City brought breach of contract action against neighboring village regarding a contract in which a portion of the revenue received by the village from discount stores, built under a city and village economic development plan on property partially owned by the city and partially owned by the village, would be payable to the city.
The District Court denied village’s plea to the jurisdiction. Village sought interlocutory appeal.
The Court of Appeals held that village entering into an agreement with city constituted a proprietary act that governmental immunity did not apply to rather than a governmental function.
The village entering into an agreement with neighboring city, regarding the building of two discount stores that were partially on city property and partially on village property, constituted a proprietary act that governmental immunity did not apply to rather than a governmental function, where the village was not required to enter into the agreement or perform the functions contemplated therein and its decision to do so was purely discretionary, village and city entered into the agreement primarily for the benefit of their own residents not the general public, village acted primarily on its own behalf in entering into this agreement, and the primary purpose of the agreement was to foster local economic development to the benefit of the city and village inhabitants rather than the general public of the state.