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Manning v. Alamance County

United States District Court, M.D. North Carolina

June 22, 2017



          N. Carlton Tilley, Jr. Senior United States District Judge.

         Plaintiff Thomas K. Manning has alleged that Defendant Alamance County, North Carolina (“Alamance County” or “the County”) wrongfully terminated his employment in violation of public policy. (Compl. [Doc. #1].) This matter is before the Court on cross-motions for summary judgment by Alamance County [Doc. #39] and by Manning [Doc. #47]. On June 21, 2017, a hearing was held on the motions during which each motion was denied. This Memorandum Opinion and Order explains why.


         As an initial matter, Alamance County challenges the admissibility of two of Manning's exhibits, an article in The Times-News, (Ex. G to Pl.'s Br. in Supp. of Summ. J. (“Pl.'s Br. in Supp.”) [Doc. #49]), and the determination of North Carolina's Division of Employment Security (“ESC”), (Ex. K to Pl.'s Br. in Supp.). (Def.'s Reply Br. at 4 [Doc. #56].) The County argues that the newspaper article in which its Board of Commissioners' then-Chair, David Smith, is quoted as saying that Manning was “absolutely” and “involuntarily terminated” is inadmissible hearsay. (Id.) On the other hand, Manning argues that the article is admissible either as a statement by a party opponent pursuant to Rule 801(d)(2)(A) of the Federal Rules of Evidence or for impeachment purposes pursuant to Rule 801(c)(2) of the Federal Rules of Evidence. (Pl.'s Reply Br. at 2-3 [Doc. #58].)

         “[H]earsay evidence, which is inadmissible at trial, cannot be considered on a motion for summary judgment.” Md. Highways Contractors Ass'n, Inc. v. Md., 933 F.2d 1246, 1251 (4th Cir. 1991). The admissibility of the newspaper article presents two levels of possible hearsay - the quoted statement and the article itself. The quoted assertion purportedly made by Smith is a statement by a party opponent and, therefore, is not hearsay. Fed.R.Evid. 801(d)(2)(A) (providing that a statement is not hearsay when it is offered against an opposing party and was made by the party in a representative capacity, or by a person whom the party authorized to make a statement on the subject, or by the party's agent on a matter within the scope of that existing relationship). However, the Fourth Circuit has repeatedly held that newspaper articles are inadmissible hearsay when presented for the truth of their contents. See Greene v. Scott, 637 F. App'x 749 (4th Cir. Feb. 11, 2016) (unpublished) (recognizing that that the mayor's statement as a party-opponent was not hearsay, but “the conveyance of that statement in the newspaper article [was] hearsay”); Gantt v. Whitaker, 57 F. App'x 141, 150 (4th Cir. 2003) (unpublished) (affirming the district court's striking of a newspaper article submitted by the plaintiff in response to the law enforcement defendants' motion for summary judgment that contained statements allegedly made by one of the law enforcement defendants about the plaintiff's arrest). This is precisely the purpose for which Manning seeks to introduce the newspaper article - to prove that Smith made the statements attributed to him and that Manning had absolutely been involuntarily terminated.

         Perhaps recognizing that the newspaper article is impermissible hearsay, Manning alternatively argues that he could use the newspaper article to impeach Smith's earlier statement that Manning had resigned. (Pl.'s Reply Br. at 3 (citing Fed.R.Evid. 801(c)(2)).) Fourth Circuit precedent suggests, though, that the newspaper article is also inadmissible for purposes of impeachment at trial. See United States v. Mathis, 550 F.2d 180, 182 (4th Cir. 1976) (“A newspaper article connecting a witness to a robbery was inadmissible hearsay, even for purposes of impeachment.”). Moreover, for purposes of summary judgment, evidence must be admissible to prove the truth of the matter asserted. Impeachment evidence is not considered at this stage, so this argument as to the article's admissibility in support of Manning's summary judgment motion is unavailing.

         Manning's seemingly unavoidable use of the newspaper to prove the truth of the matter asserted therein is further evident in his argument that the article is admissible under Rule 807's residual exception. (Pl.'s Reply Br. at 3 (explaining that he could cure the hearsay problem by calling the newspaper reporter to testify, but, in the reporter's absence, the article is admissible under Rule 807).) Among other things, he contends that he would offer the article “as evidence of a material fact (that Manning was terminated)”. (Id.) Under these circumstances, the newspaper article is inadmissible hearsay and will not be considered for purposes of the summary judgment motions.

