Title: Scarborough v. Dillard
Citation: 363 N.C. 715
Docket Number: 112A08
State: north-carolina
Issuer: north-carolina Supreme Court
Date: December 11, 2009

IN THE SUPREME COURT OF NORTH CAROLINA
No. 112A08
FILED: 11 DECEMBER 2009
BERNARD SCARBOROUGH
v.
DILLARD’S, INC., formerly Dillard Department Stores, Inc., a
North Carolina Corporation
Appeal pursuant to N.C.G.S. § 7A-30(2) from the
decision of a divided panel of the Court of Appeals, 188 N.C.
App. 430, 655 S.E.2d 875 (2008), reversing entry of judgment
notwithstanding the verdict in defendant’s favor as to punitive
damages on 8 January 2007 by Judge Hugh B. Campbell, Jr. in
District Court, Mecklenburg County.  Heard in the Supreme Court
15 October 2008.
David Q. Burgess for plaintiff-appellee.
Poyner & Spruill LLP, by David W. Long, Douglas Martin,
and John W. O’Hale, for defendant-appellant.
PARKER, Chief Justice.
The issue before the Court on this appeal is whether
the trial court erred in granting defendant judgment
notwithstanding the verdict as to punitive damages.  For the
reasons stated herein, we conclude that the trial court did not
err, and the decision of the Court of Appeals is reversed.
This case arises out of an action for malicious
prosecution instituted by plaintiff Bernard Scarborough as the
result of his having been indicted, tried, and acquitted of
embezzlement from his employer, defendant Dillard’s, Inc.  At the
outset, we note that the sufficiency of the evidence to support
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the underlying tort of malicious prosecution is not before the
Court in that defendant did not cross appeal the trial court’s
denial of its motion for judgment notwithstanding the verdict
(JNOV) as to the jury’s determination of liability for malicious
prosecution.
The evidence presented at trial tended to show that on
27 October 1997, plaintiff worked in the ladies’ shoe department
at Dillard’s, where he had been employed part-time for
approximately two years.  Around 8:00 p.m., plaintiff  waited on
two women for approximately thirty-five to forty minutes, showing
them about twenty pairs of shoes.  When one of the women decided
to purchase two pairs of shoes, plaintiff took the shoes to the
register, scanned the shoes, and placed them in a bag.  Before
plaintiff completed this transaction, the other woman came to the
register and asked him about trying on a pair of shoes. 
Plaintiff voided the first transaction so he could check the
price of the shoes for that customer and to prevent his employee
number from remaining in the register when he went into the
stockroom to look for the shoes.  Plaintiff was unable to find
shoes in the width the woman needed but agreed to stretch the
shoes for her.  The two women stated that they would return for
the third pair.  The women then left Dillard’s with two pairs of
shoes for which no payment had been made.
The women later returned and asked plaintiff if he
could hold the third pair of shoes until the next day.  Plaintiff
agreed, and the woman who wanted the shoes wrote her name, Betty
Jordan, on a piece of paper which plaintiff attached to the shoe
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box.  Plaintiff also wrote his employee number on the piece of
paper so he could receive credit for the sale.
After the women left, two other shoe department
employees, Lynette Withers and Selma Brown, who had watched the
transaction, commented to plaintiff that he had had a big sale
and asked if they could look at the journal tape to see what the
amount was.  Plaintiff agreed.  Upon looking at the tape Withers
and Brown confirmed that the women had taken the first two pairs
of shoes without paying for them.  Ms. Brown told plaintiff that
the sales transaction was missing.  Plaintiff then called Steven
Gainsboro, the manager on duty that night, to tell him what had
happened.  Mr. Gainsboro told plaintiff he would discuss the
incident the next day with David Hicklin, the shoe department
manager.
When plaintiff arrived at Dillard’s the next evening,
he met with Mr. Hicklin, Kevin McCluskey, the store manager, and
Sergeant Cullen Wright, a Dillard’s loss prevention employee, who
also worked full time as an officer for the Charlotte-Mecklenburg
Police Department (CMPD).  During the two-hour interview,
plaintiff explained that he had made a mistake, took
responsibility for the incident, and offered to pay Dillard’s for
the shoes.  Plaintiff also offered to submit to a polygraph exam. 
Mr. McCluskey accused plaintiff of knowing the two women and
threatened to have him prosecuted for embezzlement and ruin his
full-time job at First Union National Bank if he did not provide
the names of the women.  Plaintiff told Mr. McCluskey that he did
not know the women and could not provide their names.  Sergeant
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Wright also participated in questioning plaintiff about the
incident and took a written statement from him.  At the end of
the interview, Mr. McCluskey terminated plaintiff for
embezzlement.
After plaintiff’s termination, Sergeant Ken Schul,
another Dillard’s security guard who was employed full time as an
officer for the CMPD, took statements from four Dillard’s
employees, Ms. Withers, Ms. Brown, Mr. Gainsboro, and Mr.
Hicklin, about plaintiff’s failed transaction.  On 12 November
1997, Sergeant Schul met with Assistant District Attorney (ADA)
Nathaniel Proctor to present a case against plaintiff.  Upon
review of the information presented, Mr. Proctor authorized the
prosecution of plaintiff for embezzlement.  Mr. Proctor did not
ask for additional information or investigation.  Thereafter,
Sergeant Schul obtained a warrant for plaintiff’s arrest.
Approximately two weeks after his termination from
Dillard’s, plaintiff was arrested in the atrium of One First
Union Center in Charlotte while on his way to his office. 
Uniformed police officers, one of whom was Sergeant Wright,
handcuffed plaintiff and escorted him outside to a police car. 
Upon his release from jail, plaintiff returned to First Union to
find that his employment was suspended without pay because of his
arrest for embezzlement and that he would be eligible to return
to work only if the charges against him were cleared.
Plaintiff was subsequently indicted by the grand jury
for embezzlement.  Plaintiff was tried for embezzlement in
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Superior Court, Mecklenburg County.  On 27 May 1998, a jury found
plaintiff not guilty.
