Court Opinion

ID: 3174236
Source: CourtListenerOpinion
Date Created: 2016-02-05 08:45:30.66759+00
Date Added: 2024-06-11T15:05:28.712368
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA15-367

                              Filed: 2 February 2016

Lenoir County, No. 14 CVS 799

NC DEPARTMENT OF PUBLIC SAFETY; NC HIGHWAY PATROL, Petitioner-
Employer,

            v.

KEVIN DAIL OWENS, Respondent-Employee.

      Appeal by Petitioner-Employer from orders entered 8 December 2014 and 19

December 2014 by Judge Paul L. Jones in Lenoir County Superior Court.

Respondent-Employee cross-appeals from orders entered 6 November 2014 and 19

December 2014 by Judge Paul L. Jones in Lenoir County Superior Court. Heard in

the Court of Appeals 24 September 2015.

      The McGuinness Law Firm, by J. Michael McGuinness, and Carraway Law
      Firm, by Lonnie W. Carraway, for the Respondent-Employee/Petitioner-
      Appellee/Cross-Appellant.

      Attorney General Roy A. Cooper, III, by Assistant Attorney General Vanessa N.
      Totten, for the Petitioner-Employer/Respondent-Appellant/Cross-Appellee.

      Law Offices of Michael C. Byrne, by Michael C. Byrne, for Amicus Curiae, the
      North Carolina Police Benevolent Association and Southern States Police
      Benevolent Association.

      DILLON, Judge.

      The North Carolina Department of Public Safety and the North Carolina

Highway Patrol (collectively, the “Highway Patrol”) appeal from orders reversing the
                     NC DEP’T OF PUB. SAFETY ET AL. V. OWENS

                                  Opinion of the Court

separation of Kevin Dail Owens (“Sergeant Owens”) from his employment. Sergeant

Owens cross-appeals from the final corrected order reversing his separation from his

employment as well as an earlier order denying his motion to dismiss for lack of

jurisdiction. For the following reasons, we affirm these orders.

                                   I. Background

      This matter involves an appeal by the Highway Patrol and a cross-appeal by

Sergeant Owens.

      Sergeant Owens was employed with the Highway Patrol in 1995.              His

employment was terminated on 1 November 2012. He was rehired by the Highway

Patrol nine months later in August 2013. Notwithstanding his reinstatement, he

petitioned for a contested case hearing challenging his November 2012 termination,

seeking to have his reinstatement applied retroactively back to November 2012 such

that he would not have any break in service and to recover back pay and benefits for

those nine months.

      A contested case hearing was held before an administrative law judge (the

“ALJ”). By order entered 24 June 2014, the ALJ concluded that the Highway Patrol’s

termination of Sergeant Owens was improper and ordered that his reinstatement be

retroactive to November 2012 without any break in service and that he receive back

pay and benefits.

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                                  Opinion of the Court

      The Highway Patrol subsequently filed a petition in superior court for judicial

review of the ALJ’s order. Sergeant Owens moved the superior court to dismiss the

petition, contending that the Highway Patrol failed to serve him with the petition

within the time allowed by statute. The superior court denied Sergeant Owens’

motion to dismiss and granted the Highway Patrol additional time to properly serve

Sergeant Owens. Subsequently, though, the superior court sided with Sergeant

Owens on the merits, affirming the ALJ’s order reinstating Sergeant Owens

retroactively with back pay and benefits.

      On appeal to this Court, the Highway Patrol challenges the superior court’s

decision affirming the ALJ’s order.

      On cross-appeal, Sergeant Owens argues that our Court should not even reach

the merits of the Highway Patrol’s appeal, contending that the superior court erred

by denying his motion to dismiss the Highway Patrol’s petition for judicial review.

                         II. Sergeant Owens’ Cross-Appeal

      Before reaching the merits of the Highway Patrol’s appeal, we first address the

merits of Sergeant Owens’ cross-appeal. Specifically, Sergeant Owens contends that

the superior court should have granted his motion to dismiss the Highway Patrol’s

petition for judicial review of the ALJ’s order on the ground that he was not properly

served the petition within the time allowed by N.C. Gen. Stat. § 150B-46.         We

disagree.

