On March 1, 2011, in Hodges v. Young, the N.C. Court of Appeals reversed a trial court's order granting defendants' summary judgment motion asserting plaintiff failed to prove any damages based on an alleged breach of contract. The court pointed out that there are only two elements of a breach of contract: the existence of a valid contract and a breach of the contract's terms. No damages are required to be shown. The Court of Appeals also affirmed the trial court's grant of summary judgment on plaintiff's Chapter 75 claims which tried to assert fraudulent acts based on "should have known" allegations. We all see these efforts by creative pleaders to manufacture a Chapter 75 claim out of a breach of contract claim so this case may be one to keep in the drawer as an example of Chapter 75 allegations that are too thin.
Showing posts with label N.C. Court of Appeals. Show all posts
Showing posts with label N.C. Court of Appeals. Show all posts
Wednesday, March 30, 2011
Monday, March 28, 2011
In Most Cases, You Have To Be A Party To Seek Sanctions Or To Have To Pay Them
by Gary Beaver
A trial court order sanctioned a plaintiff company and its owner with dismissal of claims, striking of pleadings, and default on counterclaims due to multiple failures to make proper discovery responses. On January 4, 2011, in Honeycutt Contractors, Inc. v. Otto, the N.C. Court of Appeals reversed the sanctions against the individual owner because, though the pleadings alleged piercing the corporate veil, the owner was never made a party to the case and, therefore, the court lacked jurisdiction over him. The sanctions against the company stood. On the other side of the coin, in Lucas v. R.K. Lock & Associates, filed on March 1, 2011, the same court held that a company lacked standing to move for and the court lacked jurisdiction to grant Rule 11 sanctions where the company was listed only as a "dba" in the plaintiff's Complaint, the trial court had ruled that insufficient to make it a party, and the named defendant did not appeal that ruling.
Friday, March 18, 2011
No Magic In Internet Evidence
By Gary Beaver
The N.C. appellate courts have been slow to issue opinions on the subjects of e-discovery and the internet. Practitioners in the N.C. trial courts have had to rely upon the existing rules and make arguments for those rules to be applied similarly to leading federal court decisions (such as the five Zubulake opinions) and or as suggested by authoritative sources like the guidelines issued by the Sedona Conference and the Conference of Chief Justices (for the state appellate courts). The development of those areas of law in the N.C. courts will likely be incremental as the N.C. appellate courts typically do not engage in the comprehensive opinions providing treatise-type treatment of internet and e-discovery issues that some federal district court judges have entered. The closest to such opinions in the N.C. state courts came from Judge Tennille, in the
N.C. Business Court,
when he provided two non-precedential but influential decisions on e-discovery issues back on November 1, 2006. We have seen little guidance since then. In Rankin v. Food Lion, decided March 1, 2011, the N.C. Court of Appeals had the opportunity to address the use of evidence found on the internet but limited its opinion to addressing the narrow issue before it without providing a lot of discussion about the methods for admitting such evidence. The Rankin court affirmed the trial court's grant of summary judgment for the defendant. In doing so, the court also affirmed the trial court's rejection of the plaintiff's evidence printed out from the internet due to the failure of the plaintiff to properly authenticate it. The plaintiff had submitted printouts from internet websites -- a page from the N.C. Secretary of State and an internet posting about the ownership of Food Lion. The plaintiff failed to provide any sworn testimony by affidavit or live witness or to use a means of self-authentication to identify and authenticate those internet printouts. While this decision did not tell us anything new, it did remind trial lawyers that the internet does not magically make authentic or reliable information found on the internet; one must always comply with the rules for authenticating documents and establishing hearsay exceptions. If you want extensive advice on admitting internet evidence, look at Lorraine v. Markel American Insurance Company, 242 F.R.D. 534 (2007) -- a 100-page opinion by Magistrate Judge Paul Grimm.
Gary Beaver is a member of Nexsen Pruet's Technology Law team. Visit www.nptechlaw.com to learn more about how ever-changing technology is impacting your business and how our attorney can help you solve problems that might arise.
