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

IN THE SUPREME COURT OF NORTH CAROLINA

2022-NCSC-100

No. 47PA21

Filed 19 August 2022

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

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. Heard in the Supreme Court on 21 March 2022.

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

1 The factual statements set forth above are based upon the allegations contained in

Providence’s complaint, which must be viewed in the light most favorable to Providence given

that this case is before us based upon the trial court’s rulings with respect to the Town’s and

the Mayor’s motions to dismiss for failure to state a claim for which relief can be granted

pursuant to N.C.G.S. § 1A-1, Rule 12(b)(6). See Est. of Long v. Fowler, 378 N.C. 138, 2021-

NCSC-81, ¶ 12 (stating that this Court “accept[s] the allegations in the complaint as true and

view[s] them in the light most favorable to the non-moving party” when reviewing the trial

court’s rulings upon a motion to dismiss for failure to state a claim for which relief can be

granted (quoting Corwin v. British Am. Tobacco PLC, 371 N.C. 605, 611 (2018))).

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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 it affirmed

the trial court’s decision to allow Providence to amend its complaint; affirmed the

trial court’s decision to deny the Town’s dismissal motion based upon governmental

immunity; and reversed the trial court’s decision to grant Providence’s preliminary

injunction motion. Providence Volunteer Fire Dep’t v. Town of Weddington, 253 N.C.

App. 126, 140–41 (2017). On 6 September 2017, Providence filed another motion to

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amend its complaint, which the trial court denied. On 26 March 2018, Providence

voluntarily dismissed its complaint against the Town without prejudice pursuant to

Rule 41 of the North Carolina Rules of Civil Procedure. See N.C.G.S. § 1A-1, Rule

41(a) (2021).

¶8 On 27 March 2018, Providence filed a new complaint asserting multiple claims

against the Town, Mayor Deter, and the Wesley Chapel Volunteer Fire Department

sounding in breach of contract, fraud in the inducement and actual fraud, deprivation

of property and liberty without due process, and tortious interference with contract.

On 1 June 2018, Mayor Deter filed a motion to dismiss and an answer to Providence’s

complaint in which he asserted that Providence’s claims against him should be

dismissed on the grounds that (1) Providence did not state a claim upon which relief

could be granted; (2) Providence failed to allege facts tending to show that Mayor

Deter had deprived Providence of a federal right; (3) Mayor Deter was not a real party

in interest to the contracts at issue in this case; (4) Providence’s claims were barred

by res judicata, collateral estoppel, and the law of the case doctrine; and (5) Mayor

Deter was protected by governmental immunity, legislative immunity, public official

immunity, and qualified immunity. On 16 July 2018, the Town filed a motion to

dismiss and an amended answer to Providence’s complaint in which it asserted that

Providence’s complaint was subject to dismissal pursuant to N.C.G.S. § 1A-1, Rules

12(b)(1), 12(b)(2), 12(b)(6) and 54, on the grounds that (1) the Town was entitled to

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governmental immunity; (2) the assertion of Providence’s claims was precluded by

the law of the case doctrine; (3) Providence’s claims were barred by the doctrine of

qualified immunity; and (4) Providence had failed to state a claim for which relief

could be granted. On 1 November 2018, Providence filed a motion seeking leave to

amend its complaint and presented a proposed amended complaint to the trial court.

¶9 On 27 November 2018, the trial court entered an order addressing Providence’s

request to amend its complaint, the Town’s dismissal motion, and Mayor Deter’s

dismissal motion. Among other things, the trial court found that Providence’s

complaint stated a claim for relief against the Town, but not Mayor Deter, for breach

of contract. In addition, the trial court found that Providence’s complaint stated a

claim for relief sounding in fraud against the Town and that its fraud-related claims

were not barred by the doctrine of governmental immunity given that the Town was

acting in a proprietary, rather than a governmental, capacity, stating that

13. The [c]ourt . . . determines that the weight

and sufficiency of the evidence shows that the alleged

tortious conduct of Defendant Town, under the particular

circumstances of this action, arose from an activity that

was proprietary in nature.

a. . . . [T]his proprietary nature of the Town’s

activity herein includes: the allegedly-

fraudulent negotiation and execution of

Defendant Town’s purchase of the Property and

lease-back of the Property to [Providence], which

included the insertion of a key provision or

provisions making a breach of the [Fire

Suppression Agreement] also a breach of the

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lease, designed to open the door for Defendant

Town to, shortly after execution of the deed and

lease-back, manufacture an unsubstantiated

and subjective breach. This alleged a breach of

the [Fire Suppression Agreement] and thus the

lease was subjective enough to possibly allow the

Town to obtain the real and personal property of

[Providence], having substantial value,

i. without just compensation as provided for

under our state and federal constitutions;

ii. without payment of adequate consideration;

and,

iii. in laymen’s terms, allowing the town to

fraudulently obtain all this long-standing

fire department property.

14. The Court is not persuaded that this specific

transaction . . . has been designated as governmental by

the General Assembly or that the undertaking is one in

which only a governmental agency could engage. At first

glance this activity might appear to be all about fire

suppression and emergency services, and thus

governmental in nature, by virtue of Chapter 69 of our

General Statutes or even N.C.G.S. § 160A-291 which

authorizes, but does not require a town to provide for its

own fire protection. Yet, in this case, [Providence]’s

allegations are not that Defendant Town was entering the

lease for a legitimate governmental purpose, but rather the

Town was attempting to obtain significant and valuable

property in a proprietary manner, by way of a sale and

lease back, of [Providence]’s property in a fraudulent

manner. Indeed, the purchase and lease-back of any real

property can be performed both privately and publicly. But

if a Town is to acquire private property, it must do so

properly, legally, and in accord with applicable law, not

fraudulently, as alleged by [Providence]. Furthermore, the

affidavits submitted by Defendant Town do not provide

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sufficient evidence controverting [Providence]’s allegations

that the specific actions . . . were proprietary in nature.

15. The Court is also not persuaded that this

action must follow the same result as that in Meinck v. City

of Gastonia, [371 N.C. 497 (2018)]. . . .

16. The Court therefore concludes that the factors

espoused in Estate of Williams v. Pasquotank County Parks

& Rec. Dep’t, 366 N.C. 195, 198–203 . . . (2012), have been

met, . . . and Defendant Town is not entitled to dismissal of

[Providence]’s fraud claim based upon governmental

immunity at this stage of the proceedings.

After determining that Providence’s fraud-related claims against the Town were not

barred by the doctrine of governmental immunity, the trial court reached the same

result with respect to the legislative immunity defense that Mayor Deter had asserted

against Providence’s fraud-related claims, stating that:

20. The Court concludes that [Mayor] Deter in his

individual capacity, at this early stage of the litigation, is

not entitled to the protection afforded by legislative

immunity. . . . [Providence]’s allegations show that [Mayor]

Deter was not engaged in the process of adopting

prospective, legislative-type rules, but instead was

engaged in activities wherein his alleged actions served to

single out [Providence] for termination of the contractual

agreements[.]

Finally, in addressing Providence’s substantive due process claims alleging

deprivation of property in violation of 42 U.S.C. § 1983 and the North Carolina

Constitution, the trial court allowed those claims to move forward against the Town

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and against Mayor Deter in his individual capacity. The Town, Mayor Deter, and

Providence noted appeals from the trial court’s order to the Court of Appeals.

¶ 10 On 31 December 2020, the Court of Appeals filed an opinion in which it held,

among other things, that the trial court had erred by denying the Town’s motion to

dismiss Providence’s fraud-related claims against the Town because the Town was

entitled to governmental immunity and that the trial court had erred by denying

Mayor Deter’s motion to dismiss the fraud-related claims that Providence had

asserted against him on the basis of legislative immunity. Providence Volunteer Fire

Dep’t, Inc. v. Town of Weddington, No. COA19-203, 2020 WL 7974274, at **3–4 (N.C.

