IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA19-1031

Filed: 18 August 2020

North Carolina Industrial Commission, I.C. No. TA-26709

KEITH WILLIAMS, CEO/DIRECTOR, SOUTHEASTERN PUBLIC SAFETY 

GROUP, INC., Plaintiff,

v.

NORTH CAROLINA DEPARTMENT OF JUSTICE, CRIMINAL STANDARDS 

DIVISION, Defendant.

Appeal by Plaintiff from an Order filed 18 June 2019 by the North Carolina 

Industrial Commission. Heard in the Court of Appeals 14 April 2020.

Ian Morris for plaintiff-appellant.

Attorney General Joshua H. Stein, by Assistant Attorney General Kenzie M. 

Rakes, for defendant-appellee.

MURPHY, Judge.

The State Tort Claims Act authorizes the Industrial Commission to hear

claims arising as a result of the negligence of any agent of the State within the scope 

of their employment. Where the Industrial Commission does not dismiss a claim for 

lack of subject matter jurisdiction, but instead for failure to state a claim upon which 

relief may be granted, we affirm when the claim is not a recognized form of 

negligence.

There is neither a statute nor caselaw in North Carolina which would support 

Plaintiff’s claim for negligent interference with a contract. In 1914, our Supreme 
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Court held a party to a contract who is injured by the negligence of a third party 

cannot recover damages from that third party. North Carolina caselaw does not 

support Plaintiff’s request that we recognize the tort of negligent interference with a 

contract. Further, since we are an error-correcting court, it is not our role to expand 

the law. The claim for negligent interference with a contract was properly dismissed 

for failure to state a claim upon which relief may be granted. We affirm. 

BACKGROUND

Southeastern Public Safety Group, Inc. (“Southeastern”) is a North Carolina 

corporation and certified company police agency. On 31 March 2015, Southeastern 

became certified to provide law enforcement services to the North Carolina 

Department of Transportation. On 19 July 2016, Southeastern won a bid to provide 

law enforcement services for traffic control to Sugar Creek Construction (“SCC”). The 

contract required traffic control by a law enforcement agency in an active work zone. 

On 7 April 2017, Southeastern’s Chief Executive, Keith Williams (“Williams”), 

was contacted by Morgan Powell of the Federal Highway Administration. Powell was

in contact with Randy Munn (“Munn”), an official representative of the North 

Carolina Department of Justice (“the NCDOJ”). Powell contacted Williams by 

forwarding a message from Munn, where Munn requested information on Williams’s

“certification as a company police agency.” Williams complied. Munn later forwarded

Williams an email from the Assistant Attorney General, informing Williams that his 
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work for SCC was in violation of N.C.G.S. § 74E (“the Company Police Act”) and 

Southeastern must stop work on the contract immediately.

On 18 December 2017, Williams, in his official capacity and on behalf of 

Southeastern, filed a North Carolina Industrial Commission (“NCIC”) Form T-11 (“T1 Affidavit”)for a claim of damages under the Tort Claims Act. Williams made claims 

of work stoppage attributed to the NCDOJ in its failure to administrate the Company 

Police Act. The T-1 Affidavit further alleged the administrative stoppage prevented 

the business from providing police services as contracted and caused severe economic 

loss.

The NCDOJ filed a Motion to Dismiss on 21 February 2018, pursuant to Rule 

12(b)(6) for failure to state a claim and Rule 12(b)(1), (2), and (6) for lack of subject 

matter jurisdiction over intentional tort and/or constitutional rights violations. 

Williams moved to amend the complaint on 6 March 2018 to include additional causes 

of action based on “negligent infliction of economic loss” due to breaches of duty to 

investigate and duty to inform. 

On 30 May 2018, the Deputy Commissioner entered an order (“the 30 May 

2018 Order”) dismissing Williams’s claims with prejudice under Rule 12(b)(1) due to 

lack of subject matter jurisdiction of the NCIC to handle claims of alleged intentional 

tort or constitutional rights violations and breach of contract actions. A notice of 

 

1 The T-1 Affidavit is a form the NCIC requires a claimant to file in order to enter the case 

onto its hearing docket.
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appeal and application for review to the Full Commission was submitted by Williams

on 14 June 2018. Williams argued “[t]he claim was and still is that [the NCDOJ]

negligently inflicted economic harm to Southeastern by failing to thoroughly 

administer, supervise, investigate, inform and protect Southeastern.” Further, 

Williams argued “[w]hile some of the alleged actions of . . . Munn were intentional

actions, they could just as easily be attributed to misfeasance, inaction, poor 

supervision, or outright incompetence.” 