Monday, February 28, 2011
Builders Beware
by Gary Beaver
North Carolina
Until now, there have been no reported N.C. cases applying individual tort liability on corporate officers in a construction context. In January 2011, in White v. Collins Building, Inc., the N.C. Court of Appeals reversed the dismissal of negligence claims against a construction company president finding them adequate to survive pleading requirements. Specifically, the plaintiff alleged that the president "oversaw and personally supervised the day-to-day construction of [plaintiffs'] residence and was negligent in "failing to properly supervise the construction of the residence, including, but not limited, failing to properly supervise the installation of the doors and windows, the flashing around the doors and windows, and the house wrap" and in "fail[ing] to properly supervise the design and installation of the plumbing system, including the hot water lines and other system components."
One wonders if the plaintiffs actually have any evidence that the president did more than occasionally visit the worksite to check on progress. In any event, builders should expect that if they are playing any role in on-site work, they will be named as defendants in lawsuits involving claims of negligent construction. There are many aggressive lawyers who will provide a sufficient level of detail in the pleadings to get them into discovery whether or not they initially have any evidence to support those specific allegations. It remains to be seen if the courts will allow similar allegations to pass if they are based only on "information and belief."
Friday, July 9, 2010
Bad Settlement Decisions And Failure To Make Statutory Demand Result In Pyrrhic Victory
by Gary Beaver
In Brooks Millwork Co. v. Levine, the plaintiff won its breach of contract claim at trial but the jury awarded plaintiff only $25,575.61 -- over $10,000 less than defendants highest settlement offer. Both sides moved for attorney fees – plaintiff on the basis of contract under NCGS § 6-21.2 and defendant under NCGS § 44A-35, which allows a judge to award reasonable attorneys’ fee to the “prevailing party . . . upon a finding that there was an unreasonable refusal by the losing party to fully resolve the matter. . .” A prevailing party is a plaintiff who recovers more than 50% of the amount claimed or a defendant found liable for less than 50% of the amount claimed. Plaintiff had initially claimed over $98,000 but acknowledged partial satisfaction of its lien reducing the principal amount owed to $63,358.48.
The Court of Appeals held on June 15, 2010, that plaintiff was not entitled to contractual attorney fees because it had not complied with the mandatory provision in NCGS § 6-21.2(5) requiring it to give the defendant 5 days to pay the principal amount owed to avoid the attorney fees. Plaintiff never made that demand before filing the lawsuit. Very big “OOPS.” The court then granted attorney fees and costs to defendant as the prevailing party under § 44A-35. The trial court used the $98,000 figure rather than $63,358.48. [Note: the Court of Appeals did not give a satisfactory explanation of what claimed damages number it considered and noted that “excluding contractual attorneys’ fees – to which plaintiff is not entitled. . . – from plaintiff’s calculation, the final judgment totals less than half of plaintiff’s claimed amount.” So did the plaintiff claim attorney fees as part of the $98,000 or of the $63,358.48? Did the court then exclude those claimed fees? What number did the court use as the claimed amount? Inquiring minds want to know.] The attorney fees and costs awarded to defendant totaled about $21,000 which was only about $4600 less than the damages plaintiff won at trial. It got worse. Plaintiff’s counsel was also ordered to pay sanctions to defendant in the amount of twice the printing costs of the appeal for his many violations of the appellate rules. The court listed 7 specific violations – 6 of them involving the brief.
This is a reminder to counsel your clients to be reasonable in settlement discussions and not hold out for the homerun. There is not enough detail in the decision about the merits of the breach of contract claimed damages to know if that is what happened here but, regardless, rolling the dice with the jury obviously did not work out. Also, obey the appellate rules or bear the consequences; plaintiff’s counsel was lucky the appeal was not dismissed or the consequences could have been even worse for him.
In Brooks Millwork Co. v. Levine, the plaintiff won its breach of contract claim at trial but the jury awarded plaintiff only $25,575.61 -- over $10,000 less than defendants highest settlement offer. Both sides moved for attorney fees – plaintiff on the basis of contract under NCGS § 6-21.2 and defendant under NCGS § 44A-35, which allows a judge to award reasonable attorneys’ fee to the “prevailing party . . . upon a finding that there was an unreasonable refusal by the losing party to fully resolve the matter. . .” A prevailing party is a plaintiff who recovers more than 50% of the amount claimed or a defendant found liable for less than 50% of the amount claimed. Plaintiff had initially claimed over $98,000 but acknowledged partial satisfaction of its lien reducing the principal amount owed to $63,358.48.