Ct. App. Dec. 31, 2020). As an initial matter, the Court of Appeals noted that

governmental immunity “covers only the acts of a municipality or a municipal

corporation committed pursuant to its governmental functions,” Providence, 2020 WL

7974274, at **3 (quoting Evans ex rel. Horton v. Hous. Auth., 359 N.C. 50, 53 (2004)),

and concluded that “the act of a town entering into contracts for the provision of

firefighting services is governmental in nature[,]” id. The Court of Appeals based its

determination that entering into contracts for the provision of fire protection services

was governmental, rather than proprietary, in nature upon N.C.G.S. § 69-25.6, which

empowers municipal corporations “to make contracts to carry out the purposes of this

Article [concerning rural fire protection]” and upon N.C.G.S. § 69-25.8, which allows

any county or municipal corporation that is “performing any of the services

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authorized by this Article” to “be subject to the same authority and immunities as . . .

a municipal corporation would enjoy in the operation of a fire department within its

corporate limits.” Id.; see N.C.G.S. §§ 69-25.6, -25.8 (2021). Finally, the Court of

Appeals noted that, while the Town was immune from Providence’s fraud-related

claims, the same was not true with respect to the breach of contract claim that

Providence had asserted against the Town. Providence, 2020 WL 7974274, at **3.

¶ 11 Similarly, the Court of Appeals held that the trial court should have dismissed

the fraud-related claims that Providence had lodged against Mayor Deter in light of

the fact that those claims rested upon actions that Mayor Deter had taken in a

legislative capacity following his election as Mayor. Providence, 2020 WL 7974274,

at **4. After pointing out that it had previously held that elected officials enjoy

legislative immunity if (1) “they were acting in a legislative capacity at the time of

the alleged incident; and (2) their acts were not illegal acts,” Providence, 2020 WL

7974274, at **3 (quoting Vereen v. Holden, 121 N.C. App. 779, 782 (1996)), and that

this “immunity may extend to ‘voting, . . . and . . . every other act resulting from the

nature, and in the execution, of the office,’ ” (alterations in original) (quoting

Stephenson v. Town of Garner, 136 N.C. App. 444, 450 (2000)), the Court of Appeals

cited Bogan v. Scott-Harris, 523 U.S. 44 (1998), in which the United States Supreme

Court held that elected city council members were entitled to legislative immunity

when they voted for an ordinance which terminated the plaintiff’s employment, with

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this action being “undoubtedly legislative” given that it constituted “a discretionary,

policymaking decision implicating the budgetary priorities of the city and the services

the city provides to its constituents[,]” Providence, 2020 WL 7974274, at **4 (quoting

Bogan, 523 U.S. at 55–56). In deciding that Mayor Deter’s allegedly tortious acts had

occurred while he was acting in a legislative capacity, the Court of Appeals held that,

even though “some of the alleged actions happened before the Mayor’s election,”

Providence’s fraud-related claims also rested upon “the legislative actions that

occurred after his election,” a series of events that included the town council’s vote to

terminate the Town’s fire services contract with Providence. Id. (emphasis omitted).

This Court allowed Providence’s request for discretionary review of the Court of

Appeals’ decision.

II. Analysis

A. Standard of Review

¶ 12 Interlocutory orders such as those at issue in this case are not immediately

appealable unless they affect a substantial right. N.C.G.S. § 7A-27(b)(3)(a) (2021).

An interlocutory appeal from an order addressing a governmental entity’s immunity

claim is immediately appealable “because [immunity] represents a substantial right.”

Craig v. New Hanover Cnty. Bd. of Educ., 363 N.C. 334, 338 (2009). This Court

reviews a trial court’s decision to grant or deny a motion to dismiss based upon the

doctrine of governmental or legislative immunity using a de novo standard of review.

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See White v. Trew, 366 N.C. 360, 362–63 (2013) (reviewing an appeal from a trial

court order denying “a motion to dismiss that raises sovereign immunity as grounds

for dismissal” utilizing a de novo standard of review).

B. Governmental Immunity for the Town of Weddington

¶ 13 In attempting to persuade us to reverse the Court of Appeals’ decision in this

case, Providence begins by arguing that the Town is not shielded from the fraud-

related claims that Providence has asserted against it on the basis of governmental

immunity on the grounds that the challenged actions in which the Town allegedly

engaged were proprietary, rather than governmental, in nature. According to

Providence, the Town would be “hard pressed to provide to this Court an action which

is more ‘proprietary’ then [sic] the bargain and exchange of real property,” with the

Town’s actions being clearly proprietary given that it received a “significant economic

benefit” by “acquir[ing] an asset worth over $1,595,000.00 for an investment of only

$935,000.00.” In Providence’s view, the trial court correctly found that the complaint

adequately alleged that the Town’s actions in executing an agreement providing for

the sale and lease-back of the fire station was proprietary in nature, with the Town’s

“insertion of a key provision . . . making a breach of the [Fire Services Agreement]

also a breach of the lease [being] designed to open the door for Defendant Town to,

shortly after execution of the deed and lease-back, manufacture an unsubstantiated

and subjective breach.”

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¶ 14 Providence argues that a governmental action is proprietary in the event that

the governmental entity operates as a private corporation or, in other words, when

“the activity is commercial or chiefly for the private advantage of the compact

community,” citing Britt v. City of Wilmington, 236 N.C. 446, 450 (1952). According

to Providence, the acquisition of the fire station was “chiefly for the benefit of the

compact community of the Town of Weddington” rather than for the benefit of “the

State as a whole” and that, “regardless of whether the ultimate result [wa]s some

public purpose, i.e., fire safety, if the activities . . . are done through the Town’s

commercial function, the said actions are proprietary.”

¶ 15 In addition, Providence asserts that, in evaluating whether a municipality’s

actions are proprietary, rather than governmental, in nature, a reviewing court must

examine each aspect of the municipality’s interactions with a private entity

individually in the course of determining which aspects of the transaction are

proprietary and which are governmental. See City of Gastonia v. Balfour Beatty

Constr. Corp., 222 F. Supp. 2d 771, 774 (W.D.N.C. 2002). In support of this assertion,

Providence directs our attention to Town of Sandy Creek v. E. Coast Contracting, Inc.,

226 N.C. App. 576, 581–82 (2013), in which the Court of Appeals distinguished

between the initial steps involved in constructing a sewer system, which included

making governmental decisions such as “whether to construct a sewer system or

where to locate the sewer system,” and the latter stages of that process, which

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included entering into and administering a construction contract, before holding that

“a local governmental unit acts in a proprietary function when it contracts with

engineering and construction companies, regardless of whether the project under

construction will be a governmental function once it is completed.” In Providence’s

view, the trial court in this case correctly applied the factors enunciated in Estate of

Williams ex rel. Overton v. Pasquotank Cnty. Parks & Recreation Dep’t, 366 N.C. 195,

196 (2012), in the course of determining that “the purchase and lease back of any real

property can be performed both privately and publicly” and that nothing in the

relevant statutory provisions suggests that the General Assembly intended to

designate the purchase and lease-back of the property upon which a fire station is

situated as a governmental function. Finally, Providence contends that, in the event

that we believe that we must look to “additional factors” in order to determine

whether the Town’s actions were proprietary, rather than governmental, in nature,

it should consider that the function of “entering into purchase and lease back

documents is not one traditionally provided by the government,” that “the Town’s

actions were done to obtain a significant and valuable property,” and that “the Town

failed to provide any evidence to rebut [Providence]’s allegations.”

¶ 16 In seeking to persuade us to affirm the Court of Appeals’ decision, the Town

begins by arguing that the purchase and lease-back of the fire station cannot be

“viewed in a vacuum as a standalone property purchase” and that the contractual

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provisions relating to the fire station constituted “an integral part of a larger

agreement for the provision of fire protection services” that was “necessary for [the

Town] to provide fire protection to its citizens” and that the ultimate purpose of the

overall transaction was governmental, rather than proprietary, in nature. The Town

argues that, if its actions are viewed as the provision of fire protection services, a

proper application of the test enunciated in Estate of Williams establishes that it was

acting in a governmental, rather than a propriety, manner in the course of its

dealings with Providence given that the General Assembly has designated the

provision of fire protection services as a governmental action and given that the Town

does not charge a separate fee for providing such services.

¶ 17 In the Town’s view, the sale and lease-back of the property upon which the fire

station is located cannot be separated out from the rest of the agreements between

the Town and Providence, with it being necessary to examine the relationship

between the parties as a single governmental action, citing Meinck v. City of

Gastonia, 371 N.C. 497, 517 (2018), in which this Court held that the municipality’s

action in “leasing . . . property to the Art Guild so as to promote the arts for the

purpose of redeveloping and revitalizing the downtown area was a governmental[,]”

rather than a proprietary, function. According to the Town, the Court in Meinck

“examined the larger picture and the lease as part of a governmental function” rather

than “narrowly describ[ing the town’s] actions as a commercial property lease.” As a

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result, the Town posits that the Fire Suppression Agreement, the Interlocal

Agreement, and the Sale and Lease-back Agreement constituted integrated

agreements that were necessary in order for the Town to carry out the governmental

function of providing fire protection services and that, “[w]hen the relationship

between the parties is viewed in its entirety as in Meinck,” the purchase of the fire

station cannot be fairly seen as a standalone proprietary real estate transaction and

should be understood as part of an overall arrangement for providing fire suppression

services.