The Full Commission’s order (“the Order”) affirmed the 30 May 2018 Order. 

The Full Commission held “[Williams’s] Affidavit and Motion to Amend Complaint

include allegations of constitutional violations, breach of contract claims, and 

intentional torts, including tortious interference with a contract. Said claims are 

outside of the [NCIC]’s jurisdiction and, as such, are subject to dismissal.” The Order 

further concluded that “[t]o the extent [Williams] has remaining purported 

negligence claims, including negligent tortious interference with a contract, they are 

not recognized claims under which relief can be granted under North Carolina law 

and are subject to dismissal under Rule 12(b)(6).” Williams timely appealed on 17 

July 2019. 

ANALYSIS

A. Standard of Review

The standard of review for an appeal from the Full 

Commission’s decision under the Tort Claims Act ‘shall be 
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for errors of law only under the same terms and conditions 

as govern appeals in ordinary civil actions, and the findings 

of fact of the Commission shall be conclusive if there is any 

competent evidence to support them.’

Simmons ex rel Simmons v. Columbus Cnty. Bd. of Educ., 171 N.C. App. 725, 727-28, 

615 S.E.2d 69, 72 (2005) (quoting N.C.G.S. § 143-293 (2003)). “Under the Tort Claims 

Act, when considering an appeal from the [Full] Commission, our Court is limited to 

two questions: (1) whether competent evidence exists to support the [Full] 

Commission's findings of fact, and (2) whether the [Full] Commission's findings of 

fact justify its conclusions of law and decision.” Fennell v. N.C. Dep't of Crime Control 

& Pub. Safety, 145 N.C. App. 584, 589, 551 S.E.2d 486, 490 (2001).

“[T]he North Carolina Rules of Civil Procedure apply in tort claims before the 

Commission, to the extent that such rules are not inconsistent with the Tort Claims 

Act, in which case the Tort Claims Act controls.” Pate v. N.C. Dep’t of Transp., 176 

N.C. App. 530, 533, 626 S.E.2d 661, 664 (2006); N.C.G.S. § 143-300 (2019).

1. Dismissal for Lack of Subject Matter Jurisdiction

The NCIC is “a court for the purpose of hearing and passing upon tort claims 

against . . . institutions and agencies of the State.” N.C.G.S. § 143-291 (2019).

The [NCIC] shall determine whether or not each individual 

claim arose as a result of the negligence of any officer, 

employee, involuntary servant or agent of the State while 

acting within the scope of his office, employment, service, 

agency or authority, under circumstances where the State 

of North Carolina, if a private person, would be liable to the 

claimant in accordance with the laws of North Carolina.
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Id. “It is well-settled that the Tort Claims Act does not permit recovery for intentional 

injuries. Only claims for negligence are covered.” Fennell, 145 N.C. App. at 592, 551 

S.E.2d at 492 (internal citations omitted); N.C.G.S. § 143-291 (2019).

“Every defense, in law or fact, to a claim for relief in any pleading, . . . shall be 

asserted in the responsive pleading thereto if one is required, except that the 

following defenses may at the option of the pleader be made by motion: (1) Lack of 

jurisdiction over the subject matter.” N.C.G.S. § 1A-1, Rule 12(b)(1) (2019). “Subject 

matter jurisdiction is conferred upon the courts by either the North Carolina 

Constitution or by statute.” Harris v. Pembaur, 84 N.C. App. 666, 667, 353 S.E.2d 

673, 675 (1987). “The question of subject matter jurisdiction may be raised at any 

time, even in the Supreme Court.” Lemmerman v. A.T. Williams Oil Co., 318 N.C. 

577, 580, 350 S.E.2d 83, 85-86 (1986).

“It is a universal rule of law that parties cannot, by consent, give a court, as 

such, jurisdiction over subject matter of which it would otherwise not have 

jurisdiction. Jurisdiction in this sense cannot be obtained by consent of the parties, 

waiver, or estoppel.” Pulley v. Pulley, 255 N.C. 423, 429, 121 S.E.2d 876, 880 (1961).

“Whether a trial court has subject-matter jurisdiction is a question of law, reviewed 

de novo on appeal.” McKoy v. McKoy, 202 N.C. App. 509, 511, 689 S.E.2d 590, 592 

(2010).
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“When the record shows a lack of jurisdiction in the lower court, the 

appropriate action . . . is to arrest judgment or vacate any order entered without 

authority.” State v. Felmet, 302 N.C. 173, 176, 273 S.E.2d 708, 711 (1981). “When 

the record is silent and the appellate court is unable to determine whether the court 

below had jurisdiction, the appeal should be dismissed.” Id.

