Carlton v. Burke Cty. Bd. of Educ.Â

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-62
Filed: 6 November 2018
Burke County, No. 14 CVS 783
LEWIS SCOTT CARLTON and THOMAS P. WOOD, Plaintiffs,
v.
BURKE COUNTY BOARD OF EDUCATION, Defendant.
Appeal by Defendant from order entered 6 June 2016 by Judge Yvonne Mims
Evans and judgment entered 12 October 2016 and order entered 22 November 2016
by Judge W. Todd Pomeroy in Burke County Superior Court. Heard in the Court of
Appeals 4 September 2018.
Kennedy, Kennedy, Kennedy and Kennedy, L.L.P., by Harold L. Kennedy, III
and Harvey L. Kennedy, for plaintiff-appellees.
Cranfill Sumner & Hartzog LLP, by Katie Weaver Hartzog and Meredith
Taylor Berard, for defendant-appellant.
HUNTER, JR., Robert N., Judge.
Burke County Board of Education (“Defendant”) appeals following jury
verdicts finding Defendant liable for negligent infliction of emotional distress and
invasion of privacy. On appeal, Defendant argues the trial court committed the
following errors: (1) denying its motion to dismiss based on sovereign immunity; (2)
denying its motion to dismiss for failure to state a claim, motion for directed verdict,
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
and motion for judgment notwithstanding the verdict; (3) denying its motion for new
trial; and (4) awarding Plaintiffs costs and expenses. We affirm.
I. Factual and Procedural Background
On 29 July 2014, Lewis Scott Carlton and Thomas P. Wood (“Plaintiffs”) filed
a complaint for invasion of privacy, breach of contract, negligent infliction of
emotional distress, and civil conspiracy.1 Plaintiffs asserted Defendant waived its
right to assert sovereign immunity by purchasing liability insurance coverage. The
complaint alleged the following narrative.
On 28 March 2011, Wood attended a “closed” session of a Burke County Board
of Education (“Board”) meeting. Speaking on behalf of himself and Carlton, Wood
addressed the Board “about a highly confidential matter.” The Board asked him to
submit the information in a written statement. Through its chairperson,2 Defendant
“represented . . . it would maintain the confidentiality” of the information.
On 11 April 2011, Plaintiffs “confidentially” sent envelopes to every member of
the Board. In each envelope, Plaintiffs included a letter and “supporting
documentation.” All papers were placed “under seal[,]” with “Confidential” written
on the envelope. (Emphasis in original). In the letter, Plaintiffs “raised serious
concerns” about the superintendent of the Board, Dr. Arthur Stellar. Specifically,
1 Plaintiffs initially included Dr. Arthur Stellar as a defendant, but dismissed, without
prejudice, their claims against Stellar on 17 March 2016.
2 The complaint did not state who chaired the Board.
-2-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Plaintiffs alleged Stellar engaged in an “improper relationship” with Amy Morgan, a
Board employee. Had Defendant not assured Plaintiffs of confidentiality, Plaintiffs
“would never have submitted said materials[.]”
A member of the Board gave a copy of the letter and supporting documents to
Stellar. In August 2011, Stellar gave a copy to Morgan. On 11 August 2011, the
Board voted to “buy out” Stellar’s contract, and Morgan resigned from her position in
the school system.
On 31 October 2011, Morgan sued Plaintiffs for libel. As a result of the lawsuit,
Plaintiffs “were viciously and maliciously attacked in the media and on the internet.”
Plaintiffs feared for their safety, suffered damage to their reputations and businesses,
suffered severe mental and emotional distress, and spent “large sums” of money
defending themselves in the Morgan lawsuit. On 1 April 2013, a court dismissed
Morgan’s lawsuit.
On 14 October 2014, Defendant filed a motion to dismiss, pursuant to Rule
12(b)(1)-(2), (4)-(6) of the Rules of Civil Procedure. After a hearing on 20 January
2015, the court entered an order on 10 February 2015 on Defendant’s motion to
dismiss pursuant to Rule 12(b)(6). The court dismissed Plaintiffs’ breach of contract
claim. The court denied Defendant’s motion on the invasion of privacy, negligent
infliction of emotional distress, and civil conspiracy claims.
-3-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
On 16 March 2015, Defendant filed its answer. Defendant raised the defenses
of contributory negligence, sovereign immunity, and expiration of the statute of
limitations.
On 20 May 2016, Defendant filed a notice of hearing for 31 May 2016 on its
motion to dismiss pursuant to Rule (12)(b)(1)-(2). That same day, Defendant filed an
affidavit by Keith Lawson, its finance officer. Lawson asserted Defendant did not
waive the defense of sovereign immunity as to the invasion of privacy claim by
purchasing liability insurance. Lawson highlighted specific portions of Defendant’s
insurance policy, which covered only bodily injury and property damage caused by an
accident. The policy, as explained by Lawson, did not cover “Personal and advertising
injury[,]” including “Knowing Violation Of Rights of Another” or any injury arising
from “Oral or written publication, in any manner, of material that violates a person’s
right to privacy[.]” Defendant attached its insurance policy as an exhibit to the
affidavit.