¶ 18 This Court has recently held that the doctrine of governmental immunity

renders local governments such as counties and municipal

corporations “immune from suit for the negligence of [their]

employees in the exercise of governmental functions absent

waiver of immunity.” Meyer v. Walls, 347 N.C. 97, 104 . . .

(1997) (quoting State ex rel. Hayes v. Billings, 240 N.C. 78,

80 . . . (1954)). Although “[t]he State’s sovereign immunity

applies to both its governmental and proprietary

functions,” the “more limited governmental immunity

covers only the acts of a municipality or a municipal

corporation committed pursuant to its governmental

functions.” Evans v. Hous. Auth. of City of Raleigh, 359

N.C. 50, 53 . . . (2004) (quoting Guthrie v. N.C. State Ports

Auth., 307 N.C. 522, 533 . . . (1983)). In other words, while

governmental immunity protects units of local government

from suit for “acts committed in [their] governmental

capacity,” if the entity in question “undertakes functions

beyond its governmental and police powers and engages in

business in order to render a public service for the benefit

of the community for a profit, it becomes subject to liability

for contract and in tort as in case of private corporations.”

Id. (quoting Town of Grimesland v. City of Washington, 234

N.C. 117, 123 . . . (1951)).

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State v. Kinston Charter Acad., 379 N.C. 560, 2021-NCSC-163, ¶ 22 (first, fourth, and

seventh alterations in original). In Estate of Williams, this Court took the

“opportunity to restate our jurisprudence of governmental immunity[,]” 366 N.C. at

196, and began that process by reciting the rule set out in Britt v. City of Wilmington,

236 N.C. 446, 450 (1952), to the effect that governmental immunity “covers only the

acts of a municipality or a municipal corporation committed pursuant to its

governmental functions[,]” Est. of Williams, 366 N.C. at 199 (emphasis omitted)

(quoting Evans, 359 N.C. at 53), and does not “apply when the municipality engages

in a proprietary function[,]” id. at 199. In addition, we noted that this Court has “long

held that a ‘governmental’ function is an activity that is ‘discretionary, political,

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

rather than for itself,’ ” while a proprietary function “is one that is ‘commercial or

chiefly for the private advantage of the compact community.’ ” Id. (quoting Britt, 236

N.C. at 450). In other words, we stated that,

[w]hen a municipality is acting “in behalf of the State” in

promoting or protecting the health, safety, security, or

general welfare of its citizens, it is an agency of the

sovereign. When it engages in a public enterprise

essentially for the benefit of the compact community, it is

acting within its proprietary powers.

Id. at 200 (quoting Britt, 236 N.C. at 450–51).

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¶ 19 Our opinion in Estate of Williams adopted a three-step method of analysis for

use in determining whether a municipality’s action was governmental or proprietary

in nature. The first step, or “threshold inquiry[,] in determining whether a function

is proprietary or governmental is whether, and to what degree, the legislature has

addressed the issue.” Id. If an action “has been designated as governmental or

proprietary in nature by the legislature,” that is the end of the inquiry; if not, the

second step is to determine whether the activity “is one in which only a governmental

agency could engage” or provide, in which case “it is perforce governmental in nature.”

Id. at 202 (emphasis omitted). As we noted, the second step in the required analysis

has limitations in our changing world. Since we first

declared in Britt, over half a century ago, that an activity

is governmental in nature if it can only be provided by a

governmental agency, many services once thought to be the

sole purview of the public sector have been privatized in

full or in part. Consequently, it is increasingly difficult to

identify services that can only be rendered by a

governmental entity.

Given this reality, when the particular service can

be performed both privately and publicly, the inquiry

involves consideration of a number of additional factors, of

which no single factor is dispositive. Relevant to this

inquiry is whether the service is 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. We conclude that consideration of these

factors provides the guidance needed to identify the

distinction between a governmental and proprietary

activity. Nevertheless, we note that the distinctions

between proprietary and governmental functions are fluid

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and courts must be advertent to changes in practice. We

therefore caution against overreliance on these four

factors.

Id. at 202–03 (footnotes omitted).

¶ 20 We applied the test enunciated in Estate of Williams in Meinck, in which the

plaintiff sued the City of Gastonia for injuries that she sustained after falling on the

steps of a City-owned building that had been purchased in an attempt to revitalize

the downtown area and that was being leased to nonprofit art groups and the Gaston

County Art Guild for the purpose of “bring[ing] artists into the downtown” area on

the theory that “that the downtown area would thus become more attractive for

businesses and people.” 371 N.C. at 498. The Art Guild, in turn, subleased portions

of the building to individual artists, with the City being “responsible for maintaining

the exterior of the premises” and having “the right to inspect the property at any

time.” Id. at 499. Although the City retained 90% of rental payments made by the

artists, it did not make a profit on the building or seek “to make a profit from the

lease with the Art Guild.” Id.

¶ 21 In applying the test enunciated in Estate of Williams to the facts at issue in

Meinck, we began by undertaking the “threshold inquiry” of determining whether the

General Assembly had deemed actions such as those in which the City had engaged

to be governmental or proprietary in nature and noted that the legislature had

authorized municipalities to engage in redevelopment projects in blighted areas in

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accordance with the “Urban Redevelopment Law,” Article 22 of Chapter 160A of the

General Statutes. Id. at 504–05. The Urban Redevelopment Law authorized and

encouraged “the acquisition, preparation, sale, sound replanning, and

redevelopment” of “blighted areas” by local governments and encouraged

municipalities “to purchase, obtain options upon, acquire by gift, grant, devise,

eminent domain or otherwise, any real or personal property or any interest therein,

together with any improvements thereon, necessary or incidental to a redevelopment

project.” Id. at 507–08 (quoting N.C.G.S. § 160A-502 (2017)). This Court noted that,

even when the legislature has not directly resolved

whether a specific activity is governmental or proprietary

in nature, a legislative provision addressing the activity

may still be relevant—in conjunction with the other

Williams factors—to a determination of whether an

activity is governmental, particularly if the statutory

language suggests a significant statutory indication that

the activity is a governmental function.

Id. at 512 (cleaned up).

¶ 22 On the other hand, we also concluded that the General Assembly “ha[d] not

deemed all urban redevelopment and downtown revitalization projects governmental

functions that are immune from suit” or “directly resolved” the issue of whether the

City’s lease of the building was governmental, rather than proprietary, in nature. Id.

at 513. For that reason, we went on to address the additional factors mentioned in

Estate of Williams. Id. First, the Court addressed whether the governmental action

at issue in Meinck was one “in which only a governmental agency could engage” and

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held that North Carolina law did “not preclude private entities from engaging in

redevelopment projects and downtown revitalization activities,” so that a private

entity “could conceivably engage in the same activity.” Id. at 514 (emphasis omitted).

In examining “whether the service is traditionally [one] provided by a governmental

entity,” we found no evidence that the service was not traditionally performed by the

government. Id. at 514–15. In addition, in examining “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,” we determined that the City sustained

net losses of $11,489.03 and $18,072.56, respectively, during the first two years in

which it owned and operated the building and concluded that the building was not

providing the City with a profit. Id. (quoting Est. of Williams, 366 N.C. at 202–03).

Finally, we noted the “decidedly noncommercial nature of defendant’s undertaking”

and the fact that “[a]rt occupies a unique role in our society and our state.” Id. at

516.

¶ 23 At the conclusion of our analysis, we held that the City’s action in “leasing the

property to the Art Guild so as to promote the arts for the purpose of redeveloping

and revitalizing the downtown area” was governmental, rather than proprietary, in

nature based upon an analysis of all of the relevant factors, particularly given “the

statutory indications that urban redevelopment activities undertaken to promote the

health, safety, and welfare of North Carolina citizens are governmental functions,

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and the legislative determination that urban blight ‘cannot be effectively dealt with

by private enterprise’ alone.” Id. at 517. As part of this process, we emphasized that

“the proper designation of a particular action of a county or municipality” as

governmental or proprietary “is a fact intensive inquiry . . . and may differ from case

to case.” Id. at 517–18 (alteration in original).

¶ 24 In applying the test enunciated in Estate of Williams to the facts before us in

this case, the “threshold inquiry” that we must undertake is whether the General

Assembly has defined the relevant municipal action as governmental or proprietary

in nature. According to the parties, four statutory provisions appear to have some

bearing upon this aspect of the required analysis. First, the parties discuss N.C.G.S.