         Alamance County next argues that the determination of the North Carolina Division of Employment Security is inadmissible according to North Carolina statute. (Def.'s Reply Br. at 4 (citing N.C. Gen. Stat. § 94[sic]-4(x)(8)).) Manning argues that because the sub-heading of § 96-4(x)(8) is entitled “Confidentiality of Records, Reports, and Information Obtained from Claimants, Employers, and Units of Government”, only the ESC is limited in its ability to disclose certain statutorily defined confidential information. (Pl.'s Reply Br. at 3-4.) He concedes that the ESC's determination is not binding on this Court, but contends that he has authority to disclose the protected information and that such information is “further impeachment of Defendant's contentions”. (Id. at 4.)

         While much of § 96-4(x) is designed to protect statutorily defined confidential information, § 96-4(x)(8) reads in full:

Any finding of fact or law, judgment, determination, conclusion or final order made by the Assistant Secretary, the Board of Review, a hearing officer, appeals referee, or any other person acting under authority of the Division pursuant to the Employment Security Law is not admissible or binding in any separate or subsequent action or proceeding, between a person and his present or previous employer brought before an arbitrator, court or judge of this State or the United States, regardless of whether the prior action was between the same or related parties or involved the same facts.

(emphasis added). Although the Federal Rules of Evidence presumably govern the admissibility of evidence in diversity actions, “a federal court may apply a state evidentiary rule that embodies or is closely tied to a state substantive policy.” Smith v. Computer Task Grp., Inc., 568 F.Supp.2d 603, 611 (M.D. N.C. 2008) (citing Scott v. Sears, Roebuck & Co., 789 F.2d 1052, 1054 (4th Cir. 1986) & Hottle v. Beech Aircraft Corp., 47 F.3d 106, 109-10 (4th Cir. 1995)). In Smith, the plaintiff alleged, among other things, that the defendant wrongfully terminated him. Id. at 606. In opposition to the defendant's motion for summary judgment, the plaintiff relied in part on a determination by the ESC granting him benefits following his termination. Id. The court concluded that then-§ 96-4(t)(8)[1] “plainly renders inadmissible the ESC Decision and any reference to it in Smith's response to the Motion for Summary Judgment.” Id. at 611. Therefore, here, as in Smith, the ESC's determination as to Manning is inadmissible.


         It is undisputed that, beginning in January 2014, Manning was employed as the Alamance County Finance Officer after having served as a member and chair of the County's Board of Commissioners (“Board”). (Thomas K. Manning Dep. (Dec. 19, 2016) 14:3-9, 14:24-15:3, 15:19-24, 18:23-19:6, 24:19-20 (Ex. A to Pl.'s Br. in Supp.).) In this position[2], Manning supervised eight employees, seven of whom were women[3] and one of whom was a man, Purchasing Manager Randy Clark who still holds that position. (Id. 21:15-22:11, 35:4-5; Susan Roberts Decl. (Mar. 28, 2017) ¶ 4 [Doc. #41].)


         In 2014, Alamance County had an agreement with Steve's Garden Market for the provision of food to the inmates in the County Detention Center (“jail”). (See Timothy J. Britt Decl. ¶¶ 6, 7, 9 and Ex. B (Mar. 29, 2017) [Doc. #40].) That summer, Purchasing Agent Clark sought legal guidance from Norma Houston at the University of North Carolina's School of Government on the purchase of food for the County jail. (See Emails between Clark & Houston, June 23, 2014 (Ex. C to Compl. [Doc. #1]); Ex. D to Pl.'s Br. in Supp.) Around that same time, Clark approached Manning concerned that there was no written contract with Steve's Garden Market and that the provision of these services had not been through the bidding process. (Manning Dep. 31:4-9, 33:4-11.) Accordingly, Manning, Clark, and Chief Deputy Tim Britt worked together to develop guidelines and sent out requests for proposals. (Id. 31:11-19, 33:13-22; see also Draft Invitation for Bids, Aug. 8, 2014 (Ex. A to Compl.).) In September, Clark forwarded the County Attorney, Clyde Albright, Houston's advice that the food purchases for the jail were subject to competitive bidding requirements. (Email from Clark to Albright, Sept. 10, 2014 (Ex. D. to Pl.'s Br. in Supp.).) The following month, Clark forwarded the same guidance from Houston to Manning. (Email from Clark to Manning, Oct. 3, 2014 (Ex. C to Compl.).) Manning then discussed the matter with Albright who refused to take the issue before the full Board. (Resp. 4 to Def.'s Reqs. for Admiss. (Ex. E to Pl.'s Br. in Supp.).)

