Herring v. Winston-Salem/Forsyth County

• Decision Date: 05 February 2008
• Docket Number: No. COA07-35.,COA07-35.
• Citation: 656 S.E.2d 307
• Court: North Carolina Court of Appeals
• Parties: Loryn HERRING, Plaintiff-Appellant, v. WINSTON-SALEM/FORSYTH COUNTY BOARD OF EDUCATION, Defendant-Appellee.

656 S.E.2d 307

Loryn HERRING, Plaintiff-Appellant, v. WINSTON-SALEM/FORSYTH COUNTY BOARD OF EDUCATION, Defendant-Appellee.

No. COA07-35.

Court of Appeals of North Carolina.

February 5, 2008.

Appeal by Plaintiff from order entered 12 July 2006, nunc pro tune 2 June 2006, and order entered 12 July 2006 by Judge William Z. Wood, Jr. in Superior Court, Forsyth County. Heard in the Court of Appeals 10 October 2007,

Kennedy, Kennedy, Kennedy & Kennedy, L.L.P., by Harold L. Kennedy, III and Harvey L. Kennedy, Winston-Salem, for Plaintiff-Appellant.

Doughton & Hart PLLC, by Thomas J. Doughton and Amy L. Bossio, Winston-Salem, for Defendant-Appellee.

McGEE, Judge.

Loryn Herring (Plaintiff) appeals from an order granting summary judgment to the. Winston-Salem/Forsyth County Board of Education (Defendant) on the ground of res judicata. Plaintiff also appeals from an order sanctioning Plaintiffs attorneys under Rule 11 of the North Carolina Rules of "Civil Procedure. We affirm the summary judgment order and reverse the order sanctioning Plaintiffs attorneys.

In a prior action, Plaintiff, through a guardian ad litem, and Plaintiffs mother (the plaintiffs) filed a complaint on 3 June 1998 and an amended complaint on 7 August 1998 against Defendant and Ronald Liner (the defendants). In that action, the plaintiffs alleged that Plaintiff had been assaulted on her school bus by three boys and that the defendants had changed Plaintiffs bus stop to a new bus stop that was more dangerous. The plaintiffs further alleged that approximately five months later, Plaintiff was hit by a vehicle while walking to the new bus stop. The plaintiffs alleged claims for negligence, breach of fiduciary duty, and constructive fraud. In their answer, the defendants raised the defense of sovereign immunity, inter alia, and moved to dismiss the complaint.

The trial court converted the motion to dismiss into a motion for summary judgment, and denied the motion. The defendants appealed, and our Court held that "sovereign immunity barred] the claims presented by the plaintiffs in this case, [and] ... conclude[d] that the trial court erred in denying the defendants' summary judgment motion based on the sovereign immunity defense." Herring v. Winston-Salem/Forsyth County Bd. of Educ., 137 N.C.App. 680, 690, 529 S.E.2d 458, 465, disc. review denied, 352 N.C. 673, 545 S.E.2d 423 (2000) (Herring I). Our Court remanded the matter to the trial court for entry of summary judgment for the defendants. Id.

On remand, the trial court entered an order allowing the defendants' motion for summary judgment. However, the plaintiffs filed a Rule 60(b)(6) motion to set aside the order as to Ronald Liner, and the trial court entered an order allowing the plaintiffs' motion. Ronald Liner then filed a motion for summary judgment. The trial court allowed the motion and dismissed the case. The plaintiffs appealed and our Court affirmed the trial court's order and held that the plaintiffs' claim against Ronald Liner was barred by sovereign immunity. Herring v. Liner, 163 N.C.App. 534, 594 S.E.2d 117 (2004) (Herring II).

Plaintiff filed the complaint in the present case against Defendant and Ronald Liner on 1 April 2005. Plaintiff alleged State constitutional claims for a violation of her rights to due process and equal protection. Plaintiffs claims arose out of the same set of facts set forth in the complaint in Herring I. However, Plaintiff also alleged that she was treated differently from the three boys who attacked her on the bus. Plaintiff further alleged that she "was treated differently from similarly situated claimants, and ... Defendants' decision not to settle her particular case was arbitrary and capricious. Upon information and belief, Defendant Board has in the past settled negligence or tort claims without raising the defense of sovereign immunity[.]" Defendant and Ronald Liner responded by raising, inter alia, the defense of res judicata. Plaintiff subsequently filed a notice of voluntary dismissal without prejudice with respect to Ronald Liner. Defendant then filed a motion for summary judgment and a motion for sanctions.

The trial court entered an order on 12 July 2006, nunc pro tune 2 June 2006, granting summary judgment for Defendant on the ground of res judicata. The trial court also entered an order on 12 July 2006 granting Defendant's motion for Rule 11 sanctions against Plaintiffs attorneys. Plaintiff appeals.

I.

Plaintiff argues the trial court erred by granting summary judgment for Defendant on the ground of res judicata. "[T]he standard of review on appeal from summary judgment is whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law." Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C.App. 729, 733, 504 S.E.2d 574, 577 (1998). We review the evidence in the light most favorable to the nonmoving party. Id.