On 31 May 2016, the court held a hearing on Defendant’s motion to dismiss.
Plaintiffs objected to the court’s consideration of Lawson’s affidavit and
accompanying attachments.3 Plaintiffs asserted Defendant violated Rule 26(c) of the
Rules of Civil Procedure because Defendant did not list Lawson as a person with
knowledge of the matter in its answer to Plaintiffs’ request for interrogatories.
3 Plaintiffs filed a written version of their objection on 2 June 2016.
-4-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Defendant argued it only waived sovereign immunity to the extent its insurance
covered the claims. Defendant further asserted its insurance policies did not cover
intentional torts.
In an order entered 6 June 2016, the court sustained Plaintiffs’ objection to
consideration of Lawson’s affidavit and accompanying attachments. The court also
concluded: (1) Defendant should have disclosed the identity of Lawson and the
insurance policy earlier in discovery; (2) the “unseasonable” disclosure prejudiced
Plaintiffs; (3) the late disclosure deprived Plaintiffs of the opportunity to depose
Lawson; and (4) Defendant violated Rules 26, 33, and 34 of the Rules of Civil
Procedure. Accordingly, the court denied Defendant’s motion to dismiss pursuant to
Rule (12)(b)(1)-(2).
The court called the case for trial on 20 September 2016.4 Plaintiff Wood
testified on his own behalf. Wood lived in Burke County and owned a photography
business. Wood had two school-aged children and was “[v]ery active” in their
education. At a Board meeting in January 2011, Wood heard rumors about Stellar
closing the schools in Burke County. One of the county principals, Ross Rumbaugh,
suggested someone else “speak . . . for the school.” The parents at the meeting asked
Wood to act as a spokesman and talk with Stellar. After coordinating with other
parents and the parent teacher organization, Wood, other parents, Rumbaugh, and
4 The court originally called the case for trial on or about 8 June 2016. However, on 29 June
2016, the court declared a mistrial.
-5-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Stellar met. Stellar “in a whirlwind[,]” told others he would have to close the schools
because of a “huge” budget deficit.
On 28 March 2011, the Board held a meeting to vote on closing the schools in
Burke County. Twelve to fifteen hundred people attended. Wood presented, began
to comment about a county employee (Morgan), and read a letter from a school
employee, in which the school employee called Stellar a “bully.” The Board
chairperson, Catherine Thomas, “cut [him] off[.]” Thomas told Wood any personnel
issues must be discussed in a closed session.
At the end of the open session, the Board went into closed session. Wood told
the Board he presented on behalf of himself and Carlton. Wood wanted to bring
forward “sensitive issues” and “needed to know that they could be kept confidential.”
Thomas responded, “[T]hat’s fine[,]” and the other Board members remained silent.
Wood started his statement about “the manager of strategic alliance position[,]” but
the Board cut him off.5
After the closed session ended, Wood and Thomas spoke. Wood told Thomas
both he and Carlton had more information about Stellar and Morgan and asked if he
needed to attend another closed Board session. Thomas instructed Wood to “submit
it to the board confidentially in writing . . . so that they can take a look at it.”
5 Wood did not testify about which Board member interrupted his statement.
-6-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
The next day, Plaintiffs met and started drafting a letter. On 11 April 2011,
prior to another Board meeting, Plaintiffs again met and assembled envelopes for
each Board member and the Board attorney, Chris Campbell. On the outside of each
envelope, Carlton wrote “Confidential.” The envelope included a letter, which stated:
Please find attached documentation of several issues we
wish to bring before the Burke County School Board
detailing disturbing allegations regarding Dr[.] Arthur
Stellar and others within our school system. As concerned
business owners, parents and stakeholders in Burke
County we wish to respectfully request further
investigation into these issues to ensure the optimal
operation of our schools and more importantly the welfare
of our children and this county.
We are not lawyers or educators. Although we cannot
personally attest to the veracity of the claims herein and
make no representation any or all of the claims are factual
or presented in their entirety, we do ask for a complete and
thorough investigation. We trust you to ascertain the facts
as our elected officials[.]
We chose to represent these items for individuals within
the school system and our county who say they are simply
too afraid to speak on their own behalf. These people need
their jobs, especially in such tough economic times.
However they do not need to perform their jobs under such
stressful and hostile conditions. For this reason please
consider the source of all items herein to be anonymous or
strictly confidential.
We wish to apologize for the obvious lack of complete
supporting documentation in some of the areas we present.
This is intentional because we fear destruction of pertinent
evidence if requested through normal channels. We have
already been informed of such incidents with key
documents related to the claims herein.
-7-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
We will gladly cooperate with the board in any way possible
that does not endanger jobs or personal assets. We request
these communications remain confidential to protect the
reputations of anyone innocently accused. We fully trust
that the appropriate action can and will be taken without
the necessity of the Stakeholders of Burke County having
to seek legal counsel[.]
