IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA16-869
Filed: 20 June 2017
Wake County, No. 14 CVS 12481
DR. EDWARD E. FULLER, SR., Plaintiff,
v.
WAKE COUNTY, a Body Politic and Corporate, Defendant.
Appeal by plaintiff from order entered 24 March 2016 by Judge A. Graham
Shirley in Wake County Superior Court. Heard in the Court of Appeals 8 February
2017.
Hicks McDonald Noecker LLP, by David W. McDonald and William E.
Mitchell, for plaintiff-appellant.
Office of the Wake County Attorney, by Senior Deputy Wake County Attorney
Roger A. Askew, Senior Assistant County Attorney Jennifer Jones, and Senior
Assistant County Attorney Allison Pope Cooper, for defendant-appellee.
ELMORE, Judge.
This governmental immunity case concerns whether a county can face liability
for making discretionary decisions relating to the manner by which it meets its
statutorily delegated responsibilities to ensure its citizens are provided emergency
medical services (EMS) and to regulate EMS within its jurisdiction.
Plaintiff Edward Fuller, Sr. served as volunteer treasurer of Six Forks Rescue
Squad, Inc. (Six Forks), a non-profit EMS provider franchised by Defendant Wake
FULLER V. WAKE CNTY.
Opinion of the Court
County to provide EMS within a certain district as part of its county-wide EMS
system. Six Forks was required by its franchise agreement to undergo annual audits
and to submit those reports to Wake County. In 2011, Wake County discovered that
Six Forks had submitted a fraudulent audit report for fiscal year 2009 (FY2009). This
discovery prompted the board of directors of Six Forks (Six Forks Board) to resolve to
immediately cease Six Forks’s EMS operations and temporarily transfer its
emergency vehicles and medical supplies to Wake County; Wake County EMS and
other contract providers assumed operational control of EMS delivery within Six
Forks’s district to ensure seamless provision of EMS to Wake County citizens.
Subsequently, the Six Forks Board voted to voluntarily dissolve Six Forks and
transfer eight ambulances and two trucks to Wake County, which accepted the
vehicles into its county-wide EMS system. Wake County has assumed operational
control of Six Forks’s service district ever since.
The discovery of Six Forks’s fraudulent FY2009 audit report also triggered a
criminal investigation by the Raleigh Police Department (RPD), requested in part by
the Internal Audit Director of Wake County. The investigation revealed questionable
charges to Six Forks’s business banking accounts, which were solely managed by its
treasurer, Fuller, and its bookkeeper, Jill Cafolla. As a result, Fuller was charged
with and arrested for allegedly embezzling $10,000.00 from Six Forks.
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After Fuller’s embezzlement charge was dismissed, he sued Wake County and
ten fictitious defendants, alleging they falsely and maliciously accused him of
embezzlement in order to trigger a publicized criminal investigation into Six Forks
as a pretext to force an involuntary takeover. Fuller alleged that engineering such a
hostile takeover served Wake County’s alleged long-term stated goal to consolidate
independent EMS providers into its county-wide EMS system. In response, Wake
County raised the complete defense of governmental immunity and moved to dismiss
Fuller’s claims. After a hearing, the trial court entered an order dismissing Fuller’s
claims as to the fictitious defendants on grounds that they were barred by the statute
of limitations. Wake County later moved for summary judgment on grounds of
governmental immunity. After a hearing, the trial court entered an order awarding
Wake County summary judgment, thereby dismissing Fuller’s claims with prejudice.
On appeal, Fuller argues that (1) Wake County’s actions were proprietary and,
therefore, unshielded by governmental immunity; and (2) Wake County waived any
immunity it might enjoy. Fuller also argues that (3) Wake County is liable to him as
a transferee of Six Forks’s assets under statutory and common law successor-liability
theories. After careful review, we affirm the trial court’s order.
I. Background
Since 1976, Wake County has issued Six Forks annual franchises to provide
EMS to its citizens within a certain district as part of its county-wide EMS system.
