The Michigan Court of Appeals recently released an unpublished opinion in DM Burr Facilities Management, Inc, v Romulus Comm Sch (Case No. 340570), a case featuring governmental immunity. The court chronicled the relatively straightforward facts leading to the maintenance company’s lawsuit against the school district. To summarize, D.M. Burr contracted with Romulus schools to provide various maintenance services for Romulus schools. The contract between the parties provided that if D.M. Burr provided its own equipment to perform services – which it did – the school district could seek to purchase the equipment at the end of the contract term, so long as the parties agreed regarding price. But when the contract ended, the school district prevented the company from retaking possession of the equipment. The company sued for breach of contract and conversion. The notable difference between the claims is that contractual remedies usually are limited to the value of the harm done to the plaintiff, while tort claims – such as conversion – often allow for damages beyond the simple value of the injury. For example, Michigan allows for treble damages in statutory conversion claims.
The school district, well aware of a potentially costly result, moved for summary disposition on the conversion claim. The trial court denied the district’s motion, but the Court of Appeals reversed. It noted that governmental agencies are generally immune from tort liability under the Government Tort Liability Act (GTLA), MCL 691.1401 et seq., as long as the agency is engaged in the exercise or discharge of a governmental function. D.M. Burr argued that the GTLA was inapplicable because the school district is not authorized to convert property belonging to another entity. Meanwhile, the school district argued that entering into contracts with third parties for the performance of maintenance on school property is a governmental function.
The Court of Appeals ultimately agreed with Romulus. It noted that under a different factual scenario – if the school district had simply stolen a tractor from a nearby farm, for example – the GTLA may not apply. In this case, however, the court held that the conversion claim turned on interpretation of the contract, and that the school district’s contracting and exercising of its rights under the contract were authorized governmental activities. Thus, the GTLA applied, and Romulus could not be held liable for conversion. The case was sent back down to the trial court to proceed on the breach of contract claim. The case is one of many that serve as reminders that governmental agencies enjoy broad immunity from legal claims, except in those circumstances where the government has allowed for claims to accrue. When the issue of governmental immunity arises, government employees with decision‑making authority are encouraged to contact legal counsel.