On August 9, 2013 the plaintiff, Larry Pyles, a paid attendee at the Mason County Fair, sustained serious injuries when he was beaten by three individuals while standing in the midway area of the fair. The Fair is an annual agricultural and entertainment festival hosted by Defendant, Mason County Fair, Inc., on fairgrounds owned by the Mason County Commission but used by the Mason County Fair, Inc., under an April 13, 2006, document captioned: AGREEMENT BETWEEN MASON COUNTY COMMISSION AND MASON COUNTY FAIR INC. FOR USE OF MASON COUNTY FAIRGROUNDS.
The plaintiffs filed their original Complaint against the Mason County Fair, Inc. only, alleging that the Mason County Fair owed non-trespassing, admission-paid fair attendees a duty of ordinary care to protect persons like Mr. Pyles from injury inflicted by others present on fair premises. During discovery, the plaintiffs obtained a cost-sharing agreement between the Mason County Commission and the Mason County Fair for use of the publicly-owned fairgrounds. Accordingly, the plaintiffs filed an amended complaint naming the County Commission as a defendant.
Discovery revealed what the plaintiffs believed to be additional elements of a joint venture between the Commission and the Fair. Accordingly, plaintiffs moved to file a second amended complaint to set forth the basis for the Commission's liability as a joint venture participant with more specificity. The Commission opposed the proposed amendment, arguing that the West Virginia Governmental Tort Claims and Insurance Reform Act, W Va. Code §§29-12A-1, et seq., provides immunity to the Commission from liability as a joint venturer and that it owed no greater duty to the plaintiffs under the circumstances than the general duty owed by any political subdivision to the public at large. In response, the Circuit Court of Mason County certified three questions of law, finding that the case against the Mason County Commission arises upon an issue of law for which there is no clear legal precedent.
Does the existence of an agreement w/ a private entity for the operation of a county fair affect any immunities otherwise available to a political subdivision ?
The Supreme Court began its analysis by restating the definition of a joint venture: "A joint venture is defined as an association of two or more persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, effects, skill, and knowledge." Price v. Halstead, 177 W.Va. 592, 355 S.E.2d 380 (1987).Â The Court focused its attention on two elements--sharing of profits and control.
The agreement did not contemplate that the Fair Board would share in any profits from the operation of the fair. Indeed, as the Court noted: "The Fair Board is a nonprofit organization and the Commission--a governmental entity--did not receive, nor did it anticipate receiving, any financial return in connection with the holding of the annual fair." The plaintiff argued that the Fair Board's agreement to maintain the property in connection with the fair was a form of "profit." The Court disagreed, finding that "this type of non-cash benefit tends to disprove the existence of [a joint venture] arrangement."
The Court also found that the plaintiff failed to prove the parties had "equal control over the common commercial pursuit." See Armor v. Lantz, 207 W.Va. 672, 535 S.E.2d 737 (2000). Specifically, the Court found that the County Commission had no role in operating the fair: "The Fair Board, not the Commission, had complete control with regard to matters pertinent to the operations of the fair."
From all of this, the Court wrote a new syllabus: "The agreement of a county commission to permit a private, nonprofit entity to hold a county fair on land owned by the county commission which fails to provide for the sharing of both profits and losses and co-equal control over the fair operations does not constitute a joint venture"
The Court also rejected two additional arguments for liability. The plaintiff alleged that the fair's gate workers were County Commission employees because they were acting pursuant to the agreement and on county-owned lands. However, the Court applied the traditional definition of an employee and found that "the County Commission did not select, hire, or have any control whatsoever with regard the individuals the fair board utilized to work at the fair." Having rejected the plaintiff's theory of joint venture, the Court also determined that there was no other legal basis for finding the County Commission to be vicariously liable.
This case suggests that proving a joint venture against a political subdivision will be an uphill climb. As a legal matter, the Court appears to be emphasizing profit and control, and demanding strict proof of these two elements. As a practical matter, it is certain that political subdivisions will draft future agreements in light of this opinion in order to avoid the potential for any joint venture liability.