2. Dismissal for Failure to State a Claim

“Every defense, in law or fact, to a claim for relief in any pleading, . . . shall be 

asserted in the responsive pleading thereto if one is required, except that the 

following defenses may at the option of the pleader be made by motion: (6) Failure to 

state a claim upon which relief can be granted.” N.C.G.S. § 1A-1, Rule 12(b)(6) (2019). 

The motion to dismiss under N.C. R. Civ. P. 12(b)(6) tests 

the legal sufficiency of the complaint. In ruling on the 

motion the allegations of the complaint must be viewed as 

admitted, and on that basis the court must determine as a 

matter of law whether the allegations state a claim for 

which relief may be granted.

Henderson v. Charlotte-Mecklenburg Bd. of Educ., 253 N.C. App. 416, 419, 801 S.E.2d 

145, 148 (2017).

Dismissal is proper when one of the following three conditions is satisfied: “(1)

the complaint on its face reveals that no law supports the plaintiff’s claim; (2) the 

complaint on its face reveals the absence of facts sufficient to make a good claim; or

(3) the complaint discloses some fact that necessarily defeats the plaintiff’s claim.” 

Wood v. Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d 490, 494 (2002). “This Court 
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must conduct a de novo review of the pleadings to determine their legal sufficiency 

and to determine whether the trial court’s ruling on the motion to dismiss was 

correct.” Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4, 

aff’d per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).

B. Subject Matter Jurisdiction

The Order dismissed Williams’s negligence claims, “including negligent 

tortious interference with [a] contract,” under Rule 12(b)(6). The non-negligence 

claims were dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction.

Williams argues the Full Commission erred in finding that his complaint was 

based on some intentional tort and not the negligent supervision, administration, and 

investigation of Southeastern by Munn and the NCDOJ. Williams argues the Full 

Commission has jurisdiction over claims that arise from the negligence of any agent 

of the State while acting within the scope of his employment. Williams argues the 

NCDOJ ordered it to cease work on its contract with SCC, and as a result it “suffered 

personal, economic injury.” Further, Williams argues Munn was not intentionally 

injuring Williams, but rather this injury was the result of Munn’s negligence. 

Williams asks us to conclude the Full Commission does have subject matter 

jurisdiction.

“The State Tort Claims Act authorizes the [NCIC] to entertain claims arising 

as a result of a negligent act of any officer, employee, involuntary servant, or agent 
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of the State while acting within the scope of his office, employment, service, agency, 

or authority[.]” Guthrie v. N.C State Ports Auth., 307 N.C. 522, 536, 299 S.E.2d 618, 

626 (1983); N.C.G.S. § 143-291 (2019). “Waiver of sovereign immunity may not be 

lightly inferred and State statutes waiving this immunity . . . must be strictly 

construed.” Guthrie, 307 N.C. at 537-38, 299 S.E.2d at 627. 

Suits against the State, its agencies and its officers for 

alleged tortious acts can be maintained only to the extent 

authorized by the Tort Claims Act, . . . and that Act 

authorizes recovery only for negligent torts. Intentional 

torts . . . are not compensable under the Tort Claims Act. 

Wojsko v. State, 47 N.C. App. 605, 610, 267 S.E.2d 708, 711 (1980); see also N.C.G.S. 

§ 143-291 (2019). 

The Order dismissed the claim of “negligent tortious interference with a 

contract” under Rule 12(b)(6). The Full Commission acknowledged the motion to 

dismiss under Rules 12(b)(1) and 12(b)(6), but chose to dismiss the negligence claim 

under Rule 12(b)(6). The Full Commission did not dismiss the negligence claim for 

lack of subject matter jurisdiction, but instead for failure to state a claim upon which 

relief may be granted. Therefore, this claim was properly dismissed. While the Full

Commission dismissed the non-negligence claims under Rule 12(b)(1), it did not order 

that it lacked jurisdiction to decide a negligence claim.

The Full Commission did not err in dismissing Williams’s claim of negligent 

interference with a contract because the claim was dismissed for failure to state a 

claim upon which relief may be granted, not for lack of subject matter jurisdiction.
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C. Failure to State a Claim

Williams next argues the Full Commission erred in finding no claim was 

alleged because Williams established the NCDOJ had a duty to administer, 

supervise, investigate, and inform company police agencies and failed to do so. 