(Emphasis omitted).
At the 11 April 2011 Board meeting, which Wood did not attend, Carlton
handed out the envelopes. Without Thomas’s promise of confidentiality, Wood would
not have compiled or submitted the information.
In November 2011, Morgan sued Plaintiffs for defamation of character. Prior
to the suit, Wood did not know the Board broke the confidentiality of the letter. Three
newspapers, a radio station, and a local blogger covered the lawsuit. The media
coverage was “embarrassing” and “humiliating” and “destroyed [his] reputation.”
Clients stopped using his photography business because “[n]obody wants to be
associated with, with that.”
Plaintiffs called Donald Vaughan and tendered him as an expert in the field of
state and local government administration and leadership. Vaughan reviewed
Plaintiffs’ complaint, Defendant’s answer, affidavits, and depositions. Vaughan also
reviewed the applicable statutes. Vaughan explained the difference between open
and closed Board sessions, specifically stating “the information that is brought into
-8-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
that [closed] session is expected to be closed.” He opined “a citizen ought to be able
to rely on the promise of a chairman of the board.”6
Plaintiff Carlton testified on his own behalf. Carlton lived in Burke County
and owned Express Lube and Wash, a car maintenance business. Carlton had one
son, who attended school in Burke County. In 2011, Carlton attended several Board
meetings. Stellar, the superintendent at the time, discussed closing schools in Burke
County, claiming the Board suffered from a deficit. However, in June 2011, financial
records showed the county actually had a ten to twelve million dollar surplus.
On 28 March 2011, Carlton could not attend a Board meeting, but Wood spoke
on his behalf. After the meeting, Plaintiffs compiled an envelope to give to the Board
about issues with Stellar. Carlton thought the information needed to be confidential
for two reasons—to protect the people mentioned and to protect Plaintiffs from
retaliation. Carlton attended the Board meeting on 11 April 2011. Before the
meeting began, pursuant to Board procedures, Carlton gave eight envelopes to the
Board’s secretary for distribution to Board members.
On 18 August 2011, the Board bought out Stellar’s contract, releasing him
prior to the end of his contract. The next morning, Morgan resigned. Carlton first
learned of the breach of confidentiality and Morgan’s lawsuit through rumors online.
6 Defendant objected and moved to strike this portion of Vaughan’s testimony. The court had
Plaintiffs’ counsel reword the question and instructed Vaughan to answer “that limited question.”
Vaughan answered, “Should be able to rely on it.”
-9-
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
After reading about the suit on a local blogger’s website, a deputy served Carlton with
the complaint at his business, in front of customers. Three newspapers, a radio
station, and a local blogger covered the lawsuit. As a result of the suit and coverage,
Carlton resigned from his deaconship at his church. Longstanding customers stopped
coming to Carlton’s business. Consequently, Carlton closed the car wash portion of
his business
Plaintiff called Catherine Thomas, a former member and Chair of the Board.
In fall 2010, the Board hired an outside attorney, Chris Campbell, to investigate
complaints about Stellar. In a closed session on 22 November 2010, Campbell
reported his findings to the Board and the Board’s attorney. After his report, the
Board gave “[t]hose documents” back to Campbell, to store at his office, so they did
not become public.
On 28 March 2011, the Board held an open session. Wood spoke at the session,
first about schools closing and then about Stellar and Morgan. Thomas interrupted
Wood and told him, “You can’t discuss personnel matters in, in public like that.”
Thomas told Wood he could finish his speech during a closed session. When Wood
later attended a closed session, “he complained about Dr. Stellar . . . [and] probably
talked about Amy Morgan as well[,]” though Thomas did not recall “specifically” what
Wood said. The closed session ended before Wood could finish his speech. Thomas
instructed Wood to “put it in writing and submit it confidentially.” It was Thomas’s
- 10 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
“intention” to tell Wood to “submit it so that it could be reviewed in closed session[.]”7
At that time, Thomas did not expect that the information Wood gave would be turned
over to Stellar.
At the next Board meeting, on 11 April 2011, each Board member’s seat had
an envelope marked “Confidential.” Inside the envelope, Board members found a
cover letter and other documents “that detailed allegations about Dr. Stellar and
Ms. . . . Amy [Morgan.]” During a following closed session, Thomas read the
materials. When other members asked what to do with the envelope, Thomas replied,
“It’s confidential and we’ll discuss it later.” Additionally, “[t]he school board knew
that personnel matters were confidential and had been trained on that many times.”
Thomas gave her envelope to attorney Campbell. Other members of the Board took
the envelope and documents home.
Sometime after the meeting, Thomas asked Campbell to investigate the
allegations in the report. On 25 April 2011, Campbell reported his findings in a closed
session, without Stellar present. The Board did not take any action on the allegations
at that meeting.
In August 2011, the Board decided to buy out Stellar’s contract. The next day,
Morgan resigned from her position. Thomas did not “think” the Board took any
adverse action against Morgan. Thomas voted in favor of buying out Stellar’s
7 This wording is from Plaintiffs’ counsel’s question, to which Thomas responded in the
affirmative.
