Veolia Water Indianapolis, LLC v. National Trust Insurance Co.
2014 Ind. LEXIS 89
| Ind. | 2014Background
- Texas Roadhouse restaurant fire in Indianapolis led insurers to sue City and Veolia over hydrant water adequacy.
- Veolia operated the City water utility under a Management Agreement supplying hydrants to private users.
- Insurers alleged hydrants froze due to private operators’ failure to close them, delaying firefighting.
- Trial court denied motions; held City not immune under ITCA or common law and Veolia not immune.
- Court of Appeals reversed; held municipal and Veolia immunity; insurers not third-party beneficiaries; case remanded.
- Indiana Supreme Court granted transfer to resolve common law immunity for private contractor providing public service.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ITCA statutory immunity for water supply adequacy | Insurers contend City lacks ITCA immunity for inadequate water | City asserts discretionary function immunity under planning/operational test | City not entitled to statutory immunity |
| Common law immunity for City regarding water adequacy | Insurers seek common law immunity exception for water provision failure | City relies on Gates; claims policy-like discretion | City entitled to common law immunity |
| Veolia common law immunity for water adequacy | Insurers argue Veolia is not immune as private for-profit entity | Veolia asserts private contractor status with autonomy; cites Metal Working Lubricants | Veolia not entitled to common law immunity |
Key Cases Cited
- Gates v. Town of Chandler, Water Dept., 725 N.E.2d 117 (Ind.Ct.App.2000) (adequate fire protection treated as immunity exception to Campbell)
- Metal Working Lubricants Co. v. Indianapolis Water Co., 746 N.E.2d 352 (Ind.Ct.App.2001) (IWC treated as government instrumentality; privates distinguishable)
- Ayres v. Indian Heights Volunteer Fire Dept., Inc., 493 N.E.2d 1229 (Ind.1986) (firefighting as governmental function; immunity for agencies)
- Barnum v. Rural Fire Protection Co., 537 P.2d 618 (Ariz. App.1975) (private for-profit fire protection not immune)
- United States ex rel. Barron v. Deloitte & Touche, LLP, 381 F.3d 438 (5th Cir.2004) (six-factor test for private entities not arms of state)
- Takle v. Univ. of Wisconsin Hosp. and Clinics Auth., 402 F.3d 768 (7th Cir.2005) (privatization not a shield from liability)
- Campbell v. State, 259 Ind. 55, 284 N.E.2d 733 (Ind.1969) (abrogation of common law immunity for governmental units)
- Lamb v. City of Bloomington, 741 N.E.2d 436 (Ind.Ct.App.2001) (planning/operational test for discretionary immunity)
- Peavier v. Bd. of Comm'rs of Monroe Cnty., 528 N.E.2d 40 (Ind.1988) (planning/operational dichotomy for immunity)