Court Opinion

ID: 9567016
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:46:55.981876+00
Date Added: 2024-06-11T09:50:40.920305
License: Public Domain

Justice Frye
dissenting.
I disagree with the majority’s holding in this case. The issues in this case are: (1) whether the City of Charlotte has waived its governmental immunity by entering into a joint risk-management program with other units of local government, and (2) whether the liability insurance policy provides coverage for the City against a Woodson claim.
“[Ujnder the common law, a municipality is immune from liability for the torts of its officers committed while they were performing a governmental function.” Wiggins v. City of Monroe, 73 N.C. App. 44, 49-50, 326 S.E.2d 39, 43 (1985). However, N.C.G.S. § 160A-485(a) establishes an exception to the common law rule:
Any city is authorized to waive its immunity from civil liability in tort by the act of purchasing liability insurance. Participation in a local government risk pool pursuant to Article 23 of General Statute Chapter 58 shall be deemed to be the purchase of insur*683anee for the purposes of this section. Immunity shall be waived only to the extent that the city is indemnified by the insurance contract from tort liability. No formal action other than the purchase of liability insurance shall be required to waive tort immunity, and no city shall be deemed to have waived its tort immunity by any action other than the purchase of liability insurance.
Additionally, N.C.G.S. § 58-23-5 provides:
In addition to other authority granted pursuant to Chapters 153A and 160A of the General Statutes, two or more local governments may enter into contracts or agreements pursuant to this Article for the joint purchasing of insurance or to pool retention of their risks for property losses and liability claims and to provide for the payment of such losses of or claims made against any member of the pool on a cooperative or contract basis with one another, or may enter into a trust agreement to carry out the provisions of this Article. In addition to other authority granted pursuant to Chapters 153A and 160A of the General Statutes, two or more local governments may enter into contracts or agreements pursuant to this Article to establish a separate workers’ compensation pool to provide for the payment of workers’ compensation claims pursuant to Chapter 97 of the General Statutes or to establish pools providing for life or accident and health insurance for their employees on a cooperative or contract basis with one another; or may enter into a trust agreement to carry out the provisions of this Article. A workers’ compensation pool established pursuant to this Article may only provide coverage for workers’ compensation, employers’ liability, and occupational disease claims. Such local governments shall give the Commissioner 30 days’ advance written notification, in a form prescribed by the Commissioner, that they intend to organize and operate risk pools pursuant to this Article.
Thus, a city may waive immunity in its governmental capacity through the purchase of liability insurance or by joining a local government risk pool. N.C.G.S. § 160A-485(a) (1994); Combs v. Town of Belhaven, 106 N.C. App. 71, 73, 415 S.E.2d 91, 92 (1992) (addressing purchase of insurance). However, a city generally retains immunity from civil liability in its governmental capacity to the extent it does not purchase liability insurance or participate in a local government risk pool pursuant to article 23 of chapter 58 of the General Statutes. N.C.G.S. § 160A-485; see also Wall v. City of Raleigh, 121 N.C. App. *684351, 354, 465 S.E.2d 551, 553 (1996); Jones v. Kearns, 120 N.C. App. 301, 302, 462 S.E.2d 245, 246, disc. rev. denied, 342 N.C. 414, 465 S.E.2d 541 (1995).
In the instant case, clearly, the City of Charlotte is a local government within the meaning of N.C.G.S. § 58-23-1, which defines “local government” as “any county, city, or housing authority located in this State.” Thus, the City may waive its governmental immunity by purchasing liability insurance or by participating in a government risk pool. Otherwise, the City has no “risk” to protect itself against since the City is immune from suit in tort.
The City of Charlotte has purchased liability insurance for accidental injury to City employees, but contends that the claim asserted in the instant action is not covered by its liability insurance because of a specific exclusion in the policy. Although it has entered into an elaborate risk-management program with the County and the School Board, the City of Charlotte contends that it is not participating in a local government risk pool so as to waive governmental immunity. I believe that the City has waived its governmental immunity, both by the purchase of liability insurance and by entering a risk-management program which should be deemed a local government risk pool.
The problem with allowing local governments to enter into “joint undertaking” contracts, such as the one at issue in the instant case, is that it gives local governments the unbridled discretion to pay some claims and to assert governmental immunity as to those claims that it does not wish to pay. Under such a scheme, the decision of the local government officials is not reviewable, and the awards to injured parties may be distributed on an arbitrary basis without any opportunity for the injured party to have the decision of the local government reviewed by the courts. Even the State of North Carolina does not have such unbridled discretion. Thus, I conclude that a municipal corporation may not benefit by participating with other local governments in a risk-management program which is tantamount to a statutory local government risk pool without losing its governmental immunity for claims covered by the risk-management program.