On 4 April 2001, plaintiff initiated this action for
malicious prosecution.  Following a trial in January 2005, the
jury returned a verdict in plaintiff’s favor, awarding him
$30,000 in compensatory damages and $77,000 in punitive damages
for malicious prosecution.  On 24 February 2005, the trial court
granted Dillard’s motion for JNOV as to punitive damages and
entered an order setting aside that award.  Plaintiff appealed to
the Court of Appeals, which remanded the case because, contrary
to N.C.G.S. § 1D-50, the trial court’s 24 February 2005 order
contained no reasons why the trial court set aside the jury
verdict as to punitive damages.  Scarborough v. Dillard’s, Inc.,
179 N.C. App. 127, 130, 632 S.E.2d 800, 803 (2006).  Upon remand,
the trial court filed an order on 8 January 2007 setting out the
basis for its judgment notwithstanding the verdict as to punitive
damages.  Plaintiff appealed from that order on 9 January 2007.
The Court of Appeals reversed the trial court’s entry
of judgment notwithstanding the verdict as to punitive damages. 
The Court of Appeals’ majority reviewed the issue under the “more
than a scintilla of evidence” standard.  Scarborough v. Dillard’s
Inc., 188 N.C. App. 430, 431, 655 S.E.2d 875, 876 (2008).  The
dissenting judge would have affirmed the trial court as plaintiff
failed to present “clear and convincing evidence” of any
statutory aggravating factor required for punitive damages.  Id.
at 438, 655 S.E.2d at 881 (Hunter, Robert C., J., dissenting).
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Defendant appealed to this Court based on the
dissenting opinion in the Court of Appeals.  Defendant contends
that the Court of Appeals applied an incorrect standard of review
and that the evidence was insufficient to support a jury’s
finding of an aggravating factor.  We agree.
This Court has stated that “[t]he test for determining
the sufficiency of the evidence when ruling on a motion for
judgment notwithstanding the verdict is the same as that applied
when ruling on a motion for directed verdict.”  Northern Nat'l
Life Ins. Co. v. Lacy J. Miller Mach. Co., 311 N.C. 62, 69, 316
S.E.2d 256, 261 (1984) (citing Summey v. Cauthen, 283 N.C. 640,
648, 197 S.E.2d 549, 554 (1973)).  A motion for judgment
notwithstanding the verdict “is essentially a renewal of an
earlier motion for directed verdict.”  Bryant v. Nationwide Mut.
Fire Ins. Co., 313 N.C. 362, 368-69, 329 S.E.2d 333, 337 (1985)
(citation omitted).  A motion for directed verdict “tests the
legal sufficiency of the evidence to take the case to the jury
and support a verdict” for the nonmovant.  Manganello v.
Permastone, Inc., 291 N.C. 666, 670, 231 S.E.2d 678, 680 (1977)
(citing, inter alia, Investment Props. of Asheville, Inc. v.
Allen, 281 N.C. 174, 188 S.E.2d 441 (1972)).
“The standard of review of directed verdict is whether
the evidence, taken in the light most favorable to the non-moving
party, is sufficient as a matter of law to be submitted to the
jury.”  Davis v. Dennis Lilly Co., 330 N.C. 314, 322, 411 S.E.2d
133, 138 (1991) (citation omitted).  A directed verdict and
judgment notwithstanding the verdict are therefore “not properly
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allowed ‘unless it appears, as a matter of law, that a recovery
cannot be had by the plaintiff upon any view of the facts which
the evidence reasonably tends to establish.’”  Manganello, 291
N.C. at 670, 231 S.E.2d at 680 (quoting Graham v. North Carolina
Butane Gas Co., 231 N.C. 680, 683, 58 S.E.2d 757, 760 (1950)).
We must first determine the application of these
principles to an award of punitive damages.  Our General Assembly
has set parameters for the recovery of punitive damages through
the enactment of Chapter 1D of the North Carolina General
Statutes.  To recover punitive damages a claimant must prove
that the defendant is liable for compensatory
damages and that one of the following
aggravating factors was present and was
related to the injury for which compensatory
damages were awarded:
(1) Fraud.
(2) Malice.
(3) Willful or wanton conduct.
N.C.G.S. § 1D-15(a) (2007).  The statute further provides that a
claimant “must prove the existence of an aggravating factor by
clear and convincing evidence.”  N.C.G.S. § 1D-15(b) (2007). 
When punitive damages are sought against a corporation, the
claimant must further show that “the officers, directors, or
managers of the corporation participated in or condoned the
conduct constituting the aggravating factor giving rise to
punitive damages.”  N.C.G.S. § 1D-15(c) (2007).
The clear and convincing standard requires evidence
that “‘should fully convince.’”  In re Will of McCauley, 356 N.C.
91, 101, 565 S.E.2d 88, 95 (2002) (quoting Williams v. Blue Ridge
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Bldg. & Loan Ass’n, 207 N.C. 362, 364, 177 S.E. 176, 177 (1934)). 
This burden is more exacting than the “preponderance of the
evidence” standard generally applied in civil cases, but less
than the “beyond a reasonable doubt” standard applied in criminal
matters.  Williams, 207 N.C. at 363-64, 177 S.E. at 177.
Plaintiff argues that whether the evidence is clear and
convincing is for the jury to decide; and if there is more than a
scintilla of evidence from which the jury could infer the
existence of the aggravating factor, the determination should be
left to the jury.  The plain language of the statute, however,
does not support this contention in the context of punitive
damages.
The statute provides that a trial court in “upholding
or disturbing” an award of punitive damages must “address with
specificity the evidence, or lack thereof, as it bears on the
liability for or the amount of punitive damages, in light of the
requirements of this Chapter.”  N.C.G.S. § 1D-50 (2007) (emphasis
added).  This language, coupled with that in N.C.G.S. § 1D-15(b)
requiring proof by “clear and convincing evidence,” manifests
that the General Assembly intended that the quantum of evidence
be more than would be sufficient to uphold liability for the
underlying tort and that the trial court have a role in
ascertaining whether the evidence presented was sufficient to
support a jury’s finding of the factor under the standard
established by the legislature.  See, e.g., Anderson v. Liberty
Lobby, Inc., 477  U.S. 242, 255, 91 L. Ed. 2d  202, 216 (1986)
(stating that for purposes of a directed verdict “the
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determination of whether a given factual dispute requires
submission to a jury must be guided by the substantive
evidentiary standards that apply to the case” and that where
“clear and convincing” evidence is required, the inquiry is
“whether the evidence presented is such that a jury applying that
evidentiary standard could reasonably find for either the
plaintiff or the defendant”).
