374 N.C. 726
N.C.2020Background
- Winkler, a Heating Group 3 Class II (H-3-II) licensee not authorized for commercial pool heaters, inspected a Best Western pool heater, turned on its gas supply, and later performed an incomplete ventilation check. Multiple hotel guests subsequently died of carbon monoxide poisoning traced to the pool-heater ventilation system.
- The North Carolina State Board of Plumbing, Heating & Fire Sprinkler Contractors investigated, found Winkler performed work beyond his license, suspended his license for one year, and ordered remedial courses.
- Winkler appealed administratively and in superior court; the trial court affirmed the Board. On appeal (Winkler I) the Court of Appeals held the Board lacked jurisdiction to discipline Winkler for the pool-heater inspection.
- Winkler sought attorney’s fees under N.C.G.S. § 6-19.1 and § 6-20; the superior court awarded $29,347.47. The Court of Appeals reversed, reading § 6-19.1 to exclude disciplinary actions by licensing boards.
- The North Carolina Supreme Court granted discretionary review to decide (1) whether § 6-19.1 bars fee awards in licensing-board disciplinary actions and (2) whether the Board acted without substantial justification. The Court held § 6-19.1 does not categorically bar fee awards in licensing-board disciplinary actions but reversed the fee award because the Board was substantially justified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether N.C.G.S. § 6-19.1 excludes "disciplinary action[s] by a licensing board" from fee awards | § 6-19.1 only excludes rate-fixing adjudications; disciplinary actions are not excluded | The comma-delimited language shows disciplinary actions are an express exception to fee awards | Court: statutory language is ambiguous grammatically; disciplinary proceedings are administrative (not civil) and the statute authorizes fee awards in licensing-board disciplinary actions |
| Whether the Board acted "without substantial justification," such that fees are proper | Winkler: Board should have known it lacked authority to discipline for the inspection, so acted without substantial justification | Board: its position was rational and legitimate in light of facts (restoration/installation theory) | Court: Board was substantially justified; trial court abused discretion in awarding fees; fee award reversed |
Key Cases Cited
- Applewood Props., LLC v. New S. Props., LLC, 366 N.C. 518 (statutory interpretation standard)
- Crowell Constructors v. State ex rel. Cobey, 342 N.C. 838 (defines "substantial justification" standard for State litigation)
- Pierce v. Underwood, 487 U.S. 552 (Supreme Court discussion of substantial justification standard)
- Empire Power Co. v. N.C. Dep’t of Env’t, Health & Nat. Res., 337 N.C. 569 (administrative vs. judicial components; judicial review availability)
- Porsh Builders, Inc. v. City of Winston-Salem, 302 N.C. 550 (statutory construction principle against rendering provisions redundant)
- High Rock Lake Partners, LLC v. N.C. Dep’t of Transp., 234 N.C. App. 336 (standard of review for § 6-19.1 fee awards)