Mayo v. North Carolina State University

• Decision Date: 15 February 2005
• Docket Number: No. COA04-240.,COA04-240.
• Citation: 168 NC App. 503,608 S.E.2d 116
• Parties: Robert M. MAYO, Petitioner v. NORTH CAROLINA STATE UNIVERSITY, Respondent.
• Court: North Carolina Court of Appeals

608 S.E.2d 116

168 NC App. 503

Robert M. MAYO, Petitioner v. NORTH CAROLINA STATE UNIVERSITY, Respondent.

No. COA04-240.

Court of Appeals of North Carolina.

February 15, 2005.

Young Moore & Henderson, P.A., by Christopher A. Page, Raleigh, for petitioner.

Attorney General Roy Cooper, by Assistant Attorney General Q. Shante' Martin, for respondent. BRYANT, Judge.

North Carolina State University (NCSU) (respondent) appeals an order filed 13 November 2003, reversing an agency decision and holding that respondent was estopped to claim an overpayment of salary owed by Robert M. Mayo (petitioner). Petitioner cross-appeals.

Procedural History

On 8 November 2002, NCSU conducted a hearing to determine the validity of a debt NCSU claimed petitioner owed as result of a salary overpayment. On 19 November 2002, NCSU issued its final agency decision pursuant to N.C. Gen.Stat. § 150B-42, upholding the validity of the debt.

Petitioner filed a petition for judicial review on 20 December 2002. Petitioner subsequently filed an amended petition for judicial review on 27 January 2003. This matter came for hearing on the 5 November 2003 session of Wake County Superior Court with the Honorable Donald W. Stephens presiding. By order filed 13 November 2003, the superior court reversed the final agency decision, holding that it was affected by error of law and NCSU was estopped to claim the overpayment of salary as a debt. The superior court, however, held petitioner was not entitled to return of the $500.00 check tendered by petitioner, nor return of any tax refund garnished from petitioner.

On 11 December 2003, NCSU filed notice of appeal to this Court. Petitioner filed his notice of appeal on 22 December 2003, cross-appealing only the portion of the order holding that he was entitled to return of either the check tendered or the seized tax refund.

Facts

In July 2001, petitioner had worked for NCSU for a period of ten years and was a tenured faculty member of NCSU's Engineering Department and also served as Director of Graduate Programs for the Nuclear Engineering Department. That same month, petitioner informed his Department Head, Dr. Paul Turinsky that he desired to leave NCSU's employment effective 1 September 2001. Dr. Turinsky accepted petitioner's resignation, but failed to report the resignation to NCSU's payroll department until 14 September 2001, two weeks after petitioner's departure.

At the time of accepting petitioner's resignation, Dr. Turinsky did not inform petitioner that petitioner would not be entitled to any salary for the time period of 1 July 2001 through 14 August 2001. Nor did Dr. Turinsky inform petitioner that it was NCSU's policy that salary paid to petitioner during the 1 July through 14 August time period was a pre-payment for the upcoming academic year, and if petitioner in fact received such money, petitioner would have to repay NCSU the amount received. Dr. Turinsky testified at the agency hearing that it was the department head's duty to inform the faculty in the respective department of the terms of their employment agreement. He also testified that petitioner was at the department on a daily basis between July and August 2001, working on department business, including serving as the Director of Graduate Programs.

On 3 October 2001, Phyllis Jennette, NCSU's Special Payroll Coordinator, informed petitioner that NCSU had determined that he was overpaid in July and August 2001 by a net amount of $4,587.45. The letter stated that the "overpayment was due to your early separation from [NCSU], which resulted in your overpayment for July and August 2001." Jennette requested petitioner to repay the amount of the overpayment. Petitioner declined.

By letter dated 10 April 2002, NCSU informed petitioner that it had garnished his state income tax refund in the amount of $437.88 pursuant to N.C. Gen.Stat. § 105A. The letter stated that the amount would be applied to petitioner's past due payroll debt.

NCSU claimed the debt owed was based on two terms of the employment agreement between NCSU and petitioner. Those terms, according to NCSU, include first, that the July and first half of August salary payments to a nine-month employee are pre-payments for the upcoming academic year. Second, when a nine-month employee who is paid on a twelve-month basis, leaves during the fall of a given academic year, that employee must repay the amount of overpayment.

