Meinck v. City of GastoniaÂ

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA16-892

Filed: 21 March 2017

Gaston County, No. 15 CVS 423

JOAN A. MEINCK, Plaintiff,

v.

CITY OF GASTONIA, a North Carolina Municipal Corporation, Defendant.

Appeal by plaintiff from order entered 1 June 2016 by Judge Lisa Bell in

Gaston County Superior Court. Heard in the Court of Appeals 22 February 2017.

Law Office of Thomas D. Bumgardner, PLLC, by Thomas D. Bumgardner, for
plaintiff-appellant.

Stott, Hollowell, Palmer & Windham, L.L.P., by Martha Raymond Thompson
and Ryan L. Bostic for defendant-appellee.

TYSON, Judge.

Joan Meinck (“Plaintiff”) appeals from an order granting summary judgment

in favor of the City of Gastonia (“Defendant”). We reverse and remand.

I. Background

Defendant owns a commercial building located at 212 West Main Avenue in

Gastonia, North Carolina. The building is located within a downtown revitalization

district established by Defendant in a 1999 city resolution. Defendant did not use the

building to house any municipal or government departments or offices.
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Opinion of the Court

Beginning in 2013, Defendant leased the building to the Gaston County Art

Guild (“Art Guild”), a private non-profit entity unaffiliated with either Defendant or

Gaston County. Defendant leased the building as an effort to fill a vacancy and help

remove a blight from vacant buildings on the downtown area. Defendant’s evidence

tends to show Defendant did not seek to make a profit from the lease. Defendant

retained the responsibility for maintaining the exterior of the premises and the right

to inspect the building at any time.

The lease agreement between Defendant and the Art Guild limited the Art

Guild’s uses of 212 West Main Avenue to an “art gallery and artists’ studios and a

gift shop.” The lease agreement provided for four separate means of compensation to

Defendant. The first method required the Art Guild to pay Defendant 90% of all rent

money it received from subtenants. The second method guaranteed Defendant 30%

of the gross sales receipts received for art the Art Guild sold on the premises. The

third method required subtenants of the Art Guild to disgorge 15% of their gross sales

receipts to Defendant. The fourth method required subtenants to provide a minimum

of fifteen hours of volunteer time each month working on tending to the gallery and

the gift shop. In addition to the minimum required volunteer time, subtenants were

also tasked to arrange sales shows, serve on committees, or help manage other

subtenants.

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Opinion of the Court

The subleased space in 212 West Main Avenue contained enough room for

nineteen private art studios for subtenants. Plaintiff was one of the subtenants of

the Art Guild. Plaintiff paid $95.00 per month to rent space inside 212 West Main

Avenue, 90% of which was paid to Defendant.

For the 2013 fiscal year, Defendant expended $33,062.01 on 212 West Main

Avenue and received revenues of $21,572.98 from the Art Guild’s lease, a loss of

$11,489.03. For the 2014 fiscal year, Defendant expended $40,008.13 and received

revenues of $21,935.57, a loss of $18,072.56.

On 11 December 2013, Plaintiff left through the rear exit of 212 West Main

Avenue, and she carried several large pictures, lost her balance on a set of steps, and

fell. As a result of her fall, Plaintiff suffered a broken hip, required hospitalization,

and incurred medical expenses. Portions of the cement on the steps had apparently

eroded. As a result of carrying large pictures, Plaintiff was prevented from seeing

where she was stepping.

On 4 February 2015, Plaintiff filed a complaint and alleged Defendant had

negligently failed to maintain the exit of the building or to warn of the dangerous

condition of the exit. On 12 January 2016, Defendant filed a motion for summary

judgment asserting governmental immunity as an affirmative defense. The trial

court granted Defendant’s motion on that basis. Plaintiff appeals.

II. Statement of Jurisdiction

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Opinion of the Court

Jurisdiction lies in this Court pursuant to N.C. Gen. Stat. § 7A-27(b)(1), which

provides for an appeal of right from any final judgment of a superior court. N.C. Gen.

Stat. § 7A-27(b)(1) (2015).

III. Standard of Review

Summary judgment is proper where “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 a

judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2016).

In reviewing a motion for summary judgment, the trial court must “view the

pleadings and all other evidence in the record in the light most favorable to the

nonmovant and draw all reasonable inferences in that party’s favor.” N.C. Farm

Bureau Mut. Ins. Co. v. Sadler, 365 N.C. 178, 182, 711 S.E.2d 114, 117 (2011) (citation

omitted).

An issue is “genuine” if it can be proven by substantial
evidence and a fact is “material” if it would constitute or
irrevocably establish any material element of a claim or a
defense.

