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Caudill v. Dellinger

June 16, 1998


The opinion of the court was delivered by: Horton, Judge.

Appeal by plaintiff Shannon Caudill from orders entered 19 May 1997 and 3 June 1997, and appeal by defendant James L. Dellinger from the order entered 3 June 1997, all by Judge C. Preston Cornelius in Surry County Superior Court. Heard in the Court of Appeals 1 April 1998.

On 1 October 1991, plaintiff Shannon Caudill ("Caudill") began employment as an administrative assistant in the office of James L. Dellinger ("Dellinger"), then District Attorney for Judicial District 17-B (Surry and Stokes Counties). During October 1994, Caudill was interviewed by agents of the State Bureau of Investigation ("SBI"), who were investigating allegations that Dellinger had falsified expense reimbursement documents submitted to the State of North Carolina, and had caused his wife's name to be forged on certain banking and tax documents. Caudill answered the agents' questions about the forged documents and about Dellinger's relationship with Old North State Bank ("Bank").

Prior to 2 November 1994, SBI agents questioned Dellinger about his dealings with the Bank. Caudill stated in her deposition that Dellinger called her into his office on 2 November 1994 and asked her what she had told the SBI, since she was the "only one who knew about [his dealings with Old North State Bank]." According to Caudill, when she acknowledged she had talked with SBI agents about the Bank, Dellinger told her she was insubordinate, she was fired, and she had "one d-mn hour to get [her] sh-t out of [the office]."

Dellinger stated in his deposition that during the fall of 1994 he suffered heart problems which caused his hospitalization. Upon his release, he learned Caudill had made comments to the effect that she wished he had died, and that he had "faked" a heart attack to get sympathy. Dellinger stated further that he noticed a change in Caudill's attitude towards him, and other employees in his office complained about Caudill's attitude. On 2 November 1994, Dellinger talked by telephone with Cynthia Phillips, acting personnel administrator for the Administrative Office of the Courts ("AOC"), and told her that he had lost confidence in the loyalty of Caudill. He also told her about certain negative comments Caudill had allegedly made about him. He did not discuss the ongoing SBI investigation with Ms. Phillips or tell her that Caudill had talked with the agents. Ms. Phillips advised Dellinger it was "within his authority to fire [Caudill] if he wanted to."

In April 1995, Dellinger resigned as District Attorney, and C. Ricky Bowman ("Bowman") became the District Attorney for District 17-B. On 5 May 1995, Caudill filed this action against Dellinger, Bowman (in his official capacity), and AOC. Caudill alleged six separate claims for relief against Dellinger, including: (1) he violated her rights under the North Carolina "Whistleblower Act," (N.C. Gen. Stat. § 126-84 (Cum. Supp. 1997), et seq.); (2) she was wrongfully discharged from her employment; (3) she was deprived of her freedom of speech as guaranteed by Article 1, § 14 of the North Carolina Constitution; (4) she was deprived of her right to freedom of speech under the First and Fourteenth Amendments to the United States Constitution in violation of 42 U.S.C. § 1983; (5) she was deprived of her property without due process in violation of the Fourteenth Amendment to the United States Constitution in violation of 42 U.S.C. § 1983; and (6) she was deprived of her property without due process in violation of Article 1, § 19 of the North Carolina Constitution. Plaintiff also added a seventh claim for relief against Bowman, contending that he could give her equitable relief by reinstating her, and could also pay money damages to her. In her eighth claim for relief, plaintiff alleged AOC was in a position to provide money damages and restoration of employment benefits to her. Caudill prayed for compensatory damages "from the defendants," including back wages and reinstatement of fringe benefits; that her actual damages be trebled; that she be reinstated to her former position; and that she recover her costs, including reasonable attorneys' fees.

In November 1995, the trial court dismissed Caudill's claims against defendants AOC and Bowman for common law wrongful discharge and for monetary relief against them under 42 U.S.C. § 1983. Caudill did not appeal from that dismissal. On 19 May 1997, summary judgment was entered for defendants AOC and Bowman on all the remaining claims against them. On 3 June 1997, summary judgment was entered for defendant Dellinger on the claim under the Whistleblower Act, but denied as to the remaining causes of action against him. Both Caudill and Dellinger appealed from the entries and denial of summary judgment.

Elliot, Pishko, Gelbin & Morgan, P.A., David C. Pishko, for plaintiff appellant.

White and Crumpler, by Dudley A. Witt and Laurie A. Schlossberg, for James L. Dellinger, defendant appellant-appellee.

Attorney General Michael F. Easley, by Assistant Attorney General Robert M. Curran, for C. Ricky Bowman and Administrative Office of the Courts, defendant appellees.

This appeal presents the following issues for decision: (I) whether Caudill forecast sufficient evidence to support her claim against Dellinger under the North Carolina Whistleblower Act; (II) whether Caudill forecast sufficient evidence to support her claim against Dellinger for common law wrongful discharge; (III) whether Caudill may bring claims against Dellinger, in his individual capacity, for violations of her rights to free speech and to due process of law under the North Carolina Constitution; (IV) whether Caudill may bring claims against Dellinger, in his individual capacity, for deprivation of her rights to free speech and due process under the United States Constitution in violation of 42 U.S.C. § 1983; and (V) whether plaintiff Caudill forecast sufficient evidence to support any of her claims against AOC and Bowman, and to resist those defendants' motions for summary judgment. We will first discuss plaintiff's claims against former District Attorney Dellinger, combining for Discussion the two claims based on the North Carolina Constitution, and combining the two § 1983 claims.

