Walker v. Town of Stoneville

• Citation: 712 S.E.2d 239
• Decision Date: 19 April 2011
• Docket Number: No. COA10–278.,COA10–278.
• Parties: Gary Lawrence WALKER, Plaintiff,v.TOWN OF STONEVILLE, North Carolina, Defendant.
• Court: Court of Appeal of North Carolina (US)

712 S.E.2d 239

Gary Lawrence WALKER, Plaintiff,

v.TOWN OF STONEVILLE, North Carolina, Defendant.

No. COA10–278.

Court of Appeals of North Carolina.

April 19, 2011.

OPINION TEXT STARTS HERE

Appeal by Plaintiff from order and judgment entered 25 June 2009 by Judge James M. Webb in Rockingham County Superior Court. Cross-appeal by Defendant from order entered 23 March 2009 by Judge John O. Craig, III and order entered 28 May 2009 by Judge James M. Webb in Rockingham County Superior Court. Heard in the Court of Appeals 11 October 2010.

Elliot Pishko Morgan, P.A., by Robert M. Elliot, Winston–Salem, for Plaintiff.

Gray King Chamberlin & Martineau, LLC, by Elizabeth A. Martineau, Charlotte, and Susan M. Hill, for Defendant.

STEPHENS, Judge.

This appeal addresses, in its paramount legal issues, the sufficiency of evidence to support a jury verdict in favor of Plaintiff Gary Lawrence Walker (“Plaintiff”) on his negligent misrepresentation claim against Defendant Town of Stoneville (“Defendant” or “Town”) and the statutory construction of the law prohibiting wrongful discrimination in the workplace. But this case involves much more than just these primary legal issues; this case raises, in its essence, issues of competency, trust, accountability, and fundamental fairness.

For the reasons stated below, we hold that the trial court erred in setting aside the jury's verdict on Plaintiff's negligent misrepresentation claim and in directing a verdict for Defendant on Plaintiff's wrongful discharge claim.

I. Procedure

On 19 October 2007, Plaintiff filed this action against the Town for negligent misrepresentation and breach of contract, seeking damages for the loss of Plaintiff's retirement benefits. Defendant filed an answer on 11 January 2008.

On 18 August 2008, Plaintiff filed a Supplemental and Amended Complaint adding claims for wrongful discharge based on age discrimination. Defendant filed an answer on 19 September 2008 and an amended answer on 25 September 2008.

On 14 January 2009, Defendant filed a motion for summary judgment. By order entered 23 March 2009, following a hearing, the Honorable John O. Craig, III granted Defendant's motion as to Plaintiff's contract claims and one of Plaintiff's wrongful discharge claims, and denied Defendant's motion as to Plaintiff's negligent misrepresentation claim and remaining wrongful discharge claim.

These remaining claims came on for trial before a jury starting 19 May 2009, the Honorable James M. Webb presiding. At the conclusion of Plaintiff's evidence, Defendant made an oral motion for directed verdict on all of Plaintiff's claims. The court granted Defendant's motion on Plaintiff's wrongful discharge claim and took Defendant's motion on Plaintiff's negligent misrepresentation claim under advisement. At the close of all the evidence, Defendant made an oral motion for directed verdict on Plaintiff's negligent misrepresentation claim, which the trial court also took under advisement.

The matter was submitted to the jury. On 28 May 2009, the jury returned a verdict finding Defendant liable for negligent misrepresentation and awarding Plaintiff $170,008.13 in damages from Defendant. After the jury's verdict was announced, Defendant made an oral motion for judgment notwithstanding the verdict (“JNOV”). The trial court set Defendant's motions for directed verdict and JNOV for hearing during the court's 15 June 2009 civil term.

Defendant's motions were heard on 16 June 2009. At the conclusion of the hearing, the trial court found that the evidence presented at trial was “insufficient to justify a verdict for [ ] Plaintiff as a matter of law [.]” Thus, by “Order and Judgment” entered 25 June 2009, the trial court allowed Defendant's motion for directed verdict at the close of all the evidence,¹ which the court had taken under advisement before submitting the case to the jury, and Defendant's post-trial motion for JNOV, and entered judgment for Defendant.

Plaintiff filed notice of appeal on 2 July 2009, challenging Judge Webb's 25 June 2009 order and judgment. Defendant filed notice of cross-appeal on 16 July 2009, challenging Judge Craig's 23 March 2009 order and Judge Webb's denial of Defendant's written requests for special jury instructions and issues to be submitted to the jury.