§ 69-25.5, which governs “[m]ethods of providing fire protection” services in Rural

Fire Protection Districts and provides that “the board of county commissioners shall

. . . provide fire protection for the district—(1) [b]y contracting with any incorporated

city or town, with any incorporated nonprofit volunteer or community fire

department, or with the Department of Agriculture and Consumer Services to furnish

fire protection.” Secondly, the parties refer to N.C.G.S. § 69-25.6, which appears in

the same article as N.C.G.S. § 69-25.5 and provides that “[m]unicipal corporations

are hereby empowered to make contracts to carry out the purposes of this Article.”

Thirdly, the parties address N.C.G.S. § 69-25.8, which governs the “[a]uthority,

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rights, privileges and immunities of counties” or other local government entities

which perform services within Rural Fire Protection Districts and provides that

[a]ny county, municipal corporation or fire protection

district performing any of the services authorized by this

Article shall be subject to the same authority and

immunities as a county would enjoy in the operation of a

county fire department within the county, or a municipal

corporation would enjoy in the operation of a fire

department within its corporate limits[.]

N.C.G.S. § 69-25.8. Finally, the parties mention N.C.G.S. § 160A-291, which provides

that a municipality “is authorized to appoint a fire chief; to employ other

[firefighters]; to establish, organize, equip, and maintain a fire department; and to

prescribe the duties of the fire department.”

¶ 25 The trial court and the Court of Appeals reached opposite conclusions about

the degree to which the relevant statutory provisions address whether the function

of entering into contracts, including one involving the sale, lease-back, and purchase

of real estate, for the ultimate purpose of providing fire protection services is a

governmental or proprietary activity. On the one hand, the trial court was “not

persuaded that this specific transaction . . . has been designated as governmental by

the General Assembly or that the undertaking is one in which only a governmental

agency could engage.” In reaching this conclusion, the trial court determined that

the Town’s conduct in entering into the relevant contracts as alleged in the complaint

was proprietary on the theory that, while, “[a]t first glance this activity might appear

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to be all about fire suppression and emergency services . . . by virtue of Chapter 69 of

our General Statutes or even N.C.G.S. § 160A-291,” Providence had alleged “not that

Defendant Town was entering the lease for a legitimate governmental purpose, but

rather [that] the Town was attempting to obtain significant and valuable property in

a proprietary manner, by way of a sale and lease back, of [Providence]’s property in a

fraudulent manner.” The Court of Appeals, on the other hand, determined that, in

light of its reading of N.C.G.S. § 69-25.6 and N.C.G.S. § 69-25.8, the General

Assembly had intended that “entering into contracts for the provision of firefighting

services” would be a governmental, rather than a proprietary, action.

¶ 26 Assuming, without deciding, that the initial step of the analysis required by

Estate of Williams is not determinative of the inquiry that we must undertake in this

case, we proceed to the next step, at which we are required to determine whether the

activity “is one in which only a governmental agency could engage.” 366 N.C. at 202

(emphasis omitted). Although private fire departments such as Providence are

authorized to provide fire protection services to rural fire districts, it is also clear that

such arrangements are often organized and funded by a town or other local

government entity. As a result, at an absolute minimum, it is clear that, while

private entities are authorized to provide fire service within municipal boundaries,

they are frequently acting on behalf of local governmental entities when they do so.

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¶ 27 In examining the “additional factors” mentioned in Estate of Williams,

including “whether the service is traditionally . . . 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,” 366 N.C. at

202 (footnotes omitted), we hold that each of these factors clearly tends to suggest

that the activities in which the Town was engaged in the course of its dealings with

Providence were governmental, rather than proprietary, in nature. Fire protection

services are traditionally provided by the government, either directly or through

contractual arrangements with private entities as authorized by N.C.G.S. § 160A-291

and Chapter 69 of the General Statutes. In addition, the Town does not currently

charge a fee to its residents for fire protection services and does not make a profit in

connection with the provision of such services.

¶ 28 As a result, as was the case in Meinck, we hold that, even if the General

Assembly has not “directly resolved” the issue of whether entering into contractual

arrangements for the provision of fire protection services is governmental or

proprietary in nature, 371 N.C. at 512 (quoting Est. of Williams, 366 N.C. at 202),

N.C.G.S. § 160A-291 and Chapter 69 of the General Statutes represent “a significant

‘statutory indication’ ” that the activity is governmental, id. (quoting Est. of Williams,

366 N.C. at 200). In addition, as was the case with the downtown revitalization

process at issue in Meinck, the provision of fire protection services is “decidedly

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noncommercial” in nature given that, rather than being an activity that tends to

generate a significant profit, such services have traditionally been provided by

governmental entities for the purpose of protecting the safety and well-being of local

residents. Id. at 516 (quoting Est. of Williams, 366 N.C. at 203). Finally, as was the

case in Meinck, we decline to differentiate between the purchasing and leasing of real

estate for the purpose of providing fire protection services from the other activities

involved in the provision of such services, given that both actions were part of the

same transaction and had the effect of accomplishing the same governmental

purpose.

¶ 29 In reaching the last of these conclusions, we decline Providence’s invitation to

divide the activity in which the Town was engaged into multiple, separate pieces and

to treat the sale and lease back provisions of the contracts between the parties as a

standalone real estate transaction that must be considered separate and apart from

the remainder of the agreement between the parties. As the trial court recognized,

even though the Fire Suppression Agreement, the Interlocal Agreement, and the Sale

and Lease-back Agreement were “delineated as separate contracts and executed at

different times,” they were, “in actuality, so integrated, one with the other, as to

arguably constitute a single, integrated agreement.” In essence, the contracts

between the parties reflect the undisputed fact that the fire station that Providence

intended to utilize to provide fire protection services to the residents of the Town

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needed renovation, that the Town had agreed to pay for those renovations and

assume a portion of Providence’s debt, and that the Town had entered into the sale

and lease back arrangement with Providence for the purpose of securing its

investment. As a result, given that Providence would need a fire station in order to

provide service to the Town and given that the transaction reflected in the Sale and

Lease-Back Agreement set out the manner in which the needed fire station would be

provided, we are unable to divorce the provisions of the Sale and Lease-Back

Agreement from the remainder of the overall transaction between the parties, which

was clearly intended to ensure that the residents of the Town received fire protection

services.

¶ 30 A municipality cannot provide fire suppression services without some degree

of preparation, such as ensuring that the facilities and equipment needed to permit

effective fire suppression functions to be performed by Town directly or an entity with

which the Town had contracted are available. Put another way, more is necessarily

involved in the provision of fire protection services than the immediate act of fire

suppression. Under the logic of Providence’s position, a municipality’s decision to

purchase fire protection equipment, such as fire trucks, hoses, and turnout gear, on

the commercial market would be rendered proprietary even though the resulting

costs were necessarily incurred for the purpose of making a service that units of local

government have traditionally provided, that benefits all residents, and that does not

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provide an economic return to the municipality, available. Obtaining a fire station

for use in providing fire suppression services is not, in our opinion, any different than

the procurement of vehicles, hoses, and turnout gear. As a result, for all of these

reasons, we hold that the Town’s conduct in entering into the Fire Suppression

Agreement, the Interlocal Agreement, and the Sale and Lease-back Agreement for

the provision of fire protection services was a governmental action that rendered it

immune from Providence’s fraud-based claims.

C. Legislative Immunity for the Mayor

¶ 31 In arguing that Mayor Deter was not entitled to the protection of legislative

immunity from its fraud-related claims, Providence asserts that the trial court

correctly determined that Mayor Deter “was not engaged in the process of adopting

prospective, legislative-type rules, but instead was engaged in activities wherein his

alleged actions served to single out [Providence] for termination of the contractual

agreements.” In Providence’s view, the Court of Appeals erred in relying upon Vereen

v. Holden, 121 N.C. App. 779 (1996), in holding that legislative immunity applies to

circumstances such as those at issue here, with the burden resting upon Mayor Deter

to prove that he is entitled to legislative immunity in light of the relevant facts. In

addition, Providence argues that the Court of Appeals failed to analyze the specific

facts alleged in its complaint and that its holding that, “because [Mayor] Deter

operated in his legislative capacity when he added items to an agenda and abstained

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from voting on the action he was acting in his legislative capacity,” ignores

Providence’s allegation that Mayor Deter’s “fraudulent actions occurred outside of the

legislative setting.” Providence maintains that its allegations that Mayor Deter

concealed “his intent to fraudulently induce [Providence] into transferring the real

property, in exchange for a 10-Year Fire Service Agreement and to only later cancel

said Agreements and transfer the [Fire Suppression Agreement] and property to

[Wesley Chapel Volunteer Fire Department]” were consistently stated throughout the

complaint, and described actions that are not legislative in nature.

