David, J.
In this case, appellants Veolia Water Indianapolis, LLC (“Veolia”); the City of Indianapolis, Department of Waterworks (the “Department”); and the City of Indianapolis (collectively with the Department, the “City”) claim sovereign immunity from liability for damages resulting from a fire that destroyed a Texas Roadhouse restaurant insured by appellees National Trust Insurance Company and FCCI Insurance Company a/s/o Ultra Steak, Inc. d/b/a Texas Roadhouse (the “Insurers”). This case is before us on appeal of the trial court’s denial of Veolia’s motion for judgment on the pleadings and the City’s motion to dismiss. Finding that the trial court was correct in holding that Veolia cannot claim common law sovereign immunity and that the City cannot claim statutory sovereign immunity, we affirm the trial court in these regards but reverse the trial court’s holding that the City is not entitled to common law sovereign immunity.
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Despite the arguments that the City and Veolia advance, we are persuaded by the Insurers’ claim that the profit motive of Veolia—a for-profit, private company operating a public water utility under contract with a governmental unit—precludes extension of the common law sovereign immunity to which the City is entitled. Therefore, Veolia is not entitled to common law sovereign immunity on the Insurers’ claims that it failed to provide an adequate supply of water from which to fight the fire. The case against Veolia may proceed; although the Insurers’ case may not be successful on its merits, or even reach the merits, their case survives Veolia’s Rule 12 motion.
Careful to distinguish wholly private companies like Veolia from governmental instrumentalities like IWC, we stress that our holding does not significantly depart from the precedent of Metal Working Lubricants. Crucial is the nature of the link between the private company and the governmental unit.
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We emphasize that our holding today does not in any way usurp the discretion and authority of the legislature. Since common law sovereign immunity is judge-made in nature, judges are responsible for its incremental development. “In the absence of a statutory directive or controlling case law, our decision rests heavily on the sort of policy considerations that have always been a part of the development of common law.” Mendenhall v. Skinner and Broadbent Co., Inc., 728 N.E.2d 140, 143 (Ind. 2000). Among other factors, our consideration of Veolia’s profit motive and status as an autonomous entity has led us to conclude that Veolia is not entitled to common law sovereign immunity from liability for damages resulting from the hydrants’ inadequate water supply.
Conclusion
We hold that a private, for-profit company under the circumstances of this case is not entitled to common law sovereign immunity from liability for damages resulting from a fire that destroyed a Texas Roadhouse restaurant. Accordingly, we affirm the trial court’s rulings that Veolia is not entitled to common law sovereign immunity and that the City is not entitled to statutory sovereign immunity from liability for damages resulting from an inadequate water supply in the hydrants near the restaurant. Only the City is entitled to common law sovereign immunity; thus, we reverse the trial court’s ruling to the contrary.
Dickson, C.J., Rucker, Massa, and Rush, J.J., concur.