II. Evidence

From 1968 through March 1994, Plaintiff was employed by the Eden Police Department of the City of Eden, North Carolina. Plaintiff started as a patrol officer, and during his 26 years of service, moved through the ranks to ultimately become a lieutenant, supervising seven other police officers. While employed by the City of Eden, Plaintiff was enrolled as a member of the North Carolina Local Governmental Employees' Retirement System (LGERS),² which is administered by the State Retirement System through local governmental employers such as the City of Eden and the Town of Stoneville. Eden's Finance Officer, Margie Blackstock, enrolled Plaintiff in LGERS when he started working for Eden. Plaintiff received periodic statements from the State Retirement System regarding his retirement account but, otherwise, had no contact with the State Retirement System during his employment.

At age 55, after more than 25 years of service, Plaintiff decided to retire. Because of his age at retirement and his years of service, Plaintiff was entitled to full retirement benefits. Plaintiff talked to Ms. Blackstock, who explained to Plaintiff his rights regarding his retirement benefits and provided Plaintiff with the information he needed to file for retirement. With Ms. Blackstock's assistance, Plaintiff filled out an application for retirement on 10 January 1994 for his retirement benefits to begin in April 1994. Ms. Blackstock sent the application to LGERS. Plaintiff retired 1 April 1994 and began receiving monthly retirement benefits.

Following his retirement, Plaintiff's son, a sergeant with the Town of Stoneville's Police Department, informed Plaintiff that the police department was short-handed and needed some extra help. Plaintiff spoke with Police Chief Garrison and informed her that he was willing to work for the Town as long as his work did not jeopardize his retirement benefits. Chief Garrison referred Plaintiff to the Town's Finance Officer, Amy Winn, who administered LGERS for the Town.

Plaintiff went to see Ms. Winn and told her that he was interested in working for the Town only if he could continue to receive his retirement benefits. Ms. Winn researched some information on her computer and told Plaintiff that he could work for the Town without jeopardizing his retirement benefits as long as three conditions were met: (1) that he not receive regular employee benefits from the Town; (2) that he not be enrolled as an active member of LGERS; and (3) that he not receive compensation exceeding the maximum compensation established yearly by LGERS.

Based on the information he received from Ms. Winn, Plaintiff agreed to work for the Town under the following conditions: (1) Plaintiff received no benefits, i.e., he received no vacation, holiday leave, or other benefits which “regular” employees for the Town received; (2) Plaintiff was not enrolled in LGERS; and (3) Plaintiff received only the statutory maximum salary provided under N.C. Gen.Stat. § 128–24(5)c (“salary cap”).

Plaintiff initially worked sporadic hours, filling in as needed. Less than a year later, however, Plaintiff was asked to work more regular hours, and Plaintiff assumed a position requiring approximately 42 hours per week. On 5 February 1997, Plaintiff was appointed the Town's police chief. He served in that position until 3 April 2007. During this time, the Town still considered Plaintiff to be a part-time employee with no benefits.

On a yearly basis, the Town Administrator, Bob Wyatt, and/or the Town Finance Officer, Ms. Winn and later Penny French, would calculate how much Plaintiff could earn during the year under the salary cap and set his salary accordingly. Mr. Wyatt or Ms. Winn would tell Plaintiff what his salary for the upcoming year would be or write Plaintiff's salary on a note and give it to him. The Town's budget each year reflected the overall salary of the police chief, which did not exceed the salary cap established by LGERS.

During his years of employment with the Town, Plaintiff was never informed that the North Carolina General Statutes imposed a limitation on the number of hours he could work without affecting his retirement benefits. Specifically, Plaintiff was never informed by the Town that employees who work over 1,000 hours in a year must become members of LGERS, which ends their eligibility for retirement benefits. Mr. Wyatt was unaware of the 1,000–hour rule. Ms. Winn believed that Plaintiff would continue to receive his retirement benefits as long as he stayed under the salary cap, and Ms. Winn never enrolled Plaintiff in LGERS. When Shirley Price took over as the Town Finance Officer on 3 April 1997, Ms. Price was also unaware of the 1,000–hour rule.³

In the fall of 2006, the State Retirement System became aware of the nature of the Town's compensation arrangement with Plaintiff. Through communications with the Town, the State Retirement System concluded that Plaintiff was working in excess of 1,000 hours per year and, thus, was receiving retirement benefits in violation of the law. Based on that information, the State Retirement System immediately terminated Plaintiff's eligibility for retirement benefits and informed him that he was required to reimburse LGERS $174,283.37 for the overpayment of retirement benefits. Additionally, the State Retirement System determined that Plaintiff should have been enrolled as a member of LGERS, and that he would be required to pay LGERS the contributions to the retirement system which should have been deducted from his pay.

During the fall of 2006, the Town drafted an “agreement” indicating that it would pay Plaintiff for more than 2,000 hours of work for which he had...