Womack Newspapers v. Town of Kitty Hawk, COA05-1650.

• Decision Date: 02 January 2007
• Docket Number: No. COA05-1650.,COA05-1650.
• Citation: 639 S.E.2d 96
• Court: North Carolina Court of Appeals
• Parties: WOMACK NEWSPAPERS, INC., D/B/A the Outer Banks Sentinel, Plaintiff, v. THE TOWN OF KITTY HAWK through the Kitty Hawk Town Council; William A. Harris in his capacity as Mayor; Doug Seay, in his capacity as Mayor Pro Tempore; Ervin Bateman, Clifton Perry and Donna Trivette, in their capacities as members of the Town Council; Gary McGee and Innovative Management Services, LLC, in their capacity as Town Manager; and Norman W. Shearin, Jr., Daniel D. Khoury and Vandeventer Black LLP, in their capacity as Town Attorneys, Defendants.

639 S.E.2d 96

WOMACK NEWSPAPERS, INC., D/B/A the Outer Banks Sentinel, Plaintiff, v. THE TOWN OF KITTY HAWK through the Kitty Hawk Town Council; William A. Harris in his capacity as Mayor; Doug Seay, in his capacity as Mayor Pro Tempore; Ervin Bateman, Clifton Perry and Donna Trivette, in their capacities as members of the Town Council; Gary McGee and Innovative Management Services, LLC, in their capacity as Town Manager; and Norman W. Shearin, Jr., Daniel D. Khoury and Vandeventer Black LLP, in their capacity as Town Attorneys, Defendants.

No. COA05-1650.

Court of Appeals of North Carolina.

January 2, 2007.

COPYRIGHT MATERIAL OMITTED

Appeal by defendants from orders entered 7 April 2005, 2 May 2005 and 2 June 2005 by Judge J. Richard Parker in Dare County Superior Court. Heard in the Court of Appeals 13 September 2006.

Everett, Gaskins, Hancock & Stevens, LLP by Hugh Stevens and Michael J. Tadych, Raleigh, for plaintiff-appellee.

Vandeventer Black LLP, by David P. Ferrell and Allison A. Holmes, Kitty Hawk, for defendant-appellants.

JACKSON, Judge.

The Town of Kitty Hawk, North Carolina ("Town"), is a municipal corporation organized and existing pursuant to North Carolina General Statutes Chapter 160A. The law firm of Vandeventer Black LLP was duly appointed and served as the Town Attorney, pursuant to an agreement entered into between defendant Town and the firm on 19 April 2002 and section 160A-173. Womack Newspapers, Inc. ("plaintiff"), publishes and does business as The Outer Banks Sentinel ("The Sentinel"), a bi-weekly newspaper published in Dare County, North Carolina.

On 13 May 2004, Angela Perez, a reporter for The Sentinel, made a request to the Town pursuant to the Public Records Act, seeking to inspect and copy all of the detailed billing statements from the Town Attorney for legal fees incurred during fiscal years 2003-2004. The Town denied the request on the grounds that the documents were not "public records" as that term is defined by our state's Public Records Act, found in North Carolina General Statutes, section 132-1 et seq. The Town contended the documents contained privileged communications between the Town and its attorney, and therefore were exempt from the Public Records Act pursuant to section 132-1.1. The Town provided summaries of the detailed billing statements which included the general nature of each matter handled by the Town Attorney along with the amount of fees paid by the Town on each matter.

Following meetings with various Town officials, on 8 June 2004, the editor of The Sentinel wrote a letter to the Kitty Hawk Town Council ("Council") requesting that the Council authorize the release of redacted copies of the billing statements. The editor noted in her letter that only the Council could waive the Town's attorney-client privilege, which would be necessary before even redacted copies of the billing statements could be released.

A special meeting of the Council was called on 17 June 2004, to consider The Sentinel's request to obtain redacted copies of the billing statements sent to the Town by the Town Attorney. The Town Attorney recommended the Council waive the attorney-client privilege in all respects with the exception of billing statements for ongoing litigation and billing statements related to claims which were unresolved and might result in future litigation for the Town. During closed session, the Council voted to waive the Town's attorney-client privilege as to written communications from the Town Attorney regarding the requested billing statements, except for billing statements related to litigation.

Redacted copies of the detailed billing statements from the Town Attorney for fiscal year 2003-2004 subsequently were made available to the public. The Sentinel obtained copies of the redacted billing statements, and then contended that the copies contained far more redaction and obliteration than the Council's vote directed. On 13 July 2004, The Sentinel's editor wrote to members of the Council, notifying them that the billing statements had been redacted to a far greater extent than was directed, and requesting that the Council instruct the Town Manager to release the records in a manner consistent with the Council's 17 June 2004 vote. The Town's Mayor denied The Sentinel's request stating that the Council's vote did not authorize the release of privileged communications between the Town and Town Attorney, and that releasing the documents as requested by The Sentinel would compromise the Town's ability to prosecute and defend present and future claims.