- 11 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
contract, in part based on the allegations in the envelope Plaintiffs submitted. On 31
October 2011, Thomas learned the documents became public because of a local blog.
However, she did not give the documents to anyone besides Campbell.
Plaintiff next called Susan Stroup, a former Board member. At the March 2011
closed session, Wood, amongst others, lodged complaints against Stellar. When asked
about the complaints she heard from others and if Wood specifically mentioned an
inappropriate relationship between Stellar and Morgan, Stroup answered, “I don’t
remember that specifically. I just --. I just know that it was directed towards Dr.
Stellar’s -- lots of things about him, just various issues about him. Inappropriate
relationships, as well as, other things, but I, I don’t remember exactly what it was.”
At the 11 April 2011 meeting, Stroup found an envelope marked “Confidential”
in her seat. She was not surprised to see an envelope in her seat, because Stellar
often left packets out for Board members. Stroup “glanc[ed]” at the documents, which
did not contain any information she did not already know. The information “was
pretty common knowledge[.]” Stroup took the documents home with her. However,
another Board member, Rob Hairfield, left his envelope on the desk. Hairfield, due
to health difficulties, often left things on his desk, and Stellar’s secretary “usual[ly]”
got what Hairfield left. Stroup could not specifically remember if the secretary picked
up Hairfield’s envelope at the April 2011 meeting. The Board never voted to keep the
- 12 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
documents away from Stellar and Morgan. After her last Board meeting, Stroup gave
the envelope and documents to “the central office to the superintendent’s secretary.”
Plaintiffs rested.8 Defendant moved for directed verdict. The trial court denied
the motion for directed verdict.
Defendant called Robert Armour, a current member of the Board. At the 11
April 2011 meeting, Armour saw an envelope in his chair. Armour did “nothing” with
the materials at the meeting and took the envelope home. At home, he opened the
envelope and read documents “that implied . . . that referred to rumors and
conjecture” he already heard about Stellar and Morgan. Armour did not give the
documents to another.
Armour also described Board practice during closed sessions. When in closed
session, the Board members “are trained . . . to keep whatever goes on in closed
session meeting quiet.” “Quiet” means “[n]ot to discuss it with anyone else outside
the meeting.” However, at the meeting, the Board did not explicitly vote to keep the
information Plaintiffs gave confidential.
Defendant called Karen Sain, another former Board member. Sain attended
the 11 April 2011 Board meeting and received the envelope from Plaintiffs. She
opened the envelope at the meeting, but did not review it there. Sain took the
envelope and documents home and burned them. The Board did not vote to keep the
8
Plaintiffs also called five other witnesses, but their testimonies are not pertinent to the issues
on appeal.
- 13 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
documents confidential or from Stellar. Sain also described how the Board acts in
closed sessions. Specifically, Sain testified the chairperson cannot make a decision
on her own, as the Board “perform[s] as a body.”
Defendant called Samuel Wilkinson, a member of the Board. Wilkinson
attended the 11 April 2011 meeting. However, Wilkinson did not “specifically
remember receiving” the envelope and documents, though he was “sure that packet
was delivered.” He also did not remember receiving anything from Plaintiffs. He did
not give any materials received as a member of the Board to Stellar or Morgan.
Defendant called Timothy Buff, another former Board member. Buff attended
the 11 April 2011 meeting, where there was an envelope in his seat. Buff did not
review the materials at the meeting and took the envelope home. At the meeting,
Thomas did not say the information in the envelope must remain confidential, and
the Board did not vote to keep the information confidential. Buff did not give the
envelope to anyone.
Defendant called Chris Campbell. Campbell did not work “in-house” as the
Board’s attorney, but as “an independent attorney hired for legal matters.” In 2010,
the Board hired Campbell to investigate Stellar. In April 2011, Campbell received
one of the envelopes distributed to Board members. In August 2011, Stellar asked
Campbell for copies of complaints “made against him in the process of the review[.]”
Campbell did not consult with the Board and sent Stellar the cover letter and other
- 14 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
documents which were in the envelopes Plaintiffs compiled. Campbell considered the
complaint to be a part of Stellar’s personnel file.
Defendant rested and renewed its motion for directed verdict. The court denied
the motion.9 The jury found Defendant liable for invasion of privacy and negligent
infliction of emotional distress as to both Plaintiffs. The jury awarded Plaintiffs
$250,000 each. On 12 October 2016, the trial court entered judgment in accordance
with the jury verdicts.
On 24 October 2016, Defendant filed a motion for judgment notwithstanding
the verdict and a motion for new trial, pursuant to Rule 59(a)(1), (7)-(9). On 16
November 2016, Plaintiffs filed a motion for recovery of litigation costs and expenses.
On 22 November 2016, the court held a hearing on the parties’ motions. After
argument, the court denied Defendant’s motions. The court awarded Plaintiffs
$4,281.85 in costs and expenses. The same day, the court entered orders in
accordance with its oral rulings. On 20 December 2016, Defendant filed notice of
appeal.