Williams argues the claim was and still is that the NCDOJ negligently stopped it 

from working in contract with SCC, thus the NCDOJ breached their duty under the 

Company Police Act. Further, Williams argues the NCDOJ was not seeking to 

intentionally injure the contract, but the NCDOJ was the actual and proximate cause 

of Williams’s injury and inability to complete the contract. 

“A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the 

complaint by presenting ‘the question whether, as a matter of law, the allegations of 

the complaint, treated as true, are sufficient to state a claim upon which relief can be 

granted under some [recognized] legal theory.’” Forsyth Mem'l Hosp., Inc. v. 

Armstrong World Indus. Inc., 336 N.C. 438, 442, 444 S.E.2d 423, 425-26 (1994) 

(quoting Lynn v. Overlook Dev., 328 N.C. 689, 692, 403 S.E.2d 469, 471 (1991)). 

Dismissal is proper under Rule 12(b)(6) when “the complaint on its face reveals that 

no law supports the plaintiff’s claim.” Wood, 355 N.C. at 166, 558 S.E.2d at 494.

This appeal is bound by the jurisdictional requirements of the Tort Claims Act, 

and therefore any claim must be based in negligence. “Under the Tort Claims Act, 

jurisdiction is vested in the [NCIC] to hear claims against the State of North Carolina 
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for personal injuries sustained by any person as a result of the negligence of a State 

employee while acting within the scope of his employment.” Guthrie, 307 N.C. at 536, 

299 S.E.2d at 626. 

There is neither a statute nor any caselaw supporting Williams’s claim for 

negligent interference with a contract. North Carolina recognizes a claim for tortious 

interference with a contract. See Beck v. City of Durham, 154 N.C. App. 221, 231-

232, 573 S.E.2d 183, 191 (2002). However, our Supreme Court has declined to 

recognize negligent interference with a contract. See generally Thompson v. Seaboard 

Air Line Ry., 165 N.C. 377, 81 S.E. 315 (1914).

In Thompson v. Seaboard Air Line Ry., a lumber company contracted with the 

plaintiff to cut and saw timber. Thompson, 165 N.C. at 378, 81 S.E. at 316. The 

plaintiff brought an action against a railway company after a fire ignited by sparks 

from a train engine destroyed a portion of a timber lot where the plaintiff was 

working. Id. Evidence showed that the fire destroyed groceries, provisions, and 

shacks owned by the plaintiff. Id. The Supreme Court noted that “no recovery can

be had for an indirect, unintended injury to one arising from a tort to another.” Id.

at 379, 81 S.E. at 316. 

Where, however, by the willful tort of a third person, one of 

two contracting parties is disabled from performing his 

contract, the wrong having been committed with intent to 

injure the other, it has been held that the latter may 

recover from the tort feasor in damages. But unless the 
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wrong is done with a willful intent to injure the 

complaining party, the latter cannot recover.

Id. (emphasis added) (internal alterations omitted). While Thompson is not an 

express rejection of a negligent interference with a contract cause of action, it is an 

implicit rejection. Presented with the opportunity to recognize such a cause of action, 

our Supreme Court demurred and instead cited approvingly authority holding the 

injury too attenuated from the wrongdoing to merit recognition of a claim based on 

inability to perform a contract due to a third party’s negligence. Id. at 380, 81 S.E. 

at 316 (citing Byrd v. English, 117 Ga. 191, 43 S.E. 419 (1903)).

In Thompson, our Supreme Court cited Byrd v. English to support the 

application of the principle that “unless the wrong is done with a willful intent to 

injure the complaining party, the latter cannot recover.” Thompson, 165 N.C. at 379-

380, 81 S.E. at 316. Byrd is a case from the Supreme Court of Georgia that is 

analogous to the present situation where Williams is claiming negligent interference

with a contract, and given our Supreme Court’s reliance on the same, we consider it 

here. 

According to this petition, the damage done by them was to 

the property of the Georgia Electric Light Company, who

were under contract to the plaintiff to furnish him with

electric power, and the resulting damage done to the 

plaintiff was that it was rendered impossible for that 

company to comply with its contract. If the plaintiff can 

recover of these defendants upon this cause of action, then 

a customer of his, who was injured by the delay occasioned 

by the stopping of his work, could also recover from them,

and one who had been damaged through his delay could in 
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turn hold them liable, and so on without limit to the 

number of persons who might recover on account of the 

injury done to the property of the company owning the 

conduits. To state such a proposition is to demonstrate its 

absurdity.