¶ 32 In arguing that the Court of Appeals correctly held that he was shielded from

Providence’s fraud-related claims on the basis of legislative immunity, Mayor Deter

begins by arguing that an “overwhelming body of law” as well as “public policy

considerations” would support a decision on the part of this Court to recognize the

existence of the doctrine of legislative immunity. Mayor Deter also argues that there

would be “no fraud claim [in this case] without the legislative actions that occurred

after [Mayor Deter’s] election,” citing the Court of Appeals decision, Providence, 2020

WL 7974274, at **4, given that the “controlling event” around which Providence’s

fraud claims center is the 28 April 2015 town council vote to terminate the contracts,

with this event being clearly legislative in nature. In support of this assertion, Mayor

Deter cites Stephenson, in which the Court of Appeals held that, “[s]o long as the acts

are legislative in nature, [legislative] immunity may extend to voting, and every other

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act resulting from the nature, and in the execution, of the office,” 136 N.C. App. at

450 (cleaned up), and posits that his actions in “call[ing] the special meeting and

set[ting] the agenda” for the 28 April 2015 town council meeting fall squarely within

the grant of legislative authority vested in his office.

¶ 33 Although this Court has not directly addressed the doctrine of legislative

immunity to date, both the United States Court of Appeals for the Fourth Circuit and

the North Carolina Court of Appeals have recognized its existence. Similarly, the

United States Supreme Court has determined that “state and regional legislators”

and “local legislators” are entitled to federal legislative immunity, since “the

rationales for such immunity are fully applicable to local legislators[,]” Bogan v. Scott-

Harris, 523 U.S. 44, 49 (1998), and “the exercise of legislative discretion should not

be inhibited by judicial interference or distorted by the fear of personal liability[,]” id.

at 52. Finally, Providence has not contended that we should refrain from recognizing

the doctrine of legislative immunity. As a result, we hold that legislative immunity

is a recognized bar to claims against North Carolina public officials.

¶ 34 According to the Court of Appeals, local officials are immune from suit if

“(1) . . . they were acting in a legislative capacity at the time of the alleged incident;

and (2) their acts were not illegal acts.” Vereen, 121 N.C. App. at 782 (citing Scott v.

Greenville County, 716 F.2d 1409, 1422 (4th Cir. 1983)). An elected official may,

however, be held liable in his or her individual capacity if his or her actions were

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malicious, corrupt or outside the scope of his or her official duties, even if they were

legislative in nature. See Epps v. Duke Univ., Inc., 122 N.C. App. 198, 204–05 (1996).

“Whether an action is legislative or administrative has been determined on a case by

case basis,” with the Fourth Circuit having treated “eliminating a position for

budgetary reasons” as legislative, while treating decisions involving “hiring, firing

and other employment decisions [as] administrative and not deserving of legislative

immunity.” Vereen, 121 N.C. App. at 783. In addition, the Fourth Circuit has held

that governmental officials cannot claim legislative immunity for “acts such as

bribery which are obviously not in aid of legislative activity.” Scott, 716 F.2d at 1422

(cleaned up). Finally, in Bogan, the United States Supreme Court held that a city

council-member’s decision to vote for the adoption of a particular ordinance was

“quintessentially legislative” and that a mayor’s “introduction of a budget and signing

into law an ordinance also were formally legislative,” despite the fact that the mayor

“was an executive official,” given that “officials outside the legislative branch are

entitled to legislative immunity when they perform legislative functions.” 523 U.S.

at 55.

¶ 35 After carefully reviewing the record, we hold that Mayor Deter’s actions in

calling the 28 April 2015 town council meeting and setting the agenda for that

meeting constituted legislative actions. Like the activities held to be protected in

Bogan, Mayor Deter’s acts were “formally legislative” in that they were within his

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discretion as an elected official, they were undertaken as a part of the execution of

his mayoral duties, and they were related to the making of legislative decisions. See

Bogan, 523 U.S. at 55. Although certain of the allegations that Providence has made

in support of its fraud-related claims describe events that occurred before Mayor

Deter’s election, his alleged conduct would not have resulted in any injury to

Providence in the absence of the legislative acts of calling a town council meeting to

vote to terminate the contracts, placing the issue of contract termination on the

agenda, and calling for a vote on that issue. As a result, we hold that the trial court

erred when it denied Mayor Deter’s motion to dismiss the fraud-related claims that

had been lodged against him on the basis of legislative immunity.

III. Conclusion

¶ 36 Thus, for the reasons set forth above, we hold that the Court of Appeals did not

err in deciding that the Town was shielded from Providence’s fraud-related claims on

the basis of governmental immunity given that the Town’s actions in entering into

the Fire Suppression Agreement, the Interlocal Agreement, and the Sale and Lease-

back Agreement involved the governmental activity of providing fire protection

services and cannot be separated into multiple segments for the purpose of

determining whether the Town was performing a governmental or proprietary

function. In addition, we hold that the Court of Appeals did not err in holding that

Mayor Deter was shielded from Providence’s fraud-related claims on the basis of

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legislative immunity given that his actions during the period leading up to and during

the 28 April 2015 town council meeting were undertaken as part of his discretionary

legislative duties as mayor. On the other hand, as we have already noted,

Providence’s claims for breach of contract and claims alleging deprivation of property

in violation of due process remain pending before the trial court. As a result, the

Court of Appeals’ decision is affirmed, with this case being remanded to the Court of

Appeals for further remand to Superior Court, Union County, for further proceedings

not inconsistent with this opinion.

AFFIRMED.

Justice EARLS concurring in part and dissenting in part.

¶ 37 Firefighting is a hallmark governmental function. In North Carolina,

“[m]unicipal corporations are specifically authorized to organize and maintain fire

departments,” and “[t]he organization and operation of a fire department is a

governmental, not a private or proprietary function.” Great Am. Ins. Co. v. Johnson,

257 N.C. 367, 370 (1962). A municipality, or the entity it contracts with, is thus

“entitled to governmental immunity for conduct performed in the course of fighting a

fire.” Pruett v. Bingham, 238 N.C. App. 78, 85 (2014), aff’d, 368 N.C. 709 (2016)

(emphasis added). But not everything a municipality does that is related to

firefighting is “conduct performed in the course of fighting a fire.” Indeed, the basic

premise of the governmental immunity doctrine, which hinges on the distinction

between governmental and proprietary functions, is that certain actions undertaken

by a governmental entity that are at least tangentially connected to a public purpose

are, nevertheless, not governmental functions. A town purchasing a copier for use at

the fire station is not the same legally as firefighters rushing to the scene of a blaze.

¶ 38 In this case, the Town of Weddington (the Town) asserts that its acquisition of

a fire station from Providence Volunteer Fire Department (Providence) is a

governmental function because firefighting is a governmental function. The majority

takes this self-interested assertion at face value. Yet purchasing a fire station is not

necessarily “conduct performed in the course of fighting a fire.” Nor is it, as the

majority proposes, necessarily the same as “entering into contractual arrangements

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for the provision of firefighting services,” ante, at ¶ 28. The fact that the Town’s

conduct is firefighting-adjacent is not enough to demonstrate its entitlement to

governmental immunity when Providence has “allege[d] facts that, if taken as true,

are sufficient to establish a waiver . . . [of] immunity.” Wray v. City of Greensboro, 370

N.C. 41, 48 (2017) (second and third alterations in original) (emphasis omitted).

Accordingly, while I agree with the majority that the mayor of the Town is entitled to

legislative immunity, I dissent from the portion of the majority opinion affirming the

Court of Appeals’ reversal of the trial court’s order denying the Town’s motion to

dismiss Providence’s fraud-based claims on governmental immunity grounds.

I. General sovereign and governmental immunity principles

¶ 39 A municipality’s governmental immunity from tort liability is a “judge-made

doctrine” deriving from the State of North Carolina’s sovereign immunity. Steelman

v. City of New Bern, 279 N.C. 589, 594 (1971). Sovereign immunity “originated with

the feudal concept that the king could do no wrong” under English common law.

