DR. EDWARD E. FULLER, SR., Plaintiff,
WAKE COUNTY, a Body Politic and Corporate, Defendant.
in the Court of Appeals 8 February 2017.
by plaintiff from order entered 24 March 2016 by Judge A.
Graham Shirley in Wake County Superior Court Wake County, No.
14 CVS 12481.
McDonald Noecker LLP, by David W. McDonald and William E.
Mitchell, for plaintiff-appellant.
of the Wake County Attorney, by Senior Deputy Wake County
Attorney Roger A. Askew, Senior Assistant County Attorney
Jennifer Jones, and Senior Assistant County Attorney Allison
Pope Cooper, for defendant-appellee.
governmental immunity case concerns whether a county can face
liability for making discretionary decisions relating to the
manner by which it meets its statutorily delegated
responsibilities to ensure its citizens are provided
emergency medical services (EMS) and to regulate EMS within
Edward Fuller, Sr. served as volunteer treasurer of Six Forks
Rescue Squad, Inc. (Six Forks), a non-profit EMS provider
franchised by Defendant Wake County to provide EMS within a
certain district as part of its county-wide EMS system. Six
Forks was required by its franchise agreement to undergo
annual audits and to submit those reports to Wake County. In
2011, Wake County discovered that Six Forks had submitted a
fraudulent audit report for fiscal year 2009 (FY2009). This
discovery prompted the board of directors of Six Forks (Six
Forks Board) to resolve to immediately cease Six Forks's
EMS operations and temporarily transfer its emergency
vehicles and medical supplies to Wake County; Wake County EMS
and other contract providers assumed operational control of
EMS delivery within Six Forks's district to ensure
seamless provision of EMS to Wake County citizens.
Subsequently, the Six Forks Board voted to voluntarily
dissolve Six Forks and transfer eight ambulances and two
trucks to Wake County, which accepted the vehicles into its
county-wide EMS system. Wake County has assumed operational
control of Six Forks's service district ever since.
discovery of Six Forks's fraudulent FY2009 audit report
also triggered a criminal investigation by the Raleigh Police
Department (RPD), requested in part by the Internal Audit
Director of Wake County. The investigation revealed
questionable charges to Six Forks's business banking
accounts, which were solely managed by its treasurer, Fuller,
and its bookkeeper, Jill Cafolla. As a result, Fuller was
charged with and arrested for allegedly embezzling $10,
000.00 from Six Forks.
Fuller's embezzlement charge was dismissed, he sued Wake
County and ten fictitious defendants, alleging they falsely
and maliciously accused him of embezzlement in order to
trigger a publicized criminal investigation into Six Forks as
a pretext to force an involuntary takeover. Fuller alleged
that engineering such a hostile takeover served Wake
County's alleged long-term stated goal to consolidate
independent EMS providers into its county-wide EMS system. In
response, Wake County raised the complete defense of
governmental immunity and moved to dismiss Fuller's
claims. After a hearing, the trial court entered an order
dismissing Fuller's claims as to the fictitious
defendants on grounds that they were barred by the statute of
limitations. Wake County later moved for summary judgment on
grounds of governmental immunity. After a hearing, the trial
court entered an order awarding Wake County summary judgment,
thereby dismissing Fuller's claims with prejudice.
appeal, Fuller argues that (1) Wake County's actions were
proprietary and, therefore, unshielded by governmental
immunity; and (2) Wake County waived any immunity it might
enjoy. Fuller also argues that (3) Wake County is liable to
him as a transferee of Six Forks's assets under statutory
and common law successor-liability theories. After careful
review, we affirm the trial court's order.
1976, Wake County has issued Six Forks annual franchises to
provide EMS to its citizens within a certain district as part
of its county-wide EMS system. The franchise agreement
required Six Forks to engage in annual audits and to submit
those reports to the Wake County's Director of Budget and
Management Services, Finance Officer, and EMS Director, no
later than 1 October of each succeeding fiscal year.
2009, Fuller was elected by the Six Forks Board to serve as
Six Forks's treasurer. In 2010, Wake County officials
discovered that it did not have a budget from Six Forks or a
copy of Six Forks's FY2009 audit report. At Wake County
EMS Medical Director Brent Myers's request, around 16
June 2010, Cafolla sent a FY2009 audit report to Chief of Six
Forks Daniel Cline, who then forwarded it to Wake County
officials. In February 2011, Wake County was alerted that Six
Forks failed to submit its FY2010 audit report and, after
several unanswered requests, discovered that Fuller had
failed to secure an auditor for FY2010.
March 2011, Wake County Internal Audit Director John
Stephenson met with Myers, Cline, and Fuller, to review Six
Forks's cash projection in order to ensure its payroll
and bill obligations would be met. During the meeting,
Stephenson closely reviewed the FY2009 audit and opined that
it reported a $65, 000.00 profit but should have shown a $2,
000.00 loss and contained a potentially fraudulent signature.
Six Forks's FY2009 audit was then forwarded to and
investigated by the North Carolina State Board of Certified
Public Accountant Examiners, which confirmed the signature
had been forged. In late April 2011, Stephenson alerted
Fuller and Six Forks the FY2009 audit was a fake. On 1 May
2011, at President of Six Forks Ed Bottum's request,
Fuller resigned as its treasurer.
May 2011, the Six Forks Board called an emergency meeting and
resolved immediately to cease its EMS operations and to
transfer its eight ambulances, two trucks, and medical
supplies to Wake County for the next 30 days in order
"to maintain seamless emergency medical care to the
citizens of Wake County." Wake County EMS and a few
other contract providers assumed operational coverage of Six
Forks's service district and, around 21 June 2011, Six
Forks and Wake County executed an asset transfer agreement to
effectuate the transfer of Six Forks's emergency vehicles
to Wake County. According to the agreement, Wake County
accepted the vehicles, valued at $348, 450.00, for $1 of
May 2011, according to police reports, Cline called the RPD
and reported that Cafolla had submitted the fraudulent FY2009
audit, causing Six Forks to disband. Soon after, Stephenson
also reported the fraudulent FY2009 audit to the RPD and
provided further information about the events leading up to
its discovery. Noting Stephenson's request that Wake
County would like the case investigated, the RPD commenced an
investigation into the allegations of fraud at Six Forks
revealing multiple non-business related expenses charged to
Six Forks's business banking account at Coastal Federal
Credit Union (CFCU), an account solely controlled and managed
by Fuller and Cafolla. The expenses ...