IN THE SUPREME COURT OF NORTH CAROLINA
No. 255A16
Filed 18 August 2017
DAVID WRAY
v.
CITY OF GREENSBORO
Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of
the Court of Appeals, ___ N.C. App. ___, 787 S.E.2d 433 (2016), reversing an order
entered on 13 May 2015 by Judge James C. Spencer, Jr. in Superior Court, Guilford
County, and remanding the case for further proceedings. Heard in the Supreme
Court on 9 May 2017 in session in the Old Chowan County Courthouse (1767) in the
Town of Edenton pursuant to N.C.G.S. § 7A-10(a).
Carruthers & Roth, P.A., by Kenneth R. Keller and Mark K. York, for plaintiff-
appellee.
Mullins Duncan Harrell & Russell PLLC, by Alan W. Duncan and Stephen M.
Russell, Jr.; and Smith Moore Leatherwood LLP, by Patrick M. Kane, for
defendant-appellant.
Wilson & Helms LLP, by Lorin J. Lapidus; and Kimberly S. Hibbard, General
Counsel, and Gregory F. Schwitzgebel, III, Associate General Counsel, for North
Carolina League of Municipalities, amicus curiae.
HUDSON, Justice.
This case involves attempts by plaintiff, David Wray, a former Chief of Police
for defendant, the City of Greensboro, to obtain reimbursement from the City for costs
WRAY V. CITY OF GREENSBORO
Opinion of the Court
incurred by plaintiff in defending lawsuits brought against him for events that
occurred during his tenure as Chief of Police. Because we conclude that plaintiff has
sufficiently pleaded waiver of governmental immunity by alleging the essence of a
contract claim, we affirm the decision of the Court of Appeals reversing the trial
court’s order of dismissal and remanding the matter for further proceedings.
On 2 January 2009, plaintiff filed a complaint in the Superior Court in Guilford
County, seeking, inter alia, a judgment declaring that he is entitled to
indemnification and reimbursement from the City for all legal expenses incurred by
him in connection with two lawsuits naming him as a defendant. In his complaint
plaintiff stated that he began employment with defendant as a police officer in March
1981 and rose through the ranks to be named Chief of Police in July 2003. According
to plaintiff, he was told that he “would need to take appropriate steps to restore the
integrity and high standards” of the police department that had deteriorated under
his predecessor. Plaintiff instituted measures that were unpopular with some
officers, and he was ultimately forced to resign from his position in January 2006.
In 2007 and 2008, respectively, two police officers sued plaintiff and other
individuals, as well as the City, seeking damages for various wrongs alleged to have
been inflicted on them during plaintiff’s tenure. In his complaint plaintiff states that
he requested that the City provide him with a defense in both suits, which
“contain[ed] allegations that David Wray was acting within the course and scope of
his employment with the City”; however, the City refused to do so.
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Plaintiff asserted that in November 1980, long before either suit was filed, “the
City passed a Resolution which provided that if a City officer or an employee were
sued in either their individual or official capacities, the City would provide for the
defense of said employee or individual and pay any judgment resulting from said suit
against the employee or official.” Plaintiff stated that “[t]he Resolution provided for
defense and indemnification if the employee or official were acting in the scope and
course of their employment or duty, unless the employee or official: 1) acted with
fraud, corruption or actual malice, or 2) acted or failed to act in a wanton or oppressive
manner.” The 1980 Resolution reads that, as authorized by the General Assembly in
1977 in section 160A-167 of the North Carolina General Statutes,1 “it is . . . the policy
of the City of Greensboro to provide for the defense of its officers and employees
1 Section 160A-167 of the North Carolina General Statutes, titled “Defense of
employees and officers; payment of judgments,” reads in pertinent part:
Upon request made by . . . any . . . former employee or officer, . .
. any city . . . may provide for the defense of any civil or criminal
action or proceeding brought against him either in his official or
in his individual capacity, or both, on account of any act done or
omission made, or any act allegedly done or omission allegedly
made, in the scope and course of his employment or duty as an
employee or officer of the city . . . . The defense may be provided
by the city . . . by its own counsel, or by employing other counsel,
or by purchasing insurance which requires that the insurer
provide the defense. Providing for a defense pursuant to this
section is hereby declared to be for a public purpose, and the
expenditure of funds therefor is hereby declared to be a
necessary expense. Nothing in this section shall be deemed to
require any city . . . to provide for the defense of any action or
proceeding of any nature.
