Veolia Water Indianapolis, LLC, et al. v. National Trust Ins. Co.
Indiana Supreme Court case clarifies issues of sovereign immunity with respect to third party contractors. Here, the insurer (NTI) of Texas Roadhouse sued, as subrogee of the restaurant, Veolia, a company managing water for City of Indianapolis. NTI stated that the hydrants were negligently managed and therefore a fire that broke out at Texas Roadhouse resulted in a total loss of the building.
The Indiana Supreme Court held that the City could not claim immunity for discretionary functions under the ITCA since it made no policy decision to enforce the standard of care promulgated in the contract between the City and Veolia (basically, no decision at all is not the same as deciding to do nothing).
The Court then held that common law immunity applies under Campbell v. State, 284 N.E.2d 733 (Ind. 1972) exception to the claims relating to providing adequate fire protection.
Finally, the Court held that Veolia was not entitled to common law immunity since it was a “for-profit private company operating a public utility under contract with a governmental unit” as opposed to a company working at the direction of the government as distinguished in Metal Working Lubricants Co. v. Indianapolis Water Co., 746 N.E.2d 352 (Ind. Ct. App. 2001), where common law immunity did apply to the third party contractor.