Hunt v. NC Dep't of Pub. Safety , 266 N.C. App. 24 ( 2019 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-1195
Filed: 18 June 2019
Office of Administrative Hearings, No. 17 OSP 1269
JEFFREY HUNT, Petitioner
v.
N.C. DEPARTMENT OF PUBLIC SAFETY, Respondent.
Appeal by respondent from order entered 24 August 2018 by Administrative
Law Judge Melissa Owens Lassiter in the Office of Administrative Hearings. Heard
in the Court of Appeals 21 May 2019.
Attorney General Joshua H. Stein, by Assistant Attorney General Tamika L.
Henderson, for the State.
Law Offices of Michael C. Byrne, by Michael C. Byrne, for petitioner.
The McGuinness Law Firm, by J. Michael McGuinness, for amicus curiae
North Carolina Police Benevolent Association and Southern States Police
Benevolent Association.
ARROWOOD, Judge.
The North Carolina Department of Public Safety (“DPS” or “respondent”)
appeals from an order of the North Carolina Office of Administrative Hearings (the
“OAH”) granting Jeffrey Hunt (“petitioner”)’s petition for appellate attorneys’ fees.
For the reasons stated herein, we affirm the order of the administrative law judge
(“ALJ”).
HUNT V. N.C. DEP’T OF PUB. SAFETY
Opinion of the Court
I. Background
In November 2016, petitioner was a career status State employee, working for
DPS as a correctional officer at Scotland Correctional Institution. Petitioner’s unit
manager, Ms. Queen Gerald, requested a meeting with petitioner on
3 November 2016. During the meeting, Ms. Gerald informed him that she was
investigating his alleged absence from work on 18 August 2016. She asked him to
sign paperwork regarding the absence. Petitioner refused, and became upset. He
said he was tired of “this s***” and stated either “I quit” or “I’m quitting” before
walking out of the prison, through the main door. Instead of “swiping out” at the
security checkpoint, petitioner informed the officer-in-charge that he had resigned.
On 9 November 2016, petitioner spoke with the Superintendent at Scotland
Correctional Institution, Ms. Katy Poole, by telephone. Petitioner asked Ms. Poole if
he could return to work. In response, Ms. Poole asked whether petitioner was
rescinding his resignation. Petitioner replied, “Yes.” Ms. Poole informed him that
she had already accepted his resignation, and was unwilling to rescind it based on
“his history of pending investigations and corrective actions[,]” and his behavior on
3 November 2016. That same day, petitioner received a letter confirming he tendered
his resignation on 3 November 2016. Although petitioner attempted to use DPS’s
internal grievance procedure, he was notified that the agency would not process his
grievance because he had resigned from employment.
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Petitioner filed a petition for a contested case hearing in the OAH on
22 February 2017. The matter came on for hearing before ALJ Melissa Owens
Lassiter on 15 June 2017. The ALJ issued a final decision pursuant to N.C. Gen.
Stat. § 150B-34 on 17 August 2017, holding petitioner was terminated without just
cause because petitioner “never submitted a verbal statement of resignation to any
DPS employee authorized to accept it.” Accordingly, the ALJ ordered that petitioner
be reinstated and receive back pay. After the issuance of the final decision, petitioner
filed a petition for attorneys’ fees, which the ALJ granted in an order entered
28 August 2017. The order awarded $11,720.00 in attorneys’ fees and $20.00 in filing
fees. Respondent appealed.
Our Court affirmed the ALJ’s final decision in Hunt v. N.C. Dep’t of Pub. Safety
(“Hunt I”), __ N.C. App. __, 817 S.E.2d 257 (2018). Following the entry of Hunt I in
the OAH, petitioner filed a petition for attorneys’ fees incurred during petitioner’s
appeal. Petitioner argued the OAH had the authority to grant this petition pursuant
to N.C. Gen. Stat. § 126-34.02(e). The OAH granted the petition and awarded
petitioner $14,700.00 in attorneys’ fees.