N.C.G.S. § 160A-167(a) (2015).
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against civil claims and judgments and to satisfy the same, either through insurance
or otherwise, when resulting from any act done . . . in the scope and course of their
employment,” with the exceptions stated above. The policy authorizes the City
Manager to determine whether a claim filed against an officer meets the standards
set forth in the policy and states that the City Council “shall determine . . . whether”
to provide for payment of any such claim made or judgment entered against an officer.
Plaintiff asked the court to “enter a declaratory judgment requiring the City to
defend and indemnify him in connection with [both lawsuits]” and to pay his costs for
defending those suits.
The case was removed to federal court to address a companion federal claim
asserted by plaintiff. That claim was dismissed, and in August 2013, the state-law
claim was remanded to the Superior Court in Guilford County.
On 20 October 2014, plaintiff filed an amended complaint reflecting dismissal
of the federal claim and adding details to his remaining claim seeking indemnification
and reimbursement from the City. Specifically, plaintiff stated that a third lawsuit
was filed against him, the City, and other individuals in January 2009, and that he
also had to pay his own defense costs for that action. Plaintiff reiterated that “[a]s
an employee of the City acting within the course and scope of his employment, and
pursuant to the provisions of the City Policy, [he] is entitled to indemnification and
reimbursement for the expenses he has incurred as a result of the allegations by and
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Opinion of the Court
position taken by the City, as well as costs he has incurred in connection with his
defense” in all three lawsuits “in the amount of $220,593.71.”
On 24 November 2014, the City filed a motion to dismiss under Civil Procedure
Rules 12(b)(1), 12(b)(2), and 12(b)(6). Defendant asserted that the complaint should
be dismissed for “lack of a justiciable controversy, lack of personal and subject matter
jurisdiction, and for failure to state a claim.” Defendant argued, inter alia, that the
claims asserted by plaintiff in his first amended complaint, including his “newly-
added claims for reimbursement of legal expenses,” “are barred by the doctrine of
governmental immunity, and accordingly Plaintiff has failed to state a claim on which
relief can be granted.”
On 13 May 2015, Judge James C. Spencer, Jr. entered an order dismissing
plaintiff’s first amended complaint with prejudice. The trial court ruled that
defendant is “shielded by the doctrine of governmental immunity, which immunity
has not been waived.” The court added, “Neither the institution of a plan adopted
pursuant to N.C.G.S. § 160A-167, under which a city may pay all or part of some
claims against employees of the city, nor action taken by the city under N.C.G.S. §
160A-167, waives governmental immunity.” Plaintiff appealed to the Court of
Appeals.
On 7 June 2016, a divided panel of the Court of Appeals reversed the trial
court’s order dismissing plaintiff’s claim and remanded the matter for further
proceedings. Wray v. City of Greensboro, ___ N.C. App. ___, 787 S.E.2d 433 (2016).
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The majority held that plaintiff “has, in fact, set forth allegations that the City has
waived governmental immunity . . . based on the City’s act of entering into an
employment agreement with Plaintiff.” Id. at ___, 787 S.E.2d at 435.
The majority explained, “Specifically, Plaintiff has made a breach of contract
claim, essentially alleging that he had a contract with the City to work for the City
and that pursuant to the City’s contractual obligations, the City is required to pay for
his litigation expenses.” Id. at ___, 787 S.E.2d at 435 (emphasis omitted). The
majority added, “Importantly, the City is authorized to enter into employment
contracts with its police officers, and the City is authorized by N.C.[G.S.] § 160A-167
to enact a policy by which it may contractually obligate itself to pay for certain legal
expenses incurred by these officers.” Id. at ___, 787 S.E.2d at 435-36.