In light of these principles, we hold that in reviewing
a trial court’s ruling on a motion for judgment notwithstanding
the verdict on punitive damages, our appellate courts must
determine whether the nonmovant produced clear and convincing
evidence from which a jury could reasonably find one or more of
the statutory aggravating factors required by N.C.G.S. § 1D-15(a)
and that that aggravating factor was related to the injury for
which compensatory damages were awarded.  Reviewing the trial
court’s ruling under the “more than a scintilla of evidence”
standard does not give proper deference to the statutory mandate
that the aggravating factor be proved by clear and convincing
evidence.  Evidence that is only more than a scintilla cannot as
a matter of law satisfy the nonmoving party’s threshold statutory
burden of clear and convincing evidence.
Having determined the applicable standard of review, we
must now determine whether plaintiff presented clear and
convincing evidence from which a jury applying that standard
could reasonably find that the officers, directors, or managers
of defendant Dillard’s participated in or condoned conduct that
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was (i) malicious or willful or wanton and (ii) was related to
the injury for which compensatory damages were awarded.
We initially note that although the dissenting opinion
relies on plaintiff’s failure to assign error to the trial
court’s findings of fact, defendant does not raise this issue in
its new brief to this Court.  Normally, when an appellant fails
to assign error to findings of fact by the trial court, the
findings are binding on the appellate court, Koufman v. Koufman,
330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991) (citing, inter alia,
Schloss v. Jamison, 258 N.C. 271, 275, 128 S.E.2d 590, 593
(1962)), and the only question is whether the trial court’s
findings support the conclusions of law, Quick v. Quick, 305 N.C.
446, 451, 290 S.E.2d 653, 657 (1982), which are reviewable de
novo.  Humphries v. City of Jacksonville, 300 N.C. 186, 187, 265
S.E.2d 189, 190 (1980) (citing, inter alia, Food Lion Stores,
Inc. v. City of Salisbury, 300 N.C. 21, 265 S.E.2d 123 (1980)). 
However, this Court, in reviewing trial court rulings on motions
for directed verdict and judgment notwithstanding the verdict,
has held that the trial court should not make findings of fact,
and if the trial court finds facts, they are not binding on the
appellate court.  Kelly v. Int’l Harvester Co., 278 N.C. 153,
158-59, 179 S.E.2d 396, 398-99 (1971).  Moreover, the language of
the statute does not require findings of fact, but rather that
the trial court “shall state in a written opinion its reasons for
upholding or disturbing the finding or award.  In doing so, the
court shall address with specificity the evidence, or lack
thereof, as it bears on the liability for or the amount of
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punitive damages.”  N.C.G.S. § 1D-50.  That the trial court
utilizes findings to address with specificity the evidence
bearing on liability for punitive damages is not improper; the
“findings,” however, merely provide a convenient format with
which all trial judges are familiar to set out the evidence
forming the basis of the judge’s opinion.  The trial judge does
not determine the truth or falsity of the evidence or weigh the
evidence, but simply recites the evidence, or lack thereof,
forming the basis of the judge’s opinion.  As such, these
findings are not binding on the appellate court even if
unchallenged by the appellant.  These findings do, however,
provide valuable assistance to the appellate court in determining
whether as a matter of law the evidence, when considered in the
light most favorable to the nonmoving party, is sufficient to be
considered by the jury as clear and convincing on the issue of
punitive damages.
We next consider defendant’s contentions that plaintiff
failed to present sufficient evidence of willful or wanton
conduct or of malice on the part of defendant to support the
jury’s award of punitive damages.  The General Assembly has
defined “willful or wanton conduct” as “the conscious and
intentional disregard of and indifference to the rights and
safety of others, which the defendant knows or should know is
reasonably likely to result in injury, damage, or other harm. 
‘Willful or wanton conduct’ means more than gross negligence.” 
N.C.G.S. § 1D-5(7) (2007).
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Plaintiff relies on two cases in support of his
contention that defendant’s “superficial and cursory
investigation” of the alleged embezzlement evidences “a ‘reckless
and wanton disregard of [his] rights’”:  Jones v. Gwynne, 312
N.C. 393, 408-09, 323 S.E.2d 9, 18 (1984), receded from by
Hawkins v. Hawkins, 331 N.C. 743, 417 S.E.2d 447 (1992), and
Williams v. Boylan-Pearce, Inc., 69 N.C. App. 315, 319, 317
S.E.2d 17, 20 (1984), aff’d per curiam, 313 N.C. 321, 327 S.E.2d
870 (1985).  Plaintiff’s reliance on these cases is misplaced as
each of them is distinguishable on its facts from the present
case.
In Jones this Court determined that the evidence was
sufficient for submission to the jury on the issue of punitive
damages based on the fact that the investigation conducted by
defendant Gwynne, the regional security officer for McDonald’s
Corporation, “was conducted ‘in a manner which showed the
reckless and wanton disregard of the plaintiff’s rights.’” 
Jones, 312 N.C. at 405, 323 S.E.2d at 16.  One witness testified
that she saw the plaintiff Ray Jones, McDonald’s store manager,
ring numerous consecutive “no sales” and put the money in the
register, yet time cards showed that this particular witness had
worked less than half the days she allegedly saw the plaintiff
ring the “no sales.”  Id. at 406, 312 S.E.2d at 17.  Although
Gwynne had reviewed the daily store records, the register journal
tapes, the managers’ schedules, the crew schedules, and the
employee time cards for the period in question, he failed to make
any notations as to when the witness worked and at trial did not
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know where the time cards could be located.  Id.  Moreover, no
evidence was adduced at trial that the McDonald’s restaurant
showed a shortage of money for any day or that any McDonald’s
money was ever missing from that store.  Id.  Gwynne never
performed an audit of the McDonald’s nor did he order that an
audit of the store’s records be performed.  Id. at 406-07, 323
S.E.2d at 17.  After Gwynne discussed the case with two of his
superiors, he talked with two detectives, telling them that he
thought they had enough evidence to charge the plaintiff with
embezzlement.  Id. at 408, 323 S.E.2d at 18.  Gwynne also
suggested that one of the detectives discuss the case with an
assistant district attorney.  Id.  The ADA advised the detective
that although it sounded like a good case, if the detective
“‘could get more information as to the actual conversion of the
money . . . it certainly would be better.’”  Id.  At the time of
the events in question, Gwynne was an employee of McDonald’s
Corporation and was not a sworn law enforcement officer, although
he had previously been an SBI agent and a Chief Deputy Sheriff. 
