Ocean City Claims Immunity In Escalator Lawsuit

OCEAN CITY – The town of Ocean City last week filed a motion for summary judgment in the $500,000 civil suit filed in May against the resort and a private company by a former Vermont high school injured in an escalator accident in the Roland E. Powell Convention Center in May 2006, asking the court essentially to dismiss the action because the town is protected by governmental immunity and the non-profit facility operates at a substantial loss each year.

In May 2006, several members of a high school band from Vermont, in Ocean City for the annual Youth Music Competition at the Convention Center, were injured when the north elevator to the second floor stopped suddenly and starting running in reverse. Several of the students fell during the accident and a handful were taken to Atlantic General Hospital in Berlin where they were treated for a wide variety of injuries.

Nearly three years to the day of the accident, one of the injured students, Rebecca Beall, of Barre, Vt., filed suit in U.S. District Court, claiming negligence against the town of Ocean City, the Ocean City Convention Center and Visitors Bureau, Inc., and the private ThyssenKrupp Elevator Company, which the town retained to service and maintain the faulty escalator. The suit is seeking $500,000 in damages jointly and severally against the defendants for the various alleged roles in the accident. The Mayor and Council of Ocean City has recently replaced the town of Ocean City and the Ocean City Convention Center and Visitor’s Bureau as the public defendant in the case because the first two are considered one and the same and the latter is now defunct.

Last Thursday, attorneys for Ocean City filed a motion for summary judgment in its portion of the case, evoking often-used governmental immunity as one of the primary reasons for seeking the dismissal. Under state law, municipalities such as Ocean City are protected somewhat from liability at incidents at non-profit public facilities because of the services they provide to the greater good.

“The only material facts in this case are that the plaintiff’s injuries took place at the Roland E. Powell Convention Center, that the convention center is operated by the defendant for the benefit of the public, and that the convention center always operates at a loss,” the town’s motion to dismiss the case reads. “The convention center is operated solely for public benefit and without profit. Any other disputed facts are not material and will not change the fact that the defendant is entitled to governmental immunity.”

Essentially, the town’s motion for summary judgment claims the convention center as a physical entity cannot be held liable for the damages sought by the defendant because of governmental immunity protections afforded by the Local Government Tort Claims Act (LGTCA). If a town employee had been named as a defendant in the case, the situation would be different.

“The Local Government Tort Claims Act (LGTCA) requires a local government to defend its employees and pay all judgments and settlements,” the motion reads. “However, the LGTCA does not create liability on the part of the local government, but simply creates a financial responsibility on the local government for the non-malicious acts of its employees. The LGTCA is inapplicable to this case because the plaintiff has not named an individual employee of the defendant in its complaint.”

The motion for summary judgment argues if the town is held liable for incidents at its non-profit facilities, it might be reluctant to build and operate similar facilities for the betterment of the community.

“If the defendant was not entitled to governmental immunity, despite the fact that it was acting for the public and making no profits, any liability would exhaust tax funds that would otherwise be spent or used for public purposes,” the motion reads. “Without the defendant’s operation of the convention center, the public at large would suffer a great loss. To take the protection of governmental immunity away from the municipality would have the chilling effect on the municipality’s willingness to provide this most vital and substantial public service.”

Perhaps more chilling is the extent to which the convention center operates at a loss each year. An affidavit submitted to the court by Ocean City Finance Director Martha Bennett Lucey outlines the convention center’s revenues and expenses and illustrates the extent of the losses by the convention center each year. For example, in each year detailed in the affidavit, the convention center operated at an annual loss no less than $2.8 million. In 2004, the first year highlighted in the report, the facility lost $2.8 million. Last year, according to the report, the convention center lost roughly $3.9 million.

It’s important to note the losses are subsidized by the town of Ocean City, which makes a contribution to the convention center each year from its general fund, the Maryland Stadium Authority, and an additional one-percent tax on food and beverages in the resort directed on paying bond service on the facility. Nonetheless, the losses outlined in the affidavit are substantial. Last year, for example, the convention center lost over $209,000 after the aforementioned subsidies.

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