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                                    Opinion of the Court

         N.C. Gen. Stat. §§ 150B-45 and 46 are the sections of the Administrative

Procedure Act which set forth the procedures for the filing and serving of a petition

for judicial review of a final decision in a contested case hearing.

         N.C. Gen. Stat. § 150B-45(a) provides that the person seeking judicial review

must file the petition in the superior court “within 30 days after [being] served with

the written copy of the [ALJ’s] decision.” Subsection (b) of that statute provides that

“[f]or good cause shown[,] the superior court may accept an untimely [filed]

petition[,]” otherwise, the right to judicial review is waived. N.C. Gen. Stat. § 150B-

45(b).

         N.C. Gen. Stat. § 150B-46 states that the party seeking judicial review must

serve copies of the petition on the other parties “[w]ithin 10 days after the petition is

filed with the [superior] court,” further providing that the service be either by

personal service or by certified mail. However, unlike G.S. 150B-45 which allows the

superior court to grant additional time for the filing of the petition, there is no express

provision in G.S. 150B-46 which authorizes the superior court to extend the time for

serving the petition.

         In the present case, the Highway Patrol timely filed its petition for judicial

review. However, it improperly served the petition by regular mail, a means not

authorized by G.S. 150B-46. After the 10-day period for service had expired, Sergeant

Owens moved to dismiss the petition for improper service, contending that the

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                                   Opinion of the Court

superior court lacked personal jurisdiction over him. The superior court, though,

granted the Highway Patrol’s motion for additional time to serve the petition, and

the Highway Patrol subsequently served the petition properly (by certified mail) some

months after it originally filed the petition in the superior court.

      Sergeant Owens argues that the superior court should have granted his motion

to dismiss. Essentially, the question raised by Sergeant Owens’ challenge is whether

the superior court had the authority to grant the Highway Patrol more time to

accomplish service beyond the 10 days, absent any express language in G.S. 150B-46

authorizing the superior court to extend the time.

      In a published decision, our Court held that the superior court does not err by

dismissing a petition for judicial review where there had not been proper service of

the petition within 10 days of the filing of the petition in accordance with G.S. 150B-

46. Follum v. N.C. State. Univ., 198 N.C. App. 389, 395, 679 S.E.2d 420, 424 (2009).

The Follum Court did not express a view as to whether the superior court had the

authority to grant more time to a party to accomplish service outside the 10 days

provided for by G.S. 150B-46. In a subsequent unpublished opinion, though, a panel

of our Court expressly held that the superior court lacked the authority to provide an

extension beyond the 10-day limit to serve the petition and, therefore, must grant the

non-petitioning party’s motion to dismiss when proper service is not effected within

the 10-day timeframe. Schermerhorn v. N.C. State Highway Patrol, 223 N.C. App.

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                                   Opinion of the Court

102, 732 S.E.2d 394 (2012) (unpublished) (holding that “[b]ecause there is no

language in N.C. Gen. Stat. § 150B-46 nor the rest of the general statutes providing

for an extension to serve a petition for judicial review, we hold it was error for the

trial court to grant Petitioner the extension”).

      Under G.S. 150B-46, proper service can only be accomplished by either

personal service or by certified mail.     Personal service may be accomplished by

handing a copy of the petition to the respondent. Certified mail is a form of delivery

which requires that the recipient sign for the mail, and service by certified mail is

accomplished when the mailing is signed for by the recipient. The General Assembly

did not provide that service could be accomplished by depositing a copy of the petition

in a mailbox. Therefore, under the reasoning in the unpublished Schermerhorn

opinion, a respondent could avoid the judicial review of a favorable ALJ decision

simply by avoiding service of the losing party’s petition for judicial review for 10 days,

e.g., by leaving town or by refusing to sign for certified mail, whereupon the losing

party’s right to judicial review might be lost forever.

