in the Court of Appeals 9 February 2017
by plaintiff from order entered 12 May 2016 by Judge Gale M.
Adams in Sampson County Superior Court No. 15 CVS 688
Charleston Group, by R. Jonathan Charleston, Jose A. Coker,
and Quintin D. Byrd, for plaintiff-appellant.
Daughtry Woodard Lawrence & Starling, by W. Joel
Starling, Jr., for defendant-appellee Sampson County.
Crossley McIntosh Collier Hanley & Edes, PLLC, by Norwood
P. Blanchard, III, for defendant-appellee EnRoute
Transportation Services, Inc.
appeal requires us to once again examine the issue of when a
defendant is entitled to recover on an injunction bond
previously posted by the plaintiff after the plaintiff
voluntarily dismisses the lawsuit. Plaintiff Van-Go
Transportation, Inc. ("Van-Go") appeals from the
trial court's order awarding damages to Sampson County
(the "County") and EnRoute Transportation Services,
Inc. ("EnRoute") (collectively
"Defendants"). Because we conclude that the trial
court properly ruled that Van-Go's voluntary dismissal
was equivalent to an admission that it wrongfully enjoined
Defendants, we affirm.
and Procedural Background
1997 until 2013, the County contracted with EnRoute for the
transportation of area Medicaid patients to and from
appointments for medical services. During the period from
July 2013 to June 2015, the County contracted with Van-Go to
provide these transportation services. In February 2015, the
County issued a Request for Proposals ("RFP")
seeking bids from vendors to provide these services for the
period between July 2015 and June 2017.
other requirements, the RFP instructed each bidder to (1)
identify its insurer and show that it possessed a certain
amount of insurance coverage; and (2) state the fixed cost
per mile that it would charge the County for provision of the
transportation services. Van-Go and EnRoute each submitted
proposals that the County deemed timely and responsive to the
bid identified its insurer and level of coverage and stated
that its fixed cost per mile of service was $1.74.
EnRoute's proposal did not identify its insurance carrier
but stated that it would obtain the required insurance
coverage if awarded the contract. In addition, it stated that
its cost per mile of service was $1.54 "[p]lus a fuel
surcharge of $.01 per mile for each $.05 increase over $3.95
per gallon (based on average daily price at Go
Gas-Clinton)." On 6 April 2015, the Sampson County Board
of Commissioners voted to award the Medicaid transportation
services contract (the "Contract") to EnRoute based
upon the terms specified in its bid.
June 2015, Van-Go filed its initial complaint against
Defendants in which it requested monetary damages and
injunctive relief for alleged violations of N.C. Gen. Stat.
§ 143-129 (which governs the procedure for awarding
public contracts); 5 C.F.R. §§ 2635.101 and
2635.702 (which address conflicts of interest in contracts
involving federal monies); and the due process clauses of the
federal and state constitutions. These claims were premised
upon Van-Go's contentions that the Contract should not
have been awarded to EnRoute because (1) EnRoute's
proposal was not responsive to the RFP in that it both failed
to demonstrate that EnRoute had procured the required
insurance coverage and did not provide a fixed cost per mile;
and (2) a conflict of interest existed between the owners of
EnRoute and the Director of the Sampson County Department of
Social Services, who participated in the County's
consideration of the bids.
complaint included a request for a temporary restraining
order ("TRO") pursuant to Rule 65 of the North
Carolina Rules of Civil Procedure to enjoin EnRoute from
performing under the Contract and to allow Van-Go to extend
its then-existing contract with the County by continuing to
provide transportation services at the cost-per-mile rate of
$1.85 as specified in that agreement. A TRO hearing was held
in Sampson County Superior Court on 29 June 2015 after which
Judge W. Allen Cobb, Jr. issued a TRO granting Van-Go its
requested relief pending the outcome of a preliminary
injunction hearing. The TRO further directed Van-Go to post
an injunction bond in the amount of $25, 000.
