Court Opinion

ID: 4407619
Source: CourtListenerOpinion
Date Created: 2019-06-18 12:05:58.068728+00
Date Added: 2024-06-11T12:31:43.788105
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA18-1195

                                Filed: 18 June 2019

Office of Administrative Hearings, No. 17 OSP 1269

JEFFREY HUNT, Petitioner

             v.

N.C. DEPARTMENT OF PUBLIC SAFETY, Respondent.

      Appeal by respondent from order entered 24 August 2018 by Administrative

Law Judge Melissa Owens Lassiter in the Office of Administrative Hearings. Heard

in the Court of Appeals 21 May 2019.

      Attorney General Joshua H. Stein, by Assistant Attorney General Tamika L.
      Henderson, for the State.

      Law Offices of Michael C. Byrne, by Michael C. Byrne, for petitioner.

      The McGuinness Law Firm, by J. Michael McGuinness, for amicus curiae
      North Carolina Police Benevolent Association and Southern States Police
      Benevolent Association.

      ARROWOOD, Judge.

      The North Carolina Department of Public Safety (“DPS” or “respondent”)

appeals from an order of the North Carolina Office of Administrative Hearings (the

“OAH”) granting Jeffrey Hunt (“petitioner”)’s petition for appellate attorneys’ fees.

For the reasons stated herein, we affirm the order of the administrative law judge

(“ALJ”).
                          HUNT V. N.C. DEP’T OF PUB. SAFETY

                                  Opinion of the Court

                                 I.     Background

      In November 2016, petitioner was a career status State employee, working for

DPS as a correctional officer at Scotland Correctional Institution. Petitioner’s unit

manager,    Ms.   Queen    Gerald,    requested    a     meeting   with   petitioner   on

3 November 2016.    During the meeting, Ms. Gerald informed him that she was

investigating his alleged absence from work on 18 August 2016. She asked him to

sign paperwork regarding the absence. Petitioner refused, and became upset. He

said he was tired of “this s***” and stated either “I quit” or “I’m quitting” before

walking out of the prison, through the main door. Instead of “swiping out” at the

security checkpoint, petitioner informed the officer-in-charge that he had resigned.

      On 9 November 2016, petitioner spoke with the Superintendent at Scotland

Correctional Institution, Ms. Katy Poole, by telephone. Petitioner asked Ms. Poole if

he could return to work.     In response, Ms. Poole asked whether petitioner was

rescinding his resignation. Petitioner replied, “Yes.” Ms. Poole informed him that

she had already accepted his resignation, and was unwilling to rescind it based on

“his history of pending investigations and corrective actions[,]” and his behavior on

3 November 2016. That same day, petitioner received a letter confirming he tendered

his resignation on 3 November 2016. Although petitioner attempted to use DPS’s

internal grievance procedure, he was notified that the agency would not process his

grievance because he had resigned from employment.

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                         HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

      Petitioner filed a petition for a contested case hearing in the OAH on

22 February 2017.    The matter came on for hearing before ALJ Melissa Owens

Lassiter on 15 June 2017. The ALJ issued a final decision pursuant to N.C. Gen.

Stat. § 150B-34 on 17 August 2017, holding petitioner was terminated without just

cause because petitioner “never submitted a verbal statement of resignation to any

DPS employee authorized to accept it.” Accordingly, the ALJ ordered that petitioner

be reinstated and receive back pay. After the issuance of the final decision, petitioner

filed a petition for attorneys’ fees, which the ALJ granted in an order entered

28 August 2017. The order awarded $11,720.00 in attorneys’ fees and $20.00 in filing

fees. Respondent appealed.

      Our Court affirmed the ALJ’s final decision in Hunt v. N.C. Dep’t of Pub. Safety

(“Hunt I”), __ N.C. App. __, 817 S.E.2d 257 (2018). Following the entry of Hunt I in

the OAH, petitioner filed a petition for attorneys’ fees incurred during petitioner’s

appeal. Petitioner argued the OAH had the authority to grant this petition pursuant

to N.C. Gen. Stat. § 126-34.02(e).       The OAH granted the petition and awarded

petitioner $14,700.00 in attorneys’ fees.