Byrd v. English, 117 Ga. 191, 193-94, 43 S.E. 419, 420 (1903). Byrd held a party to a 

contract, who is injured by reason of the failure of the other party to comply with its 

terms, cannot recover damages of a third person, a wrongdoer, whose negligence 

rendered the performance of the contract impossible. See id. 

Here, Williams’s claim is analogous to the situation in Byrd. Williams argues 

the NDDOJ negligently stopped Southeastern from working in contract with SCC, 

breaching its duty under the Company Police Act. Further, Williams argues the 

NCDOJ was the actual and proximate cause of Southeastern’s injury and inability to 

complete the contract with SCC. Therefore, Williams is arguing the NCDOJ, a third 

party, was negligent and rendered the performance of the contract impossible. 

However, the courts in Byrd and Thompson held a party to a contract who is injured 

by the negligence of a third party cannot recover damages from that third party. As 

a result, North Carolina caselaw does not support Williams’s request that we 

recognize the tort of negligent interference with a contract. 

Even if negligent interference with a contract was an issue of first impression 

as Williams states, and it has not been barred from recognition by our Supreme 

Court, it would not be our role to expand the law in a way to create such a cause of 

action. “This Court is an error-correcting court, not a law-making court.” Shera v. 
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N.C. State Univ. Veterinary Teaching Hosp., 219 N.C. App. 117, 127, 723 S.E.2d 352, 

358 (2012). We are “not in the position to expand the law. Rather, such 

considerations must be presented to our Supreme Court or our Legislature, who have 

the power to rectify any inequities . . . .” Id. at 126, 723 S.E.2d at 358. It would be 

the role of the General Assembly or our Supreme Court to expand the law to create a 

cause of action for negligent interference with a contract. 

“[T]he Tort Claims Act . . . waive[s] the sovereign immunity of the State in 

those instances in which injury is caused by the negligence of a State employee and 

the injured person is not guilty of contributory negligence, giving the injured party 

the same right to sue as any other litigant.” Guthrie, 307 N.C. at 535, 299 S.E.2d at 

625. Since the Tort Claims Act is in derogation of sovereign immunity it must be 

strictly construed, and its terms must be strictly adhered to. Etheridge v. Graham,

14 N.C. App. 551, 554, 188 S.E.2d 551, 553 (1972); Watson v. N.C. Dep’t of Corr., 47 

N.C. App. 718, 722, 268 S.E.2d 546, 549 (1980). As a result, even if it were in our 

power to expand the law, we would not expand the Tort Claims Act to include an 

unrecognized claim when sovereign immunity has not been waived with the 

knowledge of the creation of a new tort. 

Williams failed to state a claim for which relief can be granted because 

negligent interference with a contract is not a tort recognized in North Carolina. The 

Full Commission did not err in dismissing this claim under Rule 12(b)(6).
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D. Full Commission’s Consideration of Prior Filings

Williams argues the Full Commission relied too heavily on the T-1 Affidavit 

and not the proposed Amended Complaint. Specifically, Williams argues the Full 

Commission relied on the “emotional and colloquial language” of the T-1 Affidavit, 

and not the allegations of negligent behavior from the proposed Amended Complaint. 

“[A]s a general rule this Court will not hear an appeal when the subject matter

of the litigation has been settled between the parties or has ceased to exist.” Kendrick 

v. Cain, 272 N.C. 719, 722, 159 S.E.2d 33, 35 (1968). “If the issues before the court 

become moot at any time during the course of the proceedings, the usual response is 

to dismiss the action.” 130 of Chatham, LLC v. Rutherford Elec. Membership Corp.,

241 N.C. App. 1, 8, 771 S.E.2d 920, 925 (2015). Having addressed the dismissal of 

the negligent interference with a contract claim as proper, Williams’s argument that 

the Full Commission erred in its judgment basing the dismissal on the T-1 Affidavit 

rather than the proposed Amended Complaint is now moot. Dismissal of this third 

issue is proper. 

CONCLUSION

Williams’s claim of negligent interference with a contract was properly

dismissed for failure to state a claim upon which relief may be granted, not for lack 

of subject matter jurisdiction. Further, negligent interference with a contract is not 
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a tort recognized in North Carolina, and thus Williams failed to state a claim for 

which relief can be granted. The Full Commission did not err dismissing this claim.

Williams’s claim that the Full Commission relied on the T-1 Affidavit rather 

than the proposed Amended Complaint is deemed moot because the negligent 

interference with a contract claim was properly dismissed.

AFFIRMED IN PART; DISMISSED IN PART.

Chief Judge MCGEE and Judge BROOK concur.