Courchesne v. Town of Weathersfield

Courchesne v. Town of Weathersfield (2002-453); 175 Vt. 585; 830 A.2d 118

2003 VT 62

[Filed 30-Jun-2003]

                                 ENTRY ORDER

                                 2003 VT 62

                      SUPREME COURT DOCKET NO. 2002-453

                              APRIL TERM, 2003

  Andrew Courchesne and	               }	APPEALED FROM:
  AJC Construction, Inc.	       }
                                       }
       v.	                       }	Windsor Superior Court
                                       }	
  Town of Weathersfield	               }
                                       }	DOCKET NO. 618-12-00 WrCv

                                                Trial Judge:  Alan W. Cook

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Plaintiffs appeal the decision of the Windsor Superior Court
  granting summary judgment to defendant Town of Weathersfield, a Vermont
  municipality, on plaintiffs' claims that the Town acted illegally and
  tortiously interfered with a business relationship.  The court determined
  that the Town was entitled to sovereign immunity for its actions because it
  did not exceed the scope of its authority when it leased a gravel pit and
  entered into a gravel pit management agreement.  We affirm.  

       ¶  2.  Plaintiff Andrew Courchesne was, at all relevant times, the
  sole shareholder and sole employee of plaintiff A.J.C. Construction, Inc.,
  a construction and trucking company engaged in the hauling of sand for
  winter road maintenance.  This case arises from plaintiffs' contention that
  as a result of the actions of the Town of Weathersfield, plaintiffs were no
  longer engaged to haul sand from Weathersfield to the Town of Springfield
  sand shed.  
   
       ¶  3.  During the 1997-1998 winter season, the owners of the Maple
  Street Gravel Pit in Weathersfield hired plaintiffs to haul winter sand
  from their gravel pit to the Town of Springfield. Springfield made all
  payments for the sand directly to the owners who in turn compensated
  plaintiffs for the hauling.  For more than one year prior to the winter of
  1997-1998, the Town of Weathersfield was engaged in negotiations with the
  owners of the Maple Street Gravel Pit for the exclusive rights to extract
  sand, gravel, rock, and any other by-product from the pit.  The Town wanted
  to secure a source of gravel for highway purposes so that it did not have
  to continue buying gravel from a third party.  On October 14, 1998, the
  owners of the pit executed a Sand and Gravel Extraction Agreement that
  granted the Town of Weathersfield the exclusive right to extract sand,
  gravel, rock and any other by-product from the Maple Street pit for
  twenty-five years in consideration of the payment of $250,000, which was
  subject to a ratification vote.  On March 2, 1999, the Town's legal voters
  approved an appropriation of $25,000 per year for ten years to the owners
  of the pit in exchange for the extraction rights.  

       ¶  4.  While the Town of Weathersfield was engaged in negotiations
  with the pit owners, the Town became aware of the need to extract a great
  deal of sand to get to the gravel.  The Town was not interested in
  obtaining this sand, however, because it was of a low grade and the Town
  already had a supply of higher quality sand from a sandpit on Route 5 in
  Weathersfield.  Because the Town did not need or want the sand, the Town
  attempted to contract with Springfield to supply Springfield's winter sand
  from the Maple Street pit.  Despite early negotiations between the Town and
  Springfield, the Springfield Selectboard did not enter into an agreement
  with the Town regarding the sand supply.  

       ¶  5.  Once the Town learned that Springfield would not obtain the
  sand, the Town entered into the Maple Street Gravel Pit Management
  Agreement with Jarvis and Sons, Inc. so that it would not have to hire
  employees to work at the pit.  Under the management agreement, Jarvis
  agreed to manage the pit in compliance with all permits for three years and
  to pay the Town $30,000 in exchange for the right to sell all sand and
  limited quantities of gravel.  Springfield eventually purchased winter sand
  from Jarvis in early 1999, which Jarvis hauled from the Maple Street pit to
  the Springfield sand shed.  

       ¶  6.  Springfield also continued to purchase sand from a different
  supplier, which plaintiffs hauled for the remainder of the 1998-99 winter
  season.  At no time did the Town of Weathersfield ever have a contractual
  relationship with Springfield for the supply or hauling of winter sand. 
  Springfield made all payments directly to Jarvis for sand from the Maple
  Street pit during the 1998-99 season.  Springfield did not, at any time,
  have an exclusive arrangement with a supplier, including plaintiffs, for
  the hauling of winter sand.     

       ¶  7.  In December 2000, plaintiffs filed this lawsuit against
  defendant Town alleging that the Town illegally interfered with their
  contractual relations with Springfield.  Both parties filed motions for
  summary judgment, and on September 6, 2002, the court granted summary
  judgment to the Town on the basis of sovereign immunity.  This appeal
  followed.    

       ¶  8.  In reviewing a grant of summary judgment, this Court applies
  the same standard used by the trial court.  Peters v. State, 161 Vt. 582,
  582, 636 A.2d 340, 340 (1993) (mem.).  Summary judgment will be granted if
  "the pleadings, depositions, answers to interrogatories, and admissions on
  file, together with the affidavits, if any, show that there is no genuine
  issue as to any material fact and that any party is entitled to a judgment
  as a matter of law."  V.R.C.P. 56(c)(3). 
        