Id. at 406, 323 S.E.2d at 16.  By contrast, in the instant case
the undisputed evidence is that the investigation was handled by
Sergeants Wright and Schul acting in their capacity as CMPD
officers.  ADA Proctor did not ask for any additional
investigation or information when presented with the case.  Most
importantly, the evidence was undisputed that plaintiff voided
the sales transaction and permitted the two customers to leave
the store with two pairs of shoes for which no payment had been
received.
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In Williams the plaintiff, a part-time employee during
the Christmas season, was working in the jewelry department at
the defendant department store.  69 N.C. App. at 316, 317 S.E.2d
at 18.  The sales people were permitted to model the jewelry to
encourage customers to purchase it.  Id.  One evening at closing,
after rushing to get the 14 karat gold jewelry into the safe and
to leave before the lights were turned off, the plaintiff walked
out of the store without removing a pair of earrings she had been
wearing during the day.  Id.  She was seized by J.M. Lynch, an
off-duty police officer hired to provide store security, and was
taken back into the store.  Id.  She was ushered into a small
room and questioned by three employees about an alleged theft of
earrings.  Id. at 316-17, 317 S.E.2d at 18.  The plaintiff
offered to return the earrings she had been wearing during the
day, but Lynch continued to look for other earrings by examining
the contents of the plaintiff’s purse without her consent.  Id.
at 317, 317 S.E.2d at 18.  Lynch later testified that he did not
stop the plaintiff because she was wearing the store earrings out
of the store, but because he thought she had taken other earrings
earlier when he saw her bend down and do something under the
counter.  Id.  When Lynch’s search of the plaintiff’s purse
revealed only the plaintiff’s own earrings, Karen Beasley, head
of the defendant’s security force, subjected the plaintiff to a
body search.  Id. at 317, 317 S.E.2d at 19.  The plaintiff’s
requests to call her father were refused until after the search
failed to reveal any evidence of stolen property.  Id.
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Lynch had the plaintiff transported to the magistrate’s
office, where he attempted to have her charged with felonious
larceny.  Id.  The magistrate would only issue a warrant for
misdemeanor larceny of two pairs of earrings.  Id.  The plaintiff
was found not guilty of these charges in District Court.  Id.  On
this evidence the Court of Appeals concluded that the jury could
find that the plaintiff “was treated rudely and oppressively.” 
Id. at 320, 317 S.E.2d at 20.  The Court of Appeals also
concluded that the evidence of Lynch’s failure to take an
inventory to determine if jewelry was missing, his failure to
check the plaintiff’s sales book to determine if she had made any
sales, and his failure to check with anyone regarding the
plaintiff’s personnel record or her character constituted
evidence from which the jury could find reckless and wanton
disregard of the plaintiff’s rights.  Id. at 320, 317 S.E.2d at
20-21.
Again, in the instant case the evidence is undisputed
that plaintiff failed to ring the sale and permitted the
customers to leave the store with two pairs of shoes for which
payment had not been tendered.  The evidence is undisputed that
Sergeant Schul presented the results of the investigation to an
ADA before obtaining a warrant from the magistrate.
Nevertheless, plaintiff argues that as in Jones and
Williams, defendant acted willfully and wantonly in reckless
disregard of his rights in its investigation of the incident by
failing to inquire into his character and employment records, as
well as failing to obtain statements from all possible witnesses,
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including Betty Jordan, one of the two women who received the
shoes.  Plaintiff further argues defendant did not divulge
exculpatory evidence to the police.
We find these arguments unpersuasive in light of the
investigation conducted by Sergeants Wright and Schul before the
case was submitted to ADA Proctor.  Plaintiff was interviewed by
Sergeant Wright, Mr. Hicklin, and Mr. McCluskey the day after the
incident and before he was fired.  Sergeant Wright took a written
statement from plaintiff during this meeting.  The officers took
statements from plaintiff’s coworkers, Ms. Brown and Ms. Withers,
as well as from his supervisors Mr. Gainsboro and Mr. McCluskey. 
Ms. Withers’s statement expressed her belief that plaintiff had
given the shoes to the women on purpose, even though Gainsboro
thought plaintiff had made a mistake.  However, Mr. Gainsboro’s
statement does not reflect that he thought plaintiff had made a
mistake.  The relevance of this allegedly exculpatory evidence
involving Mr. Gainsboro’s opinion about whether plaintiff made a
mistake or acted intentionally is problematic at best.  In Jones
the undiscovered or undisclosed exculpatory evidence was
presented by the plaintiff at trial and demonstrated that had the
investigator discovered this evidence, the defendant would have
known that no money was missing from McDonald’s.  In this case
Mr. Gainsboro’s initial opinion that plaintiff made a mistake has
no bearing on the existence of missing property or goods. 
Further, though the record does not disclose why Mr. Gainsboro’s
statement fails to mention his initial opinion or impression, Mr.
Gainsboro would have been entitled to change his opinion. 
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Moreover, that Mr. Gainsboro initially thought plaintiff made a
mistake was disclosed through Ms. Withers’s statement.  Certainly
this omission does not rise to the level of clear and convincing
evidence of willful or wanton reckless disregard of plaintiff’s
rights in conducting the investigation.  Although defendant’s
investigation may not have been perfect and could perhaps have
included statements from additional witnesses, unlike in Jones
and Williams, plaintiff has not adduced any evidence that this
additional investigation that plaintiff thinks could have been
conducted would have changed the officers’ decision to present
the case to the ADA.  We simply do not know what any additional
investigation would have revealed.  Speculation is not probative
evidence of willful or wanton conduct.
Plaintiff next contends that defendant acted with a
conscious and intentional disregard of his rights in procuring
his prosecution knowing that it would cause him to lose his full-
time job at First Union Bank despite evidence showing that he
simply made a mistake in forgetting to charge the women for the
shoes.  Plaintiff testified that during the meeting the day after
the incident occurred, Mr. McCluskey repeatedly accused him of
knowing the two women and threatened to “mess up” his job at
First Union if he did not tell Dillard’s who the women were. 