subsequently filed a motion to dissolve the TRO on 13 July
2015. Following a hearing, Judge Charles H. Henry issued an
order on 20 July 2015 denying Van-Go's request for a
preliminary injunction and granting Defendants' motion to
dissolve the TRO. In its order, the court determined that
Van-Go had not shown a likelihood of success on the merits
because, inter alia, (1) EnRoute's bid
substantially conformed to the specifications of the RFP; and
(2) Van-Go failed to show that a conflict of interest had
tainted the bidding process.
the entry of this order, Defendants removed the case to the
United States District Court for the Eastern District of
North Carolina based upon the federal questions presented in
Van-Go's complaint. Van-Go subsequently filed an amended
complaint that did not contain any claims arising under
federal law. Based upon the lack of a federal question in the
amended complaint, the federal court granted Van-Go's
motion to remand the case to Sampson County Superior Court on
29 July 2015.
August 2015, EnRoute filed a motion to dismiss Van-Go's
amended complaint in Sampson County Superior Court. On 10
December 2015 - while EnRoute's motion to dismiss was
pending - Van-Go filed a voluntary dismissal of its lawsuit
without prejudice pursuant to Rule 41 of the North Carolina
Rules of Civil Procedure. Van-Go subsequently filed a motion
on 1 February 2016 requesting the release of the $25, 000
injunction bond it had posted in connection with the TRO. On
4 February 2016, EnRoute submitted an objection to
Van-Go's motion along with a motion of its own seeking an
award of damages in the full amount of the bond on the ground
that EnRoute had been wrongfully enjoined. On 18 March 2016,
the County filed a similar motion.
hearing was held before the Honorable Gale M. Adams on 21
March 2016. Judge Adams issued an order on 12 May 2016
denying Van-Go's motion for release of the bond and
awarding Defendants the proceeds of the bond. In its order,
the trial court allocated $15, 993.57 of the $25, 000 to
EnRoute and $9, 006.43 to the County. Van-Go filed a timely
notice of appeal from this order.
raises several issues on appeal. First, it asserts that the
$25, 000 injunction bond should have been released to Van-Go.
Alternatively, it asserts that even if EnRoute was entitled
to recover some portion of the bond, EnRoute failed to
provide sufficient evidence of the damages it had incurred so
as to warrant the trial court's award of $15, 993.57.
Finally, Van-Go argues that the trial court erred in awarding
any amount of damages to the County because all monies at
issue belonged to the State rather than the County.
Determination that Defendants Were Wrongfully
to Rule 65(c), a party who obtains a TRO or preliminary
injunction must post a security bond. See N.C. R.
Civ. P. 65(c) (providing that, with limited exceptions,
"[n]o restraining order or preliminary injunction shall
issue except upon the giving of security by the applicant, in
such sum as the judge deems proper, for the payment of such
costs and damages as may be incurred or suffered by any party
who is found to have been wrongfully enjoined or
restrained."). In reviewing a trial court's judgment
concerning the disposition of an injunction bond, "[w]e
consider whether the trial court's findings of fact and
conclusions of law are sufficient to support the
judgment." Allen Indus., Inc. v. Kluttz, __
N.C.App. __, __788 S.E.2d 208, 209 (2016).
12 May 2016 order, the trial court made the following
findings of fact in determining that Van-Go was not entitled
to the return of its $25, 000 injunction bond:
26. On December 10, 2015, [Van-Go] filed a Notice of
Voluntary Dismissal without prejudice pursuant to Rule 41(a)
of the North Carolina Rules of Civil Procedure. The Notice of
Dismissal was unconditional, in that it was not stipulated as
pursuant to Rule 41(a)(1)(ii) of the North Carolina Rules of
30. The Court finds that, as a result of the TRO entered on
June 29, 2015, the County and Enroute were restrained from
performing under the Contract, which would have taken effect