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The franchise agreement required Six Forks to engage in annual audits and to submit
those reports to the Wake County’s Director of Budget and Management Services,
Finance Officer, and EMS Director, no later than 1 October of each succeeding fiscal
year.
In 2009, Fuller was elected by the Six Forks Board to serve as Six Forks’s
treasurer. In 2010, Wake County officials discovered that it did not have a budget
from Six Forks or a copy of Six Forks’s FY2009 audit report. At Wake County EMS
Medical Director Brent Myers’s request, around 16 June 2010, Cafolla sent a FY2009
audit report to Chief of Six Forks Daniel Cline, who then forwarded it to Wake County
officials. In February 2011, Wake County was alerted that Six Forks failed to submit
its FY2010 audit report and, after several unanswered requests, discovered that
Fuller had failed to secure an auditor for FY2010.
In March 2011, Wake County Internal Audit Director John Stephenson met
with Myers, Cline, and Fuller, to review Six Forks’s cash projection in order to ensure
its payroll and bill obligations would be met. During the meeting, Stephenson closely
reviewed the FY2009 audit and opined that it reported a $65,000.00 profit but should
have shown a $2,000.00 loss and contained a potentially fraudulent signature. Six
Forks’s FY2009 audit was then forwarded to and investigated by the North Carolina
State Board of Certified Public Accountant Examiners, which confirmed the
signature had been forged. In late April 2011, Stephenson alerted Fuller and Six
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Forks the FY2009 audit was a fake. On 1 May 2011, at President of Six Forks Ed
Bottum’s request, Fuller resigned as its treasurer.
On 2 May 2011, the Six Forks Board called an emergency meeting and resolved
immediately to cease its EMS operations and to transfer its eight ambulances, two
trucks, and medical supplies to Wake County for the next 30 days in order “to
maintain seamless emergency medical care to the citizens of Wake County.” Wake
County EMS and a few other contract providers assumed operational coverage of Six
Forks’s service district and, around 21 June 2011, Six Forks and Wake County
executed an asset transfer agreement to effectuate the transfer of Six Forks’s
emergency vehicles to Wake County. According to the agreement, Wake County
accepted the vehicles, valued at $348,450.00, for $1 of consideration.
On 3 May 2011, according to police reports, Cline called the RPD and reported
that Cafolla had submitted the fraudulent FY2009 audit, causing Six Forks to
disband. Soon after, Stephenson also reported the fraudulent FY2009 audit to the
RPD and provided further information about the events leading up to its discovery.
Noting Stephenson’s request that Wake County would like the case investigated, the
RPD commenced an investigation into the allegations of fraud at Six Forks revealing
multiple non-business related expenses charged to Six Forks’s business banking
account at Coastal Federal Credit Union (CFCU), an account solely controlled and
managed by Fuller and Cafolla. The expenses included two $5,000.00 checks written
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in early 2011 for undocumented purposes and charges totaling $9,825.36 to a debit
card linked to Six Forks’s business banking account at CFCU in 2009.
On 6 May 2011, as part of its investigation, RPD detectives met with
Stephenson, who provided additional information about the incidents leading up to
the discovery of the FY2009 audit, a binder of recorded expenses and box of financial
information recovered from the Six Forks station, as well as copies of Six Forks’s
meeting minutes. According to police reports, the minutes from 12 October 2009
indicated that Fuller explained to the Six Forks Board that the $9,825.36 of charges
to Six Forks’s CFCU business account arose because the debit card was mistakenly
linked to his son’s personal CFCU banking account. Fuller explained that his son,
Edward Fuller, Jr., believed the debit card was his and mistakenly incurred the
charges to Six Forks’s CFCU account. Stephenson told RPD he requested Six Forks’s
banking statements from CFCU and Wachovia but was only given limited
information. RPD resolved to obtain search warrants to collect this information.