A party moving for summary judgment may prevail if it
meets the burden (1) of proving an essential element of the
opposing party’s claim is nonexistent, or (2) of showing
through discovery that the opposing party cannot produce
evidence to support an essential element of his or her
claim. Generally this means that on undisputed aspects of
the opposing evidential forecast, where there is no genuine
issue of fact, the moving party is entitled to judgment as a
matter of law. If the moving party meets this burden, the

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Opinion of the Court

non-moving party must in turn either show that a genuine
issue of material fact exists for trial or must provide an
excuse for not doing so.

Lowe v. Bradford, 305 N.C. 366, 369, 289 S.E.2d 363, 366 (1982) (citations and

internal quotation marks omitted).

This Court reviews a trial court’s summary judgment order de novo. Sturgill v.

Ashe Mem’l Hosp., Inc., 186 N.C. App. 624, 626, 652 S.E.2d 302, 304 (2007), disc.

review denied, 362 N.C. 180, 658 S.E.2d 662 (2008).

IV. Analysis

A. Governmental Immunity

Plaintiff asserts the trial court’s grant of summary judgment for governmental

immunity was error.

“Under the doctrine of governmental immunity, a county or municipal

corporation ‘is immune from suit for the negligence of its employees in the exercise of

governmental functions absent waiver of immunity.’” Estate of Williams v.

Pasquotank County, 366 N.C. 195, 198, 732 S.E.2d 137, 140 (2012) (quoting Evans ex

rel. Horton v. Hous. Auth., 359 N.C. 50, 53, 602 S.E.2d 668, 670 (2004) (internal

quotation omitted)). “Nevertheless, governmental immunity is not without limit.

‘[G]overnmental immunity covers only the acts of a municipality or a municipal

corporation committed pursuant to its governmental functions.’ Governmental

immunity does not, however, apply when the municipality engages in a proprietary

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Opinion of the Court

function.” Williams, 366 N.C. at 199, 732 S.E.2d at 141 (quoting Evans, 359 N.C. at

53, 602 S.E.2d at 670 (citations omitted), and citing Town of Grimesland v. City of

Washington, 234 N.C. 117, 123, 66 S.E.2d 794, 798 (1951)).

A governmental function is an activity which is “discretionary, political,

legislative, or public in nature and performed for the public good in behalf of the State

rather than for itself [.]” Britt v. City of Wilmington, 236 N.C. 446, 450, 73 S.E.2d 289,

293 (1952). A proprietary function is an activity which is “commercial or chiefly for

the private advantage of the compact community[.]” Id. “[I]n cases of doubtful

liability[,] application of [governmental immunity] should be resolved against the

municipality.” Koontz v. City of Winston-Salem, 280 N.C. 513, 530, 186 S.E.2d 897,

908 (1972) (citations omitted).

Whether a particular government activity is a governmental or proprietary

function depends upon a multi-factor inquiry. “[T]he threshold inquiry in

determining whether a function is proprietary or governmental is whether, and to

what degree, the legislature has addressed the issue.” Williams, 366 N.C. at 200, 732

S.E.2d at 141-42.

Here, Plaintiff asserts a claim against Defendant on the basis of its ownership

and maintenance of the building leased to the private, non-profit tenant, as allegedly

part of Defendant’s downtown revitalization efforts. The legislature has authorized

cities to lease property to private parties pursuant to N.C. Gen. Stat. § 160A-272

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Opinion of the Court

(2015). The legislature did not specify in N.C. Gen Stat. § 160A-272 nor elsewhere,

whether a city’s leasing of property to a private party is a governmental or proprietary

function.

The legislature also authorizes cities to establish municipal service districts

for the purpose of, inter alia, downtown revitalization projects. N.C. Gen. Stat. §

160A-535 (2016). The statute defines “downtown revitalization” to mean

“improvements, services, functions, promotions, and developmental activities

intended to further the public health, safety, welfare, convenience, and economic well-

being of the central city or downtown area.” N.C. Gen. Stat. § 160A-536(b). Nowhere

has the legislature deemed all downtown revitalization projects undertaken by a city

within a service district to be activities, which are exempt from suit through

governmental immunity.

“[W]hen an activity has not been designated as governmental or proprietary

by the legislature, that activity is necessarily governmental in nature when it can

only be provided by a governmental agency or instrumentality.” Williams¸366 N.C.

at 202, 732 S.E.2d at 142. The ownership and maintenance of property leased to a

private entity is not an activity, which is provided only by a governmental agency or

instrumentality.

When the service in question can be provided both privately and publicly, we

are required to consider several additional factors, including: “whether the service is

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traditionally a service provided by a governmental entity, whether a substantial fee

is charged for the service provided, and whether that fee does more than simply cover

the operating costs of the service provider.” Id. at 202-03, 732 S.E.2d at 143 (footnotes

omitted). Here, a city’s ownership and maintenance of a building that is occupied and

used solely by a private non-profit entity is not a service solely and traditionally

provided by a governmental entity. Id.