On 11 August 2004, plaintiff filed a complaint and petition for writ of mandamus, seeking that the trial court order the Town to provide access to, and copies of, the detailed billing records of the Town Attorney for fiscal year 2003-2004, except for those portions as to which the Town asserts its attorney-client privilege in connection with two specific ongoing cases. The Sentinel also sought an order declaring that the requested records were in fact public records as a matter of law. In the alternative, The Sentinel asked the trial court to order the Town to submit complete and unredacted copies of all detailed billing statements from the Town Attorney for fiscal year 2003-2004 for an in camera review for a determination as to whether the attorney-client privilege asserted by the Town was well founded. Plaintiff filed an amended complaint on 10 November 2004, adding a request that the trial court also order the Town to "provide access to and copies of all checks, contracts and/or supporting invoices for land purchases, appraisal, demolition, engineering, surveying and other `Technical Assistance' performed for the Town or on the Town's behalf in conjunction with the Town's oceanfront condemnations."

Defendants filed motions seeking to transfer the action to the superior court division and to dismiss the action based upon a lack of subject matter and personal jurisdiction over defendants. Defendants alleged that the confidential information sought by plaintiff constituted written communications to the Town from its attorney regarding claims, and as such, the information was not a public record as defined by North Carolina General Statutes, section 132-1. Defendants argued that sovereign immunity barred plaintiff's claims. Defendants also filed motions seeking to strike portions of plaintiff's complaint, dismiss the petition for a writ of mandamus based upon Rule 12(b)(6) of our Rules of Civil Procedure, and dismiss the action for failure to join necessary parties and a lack of standing. Plaintiff's action was transferred to Dare County Superior Court on 21 December 2004. Defendants also filed several motions seeking to quash subpoenas which were served upon various Town officials.

In an order entered 7 April 2005, defendants' various motions were denied and defendants were ordered to present the following records for in camera review and inspection:

a. Complete and unredacted detailed billing records provided to the Town of Kitty Hawk by [the Town Attorney] for Fiscal Year 2003-2004.

b. Complete and unredacted copies of all checks and supporting invoices for land purchases, engineering and surveying related to the oceanfront and other land condemnations.

c. Complete and unredacted copies of any checks written to Town Attorneys for items and expenses which are not included on their legal billings during the fiscal years indicated above.

d. Complete and unredacted copies of all contracts and other arrangements by the Town of Kitty Hawk or on its behalf with:

1. Quible & Associates, P.C.;

2. Bourne Appraisal Service;

3. Bamette Integrated Land Services d/b/a/ BILD;

4. Green Acres Land Development; and/or

5. Any other firms or individuals who have rendered services connected with the Town of Kitty Hawk's oceanfront and land condemnations since June 1, 2003.

Defendants gave notice of their appeal from the trial court's 7 April 2005 order and filed a motion seeking to stay the submission of the documents for in camera review pending the appeal. However, defendants' notice of appeal was dismissed in an order filed 2 May 2005, on the basis that the order denying defendants' motions was not appealable, and that an attempt to appeal from a nonappealable order was a nullity. Defendants then filed their answer on 25 April 2005, and asserted various counterclaims including a declaration from the trial court as to the rights and obligations of the parties, along with an order enjoining plaintiff from continuing its attempts to obtain and misuse confidential information of defendants.

After reviewing the disputed documents in camera, the trial court entered its order on 2 June 2005. The trial court held that the records made or received by the Town Attorney, including but not limited to invoices and bills presented to the Town, were presumptively public records as defined by our state's Public Records Act, found in section 132-1 et seq. The trial court held that "[s]ubstantive communications from the Town Attorneys to the Town concerning a claim against or on behalf of the Town, or concerning the prosecution, defense, possible settlement or litigation of a judicial action are not public records if they are within the scope of the attorney-client privilege." Defendants were ordered to produce, without redaction, all billing records from the Town Attorney to the Town for fiscal year 2003-2004, with the exception of specific entries which the trial court found were subject to the attorney-client privilege. The trial court also ordered that all contracts made on behalf of the Town related to the oceanfront condemnation cases are public records, and that copies of the contracts must be produced in their entirety, with the exception of one specific document. Defendants were ordered to provide immediate public access to the public records described in the order, with the exception of those documents...