The majority reiterated throughout its opinion that this appeal is not about
the merits of plaintiff’s contract claim. Id. at ___, 787 S.E.2d at 436-37. Rather, the
issue to be resolved is whether the trial court erred in dismissing the complaint
“based on the doctrine of governmental immunity, the only basis of its order.” Id. at
___, 787 S.E.2d at 436 (emphasis omitted). The majority reviewed plaintiff’s amended
complaint and determined that plaintiff sufficiently alleged waiver. Id. at ___, 787
S.E.2d at 437. Specifically, the majority determined that plaintiff alleged “that he
was employed by the City’s Police Department as the Chief of Police, that he was
acting within the ‘course and scope of his employment’ at all times material to his
claim, that pursuant to the provisions of the City Policy he is entitled to
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reimbursement for his legal expenses and fees, and that the City failed to honor the
City Policy.” Id. at ___, 787 S.E.2d at 437. Therefore, the majority held that plaintiff
“establish[ed] waiver through a breach of Plaintiff’s contractual relationship as an
employee of the City.” Id. at ___, 787 S.E.2d at 437. The majority further held that
“the City is not shielded by the doctrine of governmental immunity to the extent that
Plaintiff’s action is based in contract.” Id. at ___, 787 S.E.2d at 438. Accordingly, the
majority reversed the trial court’s order and remanded the case for further
proceedings. Id. at ___, 787 S.E.2d at 438.
The dissent would conclude that the trial court properly granted defendant’s
motion to dismiss. Id. at ___, 787 S.E.2d at 438 (Bryant, J., dissenting). The dissent
would characterize the City’s policy, as declared in the 1980 Resolution, as
“prescrib[ing] an intent to provide for the defense of officers and employees,” which,
according to the dissent, does not equate to “provid[ing] substantive rights or
procedural steps.” Id. at ___, 787 S.E.2d at 439 (citations and emphasis omitted).
The dissent “would hold that the Resolution is not a contractual provision upon which
plaintiff can compel defendant’s performance.” Id. at ___, 787 S.E.2d at 439.
While acknowledging that “there is plenary support for the proposition that an
employer-employee relationship is essentially contractual and such a relationship
often waives immunity from suit on the contract,” the dissent would nonetheless
affirm the trial court. Id. at ___, 787 S.E.2d at 439 (citations omitted). The dissent
would conclude “that the record before the trial court was sufficient to determine that
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Opinion of the Court
plaintiff could not establish a valid contractual agreement with defendant City of
Greensboro on the issue central to this action, the provision of a legal defense as a
condition of employment.” Id. at ___, 787 S.E.2d at 439-40. Accordingly, the dissent
would “hold the trial court was correct in concluding that defendant . . . did not waive
its governmental immunity to plaintiff’s suit.” Id. at ___, 787 S.E.2d at 440.
Therefore, the dissent would affirm the trial court’s order dismissing plaintiff’s
complaint. Id. at ___, 787 S.E.2d at 440. Defendant filed its appeal based on the
dissenting opinion.
Because we agree that plaintiff has sufficiently pleaded waiver of
governmental immunity by alleging a contract claim, we affirm the decision of the
Court of Appeals reversing the trial court’s order of dismissal and remanding the
matter for further proceedings.
“Dismissal of an action under Rule 12(b)(6) is appropriate when the complaint
‘fail[s] to state a claim upon which relief can be granted.’ ” Arnesen v. Rivers Edge
Golf Club & Plantation, Inc., 368 N.C. 440, 448, 781 S.E.2d 1, 7 (2015) (alteration in
original) (quoting N.C. R. Civ. P. 12(b)(6)). “[T]he well-pleaded material allegations
of the complaint are taken as [admitted]; but conclusions of law or unwarranted
deductions of fact are not admitted.” Id. at 448, 781 S.E.2d at 7 (first alteration in
original) (quoting Sutton v. Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970)). “The
system of notice pleading affords a sufficiently liberal construction of complaints so
that few fail to survive a motion to dismiss.” Ladd v. Estate of Kellenberger, 314 N.C.
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477, 481, 334 S.E.2d 751, 755 (1985). “A complaint should not be dismissed under
Rule 12(b)(6) ‘. . . unless it affirmatively appears that plaintiff is entitled to no relief
under any state of facts which could be presented in support of the claim.’ ” Id. at
481, 334 S.E.2d at 755 (quoting Presnell v. Pell, 298 N.C. 715, 719, 260 S.E.2d 611,
613 (1979)). “We review appeals from dismissals under Rule 12(b)(6) de novo.”
Arnesen, 368 N.C. at 448, 781 S.E.2d at 8 (citing Bridges v. Parrish, 366 N.C. 539,
541, 742 S.E.2d 794, 796 (2013)). Additionally, “[q]uestions of law regarding the
applicability of sovereign or governmental immunity are reviewed de novo.” Irving
v. Charlotte-Mecklenburg Bd. of Educ., 368 N.C. 609, 611, 781 S.E.2d 282, 284 (2016)
(citations omitted).