The Court of Appeals held on June 15, 2010, that plaintiff was not entitled to contractual attorney fees because it had not complied with the mandatory provision in NCGS § 6-21.2(5) requiring it to give the defendant 5 days to pay the principal amount owed to avoid the attorney fees. Plaintiff never made that demand before filing the lawsuit. Very big “OOPS.” The court then granted attorney fees and costs to defendant as the prevailing party under § 44A-35. The trial court used the $98,000 figure rather than $63,358.48. [Note: the Court of Appeals did not give a satisfactory explanation of what claimed damages number it considered and noted that “excluding contractual attorneys’ fees – to which plaintiff is not entitled. . . – from plaintiff’s calculation, the final judgment totals less than half of plaintiff’s claimed amount.” So did the plaintiff claim attorney fees as part of the $98,000 or of the $63,358.48? Did the court then exclude those claimed fees? What number did the court use as the claimed amount? Inquiring minds want to know.] The attorney fees and costs awarded to defendant totaled about $21,000 which was only about $4600 less than the damages plaintiff won at trial. It got worse. Plaintiff’s counsel was also ordered to pay sanctions to defendant in the amount of twice the printing costs of the appeal for his many violations of the appellate rules. The court listed 7 specific violations – 6 of them involving the brief.
This is a reminder to counsel your clients to be reasonable in settlement discussions and not hold out for the homerun. There is not enough detail in the decision about the merits of the breach of contract claimed damages to know if that is what happened here but, regardless, rolling the dice with the jury obviously did not work out. Also, obey the appellate rules or bear the consequences; plaintiff’s counsel was lucky the appeal was not dismissed or the consequences could have been even worse for him.
Wednesday, July 7, 2010
The “Sovereignty of the People” Prevails
by Gary Beaver
On June 17, 2010, in State Employees Ass’n of NC, Inc., v. NC Dep’t of State Treasurer, the N.C. Supreme Court reversed the decision of the NC Court of Appeals affirming a trial court’s dismissal of a complaint seeking public records under the Public Records Act, NCGS §§ 132-1 to 132-10. The plaintiff sought records regarding the investment decisions and performance of the Retirement Systems Division of the Department of State Treasurer. Plaintiff began investigating after reading a February 2007 article in Forbes magazine about “pay-to-play” issues involving state retirement pension funds. The defendant had produced hundreds of pages of documents in several installments over the course of a year but plaintiff believed that defendant had not produced all it had.
The lower court had dismissed under Rule 12(b)(6) for failure to state a claim. The Supreme Court held that the allegations were based on reasonable inferences drawn by plaintiff from the documents that were produced. For example, one produced email referred to another email not produced. The Court rejected defendant’s contention that “possession” of the sought information is a necessary element of a Public Records Act lawsuit. The Court noted that NCGS § 132-9(a) provides the cause of action and it makes no mention of a possession element. The defendant can raise that as a substantive defense but it cannot act as the final authority in deciding possession or custody of the requested public records. To allow it to do so would undermine the strong public policy favoring release of public records to increase transparency in government.
This is a sound and needed decision. Given what we have seen in recent years from Jim Black and other “public servants” while our media sat idly by not, or belatedly, investigating or reporting misfeasance and malfeasance by elected and appointed officials, the Public Records Act is the public’s last, best hope at ferreting out and preventing corruption in government.
On June 17, 2010, in State Employees Ass’n of NC, Inc., v. NC Dep’t of State Treasurer, the N.C. Supreme Court reversed the decision of the NC Court of Appeals affirming a trial court’s dismissal of a complaint seeking public records under the Public Records Act, NCGS §§ 132-1 to 132-10. The plaintiff sought records regarding the investment decisions and performance of the Retirement Systems Division of the Department of State Treasurer. Plaintiff began investigating after reading a February 2007 article in Forbes magazine about “pay-to-play” issues involving state retirement pension funds. The defendant had produced hundreds of pages of documents in several installments over the course of a year but plaintiff believed that defendant had not produced all it had.
