Cedarbrook Residential Ctr., Inc. v. N.C. Dep't of Health & Human Servs.
| Decision Date | 21 December 2021 |
| Docket Number | COA21-194 |
| Parties | CEDARBROOK RESIDENTIAL CENTER, INC. and Fred Leonard, Plaintiffs, v. N.C. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Division of Health Service Regulation, Adult Care Licensure Section, Defendant. |
| Court | North Carolina Court of Appeals |
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., Greensboro, by Joseph A. Ponzi and Howard L. Williams, for plaintiffs-appellees.
Robinson, Bradshaw & Hinson, P.A., by Adam K. Doerr, Charlotte, and Demi Lorant Bostian, Chapel Hill; and North Carolina Department of Justice, by Senior Deputy Attorney General Amar Majmundar, for defendant-appellant.
¶ 1 The North Carolina Department of Health and Human Services ("defendant") appeals from the Commission's denial of defendant's motion to dismiss. Defendant contends that the claims of Cedarbrook Residential Center Inc. and Fred Leonard ("plaintiffs") are barred by the public duty doctrine, alternatively arguing that plaintiffs failed to plead a valid claim for negligence. For the following reasons, we affirm the Commission.
¶ 2 Plaintiffs filed an Affidavit and Verified Claim for Damages with the Commission on 25 October 2018. Plaintiffs asserted in the Affidavit that defendant had harmed plaintiffs by negligently:
(1) conducting surveys in November 2015, March 2016, and July 2016; (2) issuing statements of deficiencies that contain [defendant's] allegations against Cedarbrook from the surveys; (3) issuing a Suspension of Admissions against Cedarbrook on November 19, 2015 and leaving it in place for nearly eight months; and (4) issuing a "directed" plan of protection against Cedarbrook on March 18, 2016.
On 8 January 2019, defendant filed a response and motion to dismiss pursuant to Rules 12(b)(1), 12(b)(2), and 12(b)(6), and a motion to stay discovery pending a ruling on the motion to dismiss. Deputy Commissioner James C. Gillen denied defendant's motions on 13 March 2019. Defendant appealed to the Full Commission on 27 March 2019, and Chair Philip A. Baddour, III, approved defendant's request for an interlocutory appeal on 17 May 2019.
¶ 3 On 10 September 2019, the Commission conducted a hearing on defendant's appeal. On 6 November 2020, the Commission filed an order affirming the denial of defendant's motions to dismiss. Defendant filed notice of appeal on 4 December 2020.
¶ 4 Defendant presents the following arguments: the Commission erred in denying defendant's motion to dismiss because the Tort Claims Act does not apply; the public duty doctrine bars plaintiffs’ claims; plaintiffs failed to plead a valid claim for negligence; and allowing plaintiffs’ claim "would endanger North Carolina citizens." We address each argument in turn.
¶ 5 The denial of a motion to dismiss is an interlocutory order which is not immediately appealable unless that denial affects a substantial right of the appellant. RPR & Assocs., Inc. v. State, 139 N.C. App. 525, 527, 534 S.E.2d 247, 249-50 (2000), aff'd per curiam, 353 N.C. 362, 543 S.E.2d 480 (2001) ; see also N.C. Gen. Stat. § 7A-27(b) (2019). "[T]he denial of a motion to dismiss based upon the defense of sovereign immunity affects a substantial right and is thus immediately appealable." RPR & Assocs., Inc. , 139 N.C. App. at 527, 534 S.E.2d at 250 (citations omitted).
¶ 6 In this case, defendant's motion to dismiss is based in part upon the defense of sovereign immunity. Because the trial court's denial of defendant's motion to dismiss affects a substantial right, we hold that defendant's appeal is properly before this Court.
¶ 7 We review the denial of a motion to dismiss on the basis of sovereign immunity de novo. White v. Trew , 366 N.C. 360, 363, 736 S.E.2d 166, 168 (2013).
The standard of review for an appeal from the Full Commission's decision under the Tort Claims Act "shall be for errors of law only under the same terms and conditions as govern appeals in ordinary civil actions, and the findings of fact of the Commission shall be conclusive if there is any competent evidence to support them."
Simmons v. Columbus County Bd. of Educ., 171 N.C. App. 725, 727, 615 S.E.2d 69, 72 (2005) (quoting N.C. Gen. Stat. § 143-293 (2003) ). "Thus, ‘when considering an appeal from the Commission, our Court is limited to two questions: (1) whether competent evidence exists to support the Commission's findings of fact, and (2) whether the Commission's findings of fact justify its conclusions of law and decision.’ " Id. at 728, 615 S.E.2d at 72 (quoting Simmons v. N.C. Dep't of Transp., 128 N.C. App. 402, 405-406, 496 S.E.2d 790, 793 (1998) ).
