Lumbee River Electric Membership Corp. v. City of Fayetteville

VAUGHN, Chief Judge.

In a trial without a jury, the proper motion to test the sufficiency of the plaintiffs evidence to show a right to relief is a motion to dismiss pursuant to Rule 41(b) of the North Carolina Rules of Civil Procedure. Tanglewood Land Co. v. Wood, 40 N.C. App. 133, 252 S.E. 2d 546 (1979). Accordingly, we will treat defendants’ motion for a “directed verdict,” as a motion to dismiss. Plaintiffs argue that the court erred in allowing the motion to dismiss.

In ruling on a motion made under Rule 41(b), the judge may weigh the evidence, find the facts against plaintiff and sustain defendant’s motion at the conclusion of his evidence even though plaintiff has made out a prima facie case which would preclude a directed verdict for defendant in a jury case. Helms v. Rea, 282 N.C. 610, 194 S.E. 2d 1 (1973). We conclude that the facts found and the stipulations of the parties do not support the conclusion that the proposed extension of services to the subdivision is “within reasonable limitations.”

The facts in the present case are substantially similar to those in Domestic Electric Service, Inc. v. City of Rocky Mount, 285 N.C. 135, 203 S.E. 2d 838 (1974). Domestic Electric Service, Inc. (Domestic), sought an injunction against the City of Rocky Mount to prevent it from extending electric service to an apartment complex outside the city limits in a territory that had been assigned to Domestic. The trial court refused to grant the injunction, concluding that the extension was within reasonable limitations within the meaning of G.S. 160A-312, which reads in pertinent part:

A city shall have authority to acquire, construct, establish, enlarge, improve, maintain, own, operate and contract for the operation of any or all of the public enterprises as defined in this Article to furnish services to the city and its citizens. Subject to Part 2 of this Article, a city may acquire, construct, establish, enlarge, improve, maintain, own, and operate any public enterprise outside its corporate limits, within reasonable limitations, but in no case shall a city be held liable for damages to those outside the corporate limits for failure to furnish any public enterprise service. (Emphasis added.)

On appeal, this Court reversed the judgment of the trial court. 20 N.C. App. 347, 201 S.E. 2d 508 (1974). The Supreme Court affirmed our decision, but on different grounds, holding that the extension outside the corporate limits was not within reasonable limitations. Justice Lake wrote:

It is equally clear that without legislative authority the (city) would not be permitted to extend its lines beyond the corporate limits for the purpose of selling electricity to nonresidents of the city. ... Its power to extend its lines and distribute electric current beyond its corporate boundaries is expressly restricted to “reasonable limitations.” . . . The primary function of a municipal corporation is to provide local government within its limits and authorized services to its inhabitants, not to engage in business enterprises for profit outside its corporate limits. . . . The term “within reasonable limitations” does not refer solely to the territorial extent of the venture but embraces all facts and circumstances which affect the reasonableness of the venture. (Citations omitted.)

285 N.C. at 144, 203 S.E. 2d at 844. In concluding that the extension beyond the city limits exceeded reasonable limitations, Justice Lake found the following facts and circumstances to be decisive: Domestic, the investor-owned utility, had been assigned the territory by the Utilities Commission, had its service lines in the immediate vicinity of the apartments, and was ready, willing, and able to serve the apartment complex. There was nothing to indicate that its service would not be adequate. Domestic’s rates were subject to regulation by the Utilities Commission, while the city’s rates were subject to no regulation except by the city. Substantially all of those factors are present in the case before us. Moreover, Domestic Electric involved a contiguous tract, part of which was inside the city limits, and the controversial part of which was outside the city limits. In the present case, however, the Montibello subdivision is located four miles outside the Fay-etteville city limits. Hence, Lumbee River has a more favorable case.

Defendants argue that the General Assembly, by revising and consolidating the Charter of the City of Fayetteville, authorized the extension of electric service by the city to anywhere in Cumberland County as provided in Section 6.19 of the Charter. See, 1979 N.C. Sess. Laws Ch. 557. This revision occurred in 1979, well after the General Assembly had adopted the Electric Act in 1965 of which G.S. 160A-312 is a part and after the Domestic Electric decision. According to defendants, this action by the General Assembly reinforced the city’s right to extend its services outside the city limits. This argument is not persuasive. As a general rule, a municipal corporation has only such powers granted to it by the General Assembly in its specific charter or by the general laws of the State applicable to all municipal corporations, and the powers granted in the charter will be construed together with those granted in the general statutes. Riddle v. Ledbetter, 216 N.C. 491, 5 S.E. 2d 542 (1939). Thus, construing the Charter together with G.S. 160A-312, the City of Fayetteville can only extend electric service in Cumberland County “within reasonable limitations.”

Although on the evidence and stipulations in this record plaintiff was entitled to judgment as a matter of law, the judge terminated the trial at the close of plaintiffs evidence. It would have been better to have waited until defendant offered its evidence, if any. Helms v. Rea, supra. As a practical matter, there appears to be little dispute as to the facts. Procedurally, however, defendant is entitled to offer any evidence it might have to compel a result different from that reached in this opinion.

The judgment of dismissal against plaintiff must be reversed. The case is remanded for proceedings not inconsistent with this opinion.

Reversed and remanded.

Judges WEBB and Whichard concur.