McCULLOUGH, Judge.
The City of Northwest ("Northwest"), appeals from the trial court's denial of its motion to dismiss East Coast Contracting, Inc.'s ("ECC") third-party complaint. In the initial appeal (Sandy Creek I), we affirmed the denial of Northwest's motion on the limited basis of governmental immunity. Our Supreme Court entered an order on 11 March 2013, directing the Court of Appeals to reconsider our decision in light of the case of Estate of Williams v. Pasquotank Co. Parks and Recreation Dep't, ___ N.C. ___, 732 S.E.2d 137 (2012). Upon reconsideration, we again affirm the trial court's ruling.
This case began 9 September 2010 when The Town of Sandy Creek ("Sandy Creek") filed suit against ECC, Engineering Services, PA ("ES"), and individuals seeking recovery for damages to Sandy Creek roads allegedly caused by ECC while ECC was constructing a sewer system for Northwest. The facts were fully set forth in Sandy Creek I and will not be repeated here unless necessary to understand the rationale for our decision.
With Sandy Creek's original suit pending, ECC filed a third-party complaint against Northwest on 12 November 2010 alleging breach of contract, negligence, and indemnity and contribution. Northwest then filed a Rule 12(b)(6) motion to dismiss on 14 February 2011. The trial court on 13 February 2012, denied Northwest's motion to dismiss.
Northwest appealed that order upon the trial court's Rule 54(b) certification. In Sandy Creek I, we set forth the standard of review and we concluded that the lower court's denial of Northwest's motion was appealable.
In Sandy Creek I, we noted: "In North Carolina the law on governmental immunity is clear. In the absence of some statute that subjects them to liability, the state and its governmental subsidiaries are immune from tort liability when discharging a duty imposed for the public benefit." McIver v. Smith, 134 N.C. App. 583, 585, 518 S.E.2d 522, 524 (1999).
In the initial appeal, Northwest first argued that it is entitled to governmental immunity because ECC failed to plead statutory authorization to sue the city and failed to plead waiver of immunity.
We held that waiver of governmental immunity need only be pled where a municipal corporation is acting in a governmental capacity; and where a municipal corporation is acting in a proprietary manner, waiver need not be pled. See McIver, 134 N.C.App. at 586, 518 S.E.2d at 525.
In Sandy Creek I, we recognized the difficulty in making the determination of whether an authority is entitled to governmental immunity stating: "Our courts have long noted that drawing the line between municipal operations which are proprietary and subject to tort liability versus operations which are governmental and immune from such liability is a difficult task." Pulliam v. City of Greensboro, 103 N.C. App. 748, 751, 407 S.E.2d 567, 568 (1991).
Northwest contended that the construction of a sewer system is a governmental function and entitled to governmental immunity. Northwest relied on McCombs v. City of Asheboro, where the plaintiff's intestate crawled into a ditch excavated for the laying of a sewer line and was killed when the ditch partially collapsed on top of him. 6 N.C. App. 234, 235, 170 S.E.2d 169, 170 (1969). In McCombs, we addressed the issue of governmental immunity and noted "that the courts are sharply divided as to whether the construction of a sewerage system constitutes a governmental function or a proprietary function." Id. at 240, 170 S.E.2d at 173. Yet, we ultimately held "the construction of a sewerage system is a governmental function[.]" Id.
In Sandy Creek I, this Court felt the case of City of Gastonia v. Balfour Beatty Constr. Corp., 222 F.Supp.2d 771 (W.D.N.C.2002), to be a better analogy. Although not controlling, in Balfour, the court considered whether the construction of a water treatment facility was a governmental or proprietary function. While attempting to apply the law as it anticipated the North Carolina Supreme Court would, the court stated:
Id. at 774.
We now must consider the guidance provided in our Supreme Court's case by Estate of Williams, ___ N.C. ___, 732 S.E.2d 137. In that case, the Court dealt with a drowning in a portion of a public park called the "Swimming Hole," an area rented to the public for a fee. The trial court and Court of Appeals had both denied Pasquotank County's attempt to dismiss under the doctrine of governmental immunity. There the Court of Appeals had set forth a four-factor test to assist in determining whether an activity was governmental or proprietary in nature. That test was articulated as follows:
Estate of Williams v. Pasquotank Cnty. Parks & Rec. Dep't, 211 N.C. App. 627, 631, 711 S.E.2d 450, 453 (2011) (internal quotation marks and citations omitted).
The Court of Appeals held that the second factor, whether the undertaking was one in which only a governmental agency could engage, was the most important factor.
Our Supreme Court reversed, stating that our analysis should begin with determining what position, if any, the legislature has taken regarding this activity. This deference is warranted because the courts should not abrogate a doctrine when the legislature has expressed itself. In Estate of Williams v. Pasquotank County Parks & Rec. Dep't, our Supreme Court stated:
___ N.C. ___, ___, 732 S.E.2d 137, 140-41 (2012) (quoting Smith v. State, 289 N.C. 303, 312, 222 S.E.2d 412, 418-19 (1976)).
Our Supreme Court recognized that governmental immunity does have limits and will not apply when the function is proprietary. Town of Grimesland v. City of Washington, 234 N.C. 117, 123, 66 S.E.2d 794, 798 (1951).
Even though the legislature had recognized that the operation of public parks are proper governmental functions, N.C. Gen. Stat. § 160A-351 (2011), our Supreme Court remanded the case for a determination as to the amount of revenues derived by Pasquotank County in its operation of the "Swimming Hole."
In the case at bar, however, we recognize that judicial precedent has previously held that construction of a sewer system is a governmental function. McCombs, 6 N.C. App. 234, 170 S.E.2d 169. That is not the nature of the claim in this case, however. Here, this case began when the Town of Sandy Creek sued ECC and ES, both of whom contracted with Northwest. The City of Northwest was brought into the suit by a Third-Party Complaint based on Northwest's contractual relationship with the defendants.
In Sandy Creek I, we analyzed these pleadings as follow:
After reviewing the present case using the guidance set forth in Estate of Williams, we remain convinced 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. This is ever more so when the party harmed is a neighboring municipality.
Accordingly, we once again affirm the trial court's order on the limited basis of governmental immunity.
Affirmed.
Judges GEER and STEPHENS concur.