      We do not believe that the General Assembly intended such a harsh result that

is suggested in Schermerhorn. Rather, we hold that the superior court has the

authority to grant an extension in time, for good cause shown, to a party to serve the

petition beyond the ten days provided for under G.S. 150B-46. We further hold that,

in the present case, where Sergeant Owens did receive a copy of the petition (though

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                                    Opinion of the Court

through regular mail) within ten days of the filing of the petition, the trial court did

not err in exercising its discretion in allowing the Highway Patrol to serve Sergeant

Owens properly, though outside the ten-day window. And once proper service was

accomplished, the superior court obtained personal jurisdiction over Sergeant Owens.

                          III. The Highway Patrol’s Appeal

      Having concluded that the superior court properly exercised jurisdiction, we

turn to the merits of the Highway Patrol’s appeal.

      On appeal, the Highway Patrol argues that the superior court erred in

affirming the ALJ’s order retroactively reinstating Sergeant Owens and awarding

him back pay and benefits. We affirm the superior court’s order.

                       A. Factual and Procedural Background

      The    circumstances       concerning    Sergeant    Owens’   termination    and

reinstatement are as follows: In 2005, Sergeant Owens began working as a District

Sergeant, a position which required him to maintain certain credentials.            To

maintain these credentials and, therefore, be qualified to work as a District

Sergeant, Sergeant Owens was required to complete annual firearms training and

eight hours of other training.

      In November 2010, the State Bureau of Investigation notified the Highway

Patrol that Sergeant Owens was the subject of a criminal investigation relating to

his alleged involvement with obtaining illegal prescriptions from a nurse he was

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                                   Opinion of the Court

dating. On 2 December 2010, due to the ongoing active criminal investigation,

Sergeant Owens was placed on “administrative duty,” essentially working in a

civilian position performing general office duties (e.g., answering the phone and

making copies) within the Highway Patrol. As a consequence, Sergeant Owens was

required to surrender his vehicle, badge and firearms and was not allowed to perform

any enforcement duties or supervise other officers during this time. While Sergeant

Owens was on administrative duty, the Highway Patrol was not able to hire another

District Sergeant to perform his duties, but rather the two other District Sergeants

in his Troop had to “pick up the slack” caused by his absence.

      Throughout all of 2011, Sergeant Owens was allowed to remain on

administrative duty while the criminal investigation into his alleged drug crimes

continued. During this time, though, Sergeant Owens’ supervisor, Colonel Gilchrist,

did not allow Sergeant Owens to complete the firearms training or other training

which were required to maintain his credentials. These credentials, though, were

not required to perform the administrative duties to which Sergeant Owens’ had

been temporarily assigned.

      On 10 April 2012, Sergeant Owens was indicted in federal court on fourteen

felony charges for illegal drug prescriptions.

      On 10 October 2012, while the federal charges were still pending, a federal

judge entered an order in the criminal matter allowing Sergeant Owens to possess a

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                                  Opinion of the Court

firearm temporarily for the purpose of completing the annual firearms training

required by the Highway Patrol and further directed the Highway Patrol to allow

Sergeant Owens to complete this training. Colonel Gilchrist, however, refused to

allow Sergeant Owens to complete his firearms training.

      On 26 October 2012, Sergeant Owens received notice that he was being

considered for “administrative separation” (termination) from his employment based

on (1) his loss of certain credentials necessary to perform the duties of a District

Sergeant and (2) his unavailability to perform the duties of a District Sergeant. A

pre-dismissal conference was held in which Sergeant Owens was allowed the

opportunity to be heard and to present evidence.

      On 1 November 2012, almost two years after being placed on administrative

duty and while his federal criminal charges were still pending, Colonel Gilchrist

administratively separated (terminated) Sergeant Owens from his employment with

the Highway Patrol.

      In February 2013, Colonel Gilchrist retired.

      In March 2013, the federal felony drug charges against Sergeant Owens were

dismissed.

      In April 2013, a Lieutenant with the Highway Patrol invited Sergeant Owens

to reapply for his old job, which he did three months later in July 2013. On 12 August

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                                  Opinion of the Court

2013, Sergeant Owens completed his firearms certification and was reinstated with

the Highway Patrol as a District Sergeant.

