Court Allows Subrogation Action To Proceed Against A Municipality

In 1978, an auto parts store in the Village of Delhi, NY, hired a plumber to install a fire sprinkler system in his store.  The plumber ran a pipe from his building but did not hook up to the Village water main.  The Village connected this pipe to the water main and installed a shutoff valve in the main which was supposed to prevent water from entering the store.  For whatever reason, the store never installed the sprinkler system. 

In June 2004, a portion of the water main near this store ruptured.  A Village employee investigated and came upon this shutoff valve.  Thinking he was closing the valve (and thus stopping the flow of water), this employee turned the valve.  Unfortunately, this opened the valve and caused substantial water damage to the store.

The store’s carrier paid and subrogated against the Village (my law firm represents the subrogating carrier).  The carrier argued that the Village (through its employee) was negligent in turning the valve open and flooding the store, and that further investigation should have been done prior to turning this valve.  The Village moved for summary judgment, arguing that it could not be sued due to “governmental immunity.”

Generally, municipalities and their employees are immune from suit when they are acting in their “governmental capacities.” However, when a government employee is acting the same as a private individual, there is no immunity.  In this case, the Court found that “The maintenance and repair of water mains is traditionally performed by private businesses” and, therefore, there was no governmental immunity.  The trial judge denied the Village’s motion to dismiss and the appellate court affirmed [1].

Bottom Line:  Most of the time when government acts (i.e., inspecting a new house for code compliance), the municipality is performing a “government function” and it cannot be held liable.  However, in some instances where the government is performing a “proprietary function” (i.e., performing a task normally done by a private business), the government may be held liable.

[1]  D & D of Delhi, Inc. v. Village of Delhi, Third Department, January 17, 2008