Providence Volunteer Fire Dep't, Inc. v. The Town of Weddington, 47PA21

Docket Nº47PA21
Citation2022 NCSC 100
Case DateAugust 19, 2022
CourtUnited States State Supreme Court of North Carolina

2022-NCSC-100

PROVIDENCE VOLUNTEER FIRE DEPARTMENT, INC., a North Carolina non- profit corporation
v.

THE TOWN OF WEDDINGTON, a North Carolina municipal corporation, PETER WILLIAM DETER, in his individual and official capacity as Mayor, and WESLEY CHAPEL VOLUNTEER FIRE DEPARTMENT, INC., a North Carolina non-profit corporation

No. 47PA21

Supreme Court of North Carolina

August 19, 2022


Heard in the Supreme Court on 21 March 2022.

On discretionary review pursuant to N.C. G.S. § 7A-31(a) from a unanimous decision of the Court of Appeals, No. COA19-203, 2020 WL 7974274 (N.C. Ct. App. Dec. 31, 2020), affirming in part and reversing in part an order entered on 27 November 2018 by Judge Daniel A. Kuehnert in Superior Court, Union County, and remanding the case to the trial court.

Christopher Duggan for plaintiff-appellant.

Andrew J. Santaniello for defendant-appellee Town of Weddington.

Sumrell Sugg, P.A., by Scott C. Hart and Frederick H. Bailey, III, for defendant-appellee Peter William Deter.

No brief for defendant-appellee Wesley Chapel Volunteer Fire Department, Inc.

ERVIN, JUSTICE.

¶ 1 The issue before us in this case is whether actions taken by defendant Town of Weddington, which include entering into three contracts with plaintiff Providence

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Volunteer Fire Department, Inc., in order to (1) procure fire protection services for its residents; (2) effectuate renovations to Providence's fire station; and (3) purchase and lease the fire station back to Providence, constituted governmental, rather than proprietary, actions for purposes of the doctrine of governmental immunity with respect to the fraud-related claims that Providence has asserted against the Town. In addition, this case requires us to address whether actions taken by defendant Mayor Peter William Deter, which include the scheduling of a town council meeting and preparing the agenda for that meeting, at which the council voted to terminate the Town's contracts with Providence, were legislative in nature such that Mayor Deter is shielded from liability with respect to Providence's fraud-related claims based upon the doctrine of legislative immunity. After a careful review of the record that is before us in this case in light of the applicable law, we hold that the Town is protected from Providence's fraud-related claims based upon the doctrine of governmental immunity and that Mayor Deter is protected from those claims based upon the doctrine of legislative immunity, so that the trial court erred by failing to dismiss Providence's fraud-related claims. As a result, the decision of the Court of Appeals is affirmed, with this case being remanded to the Court of Appeals for further remand to Superior Court, Union County, for additional proceedings not inconsistent with this opinion.

I. Substantive and Procedural History

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A. Substantive Facts

¶ 2 Providence provided fire services to the Town and surrounding areas between 1954 and 2015. On 14 October 2013, Providence and the Town entered into a pair of agreements pursuant to which Providence agreed to continue to provide fire protection services to the Town and its residents: (1) the Fire Suppression Agreement and (2) the Interlocal Agreement.[1] A third agreement contemplated as part of the overall arrangement between Providence and the Town, known as the Sale and Lease-back Agreement, was entered into in August of 2014, after a "lengthy delay" that was intended to ensure that certain Town-funded improvements could be made to Providence's fire station, with the trial court having described these three agreements as "so integrated, one with the other, as to arguably constitute a single, integrated agreement." The Fire Suppression Agreement, which was made a part of the Interlocal Agreement and attached to that document, provided that

WHEREAS, the Town desires to provide fire protection to its citizens through the resources of the Department, and
WHEREAS, the Department has undertaken the renovation and improvements of its 8,329 square foot and
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1500 square foot volunteer fire station buildings located on its 1.259 acres ("the Property") and has incurred certain debt to effect the renovations and improvements; and
WHEREAS, the Town intends to participate in funding the renovations and improvements of the Property and the Department intends to sell and convey all rights and interests in the Property to the Town as security for its participation; and
WHEREAS, the Town desires to insure the stability of the Department through this Agreement; and
WHEREAS, the Department has the ability to provide fire protection to the citizens of the Town and agrees to provide fire protection and fire suppression services throughout the incorporated limits of the Town and its fire district.