The lower court had dismissed under Rule 12(b)(6) for failure to state a claim. The Supreme Court held that the allegations were based on reasonable inferences drawn by plaintiff from the documents that were produced. For example, one produced email referred to another email not produced. The Court rejected defendant’s contention that “possession” of the sought information is a necessary element of a Public Records Act lawsuit. The Court noted that NCGS § 132-9(a) provides the cause of action and it makes no mention of a possession element. The defendant can raise that as a substantive defense but it cannot act as the final authority in deciding possession or custody of the requested public records. To allow it to do so would undermine the strong public policy favoring release of public records to increase transparency in government.
This is a sound and needed decision. Given what we have seen in recent years from Jim Black and other “public servants” while our media sat idly by not, or belatedly, investigating or reporting misfeasance and malfeasance by elected and appointed officials, the Public Records Act is the public’s last, best hope at ferreting out and preventing corruption in government.
Wednesday, June 30, 2010
Failure To Give Notice To All Parties, Including Non-appealing Parties, Results In Dismissal Of Appeal
by Gary Beaver
North Carolina Rule of Appellate Procedure 3(a) requires an appellant to serve all other parties with a notice of appeal. In case anyone thinks that it is not mandatory, the NC Court of Appeals made it clear on May 18, 2010, in Lee v. Winget Road, LLC, that it is. There were originally eight plaintiffs and eight defendants in the lawsuit until plaintiffs voluntarily dismissed two of the defendants. Subsequently, the trial court granted summary judgment to the remaining defendants. Five of the Plaintiffs filed a notice of appeal as to the remaining six defendants but, thereafter, withdrew the appeal as to one of the defendants. The appellants served the five remaining defendants but did not serve the three non-appealing plaintiffs or the two previously dismissed defendants.
Citing in support Dogwood Dev. & Mgmt. Co. LLC v. White Oak Transp. Co., 362 N.C. 191, 657 S.E.2d 361 (2008) and Hale v. Afro-American Int’l, 335 N.C. 231, 436 S.E.2d 588 (1993), the Lee court held that the failure to serve the notice of appeal on the three non-appealing plaintiffs or to obtain a waiver of service from them violated Rule 3(a) and that the violation was a “significant and fundamental” one and a “’gross violation’ of the [appellate] rules which ‘frustrates the adversarial process’” requiring dismissal of the appeal. The court did not reach the issue of whether failure to serve previously dismissed defendants was a similar egregious violation. Bottom line: follow the appellate rules to a “T” or run the risk of dismissal. [Note: the appellants’ brief was submitted by their counsel but not signed by him. I wonder what is up with that?]
North Carolina Rule of Appellate Procedure 3(a) requires an appellant to serve all other parties with a notice of appeal. In case anyone thinks that it is not mandatory, the NC Court of Appeals made it clear on May 18, 2010, in Lee v. Winget Road, LLC, that it is. There were originally eight plaintiffs and eight defendants in the lawsuit until plaintiffs voluntarily dismissed two of the defendants. Subsequently, the trial court granted summary judgment to the remaining defendants. Five of the Plaintiffs filed a notice of appeal as to the remaining six defendants but, thereafter, withdrew the appeal as to one of the defendants. The appellants served the five remaining defendants but did not serve the three non-appealing plaintiffs or the two previously dismissed defendants.
Citing in support Dogwood Dev. & Mgmt. Co. LLC v. White Oak Transp. Co., 362 N.C. 191, 657 S.E.2d 361 (2008) and Hale v. Afro-American Int’l, 335 N.C. 231, 436 S.E.2d 588 (1993), the Lee court held that the failure to serve the notice of appeal on the three non-appealing plaintiffs or to obtain a waiver of service from them violated Rule 3(a) and that the violation was a “significant and fundamental” one and a “’gross violation’ of the [appellate] rules which ‘frustrates the adversarial process’” requiring dismissal of the appeal. The court did not reach the issue of whether failure to serve previously dismissed defendants was a similar egregious violation. Bottom line: follow the appellate rules to a “T” or run the risk of dismissal. [Note: the appellants’ brief was submitted by their counsel but not signed by him. I wonder what is up with that?]
