Fuller v. Easley

• Decision Date: 07 August 2001
• Docket Number: No. COA00-922.,COA00-922.
• Citation: 145 NC App. 391,553 S.E.2d 43
• Parties: Charles Franklin FULLER, Plaintiff, v. Michael F. EASLEY, individually and in his official capacity as Attorney General of North Carolina, Harlan E. Boyles, in his official capacity as State Treasurer of North Carolina, et. al., Defendants.
• Court: North Carolina Court of Appeals

553 S.E.2d 43

145 NC App. 391

Charles Franklin FULLER, Plaintiff, v. Michael F. EASLEY, individually and in his official capacity as Attorney General of North Carolina, Harlan E. Boyles, in his official capacity as State Treasurer of North Carolina, et. al., Defendants.

No. COA00-922.

Court of Appeals of North Carolina.

August 7, 2001.

Hunter, Johnson, Elam & Benjamin, P.L.L.C., by Robert N. Hunter, Jr. and Jason A. Knight, Greensboro, for plaintiff-appellant.

Attorney General Michael F. Easley, by General Counsel, Andrew A. Vanore, Jr., and Special Deputy Attorneys General, W. Dale Talbert, Norma S. Harrell, and Susan K. Nichols, for defendants-appellees.

TIMMONS-GOODSON, Judge.

On 13 October 1999, Charles Franklin Fuller ("plaintiff") filed an action against then Attorney General Michael F. Easley ("Attorney General Easley" or "the Attorney General"), State Treasurer Harlan E. Boyles ("Treasurer Boyles"), and "unknown Boards of Education to be identified hereinafter." Plaintiff brought the action as "a registered voter and citizen of Wake County." Plaintiff alleged that in his official capacity, Attorney General Easley filed certain lawsuits to collect damages for unfair and deceptive trade practices (hereinafter "the lawsuits"). According to plaintiff, the proceeds recovered in the lawsuits were "state funds or penal funds" which should have been remitted to Treasurer Boyles. Plaintiff also alleged that the lawsuit proceeds were disguised campaign contributions, which should have been reported to the State Board of Elections. Plaintiff further claimed that Attorney General Easley improperly used the lawsuit proceeds for a "public service message campaign." According to the complaint, Attorney General Easley appeared in so-called public service messages while a declared candidate for the Office of Governor, and the messages were, in fact, communications to support the Attorney General's candidacy for Governor. Plaintiff contended that in undertaking the above alleged actions, Attorney General Easley violated the North Carolina State Constitution and state election laws.

Pursuant to his allegations, plaintiff requested a variety of relief, including, inter alia, a temporary restraining order, injunctions, restitution and costs, remittance of the lawsuit proceeds to either Treasurer Boyles or "the unknown Boards of Education," and mandamus relief requiring Attorney General Easley to report the lawsuit proceeds to the State Board of Elections. In addition, plaintiff requested a declaratory judgment, asking the trial court to interpret the meaning of the state election laws allegedly violated by the Attorney General and to determine the character of the lawsuit proceeds.

Finding that plaintiff failed to demonstrate a likelihood of success at trial, the trial court denied plaintiff's request for a temporary restraining order. Defendants filed a motion to dismiss based upon Rules 12(b)(1), 12(b)(2), and 12(b)(6) of our Rules of Civil Procedure. Following a hearing, the trial court summarily dismissed plaintiff's complaint, as amended. From this order, plaintiff appeals.

Preliminarily, we note that although defendants moved to dismiss plaintiff's complaint on a variety of grounds, the trial court failed to specify upon which of those grounds it based its dismissal. As such, plaintiff presumes and argues on appeal that the trial court dismissed his complaint due to a lack of standing and/or a failure to state a claim.

Based upon plaintiff's arguments, there are two pertinent issues presented by the present appeal: (I) whether plaintiff had standing to sue; (II) whether plaintiff stated a claim upon which declaratory and other equitable relief could have been granted.

I.

We first address plaintiff's argument that the trial court erred in dismissing his complaint based upon his lack of standing to bring the present action. Standing concerns the trial court's subject matter jurisdiction and is therefore properly challenged by a Rule 12(b)(1) motion to dismiss. Energy Investors Fund, L.P. v. Metric Constructors, Inc., 351 N.C. 331, 525 S.E.2d 441 (2000); N.C. Gen.Stat. § 1A-1, Rule 12(b)(1) (1999). Our review of an order granting a Rule 12(b)(1) motion to dismiss is de novo. Smith v. Privette, 128 N.C.App. 490, 493, 495 S.E.2d 395, 397 (1998)

.

Plaintiff first contends that he had standing to sue based upon his status as a Wake County taxpayer. Allegations in plaintiff's complaint which support this argument are those which reference plaintiff's status as a taxpayer, registered voter, and citizen of Wake County.

