Court Opinion

ID: 4195781
Source: CourtListenerOpinion
Date Created: 2017-08-15 12:06:49.67541+00
Date Added: 2024-06-11T14:13:14.049558
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA16-1236

                               Filed: 15 August 2017

Orange County, No. 13 CVS 699

PAUL FRAMPTON, Petitioner-Plaintiff,

             v.

THE UNIVERSITY OF NORTH CAROLINA and THE UNIVERSITY OF NORTH
CAROLINA AT CHAPEL HILL, Respondent-Defendants.

      Appeal by plaintiff from orders entered 28 June and 3 August 2016 by Judge

James E. Hardin, Jr., in Orange County Superior Court. Heard in the Court of

Appeals 2 May 2017.

      Law Office of Barry Nakell, by Barry Nakell, for plaintiff-appellant.

      Attorney General Joshua H. Stein, by Special Deputy Attorney General
      Kimberly D. Potter, for defendant-appellee.

      BRYANT, Judge.

      Where the plain language of a statute permits the trial court to exercise its

discretion in the award of attorney’s fees and where plaintiff does not establish an

abuse of discretion in the court’s denial of plaintiff’s motion for attorney’s fees, we

affirm.

      The background of this case is set out in Frampton v. Univ. of N.C. (Frampton

I), 241 N.C. App. 401, 773 S.E.2d 526 (2015).       In brief, the case addressed the

termination of Paul Frampton (“plaintiff”), a tenured professor at the University of
                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

North Carolina at Chapel Hill (“UNC”), who was arrested in an airport in Buenos

Aires, Argentina and ultimately convicted of smuggling cocaine found in his suitcase.

Id. Following plaintiff’s arrest, UNC’s chancellor placed plaintiff on unpaid leave and

terminated his salary and benefits without pursuing the disciplinary procedures

outlined in the university’s tenure policies. After appealing to the UNC Board of

Trustees, which upheld the decision to place plaintiff on leave without pay, plaintiff

filed a petition for judicial review of a State agency decision in Orange County

Superior Court. The superior court affirmed UNC’s actions, and plaintiff appealed to

this Court. On appeal, this Court held that by placing plaintiff on personal, unpaid

leave instead of pursuing formal disciplinary proceedings pursuant to the tenure

policy, UNC violated its own policies. On this basis, this Court reversed the trial

court’s ruling and remanded the matter for the trial court to determine the

appropriate amount of the salary and benefits withheld that should have been paid

to plaintiff. Id. at 414, 773 S.E.2d at 535.

      Upon remand, plaintiff filed a motion requesting compensation for unpaid

salary and benefits as well as attorney’s fees. The trial court awarded plaintiff

$231,475.92 in back salary and $31,824.53 for loss of benefits, but denied the motion

for attorney’s fees. The trial court found “UNC-Chapel Hill did not act without

substantial justification as it attempted to manage an unusual set of circumstances

that were not of its own making, and that it would be unjust to require the State to

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                     FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                       Opinion of the Court

pay attorney fees under such special circumstances.” Plaintiff now appeals the trial

court’s denial of his request for attorney’s fees to this Court.1

                       __________________________________________

       On appeal, plaintiff argues the trial court abused its discretion by denying his

motion for an award of attorney’s fees, made pursuant to our General Statutes,

section 6-19.1, contending the trial court improperly concluded UNC (I) acted with

substantial justification (2) under special circumstances that would make the award

unjust. We disagree.

       The standard of review for a trial court’s decision whether to award attorney’s

fees is abuse of discretion. High Rock Lake Partners, LLC v. N.C. Dep’t of Transp.,

234 N.C. App. 336, 760 S.E.2d 750 (2014). “A ruling committed to a trial court’s

discretion is to be accorded great deference and will be upset only upon a showing

that it was so arbitrary that it could not have been the result of a reasoned decision.”