      Respondent appeals.

                                   II.      Discussion

      Respondent argues the OAH erred by awarding appellate attorneys’ fees

absent statutory authority. Alternatively, respondent argues an award of appellate

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                         HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

attorneys’ fees was not warranted because the agency had substantial justification to

appeal the underlying order. We disagree with both arguments.

                              A.     Standard of Review

      “Chapter 150B, the Administrative Procedure Act, specifically governs the

scope and standard of this Court’s review of an administrative agency’s final

decision.” Harris v. N.C. Dep’t of Pub. Safety, __ N.C. App. __, __, 798 S.E.2d 127,

132, aff’d per curiam, 370 N.C. 386, 808 S.E.2d 142 (2017). Chapter 150B provides:

             The court reviewing a final decision may affirm the
             decision or remand the case for further proceedings. It may
             also reverse or modify the decision if the substantial rights
             of the petitioners may have been prejudiced because the
             findings, inferences, conclusions, or decisions are:

             (1) In violation of constitutional provisions;

             (2) In excess of the statutory authority or jurisdiction of the
                 agency or administrative law judge;

             (3) Made upon unlawful procedure;

             (4) Affected by other error of law;

             (5) Unsupported by substantial evidence admissible under
                 G.S. 150B-29(a), 150B-30, or 150B-31 in view of the
                 entire record as submitted; or

             (6) Arbitrary, capricious, or an abuse of discretion.

N.C. Gen. Stat. § 150B-51(b) (2017). “The standard of review is dictated by the

substantive nature of each assignment of error.” Harris, __ N.C. App. at __, 798

S.E.2d at 132 (citing N.C. Gen. Stat. § 150B-51(c)). “[Q]uestions of law receive de

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                        HUNT V. N.C. DEP’T OF PUB. SAFETY

                                  Opinion of the Court

novo review, whereas fact-intensive issues such as sufficiency of the evidence to

support an agency’s decision are reviewed under the whole-record test.” Id. (citation

and internal quotation marks omitted).

          B.     Statutory Authority to Award Appellate Attorneys’ Fees

      “In 2013, our General Assembly significantly amended and streamlined the

procedure governing state employee grievances and contested case hearings,

applicable to cases commencing on or after 21 August 2013.” Id. at __, 798 S.E.2d at

131. Prior to these amendments, appeal of a final agency decision of the OAH was

controlled by Chapter 150B, which provides:

             [a]ny party or person aggrieved by the final decision in a
             contested case, and who has exhausted all administrative
             remedies made available to the party or person aggrieved
             by statute or agency rule, is entitled to judicial review of
             the decision under this Article, unless adequate procedure
             for judicial review is provided by another statute, in which
             case the review shall be under such other statute. . . .

N.C. Gen. Stat. § 150B-43 (2017). Under N.C. Gen. Stat. § 150B-45, appeal of a final

agency decision of the OAH is to the superior court. N.C. Gen. Stat. § 150B-45(a)

(2017).

      Prevailing petitioners in personnel cases brought pursuant to Chapter 150B,

prior to the 2013 amendments, were able to recover attorneys’ fees at both the OAH

and the superior court. The OAH had jurisdiction to award attorneys’ fees for the

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                          HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

attorneys’ work related to the case before the OAH under N.C. Gen. Stat. § 150B-

33(b)(11), which provides:

             (b)    An administrative law judge may:

             ....

             (11) Order the assessment of reasonable attorneys’ fees . . .
                  against the State agency involved in contested cases
                  decided under this Article where the administrative
                  law judge finds that the State agency named as
                  respondent has substantially prejudiced the
                  petitioner’s rights and has acted arbitrarily or
                  capriciously or under Chapter 126 where the
                  administrative law judge finds discrimination,
                  harassment, or orders reinstatement or back pay.