As a general rule, “[u]nder the doctrine of sovereign immunity, the State is
immune from suit absent waiver of immunity.” Evans ex rel. Horton v. Hous. Auth.,
359 N.C. 50, 53, 602 S.E.2d 668, 670 (2004) (quoting Meyer v. Walls, 347 N.C. 97, 104,
489 S.E.2d 880, 884 (1997)); see also Smith v. State, 289 N.C. 303, 309, 222 S.E.2d
412, 417 (1976). Specifically, “[t]he doctrine has proscribed both contract and tort
actions against the [S]tate and its administrative agencies, as well as suits to prevent
a State officer or Commission from performing official duties or to control the exercise
of judgment on the part of State officers or agencies.” Smith, 289 N.C. at 309-10, 222
S.E.2d at 417 (citations omitted). Governmental immunity is that portion of the
State’s sovereign immunity which extends to local governments. See, e.g., Evans, 359
N.C. at 53, 602 S.E.2d at 670; Meyer, 347 N.C. at 104, 489 S.E.2d at 884.
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A State or local government, however, waives that immunity when it enters
into a valid contract, to the extent of that contract. Whitfield v. Gilchrist, 348 N.C.
39, 42-43, 497 S.E.2d 412, 414 (1998); Smith, 289 N.C. at 320, 222 S.E.2d at 423-24.
Specifically, this Court has held “that whenever the State of North Carolina, through
its authorized officers and agencies, enters into a valid contract, the State implicitly
consents to be sued for damages on the contract in the event it breaches the contract.”
Smith, 289 N.C. at 320, 222 S.E.2d at 423-24. Thus, “in causes of action on contract
. . . , the doctrine of sovereign immunity will not be a defense to the State. The State
will occupy the same position as any other litigant.” Id. at 320, 222 S.E.2d at 424
(citation omitted). “Likewise, a city or county waives immunity when it ‘enters into
a valid contract.’ ” Wray, ___ N.C. App. at ___, 787 S.E.2d at 436 (majority opinion)
(emphasis omitted) (quoting M Series Rebuild, LLC v. Town of Mount Pleasant, 222
N.C. App. 59, 65, 730 S.E.2d 254, 259, disc. rev. denied, 366 N.C. 413, 735 S.E.2d 190
(2012)).
“In order to overcome a defense of governmental immunity, the complaint must
specifically allege a waiver of governmental immunity. Absent such an allegation,
the complaint fails to state a cause of action.” Fabrikant v. Currituck County, 174
N.C. App. 30, 38, 621 S.E.2d 19, 25 (2005) (quoting Paquette v. County of Durham,
155 N.C. App. 415, 418, 573 S.E.2d 715, 717 (2002) (citations omitted), disc. rev.
denied, 357 N.C. 165, 580 S.E.2d 695 (2003)); accord Hinson v. City of Greensboro,
232 N.C. App. 204, 210, 753 S.E.2d 822, 827 (2014). “This requirement does not,
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Opinion of the Court
however, mandate that a complaint use any particular language. Instead, consistent
with the concept of notice pleading, a complaint need only allege facts that, if taken
as true, are sufficient to establish a waiver . . . [of] immunity.” Fabrikant, 174 N.C.
App. at 38, 621 S.E.2d at 25 (emphasis added) (citation omitted). Because in contract
actions “the doctrine of sovereign immunity will not be a defense,” a waiver of
governmental immunity is implied, and effectively alleged, when the plaintiff pleads
a contract claim. See Smith, 289 N.C. at 320, 222 S.E.2d at 423-24 (“[W]henever the
State of North Carolina . . . enters into a valid contract, the State implicitly consents
to be sued for damages on the contract in the event it breaches the contract.”
(emphasis added)). Thus, an allegation of a valid contract is an allegation of waiver
of governmental immunity.
Here plaintiff adequately pleaded a contract action: that he had an
employment relationship with the City that included the obligation on the part of the
City to pay for his defense and that the City failed to do so. Specifically, in his first
amended complaint plaintiff alleged, in pertinent part, as follows:
2. The plaintiff . . . was formerly Chief of Police
of the Greensboro Police Department.
....
