Viking Utilities Corp. v. Onslow Water & Sewer Authority, 755 S.E.2d 62

On 16 November 2007, Viking Utilities Corporation, Inc., Garland W. Tuton, and Sue C. Tuton entered into an Asset Purchase Agreement with Onslow Water and Sewer Authority to sell Viking’s wastewater system assets, including plaintiffs’ real property, for $5,550,000; defendant paid $500,000 at closing, with $4,800,000 to be donated by plaintiffs as consideration.
The agreement gave defendant a credit of $250,000 toward the purchase price in return for allowing plaintiffs to connect to the sewer system without a tap fee for five years, with the credit applied at $2,500 per connection.
Defendant represented that the transaction did not require governmental approvals from any governmental body.
On 27 September 2012, plaintiffs sued for breach of the agreement, seeking specific performance and a declaratory judgment on tap-fee rights, with an alternative request for rescission or reformation.
Plaintiffs later amended to add restitution/quantum meruit/unjust enrichment, estoppel, and negligent misrepresentation; defendant moved to dismiss; the trial court denied, and defendant appealed.
The appellate court held the motion to dismiss based on governmental immunity was properly denied at the pleading stage, noting the record was insufficient to resolve immunity and that summary judgment could later address the issue.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendant is entitled to governmental immunity at the motion to dismiss stage.	Plaintiff argues that the alleged conduct relates to a proprietary function not shielded by immunity.	Defendant contends immunity may apply but requires a fact-intensive analysis of governmental vs. proprietary function.	Trial court’s denial affirmed; immun ity depends on record facts; summary judgment may later be used to resolve.

Williams v. Pasquotank County, 366 N.C. 195 (2012) (restated immunity framework and factors for governmental vs. proprietary functions, with fact-intensive inquiry)
Evans ex rel. Horton v. Hous. Auth., 359 N.C. 50 (2004) (limits of governmental immunity; explicit distinction between governmental and proprietary acts)
Town of Sandy Creek v. E. Coast Contr., Inc., N.C. App. , 741 S.E.2d 673 (2013) (application of Williams to sewer contract context; business/private-like handling not inherently governmental)
Sides v. Cabarrus Mem’l Hosp., Inc., 287 N.C. 14, 213 S.E.2d 297 (1975) (predecessor guidance on function and liability relevance to public vs. private operations)