      Subsequently, Sergeant Owens filed for a contested case hearing to challenge

his November 2012 termination. After an extensive hearing on the matter, the ALJ

entered an extensive order with 139 findings of fact and 86 conclusions of law. In

his order, the ALJ determined that Sergeant Owens’ November 2012 termination

was not handled in accordance with the law and directed that that his reinstatement

be retroactive to 1 November 2012 such that he would not have any break in service

and that he be awarded all back pay and benefits. The ALJ’s order was affirmed by

the superior court.

                                     B. Analysis

                      1. Decision to Terminate Sergeant Owens

      The Highway Patrol argues that the ALJ erred in reversing the decision of

Colonel Gilchrist to terminate Sergeant Owens on 1 November 2012 and that the

superior court erred in affirming the ALJ’s error.

      Our standard of review in such matters are as follows: “The North Carolina

Administrative Procedure Act (APA), codified at Chapter 150B of the General

Statutes, governs trial and appellate court review of administrative agency

decisions.” Amanini v. North Carolina Dep’t of Human Res., N.C. Special Care Ctr.,

114 N.C. App. 668, 673, 443 S.E.2d 114, 117 (1994). “[Q]uestions of law receive de

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                                         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.”                          North

Carolina Dep’t of Env’t and Natural Res. v. Carroll, 358 N.C. 649, 659, 599 S.E.2d
888, 894 (2004) (internal marks omitted) (emphasis in original).

        Turning to the merits of the appeal, Colonel Gilchrist separated Sergeant

Owens on 1 November 2012 for Sergeant Owens’ loss of credentials and for his

unavailability. The Highway Patrol states in its Reply brief filed with our Court that

it is not challenging the determination that Colonel Gilchrist failed to comply with

the policy concerning separation for unavailability.1

        The Highway Patrol, however, challenges the ALJ’s conclusion that Colonel

Gilchrist improperly terminated Sergeant Owens on the basis of the loss of

credentials. The Highway Patrol argues that the requirement that all leave time be

exhausted to separate an employee for unavailability (see footnote 1) does not apply

to a decision to separate an employee due to the loss of any credentials necessary in

performing the job. The Highway Patrol points to 25 NCAC 01J .0614(4) which states

        1 The Administrative Code states that an employee is “unavailable” when he is unable “to
return to all of the position’s essential duties” due to sickness or “other extenuating circumstances[.]”
25 NCAC 01C.1007(d)(1)(b). Here, the ALJ essentially found that Colonel Gilchrist felt that the
Highway Patrol simply could not continue to wait beyond the twenty-three (23) months it had given
Sergeant Owens to work out his legal problems and that the Highway Patrol needed someone working
as a District Sergeant. However, the ALJ determined that Colonel Gilchrist failed to fully comply with
the rule concerning unavailability which states, in part, that “[a]n employee may be separated on the
basis of unavailability when the employee remains unavailable for work after all applicable leave
credits and leave benefits have been exhausted[.]” 25 NCAC 01C .1007(a). Here, the ALJ determined
- and the Highway Patrol appears to concede - that Sergeant Owens still had unexhausted leave credits
and leave benefits when he was terminated.

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                                  Opinion of the Court

that “[d]ismissal means the involuntary termination or ending of the employment of

an employee for disciplinary purposes or failure to obtain or maintain necessary

credentials” (emphasis added) and to 25 NCAC 01J .0615(d) (now codified in 25 NCAC

01J .0616) which states that the “[f]ailure to obtain or maintain the required

credentials constitutes a basis for dismissal without prior warning” (emphasis

added).