On 13 June 2011, an RPD investigating officer contacted a representative at
CFCU to gather Six Forks’s banking information and inquired as to whether Fuller’s
explanation of the debit card mix-up was possible. The CFCU representative opined
that it was not and that the $9,825.36 had not been repaid into the account. RPD
later discovered that, immediately before the debit card transactions started in May
2009, Fuller transferred $10,000.00 from the Six Forks CFCU business commercial
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checking account into a business basic checking account. Fuller deposited $9,242.14
from his personal CFCU banking account into the business basic checking account on
10 November 2009. RPD also discovered several miscellaneous withdrawals from
and deposits to the Six Forks Wachovia and CFCU banking accounts by Cafolla.
Between Fuller and Cafolla nearly $90,000.00 of unapproved transactions were
identified. Subsequently, after conferring with an on-call assistant district attorney
of the Wake County District Attorney’s Office, RPD determined that Fuller and
Cafolla should be charged with embezzlement.
On 24 July 2011, the Six Forks Board adopted a plan of Six Forks’s dissolution
and a distribution of its assets. On 22 September 2011, RPD arrested Fuller for
allegedly embezzling $10,000.00 from Six Forks. On 10 October 2011, Six Forks
delivered a victim impact statement to Wake County, stating that Fuller and Cafolla’s
actions caused its dissolution. According to Fuller, his charge and arrest were
publicized by local news media, thereby causing him to be terminated from his long-
time employment as Director of the Master of Business Administration program at
Pfeiffer University. On some date unclear from the record, Fuller’s embezzlement
charge was dismissed.
On 17 September 2014, Fuller filed a complaint against Wake County and ten
fictitious John Does, alleging they had falsely accused him of embezzlement in order
to trigger a publicized criminal investigation indicating Six Forks had engaged in
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financial mismanagement as a pretext for compelling an involuntary takeover of Six
Forks. In his complaint, Fuller alleged that, as early as 2007, Wake County expressed
its long-term goal to take over independent EMS if “there is mismanagement of
money internally or poor patient care” and to consolidate EMS delivery to its citizens.
Fuller further alleged that in 2009, after discovering the debit card mix-up, he fully
disclosed the situation to the Six Forks Board and reimbursed Six Forks the charges
his son mistakenly accumulated on the Six Forks CFCU business banking account.
Nonetheless, Fuller contended, Wake County falsely and maliciously accused him of
embezzlement, citing the debit card incident, and indicated that Fuller was living
with Cafolla, in order to initiate a publicized criminal investigation indicating Six
Forks had engaged in financial mismanagement as a means to force an involuntary
take over Six Forks.
In his 17 September 2014 complaint, Fuller advanced six tort claims against
Wake County and the ten John Does: (1) malicious prosecution, (2) abuse of process,
(3) false arrest, (4) false imprisonment, (5) intentional infliction of severe emotional
distress, and (6) respondeat superior, seeking monetary damages from those
defendants. On 19 March 2015, Wake County filed its answer, asserting Fuller’s
claims were barred by governmental immunity and the statute of limitations and
filed a motion to dismiss Fuller’s claims. After a hearing on Wake County’s dismissal
motion, the trial court entered a 13 July 2015 order dismissing the claims against the
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ten fictitious defendants on grounds that Fuller’s claims were barred by statutes of
limitation. On 23 November 2015, Wake County filed a motion for summary
judgment, reasserting that Fuller’s claims against it were barred by governmental
immunity.
On 9 March 2016, Fuller filed a “notice of claim against assets” against Wake
County under Chapter 55A of the North Carolina General Statutes (the North
Carolina Nonprofit Corporation Act), alleging violations of N.C. Gen. Stat. § 55A-14-
08 (“Unknown and certain other claims against dissolved corporation”) by failing to
notify Fuller of Six Forks’s dissolution before transferring its assets essentially debt-
free to Wake County.