       ¶  9.  The common-law doctrine of municipal sovereign immunity dates
  back to the mid-1800s in Vermont.  Graham v. Town of Duxbury, 173 Vt. 498,
  499, 787 A.2d 1229, 1232 (2001) (mem.).  Under this doctrine,
  municipalities are protected from tort liability in "cases where the
  municipality fulfills a governmental rather than a proprietary function." 
  Id.; see Morway v. Trombly, 173 Vt. 266, 270, 789 A.2d 965, 968 (2001)
  (absent a legislative decision "to fashion a more reasonable and workable
  doctrine," Vermont continues to use the "governmental-proprietary
  distinction") (internal quotation marks omitted).  On appeal, plaintiffs
  argue that, in granting Jarvis an exclusive right to control and haul sand
  from the Maple Street pit, the Town's actions were proprietary in nature,
  and not governmental, and thus the Town should be liable in tort like any
  private entity if the foreseeable effect was to destroy plaintiff's
  business.  We disagree.

       ¶  10.  A municipality may exercise those powers and functions
  specifically authorized by the Legislature, as well as those functions that
  may be fairly and necessarily implied or that are incident or subordinate
  to the express powers.  Town of Brattleboro v. Nowicki, 119 Vt. 18, 19-20,
  117 A.2d 259, 260 (1955).  We have previously held that the operation of a
  gravel pit by a town could be a function that was both incident and
  subordinate to the town's statutory duty to keep its highways in repair. 
  Hinesburg Sand & Gravel Co. v. Town of Hinesburg, 135 Vt. 484, 486, 380 A.2d 64, 66 (1977).  Although a gravel pit operation may be for public use,
  it may not be " 'set up as a mere pretext to conceal a private purpose' . .
  . ."  Id. (quoting Bates v. Bassett, 60 Vt. 530, 536, 15 A. 200, 202
  (1888)).  

       ¶  11.  In Hinesburg Sand & Gravel, we found that the town's
  operation of the gravel pit was beyond the scope of its authority where the
  town processed and sold eight times more gravel for private sale than it
  used for public purposes, resulting in a $30,000 annual profit.  Id.  Thus,
  it could not be said that this "activity of a grossly commercial nature"
  was a legally authorized activity or one that was incident or subordinate
  to a statutory duty.  Id. at 486-87, 380 A.2d  at 66.  The case at bar does
  not confront us with such a "proprietary" situation.  Unlike the situation
  in Hinesburg, the Town here did not realize a pecuniary benefit from the
  arrangement with Jarvis.  Allowing Jarvis to sell the unwanted sand it had
  to dig through in order to extract the gravel was also reasonably related
  to obtaining the gravel for municipal purposes.  See id. at 486, 380 A.2d 
  at 66 (stating that a town's "[i]ncidental sale of a by-product (such as
  screened-out rock) to others could also be justified").  Accordingly,
  Hinesburg does not compel reversal.  
        
       ¶  12.  Since this Court's decision in Hinesburg Sand & Gravel, the
  Legislature has expanded the powers granted to municipalities and
  specifically included, as part of the duty to maintain highways, the
  authority to contract with a private agency for services.  19 V.S.A. §
  304(a)(3) (added 1985, No. 269 (Adj. Sess.), § 1).  Section 304 of Title 19
  directly authorizes the town selectboard to "purchase tools, equipment and
  materials necessary for the construction, maintenance or repair of highways
  . . . . [and to] contract with governmental or private agencies for the use
  of tools, equipment, road building material, and services."  Id. §
  304(a)(3).  Here, in lieu of hiring additional town employees to operate
  the gravel pit, the Town contracted with Jarvis for its services, a power
  specifically granted to it by the Legislature.  This Court has "only to
  consider the question of [a municipality's] power. . . . The power
  existing, the manner and extent of its exercise as determined by its
  custodian, must be held legal, until it is seen that it is perverted to
  wrongful ends or diverted to wrongful uses."  Lucia v. Village of
  Montpelier, 60 Vt. 537, 545, 15 A. 321, 325 (1888) (emphasis in original)
  (ruling in favor of the municipality in a case involving an attempt by a
  group of taxpayers to enjoin a municipality from spending funds on the
  construction of a water main).  If the primary object of a town's actions
  is not to attain a public municipal purpose but to promote some private
  end, the action is not legally authorized, but if the primary object is to
  serve a public purpose, the action is legal notwithstanding some incidental
  gain that standing alone would not be lawful.  Bates v. Bassett, 60 Vt.
  530, 535-36, 15 A. 200, 202 (1888) (recognizing the incidental right of a
  town to rent part of its town hall and explaining that a "town has no right
  as a primary purpose to erect buildings to rent, but if in erection of its
  hall for its proper municipal uses, it conceives that it will lighten its
  burdens to rent part of its building whereby income is gained, no sound
  reason is suggested why it may not do so").  

       ¶  13.  The Town had the power to contract with Jarvis for management
  services in order to produce the gravel necessary for the Town's statutory
  highway maintenance duties.  Its primary objective for entering into the
  gravel pit agreements was to serve a public, governmental purpose; the
  gravel pit management agreement was not set up as a pretext to conceal a
  private, proprietary use.  Having determined that the Town acted within the
  authority granted to it by the Legislature, we may not question the
  prudence of the Town's decision.  See Lucia, 60 Vt. at 544-45, 15 A.  at
  325.  The Town's actions were governmental in nature, and within the scope
  of its sovereign immunity.  The trial court's decision granting summary
  judgment for the Town was sound.

       Affirmed.        


                                       BY THE COURT:


                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Frederic W. Allen, Chief Justice (Ret.) 
                                        Specially Assigned

                                       _______________________________________
                                       Ernest W. Gibson III, Associate Justice
                                        (Ret.) Specially Assigned