Arts project shields city from lawsuit.

Byline: David Donovan

A nuanced legal issue is like a compelling work of artopen to more than one interpretation. In the case of one city's decision to lease an historic building to a local arts guild, the North Carolina Supreme Court saw a city that was acting in a governmental, rather than a proprietary, capacity, potentially immunizing it from a slip-and-fall lawsuit filed by an artist who broke her hip in a tumble down the building's steps.

It's been several decades since there was actually a bank at the historic Citizens National Bank building in downtown Gastonia. In an effort to spruce up its deteriorating downtown, the city purchased the building in 2011 and since 2013 has leased it to the guild to use as a space to show and sell art. But artist Joan Meinck alleges that the city, which remained responsible for the building's upkeep, failed to maintain its exit in a safe condition, causing her to fall while she was carrying away some large pictures.

In 2016 Gaston County Superior Court Judge Lisa Bell granted the city's motion to dismiss Meinck's lawsuit based on a theory of sovereign immunity, but the North Carolina Court of Appeals unanimously reversed the ruling the following year. Judge John Tyson, writing for the court, said the defense did not apply because the city, which collected substantial revenues from its contract with the guild, was engaging in a proprietary functionone that is chiefly commercial or for private advantage, as opposed to a governmental function performed for the public good.

But in an Oct. 26 decision, the Supreme Court, also unanimously, reversed that decision and remanded the case back to the trial court. It was the first time the court had ever considered the application of governmental immunity to an arrangement like the one Gastonia had with the arts guild.

Justice Robin Hudson wrote in the court's opinion that lawmakers haven't said whether leasing unused city property, as is permitted by law, is generally a governmental or proprietary function. In this case, however, Gastonia was acting pursuant to the state's Urban Redevelopment Law, a more specific statute that permits cities to act in the public interest to redevelop their blighted areas when the private sector has failed to do so.

Gastonia's city manager had testified in a deposition that the city decided to lease the property to nonprofit arts groups because attracting artists to run-down areas had been a crucial kickstarter for successful...