Respondent appeals.
II. Discussion
Respondent argues the OAH erred by awarding appellate attorneys’ fees
absent statutory authority. Alternatively, respondent argues an award of appellate
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attorneys’ fees was not warranted because the agency had substantial justification to
appeal the underlying order. We disagree with both arguments.
A. Standard of Review
“Chapter 150B, the Administrative Procedure Act, specifically governs the
scope and standard of this Court’s review of an administrative agency’s final
decision.” Harris v. N.C. Dep’t of Pub. Safety, __ N.C. App. __, __, 798 S.E.2d 127,
132, aff’d per curiam, 370 N.C. 386, 808 S.E.2d 142 (2017). Chapter 150B provides:
The court reviewing a final decision may affirm the
decision or remand the case for further proceedings. It may
also reverse or modify the decision if the substantial rights
of the petitioners may have been prejudiced because the
findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional provisions;
(2) In excess of the statutory authority or jurisdiction of the
agency or administrative law judge;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Unsupported by substantial evidence admissible under
G.S. 150B-29(a), 150B-30, or 150B-31 in view of the
entire record as submitted; or
(6) Arbitrary, capricious, or an abuse of discretion.
N.C. Gen. Stat. § 150B-51(b) (2017). “The standard of review is dictated by the
substantive nature of each assignment of error.” Harris, __ N.C. App. at __, 798
S.E.2d at 132 (citing N.C. Gen. Stat. § 150B-51(c)). “[Q]uestions of law receive de
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novo review, whereas fact-intensive issues such as sufficiency of the evidence to
support an agency’s decision are reviewed under the whole-record test.” Id. (citation
and internal quotation marks omitted).
B. Statutory Authority to Award Appellate Attorneys’ Fees
“In 2013, our General Assembly significantly amended and streamlined the
procedure governing state employee grievances and contested case hearings,
applicable to cases commencing on or after 21 August 2013.” Id. at __, 798 S.E.2d at
131. Prior to these amendments, appeal of a final agency decision of the OAH was
controlled by Chapter 150B, which provides:
[a]ny party or person aggrieved by the final decision in a
contested case, and who has exhausted all administrative
remedies made available to the party or person aggrieved
by statute or agency rule, is entitled to judicial review of
the decision under this Article, unless adequate procedure
for judicial review is provided by another statute, in which
case the review shall be under such other statute. . . .
N.C. Gen. Stat. § 150B-43 (2017). Under N.C. Gen. Stat. § 150B-45, appeal of a final
agency decision of the OAH is to the superior court. N.C. Gen. Stat. § 150B-45(a)
(2017).
Prevailing petitioners in personnel cases brought pursuant to Chapter 150B,
prior to the 2013 amendments, were able to recover attorneys’ fees at both the OAH
and the superior court. The OAH had jurisdiction to award attorneys’ fees for the
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attorneys’ work related to the case before the OAH under N.C. Gen. Stat. § 150B-
33(b)(11), which provides:
(b) An administrative law judge may:
....
(11) Order the assessment of reasonable attorneys’ fees . . .
against the State agency involved in contested cases
decided under this Article where the administrative
law judge finds that the State agency named as
respondent has substantially prejudiced the
petitioner’s rights and has acted arbitrarily or
capriciously or under Chapter 126 where the
administrative law judge finds discrimination,
harassment, or orders reinstatement or back pay.