With regards to the rentals received by Defendant from leasing the building

and maintaining the exterior of the building, the case of Glenn v. City of Raleigh is

instructive. In Glenn, the plaintiff was injured when a rock was thrown from a lawn

mower and struck him in the head, while he was visiting a public park operated by

the City of Raleigh. Glenn v. City of Raleigh, 246 N.C. 469, 470, 98 S.E.2d 913, 913-

14 (1957). Our Supreme Court determined the revenue generated from the city’s

operation of the park “import[ed] such a corporate benefit or pecuniary profit or

pecuniary advantage to the city of Raleigh as to exclude the application of

governmental immunity.” Id. at 477, 98 S.E.2d at 919. The Court stated, “[i]n order

to deprive a municipal corporation of the benefit of governmental immunity, . . . the

act or function must involve special corporate benefit or pecuniary profit inuring to

the municipality.” Id. at 476, 98 S.E.2d at 918 (internal quotation marks and citation

omitted).

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Opinion of the Court

Here, Defendant received substantial revenues from multiple sources from the

lease and subtenants of 212 West Main Avenue of $21,572.98 and $21,935.57 for fiscal

years 2013 and 2014 respectively. These revenues included amounts Defendant

received as rent payments, gift shop proceeds, as well as percentages of the amount

of private artwork sold by the subtenant-artists including Plaintiff. The substantial

revenue Defendant-city has received from the lease of the premises located at 212

West Main Avenue, solely to the private Art Guild, provides such a pecuniary

advantage to exclude the application of government immunity as a matter of law. See

id. at 477, 98 S.E.2d at 919.

We view the private commercial nature of Defendant’s agreement with the Art

Guild to receive a 15% commission on all private art sold, Defendant’s lease of the

building solely to a private organization, and the Defendant’s generation of

substantial revenues from the lease, gift shop sales, and subtenants’ rents, together

as weighing heavily towards concluding Defendant’s ownership and maintenance of

the leased building to be a proprietary function. Compare Bynum v. Wilson County,

367 N.C. 355, 359-60, 758 S.E.2d 643, 646-47 (2014) (placing significance on county’s

use of building to house government departments where slip-and-fall incident

occurred); See Britt, 236 N.C. at 450, 73 S.E.2d at 293 (defining a proprietary function

as commercial in nature); See Glenn at 477, 98 S.E.2d at 919 (holding that defendant-

city’s generation of revenue from activity precluded governmental immunity).

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In light of all these factors, we hold that Defendant is not immune from suit

for tort liability in the ownership and maintenance of its building located at 212 West

Main Avenue, and is answerable to Plaintiff for any negligent act which may have

caused Plaintiff injury and damage.

B. Negligence

Plaintiff contends that her forecast of evidence presents a material question of

fact regarding defendant’s negligence. We agree.

“Summary judgment is rarely appropriate in negligence cases, even when

there is no dispute as to the facts, because the issue of whether a party acted in

conformity with the reasonable person standard is ordinarily an issue to be

determined by a jury.” Surrette v. Duke Power Co., 78 N.C. App. 647, 650, 338 S.E.2d

129, 131 (1986) (citation omitted). In North Carolina, “the landowner . . . is required

to exercise reasonable care to provide for the safety of all lawful visitors . . . .”

Lorinovich v. K Mart Corp., 134 N.C. App. 158, 161, 516 S.E.2d 643, 646 (1999). In

order to prove a defendant's negligence, a “plaintiff must show that the defendant

either (1) negligently created the condition causing the injury, or (2) negligently failed

to correct the condition after actual or constructive notice of its existence.” Fox v.

PGML, LLC, 228 N.C. App. 28, 31, 744 S.E.2d 483, 485 (2013) (citation omitted).

“To determine whether or not the court should grant summary judgment in a

premises liability case, courts have focused on whether or not the premises met

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relevant building standards and whether there was evidence of a lack of notice of any

prior problems with the premises.” Id. (citation omitted). “Whether or not a building

meets these standards, though not determinative of the issue of negligence, has some

probative value as to whether or not defendant failed to keep his [premises] in a

reasonably safe condition.” Thomas v. Dixson, 88 N.C. App. 337, 343, 363 S.E.2d 209,

213 (1988).

Viewed in the light most favorable to the non-movant, Plaintiff’s evidence

tends to show the following facts and circumstances. Defendant was responsible for

maintaining the exterior of the building, including the steps. Defendant retained and

possessed the right to inspect the premises and building at any time. At the time of

Plaintiff’s fall, the exit from which she left the building and fell was the only means

of exit available. Plaintiff was a subtenant of the Art Guild tenant and was not a

trespasser on the premises.

