JAMES HINSON, PLAINTIFF v. CITY OF GREENSBORO, DAVID WRAY, FORMER POLICE CHIEF OF THE CITY OF GREENSBORO, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY, AND RANDALL BRADY, FORMER DEPUTY POLICE CHIEF OF THE CITY OF GREENSBORO, IN HIS OFFICIAL AND INDIVIDUAL CAPACITY, DEFENDANTS
No. COA13-404
IN THE COURT OF APPEALS
4 February 2014
[232 N.C. App. 204 (2014)]
Supreme Court and this Court, the noncompetition agreement at issue here precludes Defendant from working for a competitor in a manner which does not affect the employer‘s legitimate business interests, we hold that the noncompetition agreement at issue here is much broader than is necessary to protect Plaintiff‘s legitimate business interests and is, for that reason, unenforceable. As a result, the trial court erred by issuing a preliminary injunction enforcing the noncompetition provisions of the employment agreement between Plaintiff and Defendant.
III. Conclusion
Thus, for the reasons set forth above, we conclude that, while the trial court‘s decision to enforce the nondisclosure agreement should be affirmed, the trial court erred by concluding that the noncompetition agreement at issue here was enforceable and by issuing a preliminary injunction enforcing that agreement. As a result, the trial court‘s order should be, and hereby is, affirmed in part and reversed in part.
AFFIRMED IN PART; REVERSED IN PART.
Judges ROBERT N. HUNTER, JR. and DAVIS concur.
1. Appeal and Error—interlocutory orders and appeals—denial of motion to dismiss—immunity—substantial right—non-immunity related arguments
Although appeals from interlocutory orders raising issues of governmental or sovereign immunity affect a substantial right sufficient to warrant immediate appellate review, defendants were not entitled to immediate appellate review of the trial court‘s denial of their motions to dismiss on the basis of any non-immunity related arguments. Further, defendant‘s petitions for writ of certiorari were denied.
2. Immunity—sovereign—liability insurance policy—official capacity—waiver—state claims of discrimination
The trial court erred by denying defendants’ motion to dismiss with respect to plaintiff‘s state claims against defendant city and defendants Wray and Brady in their official capacities. Based on the terms of the city‘s liability insurance policy, it had not waived its immunity as to plaintiff‘s state claims of discrimination on the basis of race, conspiracy to discriminate on the basis of race, or conspiracy to injure plaintiff in his reputation and profession. Further, plaintiff‘s claim against defendants Wray and Brady in their official capacities was a suit against the State, and therefore, sovereign immunity applied.
Appeal by defendants from order entered 18 December 2012 by Judge Edwin G. Wilson, Jr., in Guilford County Superior Court. Heard in the Court of Appeals 8 October 2013.
Van Laningham Duncan PLLC, by Allison O. Van Laningham, Alan W. Duncan, and L. Cooper Harrell, for defendant-appellant City of Greensboro.
Smith, James, Rowlett & Cohen, LLP, by Seth R. Cohen, and Carruthers & Roth, P.A., by Kenneth R. Keller, for defendant-appellants Randall Brady and David Wray.
McCULLOUGH, Judge.
Defendants City of Greensboro, David Wray, and Randall Brady appeal from a trial court‘s interlocutory order, denying their motions to dismiss plaintiff James Hinson‘s complaint, except as to plaintiff‘s claim for punitive damages against defendant City of Greensboro. Based on the following reasons, we reverse the trial court‘s denial of defendants’ motion to dismiss with respect to plaintiff‘s State claims against defendant City of Greensboro and defendants David Wray and Randall Brady in their official capacities.
I. Background
On 30 May 2008, plaintiff James Hinson filed a complaint against defendant City of Greensboro (“defendant Greensboro“), David Wray, former Police Chief of the City of Greensboro, in his official and individual capacity (“defendant Wray“), and Randall Brady, former Deputy Police Chief of the City of Greensboro, in his official and individual capacity (“defendant Brady“) (collectively “defendants“). Plaintiff sought compensation and alleged that defendants had subjected plaintiff to discrimination on the basis of race, conspired to discriminate on the basis of race, and conspired to injure plaintiff in his reputation and profession. Plaintiff amended this complaint on 6 February 2009. On 4 September 2009, plaintiff filed a voluntary dismissal of his claims, without prejudice.