On 15 March 2016, the trial court held a hearing on Wake County’s summary
judgment motion. Wake County argued it was shielded by governmental immunity
from Fuller’s claims because the provision of EMS is a governmental function, and it
assumed operational control of EMS within Six Forks’s service district in order to
satisfy its statutory obligation to ensure its citizens are provided with EMS. Wake
County also presented evidence establishing that, although it had purchased a public
entity excess liability insurance policy, it did not waive its immunity with respect to
Fuller’s claims.
On 24 March 2016, the trial court entered an order awarding Wake County
summary judgment and dismissing Fuller’s case with prejudice. Fuller appeals.
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II. Analysis
On appeal, Fuller argues the court erred by awarding Wake County summary
judgment because Wake County (1) was engaged in a proprietary activity unshielded
by governmental immunity and (2) waived any applicable governmental immunity
by entering into the asset transfer agreement with Six Forks and by requiring under
the franchise agreement that Six Forks purchase liability insurance and name Wake
County as an insured on the policy. Fuller also argues the trial court erred because
(3) Wake County was liable to him as a transferee of Six Forks’s assets under
statutory and common law successor-liability theories.
A. Standard of Review
This Court reviews de novo an order granting summary judgment. In re Will
of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citing Forbis v. Neal, 361
N.C. 519, 523–24, 649 S.E.2d 382, 385 (2007)). “Summary judgment is appropriate
when ‘the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that any party is entitled to a judgment as a matter of law.’ ” Dawes
v. Nash Cnty., 357 N.C. 442, 444, 584 S.E.2d 760, 762 (2003) (quoting N.C. Gen. Stat.
§ 1A-1, Rule 56(c)). A party is entitled to judgment as a matter of law “whenever the
movant establishes a complete defense to the [plaintiff’s] claim.’ ” Estate of Earley ex
rel. Earley v. Haywood Cnty. Dep’t of Soc. Servs., 204 N.C. App. 338, 340, 694 S.E.2d
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405, 407 (2010) (reversing summary judgment on governmental immunity grounds)
(quoting Overcash v. Statesville City Bd. of Educ., 83 N.C. App. 21, 26, 348 S.E.2d
524, 528 (1986) (affirming summary judgment on governmental immunity grounds)).
Governmental immunity is a “complete defense.” Craig ex rel. Craig v. New Hanover
Cnty. Bd. of Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (noting that
governmental “immunity is more than a mere affirmative defense, as it shields a
defendant entirely from having to answer for its conduct at all in a civil suit for
damages” (citing Mitchell v. Forsyth, 472 U.S. 511, 525 (1985)).
B. Governmental Immunity
“Under the doctrine of governmental immunity, a county . . . ‘ “is immune from
suit for the negligence of its employees in the exercise of governmental functions
absent waiver of immunity.” ’ ” Estate of Williams ex rel. Overton v. Pasquotank Cnty.
Parks & Recreation Dep’t, 366 N.C. 195, 198, 732 S.E.2d 137, 140 (2012) (quoting
Meyer v. Walls, 347 N.C. 97, 104, 489 S.E.2d 880, 884 (1997), quoted in Evans ex rel.
Hornton v. Hous. Auth. of City of Raleigh, 359 N.C. 50, 53, 602 S.E.2d 668, 670 (2004)).
A county is also generally immune from suit for intentional torts of its employees in
the exercise of governmental functions. See Edwards v. Akion, 52 N.C. App. 668, 691,
279 S.E.2d 894, 896, aff’d per curiam, 304 N.C. 585, 586, 284 S.E.2d 518, 518 (1981).
“Immunity applies to acts committed pursuant to governmental functions but not
proprietary functions.” Bynum v. Wilson Cnty., 367 N.C. 355, 358, 758 S.E.2d 643,
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646 (2014) (citing Estate of Williams, 366 N.C. at 199, 732 S.E.2d at 141).
Governmental functions comprise county activity “ ‘which is discretionary, political,
legislative, or public in nature and performed for the public good [on] behalf of the
State rather than for itself . . . .’ ” Id. (quoting Britt v. City of Wilmington, 236 N.C.