"Res judicata precludes a second suit involving the same claim between the same parties or those in privity with them when there has been a final judgment on the merits in a prior action in a court of competent jurisdiction." Moody v. Able Outdoor, Inc., 169 N.C.App. 80, 84, 609 S.E.2d 259, 261 (2005).

In order to successfully assert the doctrine of res judicata, a litigant must prove the following essential elements: (1) a final judgment on the merits in an earlier suit, (2) an identity of the causes of action in both the earlier and the later suit, and (3) an identity of the parties or their privies in the two suits.

Id. at 84, 609 S.E.2d at 262.

Plaintiff argues that the dismissal with prejudice of the earlier action on the ground of sovereign immunity was not an adjudication, on the merits. Rather, Plaintiff argues the dismissal was a matter of practice or procedure. It is true that "`[a] judgment must be on the merits and not merely relate to matters of practice or procedure in order to have res judicata effect.'" Kirby v. Kirby, 26 N.C.App. 322, 823, 215 S.E.2d 798, 799 (1975) (quoting 2 McIntosh, N.C. Practice and Procedure, § 1732 (2d Ed., Phillips Supp. (1970))). However, for the reasons that follow, we hold that a dismissal on grounds of sovereign immunity is a final judgment on the merits for purposes of res judicata.

Our Court has recognized that "[a] dismissal with prejudice is an adjudication on the merits and has res judicata implications." Caswell Realty Assoc. v. Andrews Co., 128 N.C.App. 716, 720, 496 S.E.2d 607, 610 (1998). In Caswell Realty, although the prior action was not decided on grounds of sovereign immunity, our Court held that "[t]he order of summary judgment ... was a final adjudication on the merits for purposes of the doctrine of res judicata[.]" Id. at 721, 496 S.E.2d at 611; see also Green v. Dixon, 137 N.C.App. 305, 310, 528 S.E.2d 51, 55, aff'd per curiam, 352 N.C. 666, 535 S.E.2d 356 (2000) (stating: "In general, a cause of action determined by an order for summary judgment is a final judgment on the merits."). Moreover, our Supreme Court has recognized that "[t]he purpose of summary judgment is to bring litigation to an early decision on the merits without the delay and expense of a trial when no material facts are at issue." Harris v. Walden, 314 N.C. 284, 286, 333 S.E.2d 254, 256 (1985) (emphasis added). Furthermore, it is well settled that "`[a] dismissal under Rule 12(b)(6) operates as an adjudication on the merits unless the court specifies that the dismissal is without prejudice.'" Clancy v. Onslow Cty., 151 N.C.App. 269, 272, 564 S.E.2d 920, 923 (2002) (quoting Hoots v. Pryor, 106 N.C.App. 397, 404, 417 S.E.2d 269, 274, disc. review denied, 332 N.C. 345, 421 S.E.2d 148 (1992)). The only difference between a Rule 12(b)(6) motion and a summary judgment motion is that the trial court decides the former on the complaint alone, while the trial court may receive and consider other evidence when ruling on the latter, as the trial court did in the present case. See. Kessing v. Mortgage Corp., 278 N.C. 523, 533, 180 S.E.2d 823, 829 (1971).

Plaintiff cites Clegg v. United States, 112 F.2d 886 (10th Cir.1940), for the proposition that the term "merits" means "the real or substantial grounds of action or defense as distinguished from matters of practice, procedure, jurisdiction or form." Id. at 887 (emphasis added). However, Clegg supports our decision in the present case because sovereign immunity is an affirmative defense. See McIver v. Smith, 134 N.C.App. 583, 584, 518 S.E.2d 522, 524 (1999), disc. review improvidently allowed, 351 N.C. 344, 525 S.E.2d 173 (2000) (recognizing that sovereign immunity is an affirmative defense). Therefore, based upon Clegg, a ruling on the affirmative defense of sovereign immunity is a ruling on the merits. See Clegg, 112 F.2d at 887.

Our decision is further supported by decisions of courts in other jurisdictions. In Kutzik v. Young, 730 F.2d 149, 151 (4th Cir.1984), the Fourth Circuit recognized that "[i]n Maryland, a dismissal based on a defense of sovereign immunity meets the final judgment requirement for application of claim preclusion." In Flores v. Edinburg Consol. Independent School Dist., 741 F.2d 773, 775 n. 3 (5th Cir.1984), reh'g denied en banc, 747 F.2d 1465 (5th Cir.1984), the Fifth Circuit noted that under Texas law, "[a] summary judgment on grounds of sovereign immunity is a judgment on the merits for purposes of res judicata." In Frigard v. U.S., 862 F.2d 201, 204 (9th Cir.1988), cert. denied 490 U.S. 1098, 109 S.Ct. 2448, 104 L.Ed2d 1003 (1989) (citation omitted), the Ninth Circuit stated that whereas, "[o]rdinarily, a case dismissed for lack of subject matter jurisdiction should be dismissed without prejudice so that a plaintiff may reassert his claims in a competent court," if "the bar of sovereign immunity is absolute ... [and] no other court has the power to hear the case," the case is properly dismissed "with prejudice." See also Bloomquist v. Brady, 894 F.Supp. 108, 116...