Generally, an individual taxpayer has no standing to bring a suit in the public interest. Green v. Eure, Secretary of State, 27 N.C.App. 605, 608, 220 S.E.2d 102, 105 (1975). However, the taxpayer may have standing if he can demonstrate:

[A] tax levied upon him is for an unconstitutional, illegal or unauthorized purpose[;] that the carrying out of [a] challenged provision will cause him to sustain personally, a direct and irreparable injury[;] or that he is a member of the class prejudiced by the operation of [a] statute.

Texfi Industries v. City of Fayetteville, 44 N.C.App. 268, 270, 261 S.E.2d 21, 23 (1979) (citations omitted). Our review of plaintiff's complaint reveals no allegations which allow him to sue as an individual taxpayer.

Nonetheless, plaintiff may have had standing to bring a taxpayer action, not as an individual taxpayer, but on behalf of a public agency or political subdivision, if "`the proper authorities neglect[ed] or refus[ed] to act.'" Guilford County Bd. of Comrs. v. Trogdon, 124 N.C.App. 741, 747, 478 S.E.2d 643, 647 (1996) (quoting Branch v. Board of Education, 233 N.C. 623, 625, 65 S.E.2d 124, 126 (1951)). To establish standing to bring an action on behalf of public agencies and political divisions, a taxpayer must allege

that he is a taxpayer of [that particular] public agency or political subdivision, ... [and either,] "(1) there has been a demand on and refusal by the proper authorities to institute proceedings for the protection of the interests of the political agency or political subdivision; or (2) a demand on such authorities would be useless."

Id. (citation omitted).

Plaintiff alleged in his complaint that Attorney General Easley violated Article IX, section 7 of the North Carolina Constitution. Article IX, section 7 provides:

All moneys, stocks, bonds, and other property belonging to a county school fund, and the clear proceeds of all penalties and forfeitures and of all fines collected in the several counties for any breach of the penal laws of the State, shall belong to and remain in the several counties, and shall be faithfully appropriated and used exclusively for maintaining free public schools.

N.C. Const. art. IX, § 7. Plaintiff claimed, based upon the aforementioned constitutional provision, that the lawsuit proceeds were to be remitted to "unknown boards of education."

The only allegation indicating plaintiff had a right to sue under Article IX, section 7 was one noting his status as a taxpayer of Wake County. This allegation was insufficient to support his standing to sue on behalf of any Board of Education. Plaintiff failed to allege that the Wake County Board of Education or any other Board of Education refused to bring a suit to recover funds, that he requested the Board do so, or that such a request would be futile. Furthermore, plaintiff admitted in oral argument that there was no evidence in the record indicating that he had complied with the prerequisites for bringing a taxpayer action on behalf of the unknown Boards. We are therefore satisfied that plaintiff did not have taxpayer standing to challenge Attorney General Easley's alleged violation of Article IX, section 7 of our State Constitution.

We likewise find that plaintiff did not have taxpayer standing to challenge the Attorney General's alleged violation of state election laws. In his complaint, plaintiff claimed that the funds recovered in the lawsuits should be remitted to the State Treasurer and further named Treasurer Boyles as a defendant. Given these allegations, we can only assume that plaintiff brought the action to recover the proceeds on behalf of the State Treasurer. However, plaintiff again failed to allege that the Treasurer or any state entity refused to file suit to recover the lawsuit proceeds, that he requested a state entity do so, or that such a demand would have been made in vain. We therefore conclude that plaintiff did not have taxpayer standing to bring the present action on behalf of either the unknown boards of education or any state entity.

Plaintiff next alleged in his complaint and argues on appeal that he had standing to sue based upon the theory of qui tam. We are not so persuaded.

Qui tam actions are those "brought under a statute that allows a private person to sue for a penalty, part of which the government or some specified public institution will receive." Black's Law Dictionary 1262 (7th ed.1998) (emphasis added); see also In re Lancaster, 290 N.C. 410, 226 S.E.2d 371 (1976). The critical factor allowing plaintiffs to sue under the theory of qui tam is the existence of a statute specifically authorizing such suit. See Lancaster, 290 N.C. 410, 226 S.E.2d 371. There is no such statute allowing plaintiff sub judice to sue for a penalty based upon alleged violations of the state election laws or the constitutional provision specified in plaintiff's complaint. Plaintiff's argument is therefore meritless.

Finally, plaintiff argues and we agree that he had standing to sue to enforce state election laws under section 163-278.28(a) of our General Statutes. See N.C. Gen.Stat. § 163-278.28(a) (1999). Section 163-278.28(a) provides: "The superior courts of this State shall have jurisdiction to issue injunctions or grant any other equitable relief appropriate to enforce the provisions of this Article upon application by any registered voter of the...