II. Jurisdiction
Our Court has jurisdiction pursuant to N.C. Gen. Stat. §§ 1-277(a), 7A-27(b)(1)
(2017).
III. Standard of Review
9 Plaintiffs moved for directed verdict on Defendant’s defense of contributory negligence. The
court granted Plaintiffs’ motion.
- 15 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
We apply several standards of review to examine Defendant’s appeal.
First, we review a trial court’s determination on sovereign immunity de novo.10
White v. Trew, 366 N.C. 360, 362-63, 736 S.E.2d 166, 168 (2013) (citations omitted)
(“[A]lthough not explicitly stated previously, it is apparent that we have employed a
de novo standard of review in other cases involving sovereign immunity.”).
Second, the standard of review for a Rule 12(b)(6) motion to dismiss is de novo.
Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4 (2003). We
use the same standard of review for the denial of a motion for directed verdict and
the denial of a motion for judgment notwithstanding the verdict. Tomika Invs., Inc.
v. Macedonia True Vine Pentecostal Holiness Church of God, Inc., 136 N.C. App. 493,
498-99, 524 S.E.2d 591, 595 (2000) (citation omitted). The standard is “whether the
evidence, taken in the light most favorable to the non-moving party, is sufficient as a
matter of law to be submitted to the jury.” Davis v. Dennis Lilly Co., 330 N.C. 314,
322-23, 411 S.E.2d 133, 138 (1991) (citing Kelly v. Int’l Harvester Co., 278 N.C. 153,
179 S.E.2d 396 (1971)).
In determining the sufficiency of the evidence to withstand
a motion for a directed verdict, all of the evidence which
supports the non-movant’s claim must be taken as true and
considered in the light most favorable to the non-movant,
10 We note whether sovereign immunity is a challenge to personal jurisdiction or subject
matter jurisdiction is unsettled in North Carolina law. See M. Series Rebuild, LLC v. Town of Mount
Pleasant, Inc., 222 N.C. App. 59, 62, 730 S.E.2d 254, 257 (2012) (citations omitted) (“A motion to
dismiss based on sovereign immunity is a jurisdictional issue; whether sovereign immunity is
grounded in a lack of subject matter jurisdiction or personal jurisdiction is unsettled in North
Carolina.”).
- 16 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
giving the non-movant the benefit of every reasonable
inference which may legitimately be drawn therefrom and
resolving contradictions, conflicts, and inconsistencies in
the non-movant’s favor.
Turner v. Duke Univ., 325 N.C. 152, 158, 381 S.E.2d 706, 710 (1989) (citation
omitted).
There must be more than a “scintilla of evidence supporting each element of
the non-movant’s claim.” Denson v. Richmond Cty., 159 N.C. App. 408, 412, 583
S.E.2d 318, 320 (2003) (quotation marks and citation omitted). “A scintilla is some
evidence, and is defined by this Court ‘as very slight evidence.’ ” Mace v. Pyatt, 203
N.C. App. 245, 251, 691 S.E.2d 81, 87 (2010) (some quotation marks and citation
omitted). “If there is evidence to support each element of the nonmoving party’s cause
of action, then the motion for directed verdict and any subsequent motion for
[judgment notwithstanding the verdict] should be denied.” Green v. Freeman, 367
N.C. 136, 140-41, 749 S.E.2d 262, 267 (2013) (quotation marks, citation, and
alteration omitted). We review the trial court’s denial de novo. Denson, 159 N.C.
App. at 411, 583 S.E.2d at 320 (citation omitted).
Third, “an appellate court’s review of a trial judge’s discretionary ruling either
granting or denying a motion to set aside a verdict and order a new trial is strictly
limited to the determination of whether the record affirmatively demonstrates a
manifest abuse of discretion by the judge.” Worthington v. Bynum, 305 N.C. 478, 482,
290 S.E.2d 599, 602 (1982) (citations omitted). “Consequently, an appellate court
- 17 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
should not disturb a discretionary Rule 59 order unless it is reasonably convinced by
the cold record that the trial judge’s ruling probably amounted to a substantial
miscarriage of justice.” Id. at 487, 290 S.E.2d at 605. However, if the motion for a
new trial is based on an error in law occurring at the trial and objected to by the party
making the motion, our Court reviews de novo. Greene v. Royster, 187 N.C. App. 71,
78, 652 S.E.2d 277, 282 (2007) (citations omitted).
IV. Analysis
Defendant contends the trial court erred in the following ways: (1) denying its
motion to dismiss based on immunity; (2) denying its motion to dismiss for failure to
state a claim, motion for directed verdict, and motion for judgment notwithstanding
the verdict; (3) denying its motion for new trial; and (4) awarding Plaintiffs costs and
expenses.