N.C. Gen. Stat. § 150B-33(b)(11) (2017). In contrast, the superior court had
jurisdiction to award attorneys’ fees for the attorneys’ work related to the case before
the superior court, as well as for the fees related to appeals before the Court of
Appeals and the Supreme Court, pursuant to N.C. Gen. Stat. § 6-19.1, which provides:
(a) In any civil action, other than an adjudication for the
purpose of establishing or fixing a rate, or a disciplinary
action by a licensing board, brought by the State or
brought by a party who is contesting State action
pursuant to G.S. 150B-43 or any other appropriate
provisions of law, unless the prevailing party is the
State, the court may, in its discretion, allow the
prevailing party to recover reasonable attorney’s fees,
including attorney’s fees applicable to the
administrative review portion of the case, in contested
cases arising under Article 3 of Chapter 150B, to be
taxed as court costs against the appropriate agency if:
(1) The court finds that the agency acted without
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substantial justification in pressing its claim against
the party; and
(2) The court finds that there are no special
circumstances that would make the award of
attorney’s fees unjust. The party shall petition for
the attorney’s fees within 30 days following final
disposition of the case. The petition shall be
supported by an affidavit setting forth the basis for
the request.
N.C. Gen. Stat. § 6-19.1(a) (2017) (emphasis added).
As part of the 2013 amendments, the General Assembly enacted N.C. Gen.
Stat. § 126-34.02(a) and (e). N.C. Gen. Stat. § 126-34.02(a) provides, in relevant part,
“[a]n aggrieved party in a contested case under this section shall be entitled to judicial
review of a final decision by appeal to the Court of Appeals as provided in G.S. 7A-
29(a).” N.C. Gen. Stat. § 126-34.02(a) (2017). Thus, the superior court no longer
reviews the OAH’s final decisions in State personnel appeals in cases commenced
after 21 August 2013. Instead, final decisions in State personnel actions are now
appealed directly to the Court of Appeals. See Swauger v. Univ. of N. Carolina at
Charlotte, __ N.C. App. __, __, 817 S.E.2d 434, 437 (2018).
Subsection (e) authorizes the OAH to award attorneys’ fees. Specifically, the
subsection states: “The Office of Administrative Hearings may award attorneys’ fees
to an employee where reinstatement or back pay is ordered or where an employee
prevails in a whistleblower grievance. The remedies provided in this subsection in a
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whistleblower appeal shall be the same as those provided in G.S. 126-87.” N.C. Gen.
Stat. § 126-34.02(e).
The ALJ in the instant case determined that N.C. Gen. Stat. § 126-34.02(e)
authorizes the OAH to award attorneys’ fees and costs for both the administrative
and the appellate portions of contested cases. On appeal, respondent argues the ALJ
erred by reaching this conclusion because N.C. Gen. Stat. § 126-34.02(e) does not
grant the OAH the authority to award attorneys’ fees and costs for the appellate
portion of a contested case. We disagree.
“Questions of statutory interpretation are ultimately questions of law for the
courts and are reviewed de novo. The principal goal of statutory construction is to
accomplish the legislative intent.” Wilkie v. City of Boiling Spring Lakes, 370 N.C.
540, 547, 809 S.E.2d 853, 858 (2018) (citation and internal quotation marks omitted).
When construing legislative provisions, this Court looks
first to the plain meaning of the words of the statute itself:
When the language of a statute is clear and without
ambiguity, it is the duty of this Court to give effect to the
plain meaning of the statute, and judicial construction of
legislative intent is not required. However, when the
language of a statute is ambiguous, this Court will
determine the purpose of the statute and the intent of the
legislature in its enactment.
State v. Ward, 364 N.C. 157, 160, 694 S.E.2d 729, 731 (2010) (citation and internal
quotation marks omitted).
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Here, the plain language of N.C. Gen. Stat. § 126-34.02(e) authorizes the OAH
to “award attorneys’ fees to an employee where reinstatement or back pay is ordered
or where an employee prevails in a whistleblower grievance.” N.C. Gen. Stat. § 126-
34.02(e). Significantly, the plain language does not limit the OAH’s authority to
award attorneys’ fees to the administrative portion of a contested case before the
OAH, nor does it prohibit the OAH from awarding attorneys’ fees incurred during
judicial review before this Court or our Supreme Court, taken pursuant to N.C. Gen.