Article 23 of Chapter 58 of the North Carolina General Statutes is known as the Local Government Risk Pool Act. The Local Government Risk Pool Act provides in pertinent part:
In addition to other authority granted pursuant to Chapters 153A and 160A of the General Statutes, two or more local gov*685emments may enter into contracts or agreements pursuant to this Article for the joint purchasing of insurance or to pool retention of their risks for property losses and liability claims and to provide for the payment of such losses of or claims made against any member of the pool on a cooperative or contract basis with one another, or may enter into a trust agreement to carry out the provisions of this Article. . . . Such local governments shall give the Commissioner 30 days’ advance written notification, in a form prescribed by the Commissioner, that they intend to organize and operate risk pools pursuant to this Article.
N.C.G.S. § 58-23-5 (1994).
In Blackwelder v. City of Winston-Salem, 332 N.C. 319, 420 S.E.2d 432 (1992), this Court examined a government risk-management program and concluded that it did not operate as a waiver of sovereign immunity. The City of Winston-Salem had organized a corporation named Risk Acceptance Management Corporation (RAMCO) to handle claims against the City of $1,000,000 or less. All officers and directors of RAMCO were employees of the City. RAMCO obtained part of its funds for operations by issuing tax exempt certificates with payment of the certificates guaranteed by the City. The City agreed to pay to RAMCO $600,000 annually and to reimburse RAMCO for operating expenses, borrowed funds, and all other costs. We held that because the City of Winston-Salem had not joined with any other local government unit in the operation of RAMCO, it was not participating in a statutory risk pool.
In Blackwelder, the parties, as did the members of this Court, assumed that a City had the authority to enter into such a government risk-management program. Therefore, we were not asked to consider whether such a program was ultra vires. However, in Leete v. County of Warren, 341 N.C. 116, 462 S.E.2d 476 (1995), this Court reaffirmed the principle that a municipality must have a legal obligation to make a payment in order to distribute governmental funds. Justice Orr, writing for the majority, quoted with approval Brown v. Board of Comm’rs of Richmond Co., 223 N.C. 744, 746, 28 S.E.2d 104, 105-06 (1943):
“[T]he Legislature has no power to compel or even to authorize a municipal corporation to pay a gratuity to an individual to adjust a claim which the municipality is under no legal obligation to pay. Nor may it lawfully authorize a municipal corporation to pay gifts or gratuities out of public funds. ... [A] municipality cannot law*686fully make an appropriation of public moneys except to meet a legal and enforceable claim . . . .”
Id. at 120, 462 S.E.2d at 479. A municipality has a legal obligation to pay a legitimate claim when it has waived sovereign immunity. On the other hand, to the extent a municipality retains its sovereign immunity, it has no authority to pay the claim against it.
“It is a well-established principle that municipalities, as creatures of the State, can exercise only that power which the legislature has conferred upon them.” Bowers v. City of High Point, 339 N.C. 413, 417, 451 S.E.2d 284, 287 (1994). By what authority does the City of Charlotte negotiate, settle, and pay tort claims against it under the risk-management program? I find no statutory authority to pay such claims unless the City has waived its governmental immunity, either by the purchase of liability insurance or by participation in a local government risk pool. The City cannot have it both ways. Either it has waived governmental immunity by entering into this risk-management program, or its payment of government funds to settle tort claims to which governmental immunity applies would appear to be ultra vires. I presume that the City acted pursuant to article 20 of chapter 160A of the North Carolina General Statutes as recited in the agreement establishing the risk-management program, meaning its actions are not ultra vires. Therefore, I would deem the participation in the risk-management program to be participation in a local government risk pool, thereby waiving governmental immunity. Accordingly, I would affirm the decision of the Court of Appeals which affirmed the trial court as to this issue.
I now consider whether the City has waived governmental immunity for plaintiffs Woodson claim by the purchase of liability insurance. To the extent that the plaintiffs Woodson claim falls under the coverage provisions of the City’s liability policy, the City has waived its governmental immunity. N.C.G.S. § 160A-485; see also Wall, 121 N.C. App. at 354, 465 S.E.2d at 553; Jones, 120 N.C. App. at 302, 462 S.E.2d at 246. Relying on this Court’s decision in N. C. Farm Bureau Mut. Ins. Co. v. Stox, 330 N.C. 697, 412 S.E.2d 318 (1992), the majority holds that plaintiff’s allegation, that the City’s action was substantially certain to cause injury removed the claim from coverage under the policy for purposes of this action. I do not believe that Stox requires this result.
