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Rountree v. Chowan County

Court of Appeals of North Carolina

March 7, 2017


          Heard in the Court of Appeals 2 November 2016.

         Appeal by plaintiff from order entered 18 December 2015 by Judge J. Carlton Cole in Chowan County No. 13 CVS 88 Superior Court.

          Maginnis Law, PLLC, by Edward H. Maginnis and T. Shawn Howard, for plaintiff-appellant.

          Womble Carlyle Sandridge & Rice, LLP, by Theresa M. Sprain and Lawrence A. Moye, IV, for defendant-appellee.

          ELMORE, Judge.

         Wilton Gene Rountree (plaintiff), a former tax administrator, retired from his employment with Nash County before accepting a new position with Chowan County (defendant) on a limited basis. After working for nearly two years, plaintiff learned that the terms of his employment with defendant had rendered him ineligible to receive retirement benefits. He resigned and sued defendant for breach of contract and negligent misrepresentation. The trial court granted summary judgment for defendant on both claims.

         Plaintiff appeals, arguing that the trial court erred in granting summary judgment on his negligent misrepresentation claim. Upon review, we hold that summary judgment for defendant was proper because (1) plaintiff failed to forecast evidence which, taken as true, would establish that defendant owed plaintiff a duty of care apart from defendant's purported contractual obligation; and (2) assuming the existence of a separate legal duty, plaintiff failed to produce evidence tending to show that his reliance was justifiable. Affirmed.

         I. Background

         In 2009, defendant was experiencing financial difficulties. It had been forced to increase taxes twice in the preceding year to fund its operations and, to make matters worse, its longtime tax administrator resigned unexpectedly. Plaintiff was referred to Peter Rascoe, the Chowan County manager, as a potential replacement. Plaintiff had served as a tax administrator, first in Edgecombe County and then Nash County, before his retirement in February 2009. Impressed with plaintiff's experience and reputation, Rascoe contacted plaintiff to discuss the position.

         As a retiree, plaintiff was receiving benefits through the Local Government Employees' Retirement System (LGERS). During his initial meeting with Rascoe, plaintiff expressed interest in the tax administrator position but made clear that he wanted to protect his retirement benefits. After their meeting, Rascoe sent plaintiff an offer letter describing the terms of the proposed employment agreement. The letter provided in part:

As a retiree realizing benefits from the local government retirement system and health insurance benefits from your former employer, you have expressed interest in the position on a contract basis. I am prepared to offer you such an arrangement along the parameters we discussed. As such, the position if accepted by you, would be an "at will" contract relationship. I am prepared to offer such an arrangement to you for at least a term of twenty-four months with the hope that it may continue for a longer period if both parties are in agreement.

         On the more specific conditions, the letter stipulated that plaintiff would receive an annual salary of $46, 800.00, or $30.00 per hour based on the number of actual hours worked per week, with a target of a thirty-hour work week. Defendant would not withhold retirement contributions, as plaintiff was already receiving those benefits.

         Rascoe, an attorney, knew the state had employment restrictions in place for its retirees which, if not observed, could disqualify them from their retirement benefits. During his deposition, Rascoe explained that he was acting in defendant's interest when he drafted the letter although he tried to address plaintiff's concerns. He did not represent or guarantee that plaintiff's benefits would be safe under the proposed terms of employment but he did believe that plaintiff would find them suitable. Rascoe testified: "It was my understanding that we had presented him . . . with an arrangement that he could agree to that he would have-he could make the determination whether or not it affected his retirement . . ., but it was our understanding . . . of the system that this did that. We thought."

         Plaintiff himself was also familiar with LGERS. When he prepared to retire from his position in Nash County, he had consulted the State Employee Retirement Handbook, which contained the benefits eligibility requirements, to determine the amount of money he could expect to receive in retirement. He acknowledged during his deposition that he would have been responsible for maintaining his own benefits eligibility. According to plaintiff's testimony and affidavit, however, Rascoe "assured" him that the employment contract would protect his benefits. Beyond his ...

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