Stat. § 126-34.02(a). Therefore, we do not read these limitations into the statute. We
conclude the OAH has the authority to award attorneys’ fees for both the
administrative portion of a contested case before the OAH, and for the attorneys’ fees
incurred during judicial review of the OAH’s final decision.
The plain language of the second sentence of subsection (e) further evidences
that the statute expands the OAH’s authority to award attorneys’ fees by authorizing
remedies where an employee prevails in the appeal of a whistleblower grievance:
“The remedies provided in this subsection in a whistleblower appeal shall be the same
as those provided in G.S. 126-87.” N.C. Gen. Stat. § 126-34.02(e) (emphasis added).
At the same time the General Assembly enacted this statutory change, it made a
significant contemporaneous change to the whistleblower law, amending N.C. Gen.
Stat. § 126-86 (2013).
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Prior to the 2013 changes, State employees had the discretion to pursue a
whistleblower claim in superior court under N.C. Gen. Stat. § 126-85, or in the OAH
under N.C. Gen. Stat. § 126-34.1, but not in both. Swain v. Elfland, 145 N.C. App.
383, 389, 550 S.E.2d 530, 535 (2001). If the employee brought the action in the OAH,
the employee would not be able to seek recovery of the remedies in N.C. Gen. Stat. §
126-87, which include treble damages and injunctive relief; whereas, the superior
court was authorized, pursuant to N.C. Gen. Stat. § 126-87, to allow the recovery of
these remedies.
However, in 2013, the General Assembly amended the whistleblower statute,
N.C. Gen. Stat. § 126-86. See S.L. 2013-382, § 7.10, eff. Aug. 21, 2013. It now states,
“Any State employee injured by a violation of G.S. 126-85 who is not subject to Article
8 of this Chapter may maintain an action in superior court for damages, an injunction,
or other remedies provided in this Article. . . .” N.C. Gen. Stat. § 126-86 (2017)
(emphasis added). Thus, State employees subject to Article 8 of Chapter 126 now
must pursue a whistleblower claim in the OAH. By simultaneously amending N.C.
Gen. Stat. § 126-86 and enacting N.C. Gen. Stat. § 126-34.02(e), the General
Assembly ensured remedies described by N.C. Gen. Stat. § 126-87 are still available
to these claimants.
These corresponding changes are significant to the case at hand because they
expanded the OAH’s authority to award attorneys’ fees in whistleblower appeals.
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Therefore, because “words and phrases of a statute may not be interpreted out of
context, but must be interpreted as a composite whole so as to harmonize with other
statutory provisions and effectuate legislative intent, while avoiding absurd or
illogical interpretations,” it is clear the General Assembly authorized the OAH to
award attorneys’ fees not only for fees incurred during whistleblower appeals, but
also for fees incurred during appeals of contested cases where reinstatement or back
pay is ordered. Fort v. Cty. of Cumberland, 218 N.C. App. 401, 407, 721 S.E.2d 350,
355 (2012) (citations and internal quotation marks omitted).
To determine otherwise, and accept respondent’s argument on appeal that
N.C. Gen. Stat. § 126-34.02(e) does not authorize the OAH to award attorneys’ fees
for fees incurred during appeals of contested cases where reinstatement or back pay
is ordered, and only authorizes the OAH to award attorneys’ fees for the
administrative portion of a contested case, would interpret the law in a way that
renders the General Assembly’s actions meaningless The OAH already had the
authority to award attorneys’ fees for the administrative portion of a contested case
pursuant to N.C. Gen. Stat. § 150B-33, so N.C. Gen. Stat. § 126-34.02(e) would have
no effect on the law if read in accord with respondent’s argument. We decline to read
the statute in this way, as our Court “presume[s] that no part of a statute is mere
surplusage, but that each provision adds something not otherwise included therein.”