Plaintiff testified that he told Mr. McCluskey that he did not
know the women and that he would take a polygraph test to clear
his name.  At the time of the meeting, Dillard’s was in
possession of the piece of paper with the name “Betty Jordan” on
it, which had been placed by plaintiff on the box of shoes that
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he had put on hold for one of the women who was supposed to
return the next day to purchase the shoes.
While plaintiff’s characterization of Mr. McCluskey’s
statements reveals that Mr. McCluskey may have been somewhat
intemperate in his interview with plaintiff, interviews such as
this one are always stressful.  The pertinent question is
whether, under the circumstances, Mr. McCluskey’s statements to
plaintiff that he was suspected of embezzlement and that if he
were charged with embezzlement, it would adversely affect
plaintiff’s position at First Union Bank constitutes evidence of
reckless disregard for plaintiff’s rights, or whether Mr.
McCluskey simply confronted plaintiff with the truth.  That being
charged with embezzlement would affect a person’s job with a bank
is indisputable.  The underlying premise of plaintiff’s argument
is that Mr. McCluskey acted inappropriately by not merely
accepting plaintiff’s explanation that he made a mistake by
forgetting to re-ring the sale.  Department store managers have
an obligation to protect the safety and security of people and
property within the store.  Common sense dictates that a store
manager cannot be precluded from taking investigative measures
necessary to fulfill this obligation when confronted with the
information Mr. McCluskey had in this instance.  Refusing to
accept an employee’s explanation and telling an employee the
consequences of the situation do not equate with reckless
disregard of an employee’s rights.
Plaintiff next argues that he presented sufficient
evidence of malice on the part of defendant in procuring his
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felony prosecution to support the jury’s award of punitive
damages.  In the context of punitive damages, “[m]alice” is
defined as “a sense of personal ill will toward the claimant that
activated or incited the defendant to perform the act or
undertake the conduct that resulted in harm to the claimant.”
N.C.G.S. § 1D-5(5) (2007).
Plaintiff argues that malice can be evidenced by his
previous reprimand by Mr. McCluskey for referring a customer to
another shoe store.  Plaintiff testified that at the beginning of
his meeting with management the day after the incident, Mr.
McCluskey repeatedly said, “I cannot believe you’re [Scarborough]
in my office again.”  Plaintiff also argues that the prosecution
was due to Mr. McCluskey’s belief that plaintiff was so inept
that the women were able to dupe him out of the shoes rather than
any honest belief that Mr. McCluskey had intentionally given away
the shoes.  These arguments are too speculative and fall well
short of constituting clear and convincing evidence from which a
jury could conclude that Mr. McCluskey acted with malice under
N.C.G.S. § 1D-15(a).
In conclusion, we hold that the proper standard of
review of a trial court’s ruling on a motion for judgment
notwithstanding the verdict as to punitive damages is whether the
nonmovant produced clear and convincing evidence of one of the
statutory aggravating factors for punitive damages.
Inasmuch as we have determined that the evidence in
this case is not sufficient to support a jury’s finding of a
statutory aggravating factor by clear and convincing evidence, we
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do not reach the issues of whether the factor “was related to the
injury” or whether one of defendant’s “officers, directors, or
managers . . . participated in or condoned the conduct
constituting the aggravating factor giving rise to punitive
damages.”  N.C.G.S. § 1D-15(c).
For the forgoing reasons, the decision of the Court of
Appeals is reversed.
REVERSED.
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Justice TIMMONS-GOODSON dissenting.
The majority conflates the burden of persuasion--the
exclusive province of the jury--with the burden of production. 
In so doing, the majority improperly weighs the evidence and
substitutes its own judgment for the jury’s.  I therefore
respectfully dissent.  Because plaintiff presented sufficient
evidence to support the jury’s award of punitive damages, the
trial court erred in granting defendant’s motion for judgment
notwithstanding the verdict.  
I. N.C.G.S. § 1D-15
Subsections 1D-15(a) and (b) state that: 
(a) Punitive damages may be awarded
only if the claimant proves that
the defendant is liable for
compensatory damages and that one
of the following aggravating
factors was present and was related
to the injury for which
compensatory damages were awarded:
(1) Fraud.
(2) Malice.
(3) Willful or wanton conduct.
(b) The claimant must prove the
existence of an aggravating factor
by clear and convincing evidence.
N.C.G.S. §§ 1D-15 (a),(b) (2007). 
To determine the General Assembly’s intent in requiring
“clear and convincing” evidence of punitive damages under
N.C.G.S. § 1D-15 and whether by establishing such burden of
proof, the General Assembly intended to alter the trial court’s
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review of the evidence upon a motion for judgment notwithstanding
the verdict, I believe it instructive to closely examine two
basic concepts of law:  the burden of proof and judgment
notwithstanding the verdict. 
II. Burden of Proof
The burden of proof in any case includes both the
burden of production and the burden of persuasion.  Black’s Law
Dictionary 209 (8th ed. 2004) [hereinafter Black’s]; see also
N.C.G.S. § 8C-1, Rule 301 (2007) (distinguishing between the
burden of production and the burden of persuasion); Hunt v. Eure,
189 N.C. 482, 486, 127 S.E. 593, 594 (1925); Speas v. Merchs.
Bank & Tr. Co., 188 N.C. 524, 526, 125 S.E. 398, 399 (1924); 1
Kenneth S. Broun, Brandis & Broun on North Carolina Evidence § 30
(6th ed. 2004) [hereinafter Broun].  The burden of production,
also known in North Carolina as the “duty of going forward,”
Speas, 188 N.C. at 529, 125 S.E. at 401, is “[a] party’s duty to
introduce enough evidence on an issue to have the issue decided
by the fact-finder, rather than decided against the party in a
peremptory ruling” such as a directed verdict or a judgment
notwithstanding the verdict, Black’s 209.  See also Speas, 188
N.C. at 526, 125 S.E. at 399 (contrasting the “burden or duty of
going forward and producing evidence” with the party’s burden of
persuasion); Broun § 30 (same).  The burden of persuasion,
meanwhile, is the “party’s duty to convince the fact-finder to
view the facts in a way that favors that party.”  Black’s 209;
see also Broun § 33.  The burden of persuasion is commonly known
in North Carolina as the “burden of the issue.”  Speas, 188 N.C.
