State Farm v. Corby Energy

• Decision Date: 11 July 2006
• Docket Number: Docket No. 267266.
• Citation: 722 N.W.2d 906,271 Mich. App. 480
• Parties: STATE FARM FIRE & CASUALTY COMPANY, as Subrogee of Leethel Neal, Plaintiff-Appellee, v. CORBY ENERGY SERVICES, INC., Defendant/Cross-Defendant-Appellee, and Level 3 Communications, Inc., Defendant/Cross-Plaintiff/Cross-Defendant-Appellee, and City Of Detroit, Defendant/Cross-Plaintiff-Appellant.
• Court: Court of Appeal of Michigan — District of US

722 N.W.2d 906

271 Mich. App. 480

STATE FARM FIRE & CASUALTY COMPANY, as Subrogee of Leethel Neal, Plaintiff-Appellee, v. CORBY ENERGY SERVICES, INC., Defendant/Cross-Defendant-Appellee, and Level 3 Communications, Inc., Defendant/Cross-Plaintiff/Cross-Defendant-Appellee, and City Of Detroit, Defendant/Cross-Plaintiff-Appellant.

Docket No. 267266.

Court of Appeals of Michigan.

Submitted June 7, 2006, at Lansing.

Decided July 11, 2006, at 9:00 a.m.

Released for Publication October 2, 2006.

COPYRIGHT MATERIAL OMITTED

The Everhart Law Firm, P.C. (by Edward J. Everhart), Grand Rapids, for State Farm Fire & Casualty Insurance Company.

Harvey Kruse, P.C. (by James Sukkar and Julie E. Nichols), Troy, for Corby Energy Services, Inc.

Secrest Wardle (by Janet Callahan Barnes), Farmington Hills, for Level 3 Communications, Inc.

John E. Johnson, Jr., Corporation Counsel, and Joanne D. Stafford and Eric B. Gaabo, Assistant Corporation Counsel, for the city of Detroit.

Before: SMOLENSKI, P.J., and HOEKSTRA and MURRAY, JJ.

PER CURIAM.

Defendant/cross-plaintiff, city of Detroit (the City), appeals as of right the trial court's order denying its motion for summary disposition. We reverse and remand.

This lawsuit arises out of the 2002 failure of a water main owned by the City. In March 1999, defendant Level 3 Communications, Inc. (Level 3), hired defendant Corby Energy Services, Inc. (Corby), through a third party, to install fiber optic conduit in Southfield and Farmington Hills. During this installation, Corby allegedly damaged an unmarked water main owned by the City. The damaged water main corroded over time and eventually failed. As a result of this failure, the home of plaintiff Leethel Neal was damaged by flooding.

Plaintiff State Farm Fire & Casualty Company (State Farm), as Neal's subrogee, filed the present lawsuit.¹ In August 2005, the City moved for summary disposition pursuant to MCR 2.116(C)(7), (8), and (10). After the trial court denied the motion, the City appealed as of right. See MCR 7.203(A)(1); MCR 7.202(6)(a)(v).

On appeal, the City argues that the trial court erred when it determined that plaintiff's suit against the City was not barred by the governmental tort liability act (GTLA), MCL 691.1401 et seq. We agree.

This Court reviews de novo decisions on motions for summary disposition. Fane v. Detroit Library Comm., 465 Mich. 68, 74, 631 N.W.2d 678 (2001). Under MCR 2.116(C)(7), summary disposition is proper when a claim is barred by immunity granted by law. Id. In order to avoid summary disposition pursuant to MCR 2.116(C)(7), a plaintiff must plead facts in avoidance of immunity. Mack v. Detroit, 467 Mich. 186, 199, 649 N.W.2d 47 (2002). A party may support a motion under MCR 2.116(C)(7) by affidavits, depositions, admissions, or other documentary evidence, which, if submitted, must be considered. Maiden v. Rozwood, 461 Mich. 109, 119, 597 N.W.2d 817 (1999).

This Court also reviews de novo questions of statutory interpretation. Ostroth v. Warren Regency, GP, LLC, 474 Mich. 36, 40, 709 N.W.2d 589 (2006). The goal of statutory interpretation is to give effect to the Legislature's intent as expressed in the statutory language. Gladych v. New Family Homes, Inc., 468 Mich. 594, 597, 664 N.W.2d 705 (2003). "If the language is unambiguous, `we presume that the Legislature intended the meaning clearly expressed—no further judicial construction is required or permitted, and the statute must be enforced as written.'" Id., quoting DiBenedetto v. West Shore Hosp., 461 Mich. 394, 402, 605 N.W.2d 300 (2000).