(I) The Whistleblower Act

Chapter 126 of the North Carolina General Statutes (State Personnel System) was enacted in 1965 for the express purpose of "establish[ing] for the government of the State a system of personnel administration under the Governor . . . ." N.C. Gen. Stat. § 126-1 (Cum. Supp. 1997). Chapter 126 created the State Personnel Commission and gave it power to establish rules and policies governing personnel matters. N.C. Dept. of justice v. Eaker, 90 N.C. App. 30, 34, 367 S.E.2d 392, 395, disc. review denied, 322 N.C. 836, 371 S.E.2d 279 (1988). Various categories of employees, including constitutional officers of the state, were exempted from portions of the Act. Other categories, including public school employees, and community college employees, were totally exempted from the Act. In 1989, Chapter 126 was amended by Chapter 236 of the 1989 Session Laws (Senate Bill 125), entitled "AN ACT TO ENCOURAGE REPORTING OF FRAUD, WASTE, AND ABUSE IN STATE GOVERNMENT AND ENDANGERMENT TO THE PUBLIC HEALTH AND SAFETY, AND TO PROTECT INFORMANT STATE EMPLOYEES FROM RETALIATION." Senate Bill 125 added Article 14, popularly known as the "Whistleblower Act," to Chapter 126. Senate Bill 125 amended the provisions of Chapter 126 which set out numerous categories of exempt employees, by adding the following language: "(c5) Notwithstanding any other provision of this Chapter, Article 14 of this Chapter shall apply to all State employees, public school employees, and community college employees."

The trial court granted defendant Dellinger's motion for summary judgment on the "Whistleblower" claim, apparently at least partially on the theory that the provisions of the Act do not apply to constitutional officers of the state under N.C. Gen. Stat. § 126-5(c1)(1) (Cum. Supp. 1997), which provides that "Constitutional officers of the State" are exempt from the provisions of Chapter 126 (except for two articles not pertinent to this appeal). Likewise, N.C. Gen. Stat. § 126-5(c1)(2) exempted "Officers and employees of the Judicial Department." Defendant Dellinger was a district attorney at all times pertinent hereto, and all parties agree that he was a constitutional officer of the state pursuant to Article IV, Section 18, of the North Carolina Constitution. Plaintiff was administrative assistant to the District Attorney pursuant to the provisions of N.C. Gen. Stat. § 7A-68 (1995), and thus was an employee within the Judicial Department. N.C. Gen. Stat. § 126-5(c5), the pertinent provision of the Whistleblower Act, makes it clear, however, that the protection of the Act applies to all state employees, regardless of any other provision of Chapter 126. N.C. Gen. Stat. § 126-5(c5). We note that N.C. Gen. Stat. § 126-5(c5) also specifically includes public school employees and community college employees, two groups which were excluded prior to the amendment.

The legislative intent that the protections of this legislation apply to all state employees is clear; and we hold, therefore, that the provisions of the Whistleblower Act apply to plaintiff Caudill. The Act provides, in pertinent part, that "[n]o head of any State department, agency or institution or other State employee exercising supervisory authority shall discharge . . ." a state employee because of a report of activities described in the Act. N.C. Gen. Stat. § 126-85(a) (Cum. Supp. 1997). Caudill served at the pleasure of the District Attorney and under his direct supervision. The Act authorizes an action against "the person or agency who committed the violation . . . ." N.C. Gen. Stat. § 126-86 (1995) (emphasis added). Here, Caudill contends Dellinger committed a violation of the Act by discharging her for protected activity. She brings this action against Dellinger individually, as the "person . . . who committed the violation" of the Act. It would be contrary to the intent and spirit of the Whistleblower Act that Caudill be denied relief merely because Dellinger, as a constitutional officer, is exempted from certain other portions of the Chapter which have no relationship to the Whistleblower provisions. See In Re Filing by Fire Ins. Rating Bureau, 275 N.C. 15, 34, 165 S.E.2d 207, 220 (1969) (statute is to be construed in light of the purpose to be accomplished by the legislation). Our construction of the Act results in no conflict between the two sections in question, and tends to suppress the evil which the legislature intended to prevent by this remedial legislation. In re Hardy, 294 N.C. 90, 96, 240 S.E.2d 367, 372 (1978).

Further, even if we assume arguendo that the two provisions in question are in pari materia, but are in irreconcilable conflict, the provisions of N.C. Gen. Stat. § 126-5(c5) were added later in time and will control. State v. Hutson, 10 N.C. App. 653, 657, 179 S.E.2d 858, 861 (1971). Application of that general rule of construction would seem to be especially appropriate in this case, since N.C. Gen. Stat. § 126- 5(c5) provides that Article 14 applies to all state employees "[n]otwithstanding any other provision of . . . Chapter [126]."

Further, plaintiff's forecast of evidence makes out a prima facie claim under the Whistleblower Act. Such a claim consists of the following elements: "(1) [plaintiff] engaged in protected activity, (2) followed by an adverse employment action, and (3) that the protected conduct was a substantial or motivating factor in the adverse action." Hanton v. Gilbert, 126 N.C. App. 561, 571, 486 S.E.2d 432, 439 (citation omitted), disc. review denied, 347 N.C. 266, 493 S.E.2d 454 (1997). In this case, Caudill has forecast evidence tending to show that she was performing satisfactorily as Dellinger's administrative assistant until she talked with SBI agents in connection with their official investigation of Dellinger, when Dellinger learned of her actions he discharged her almost immediately, and her cooperation with SBI agents was a substantial or motivating factor in the decision to discharge her. As required by the holding in Hanton, Dellinger forecast evidence in support of his motion for summary judgment tending to show that he discharged Caudill "`based on a legitimate non-retaliatory motive,'" because of her change in attitude, negative comments she had made about him, and his loss of confidence in her loyalty. Id. Caudill meets her burden in her ...

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