First, Stox does not involve a Woodson claim. In fact, I have found no case from this Court discussing the applicability of liability cover*687age for a Woodson claim. To the extent applicable, however, I believe that Stox would suggest that the policy in this case would cover most Woodson claims. As Justice (now Chief Justice) Mitchell wrote for a unanimous Court in Stox:
The primary issue to be resolved in this appeal is whether liability for personal injuries suffered by the defendant Louise Hooks Stox, which occurred when she fell as the result of a push by the defendant Gordon Owens, is covered by a policy of homeowners liability insurance issued to Owens by Farm Bureau. We conclude that under the language of the policy in question, coverage is provided.
Id. at 699, 412 S.E.2d at 320.
The exclusion at issue in the instant case is for “bodily injury intentionally caused or aggravated by or at the direction of the insured.” In Stox, the exclusion was for “bodily injury . . . which is expected or intended by the insured.” In that case, we considered whether the policy’s exclusion placed Owens’ liability for injury to Stox outside the coverage of the policy. We said:
The trial court found from competent evidence before it that, although Gordon Owens intentionally pushed Louise Stox, he had no specific intent to cause her injury. Thus, the injuries she sustained were “the unintended result of an intentional act.” These findings supported the trial court’s conclusion that “the ‘expected or intended injury’ exclusion contained in the policy is inapplicable.”
Id. at 703, 412 S.E.2d at 322. In Stox, the Court of Appeals relied upon Commercial Union Ins. Co. v. Mauldin, 62 N.C. App. 461, 303 S.E.2d 214 (1983), in holding that the exclusion applied. In Commercial Union, the Court of Appeals properly held that a person’s actions in shooting into an occupied automobile were excluded from coverage under his homeowner’s policy by the “expected or intended injury” exclusion. This Court distinguished Commercial Union as follows: “Under the rules of construction which govern this exclusionary provision in the Farm Bureau homeowners policy, we disagree with the Court of Appeals and conclude that it is the resulting injury, not merely the volitional act, which must be intended for this exclusion to apply.” 330 N.C. at 703-04, 412 S.E.2d at 322. Firing a pistol into an occupied vehicle and pushing an individual are both intentional acts, *688but the former, and not the latter, is excludable under the homeowner’s policy.
Returning to the instant case, the policy excludes from coverage “bodily injury intentionally caused or aggravated by or at the direction of the insured.” Construing this provision narrowly, as we must, it does not apply to this case. There is no allegation in the complaint, or in the summary judgment materials before this Court, which indicates that plaintiff believes or contends that the police department did anything with the intent to injure or to kill Mr. Lyles or anyone else. Nor is such an intent required in order to state a Woodson claim. As we said in Woodson:
Thus, both courts and legislatures in a fair number of other jurisdictions have rejected the proposition that actual intent to harm is required for an employer’s conduct to be actionable in tort and not protected by the exclusivity provisions of workers’ compensation. Our adoption of the substantial certainty standard does the same.
Woodson v. Rowland, 329 N.C. 330, 344, 407 S.E.2d 222, 230 (1991).
The complaint in Woodson stated a claim against Rowland, not because Rowland intended to injure Woodson by requiring him to remain in-the dangerous trench, but because Rowland insisted on Woodson’s continuing to work in the trench notwithstanding the substantial likelihood of injury. As we said in our per curiam reversal of the Court of Appeals in Owens v. W.K. Deal Printing, Inc., 339 N.C. 603, 453 S.E.2d 160 (1995):
We reemphasize that plaintiffs in Woodson actions need only establish that the employer intentionally engaged in misconduct and that the employer knew that such misconduct was “substantially certain” to cause serious injury or death and, thus, the conduct was “so egregious as to be tantamount to an intentional tort.” Pendergrass v. Card Care, Inc., 333 N.C. 233, 239, 424 S.E.2d 391, 395 (1993).
339 N.C. at 604, 453 S.E.2d at 161. There may be a fine line between intentional torts and conduct “so egregious as to be tantamount to an intentional tort,” but it is a line that this Court has drawn. This line is emphasized by our continued disavowal of the “bomb throwing” language used in certain opinions of the Court of Appeals.
*689In summary, I disagree with the majority’s conclusion that this wrongful death claim falls under the exclusionary provisions of the policy. For purposes of plaintiff’s claim against the City, Officer Lyles’ injuries resulted from an accident within the coverage section of the liability policy, and were not “intentionally caused or aggravated by or at the direction of the insured” within the meaning of the policy exclusion. Accordingly, I would hold that the liability insurance policy purchased by the City in the instant case covers the plaintiff’s Woodson claim, if a Woodson claim is properly alleged and proved.
For the foregoing reasons, I respectfully dissent from the decision of the majority of this Court.
Chief Justice Mitchell and Justice Lake join in this dissenting opinion.