A. Motion to Dismiss Based on Sovereign Immunity
Defendant first contends the court erred by denying its motion to dismiss based
on immunity. In its brief, Defendant asserts sovereign immunity barred both the
invasion of privacy and negligent infliction of emotional distress claims. At oral
argument, however, Defendant conceded it failed to argue below sovereign immunity
barred Plaintiffs’ claim for negligent infliction of emotional distress. Thus,
Defendant’s argument as to the negligence claim is not properly before this Court,
and we do not address it. For reasons stated infra, we need not address whether
- 18 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Defendant’s argument that sovereign immunity barred Plaintiffs’ invasion of privacy
claim would have been meritorious.
B. Motion to Dismiss Based on Failure to State a Claim, Motion for Directed
Verdict, and Motion for Judgment Notwithstanding the Verdict
Defendant next contends the trial court erred by denying its motions to dismiss
pursuant to Rule 12(b)(6), for directed verdict, and for judgment notwithstanding the
verdict. Defendant argues Plaintiffs failed to present sufficient evidence of duty,
breach of duty, and reasonable foreseeability in support of their claim for negligent
infliction of emotional distress.
First, Defendant argues it did not, and could not, owe Plaintiffs any duty for
three reasons: (1) the documents submitted (and information contained therein) were
public information; (2) the closed nature of the Board session did not mean the
matters were confidential; and (3) Thomas’s assertions of confidentiality did not bind
the Board because she acted alone. Plaintiffs contend a duty arose from the
circumstances.
Vaughan, Plaintiffs’ expert on state and local government and administration
and leadership, testified:
BY [PLAINTIFFS’ COUNSEL]:
Q. Well, let me just ask you, in terms of the closed session
in this case, could you explain what we’re talking about and
how that impacts --
A. Sure.
- 19 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Q. -- the issues in this case?
A. In a closed session, information is presented to a body
without the public being in. The public could be in this
particular meeting. They could, could fill the whole
courthouse if they were interested enough in this
particular case. A closed session is the participants in the
closed meeting of, of the board. In this case they had
requested that their information be held confidential.
[DEFENDANT’S COUNSEL]: Objection. Move to strike.
THE COURT: Sustained. Motion to strike is allowed as to
the “keep it confidential.” Next question, please.
BY [PLAINTIFFS’ COUNSEL]:
Q. Let me ask you, in this case is it typical when a, a school
board or any public entity wants to go into closed session,
they have to make a motion to go into closed session and
that has to be voted on by the school board?
A. That’s correct. The statutes are pretty specific. Closed
sessions are a rare animal. Ninety -- I would guess 90
percent of, of all -- 95 percent of all sessions of every board,
board meeting in North Carolina this week would be in
open session. There are just particular things that allow a
board to go into closed session.
Q. Okay. And in this case the board went into closed
session --
A. That’s correct.
Q. -- correct? And then once the board went into closed
session, tell the jury about the importance of citizens being
able to share information with a school board or city council
or county commissioners in closed session.
A. It’s --
- 20 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Q. What, what does that mean?
A. It’s the reason -- It’s the whole basis of democracy. You
have elected the people on a school board to represent you
and your best interest on school-board-type related
matters. They are the people’s representative, and they
make the decisions based on the information that they
have.
And it’s the right of citizens, it’s the basic tenant of
government in North Carolina, that, that citizens can go
before those boards and express their concerns, grievances,
whatever they want to express. That’s, that’s why we have
government and not monarchs and dictators and other
things. That’s why we have the government the way we
have it in North Carolina.
Q. Okay. And once the citizens go before a governmental
entity like a school board in closed session and whatever
statements they make or discussions there are in that
closed session, is that information that they say or people
question, promises made -- is that information that would
be open or public or would that information be --
A. “Closed” means closed.
[DEFENDANT’S COUNSEL]: Objection, Your Honor.
Move to strike.
THE COURT: Overruled.
BY [PLAINTIFFS’ COUNSEL]:
Q. Go, go ahead and explain your answer.
A. Closed sessions are closed sessions. They are not open
to the public. And the information that is brought into that
session is expected to be closed.
Q. Now, let me ask you this: Assuming that the evidence in
this case will tend to show by its greater weight that during
- 21 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
the first closed session in which Mr. Wood made a
presentation to the Burke County Board of Education in
their closed session and made a statement that he wanted
whatever information he shared or gave to the school board
to be kept in confidence, do you have an opinion
satisfactory to yourself as to whether or not during the
course of that actual session that if the chairperson of the
school board told him that the information would be kept
confidential that he could rely on her promise?
[DEFENDANT’S COUNSEL]: Objection, Your Honor.
THE COURT: Sustained as to the form.
[PLAINTIFFS’ COUNSEL]: Okay.
BY [PLAINTIFFS’ COUNSEL]:
Q. State whether or not in a closed session that citizens can
rely on a promise of confidentiality by the chair of, of a
school.
[DEFENDANT’S COUNSEL]: Objection, Your Honor.
THE COURT: Sustained as to the form.