446, 450, 73 S.E.2d 289, 293 (1952)). Proprietary functions comprise county activity
which is “ ‘commercial or chiefly for the private advantage of the compact
community . . . .’ ” Id. Whether a county enjoys governmental immunity “turns on
whether the alleged tortious conduct of the county . . . arose from an activity that was
governmental or proprietary in nature.” Estate of Williams, 366 N.C. at 199, 732
S.E.2d at 141.
Here, the parties dispute the relevant activity for purposes of determining
governmental immunity. Fuller contends Wake County’s “hostile, commercial
acquisition of the assets of an ongoing profitable business in an effort to expand an
existing business operated by Wake County” constitutes the relevant activity. Wake
County contends its operation of EMS and ambulance service constitutes the relevant
activity. The alleged tortious conduct of Wake County—fabricating false
embezzlement charges against Fuller in order to trigger a publicized criminal
investigation as a pretext for forcing an involuntary takeover of Six Forks—can be
separated into two distinct categories: (1) Fuller’s criminal investigation, i.e., Wake
County Internal Audit Director John Stephenson providing information to the RPD
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regarding the FY2009 fraudulent audit and requesting that RPD investigate
potential fraud at Six Forks; and (2) Wake County’s consolidation of Six Forks into
its county-wide EMS system, i.e., Wake County accepting Six Forks’s EMS vehicles
and directing Wake County EMS and other contract providers to assume operational
control of Six Forks’s service district. Because there are no individual-capacity claims
against Stephenson or any other Wake County official or employee, only the latter
category is properly under consideration. The relevant inquiry, then, is whether
these county activities arose out of a function that was governmental or proprietary.
Acknowledging “the distinction may be difficult” our Supreme Court in Estate
of Williams “set forth a three-step inquiry for determining whether an activity is
governmental or proprietary in nature.” Bynum, 367 N.C. at 358, 758 S.E.2d at 646
(citing Estate of Williams, 366 N.C. at 200–01, 732 S.E.2d at 141–42). “[T]he
threshold inquiry . . . is whether, and to what degree, the legislature has addressed
the issue.” Estate of Williams, 366 N.C. at 200, 732 S.E.2d at 141–42. “[T]hat the
legislature has designated [certain county] responsibilities as governmental is
dispositive” of the issue of whether county activity arising from executing statutorily
delegated responsibilities is immune from suit. Bynum, 367 N.C. at 360, 758 S.E.2d
at 647 (construing Estate of Williams and holding that county’s supervision,
maintenance, and responsibility of county buildings were activities arising from a
governmental function, since the General Assembly delegated that authority to
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county and, therefore, county was immune from alleged negligence in failing to
maintain its building); see also Bellows v. Asheville City Bd. of Educ., ___ N.C. App.
___, ___, 777 S.E.2d 522, 524 (2015) (relying on Bynum to hold that statutory
delegation of authority to local board to maintain its school grounds dispositively
established activity arising therefrom was governmental and, therefore, board was
immune from tort liability arising from allegedly unsafe conditions on school
grounds), disc. rev. denied, 368 N.C. 684, 781 S.E.2d 482 (2016). In reaching its
holding, the Bynum Court cited to N.C. Gen. Stat. § 153A-169 (2013) (“The board of
commissioners shall supervise the maintenance, repair, and use of all county
property.” (emphasis added)), and to N.C. Gen. Stat. §§ 153A-351, -352 (2013), which
it interpreted as “requiring counties to perform duties and responsibilities associated
with enforcing State and local laws and ordinances relating to, inter alia, construction
and maintenance of buildings.” Bynum, 367 N.C. at 360, 758 S.E.2d at 647.
Here, the General Assembly has assigned Wake County the responsibilities of
ensuring its citizens are provided with EMS and of regulating EMS delivery within
its jurisdiction, functions which can only be performed by Wake County. See N.C.