-23-
at 529, 125 S.E. at 401; see also Bd. of Educ. v. Makely, 139
N.C. 54, 57-58, 139 N.C. 30, 35-36, 51 S.E. 784, 786 (1905);
Broun §§ 30, 33.  The burden of persuasion is also often “loosely
termed [the] burden of proof.”  Black’s 209 (emphasis omitted);
see also Broun § 33.  
The burden of production and the burden of persuasion
are distinct concepts.  See, e.g., Speas, 188 N.C. at 529, 125
S.E. at 401 (“The burden of the issue and the duty of going
forward with evidence are two very different things.”); Makely,
139 N.C. at 57-58, 139 N.C. at 35-36, 51 S.E. at 786
(distinguishing the burden of production from the burden of
proof); Black’s 209 (same).  Significantly, the trial court may
review the evidence to ensure that the burden of production is
met, while the burden of persuasion rests with the trier of fact:
“The important practical
distinction between these two
senses of ‘burden of proof,’ is
this:  ‘The risk of non[]persuasion
operates when the case[s] . . .
come into the hands of the jury []
while the duty of producing
evidence implies a liability to a
ruling [of] the judge disposing of
the issue without leaving the
question open to the jury’s
deliberation[].’” 
Hunt, 189 N.C. at 488, 127 S.E. at 596 (quoting 5 John Henry
Wigmore, Evidence § 2487 (2d ed. 1923) (alterations in
original)); see also Campbell v. Everhart, 139 N.C. 395, 405, 139
N.C. 503, 516, 52 S.E. 201, 206 (1905) (“The legal sufficiency of
proof and the moral weight of legally sufficient proof are very
distinct in the conception of the law.  The first lies within the
province of the court, the last within that of the jury.”);
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Black’s 209 (defining the burden of production as the “party’s
duty to introduce enough evidence on an issue to have the issue
decided by the fact-finder” rather than by the trial judge, while
the burden of persuasion is the “party’s duty to convince the
fact-finder”); Broun §§ 32, 33, 39. 
A. Varying Levels of the Burden of Persuasion
The burden of persuasion is “heavier or lighter
depending upon the kind of case and the particular issue
involved.”  Broun § 33; see also Speas, 188 N.C. at 528-29, 125
S.E. at 400-01 (describing the differing levels of the burden of
persuasion); Black’s 209 (identifying varying burdens of
persuasion).  In civil cases, the burden of persuasion is usually
the “greater weight” or “preponderance” of the evidence, Black’s
209, but other civil cases require a greater burden of
persuasion, that of “clear and convincing evidence,” see Speas,
188 N.C. at 528-29, 125 S.E. at 401, also called the “middle
burden of proof,” Black’s 209.  See also Broun § 42.  In criminal
cases, the burden of persuasion is almost always “beyond a
reasonable doubt.”  Speas, 188 N.C. at 528, 125 S.E. at 400;
Black’s 209.  In each case, the jury must determine whether the
party with the burden of persuasion has met that burden with
evidence that preponderates, clearly convinces, or establishes
the matters at issue beyond a reasonable doubt.  These various
burdens of persuasion relate to the credibility of the evidence
offered rather than the quantity of the evidence.  See In re Will
of Lomax, 225 N.C. 592, 595, 35 S.E.2d 876, 878 (1945) (noting
-25-
that the probative value of testimony offered “is a matter only
for the jury”). 
B. The “Clear and Convincing” Burden of Persuasion
The majority asserts that, as a matter of law,
plaintiff failed to present “clear and convincing” evidence in
support of his claim for punitive damages.  In so concluding, the
majority conflates the burden of production with the burden of
persuasion.  Determining whether a plaintiff has met the burden
of persuasion by producing “clear and convincing” evidence is the
exclusive province of the fact finder.  See, e.g., In re Will of
McCauley, 356 N.C. 91, 102, 565 S.E.2d 88, 95 (2002) (“Whether
the evidence on these questions is clear, strong, and convincing
is for the jury to decide.”); Speas, 188 N.C. at 530, 125 N.C. at
401.  This principle is well established.  As this Court
admonished in Lehew v. Hewett, 130 N.C. 15, 16, 130 N.C. 22, 22-
23, 40 S.E. 769, 770 (1902):
The evidence was sufficient to be
submitted to the jury, with the
instruction that it must be clear,
strong and convincing to warrant a
verdict for the plaintiff, but
whether it was or was not “strong,
clear and convincing” was to be
determined by the jury and not by
the court; otherwise, the jury
would be useless.
“The [j]udge has no more right,
when the testimony[,] if
believed[,] is sufficient to be
submitted to the jury, to determine
in the trial of civil actions what
is strong, clear and convincing
proof[,] tha[n] he has in the trial
of a criminal action to express an
opinion as to whether guilt has
been shown beyond a reasonable
doubt.”
-26-
Id. (quoting Cobb v. Edwards, 117 N.C. 167, 173, 117 N.C. 245,
253, 23 S.E. 241, 244 (1895) (alterations in original)); see also
Lefkowitz v. Silver, 182 N.C. 361, 372, 182 N.C. 339, 350, 109
S.E. 56, 61 (1921) (noting that it is the role of the jurors to
decide if evidence is strong, cogent and convincing, “just as
they decide in ordinary civil cases whether the proof of
plaintiff preponderates, or in criminal cases whether the State
has established the crime beyond a reasonable doubt”).   
Section 1D-15 of the North Carolina General Statutes,
like so many statutes, sets forth both the burden of production
and the burden of persuasion.  To be awarded punitive damages,
the plaintiff must meet his burden of production by producing
evidence of (1) fraud, (2) malice, or (3) willful or wanton
conduct.  N.C.G.S. § 1D-15(a).  The plaintiff’s burden of
persuasion is to produce “clear and convincing” evidence of one
of these aggravating factors.  Id. § 1D-15(b).  The “clear and
convincing” burden of persuasion required by N.C.G.S. § 1D-15(b)
is neither novel nor unique in our statutory scheme and case law. 