N.C. Gen. Stat. § 150B-33(b)(11) (2017).         In contrast, the superior court had

jurisdiction to award attorneys’ fees for the attorneys’ work related to the case before

the superior court, as well as for the fees related to appeals before the Court of

Appeals and the Supreme Court, pursuant to N.C. Gen. Stat. § 6-19.1, which provides:

             (a) In any civil action, other than an adjudication for the
                 purpose of establishing or fixing a rate, or a disciplinary
                 action by a licensing board, brought by the State or
                 brought by a party who is contesting State action
                 pursuant to G.S. 150B-43 or any other appropriate
                 provisions of law, unless the prevailing party is the
                 State, 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, in contested
                 cases arising under Article 3 of Chapter 150B, to be
                 taxed as court costs against the appropriate agency if:

                   (1) The court finds that the agency acted without

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                          HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

                    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) (2017) (emphasis added).

      As part of the 2013 amendments, the General Assembly enacted N.C. Gen.

Stat. § 126-34.02(a) and (e). N.C. Gen. Stat. § 126-34.02(a) provides, in relevant part,

“[a]n aggrieved party in a contested case under this section shall be entitled to judicial

review of a final decision by appeal to the Court of Appeals as provided in G.S. 7A-

29(a).” N.C. Gen. Stat. § 126-34.02(a) (2017). Thus, the superior court no longer

reviews the OAH’s final decisions in State personnel appeals in cases commenced

after 21 August 2013. Instead, final decisions in State personnel actions are now

appealed directly to the Court of Appeals. See Swauger v. Univ. of N. Carolina at

Charlotte, __ N.C. App. __, __, 817 S.E.2d 434, 437 (2018).

      Subsection (e) authorizes the OAH to award attorneys’ fees. Specifically, the

subsection states: “The Office of Administrative Hearings may award attorneys’ fees

to an employee where reinstatement or back pay is ordered or where an employee

prevails in a whistleblower grievance. The remedies provided in this subsection in a

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                         HUNT V. N.C. DEP’T OF PUB. SAFETY

                                  Opinion of the Court

whistleblower appeal shall be the same as those provided in G.S. 126-87.” N.C. Gen.

Stat. § 126-34.02(e).

      The ALJ in the instant case determined that N.C. Gen. Stat. § 126-34.02(e)

authorizes the OAH to award attorneys’ fees and costs for both the administrative

and the appellate portions of contested cases. On appeal, respondent argues the ALJ

erred by reaching this conclusion because N.C. Gen. Stat. § 126-34.02(e) does not

grant the OAH the authority to award attorneys’ fees and costs for the appellate

portion of a contested case. We disagree.

      “Questions of statutory interpretation are ultimately questions of law for the

courts and are reviewed de novo. The principal goal of statutory construction is to

accomplish the legislative intent.” Wilkie v. City of Boiling Spring Lakes, 370 N.C.
540, 547, 809 S.E.2d 853, 858 (2018) (citation and internal quotation marks omitted).

             When construing legislative provisions, this Court looks
             first to the plain meaning of the words of the statute itself:
             When the language of a statute is clear and without
             ambiguity, it is the duty of this Court to give effect to the
             plain meaning of the statute, and judicial construction of
             legislative intent is not required. However, when the
             language of a statute is ambiguous, this Court will
             determine the purpose of the statute and the intent of the
             legislature in its enactment.

State v. Ward, 364 N.C. 157, 160, 694 S.E.2d 729, 731 (2010) (citation and internal

quotation marks omitted).

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                         HUNT V. N.C. DEP’T OF PUB. SAFETY

                                  Opinion of the Court

      Here, the plain language of N.C. Gen. Stat. § 126-34.02(e) authorizes the OAH

to “award attorneys’ fees to an employee where reinstatement or back pay is ordered

or where an employee prevails in a whistleblower grievance.” N.C. Gen. Stat. § 126-

34.02(e). Significantly, the plain language does not limit the OAH’s authority to

award attorneys’ fees to the administrative portion of a contested case before the

OAH, nor does it prohibit the OAH from awarding attorneys’ fees incurred during

judicial review before this Court or our Supreme Court, taken pursuant to N.C. Gen.