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Fort, 218 N.C. App. at 407, 721 S.E.2d at 355 (citation and internal quotation marks
omitted).
Furthermore, to agree with respondent that subsection (e) of N.C. Gen. Stat. §
126-34.02 does not allow a method of recovering fees for the appellate portion of
contested cases would mean the General Assembly intended that State employees
who successfully defended appeals against State agencies would have no method of
recovering attorneys’ fees incurred on appeal. This interpretation would harm the
fair administration of justice, as it would drastically impair an employee’s ability to
contest State action in appellate courts.
Therefore, we hold N.C. Gen. Stat. § 126-34.02(e) authorizes the OAH to award
attorneys’ fees for the appellate or judicial review portion of a contested case.
Respondent’s argument is without merit.
C. Award of Attorneys’ Fees
We now turn to respondent’s alternative argument that attorneys’ fees were
not warranted. Respondent contends the attorneys’ fees were not warranted because:
(1) Chapter 126 did not grant the OAH the authority to award appellate fees, so it
does not provide an analytical framework for such an award; and (2) even assuming
arguendo it is appropriate for the OAH to evaluate the propriety of appellate
attorneys’ fees under N.C. Gen. Stat. § 6-19.1, the agency had substantial justification
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Opinion of the Court
to appeal the OAH’s order reinstating petitioner and awarding back pay in the instant
case.
We disagree. As discussed supra, N.C. Gen. Stat. § 126-34.02(e) authorizes the
OAH to award attorneys’ fees for the appellate or judicial review portion of a
contested case. Additionally, the ALJ’s order awarding attorneys’ fees was not made
pursuant to N.C. Gen. Stat. § 6-19.1. Rather, it was made pursuant to N.C. Gen.
Stat. § 126-34.02(e). Therefore, respondent’s argument is without merit.
Although not raised by respondent as an issue on appeal, and therefore waived,
we find it pertinent to address the standard the ALJ utilized to determine reasonable
attorneys’ fees in this case. The ALJ applied the twelve “Johnson factors” set forth
in Johnson v. Georgia Highway Exp. Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), which
was adopted by the Fourth Circuit. Grissom v. The Mills Corp., 549 F.3d 313, 321
(4th Cir. 2008). These factors have been summarized by the Fourth Circuit as:
(1) the time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill required to
properly perform the legal services rendered; (4) the
attorney’s opportunity costs in pressing the instant
litigation; (5) the customary fee for like work; (6) the
attorney’s expectations at the outset of the litigation; (7)
the time limitations imposed by the client or
circumstances; (8) the amount in controversy and the
results obtained; (9) the experience, reputation and ability
of the attorney; (10) the undesirability of the case within
the legal community in which the suit arose; (11) the
nature and length of the professional relationship between
attorney and client; and (12) attorneys’ fees awards in
similar cases.
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Id. (citation and internal quotation marks omitted).
North Carolina courts do not use these factors to determine reasonable
attorneys’ fees. Instead, it is well-established that the correct standard is as follows:
A court’s decision to grant attorneys’ fees is discretionary. Stilwell v. Gust, 148 N.C.
App. 128, 130, 557 S.E.2d 627, 629 (2001). However, if attorneys’ fees are awarded,
the court “must make findings of fact to support the award. These findings must
include the time and labor expended, the skill required, the customary fee for like
work, and the experience or ability of the attorney.” Id. at 131, 557 S.E.2d at 629
(citations and internal quotation marks omitted). Although these findings are
contemplated by the Johnson factors, our State has not adopted the Johnson
framework. Therefore, the ALJ should not have applied Johnson to determine the
reasonable attorneys’ fees in this case. Nevertheless, respondent did not raise this
argument on appeal, and it is waived.
III. Conclusion
For the foregoing reasons, we affirm the ALJ’s order allowing petitioner’s
petition for appellate attorneys’ fees.
AFFIRMED.
Chief Judge MCGEE and Judge ZACHARY concur.
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