ¶ 11. "Summary judgment is appropriate whenever the movant establishes a complete defense to the plaintiff's claim." Estate of Earley v. Haywood Cnty. Dep't of Soc. Servs., 204 N.C.App. 338, 340, 694 S.E.2d 405, 407 (2010) (citation and quotation marks omitted) (cleaned up).

B. Insurance Policy's Immunity Endorsement &Governmental Immunity

¶ 9 The City contends the immunity endorsement in its insurance policy precludes waiver of its municipal governmental immunity because it is indistinguishable from policy language this Court has held precluded waiver in other cases. We agree and reverse the trial court's order.

¶ 10 Purchase of liability insurance pursuant to N.C. Gen. Stat. § 153A-435(a) (2021) may waive governmental immunity to the extent of the municipality's insurance coverage. Patrick v. Wake Cnty. Dep't of Human Servs., 188 N.C.App. 592, 595-96, 655 S.E.2d 920, 923 (2008). That statute provides:

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. . . .

§ 153A-435(a). However, "[a] governmental entity does not waive sovereign immunity if the action brought against them is excluded from coverage under their insurance policy." Patrick, 188 N.C.App. at 596, 655 S.E.2d at 923 (citation omitted).

¶ 11 In Patrick, we held a county did not waive its immunity when the policy provided:

This policy is not intended by the insured to waive its governmental immunity as allowed by North Carolina General Statutes Sec. 153A-435. Accordingly, subject to this policy and the Limits of Liability shown on the Declarations, this policy provides coverage only for occurrences or wrongful acts for which the defense of governmental immunity is clearly not applicable or for which, after the defenses is asserted, a court of competent jurisdiction determines the defense of governmental immunity not to be applicable.

188 N.C.App. at 596-97, 655 S.E.2d at 923-24 (emphasis in original) (emphasis added).

¶ 12 More recently in Butterfield, this Court summarized other instances in which we have held the purchase of insurance did not waive governmental immunity:

In Owen v. Haywood Cnty., 205 N.C.App. 456, 697 S.E.2d 357 (2010), we held that immunity had not been waived where the policy excluded from coverage "any claim, demand, or cause of action against any Covered Person as to which the Covered Person is entitled to sovereign immunity or governmental immunity under North Carolina law." Id. at 460, 697 S.E.2d at 359. Similarly, in Estate of Earley v. Haywood Cnty. Dep't of Soc. Servs., 204 N.C.App. 338, 694 S.E.2d 405 (2010), we held that immunity was not waived where the policy contained an exclusion substantively identical to that in Owen and the policy further specified that the parties

intend for no coverage to exist . . . as to any claim for which the Covered Person is protected by sovereign immunity and/or governmental immunity under North Carolina law. It is the express intention of the parties to this Contract that none of the coverage set out herein be construed as waiving in any respect the entitlement of the Covered Person to sovereign immunity and/or governmental immunity.

Id. at 342, 694 S.E.2d at 409. We reached the same conclusion in Bullard v. Wake Cnty., 221 N.C.App. 522, 729 S.E.2d 686 (2012), where the insurance policy similarly provided that it was

not intended by the insured to waive its governmental immunity as allowed by North Carolina General Statutes Sec. 153A-435. Accordingly, subject to this policy and the Limits of Liability shown on the Declarations, this policy provides coverage only for occurrences or wrongful acts for which the defense of governmental immunity is clearly not applicable or for which, after the defense is asserted, a court of competent jurisdiction determines the defense of governmental immunity not to be applicable.

Id. at 527, 729 S.E.2d at 690.

Butterfield, ¶¶ 23-24.

¶ 13 The policy at issue in this case expressly and unambiguously provides the City's purchase of insurance is not a waiver of governmental immunity under our General Statutes and "applies to the tort liability of an[] insured only to the extent that such tort liability is not subject to any defense of governmental immunity." This language is "substantively identical" to the policy language we have previously held does not waive governmental immunity. See Butterfield, ¶¶ 24, 29; Owen, 205 N.C.App. at 460, 697 S.E.2d at 359; Earley, 204 N.C.App. at 342, 694 S.E.2d at 409; Bullard, 221 N.C.App. at 527, 729 S.E.2d at 690; Patrick, 188...