Watts-Robinson v. Shelton, 251 N.C. App. 507

Watts-Robinson was disbarred on 2 December 2014 for mismanaging entrusted client funds and other professional misconduct.
During Watts-Robinson’s disciplinary hearing, Shelton testified regarding her handling of Billips settlement funds and concerns about deposits.
After the hearing, the Disciplinary Hearing Commission issued a disbarment order disbarring Watts-Robinson.
On 10 November 2015, Watts-Robinson filed a defamation action against Shelton alleging his statements were defamatory.
Shelton moved to dismiss under Rule 12(b)(6), attaching the disbarment order and arguing absolute privilege for statements in a judicial proceeding.
The superior court dismissed Watts-Robinson’s defamation action; Watts-Robinson appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Shelton’s statements during the disciplinary hearing absolutely privileged?	Watts-Robinson argues the statements were not sufficiently relevant and should not be absolutely privileged.	Shelton argues statements in a judicial proceeding are absolutely privileged if sufficiently relevant.	Shelton’s statements were absolutely privileged; dismissal proper.
Was the disbarment order admissible under Rule 403, and did its prejudice outweigh its probative value?	The disbarment order was prejudicial and should have been excluded.	The order is probabilative of privilege relevance and the bench trial reduces risk of prejudice.	No Rule 403 error; court did not improperly weigh prejudice against probative value.

Jarman v. Offutt, 239 N.C. 468 (1954) (absolute privilege for statements made in judicial proceedings; malice not required)
Harman v. Belk, 165 N.C. App. 819 (2004) (palpably irrelevant standard for absolute privilege)
Harris v. NCNB Nat’l Bank of N.C., 85 N.C. App. 669 (1987) (test of sufficiency of relevance to proceedings for privilege)
State Bar v. Adams, 769 S.E.2d 406 (2015) (Rule 403 balancing in disciplinary context; admission of relevant evidence)