BY [PLAINTIFFS’ COUNSEL]:
Q. Just explain to us the significance of a -- the closed
session as it relates to whatever is promised or said in a
closed session by the chairman of the governmental --
A. I think a citizen ought to be able to rely on the promise
of the chairman of a board.
[DEFENDANT’S COUNSEL]: Objection. Move to strike.
Your Honor, may we approach?
THE COURT: Yes. Wait one second. The response is
nonresponsive to the question. Restate your question.
Listen to the question. Answer the question. The question
again, please.
- 22 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
BY [PLAINTIFFS’ COUNSEL]:
Q. Well, the question is: Explain to the jury how the closed
session relates to any statements made in closed session by
the citizens going before the, the governmental body or any
statements made by the chairman of, of a school board or
any promises made by the chairman of the school board.
How, how do those two things fit together?
[DEFENDANT’S COUNSEL]: Objection, Your Honor.
THE COURT: Overruled as to that. You may answer to
that limited question. Answer, please.
BY [PLAINTIFFS’ COUNSEL]:
A. Should be able to rely on it. That’s the whole basis--
Additionally, Thomas instructed Wood to submit the information
confidentially. Plaintiffs both testified about how the promise of confidentiality
influenced their decision to submit the letter and supporting documents. Plaintiffs
marked “Confidential” on the front of each envelope and asked for confidentiality in
the letter. Wood testified he began his speech during the closed session by saying he
wanted to bring forward “sensitive issues” and “needed to know that they could be
kept confidential.” Former Board member, Robert Armour, testified when in closed
session, Board members “are trained . . . to keep whatever goes on in closed session
meeting quiet.” “Quiet” means “[n]ot to discuss it with anyone else outside the
meeting.” After reviewing the evidence in the light most favorable to the non-movant
- 23 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Plaintiffs, we conclude Plaintiffs produced sufficient evidence of Defendant’s duty
owed.11
Second, Defendant argues Plaintiffs failed to present more than a scintilla of
evidence Defendant breached any duty. Specifically, Defendant contends Plaintiffs
only presented evidence showing attorney Campbell, who did not work as the Board’s
attorney at the time, gave Stellar Plaintiffs’ identities. Defendant further argues that
at trial, Plaintiffs proceeded under a “fail[ure] to secure” theory of negligence—that
Defendant failed to properly secure the confidential information. However, viewing
11 Defendant also contends the Public Records Act required it to provide Stellar and Morgan
with their personnel files, which included Plaintiffs’ identities. N.C. Gen. Stat. § 115C-319 defines a
personnel file as:
Personnel files of employees of local boards of education, former
employees of local boards of education, or applicants for employment
with local boards of education shall not be subject to inspection and
examination as authorized by G.S. 132-6. For purposes of this Article,
a personnel file consists of any information gathered by the local board
of education which employs an individual, previously employed an
individual, or considered an individual’s application for employment,
and which information relates to the individual’s application, selection
or nonselection, promotion, demotion, transfer, leave, salary,
suspension, performance evaluation, disciplinary action, or
termination of employment wherever located or in whatever form.
N.C. Gen. Stat. § 115C-319 (2017).
Defendant argues because Plaintiffs asked the Board to terminate or put Stellar and Morgan
on leave, the letter (and Plaintiffs’ identities) were a part of Stellar’s and Morgan’s personnel files. In
a footnote, Defendant argues the information was not confidential because Stellar has a “right to
judicial review of the reasons and validity of his removal.” Plaintiffs argue “[t]he information
submitted by Plaintiffs does not relate to any promotion, demotion, [or] termination . . . .” Plaintiffs
argue the Board bought out Stellar’s contract—did not demote or terminate him—and Morgan
resigned. While Defendant is correct Stellar would have a right to his personnel file, Plaintiffs made
clear in their letter and at the trial court the confidential information was not just the allegations
within the letter, but also Plaintiffs’ identities as the source of the information. Indeed, the cover
letter explicitly stated, “please consider the source of all items herein to be anonymous or strictly
confidential.” Thus, the Board could inform Stellar of the reasons for the buyout, without disclosing
Plaintiffs’ confidential information—their identities.
- 24 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
the evidence in the light most favorable to Plaintiffs and resolving all contradictions
in Plaintiffs’ favor, we conclude Plaintiffs presented sufficient evidence—more than
mere speculation—Defendant breach its duty to keep Plaintiffs’ identities
confidential.
Finally, Defendant argues Plaintiffs failed to present sufficient evidence of the
reasonable foreseeability they would suffer severe emotional distress. Defendant
points to evidence Wood attempted to openly discuss Stellar’s and Morgan’s alleged
behavior and relationship at the 28 March 2011 Board meeting. Our review of the
evidence, in the light most favorable to Plaintiffs, reveals sufficient evidence of
reasonable foreseeability. Plaintiffs explicitly marked “Confidential” on each
envelope and stated several times in the letter their request for confidentiality. Wood
testified when he attended the Board’s closed session, he told the Board he needed to
discuss “sensitive issues” and “needed to know that they could be kept confidential.”