      Here, the ALJ found that Sergeant Owens, indeed, had lost certain credentials

required to perform the duties of a District Sergeant while he was on administrative

duty. However, the ALJ determined that the Highway Patrol had acted arbitrarily

and capriciously in terminating Sergeant Owens on this basis. Specifically, the ALJ

made a number of findings which were not challenged by the Highway Patrol,

including (1) that Sergeant Owens lost his credentials through no fault of his own but

because the Highway Patrol prevented him from doing so; (2) that the Highway Patrol

relied on an order entered by a federal magistrate in Sergeant Owens’ criminal case

which prohibited Sergeant Owens from possessing a firearm as its justification,

ignoring the subsequent order from the federal judge modifying the magistrate’s

order to allow Sergeant Owens to possess a firearm to complete his certification; and

(3) that when he was terminated, Sergeant Owens was still on administrative duty

performing functions which did not require that he be credentialed.

      The Administrative Code may allow for an employee to be terminated without

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                                   Opinion of the Court

prior warning for the failure to maintain required credentials; however, an employee

so terminated is entitled to relief from an ALJ where the employer-agency acts

arbitrarily and capriciously in terminating him on this basis. N.C. Gen. Stat. § 150B-

23(a)(4) (2013). Here, the superior court did not err in affirming the ALJ’s conclusion

that the Highway Patrol acted arbitrarily and capriciously in terminating Sergeant

Owens on the basis of loss of credentials. For instance, it was arbitrary and capricious

for the Highway Patrol to prevent Sergeant Owens from taking his annual firearms

training (necessary to retain his credentials), though the Highway Patrol was under

no disability to allow the training to take place, and then terminate Sergeant Owens

for his failure to complete said training. The ALJ’s conclusion in this regard is

supported by its uncontested findings.

      We note that the Highway Patrol does challenge other findings and

conclusions.   However, we do not believe that these challenged findings and

conclusions are essential to the ALJ’s conclusion that the Highway Patrol acted

arbitrarily and capriciously. For instance, the Highway Patrol argues that the ALJ

impermissibly determined that the Highway Patrol was required to follow the

directive by the federal judge in Sergeant Owens’ criminal case which appears to

order the Highway Patrol to allow Sergeant Owens to complete his firearms training.

Specifically, the Highway Patrol contends that the federal judge lacked the power to

compel the Highway Patrol, a non-party to Sergeant Owens’ federal criminal action,

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                                  Opinion of the Court

to do anything. However, even if the federal judge lacked such power, the Highway

Patrol still had the obligation not to act arbitrarily and capriciously when it

terminated Sergeant Owens for failure to maintain his credentials.

                            2. Duty to Mitigate Back Pay

      The Highway Patrol next argues that even if Sergeant Owens was improperly

terminated on 1 November 2012, the trial court erred in affirming the conclusion of

the ALJ that Sergeant Owens was not obligated to mitigate his damages.

Specifically, the Highway Patrol contends that Sergeant Owens should not be entitled

to back pay and benefits for the entire nine months he was separated where he was

asked to reapply for his old job five months into his separation (in April 2013) but

waited three additional months to do so. The ALJ, however, made certain findings

concerning this issue which support its conclusion that Sergeant Owens was entitled

to the benefits for the entire nine months. For instance, the ALJ determined that the

Highway Patrol failed to meet its burden to prove that the Highway Patrol would

have rehired Sergeant Owens had he applied earlier, noting that the Colonel that

replaced Colonel Gilchrist was never called to testify that he would have rehired

Sergeant Owens sooner. Further, the ALJ found that the Highway Patrol had sent a

form to Sergeant Owens indicating that he would not be rehired if he reapplied,

suggesting that it was reasonable for Sergeant Owens to believe, at least for a period

of time, that it would have been futile for him to reapply. Accordingly, the ALJ

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                                  Opinion of the Court

concluded that the Highway Patrol failed to meet its burden to show that Sergeant

Owens failed to mitigate. Though the Highway Patrol points to evidence which tends

to support an alternate conclusion, we hold that the ALJ’s findings are supported by

the record. This argument is overruled.

                                    IV. Conclusion

      Regarding Sergeant Owens’ cross-appeal, we hold that the superior court had

personal jurisdiction over Sergeant Owens and, therefore, overrule his arguments on

his cross-appeal. Regarding the Highway Patrol’s appeal, we affirm the orders of the

trial court affirming the order of the ALJ.

      AFFIRMED.

      Judges HUNTER, JR., and DIETZ concur.

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