         During this time, though, the County never stopped paying for food, but it informed the vendor that there would be requests for proposals as required under the law. (Manning Dep. 32:15-22.) However, then-Board Chair Smith instructed Clark to cancel the invitation for bids, which Clark did on October 6. (Id. 31:21-25; Bid Cancellation Notice, Oct. 6, 2014 (Ex. C to Pl.'s Br. in Supp.).) Manning was not in a position to refrain from signing the checks for the food vendor because the inmates needed to be fed, but he was working toward a solution that he believed would comply with the law. (Checks to Steve's Garden Mkt., Oct. 6, 2014, Oct. 29, 2014, Nov. 5, 2014 (Ex. A to Answer [Doc. #24]); Resps. 4 & 5 to Def.'s Reqs. for Admiss.) Ultimately, on July 20, 2015, the North Carolina General Assembly ratified Session Law 2015-156 exempting the Alamance County Sheriff's Office, among other counties' sheriffs' offices, from the formal bidding requirements of North Carolina General Statute § 143-129 when purchasing food and food services supplies; however, neither party has provided evidence of the General Assembly's motivation for ratifying this Session Law or the significance, if any, of such action on Manning's claims here. (Ex. B to Answer.)


         Sometime after Clark initially approached Manning about the provision of food for the County jail, Clark expressed concern to Manning about the purchase of Sheriff's Department vehicles. (Manning Dep. 24:25-26:25.) He brought Manning purchase orders that the Sheriff's Department had presented to him for approximately $282, 000 worth of vehicles to be purchased from Nichols Dodge, a local dealership, but that he believed had not been through the requisite bidding process. (Id. 25:1-19; see also Requisition, Oct. 3, 2014 (Ex. E to Compl.).) Clark and Manning met with the County Manager, Craig Honeycutt, about the vehicle purchase, and he agreed that it needed to be “process[ed] . . . up” and that he would speak to the Sheriff. (Manning Dep. 27:1-5.)

         In October, Clark reached out to Houston once again for legal guidance, this time about the vehicle procurement issue and Public Contract Law in general. (Emails citing N.C. Gen. Stat. §§ 143-129 & 159-28 between Houston and Clark, Oct. 7, 2014, Oct. 13, 2014 (Ex. A-1 to Manning Dep., Ex. D to Pl.'s Br. in Supp., Ex. A to Albright Decl. (Mar. 29, 2017) [Doc. #43]).) He forwarded Manning her responses, which Manning then forwarded to Albright and Honeycutt. (Email citing N.C. Gen. Stat. §§ 143-129 & 159-28 from Manning to Albright & Honeycutt, Oct. 13, 2014 (Ex. A-1 to Manning Dep., Ex. A to Albright Decl.).) Houston explained that the office of the sheriff was subject to the same bidding, contracting, and finance laws as any other county department and all contracts into which the sheriff entered had to comply with state competitive bidding and pre-audit requirements. (Email from Houston to Clark, Oct. 13, 2014 (Ex. A-1 to Manning Dep.).) According to Houston, a contract that did not fully comply with the competitive bidding or pre-audit requirements was void and unenforceable and subjected the employee making a payment under such contract to liability against the bond. (Id.)

         Albright responded twice to Manning, first on October 13 and next on October 14. (Email from Albright to Manning, Oct. 13, 2014 (Ex. A to Albright Decl.); Email from Albright to Manning, Oct. 14, 2014 (Ex. A-1 to Manning Dep.).) Albright distinguished this situation from a previous problematic expenditure and explained, among other things, that “[t]he existence of a pre-audit certification, required by Chapter 159, indicates that there is money budgeted to pay for the contract and I believe that there is no question that funds have been budgeted”, that “[t]he spirit of the law was followed, if not the letter of the law”, and that, “[i]n the future we can work to be more attentive to the vehicle and equipment requests to ensure the law is followed as best as possible.” (Email from Albright to Manning, Oct. 14, 2014.) Albright also questioned, “At the end of the day . . . what is the harm to taxpayers?” because the vehicles were purchased below the state contract rate and local dealer informal quotes and the local dealers would benefit from the sale and service of the vehicles. (Id.) In response to Houston's warning of personal liability, Albright asked “who is going to file this lawsuit? There are no damages since the vehicles were purchased below the state contract rate.” (Id.) He determined that, as the County Attorney, he would not bring the issue before the Board because he believed it was best handled by the County Manager and the Sheriff. (Id.)

         Approximately two weeks later, on October 24, Albright issued a memorandum to Manning in which he analyzed whether the Sheriff's vehicle purchase met the disbursement requirements of Chapter 159 of the North Carolina General Statutes and concluded that it had because there was a payable invoice and the County had included an appropriation in the Sheriff's budget to purchase vehicles, for which there were sufficient funds remaining. (Mem. from Albright to Manning, Oct. 24, 2014 (citing N.C. Gen. Stat. § 159-28(b)) (Ex. J to Pl.'s Br. in Supp.).) He also explained that Manning's obligations as the Finance Officer when presented ...

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