¶ 8 Additionally, when reviewing a motion to dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted, this Court treats plaintiffs’ "factual allegations contained in [their] affidavit before the Industrial Commission as true." Hunt v. N.C. Dep't of Lab. , 348 N.C. 192, 194, 499 S.E.2d 747, 748 (1998) (citation omitted).
¶ 9 Defendant first argues that the State Tort Claims Act ("STCA") does not apply because plaintiffs cannot sue defendant like a "private person." We disagree.
¶ 10 An action cannot be maintained against the State of North Carolina or a state agency unless the State consents to be sued or upon its waiver of immunity; this immunity is absolute and unqualified. Guthrie v. N.C. State Ports Auth. , 307 N.C. 522, 534, 299 S.E.2d 618, 625 (1983) (citations omitted).
Ray v. N.C. Dep't of Transp. , 366 N.C. 1, 4, 727 S.E.2d 675, 678 (2012) (quoting N.C. Gen. Stat. § 143-291 (2011) ). "No formal pleadings are required to invoke the jurisdiction of the Industrial Commission under the State Tort Claims Act." Zimmer v. N.C. Dep't of Transp. , 87 N.C. App. 132, 135, 360 S.E.2d 115, 117 (1987) (citing Branch Banking & Trust Co. v. Wilson County Bd. of Educ., 251 N.C. 603, 111 S.E.2d 844 (1960) ). The only requirement is that the claimant file with the Commission an affidavit in duplicate, containing the following information:
N.C. Gen. Stat. § 143-297 (2019). Plaintiffs have filed an affidavit in compliance with these requirements.
¶ 12 Defendant argues that the STCA does not apply in this case because "[p]rivate persons cannot be held liable for regulatory actions[,]" and accordingly "state agencies cannot be held liable for the same." This argument misconstrues the meaning of "private person" under the STCA. Although defendant contends the STCA only applies to situations where a private person may also be liable, this Court has held that the STCA "will be construed so as to effectuate its purpose of waiving sovereign immunity so that a person injured by the negligence of a State employee may sue the State as he would any other person." Zimmer , 87 N.C. App. at 136, 360 S.E.2d at 117-18 (citation omitted). Accordingly, the "private person" language within the STCA pertains to the nature of the proceedings but does not operate to bar waiver of sovereign immunity. Defendant's argument fails to acknowledge that many cases presented to the Commission and to this Court on appeal involve regulatory action.
¶ 13 Defendant also contends the STCA does not apply because "[t]he statutes regulating adult care homes expressly provide for challenges of penalties and suspensions under the Administrative Procedure Act." Defendant argues that allowing this claim amounts to an impermissible "end-run around" the process the General Assembly established for challenges to regulatory action. Defendant cites N.C. Gen. Stat. §§ 131D-2.7(d)(4) and 131D-34(e) to support its argument.
¶ 14 Although the General Assembly has provided several remedies under the Administrative Procedures Act, the availability of an administrative remedy does not preclude plaintiff from seeking a remedy under the STCA. This Court recently held that an entity regulated by defendant had an adequate state remedy under the STCA. Nanny's Korner Day Care Ctr., Inc. v. N.C. Dep't of Health & Hum. Servs. , 264 N.C. App. 71, 80, 825 S.E.2d 34, 41, appeal dismissed, review denied sub nom. , Nanny's Korner Day Care Ctr., Inc. v. N.C. Dep't of Health & Hum. Servs., Div. of Child Dev. & Early Educ. , 372 N.C. 700, 831 S.E.2d 89 (2019).
¶ 15 In Nanny's Korner , DHHS took regulatory action against a daycare center and required the center to notify its customers of an allegation of sexual abuse, resulting in loss of business and the daycare center's closure. Id. at 73-75, 825 S.E.2d at 37-38. The daycare center brought a claim against DHHS under the STCA, which was dismissed because the statute of limitations had run. Id. at 79, 825 S.E.2d at 40. While addressing a constitutional procedural due process claim, this Court held that the plaintiff did not have the right to bring a direct constitutional claim because plaintiff "had an adequate state remedy in the form of the Industrial Commission through the Torts Claim Act." Id. at 80, 825 S.E.2d at 41.
¶ 16 "Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that...
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...precedent should change." Cedarbrook Residential Ctr., Inc. v. N.C. Dep't of Health & Hum. Servs. , 2021-NCCOA-689, ¶ 38, 868 S.E.2d 623 (Dietz, J., concurring). The Supreme Court has spoken. We have the authority under N.C. Gen. Stat. § 7A-32 to issue a writ of certiorari in our discretion......