The Fire Suppression Agreement further provided that Providence would provide fire protection and emergency medical services to the Town for a period of ten years beginning on 14 October 2013, with this period subject to extension for an additional five-year period in the event that Providence gave notice to the Town six months prior to the date upon which the agreement was to expire. The Fire Suppression Agreement could only be terminated "for cause," which was defined as "the failure of either party to perform the material provisions of this Agreement and [which] shall include, but not be limited to, the failure to meet the required service levels and transparency requirements of the Agreement."

¶ 3 In accordance with the Interlocal Agreement, substantial improvements were to be made to Providence's fire station, Providence was required to satisfy the Town's

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increased demand for fire protection services, and the Town would assume the debts incurred by Providence in connection with the improvements to be made to its fire station. Finally, the Sale and Lease-back Agreement provided that Providence's fire station would be sold to the Town for approximately $935,000.00 and leased back to Providence for use as a fire station for a fee of one dollar ($1.00) per year.

¶ 4 In November of 2013, Mayor Deter was elected to serve as the Town's mayor. Providence alleges that, during his campaign, Mayor Deter "concealed [his] intent to terminate the fire district and the [Fire Suppression Agreement] and w[as] supported by [a rival fire department] in order to bring about the termination of the contracts between [Providence] and the town." In addition, Providence alleges that Mayor Deter took a number of actions, including working with Wesley Chapel Volunteer Fire Department, to "create financial instability" for Providence "in order to set up a claim that the [Fire Suppression Agreement] could be terminated 'with cause' based upon manufactured financial instability claims." Among other things, Mayor Deter allegedly acted during 2014 and 2015 to undermine Providence by, among other things, "unilaterally chang[ing] the interpretation of the Interlocal Agreement to reduce the purchase price" of the fire station; creating, and then concealing, a" 'Decision Tree' which contemplated terminating the Interlocal Agreement and [Fire Suppression Agreement] and transferring the property to" Wesley Chapel Volunteer Fire Department; and directing the Town's attorney "to examine ways to dissolve the

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Fire District" in order to avoid paying damages to Providence.

According to Providence, the Town's fraud was designed to (1) first encourage [Providence] to deed its long-owned Property, including the fire department building, to the Town since [Providence] would get its Property back anyway via a long term (and previously contemplated by the 2013 Interlocal Agreement) lease. This was done when the Town in reality was surreptitiously planning how best to (2) break the lease after it was entered into (together with the other agreements) rather than honor the lease and the other contracts....
[Providence] contends the Town's actions at this time, guided by Mayor Deter, were intended to put the Town in the best position to most easily terminate the lease (and Interlocal Agreement) together with the Fire Suppression Agreement as soon as possible, and with the ultimate goal and intent of:
i. putting [Providence] out of its non-profit fire suppression and emergency medical services business;
ii. having the Town end up owning all, or substantially all, of [Providence]'s real estate and other personal property;
iii. all without paying just compensation to [Providence] for said property; and then,
iv. transferring [Providence]'s property and service agreement to Defendant Wesley Chapel Volunteer Fire Department.

¶ 5 On 20 August 2014, the Town paid approximately $935,000.00 for the property upon which the fire station was located and obtained title to that property by means

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of a quitclaim deed. On 28 April 2015, a special meeting of the town council was held during which the council voted to terminate the Fire Suppression Agreement, a decision which had the effect of terminating the Interlocal Agreement as well. According to Providence, the Town "terminated the Lease, forced [Providence] from the [fire station] property, forced [Providence] out of business, and . . . leased with an option to purchase the [fire station] by deed to Wesley Chapel Volunteer Fire Department."

B. Procedural History

¶ 6 On 4 June 2015, Providence filed a complaint asserting various claims for relief against the Town. On 25 August 2015, the trial court entered orders allowing Providence to amend its complaint; denying, in part, the Town's motion to dismiss Providence's complaint based upon governmental immunity; and granting a preliminary injunction in favor of Providence. The Town noted an appeal to the Court of Appeals from the trial court's orders.

¶ 7 On 18 April 2017, the Court of Appeals filed an opinion in which...

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