Chairperson Thomas replied, “[T]hat’s fine[.]” Wood also testified without Thomas’s
promise of confidentiality, he would not have submitted the letter. Thus, we conclude
Plaintiffs presented sufficient evidence of reasonable foreseeability of emotional
distress.
Accordingly, the trial court did not err by denying Defendant’s motion to
dismiss, motion for direct verdict, or motion for judgment notwithstanding the verdict
- 25 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
for Plaintiffs’ negligent infliction of emotional distress claim.12 Below, the jury
awarded both Plaintiffs $250,000 for both negligent infliction of emotional distress
and invasion of privacy. The verdict sheets show the jury awarded the full amount
for both claims to both Plaintiffs and did not divide the amount between the two
claims. Thus, we need not analyze Defendant’s motions as to the invasion of privacy
claim, for the judgment still stands, as we affirm the trial court’s denial of Defendant’s
motions as to the negligence claim.
C. Motion for New Trial
Defendant next argues the trial court erred by denying its motion for new trial
because the court “allowed inadmissible and highly prejudicial testimony and
instructed the jury on an unsupported theory of negligence.” (All capitalized in
original). Defendant’s argument is three-fold and concerns: (1) testimony on lost
future profits; (2) instructing the jury on failure to secure information; and (3)
“[p]rejudicial and [i]rrelevant” testimony.
i. Carlton’s Testimony on Lost Profits
Defendant and Plaintiffs disagree as to whether Defendant preserved this
argument as a ground for its motion for new trial and on appeal. Defendant asserts
it preserved the issue on appeal because it filed and argued a motion in limine and
objected during Carlton’s testimony. However, as argued at the trial court,
12 We conclude the allegations in Plaintiffs’ complaint, taken as true, were sufficient to
withstand Defendant’s motion to dismiss for failure to state a claim.
- 26 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
Defendant did not base its motion in limine on the same grounds now argued on
appeal. Below, Defendant argued Carlton was not an expert and did not give
Defendant his 2015 tax return. During Carlton’s testimony, Defendant did object
several times, but, again, not on the grounds argued on appeal. N.C. R. App. P.
10(a)(1) (2017) (“In order to preserve an issue for appellate review, a party must have
presented to the trial court a timely . . . motion, stating the specific grounds for the
ruling the party desired the court to make[.]”). Defendant contended some numbers
were based on speculation, Carlton was not an expert, and Plaintiffs’ counsel
impermissibly asked leading questions. Defendant did not object to Carlton’s
testimony (or to jury instructions) that “lost business profits are not a proper measure
of damage in this type of tort case.” Accordingly, Defendant did not present this
argument below, and it not properly before us on appeal.
ii. Theory of Negligence Outside the Pleadings
Defendant next argues the trial court erred in instructing the jury on failure
to secure the information when Plaintiffs did not include this theory of negligence in
their pleadings. Defendant further contends this theory “was directly contrary to the
only basis alleged for their claim – that a Board member actively gave the information
to Stellar.” At the outset, Plaintiffs pled multiple theories, two of which were an
intentional act by the Board and negligence by the Board. In their complaint,
Plaintiffs did not limit their allegation of a negligent act to a specific act. Plaintiffs’
- 27 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
complaint alleges “Defendants committed a negligent act[.]” Thus, the negligent act
Plaintiffs forwarded at trial (failure to secure information) was within the pleadings,
as the pleadings were not limited.13
iii. Prejudicial and Irrelevant Testimony
Defendant contends “[t]he trial court continually allowed highly inflammatory
and irrelevant testimony about Stellar which had nothing to do with the legal issues
and which, taken together, painted a negative picture of the management of the
school system which easily could have colored the jury’s view of the Board.”
Defendant specifically points to five portions of testimony. However, Defendant did
not include three of the five portions in its motion for new trial (points one, three, and
five). As for the two portions of testimony properly before this Court, we reviewed
the record below and conclude neither warrants a new trial. Accordingly, we affirm
the trial court’s order denying Defendant’s motion for new trial.
D. Costs and Expenses
Lastly, Defendant contends “[a]s the Board was entitled to dismissal, and/or
directed verdict and/or JNOV and/or new trial, plaintiffs were not entitled to costs
and expenses.” As stated above, we hold the trial court properly denied Defendant’s
13 Defendant is correct in its assertion Plaintiffs pled “That upon information and belief,
around the early part of August, 2011 when Dr. Stellar was still Superintendent of the Board, he
leaked a copy of the confidential packet to Amy Morgan.” However, Plaintiffs also asserted a broad
claim of negligence in their complaint.
- 28 -
CARLTON V. BURKE CTY. BD. OF EDUC.
Opinion of the Court
motions for dismissal, directed verdict, judgment notwithstanding the verdict, and
new trial. Thus, the trial court did not err in awarding Plaintiffs costs and expenses.
V. Conclusion
For the foregoing reasons, we affirm the trial court’s orders and judgment.
AFFIRMED.
Judges BRYANT and ARROWOOD concur.
- 29 -