Smith v. Beaufort Cty. Hosp. Ass’n, Inc., 141 N.C. App. 203, 210, 540 S.E.2d 775, 780

(2000) (citation omitted). On appeal, the appellant has the burden to show the trial

court’s ruling was unsupported by reason or could not be the product of a reasoned

decision. High Rock Lake Partners, LLC, 234 N.C. App. at 340, 760 S.E.2d at 753.

       1   On 30 March 2016, pursuant to the decision of this Court in Frampton I, plaintiff filed a
motion seeking attorney’s fees. Following the trial court’s denial of the motion on 28 June 2016,
plaintiff filed a motion for reconsideration of the ruling pursuant to Rules 59 and 60. In an order
entered 3 August 2016, the trial court denied the motion for reconsideration. Plaintiff appeals both
orders.

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                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

      As the appellant, here, plaintiff contends the trial court abused its discretion

by finding “UNC-Chapel Hill did not act without substantial justification” under

special circumstances and that it would be unjust to require UNC to pay plaintiff’s

attorney’s fees.

      General Statutes, section 6-19.1, specifically addresses the awarding of

attorney’s fees to parties defending against agency decisions.

             In any civil action . . . brought by a party who is contesting
             State action . . . the court may, in its discretion, allow the
             prevailing party to recover reasonable attorney’s fees,
             including attorney’s fees applicable to the administrative
             review portion of the case . . . if:
             (1) The court finds that the agency acted without
                  substantial justification in pressing its claim against
                  the party; and
             (2) The court finds that there are no special circumstances
                  that would make the award of attorney’s fees unjust.
                  The party shall petition for the attorney’s fees within
                  30 days following final disposition of the case. The
                  petition shall be supported by an affidavit setting forth
                  the basis for the request.

N.C. Gen. Stat. § 6-19.1(a) (2015). In accordance with this statute, our Supreme

Court determined that in order for a trial court to act within its discretion and award

attorney’s fees to the prevailing party, the trial court must first find that the State

agency acted “without substantial justification” and, second, that there were no

special circumstances which would make awarding attorney’s fees unjust. Crowell

Constructors, Inc. v. State ex rel. Cobey, 342 N.C. 838, 843, 467 S.E.2d 675, 678 (1996).

Thus, a trial court’s power to award attorney’s fees manifests only when the court

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                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

determines that the agency acted without substantial justification and no special

circumstances exist. High Rock Lake Partners, LLC, 234 N.C. App. at 339, 760 S.E.2d

at 753. However, even when both criteria are met, the trial court is not required to

award attorney’s fees. See id. at 339, 760 S.E.2d at 753.

                              I. Substantial Justification

      Plaintiff first argues that the trial court erred in concluding UNC did not act

without substantial justification. We disagree.

      A state agency has the initial burden before the trial court to show substantial

justification existed. Early v. Cty. of Durham, Dep’t. of Soc. Servs., 193 N.C. App.
334, 347, 667 S.E.2d 512, 522 (2008).        The “substantial justification” standard

requires that a State agency bear the burden “to demonstrate that its position, at and

from the time of its initial action, was rational and legitimate to such degree that a

reasonable person could find it satisfactory or justifiable in light of the circumstances

then known to the agency.” Crowell Constructors, 342 N.C. at 844, 467 S.E.2d at 679.

On appeal, a trial court’s determination that a state agency’s actions were

substantially justified is a reviewable conclusion of law, but findings of fact are

binding if substantiated by evidence in the record.          See Whiteco Indus., Inc. v.

Harrelson, 111 N.C. App. 815, 819, 434 S.E.2d 229, 232–33 (1993); see also Early, 193
N.C. App. at 346–47, 667 S.E.2d at 522. “Conclusions of law are reviewed de novo

and are subject to full review.” State v. Biber, 365 N.C. 162, 168, 712 S.E.2d 874, 878

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                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

(2011); see also Carolina Power & Light Co. v. City of Asheville, 358 N.C. 512, 517,

597 S.E.2d 717, 721 (2004) (“Conclusions of law drawn by the trial court from its

findings of fact are reviewable de novo on appeal.” (citation omitted)).