Pursuant to MCL 691.1407(1), "[e]xcept as otherwise provided in this act, a governmental agency is immune from tort liability if the governmental agency is engaged in the exercise or discharge of a governmental function." The City, as a "political subdivision," MCL 691.1401(b), is a "governmental agency" for purposes of governmental immunity. MCL 691.1401(d). Therefore, absent the applicability of a statutory exception, the City is immune from tort liability if the tort claim arises from the City's exercise of a governmental function. MCL 691.1407(1). A "[g]overnmental function' is an activity that is expressly or impliedly mandated or authorized by constitution, statute, local charter or ordinance, or other law." MCL 691.1401(f); see also Tryc v. Michigan Veterans' Facility, 451 Mich. 129, 134, 545 N.W.2d 642 (1996). Municipalities, such as the City, are authorized under Michigan's Constitution and by statute to operate public utilities such as the City's water and sewerage department. Const. 1963, art. 7, § 24; MCL 117.4f(c). Hence, the City is entitled to immunity from tort liability for actions undertaken in the operation of its water and sewerage department unless a statutory exception applies. Fane, supra at 74, 631 N.W.2d 678.²

In the present case, the trial court concluded that the City was not entitled to governmental immunity. The trial court explained:

[T]here's obviously a question of fact as [to] whether the lines were actually marked. And I do feel that the Miss Dig Statute does create a duty of the City to mark the lines when requested and it does allow for civil damages against the city which acts as a public utility.

From this statement, it appears that the trial court did not rely on any of the exceptions to governmental immunity stated in the GTLA.³ Rather it concluded that the act for the protection of underground facilities, see MCL 460.701 to MCL 460.718 (hereinafter the MISS-DIG act or the Act), established an exception to the general rule that municipalities are entitled to immunity from tort liability when performing a governmental function. Therefore, we shall examine whether the trial court correctly concluded that the MISS-DIG act created an exception to the general immunity provided by the GTLA.

Although the GTLA proclaims that it contains all the exceptions to governmental immunity, the Legislature remains free to create additional exceptions, either within the GTLA or another statute. Ballard v. Ypsilanti Twp., 457 Mich. 564, 569, 577 N.W.2d 890 (1998).

This is so because the Legislature, in enacting a law, cannot bind future Legislatures. Malcolm v. East Detroit, 437 Mich. 132, 139, 468 N.W.2d 479 (1991), citing Harsha v. Detroit, 261 Mich. 586, 246 N.W. 849 (1933). As a result, it remains free to amend or abolish governmental immunity by creating exceptions to it, either within the GTLA, or in the context of another statute. [Id.]

However, immunity under the GTLA "`may not be held to have been waived or abrogated except that result has been accomplished by an express statutory enactment or by necessary inference from a statute.'" Id. at 574, 577 N.W.2d 890, quoting Mead v. Pub. Service Comm., 303 Mich. 168, 173, 5 N.W.2d 740 (1942). Whether an express statutory enactment creates an exception to governmental immunity is resolved by reference to the language of the statute. Ballard, supra at 574, 577 N.W.2d 890.

Pursuant to the MISS-DIG act, an association of public utilities is created for mutual receipt of notification of certain types of construction activities that may affect underground facilities. See MCL 460.707; see also MCL 460.701(a) (defining "association" to mean "the MISS-DIG utilities communications programs"). In addition to the creation of the association, the MISS-DIG act imposes various notification requirements on "persons," "public agenc[ies]," and "public utilit[ies]," as those terms are defined in the Act.⁴ MCL 460.701 provides in relevant part:

(b) "Person" includes an individual, partnership, corporation, association, or any other legal entity. Person does not mean a public agency.

(c) "Public agency" means the state, a city, village, township, county, or any other governmental entity or municipality.

(d) "Public utility" means . . . a public agency, other than the state transportation department, owning public service facilities for supplying water, light, heat, gas, power, telecommunications, sewage disposal, storm drains, or storm water drainage facilities.

Pursuant to MCL 460.701(c), the City is a public agency for purposes of the MISS-DIG act. Further, because it owns public service facilities for supplying water and sewage disposal, the City's water department is also a public utility. MCL 460.701(d). Accordingly, the City's water department is subject to the duties imposed by the Act on public agencies and public utilities.

Although the MISS-DIG act imposes duties on governmental entities such as the City, at no point does the Act specifically address governmental immunity. The Act also does not establish a general cause of action for breaches of the duties it imposes. Instead, the only liability imposed by the Act is for harms caused by a "person" who damages underground facilities. MCL 460.714 provides:

In a civil action in a court of this state, when it is shown by competent evidence that damage to the underground facilities of a public utility resulted from excavating, tunneling, drilling or boring procedures, or demolishing operations, or the discharge of explosives, as described in [MCL 460.703], and that the person responsible for giving the notice of intent to excavate, tunnel, demolish, or discharge explosives failed to give notice, or the person did not employ hand-digging or failed to provide support, the person shall be liable for the resulting damage to the underground facilities, but the liability for damages shall be reduced in proportion to the negligence of the public utility if it fails to comply with [MCL 460.708].

This section clearly does not impose liability on public utilities for a failure to give proper notice under MCL 460.708. Instead, it imposes liability on a "person" if the underground facilities of a public utility are damaged by the activities described in MCL 460.703 and the "person" responsible for giving the notice prescribed by MCL 460.705 or MCL 460.707 failed to give notice or...