Gen. Stat. § 143-517 (2015) (“Each county shall ensure that emergency medical
services are provided to its citizens.” (emphasis added)); see also N.C. Gen. Stat. §
153A-250 (2015) (permitting counties to operate EMS or to franchise EMS within its
jurisdiction, and granting counties broad powers to regulate EMS delivery). Wake
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County’s decision that Wake County EMS and other contract providers assume
operational control of Six Forks after its board resolved to cease its EMS operations,
and Wake County’s subsequent decision to accept the transfer of Six Forks’s EMS
vehicles for use by Wake County EMS after Six Forks’s voluntary dissolution, were
discretionary decisions satisfying Wake County’s statutorily delegated responsibility
to ensure its citizens are provided with EMS and to regulate those EMS within its
jurisdiction. Applying Bynum, “that the legislature has designated these
responsibilities as governmental is dispositive.” 367 N.C. at 360, 758 S.E.2d at 647.
Assuming arguendo we needed to consider the next step in Estate of Williams,
that the activities arose from functions that can only be performed by Wake County—
ensuring its citizens are provided with EMS and regulating the manner by which
those EMS are furnished—establishes that the activities are governmental. See
Estate of Williams, 366 N.C. at 202, 732 S.E.2d at 142 (“[An] activity is necessarily
governmental in nature when it can only be provided by a governmental agency or
instrumentality.”).
Accordingly, because Wake County’s alleged tortious conduct of engineering an
involuntary takeover of Six Forks arose from its statutorily delegated responsibilities
to ensure its citizens EMS and to regulate EMS within its jurisdiction, governmental
functions which can only be performed by Wake County, we hold that Wake County
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satisfied its burden of establishing that its governmental immunity barred Fuller’s
tort claims arising therefrom.
C. Waiver
Fuller next contends that Wake County waived its immunity by entering into
the asset transfer agreement with Six Forks and by requiring Six Forks as part of the
franchise agreement to purchase liability insurance and to designate Wake County
as an insured on the policy. We disagree.
Generally, a county may waive its governmental immunity by (1) engaging in
a proprietary activity; (2) entering into a valid contract, thereby consenting to be
sued; or (3) purchasing liability insurance, but only to the extent of coverage. See,
e.g., Howard v. Cnty. of Durham, 227 N.C. App. 46, 49, 748 S.E.2d 1, 3 (2013)
(recognizing that counties may waive immunity by entering into a contract); see also
N.C. Gen. Stat. § 153A-435(a) (2015) (authorizing counties to waive immunity by
purchasing insurance).
Initially, we note that Wake County had purchased two nearly identical public
entity excess liability insurance policies spanning two policy periods and satisfied its
burden at the summary judgment hearing to establish these policies did not waive its
immunity as to Fuller’s claims. We have repeatedly held that virtually identical
language contained within the governmental immunity endorsement of Wake
County’s liability policies do not waive immunity for claims barred by governmental
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immunity. See, e.g., Bullard v. Wake Cnty., 221 N.C. App. 522, 527–28, 729 S.E.2d
686, 690 (holding county did not waive immunity through purchasing policy
containing exact endorsement here), disc. rev. denied, 366 N.C. 409, 735 S.E.2d 184
(2012).
As to his first argument, Fuller appears to assert a contract theory of waiver,
by which a county entering into a valid contract “ ‘implicitly consents to be sued for
damages on the contract in the event it breaches the contract.’ ” AGI Assocs. v. City
of Hickory, N.C., 773 F.3d 576, 579 (4th Cir. 2014) (alteration omitted) (quoting Smith
v. State, 289 N.C. 303, 320, 222 S.E.2d 412, 424 (1976)). Yet Fuller never properly
pled a breach of contract claim against Wake County, and neither presented evidence
that Wake County breached that contract, nor, importantly, that Fuller was a party
thereto. See Howard, 227 N.C. App. at 50, 748 S.E.2d at 3 (concluding that, to show
a county waived immunity under contract theory of waiver, the plaintiff must
properly plead a valid contract between the plaintiff and the county). Additionally,
we note that Fuller has failed to cite any legal authority to support his theory that
Wake County waived its immunity by entering into the asset transfer agreement with
Six Forks. See Moss Creek Homeowners Ass’n v. Bissette, 202 N.C. App. 222, 233, 689
S.E.2d 180, 187 (2010) (“[I]t is the duty of appellate counsel to provide sufficient legal
authority to this Court, and failure to do so will result in dismissal. N.C. R. App. P.