Stat. § 126-34.02(a). Therefore, we do not read these limitations into the statute. We

conclude the OAH has the authority to award attorneys’ fees for both the

administrative portion of a contested case before the OAH, and for the attorneys’ fees

incurred during judicial review of the OAH’s final decision.

      The plain language of the second sentence of subsection (e) further evidences

that the statute expands the OAH’s authority to award attorneys’ fees by authorizing

remedies where an employee prevails in the appeal of a whistleblower grievance:

“The remedies provided in this subsection in a whistleblower appeal shall be the same

as those provided in G.S. 126-87.” N.C. Gen. Stat. § 126-34.02(e) (emphasis added).

At the same time the General Assembly enacted this statutory change, it made a

significant contemporaneous change to the whistleblower law, amending N.C. Gen.

Stat. § 126-86 (2013).

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                         HUNT V. N.C. DEP’T OF PUB. SAFETY

                                  Opinion of the Court

      Prior to the 2013 changes, State employees had the discretion to pursue a

whistleblower claim in superior court under N.C. Gen. Stat. § 126-85, or in the OAH

under N.C. Gen. Stat. § 126-34.1, but not in both. Swain v. Elfland, 145 N.C. App.
383, 389, 550 S.E.2d 530, 535 (2001). If the employee brought the action in the OAH,

the employee would not be able to seek recovery of the remedies in N.C. Gen. Stat. §

126-87, which include treble damages and injunctive relief; whereas, the superior

court was authorized, pursuant to N.C. Gen. Stat. § 126-87, to allow the recovery of

these remedies.

      However, in 2013, the General Assembly amended the whistleblower statute,

N.C. Gen. Stat. § 126-86. See S.L. 2013-382, § 7.10, eff. Aug. 21, 2013. It now states,

“Any State employee injured by a violation of G.S. 126-85 who is not subject to Article

8 of this Chapter may maintain an action in superior court for damages, an injunction,

or other remedies provided in this Article. . . .” N.C. Gen. Stat. § 126-86 (2017)

(emphasis added). Thus, State employees subject to Article 8 of Chapter 126 now

must pursue a whistleblower claim in the OAH. By simultaneously amending N.C.

Gen. Stat. § 126-86 and enacting N.C. Gen. Stat. § 126-34.02(e), the General

Assembly ensured remedies described by N.C. Gen. Stat. § 126-87 are still available

to these claimants.

      These corresponding changes are significant to the case at hand because they

expanded the OAH’s authority to award attorneys’ fees in whistleblower appeals.

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                        HUNT V. N.C. DEP’T OF PUB. SAFETY

                                 Opinion of the Court

Therefore, because “words and phrases of a statute may not be interpreted out of

context, but must be interpreted as a composite whole so as to harmonize with other

statutory provisions and effectuate legislative intent, while avoiding absurd or

illogical interpretations,” it is clear the General Assembly authorized the OAH to

award attorneys’ fees not only for fees incurred during whistleblower appeals, but

also for fees incurred during appeals of contested cases where reinstatement or back

pay is ordered. Fort v. Cty. of Cumberland, 218 N.C. App. 401, 407, 721 S.E.2d 350,

355 (2012) (citations and internal quotation marks omitted).

      To determine otherwise, and accept respondent’s argument on appeal that

N.C. Gen. Stat. § 126-34.02(e) does not authorize the OAH to award attorneys’ fees

for fees incurred during appeals of contested cases where reinstatement or back pay

is ordered, and only authorizes the OAH to award attorneys’ fees for the

administrative portion of a contested case, would interpret the law in a way that

renders the General Assembly’s actions meaningless The OAH already had the

authority to award attorneys’ fees for the administrative portion of a contested case

pursuant to N.C. Gen. Stat. § 150B-33, so N.C. Gen. Stat. § 126-34.02(e) would have

no effect on the law if read in accord with respondent’s argument. We decline to read

the statute in this way, as our Court “presume[s] that no part of a statute is mere

surplusage, but that each provision adds something not otherwise included therein.”

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                         HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

Fort, 218 N.C. App. at 407, 721 S.E.2d at 355 (citation and internal quotation marks

omitted).

