Gilbert v. North Carolina State Bar

Citation363 N.C. 70,678 S.E.2d 602
Decision Date20 March 2009
Docket NumberNo. 41PA07.,41PA07.
CourtUnited States State Supreme Court of North Carolina
PartiesWillie D. GILBERT, II v. The NORTH CAROLINA STATE BAR.

Michaux & Michaux, P.A., by Eric C. Michaux, for plaintiff-appellee.

North Carolina State Bar, by Katherine E. Jean, Counsel, and David R. Johnson and A. Root Edmonson, Deputy Counsel, for defendant-appellant.

EDMUNDS, Justice.

In this case, plaintiff Willie Gilbert, a licensed attorney, alleges that defendant North Carolina State Bar acted vindictively when it filed sequential actions against him. The questions before this Court are whether plaintiff's complaint properly presents a claim under 42 U.S.C. § 1983 for deprivation of his right to due process under the Fourteenth Amendment to the Constitution of the United States and whether the trial court's permanent injunction of defendant's administrative action was proper. As to the first question, we conclude that plaintiff failed to state a § 1983 claim because (1) substantive due process does not provide an individual right to be free from either vindictive or malicious prosecution of an administrative action, and (2) a plaintiff's right to procedural due process under the Fourteenth Amendment is not violated by the tortious conduct of a state actor until and unless the State fails to provide an adequate remedy. As to the second question, because plaintiff must allow the State an opportunity to remedy the alleged deprivation of a protected right before he can state a viable § 1983 claim based on an alleged violation of his right to procedural due process, the trial court should not have imposed a permanent injunction. We vacate the decision of the Court of Appeals dismissing defendant's appeal and remand to that court for further remand to Superior Court, Wilson County, with instructions to dissolve the permanent injunction, dismiss plaintiff's substantive due process claim with prejudice, and dismiss plaintiff's procedural due process claim without prejudice.

Between February 2000 and September 2003, defendant filed three complaints against plaintiff. Two were administrative actions (Gilbert I and Gilbert III) that were brought before defendant's Disciplinary Hearing Commission (DHC), while the third was a civil action (Gilbert II) brought in District Court, Wake County, to recover money paid to one of plaintiff's clients by defendant's Client Security Fund (CSF). Defendant filed Gilbert I on 15 February 2000, alleging that plaintiff violated numerous provisions of the Revised Rules of Professional Conduct (RRPC) during his representation of three clients between 1997 and 1999. After a four-day hearing held on 17-18 July 2000 and 18-19 September 2000, the DHC entered an Order of Discipline concluding that plaintiff had violated Rules 1.5, 1.7, 1.15-2(h), 8.4(b), 8.4(c), 8.4(d), and 8.4(g) of the RRPC. The DHC suspended plaintiff's license to practice law for five years, but stayed the last three years of the suspension upon enumerated conditions. The North Carolina Court of Appeals affirmed the DHC Order of Discipline, N.C. State Bar v. Gilbert, 151 N.C.App. 299, 566 S.E.2d 685 (2002) (unpublished), and this Court affirmed the Court of Appeals in a per curiam opinion, 357 N.C. 502, 586 S.E.2d 89 (2003).

Defendant filed Gilbert II on or about 18 April 2002, seeking reimbursement on behalf of the CSF for $4,627.43 that had been paid by the CSF to one of plaintiff's clients. Following a bench trial held on 7-8 January 2004, the trial court awarded defendant the double damages allowed by N.C.G.S. § 84-13, for a total of $9,254.86 plus interest. On appeal, the Court of Appeals affirmed the trial court's judgment in part and vacated in part, remanding the matter for additional findings as to plaintiff's affirmative defenses. N.C. State Bar v. Gilbert, 176 N.C.App. 408, 626 S.E.2d 877 (2006) (unpublished). On remand, the trial court again entered judgment in favor of defendant. On appeal after remand, the Court of Appeals affirmed the trial court's judgment in part and vacated in part, remanding for recalculation of interest pursuant to N.C.G.S. § 24-5(b). N.C. State Bar v. Gilbert, 189 N.C.App. 320, 663 S.E.2d 1 (2008).

Defendant filed Gilbert III on 12 September 2003, alleging that plaintiff misappropriated funds from his trust account and failed to pay client funds promptly to third parties. The transactions at issue identified by defendant in its Gilbert III complaint occurred in April 1998.