Our statutes require varying burdens of persuasion--from
preponderance of the evidence, to clear and convincing, to beyond
a reasonable doubt.  See, e.g., N.C.G.S. §§ 7B-805 (2007)
(requiring clear and convincing evidence); 7B-2409 (2007)
(requiring proof beyond a reasonable doubt); 42-30 (2007)
(requiring preponderance of the evidence).  The majority
concludes that because the burden of persuasion set forth in
N.C.G.S. § 1D-15 is “clear and convincing,” the trial court must,
upon a motion for directed verdict or judgment notwithstanding
-27-
the verdict, review and determine whether the evidence is clear
and convincing.  Yet as explained above, the burden of persuasion
lies within the province of the jury.  See Martin v. Underhill,
265 N.C. 669, 675, 144 S.E.2d 872, 876 (1965) (stating that when
the required burden of persuasion is clear, cogent, and
convincing evidence, “whether the evidence has that convincing
quality is a question for the jury upon proper instructions from
the court” but “the rule as to the sufficiency of the proof to
withstand a motion for judgment of nonsuit [is] the same as in
other cases” (citations omitted)).  I do not believe, and the
majority offers no compelling argument otherwise, that the
General Assembly intended to overturn this settled principle of
law by merely requiring a heightened burden of persuasion in
order to recover punitive damages under N.C.G.S. § 1D-15.
III. Judgment Notwithstanding the Verdict
“A motion for judgment notwithstanding the verdict . .
.  is essentially a renewal of an earlier motion for a directed
verdict.”  Taylor v. Walker, 320 N.C. 729, 733, 360 S.E.2d 796,
799 (1987) (citation omitted).  It requires the trial court to
assess whether the burden of production has been met by evidence
that is “legally sufficient to take the case to the jury.”  Id.
(citations omitted).  It is well established that “[t]he party
moving for judgment notwithstanding the verdict, like the party
seeking a directed verdict, bears a heavy burden under North
Carolina law.”  Id.  “In ruling on the motion, the trial court
must consider the evidence in the light most favorable to the
non-moving party, giving him the benefit of all reasonable
-28-
inferences to be drawn therefrom and resolving all conflicts in
the evidence in his favor.”  320 N.C. at 733-34, 360 S.E.2d at
799 (citing, inter alia, Smith v. Price, 315 N.C. 523, 340 S.E.2d
408 (1986)).  Judgment notwithstanding the verdict may not be
granted “unless it appears as a matter of law that a recovery
simply cannot be had by plaintiff upon any view of the facts
which the evidence reasonably tends to establish.”  Id. (emphases
added) (citing Manganello v. Permastone, Inc., 291 N.C. 666, 231
S.E.2d 678 (1977)).  
Contrary to the majority’s assertions, the trial court
does not alter its review of the plaintiff’s burden of production
upon a motion for judgment notwithstanding the verdict merely
because the burden of persuasion is higher or lower in each case. 
As long as the plaintiff has met his burden of production and the
facts in evidence establish a prima facie case, the case belongs
with the jury.  See, e.g., Millers Mut. Ins. Ass’n v. Atkinson
Motors Inc., 240 N.C. 183, 187, 81 S.E.2d 416, 420 (1954);
Campbell, 139 N.C. at 405, 139 N.C. at 516-17, 52 S.E. at 206
(noting that “the province of the jury should not be invaded in
any case” and that when reasonable minds “might reach different
conclusions, the evidence must be submitted to the jury”
(citations omitted)).  The trial court then instructs the jury
on, inter alia, the plaintiff’s burden of persuasion, and it is
“for the jury to say, upon the facts and the circumstances shown
by [the] plaintiff’s evidence” whether the plaintiff has
established his claim.  Millers Mut. Ins., 240 N.C. at 187, 81
S.E.2d at 419-20. 
-29-
Here, the trial court instructed the jury regarding 
plaintiff’s “clear and convincing” burden of persuasion on his
claim for punitive damages.  “This Court presumes that jurors
follow the trial court’s instructions.”  State v. Cummings, 352
N.C. 600, 623, 536 S.E.2d 36, 53 (2000), cert. denied, 532 U.S.
997 (2001).  The jury applied the clear and convincing burden of
persuasion to plaintiff’s evidence and found that punitive
damages were warranted.  The jury in its discretion, therefore,
awarded plaintiff punitive damages.  See Watson v. Dixon, 352
N.C. 343, 348, 532 S.E.2d 175, 178 (2000).  This Court will not
set aside the jury’s determination unless only a single
inference, unfavorable to the plaintiff, is possible from the
evidence:
Taking the case away from the jury,
while a duty sometimes unavoidable,
is always a delicate task,
involving much more than a strong
feeling that the plaintiff ought
not to recover.  The power of the
court is limited to the
ascertainment whether there is any
evidence at all which has probative 
value in any or all of the facts
and circumstances offered in the
guise of proof.  It is not a matter
of passing upon the weight of
evidence when it has weight.  That
power is denied us.  It is a matter
of dropping the proffered proof
into evenly poised balances to see
whether it weighs against nothing. 
Wall v. Bain, 222 N.C. 375, 378, 23 S.E.2d 330, 332-33 (1942)
(emphases added) (citations omitted).
IV. Evidence Presented 
In the present case, I conclude that plaintiff met his
burden of production.  Taken in the light most favorable to the
-30-
nonmovant, the evidence shows that plaintiff, a forty-one year
old African-American man, was terminated from his employment as a
part-time shoe salesman at Dillard’s after mistakenly allowing
two African-American women to leave the store with two pairs of
shoes for which they did not pay.  When plaintiff realized his
mistake, his “hands start[ed] shaking” and he uttered an
expletive.  Plaintiff immediately reported his mistake to the
manager on duty, Steven Gainesboro.  Gainesboro took no action to
recover the shoes, but merely checked the register tape. 
Gainesboro believed that plaintiff’s actions were inadvertent
rather than intentional.  Gainesboro told plaintiff he would
speak to his supervisor, shoe department manager David Hicklin,
the following day.  Although other Dillard’s shoe department
employees later observed the two women carrying the bag with the
shoes, no steps were taken to approach or apprehend the women.  