28(b)(6). Thus, because the [appellants] have failed to cite any legal authority
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whatsoever in support of their argument . . . , we conclude this issue does not warrant
appellate review.” (citing Pritchett & Burch, PLLC v. Boyd, 169 N.C. App. 118, 609
S.E.2d 439, 443, disc. rev. dismissed, 359 N.C. 635, 616 S.E.2d 543 (2005); Hatcher v.
Harrah’s N.C. Casino Co., 169 N.C. App. 151, 159, 610 S.E.2d 210, 214–15 (2005)).
Accordingly, we overrule this argument.
As to his second argument, Fuller has failed to cite any relevant legal authority
to support his contention that the franchise agreement between Wake County and
Six Forks, which required Six Forks to purchase general liability insurance and to
name Wake County as an insured, constituted waiver. Nonetheless, Fuller appears
to be asserting a purchase of liability insurance waiver theory.
“The State and its governmental units cannot be deprived of the sovereign
attributes of immunity except by a plain, unmistakable mandate of the [General
Assembly].” Irving v. Charlotte-Mecklenburg Bd. of Educ., 368 N.C. 609, 611, 781
S.E.2d 282, 284 (2016) (quoting Orange Cnty. v. Heath, 282 N.C. 292, 296, 192 S.E.2d
308, 310 (1972)). “In the absence of statutory authority a municipality has no power
to waive its governmental immunity.” Heath, 282 N.C. at 294, 192 S.E.2d at 310
(citing Stephenson v. City of Raleigh, 232 N.C. 42, 47, 59 S.E.2d 195, 199 (1950)). A
statute operating to waive governmental immunity “must not only be strictly
construed, but also be given its plain meaning and enforced as written, so long as its
language is clear and unambiguous.” Irving, 368 N.C. at 615, 781 S.E.2d at 286
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(citations omitted). Relevant here, N.C. Gen. Stat. §153A-435(a) authorizes a county
to waive its immunity and provides in pertinent part: “Purchase of insurance
pursuant to this subsection waives the county’s governmental immunity, to the
extent of insurance coverage, for any act or omission occurring in the exercise of a
governmental function.” (Emphasis added.)
Although Six Forks’s liability insurance policy neither was presented to the
trial court nor included in the appellate record, the franchise agreement requiring
the policy makes clear that such a policy was purchased, if at all, by Six Forks, and
not by Wake County. Additionally, we note the franchise agreement explicitly
provided: “Nothing in this [indemnification] provision is intended to affect or
abrogate [Wake] County’s governmental immunity . . . .” Strictly construing the plain
language of N.C. Gen. Stat. § 153A-435’s immunity waiver to apply to insurance
policies actually purchased by the county, we hold that Fuller failed to establish a
genuine issue of material fact that Wake County waived its immunity in this respect.
Because Fuller presented no genuine issue of material fact that Wake County
waived its immunity by entering into the asset transfer agreement or by requiring
Six Forks to purchase liability insurance and to name Wake County as an insured,
the trial court properly awarded Wake County summary judgment.
D. Successor Liability
Fuller next contends that Wake County is liable to him as a transferee of Six
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Forks’s assets under two distinct successor-liability theories: that Wake County is
statutorily liable under the North Carolina Nonprofit Corporation Act and liable
under common law as survivor of a de facto merger with Six Forks.