While Gilbert III was pending before the DHC, plaintiff filed the instant action in Superior Court, Wilson County, alleging, in part, that defendant was vindictively prosecuting the Gilbert III administrative action. Specifically, plaintiff alleged violations of both his substantive and his procedural due process rights. Plaintiff further alleged that the conduct at issue in Gilbert III was known or should have been known to defendant before Gilbert I was heard by the DHC. Plaintiff sought injunctive and monetary relief under 42 U.S.C. § 1983 and Article I of the North Carolina State Constitution.

On 9 April 2004, the trial court granted plaintiff an ex parte temporary restraining order, enjoining defendant from proceeding with further prosecution of Gilbert III. At the subsequent hearing on plaintiff's motion for preliminary injunction, defendant argued that the trial court did not have jurisdiction to enjoin a disciplinary action that was pending before the DHC.1 Plaintiff responded that the DHC is not authorized to rule on the constitutional questions he raised and that superior court is an appropriate forum in which to bring a claim under § 1983.2 After considering arguments, the trial court granted plaintiff's request for a preliminary injunction.

Defendant moved to dismiss the complaint on 3 August 2004, and plaintiff moved for summary judgment on 13 October 2004. The trial court treated defendant's motion as one for summary judgment and, after hearing argument, expressed its concern.

THE COURT: .... [I]t smacks—to me, it smacks in the face of fairness when you have a man that you take a period of time, you go in and you find three people, you prosecute him on those three, and there were six people there at the same time, and instead of prosecuting him on six and doing whatever you want to do to him, you choose to do three of them, have a time of suspension to run, and then come back when that time of suspension runs and says, oh, yes, I got three more that I didn't prosecute you on so I want to now prosecute you on those matters. And that, right or wrong, in my mind is where I have the problem, because—and that's why I used the terms that the State Bar knew or should have known, having done the investigation of the trust account, that those violations were there.

The trial court entered an order on 12 September 2005 granting plaintiff's motion for partial summary judgment on the issue of liability for violation of his Fourteenth Amendment right to due process. The trial court's order permanently enjoined defendant from prosecuting Gilbert III and expressly retained jurisdiction over the matter for the purposes of enforcing the injunction, determining compensatory damages, and awarding attorneys' fees.

Defendant appealed. The Court of Appeals concluded that defendant had appealed from an interlocutory order not affecting a substantial right and dismissed defendant's appeal. Gilbert v. N.C. State Bar, 180 N.C.App. 690, 639 S.E.2d 143 (2006) (unpublished). This Court allowed defendant's petition for discretionary review as to two issues: (1) whether the Court of Appeals erred by dismissing defendant's appeal as interlocutory, and (2) whether the superior court had jurisdiction to enjoin permanently defendant's prosecution of plaintiff in an administrative disciplinary proceeding before the DHC.

We begin with defendant's first issue. Defendant acknowledged in its brief to the Court of Appeals that the trial court's order "may be considered interlocutory," and the Court of Appeals so held. Gilbert, 180 N.C.App. 690, 639 S.E.2d 143, 2006 WL 3718000, at *3. Defendant argues that the order nevertheless may be appealed immediately because it affects a substantial right. See N.C.G.S. §§ 1-277(a), 7A-27(d)(1) (2007).

A substantial right is "a legal right affecting or involving a matter of substance as distinguished from matters of form: a right materially affecting those interests which [one] is entitled to have preserved and protected by law: a material right." Oestreicher v. Am. Nat'l Stores, Inc., 290 N.C. 118, 130, 225 S.E.2d 797, 805 (1976) (citation and internal quotation marks omitted). We consider whether a right is substantial on a case-by-case basis. "It is usually necessary to resolve the question in each case by considering the particular facts of that case and the procedural context in which the order from which appeal is sought was entered." Waters v. Qualified Pers., Inc., 294 N.C. 200, 208, 240 S.E.2d 338, 343 (1978).

Plaintiff argues that this interlocutory appeal does not affect a substantial right. The Court of Appeals agreed with plaintiff, citing precedent from that court for the proposition that an order of a trial court allowing a party's motion for summary judgment as to liability while retaining jurisdiction over the issue of damages, does not affect a substantial right. Gilbert, 180 N.C.App. 690, 639 S.E.2d 143, 2006 WL 3718000, at *3. In so doing, the Court of Appeals reasoned that "the most [defendant] will suffer from being denied an immediate appeal is a trial on the issue of damages." Id. (internal quotation marks and citation omitted).

Although ...

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