      Furthermore, to agree with respondent that subsection (e) of N.C. Gen. Stat. §

126-34.02 does not allow a method of recovering fees for the appellate portion of

contested cases would mean the General Assembly intended that State employees

who successfully defended appeals against State agencies would have no method of

recovering attorneys’ fees incurred on appeal. This interpretation would harm the

fair administration of justice, as it would drastically impair an employee’s ability to

contest State action in appellate courts.

      Therefore, we hold N.C. Gen. Stat. § 126-34.02(e) authorizes the OAH to award

attorneys’ fees for the appellate or judicial review portion of a contested case.

Respondent’s argument is without merit.

                           C.     Award of Attorneys’ Fees

      We now turn to respondent’s alternative argument that attorneys’ fees were

not warranted. Respondent contends the attorneys’ fees were not warranted because:

(1) Chapter 126 did not grant the OAH the authority to award appellate fees, so it

does not provide an analytical framework for such an award; and (2) even assuming

arguendo it is appropriate for the OAH to evaluate the propriety of appellate

attorneys’ fees under N.C. Gen. Stat. § 6-19.1, the agency had substantial justification

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                          HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

to appeal the OAH’s order reinstating petitioner and awarding back pay in the instant

case.

        We disagree. As discussed supra, N.C. Gen. Stat. § 126-34.02(e) authorizes the

OAH to award attorneys’ fees for the appellate or judicial review portion of a

contested case. Additionally, the ALJ’s order awarding attorneys’ fees was not made

pursuant to N.C. Gen. Stat. § 6-19.1. Rather, it was made pursuant to N.C. Gen.

Stat. § 126-34.02(e). Therefore, respondent’s argument is without merit.

        Although not raised by respondent as an issue on appeal, and therefore waived,

we find it pertinent to address the standard the ALJ utilized to determine reasonable

attorneys’ fees in this case. The ALJ applied the twelve “Johnson factors” set forth

in Johnson v. Georgia Highway Exp. Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), which

was adopted by the Fourth Circuit. Grissom v. The Mills Corp., 549 F.3d 313, 321

(4th Cir. 2008). These factors have been summarized by the Fourth Circuit as:

              (1) the time and labor expended; (2) the novelty and
              difficulty of the questions raised; (3) the skill required to
              properly perform the legal services rendered; (4) the
              attorney’s opportunity costs in pressing the instant
              litigation; (5) the customary fee for like work; (6) the
              attorney’s expectations at the outset of the litigation; (7)
              the time limitations imposed by the client or
              circumstances; (8) the amount in controversy and the
              results obtained; (9) the experience, reputation and ability
              of the attorney; (10) the undesirability of the case within
              the legal community in which the suit arose; (11) the
              nature and length of the professional relationship between
              attorney and client; and (12) attorneys’ fees awards in
              similar cases.

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                          HUNT V. N.C. DEP’T OF PUB. SAFETY

                                   Opinion of the Court

Id. (citation and internal quotation marks omitted).

      North Carolina courts do not use these factors to determine reasonable

attorneys’ fees. Instead, it is well-established that the correct standard is as follows:

A court’s decision to grant attorneys’ fees is discretionary. Stilwell v. Gust, 148 N.C.

App. 128, 130, 557 S.E.2d 627, 629 (2001). However, if attorneys’ fees are awarded,

the court “must make findings of fact to support the award. These findings must

include the time and labor expended, the skill required, the customary fee for like

work, and the experience or ability of the attorney.” Id. at 131, 557 S.E.2d at 629

(citations and internal quotation marks omitted).         Although these findings are

contemplated by the Johnson factors, our State has not adopted the Johnson

framework. Therefore, the ALJ should not have applied Johnson to determine the

reasonable attorneys’ fees in this case. Nevertheless, respondent did not raise this

argument on appeal, and it is waived.

                                   III.   Conclusion

      For the foregoing reasons, we affirm the ALJ’s order allowing petitioner’s

petition for appellate attorneys’ fees.

      AFFIRMED.

      Chief Judge MCGEE and Judge ZACHARY concur.

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