Dr. Turinsky testified at the agency hearing that these employment terms were material terms of the employment agreement, and that NCSU had the obligation to inform its faculty of the terms of their employment agreement. Both Dr. Turinsky and Brian Simet, NCSU's Director of Payroll Department, however, conceded at the agency hearing that neither of the alleged terms were included in the written employment agreement. Simet moreover testified that these policies were "not stated anywhere specifically." Additionally, Dr. Turinsky testified that he had never heard of those terms prior to being informed by the payroll department in September 2001.

NCSU admits the only written documents constituting the employment agreement between NCSU and petitioner are contained in petitioner's appointment letter, his annual salary letter, and the policies adopted and amended by the UNC Board of Governors and by the NCSU Board of Trustees. Petitioner's official appointment letter stated, "[y]our appointment is subject to all policies adopted and amended by the UNC Board of Governors and by the NCSU Board of Trustees. Pertinent sections of the UNC Code are printed in the Faculty Handbook." None of these documents set forth the terms upon which NCSU based its claim for repayment.

Simet testified at the agency hearing that the only written term of employment upon which the claim is based is the language found in the section of the Faculty Handbook titled "Appointment Pay Periods." Upon cross-examination, however, Simet admitted the provision is also silent concerning NCSU's assertion that salary payments during July and the first half of August are to be considered as pre-payments for the upcoming fall academic year, and is silent concerning whether a faculty member who leaves prior to commencement of the upcoming fall academic year must repay those payments.

In support of his argument regarding entitlement to the disputed salary, petitioner testified that in addition to working during the time period of July 2001 through mid August 2001, he did not receive the monthly salary that he was entitled to for the first four months of his employment in 1991. Per his written agreement, petitioner was to be paid at a rate of $3,833.33 per month during the first year of his employment. Instead, he was paid at the rate of $2,253.13 per month for the first four months. In rebuttal, NCSU stated that petitioner was only entitled to the $3,833.33 rate of pay if he had worked the entire twelve months of the previous academic year, and since he started in March, he was entitled to only a portion of the rate of $3,833.33 per month. This partial-pay policy was not contained in any of NCSU's written policies, and petitioner argued he remained undercompensated for his initial employment period.

Petitioner further testified that, as part of an agreement to serve as Director of Graduate Programs, he was required to work one summer month per academic year and was to receive additional compensation equal to one month's salary. Petitioner served as Director of Graduate Programs during July through August 2000, and May through June 2001. In 2001, NCSU paid him a total of $7,968.78, the agreed upon amount, for service as Director of Graduate Programs for the 2000-2001 academic year. Petitioner continued to serve as Director of Graduate Programs during July through August 2001. Petitioner argued that he remained undercompensated for his July through August 2001 service in this capacity.

The issues on appeal are whether the superior court erred when it held: (I) NCSU was estopped from collecting money it claims petitioner allegedly owed to NCSU as a result of an overpayment in salary; and (II) NCSU could retain petitioner's tax refund and settlement check tendered as reimbursement applied toward the debt allegedly owed for salary overpayment.

I. NCSU's Appeal

When a petitioner alleges that an agency's decision is based upon an error of law, the superior court must undertake a de novo review. Air-A-Plane Corp. v. N.C. Dept. of E.H.N.R., 118 N.C.App. 118, 124, 454 S.E.2d 297, 301 (1995). Under the de novo standard of review, the trial court "`considers the matter anew[ ] and freely substitutes its own judgment for the agency's.'" N.C. Dep't of Env't & Natural Res. v. Carroll, 358 N.C. 649, 660, 599 S.E.2d 888, 895 (2004) (citation omitted). Where, however, a petitioner alleges that an agency's decision is unsupported by substantial evidence in the record or is arbitrary and capricious, the superior court must review the "whole record" to determine if the agency's decision is supported by substantial evidence. Id.

When this Court reviews appeals from superior court either affirming or reversing the decision of an administrative agency, our scope of review is twofold, and is limited to determining: (1) whether the superior court applied the appropriate standard of review and, if so, (2) whether the superior court properly applied this standard. In re Appeal by McCrary, 112 N.C.App. 161, 166, 435 S.E.2d 359, 363 (1993). However, this Court's obligation to review a superior court order for errors of law can be accomplished by addressing the dispositive issue(s) before the agency and the superior court without examining the scope of review utilized by the superior court and remanding the case if the standard of review utilized by the superior court cannot be ascertained. Capital Outdoor, Inc. v. Guilford County Board of Adjustment, 152 N.C.App. 474, 475, 567 S.E.2d 440, 441 (2002).

Upon review of...