Tuesday, May 4, 2010
Deposition Testimony From Another Case Can be Used in Summary Judgment Filings in N.C.
by Gary Beaver
On 4/6/10, in First Gaston Bank of North Carolina v. City of Hickory, et. al., a bank sued Hickory and others when a storm drain collapsed on property owned by the bank. The bank appealed after the trial court granted the city summary judgment on the bank’s claim for negligence and inverse condemnation. The NC Court of Appeals affirmed holding:
(1) deposition testimony from another case, if it meets the requirement of an affidavit, may be used in summary judgment proceedings even if the party against whom it is used was not present or represented at the deposition;
(2) plaintiff’s inverse condemnation claim against the city failed because of lack of evidence of a taking; and
(3) plaintiff’s negligence claim against city failed because city did not owe a duty to the bank to inspect, maintain, and repair a collapsed storm drain or to warn the bank of the condition of the pipe which ran across property that the bank purchased.
The holding on the use of the deposition testimony makes eminent good sense as, in summary judgment proceedings, parties cannot stop the use of affidavits from witnesses to which the opposing party had no access. The lack of access to the deponents in the prior case is logically no different. The court reviewed leading commentators and federal court opinions interpreting and applying Rule 32(a) of the Federal Rules of Civil Procedure, which rule is similar to North Carolina’s Rule 32(a), and agreed with them in allowing the use of the deposition testimony.
On 4/6/10, in First Gaston Bank of North Carolina v. City of Hickory, et. al., a bank sued Hickory and others when a storm drain collapsed on property owned by the bank. The bank appealed after the trial court granted the city summary judgment on the bank’s claim for negligence and inverse condemnation. The NC Court of Appeals affirmed holding:
(1) deposition testimony from another case, if it meets the requirement of an affidavit, may be used in summary judgment proceedings even if the party against whom it is used was not present or represented at the deposition;
(2) plaintiff’s inverse condemnation claim against the city failed because of lack of evidence of a taking; and
(3) plaintiff’s negligence claim against city failed because city did not owe a duty to the bank to inspect, maintain, and repair a collapsed storm drain or to warn the bank of the condition of the pipe which ran across property that the bank purchased.
The holding on the use of the deposition testimony makes eminent good sense as, in summary judgment proceedings, parties cannot stop the use of affidavits from witnesses to which the opposing party had no access. The lack of access to the deponents in the prior case is logically no different. The court reviewed leading commentators and federal court opinions interpreting and applying Rule 32(a) of the Federal Rules of Civil Procedure, which rule is similar to North Carolina’s Rule 32(a), and agreed with them in allowing the use of the deposition testimony.
Thursday, April 1, 2010
NC Court of Appeals Addresses Public Policy Exception To "At-Will" Employment Doctrine
by Gary L. Beaver
Normally, a fired at-will employee in North Carolina has almost no chance of a successful wrongful discharge claim against his or her former employer. An employer can usually terminate an at-will employee for any reason whatsoever or even for no reason at all. However, there is a very narrow public policy exception to the at-will employment doctrine that allows such claim if the termination was done for an unlawful reason or purpose that contravenes public policy. The court applied the exception here. The discharged employee (Combs) claimed he was fired for reporting to the management of his employer, City Electric Supply Company, that the company had engaged in illegal and fraudulent activity by stealing from its customers' accounts. Apparently, there were times when customers overpaid and their accounts would then reflect a negative balance. Combs noted, and City Service admitted at trial, that City Service did not apply the negative account balances against later bills incurred by the customers. After Combs reported to a head supervisor (Smith) that the Combs's immediate supervisor was ordering him to take such actions, Smith denigrated Combs in an employment review and reduced Combs's salary. Then Combs was fired and Smith told him it was for job performance issues. Combs sued, among others, City Electric and Smith, and the trial court granted a directed verdict on the wrongful discharge claim against both City Service and Smith and on a tortious interference with contract claim against Smith.