Plaintiff filed a second complaint on 3 September 2010. The complaint alleged the following, in pertinent part: Plaintiff, an African-American, started working for the Police Department of the City of Greensboro in 1991 as a police officer in training. Plaintiff received numerous awards and received evaluations at the level of “exceeds expectations” and “superior performance” from the years 2000 through 2010. On 1 December 2001, plaintiff was promoted to Lieutenant. In 2003 and 2004, Chief of Police defendant Wray and Deputy Police Chief defendant Brady began “targeting plaintiff and creating problems for him in his workplace because of plaintiff‘s race.”
The complaint further alleged that in 2003, defendants Wray and Brady directed two officers to gather pictures of various black officers employed by the Greensboro Police Department, including a photograph of plaintiff, to be used in line-up books or to be used in line-up photos while similarly situated white officers were not treated in this manner. From 2003 to 2004, defendants Wray and Brady caused some black officers of the City of Greensboro Police Department, including plaintiff, to be investigated by the Special Investigation Division (“SID“) for alleged misconduct when SID was not created for this purpose. The Criminal Investigation Division (“CID“) and Internal Affairs units were designed to investigate matters involving Greensboro Police Officers. Defendants required white officers suspected of wrongdoing to be investigated by the CID, Internal
Plaintiff was transferred from the Operation Support Division to the Central Division under the direction of a Commanding Officer who required plaintiff to complete a detailed monthly schedule. Plaintiff alleges that similarly situated white officers were not treated in this manner. Plaintiff‘s department-issued computer was installed with a device that would monitor his activity while no other lieutenants in the Greensboro Police Department were monitored. Plaintiff filed a grievance alleging retaliation and a hostile work environment but dropped the grievance after a meeting on 2 February 2005 where defendant Wray, defendant Brady, an Assistant Chief, a Commanding Officer, and Police Attorney were present. In March 2005, at the instruction of defendant Wray, a tracking device was placed on plaintiff‘s patrol car. Defendant Brady advised plaintiff that he was under surveillance because he was “possibly working off duty while on duty in violation of the Greensboro Police Department Departmental Directives and Procedures.” Plaintiff alleged that his race was the motivation in initiating these investigations.
Defendant Wray falsely reported to the City Manager, Deputy City Manager, City Attorney, and media that plaintiff was suspected of being associated with illegal drug activity and other criminal activity. On 17 June 2005, plaintiff was suspended by defendant Wray for alleged ongoing relationships with prostitutes and others who have a reputation in the community for involvement in criminal activity. Defendant Wray also delivered a public media statement falsely alleging that plaintiff was part of an “ongoing multi-jurisdictional criminal investigation” and that plaintiff‘s actions were under “internal review.” Even though plaintiff was cleared by SID for any alleged wrongdoing, defendant Wray initiated an additional investigation of plaintiff by hiring retired and former officers of the Internal Affairs Division. Defendants Brady and Wray approved an additional investigation which did not adhere to the Greensboro Police Department‘s policies and Standard Operating Procedures. It was completed on 31 August 2005. On 5 June 2005, plaintiff was placed on leave. He was reinstated in January 2006. Since 2001, plaintiff has not been promoted and has not received any awards or commendations within the department.
Plaintiff‘s complaint alleged discrimination on the basis of his race, conspiracy to discriminate on the basis of race, and conspiracy to injure plaintiff and his reputation and profession in violation of federal law,
On 22 November 2010, defendant Wray and defendant Brady filed motions to dismiss pursuant to
Following a hearing held on 16 October 2012, the trial court entered an order on 18 December 2012. The order denied defendant Wray‘s motion to dismiss and defendant Brady‘s motion to dismiss. The order denied defendant Greensboro‘s motion to dismiss, except as to the claim for punitive damages against defendant Greensboro. As to that claim only, the motion to dismiss was allowed.
From this order, defendants appeal.