      This Court has made it clear that an agency need not be “legally correct in

order to avoid liability for attorney’s fees.” Estate of Joyner v. N.C. Dep’t of Health &

Human Servs., 214 N.C. App. 278, 292, 715 S.E.2d 498, 508 (2011).

             The test for substantial justification is not whether this
             Court ultimately upheld respondent’s reasons . . . but,
             rather, whether respondent’s . . . [actions were] justified to
             a degree that could satisfy a reasonable person under the
             existing law and facts known to, or reasonably believed by,
             respondent at the time respondent . . . [acted].

S.E.T.A. UNC-CH, Inc. v. Huffines, 107 N.C. App. 440, 443–44, 420 S.E.2d 674, 676

(1992) (citation omitted).

      Here on appeal, UNC argues that the trial court’s finding, “UNC-Chapel Hill

did not act without substantial justification” by deciding to place plaintiff on unpaid,

personal leave instead of pursuing disciplinary action as outlined by UNC’s tenure

policies, was supported by the evidence before the trial court.

      In Frampton I, this Court emphasized that the disciplinary procedures

incorporated by UNC’s own policies provided a method of recourse in the event a

tenured professor was unable to perform the professional duties required, such as in

plaintiff’s case. 241 N.C. App. at 413, 773 S.E.2d at 534.

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                  FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

             While we can envision scenarios in which it would be more
             beneficial to place a tenured faculty member on unpaid
             personal leave without his or her consent in order to protect
             the faculty member’s reputation from the stigma
             associated with disciplinary actions—even if those
             proceedings result in a favorable outcome—we believe that
             the more reasoned interpretation of the unpaid leave policy
             could only support its application if the faculty member
             either requested it or consented to it. Moreover, the fact
             that there is no “mandated” appeal procedure for this type
             of leave suggests that . . . the unpaid personal leave policy
             is not intended to be unilaterally imposed upon a tenured
             professor given the procedural protections afforded to
             faculty members in all other situations.

Id. (emphasis added). However, while our Court in Frampton I determined that

UNC’s actions were not proper in light of its own tenure policies, the determination

of whether the actions were based on substantial justification is reviewed for the first

time in this appeal (Frampton II).

      In Daily Express, Inc. v. Beatty, after a trial court determined an agency’s

position was not legally correct, it awarded attorney fees to the plaintiff. 202 N.C.

App. 441, 688 S.E.2d 791 (2010). On appeal, this Court reversed the attorney fee

award to the plaintiff after making a distinction between whether the agency’s

actions were legally correct and whether the agency’s actions were substantially

justified. Id. at 455–56, 688 S.E.2d at 802. “[E]ven though we ultimately did not

accept [the agency’s] construction of the applicable statutory provisions, we

recognized that [the agency’s] construction of the relevant statutory language had

some level of support in both logic and the language enacted by the General

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                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

Assembly.” Id. at 455, 688 S.E.2d at 802. Therefore, this Court in Daily Express held

that the agency was not liable to plaintiff for attorney’s fees under N.C. Gen. Stat. §

6-19.1, because although the agency’s actions were later determined to be erroneous,

“at the time that action was taken, [the agency was] not without substantial

justification[.]” Id. at 456, 688 S.E.2d at 802.

      Thus, as our Court reasoned in Daily Express (notwithstanding an erroneous

decision, a court must consider the existence of substantial justification), the Orange

County Superior Court reasoned that “UNC-Chapel Hill did not act without

substantial justification.” We uphold the trial court’s determination, and therefore,

the court’s order has met the substantial justification prong of section 6-19.1.

                               II. Special Circumstances

      Plaintiff next argues the trial court erred in finding that there were special

circumstances that would make an award of attorney’s fees unjust. We disagree.

      North Carolina case law is limited with regard to interpreting what qualifies

as special circumstances that would make an award of attorney’s fees unjust.

