Pulliam v. City of Greensboro

• Decision Date: 20 August 1991
• Docket Number: No. 9018SC1222,9018SC1222
• Citation: 407 S.E.2d 567,103 N.C.App. 748
• Parties: Deemus A. PULLIAM, Jr. and wife, Linda C. Pulliam, Plaintiffs-Appellants, v. CITY OF GREENSBORO, Defendant-Appellee.
• Court: North Carolina Court of Appeals

Page 567

407 S.E.2d 567

103 N.C.App. 748

Deemus A. PULLIAM, Jr. and wife, Linda C. Pulliam, Plaintiffs-Appellants, v. CITY OF GREENSBORO, Defendant-Appellee.

No. 9018SC1222.

Court of Appeals of North Carolina.

Aug. 20, 1991.

Rivenbark, Kirkman, Alspaugh & Moore by Jewel A. Farlow, Greensboro, for plaintiffs-appellants.

Nichols, Caffrey, Hill, Evans and Murrelle by Joseph R. Beatty and Polly D. Sizemore, Greensboro, for defendant-appellee.

WELLS, Judge.

Plaintiffs assign error to the trial court's granting of summary judgment in favor of defendant. Plaintiffs contend that questions of material fact exist as to whether defendant's operation and maintenance of its sewer lines was a proprietary or governmental function; if a governmental function, then whether defendant waived its governmental immunity by participating in a risk pool; and if so, whether plaintiffs' forecast of evidence presented a material question of fact regarding defendant's negligence.

Summary judgment is properly granted "if 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 judgment as a matter of law." N.C.Gen.Stat. 1A-1, Rule 56(c). A movant may show that he is entitled to summary judgment as a matter of law by presenting a forecast of evidence that shows an essential element of the opposing party's claim is nonexistent or that the opposing party cannot produce evidence to support an essential element of his or her claim. Zimmerman v. Hogg & Allen, 286 N.C. 24, 209 S.E.2d 795 (1974).

I. Governmental Immunity

Plaintiffs contend that defendant was engaged in a proprietary function in the operation and maintenance of its sewer line. Defendant contends that it was engaged in a governmental function in the operation and maintenance of its main sewer line and that immunity bars negligent liability.

Whether a municipality may be held liable for negligence depends on whether it acts in its governmental or proprietary capacity:

"When power conferred has relation to public purposes and for the public good, it is to be classified as governmental in its nature and appertains to the corporation in its political capacity. But when it relates to the accomplishment of private purposes in which the public is only indirectly concerned, it is private in its nature, and the municipality, in respect to its exercise, is regarded as a legal individual. In the former case the corporation is exempt from all liability, whether for nonuser or misuser; while in the latter case it may be held to that degree of responsibility which would attach to an ordinary corporation."

McCombs v. City of Asheboro, 6 N.C.App. 234, 170 S.E.2d 169 (1969) (quoting Metz v. Asheville, 150 N.C. 748, 64 S.E. 881 (1909)).

Our courts have long noted that drawing the line between municipal operations which are proprietary and subject to tort liability versus operations which are governmental and immune from such liability is a difficult task. Millar v. Wilson, 222 N.C. 340, 23 S.E.2d 42 (1942) (noting that maintenance of public roads and highways is recognized as governmental while imposing liability on a municipality for negligent failure to keep its streets and sidewalks in reasonably safe condition as an "illogical" but uniformly applied exception); Sides v. Hospital, 287 N.C. 14, 213 S.E.2d 297 (1975) (First, noting that courts have applied one classification to an activity in general while applying the opposite classification to certain phases of the same activity; Second, noting that courts have applied a proprietary classification to the exact activities that courts have previously determined that expenditures for such activities, e.g. airports, garbage removal and public parks, are for a public purpose.) The "application of the [governmental-proprietary distinction] to given factual situations has resulted in irreconcilable splits of authority and confusion as to what functions are governmental and what functions are proprietary." Koontz v. City of Winston-Salem, 280 N.C. 513, 186 S.E.2d 897 (1972).

Defendant's principal argument seems to be that due to the public's vital interest in sanitary sewer service, such service should be regarded as a governmental function. While this argument has superficial appeal, we do not find it to be dispositive.

In 1971, the General Assembly extensively revised and rewrote the statutory law relating to cities and towns in North Carolina. See Chapter 160A of the North Carolina General Statutes. In doing so, the legislature adopted a new Article 16, entitled Public Enterprises. G.S. § 160A-311 defines public enterprises:

§ 160A-311. Public enterprise defined.

As used in this Article, the term "public enterprise" includes:

(1) Electric power generation, transmission, and distribution systems;

(2) Water supply and distribution systems;

(3) Sewage collection and disposal systems of all types, including septic tank systems or other on-site collection or disposal facilities or systems;

(4) Gas production, storage, transmission, and distribution systems, where systems shall also include the purchase and/or lease of natural gas fields and natural gas reserves, the purchase of natural gas supplies, and the surveying, drilling and any other activities related to the exploration for natural gas, whether within the State or without;

(5) Public transportation systems;

(6) Solid waste collection and disposal systems and facilities;

(7) Cable television systems;

(8) Off-street parking facilities and systems;

(9) Airports.

N.C.Gen.Stat. § 160A-311 (1987). G.S. § 160A-314 provides:

§ 160A-314. Authority to fix and enforce rates.

(a) A city may establish and revise from time to time schedules of rents, rates, fees, charges, and penalties for the use of or the services furnished by any public enterprise. Schedules of rents, rates, fees, charges, and penalties may vary according to classes of service, and different schedules may be adopted for services provided outside the corporate limits of the city.

(b) A city shall have power to collect delinquent accounts by any remedy provided by law for collecting and enforcing private debts....

N.C.Gen.Stat. § 160A-314 (1987). G.S. § 160A-319 provides:

§ 160A-319. Utility franchises.

A city shall have authority to grant upon reasonable terms franchises for the operation within the city of any of the enterprises listed in G.S. 160A-311 and for the operation of telephone systems. No franchise shall be granted for a period of more than 60 years, and cable television franchises shall not be granted for a period of more than 20 years. Except as otherwise provided by law, when a city operates an enterprise, or upon granting a franchise, a city may by ordinance make it unlawful to operate an enterprise without a franchise.

N.C.Gen.Stat. § 160A-319 (1987).

Over the years, an interesting pattern of public enterprise activity has emerged in North Carolina. While it appears that the dominant pattern of sewer services in municipalities is serviced by the municipality, according to the records of the North Carolina Utilities Commission, there are at least four municipalities in the State in which sewer service is provided by privately owned public utilities. In addition, there are eighty-eight privately owned public utilities providing service in non-municipal areas. There are seventy-two municipalities which provide electric service, both inside and outside municipal limits. There are eight municipalities which own and operate natural gas distribution systems. There are some municipalities which own and operate airports.

Thus, it seems to be an accepted practice in North Carolina for cities and towns to compete with private enterprise by the ownership and operation of these public enterprises recognized by the General Assembly. Additionally, our courts have clearly stated that in setting rates for public enterprise services, municipalities act in a proprietary role. See Aviation, Inc. v. Airport Authority, 288 N.C. 98, 215 S.E.2d 552 (1975) and Town of Spring Hope v. Bissette, 53 N.C.App. 210, 280 S.E.2d 490 (1981). In Aviation, Inc., supra, ...