PROVIDENCE VOLUNTEER FIRE DEPARTMENT, a North Carolina non-profit corporation, Plaintiff,
THE TOWN OF WEDDINGTON, a North Carolina municipal corporation, Defendant.
in the Court of Appeals 9 August 2016.
by Defendant from orders entered 25 August 2015 by Judge W.
David Lee in Union County Superior Court Union County, No. 15
Duggan Law Firm, PC, by Christopher Duggan, Henderson,
Nystrom, Fletcher & Tydings, by Robert E. Henderson and
John Fletcher, for Plaintiff-Appellee.
Poe Adams & Bernstein, LLP, by Anthony Fox and Benjamin
R. Sullivan, for Defendant-Appellant.
municipality's motion to dismiss a tort claim based on
governmental immunity is properly denied when the motion does
not refute a verified complaint alleging that the tort
occurred when the municipality was engaged in a proprietary
function. A preliminary injunction is inappropriate where a
plaintiff has filed a notice of lis pendens, thereby
securing a full, adequate, and complete remedy at law.
Volunteer Fire Department, Inc. ("Plaintiff" or
"Providence") owned a fire station in Union County
that needed substantial and cost prohibitive repairs and
improvements. Providence agreed to convey the fire station to
the Town of Weddington ("Defendant" or the
"Town") in exchange for the Town's agreement to
pay for repairs and improvements. The Town also agreed to
lease the improved fire station back to Providence and to
continue to pay for fire suppression and emergency medical
services from Providence for ten years. After the conveyance
and completion of repairs, the Town terminated its
relationship with Providence and leased the fire station to
another fire department. Providence filed a law suit against
the Town for breach of contract, fraud, and unfair and
deceptive trade practices and filed a notice of lis
pendens in Union County Superior Court.
Town appeals from orders (1) granting a motion by Providence
to amend its complaint, (2) denying in part its motion to
dismiss Providence's tort claims based on governmental
immunity, and (3) granting Providence's motion for a
preliminary injunction. After careful review, we reverse the
order granting injunctive relieve and otherwise affirm the
1954 to 2012, Providence provided fire protection service to
the Town and the surrounding areas in Union and Mecklenburg
counties. In May 2012, the Town Council passed a resolution
establishing a Municipal Fire District and taking
responsibility for overseeing and funding this new district.
To do so, the Town raised taxes and entered into various
agreements with Providence and two other area fire
departments, the Wesley Chapel Volunteer Fire Department and
the Stallings Fire Department.
heart of this action is a series of agreements between
Providence and the Town stemming from the creation of the new
fire district. In October 2013, Providence and the Town
entered into an Interlocal Agreement, which contemplated,
inter alia, that the Town would invest approximately
one million dollars in repairs and improvements to the Hemby
Road fire station owned by Providence, and in exchange,
Providence would convey the fire station and the land upon
which it rests (the "Property") to the Town. In
addition to the Interlocal Agreement, the parties entered
into a Fire Suppression Agreement (the "Suppression
Agreement"), which designated Providence as the
Town's primary fire protection and emergency medical
service provider for ten years.
Suppression Agreement provided that after the first year of
the ten-year term, the amount of compensation paid to
Providence would be "established during the Town's
annual budget process." Either party could terminate the
Suppression Agreement for cause, but if the Town terminated
the agreement without cause, it was obligated to pay
liquidated damages to Providence:
If this Agreement is terminated by the Town for a reason
other than cause or mutual agreement of the parties, the
Department shall be entitled to $750, 000 as liquidated
damages. . . . Such liquidated damages shall be the sole and
exclusive remedy of the Department by reason of a default by
Town under this Agreement, and the Department hereby waives
and releases any right to sue Town, and hereby covenants not
to sue Town, for specific performance of this Agreement or to
prove that the Department's actual damages exceed the
amount which is herein provided the department as full
a year later after executing the Interlocal Agreement and the
Suppression Agreement, in August 2014, Providence conveyed
the Property by deedand the parties entered into a third
agreement (the "Lease Agreement") providing that
the Town would lease the Property to Providence for the same
ten-year period as the term of the Suppression Agreement. The
Lease Agreement also provided that if the Suppression
Agreement were terminated early, the Lease Agreement would be
terminated at the same time.
the year following the Interlocal and Suppression Agreements
and preceding the Lease Agreement, several new Town Council
members were elected. Providence alleges that the new Town
Council members opposed the first two agreements and that the
new council members' acts and omissions fraudulently
induced Providence to convey the Property to the Town through
the Lease Agreement.
February 2015, Providence projected a deficit of
approximately $70, 000 in its operations budget and requested
increased funding from the Town in order to meet its
obligations to provide fire suppression and emergency medical
services according to the standards required by the
Suppression Agreement. On 15 April 2015, the Town notified
Providence that unless it could provide documents and
information confirming that it would be able to meet its
performance obligations without increased funding, the Town
intended to terminate the Suppression Agreement for cause.
Providence responded with a revised operating budget and
other documents. The Town Council reviewed the documents and
voted to terminate the Suppression Agreement. On 29 April
2015, the Town notified Providence that it was terminating
the Suppression Agreement for cause, effective 29 July 2015,
because Providence had failed to provide adequate assurances
that it could meet its ongoing and future obligations; the
Lease Agreement also would terminate on that date.
Town then contracted with the Wesley Chapel Volunteer Fire
Department ("Wesley Chapel") as its new primary
fire service provider to begin on 29 July 2015. The Town and
Wesley Chapel signed an agreement requiring Wesley Chapel to
use the Hemby Road fire station and containing a lease for
the Property. The agreement also provided an option for
Wesley Chapel to purchase the Property from the Town for
June 2015, Providence filed a complaint alleging that the
Town breached the Suppression Agreement and seeking $750, 000
in liquidated damages. On 10 July 2015, Providence filed a
First Verified Amended Complaint, which added claims for
fraud in the inducement and unfair and deceptive trade
practices. On the same day, Providence filed a notice of
lis pendens on the Property.
Town on 17 July 2015 filed a motion for a preliminary
injunction seeking to force Providence to surrender
possession of the fire station. The trial court granted the
motion and ordered Providence to vacate the Property and
enjoined Providence from obstructing or interfering with the
Property's use, occupancy, or possession by the Town or
the Town's designees.
July 2015, Providence filed a motion for a temporary
restraining order and a preliminary injunction seeking to
prevent the Town from selling, transferring, or conveying the
Property or any interest therein. The trial court granted
Providence's request for a temporary restraining order on
29 July 2015.
Town filed a motion to dismiss Providence's tort claims
on 29 July 2015, asserting complete governmental immunity. On
6 August 2015, Providence filed a motion to amend the First
Verified Amended Complaint.
trial court granted Providence's motion to amend and
Providence filed its Second Verified Amended Complaint on 27
August 2015. The trial court granted the Town's motion to
dismiss Providence's unfair and deceptive trade practices
claim but denied the Town's motion to dismiss
Providence's fraud claim.
Town filed a notice of appeal from the orders denying its
motion to dismiss the fraud claim, granting Providence's
motion to amend, and granting ...