City Service boldly contended that there was nothing wrong with its handling of the negative balances so the plaintiff had no basis for asserting the public policy exception. On March 16, 2010, the Court of Appeals agreed with Combs that taking the evidence as true and in the light most favorable to Combs, City Electric's withholding of negative balance statements, transfers of the overpayments to a separate account, and sending later statements that did not reflect the negative balances so that the customers paid the new balances without getting any credit for the prior overpayments were evidence of obtaining property by false pretenses. The Court of Appeals reversed the directed verdict as to the wrongful discharge claim. The case opinion is useful to give one a sense of what the courts will look for in applying the public policy exception. The Court also reversed the directed verdict as to Smith's alleged tortious interference with Combs's employment contract because the forecasted evidence of Smith's conduct was enough to defeat a non-outsider's qualified privilege to interfere with a contract.
On a personal note, one of the customers that had been allegedly ripped-off was Wilbur's BBQ & Restaurant. That alone gets my dander up as Wilbur's, located on US 70 in Goldsboro, has the best commercial BBQ and hushpuppies in North Carolina (note that I said commercial as my father makes the best BBQ in NC) and, in my humble opinion, does not deserve to be mistreated by anyone. I would have to drop the hammer on anyone who cheats Wilbur's. Go get 'em Mr. Combs.
Normally, a fired at-will employee in North Carolina has almost no chance of a successful wrongful discharge claim against his or her former employer. An employer can usually terminate an at-will employee for any reason whatsoever or even for no reason at all. However, there is a very narrow public policy exception to the at-will employment doctrine that allows such claim if the termination was done for an unlawful reason or purpose that contravenes public policy. The court applied the exception here. The discharged employee (Combs) claimed he was fired for reporting to the management of his employer, City Electric Supply Company, that the company had engaged in illegal and fraudulent activity by stealing from its customers' accounts. Apparently, there were times when customers overpaid and their accounts would then reflect a negative balance. Combs noted, and City Service admitted at trial, that City Service did not apply the negative account balances against later bills incurred by the customers. After Combs reported to a head supervisor (Smith) that the Combs's immediate supervisor was ordering him to take such actions, Smith denigrated Combs in an employment review and reduced Combs's salary. Then Combs was fired and Smith told him it was for job performance issues. Combs sued, among others, City Electric and Smith, and the trial court granted a directed verdict on the wrongful discharge claim against both City Service and Smith and on a tortious interference with contract claim against Smith.
City Service boldly contended that there was nothing wrong with its handling of the negative balances so the plaintiff had no basis for asserting the public policy exception. On March 16, 2010, the Court of Appeals agreed with Combs that taking the evidence as true and in the light most favorable to Combs, City Electric's withholding of negative balance statements, transfers of the overpayments to a separate account, and sending later statements that did not reflect the negative balances so that the customers paid the new balances without getting any credit for the prior overpayments were evidence of obtaining property by false pretenses. The Court of Appeals reversed the directed verdict as to the wrongful discharge claim. The case opinion is useful to give one a sense of what the courts will look for in applying the public policy exception. The Court also reversed the directed verdict as to Smith's alleged tortious interference with Combs's employment contract because the forecasted evidence of Smith's conduct was enough to defeat a non-outsider's qualified privilege to interfere with a contract.
On a personal note, one of the customers that had been allegedly ripped-off was Wilbur's BBQ & Restaurant. That alone gets my dander up as Wilbur's, located on US 70 in Goldsboro, has the best commercial BBQ and hushpuppies in North Carolina (note that I said commercial as my father makes the best BBQ in NC) and, in my humble opinion, does not deserve to be mistreated by anyone. I would have to drop the hammer on anyone who cheats Wilbur's. Go get 'em Mr. Combs.