Although Fuller’s 17 September 2014 complaint advanced six tort claims
against Wake County, on 9 March 2016, Fuller attempted to advance a Chapter 55A
claim against Wake County under section 55A-14-08 of the North Carolina Nonprofit
Corporation Act, merely six days before the hearing on Wake County’s summary
judgment motion on immunity grounds. During this hearing, Fuller argued his
statutory and common law theories of successor liability. Subsequently, the trial
court entered its order awarding Wake County summary judgment and dismissing
Fuller’s case with prejudice.
In his underlying complaint, Fuller never advanced a claim against Six Forks
pursuant to which a common law theory of successor liability might attach to Wake
County. See, e.g., Bailey v. Handee Hugo’s, Inc., 173 N.C. App. 723, 727–28, 620
S.E.2d 312, 316 (2005) (“Necessary parties must be joined in an action.” (citing
Crosrol Carding Devs., Inc. v. Gunter & Cooke, Inc., 12 N.C. App. 448, 451, 183 S.E.2d
834, 837 (1971)). Fuller never filed a motion to amend his complaint to include any
successor-liability claim. See N.C. Gen. Stat. § 1A-1, Rule 15 (2015) (mandating that
after responsive pleadings have been filed, “a party may amend his pleading only by
leave of court or by written consent of the adverse party” (emphasis added)); see also
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FULLER V. WAKE CNTY.
Opinion of the Court
Wells v. Cumberland Cnty. Hosp. Sys., Inc., 150 N.C. App. 584, 589, 564 S.E.2d 74,
78 (2002) (“ ‘A party is bound by his pleadings and, unless withdrawn, amended, or
otherwise altered, the allegations contained in all pleadings ordinarily are conclusive
as against the pleader.’ ” (quoting Davis v. Rigsby, 261 N.C. 684, 686, 136 S.E.2d 33,
34 (1964)). Nor did Fuller move the court to order a separate trial of any non-tort
claim. See N.C. Gen. Stat. § 1A-1, Rule 42(b)(1) (2015) (“The court may in furtherance
of convenience or to avoid prejudice . . . upon timely motion order a separate trial of
any claim . . . , or of any separate issue . . . .” (emphasis added)).
Although Fuller attempted to advance a statutory successor-liability claim by
filing a “notice of claim against assets” against Wake County just six days before the
summary judgment hearing, Fuller’s underlying complaint contained no causes of
action pertaining to these assets, made no mention of those assets, and did not
purport to be an action filed under Chapter 55A. See Lawyers Title Ins. Corp. v.
Langdon, 91 N.C. App. 382, 387, 371 S.E.2d 727, 731 (1988) (“[A party] cannot seek
a monetary judgment against two corporate defendants in his original complaint,
then amend the complaint to include an action to enforce a lien against individuals,
non-parties to the original complaint, whose property interest had never been a
subject of the suit.”). Further, Fuller failed to cite any case law supporting his
position that Wake County can face liability under Chapter 55A as a transferee of Six
Forks’s assets, nor have any cases been disclosed by our research.
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FULLER V. WAKE CNTY.
Opinion of the Court
Accordingly, because Fuller never properly pled these two successor-liability
claims below, we decline to address the merits of these arguments.
III. Conclusion
Because the alleged tortious conduct of Wake County arose from its statutory
obligations to ensure its citizens are provided EMS and to regulate EMS within its
jurisdiction, both of which are governmental functions, Wake County established that
it was entitled to summary judgment as a matter of law, and Fuller raised no genuine
issue of material fact that Wake County was acting in a proprietary manner. Wake
County established that it had not waived its immunity, and Fuller presented no
genuine issue of material fact to the contrary. Finally, because Fuller failed to plead
properly his successor-liability claims below, we decline to address these arguments
on appeal. Accordingly, we affirm the trial court’s order.
AFFIRMED.
Judges DILLON and ZACHARY concur.
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