The next day, plaintiff telephoned Hicklin three times
to explain what had happened.  When plaintiff finally reached
him, Hicklin told plaintiff he didn’t “know what [plaintiff was]
talking about” but that they would talk when plaintiff came to
work that evening.  When plaintiff arrived at Dillard’s that
evening, Hicklin summoned him to the manager’s office, where he
waited outside for approximately fifteen minutes.  Once plaintiff
was allowed to enter the office, he was interviewed by Hicklin,
store manager Kevin McCluskey, and Officer Cullen Wright of the
Mecklenburg Police Department.  McCluskey immediately told
plaintiff, “I cannot believe you’re in my office again.” 
McCluskey had formally reprimanded plaintiff the previous week
-31-
for referring a customer to another store when Dillard’s did not
carry the type of shoe the customer desired to purchase.   
The “drain[ing]” interview lasted at least two hours,
during which the three men repeatedly accused plaintiff of being
acquainted with the women and intentionally allowing them to
leave with the shoes.  McCluskey threatened to charge plaintiff
with embezzlement and “mess up” his job at First Union if he did
not reveal the names of the two women.  Plaintiff repeatedly
explained that he had made a mistake, took responsibility for the
incident, and offered to pay for the shoes and to submit to a
polygraph examination.  At the end of the interview, McCluskey
terminated plaintiff’s employment at Dillard’s and banned him
from entering any Dillard’s store.  Plaintiff was “very upset”
and “very surprised” by the interview.  Dillard’s referred the
matter to Officer Wright and Officer Ken Schul, another
Mecklenburg Police Department officer who also worked at
Dillard’s, for prosecution.  Officer Wright later arrested
plaintiff at his place of employment with First Union on charges
of embezzlement.  First Union subsequently suspended plaintiff
without pay because of his arrest for embezzlement.
V. Punitive Damages Based on Malicious Prosecution 
In establishing his malicious prosecution claim,
plaintiff here was required to prove that defendant (1) initiated
the earlier proceeding, (2) with malice and (3) without probable
cause, and (4) that the earlier proceeding terminated in his
favor.  Jones v. Gwynne, 312 N.C. 393, 397, 323 S.E.2d 9, 11
(1984) (quoting Stanback v. Stanback, 297 N.C. 181, 202, 254
-32-
S.E.2d 611, 625 (1979)).  The jury found defendant liable for
malicious prosecution of plaintiff and--as the majority
acknowledges--the validity of that verdict stands.  Thus it is
uncontroverted that at least the greater weight of the evidence
showed that defendant acted with malice.  
The majority appears to concede that plaintiff
presented evidence of the aggravating factor of malice, but
concludes that the evidence falls short of the “clear and
convincing” standard required by N.C.G.S. § 1D-15.  Again,
however, whether evidence is clear and convincing is a matter for
the trier of fact.  The majority’s efforts to rationalize and
explain the actions of various persons and events illuminate the
difficulty of reviewing a cold record and attempting to assess
whether evidence is clear and convincing.  For example, the
majority characterizes McCluskey’s threat to plaintiff to “mess
up” his job at First Union if he did not reveal the names of the
women who took the shoes--even though McCluskey possessed the
name of one of the women, whom he did not bother to investigate--
as “somewhat intemperate” and “simply confronting plaintiff with
the truth.”  This is indeed one possible inference from the
evidence presented.  An equally plausible view of the evidence
presented is that McCluskey had no intention of conducting a
genuine investigation of the incident, that instead, he
personally disliked plaintiff and believed him to be an
incompetent employee, and that he therefore seized upon
plaintiff’s mistake in order to terminate his employment with
Dillard’s and advance his termination at First Union.  Such a
-33-
view is imminently reasonable given the evidence of the pre-
existing ill will McCluskey demonstrated towards plaintiff,
plaintiff’s lack of involvement in the theft, the interrogation-
style interview McCluskey conducted, McCluskey’s threat to “mess
up” plaintiff’s job at First Union, and the fact that no one at
Dillard’s appeared to be at all interested in locating the two
women or recovering the merchandise.  The jury may have also
drawn conclusions from the fact that none of plaintiff’s
supervisors at Dillard’s--Gainesboro, Hicklin, or McCluskey--
testified at trial. 
In Jones this Court held that the Court of Appeals
erred in concluding that the plaintiff’s evidence was
insufficient to justify submission of the issue of punitive
damages to the jury based on malicious prosecution when there was
evidence from which a reasonable juror could conclude that 
defendant’s investigation of the plaintiff was conducted with
reckless and wanton disregard of the plaintiff’s rights.  312
N.C. at 408-09, 323 S.E.2d at 18.  In that case the evidence
tended to show that the defendant conducted only “a superficial
and cursory investigation” of the plaintiff employee before
soliciting his prosecution for alleged embezzlement.  Id; see
also Williams v. Boylan-Pearce, Inc., 69 N.C. App. 315, 319-20,
317 S.E.2d 17, 20-21 (1984) (holding the trial court erred in
failing to submit the issue of punitive damages to the jury when
there was evidence from which the jury could find that the
defendant maliciously prosecuted the plaintiff in a manner
evincing a “reckless and wanton disregard of her rights”), aff’d
-34-
per curiam, 313 N.C. 321, 327 S.E.2d 870 (1985).  The majority
contends Jones and Williams are factually distinguishable and
therefore, inapplicable.  Cases may always be distinguished on
their facts, however.  Whether cases may be meaningfully
distinguished is the pertinent question.  That the majority
dedicates nearly half of its opinion to discussing the facts of
the instant case and attempting to distinguish them from the
facts of Jones and Williams speaks volumes. 
VI. Conclusion  
Taken in the light most favorable to plaintiff, I
conclude that plaintiff met his burden of production by
presenting evidence from which a reasonable juror could conclude
that defendant acted with malice and with reckless and wanton
disregard for plaintiff’s rights.  Given the various possible
interpretations of the evidence, judgment notwithstanding the
verdict was improper.  Taylor, 320 N.C. at 733-34, 360 S.E.2d at
799.  It was the jury’s role to sift through the evidence,
evaluate the demeanor and credibility of the witnesses, and
determine whether plaintiff met his burden of persuasion by
producing clear and convincing evidence in support of his claim
for punitive damages.  The jury did so and found in favor of
plaintiff.  The majority’s decision usurps the jury’s role and
imposes its own view of the evidence, contrary to well-
established case law.  I respectfully dissent. 
Justice HUDSON joins in this dissenting opinion.