Corum v. Univ. of N.C. Through Bd. of Governors, 330 N.C. 761, 785 (1992). But

neither sovereign immunity nor governmental immunity were “a part of the common

law of England” that North Carolina “adopted . . . in 1776.” Id. Rather, the doctrine

of governmental immunity appears to have first been recognized by this Court in a

nineteenth century decision, Moffit v. City of Asheville, 103 N.C. 237 (1889). See Trey

Allen, Local Government Immunity to Lawsuits in North Carolina 3 n.8 (2018).

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Presaging modern-day applications of the doctrine, Moffit involved a municipality’s

assertion that it was immune from suit in an action brought by a plaintiff who alleged

he was kept in sub-standard conditions in a jail operated by the city. Moffit, 103 N.C.

at 237. Since Moffit, the doctrine has been recognized and repeatedly reaffirmed “on

grounds of sound public policy.” Smith v. Hefner, 235 N.C. 1, 6 (1952).

¶ 40 What those “grounds of sound public policy” actually entail has frequently been

left unsaid. We have posited that the doctrine “seems to rest on a respect for the

positions of two coequal branches of government—the legislature and the judiciary.

Thus, courts have deferred to the legislature the determination of those instances in

which the sovereign waives its traditional immunity.” Corum, 330 N.C. at 785.

However, on the whole, we have not much improved on the United States Supreme

Court’s tautological pronouncement that “[i]t is an axiom in politics, that a sovereign

and independent State is not liable to the suit of any individual, nor amenable to any

judicial power, without its own consent.” Cohens v. Virginia, 19 U.S. 264, 303 (1821).

We have never explained why it should be an “axiom” that a doctrine so deeply rooted

in a pre-Independence understanding of sovereignty and the royal prerogative should

be a fixture in the jurisprudence of courts operating in a representative democracy.

Cf. Donahue v. United States, 660 F.3d 523, 526 (1st Cir. 2011) (Mem.) (Torruella, J.,

concerning the denial of en banc review) (“[T]he establishment in this country of a

republican form of government, in which sovereignty does not repose on any single

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individual or institution, made it clear that neither the government nor any part

thereof could be considered as being in the same infallible position as the English

king had been, and thus immune from responsibility for harm that it caused its

citizens.”).

¶ 41 Nevertheless, the doctrines of sovereign and governmental immunity have

been recognized and implicitly ratified by the legislature. See N.C.G.S. § 160A-485(a)

(2021) (“Any city is authorized to waive its immunity from civil liability in tort by the

act of purchasing liability insurance.”); see also N.C.G.S. § 115C-42 (2021) (“Any local

board of education . . . is hereby authorized and empowered to waive its governmental

immunity . . . .”). These doctrines are now “firmly established in our law today, and

by legislation ha[ve] been recognized by the General Assembly as the public policy of

the State.” Steelman, 279 N.C. at 594. I do not dispute the continued viability of the

doctrines of sovereign and governmental immunity or their availability as a general

matter to governmental actors as a defense to certain claims.

¶ 42 Yet the General Assembly has left it largely to the courts to define the

circumstances under which a municipality is understood to have waived its

governmental immunity in the absence of an express waiver. As the majority

correctly explains, this case turns on our application of another judge-made rule: the

distinction between private or proprietary functions (for which a municipality is not

entitled to governmental immunity) and governmental functions (for which immunity

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does apply). Our case law provides some guidance in approaching this question,

though we have candidly admitted that “the distinction may be difficult to distinguish

at times.” Bynum v. Wilson County, 367 N.C. 355, 358 (2014). Yet to the extent our

recognition and application of the doctrine of governmental immunity is rooted in

“sound public policy,” those policy considerations should inform our reasoning when

we are called upon to apply the doctrine.

¶ 43 I have already noted the relative paucity of legal and policy justifications for

the doctrines of sovereign and governmental immunity in our precedents. When

asked at oral argument for a “good public policy reason” to allow municipalities to

invoke governmental immunity to defend against fraud claims involving the purchase

of a building, counsel for the Town responded that withholding governmental

immunity would dissuade qualified individuals from serving in government, “chill”

the government’s ability to make decisions on difficult policy issues, and open up the

floodgates to litigation challenging every governmental decision that any citizen

disagrees with. Addressing the federal doctrine of sovereign immunity, one

prominent scholar noted a variety of plausible policy justifications including

“protecting government treasuries from the costs of damage suits,” Erwin

Chemerinsky, Against Sovereign Immunity, 53 Stan. L. Rev. 1201, 1217 (2001),

“protect[ing] the government from undue interference by the judiciary,” id. at 1218,

the existence of “adequate alternatives” as a remedy for harms in many cases, id. at

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1219, “curb[ing] bureaucratic power,” id. at 1222, and “tradition[,]” id. at 1223. In a

dissent, Justice Lake defended the doctrine of sovereign immunity as “not an un-

American concept” emanating from the fundamental principle “that the courts,

including this Court, are not the sovereign but the mere instruments of the sovereign,

having no inherent powers by Divine Right nor by virtue of superior wisdom or purer

ethics, but having only the jurisdiction conferred upon them by the sovereign.” Smith

v. State, 289 N.C. 303, 341–42 (1976) (Lake, J., dissenting).

¶ 44 Whatever water these explanations may hold, there are also countervailing

legal and policy reasons for limiting the scope of these doctrines, as this Court has

previously acknowledged. For example, in Corum, we rejected an effort to invoke

sovereign immunity to defend against a claim arising directly under our state

constitution. 330 N.C. at 786. We explained that it was “the judiciary’s responsibility

to guard and protect those rights” enumerated by the North Carolina Constitution,

id. at 785, and that

[i]t would indeed be a fanciful gesture to say on the one

hand that citizens have constitutional individual civil

rights that are protected from encroachment actions by the

State, while on the other hand saying that individuals

whose constitutional rights have been violated by the State

cannot sue because of the doctrine of sovereign immunity.

Id. at 786. Although addressing a constitutional claim rather than the tort claim at

issue here, Corum’s reasoning illustrates how expansive interpretations of immunity

doctrines conflict with “the principle that for every injury there is a remedy.” Jackson

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v. Bumgardner, 318 N.C. 172, 181 (1986). This principle is enshrined in Article 1, § 18

of the North Carolina Constitution, which proclaims that “[a]ll courts shall be open;

every person for an injury done him in his lands, good, person, or reputation shall

have remedy by due course of law; and right and justice shall be administered without

favor, denial, or delay.” Immunity has the effect of shutting the courthouse door to

injured parties.

¶ 45 Similarly, in Smith, we noted the following arguments against sovereign

immunity, a doctrine we acknowledged “often results in injustice”:

[S]ince the public purpose involves injury-producing

activity, injuries should be viewed as an activity cost which

must be met in the furtherance of public enterprise; that

[there] is no control of government activity involved in the

typical law suit; it is better to distribute the cost of

government caused injuries among the beneficiaries of

government than entirely on the hapless victims; although

the government does not profit from its activities, the

taxpayers do, so the taxpayers should bear the cost of

governmental tort liability.

289 N.C. at 313 (quoting Kenneth Culp Davis, Sovereign Immunity: The Liability of

Government and its Officials 17 (1975)). Because of sovereign immunity and its

derivatives, North Carolinians’ “rights can be violated, but individuals are left with

no remedies.” Chemerinsky, Against Sovereign Immunity at 1213. The judiciary must

grapple with the “inherent tension” between ensuring that rights can be vindicated

and legal injuries remedied “while also respecting the doctrine of sovereign [and

governmental] immunity.” Craig ex rel. Craig v. New Hanover Cnty. Bd. of Educ., 363

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N.C. 334, 339 (2009).

¶ 46 The upshot of this recap of the origins of sovereign and governmental immunity

is that reflexively expanding the scope of these doctrines whenever they are invoked

comes at a cost. When courts are called upon to examine an assertion of immunity in

a new context, we should be mindful that recognizing an immunity defense may

diminish the judiciary’s capacity to protect North Carolinians’ rights and ensure that

legal injuries can be remedied. Unfortunately, for the reasons explained below, the

majority’s imprecise application of the test used to distinguish between governmental

and proprietary functions ignores these considerations and leads it to the erroneous

conclusion that the Town is immune from suit under the circumstances of this case.

II. Distinguishing between governmental and proprietary functions

¶ 47 If the Town had been engaged in a governmental function when it acquired the

property from Providence, then it could successfully assert immunity as a defense to

Providence’s fraud claims; if the Town was engaged in a proprietary function, it could

not. See, e.g., Meinck v. City of Gastonia, 371 N.C. 497, 502–03 (2018). A governmental

function is “[a]ny activity of the municipality which is discretionary, political,

legislative, or public in nature and performed for the public good [o]n behalf of the

State rather than for itself.” Britt v. City of Wilmington, 236 N.C. 446, 450 (1952). By

contrast, an “activity” that “is commercial or chiefly for the private advantage of the

compact community . . . is private or proprietary.” Id.