Wednesday, March 24, 2010
N.C. Court of Appeals Allows Charlotte To Withhold Documents - Were They Prepared For Reasonably Anticipated Litigation Or For Speculative Litigation?
by Gary L. Beaver
On March 16, 2010, in Wallace Farm, Inc. v. City of Charlotte, the North Carolina Court of Appeals affirmed the Mecklenburg County Superior Court's order preventing the plaintiff from inspecting certain public records held by the City of Charlotte. The City had produced over 21,000 pages of documents but withheld about 225 documents consisting of about 500 pages on grounds that they were protected from discovery because they were attorney work product materials prepared in reasonable anticipation of litigation. The lower court conducted an in camera review and agreed with the City.
Charlotte zoning inspectors had used an administrative warrant to search the plaintiff farm after complaints were made of odor from the farm's composting facility and allegations that the farm had grown beyond limits set in 1999 zoning regulations. The farm owners requested all public records from 1998 to 2008 referring to the farm. The City said it would comply but the plaintiff impatiently filed the lawsuit to compel production of the public records. The City asserted in a letter that the documents were prepared in anticipation of a legal proceeding that had yet to commence that being if the City was to take action against the farm pursuant to the complaints, the litigation that was reasonably anticipated to follow. At a hearing, the City added that the materials related to the City's research and consideration of legal strategies related to possible zoning enforcement. Despite the fact that the Public Records Act (in Chapter 132 of the NC General Statutes) provides for liberal access to public records and exceptions and exemptions to the Public Records Act must be construed narrowly, the appellate court, after its own in camera review, agreed with the City withholding the documents using an abuse of discretion standard.
These kinds of cases are difficult to evaluate because the courts necessarily cannot provide much detail about what is in the documents reviewed in camera. One would think that, in light of the Public Records Act's bias toward disclosure, a public agency would have to make stronger arguments than were presented here. For example, one does not see this type of leeway given by the courts to insurance companies withholding documents in reasonable anticipation of litigation that has much greater likelihood of occurring and where the Public Records Act does not provide a bias favoring disclosure. Why treat a public agency's work product claims with greater deference than a private insurer? However, without knowing what was in the documents, one cannot know whether the court's decision here was sound. Regardless, this case is likely to be cited by every public agency in NC that withholds a document based on work product claims further driving up the cost for private citizens to obtain public information.
On March 16, 2010, in Wallace Farm, Inc. v. City of Charlotte, the North Carolina Court of Appeals affirmed the Mecklenburg County Superior Court's order preventing the plaintiff from inspecting certain public records held by the City of Charlotte. The City had produced over 21,000 pages of documents but withheld about 225 documents consisting of about 500 pages on grounds that they were protected from discovery because they were attorney work product materials prepared in reasonable anticipation of litigation. The lower court conducted an in camera review and agreed with the City.
Charlotte zoning inspectors had used an administrative warrant to search the plaintiff farm after complaints were made of odor from the farm's composting facility and allegations that the farm had grown beyond limits set in 1999 zoning regulations. The farm owners requested all public records from 1998 to 2008 referring to the farm. The City said it would comply but the plaintiff impatiently filed the lawsuit to compel production of the public records. The City asserted in a letter that the documents were prepared in anticipation of a legal proceeding that had yet to commence that being if the City was to take action against the farm pursuant to the complaints, the litigation that was reasonably anticipated to follow. At a hearing, the City added that the materials related to the City's research and consideration of legal strategies related to possible zoning enforcement. Despite the fact that the Public Records Act (in Chapter 132 of the NC General Statutes) provides for liberal access to public records and exceptions and exemptions to the Public Records Act must be construed narrowly, the appellate court, after its own in camera review, agreed with the City withholding the documents using an abuse of discretion standard.
These kinds of cases are difficult to evaluate because the courts necessarily cannot provide much detail about what is in the documents reviewed in camera. One would think that, in light of the Public Records Act's bias toward disclosure, a public agency would have to make stronger arguments than were presented here. For example, one does not see this type of leeway given by the courts to insurance companies withholding documents in reasonable anticipation of litigation that has much greater likelihood of occurring and where the Public Records Act does not provide a bias favoring disclosure. Why treat a public agency's work product claims with greater deference than a private insurer? However, without knowing what was in the documents, one cannot know whether the court's decision here was sound. Regardless, this case is likely to be cited by every public agency in NC that withholds a document based on work product claims further driving up the cost for private citizens to obtain public information.
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