However, our courts have looked to federal decisions applying similar laws for

guidance on interpreting statutory language. See generally Newberne v. Dep’t of

Crime Control & Pub. Safety, 359 N.C. 782, 618 S.E.2d 201 (2005). Specifically, our

Supreme Court, when interpreting N.C. Gen. Stat. § 6-19.1, has incorporated the

United States Supreme Court’s interpretation of the federal Equal Access to Justice

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                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                   Opinion of the Court

Act (“EAJA”) which “contains an attorney’s fees provision almost identical to [N.C.

Gen. Stat. § 6-19.1].” See Crowell, 342 N.C. at 843, 467 S.E.2d at 679 (showing the

identical language of the substantial justification and special circumstances prongs

and citing United States Supreme Court decisions to interpret the language of the

federal statute that is identical to that of the North Carolina statute).

      Interpreting “special circumstances” in the EAJA as a “safety valve”

preventing unjust awards, the United States Supreme Court stated the special

circumstances provisions allow “the [trial] court[s] discretion to deny awards where

equitable considerations dictate an award should not be made.” Scarborough v.

Principi, 541 U.S. 401, 423, 158 L. Ed. 2d 674, 692 (2004) (citation omitted).

      Though not giving deference to UNC’s basis for withholding benefits in

Frampton I, this Court did acknowledge the uniqueness of the situation UNC faced.
241 N.C. App. at 412, 773 S.E.2d at 534. “This case requires this Court, as it required

the trial court and the University, to resolve an unusual and controversial dispute

that tests the University’s responsibilities as an employer of tenured faculty and as

a steward of public funds.” Id. at 401–02, 773 S.E.2d at 527. In reviewing the issues

that are currently before this Court, we hold that based on UNC’s responsibility to

manage public funds and plaintiff’s own choices that precipitated this dispute, the

trial court acted within its discretion in determining special circumstances would

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                     FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                    Opinion of the Court

make an award of attorney’s fees unjust in this case, thus satisfying the second prong

of section 6-19.1.

       Regardless, even if UNC acted without substantial justification and no special

circumstances existed, the controlling statute specifically states that a trial court

“may” use its discretion to decide whether to grant or deny an award of attorney’s

fees. N.C. Gen. Stat. § 6-19.1(a). It is not required to award attorney’s fees. See High

Rock Lake Partners, LLC, 234 N.C. App. at 339, 760 S.E.2d at 753 (setting out the

standard of review for a trial court’s decision on whether or not to award attorney’s

fees as abuse of discretion). Plaintiff relies on what he contends was the trial court’s

error in finding substantial justification for UNC’s action to support the conclusion

that the trial court was “operating under a mistake of law” and “abused its discretion

in denying the motion for an award of attorney’s fees.” However, on appeal, plaintiff

asserts “the trial court erred on both points, ‘rational basis’ and ‘special circumstance,’

so there can be no ‘reason’ supporting its decision to deny the motion.” By this

assertion, plaintiff improperly implies that a failure to prove both provisions—

substantial justification and special circumstances—mandates that the trial court

award attorney’s fees. Yet, the plain language of the statute merely permits the trial

court to decide whether to grant the award of attorney’s fees; the use of “may” does

not necessitate an action by the trial court when both prongs are satisfied.

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                   FRAMPTON V. THE UNIV. OF N.C. AT CHAPEL HILL

                                    Opinion of the Court

      In the order denying plaintiff attorney’s fees, the trial court based its

conclusion that “it would be unjust to require the State to pay attorney’s fees” to

plaintiff on “the record in this case, the decision of the North Carolina Court of

Appeals [in Frampton I], the submissions of the parties, the arguments of counsel,

and the relevant-statutory and case law.” Given the trial court’s reasoned response

and plaintiff’s failure to establish that the trial court abused its discretion in reaching

its decision to deny the requested award, we overrule plaintiff’s argument.

      Therefore, the orders entered 28 June 2016 and 3 August 2016 denying

appellant’s request for attorney’s fees, are

      AFFIRMED.

      Judges STROUD and DAVIS concur.

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