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¶ 48 To distinguish between governmental and proprietary functions, courts

consider three factors. First, as a threshold matter, we ask “whether our legislature

has designated the particular function at issue as governmental or proprietary.”

Est. of Williams ex rel. Overton v. Pasquotank Cnty. Parks & Recreation Dep’t, 366

N.C. 195, 200 (2012) (emphasis added). If the legislature has designated the

“particular function” as governmental, the inquiry ends; if not, we proceed to the

second factor, whether “the undertaking is one in which only a governmental agency

could engage.” Id. at 202. Third, if a “particular service can be performed both

privately and publicly, the inquiry involves consideration of a number of additional

factors, of which no single factor is dispositive,” including “whether the service is

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 (footnotes omitted).

¶ 49 The majority correctly recounts the three-part test established in Estate of

Williams. But the majority goes astray in applying it. Specifically, the majority’s

analysis rests on a critical elision that confuses the general activity the Town was

engaged in, providing fire services to its residents, with the specific activity that

forms the basis for Providence’s complaint, acquiring property. In addition to being

factually inaccurate, the majority’s substitution of the general for the specific is in

significant tension with the guidance this Court provided in its most recent case

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applying the Estate of Williams test, Meinck v. City of Gastonia.

¶ 50 The majority largely adopts the Town’s characterization of the general activity

it was engaged in—providing fire services to its residents—and makes the Town’s

characterization the linchpin of its analysis. While the majority notes the difference

of opinion between the trial court and the Court of Appeals regarding the level of

generality at which to assess the conduct at issue in this case, the majority ultimately

chooses to describe the Town’s activities as “fire protection services,” ante, at ¶ 25, or

“entering into contractual arrangements for the provision of fire protection services,”

id., at ¶ 28, or “the provision of fire protection services,” id. In support of this

characterization, the majority relies on the trial court’s finding that the Fire

Suppression Agreement, the Interlocal Agreement, and the Sale and Lease-back

Agreement were “in actuality, so integrated, one with the other, as to arguably

constitute a single, integrated agreement.” Id. at ¶ 29. The interlocking nature of

these agreements does, admittedly, make this a closer case. But governmental

functions and proprietary functions are often intertwined, and courts must drill down

to assess the particular “nuanced action” at issue when considering an immunity

defense. Williams, 366 N.C. at 202. Here, the specific “nuanced action” at issue is the

Town’s acquisition of Providence’s property: that is the action contemplated by the

Sale and Lease-back Agreement and the action during which Providence alleges the

Town acted fraudulently.

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¶ 51 As we explained in Meinck, “even when the legislature has designated a

general activity to be ‘a governmental function by statute, the question remains

whether the specific [activity at issue], in this case and under these circumstances, is

a governmental function.’ ” 371 N.C. at 513–14 (alteration in original) (emphasis

added) (quoting Williams, 366 N.C. at 201). Close examination of the specific activity

a municipality is engaged in is necessary to preserve the distinction between

governmental and proprietary functions because, at a certain remove, almost every

activity a municipality undertakes is connected to a governmental function in some

way. Thus, in Meinck, immunity was available not simply because the legislature had

authorized municipalities to engage in “urban redevelopment activities undertaken

to promote the health, safety, and welfare of North Carolina citizens” but also because

“the uncontroverted evidence” established that “that defendant’s lease of the historic

property to the nonprofit Art Guild in order to promote the arts in the downtown area

was a valid urban redevelopment and downtown revitalization activity.” Id. at 517.

The specific activity (leasing property) was indisputably and in actuality closely

connected to a general activity (urban redevelopment) that was a governmental

function.

¶ 52 By contrast, in this case, it is very much disputed that the Town’s specific

activity of acquiring property was closely connected to the general activity of

providing fire services. Providence alleges that the Town did not need to acquire its

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fire station in order to contract with a volunteer fire department to provide fire

protection services to its residents because until the challenged acquisition, the Town

was able to contract for fire protection services without owning its own fire station.

Providence also alleges that the purpose of the Sale and Lease-back Agreement was

to allow the Town to obtain a “significant economic advantage” by acquiring a

property that was valued at $1,595,000.00 for $935,000.00. Of course, as the trial

court noted, “attempting to obtain significant and valuable property . . . by way of a

sale and lease back” is the kind of activity that “can be performed both privately and

publicly.”

¶ 53 The majority responds that “[u]nder the logic of Providence’s position, a

municipality’s decision to purchase fire protection equipment, such as fire trucks,

hoses, and turnout gear, on the commercial market would be rendered proprietary

even though the resulting costs were necessarily incurred for the purpose of making

a service that units of local government have traditionally provided, that benefits all

residents, and that does not provide an economic return to the municipality,

available.” Ante, at ¶ 30. That is a misstatement of Providence’s argument. If, as in

Meinck, the “uncontroverted evidence” established that the Town purchased “fire

trucks, hoses, and turnout gear” that was used by firefighters employed by the Town

or an entity it contracted with for the provision of fire services, then I would agree

that the Town was engaged in a governmental function. Yet if a plaintiff alleged that

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the Town had provided fire protection services to its residents for fifty years without

ever itself purchasing “fire trucks, hoses, and turnout gear” and that the Town was

reselling the goods it had purchased to another municipality at a significant markup,

then the Town could not win dismissal of the plaintiff’s claims simply by asserting

that “fire trucks, hoses, and turnout gear” are generally things related to fire

protection services.

¶ 54 Ultimately, the majority’s choice to describe the Town’s actions at a higher

level of generality dictates the outcome of its application of the Estate of Williams

factors. The majority is correct that there are numerous statutory and other indicia

demonstrating that providing fire protection services or contracting for the provision

of fire protection services is a governmental rather than proprietary function. Once

the majority decides that the Town is engaged in providing fire protection services,

the conclusion that it was performing a governmental function is inevitable. See, e.g.,

State ex rel. E. Lenoir Sanitary Dist. v. City of Lenoir, 249 N.C. 96, 100–01 (1958) (“In

operating a water system to provide fire protection and kindred services it is acting

in a governmental capacity.”); cf. Valevais v. City of New Bern, 10 N.C. App. 215, 219

(1970) (describing “the furnishing of fire protection” as a “governmental function”).

¶ 55 Yet Providence has alleged that the specific act the Town engaged in was part

of a savvy but pretextual real estate investment scheme, rather than part of a genuine

effort to provide residents with a vital governmental service. Providence has

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“allege[d] facts that, if taken as true, are sufficient to establish a waiver . . . [of]

immunity.” Wray, 370 N.C. at 48 (second and third alterations in original) (quoting

Fabrikant v. Currituck County, 174 N.C. App. 30, 38 (2005)). At this stage of the

proceedings, there is a disputed factual question regarding why the Town chose to

engage in the specific activity of acquiring property from Providence. Accordingly, I

would reverse the Court of Appeals’ reversal of the trial court’s denial of the Town’s

motion to dismiss. The majority’s decision to credit the Town’s naked assertion that

the challenged acquisition was necessary to achieve a governmental function allows

a municipality to obtain governmental immunity simply by claiming governmental

immunity, without establishing the necessary factual prerequisite.

III. Conclusion

¶ 56 While the majority is correct that Mayor Deter was entitled to legislative

immunity, the majority errs in concluding that the Town was entitled to

governmental immunity at this stage of the case. In my view, the requisite “fact

intensive inquiry” has not been conducted and the allegations of the complaint, if

true, are sufficient to demonstrate that the Town was engaged in a proprietary

function when it acquired the fire station from Providence. Williams, 366 N.C. at 203.

The majority’s application of Meinck and Williams risks swallowing the rule those

cases articulated by shielding all conduct relating to a governmental function from

tort liability, no matter how tenuous and tangential the connection between the

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particular activity and a general governmental function. Extending the doctrine of

governmental immunity to protect the Town under these circumstances at this stage

of the proceedings is both inconsistent with our precedents and with the broader

considerations that should inform our consideration of “this judge-made doctrine.”