Plaintiff’s expert witness, Dr. Hunt, stated the condition of the building’s steps

did not meet the building code’s requirements. Defendant has not forecasted any

evidence tending to show the steps met code standards. Additionally, Defendant’s

City Manager, Edward Munn, testifying on behalf of Defendant, stated the condition

of the steps was such as to necessitate repairs.

Plaintiff’s forecast of evidence is sufficient to raise the genuine issues of

material fact of whether Defendant negligently failed to maintain the steps on which

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Opinion of the Court

Plaintiff tripped or acted negligently in failing to warn about the condition of the

steps.

C. Contributory Negligence

Pursuant to Rule 28(c) of the North Carolina Rules of Appellate Procedure:

Without taking an appeal, an appellee may present issues
on appeal based on any action or omission of the trial court
that deprived the appellee of an alternative basis in law for
supporting the judgment, order, or other determination
from which appeal has been taken.

N.C. R. App. P. 28(c).

Before the trial court, Defendant moved for summary judgment on the ground

of Plaintiff’s contributory negligence, and on the ground of governmental immunity.

The trial court granted Defendant’s motion for summary judgment solely upon the

ground of governmental immunity. On appeal, Defendant-city argues contributory

negligence as a matter of law and as an alternative basis to support the trial court’s

grant of summary judgment under Rule 28(c).

Contributory negligence “is negligence on the part of the plaintiff which joins,

simultaneously or successively, with the negligence of the defendant alleged in the

complaint to produce the injury of which the plaintiff complains.” Fisk v. Murphy, 212

N.C. App. 667, 670, 713 S.E.2d 100, 102 (2011) (citation omitted). “[S]ummary

judgment is rarely an appropriate remedy in cases of . . . contributory negligence.”

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Frankenmuth Ins. v. City of Hickory, 235 N.C. App. 31, 34, 760 S.E.2d 98, 101 (2014)

(citing Thompson v. Bradley, 142 N.C. App. 636, 641, 544 S.E.2d 258, 261 (2001)).

Where a plaintiff’s injury results from slipping and falling, “[t]he basic issue

with respect to contributory negligence is whether the evidence shows that, as a

matter of law, plaintiff failed to keep a proper lookout for her own safety.” Duval v.

OM Hosp., LLC, 186 N.C. App. 390, 395, 651 S.E.2d 261, 265 (2007) (quoting Rone v.

Byrd Food Stores, Inc., 109 N.C. App. 666, 670, 428 S.E.2d 284, 286 (1993)). “The

existence of contributory negligence does not depend on plaintiff's subjective

appreciation of danger; rather, contributory negligence consists of conduct which fails

to conform to an objective standard of behavior[,] the care an ordinarily prudent

person would exercise under the same or similar circumstances to avoid injury.”

Smith v. Fiber Controls Corp., 300 N.C. 669, 670, 268 S.E.2d 504, 507 (1980)

(quotation marks and citation omitted) (emphasis supplied).

Here, Defendant argues Plaintiff was contributorily negligent as a matter of

law, and asserts Plaintiff should have known of any hazard on the steps based upon

her several prior uses of the exit and steps. In addition, Defendant argues Plaintiff

was contributorily negligent for carrying pictures which blocked her view of the steps.

Viewing the evidence in the light most favorable to Plaintiff as the non-moving

party, Plaintiff had never moved large pictures out of the building previously. Also,

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Opinion of the Court

the exit steps on which Plaintiff fell was the only exit available to her to leave the

building.

In Duval v. OM Hosp., the plaintiff, a guest at a hotel, left her room by means

of an unlit stairwell and fell. Duval, 186 N.C. App. at 391, 651 S.E.2d at 263. In

reversing the trial court’s grant of summary judgment for the defendant, this Court

held, in part, the jury should consider whether the plaintiff, despite her knowledge of

the hazardous condition of the stairwell, had acted reasonably by using the only

means of egress available to her. Id. at 396, 651 S.E.2d at 265.

Here, a jury could find Plaintiff also acted reasonably in using the exit with

the hazardous steps. No evidence of other means of exiting the building was

presented. The carrying of large pictures out of the art gallery is a reasonable, non-

negligent use of the exit. See id. Summary judgment for Defendant as a matter of

law, on the issue of Plaintiff’s contributory negligence, is inappropriate in this case.

V. Conclusion

We reverse the trial court's entry of summary judgment in favor of Defendant

on the issue of governmental immunity, and deny summary judgment for Defendant

on the issues of Plaintiff’s negligence and contributory negligence. We remand this

case to the trial court for further proceedings. It is so ordered.

REVERSED AND REMANDED.

Judges ELMORE and DIETZ concur.

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