“On appeal of a 12(b)(6) motion to dismiss for failure to state a claim, our Court conducts a de novo review[.]” Ventriglia v. Deese, 194 N.C. App. 344, 347, 669 S.E.2d 817, 819-820 (2008) (citation omitted). “We consider ‘whether the allegations of the complaint, if treated as true, are sufficient to state a claim upon which relief can be granted under some legal theory.‘” Bridges v. Parrish, 366 N.C. 539, 541, 742 S.E.2d 794, 796 (2013) (citation omitted). “The court must construe the complaint liberally and should not dismiss the complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief.” Enoch v. Inman, 164 N.C. App. 415, 417, 596 S.E.2d 361, 363 (2004) (citation and quotation marks omitted).
“Dismissal is proper, however, when one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiff‘s claim; (2) the complaint on its face reveals the absence of facts sufficient to make a good claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff‘s claim.” Newberne v. Dep‘t of Crime Control & Pub. Safety, 359 N.C. 782, 784, 618 S.E.2d 201, 204 (2005) (citation and quotation marks omitted).
III. Discussion
A. Scope of Review
[1] As a preliminary matter, we must first identify the issues that are properly before this Court.
“This Court has held that appeals from interlocutory orders raising issues of governmental or sovereign immunity affect a substantial right sufficient to warrant immediate appellate review.” Williams v. Devere Const. Co., Inc., 215 N.C. App. 198, 202, 716 S.E.2d 21, 25 (2011) (citation omitted). However, this only applies “for denial of a motion to dismiss under Rules 12(b)(2), 12(b)(6), and 12(c), or a motion for summary judgment under Rule 56. We cannot review a trial court‘s order denying a motion to dismiss under Rule 12(b)(1).” Horne v. Town of Blowing Rock, 223 N.C. App. 26, 33, 732 S.E.2d 614, 621 (2012). Therefore, defendants’ challenges to the trial court‘s denial of their motion to dismiss under
Defendants have also sought immediate review of the trial court‘s denial of their motion to dismiss based on non-immunity related challenges by petitioning this Court.2 However, defendants have not stated how a substantial right would be lost absent immediate appellate review of these non-immunity related challenges. Because it is well established that “[i]t is not the duty of this Court to construct arguments for or find support for appellant‘s right to appeal from an interlocutory order” and that “the appellant has the burden of showing this Court that the order deprives the appellant of a substantial right which would be jeopardized absent a review prior to a final determination on the merits[,]” we decline to review the non-immunity related challenges to the trial court‘s denial of defendants’ motions to dismiss. Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 380, 444 S.E.2d 252, 254 (1994) (citations omitted). See Bynum v. Wilson County, 228 N.C. App. 1, 4-5, 746 S.E.2d 296, 299-300 (2013) (granting review of an interlocutory order raising issues of governmental or sovereign immunity but limiting the scope of review to only immunity-related challenges).
B. Sovereign Immunity
[2] Defendants argue that plaintiff‘s state law claims of discrimination on the basis of race, conspiracy to discriminate on the basis of race, and conspiracy to injure plaintiff in his reputation and profession all fail under the doctrine of governmental immunity.
It is well established that “[s]overeign immunity shields the State, its agencies, and officials sued in their official capacities from suit on state law claims unless the State consents to suit or waives its right to sovereign immunity.” Toomer v. Garrett, 155 N.C. App. 462, 480, 574 S.E.2d 76, 91 (2002) (citation omitted). “The rule of sovereign immunity applies when the governmental entity is being sued for the performance of a governmental, rather than proprietary, function.” Dalenko v. Wake Cty. Dep‘t of Human Servs., 157 N.C. App. 49, 55, 578 S.E.2d 599, 603 (2003) (citation omitted). “Law enforcement is well-established as a governmental function, and includes the training and supervision of officers by a police department.” Pettiford v. City of Greensboro, 556 F. Supp. 2d 512, 524 (2008) (citations and quotation marks omitted).
“A [city] may, however, waive such immunity through the purchase of liability insurance. [I]mmunity is waived only to the extent that the [city] is indemnified by the insurance contract from liability for the acts alleged.” Satorre v. New Hanover County Bd. of Comm‘rs, 165 N.C. App. 173, 176, 598 S.E.2d 142, 144 (2004) (citations and quotation marks omitted). A municipality may also waive its immunity by participating in a local government risk pool.