Steelman, 279 N.C. at 594. As Justice Blackmun sagely noted, “[i]t is revolting to

have no better reason for a rule of law than that so it was laid down in the time of

Henry IV.” Bowers v. Hardwick, 478 U.S. 186, 199 (1986) (Blackmun, J., dissenting)

(alteration in original) (quoting Oliver Wendell Holmes, The Path of the Law, 10

Harv. L. Rev. 457, 469 (1897)). The majority errs in unnecessarily expanding such a

rule here. Accordingly, I respectfully dissent from that part of the majority’s opinion.

Justice BARRINGER concurring in part and dissenting in part.

¶ 57 I agree with the majority that the mayor’s actions were protected by legislative

immunity. However, I disagree with the majority’s interpretation of Providence’s

complaint. Instead, I join Section II of Justice Earls’ opinion, which explains why,

when the complaint is viewed in the light most favorable to Providence, the Town is

not entitled to governmental immunity. According to the complaint, the reason the

Town committed fraud was not for the purpose of obtaining fire services but rather

for the purpose of acquiring Providence’s real property and then leasing and selling

that real property to a different entity. Accepting that allegation as true, the Town’s

alleged fraud was a proprietary act, not a governmental one. Accordingly, I

respectfully concur in part and dissent in part.

¶ 58 I write separately to stress an important point. Integrity in government is vital

for building and maintaining citizens’ trust and confidence in their governing bodies.

When a governmental entity exercises proprietary functions without the requisite

integrity, shielding it in immunity produces a serious injustice. A municipality that

chooses to participate in a proprietary function must be held to the same standard as

any other business, acting in good faith and free from fraud.

¶ 59 Looking to the allegations in the complaint,1 Providence alleged that:

1 While this Court reviews motions to dismiss de novo, Sykes v. Health Network Sols.,

Inc., 372 N.C. 326, 332 (2019), including motions to dismiss on the basis of governmental

immunity, see White v. Trew, 366 N.C. 360, 362–63 (2013), it still “accept[s] the allegations

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147. What wasn’t disclosed by the Defendant[ ] Town and

Defendant Deter to either P[rovidence] or the general

public during the lease negotiations was the ongoing

development by the Defendant Deter in his individual and

official capacities, of a plan to terminate the [Fire Services

Agreement (FSA)] and acquire the property free and clear

so that the Defendants could put into action their plan to

remove P[rovidence] and replace them, not only in service,

but [as] title holder to the property on Hemby Road. . . . .

....

149. . . . At the time the Town acquired the Hemby

Station, it realized a significant economic benefit by

acquiring a property appraised at $1,596,000.00 for an

investment of approximately $935,000.00. Moreover, at the

time of the termination of the FSA, the Defendant Mayor

claimed that said termination was purely financial, further

evidencing the proprietary action of the Town.

....

156. Had P[rovidence] known of the Defendants[’] actual

intent, P[rovidence] would have never transferred its

ownership of Hemby Station to the Defendant Town.

Further, after obtaining the property, the Town did “lease[ ] with an option to

purchase the Hemby Fire Station by deed to Wesley Chapel Volunteer Fire

Department.”

¶ 60 In short, viewed in the light most favorable to Providence, the complaint

alleges that the Town’s purpose in fraudulently inducing Providence to transfer

ownership of the Hemby Station property was not for the purpose of obtaining fire

in the complaint as true and view[s] them in the light most favorable to the non-moving

party,” Est. of Long v. Fowler, 378 N.C. 138, 2021-NCSC-81, ¶ 12 (cleaned up).

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services for the public. Instead, the complaint alleges that the Town’s purpose was to

cease Providence’s ownership and presence on the Hemby Station property in order

to lease and provide an option to purchase the property to a different entity and that

in doing so the Town realized a significant economic benefit.

¶ 61 Accepting this allegation as true, the next question is whether the Town’s

alleged tortious conduct “arose from an activity that was governmental or proprietary

in nature” since governmental immunity “covers only the acts of a municipality or a

municipal corporation committed pursuant to its governmental functions.” Est. of

Williams ex rel. Overton v. Pasquotank Cnty. Parks & Recreation Dep’t, 366 N.C. 195,

199 (2012) (cleaned up). This Court follows a three-step analysis to determine

whether an action is governmental or proprietary in nature. See id. at 200, 202–03.

¶ 62 In the first step, this Court examines “whether, and to what degree, the

legislature has addressed the issue.” Id. at 200. Here, the Town does not direct this

Court to any statute by the legislature designating the acquisition of property for the

purpose of selling or leasing it to be a governmental as opposed to a proprietary act.

Thus, the Town does not qualify for governmental immunity under this threshold

inquiry.

¶ 63 In the next step, this Court examines whether the activity is one that “can only

be provided by a governmental agency or instrumentality.” Id. at 202. Here, acquiring

property and then attempting to sell or lease it is certainly not one that can only be

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provided by a governmental agency or instrumentality. Instead, acquiring property

and then selling or leasing it is a commercial act, one common among businesses in

the real estate sector. Thus, accepting the allegations in the complaint as true, the

Town’s actions do not qualify as governmental under the second step.

¶ 64 Finally, if an activity is one that can be undertaken by both public and private

entities, this Court examines additional factors, “of which no single factor is

dispositive,” such as “whether the service is 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 (footnotes omitted). This third step “focuses primarily on

revenue, which . . . strongly indicates that an activity runs a high risk of being deemed

proprietary if it yields substantial income for a unit of local government.” Trey Allen,

Local Government Immunity to Lawsuits in North Carolina, 28 (2018). After all, this

Court has

long held that a governmental function is an activity that

is discretionary, political, legislative, or public in nature

and performed for the public good in behalf of the State

rather than for itself. A proprietary function, on the other

hand, is one that is commercial or chiefly for the private

advantage of the compact community.

Williams, 366 N.C. at 199 (cleaned up).

¶ 65 Relevant to this third step are the allegations in the complaint that the Town

“realized a significant economic benefit” from this transaction and then leased that

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valuable property to another entity, Wesley Chapel Volunteer Fire Department, with

the option to purchase it. These actions, in the light most favorable to Providence,

indicate the Town was acting for commercial or private gain for itself and a third

party rather than acting for the public good on behalf of the state. Thus, the factors

in the third step support that the alleged fraud arose from a proprietary act by the

Town. Because no step has been satisfied, the trial court correctly denied the Town’s

motion to dismiss.

¶ 66 The allegations in Providence’s complaint of the Town’s proprietary acts cannot

be ignored simply because the contract also happened to be part of the Town obtaining

fire services. Admittedly, protecting property from destruction by fire has generally

been provided by a governmental agency and promotes the public good. However,

even if “an activity may be classified in general as a governmental function, liability

in tort may exist as to certain of its phases.” Id. at 203 (cleaned up). In this case, the

phase of fire services that Providence is contesting is the Town’s acquisition of the

Hemby Station from Providence. According to Providence, the Town’s purpose in

doing so was not to obtain fire services, but rather was “purely financial” and part “of

a plan to . . . acquire the property free and clear so that the Defendants could put into

action their plan to remove P[rovidence] and replace them, not only in service, but in

title holder to the property on Hemby Road.”

¶ 67 Thus, this case is easily distinguishable from Meinck v. City of Gastonia, 371

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N.C. 497 (2018), where the plaintiff never alleged that the defendant city’s stated

purpose of revitalizing its downtown area was simply a cover for an otherwise

commercial venture. Id. at 516. Here, Providence specifically alleged that the Town’s

stated purpose of obtaining fire services was pretextual and that its real purpose was

financial. Indeed, the complaint indicates that if the Town was truly trying to obtain

fire services for its citizens, it would have maintained its relationship with Providence

instead of terminating it. Complying with the correct standard of review, this Court

must accept these allegations as true. See Est. of Long v. Fowler, 378 N.C. 138, 2021-

NCSC-81, ¶ 12. It cannot blindly adopt the explanation offered by the Town while

ignoring the allegations in Providence’s complaint, which directly contradict the

Town’s explanation.

¶ 68 If “a municipal corporation undertakes functions beyond its governmental and

police powers and engages in business in order to render a public service for the

benefit of the community for a profit, it becomes subject to liability for contract and

in tort as in case of private corporations.” Town of Grimesland v. City of Washington,

234 N.C. 117, 123 (1951). Given the allegations in Providence’s complaint, the Town’s

acquisition of the Hemby Station was a proprietary act, not a governmental one. The

trial court properly denied the Town’s motion to dismiss, and the Court of Appeals

erred in reversing that part of the trial court’s decision. Accordingly, I respectfully

concur in part and dissent in part.

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Chief Justice NEWBY joins in this concurring in part and dissenting in part

opinion.