We find Pettiford v. City of Greensboro, 556 F. Supp. 2d 512 (M.D.N.C. 2008), to be instructive on the issue before us. In Pettiford, plaintiffs Nicole and Anthony Pettiford sought civil damages based on alleged misconduct arising from an investigation by the Greensboro Police Department which is operated and owned by the defendant City of Greensboro. Id. at 515. The plaintiffs filed the action in the Superior Court of Guilford County, North Carolina, seeking recovery under the United States Constitution, pursuant to
The Pettiford court noted that the City of Greensboro acknowledged its participation in a Local Government Excess Liability Fund (“Fund“) and purchased an excess liability insurance policy, but that “neither constitute[d] a waiver of its immunity.” Id. at 525. Uncontested evidence established that the City of Greensboro is self-insured up to $100,000.00 and that the Fund pays claims between $100,000.00 and $3,000,000.00, though the City of Greensboro is obligated to repay the Fund in the entirety. Id. The court in Pettiford concluded that the Fund did not waive the City of Greensboro‘s immunity
Furthermore, the Pettiford court concluded that the City of Greensboro‘s purchase of excess liability insurance did not waive its governmental immunity based on the explicit language of the policy. The City of Greensboro acknowledged that it purchased a $5 million excess liability policy to cover claims above $3 million. The Pettiford court examined the policy provisions of the excess liability insurance and found them to be substantially similar to those found in Magana v. Charlotte-Mecklenburg Board of Education, 183 N.C. App. 146, 645 S.E.2d 91 (2007), where our Court held that a local governmental entity had not waived its immunity through the purchase of excess liability insurance. Id. at 527. Both the policy found in Magana and the City of
Greensboro‘s policy in Pettiford “disclaim[ed] any right of indemnification until (1) the damages exceed a self-insured retention amount ($1 million in Magana and $3 million in [Pettiford]); (2) the insured has a legal obligation to pay those damages; and (3) the insured actually pays those damages to the claimant.” Id. at 529. The Pettiford court concluded the following:
This excess liability insurance does not apply unless and until the City has a legal obligation to pay the $ 3 million self-insured amount. Because the City is immune from negligence claims up to $ 3 million, it will never have a legal obligation to pay this self-insured amount and, thus, has not waived its immunity through the purchase of this excess liability insurance policy.
The City of Greensboro‘s motion to dismiss and supplemental motion to dismiss the negligence claims were granted. Id. at 529.
In the case before us, plaintiff argued in the 3 September 2010 complaint that defendant Greensboro had waived its governmental immunity by the purchase of liability insurance. In its motion to dismiss, defendant Greensboro acknowledges the purchase of liability insurance, but maintains that the liability insurance does not constitute a waiver of its sovereign immunity. In support of its defense, defendant Greensboro filed the affidavit of Everette Arnold, Executive Director of the Guilford City/County Insurance Advisory Committee and the insurance contracts themselves4. The evidence indicates that in 2004, defendant Greensboro purchased a $5 million excess liability policy with a $3 million self-insured retention from the Genesis Insurance Company. Arnold‘s affidavit stated that “the retained limit ($3,000,000.00) ‘must be paid by the Insured. ...’ Thus, under the terms of the policy, the City [of Greensboro] is responsible for paying $3,000,000.00 before there is any potential coverage under the Genesis Insurance policy.” The language of the insurance policy states that “[t]his policy is not intended by the Insured to waive its governmental immunity[.]” We find these policy provisions to be substantially similar to those found in Magana and Pettiford.
Based on the terms of defendant Greensboro‘s liability insurance policy, we hold that defendant Greensboro has not waived its immunity as to plaintiff‘s State claims of discrimination on the basis of race, conspiracy to discriminate on the basis of race, and conspiracy to injure plaintiff in his reputation and profession. Furthermore, plaintiff‘s claims against defendants Wray and Brady in their official capacities “is a suit against the State” and therefore, sovereign immunity applies. White v. Trew, 366 N.C. 360, 363, 736 S.E.2d 166, 168 (2013) (citation omitted); See Clayton v. Branson, 153 N.C. App. 488, 493, 570 S.E.2d 253, 257 (2002) (stating that “[a]n officer acting in his official capacity shares the municipalities immunity or waiver” (citation omitted)). Accordingly, we reverse the trial court‘s denial of defendants’ motion to dismiss with respect to plaintiff‘s
Reversed.
Judges MCGEE and DILLON concur.