4. David Wray began employment with the
Police Department of the City of Greensboro as a police
officer in March of 1981.
5[.] Through the years, David Wray was promoted
to Sergeant, Lieutenant, Assistant Chief, and ultimately
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Opinion of the Court
was promoted . . . to the position of Chief of Police in July
of 2003.
....
25. Mitchell Johnson’s actions in locking David
Wray from his office effectively ended David Wray’s ability
to serve as Chief and as a practical matter terminated
David Wray’s employment with the City.
26. David Wray submitted his resignation as
Chief on January 9, 2006.
....
35[.] At all times material hereto . . . David Wray
acted in the scope and course of his employment with the
City, and not because of actual fraud, corruption, actual
malice, or in a wanton or oppressive manner.
....
38[.] By letter dated June 5, 2007, counsel for
David Wray wrote to counsel representing the City,
pointing out that the Fulmore complaint pertained to
“official capacity” conduct on the part of David Wray and
requested that the City indemnify David Wray and provide
him with a defense in the action. . . .
39. By letter dated July 3, 2007, counsel for the
City responded to the request that the City provide David
Wray with representation by providing a copy of the City
Policy dated 13 November 1980 and 18 November 1980
(“City Policy”) and denied the request for representation,
based “on current information.” . . .
40. Upon information and belief, the City paid for
representation of Randy Gerringer, Brian Bissett and
Craig McMinn in the Fulmore Suit.
....
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46. David Wray also requested that the City
provide him with a defense in connection with the Hinson
Suits.
47. The City did not defend David Wray or
provide David Wray with a defense in the Hinson Suits.
....
51. David Wray requested that the City provide
him with a defense and indemnification in the Alexander
Suit.
52. The City did not defend David Wray or
provide David Wray with a defense in the Alexander Suit.
....
62. At all times material hereto, David Wray was
acting within the course and scope of his employment with
the City of Greensboro, in the good faith discharge of his
duties.
....
64. At all times material to the allegations
contained in the Fulmore Suit, the Hinson Suits, and the
Alexander Suit, David Wray acted within the course and
scope of his employment as the Chief of the Greensboro
Police Department and is entitled to reimbursement for
costs he incurred to defend himself in connection with the
statements made by the City, as well as costs incurred in
connection with his defense in the Fulmore Suit, the
Hinson Suits, and the Alexander Suit.
65[.] The City has refused and continues to refuse
to reimburse David Wray for his legal expenses.
66. As an employee of the City acting within the
course and scope of his employment, and pursuant to the
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provisions of the City Policy, David Wray is entitled to
indemnification and reimbursement for the expenses he
has incurred as a result of the allegations by and position
taken by the City, as well as costs he has incurred in
connection with his defense in the Fulmore Suit, the
Hinson Suits, and the Alexander Suit in the amount of
$220,593.71.
In sum, plaintiff alleged that he was an “employee of” defendant, that he “acted
within the course and scope of his employment as the Chief of the Greensboro Police
Department,” that “pursuant to the provisions of the City Policy, [he] is entitled to
indemnification and reimbursement for the . . . costs he has incurred in connection
with his defense” in various lawsuits, and that defendant “has refused and continues
to refuse to reimburse” him.
In light of the low bar for notice pleading under Rule 12(b)(6), as well as the
waiver of governmental immunity that is inferred from the pleading of a contract
claim, we conclude that the averments in plaintiff’s first amended complaint are
sufficient to allege a waiver of governmental immunity due to the City’s failure to
honor contractual obligations to plaintiff as an employee. Although we hold that
dismissal of the complaint was not warranted, like the Court of Appeals, we express
no opinion on the merits of plaintiff’s contract action. We simply conclude, as we did
in Smith, that “plaintiff is not to be denied his day in court because his contract was
with” the City. Smith, 289 N.C. at 322, 222 S.E.2d at 424.
Moreover, the trial court erroneously concluded that the City was “shielded by
the doctrine of governmental immunity” based on this Court’s decision in Blackwelder
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Opinion of the Court
v. City of Winston-Salem, 332 N.C. 319, 420 S.E.2d 432 (1992). Citing Blackwelder,
the trial court stated: “Neither the institution of a plan adopted pursuant to N.C.G.S.
§ 160A-167, under which a city may pay all or part of some claims against employees
of the city, nor action taken by the city under N.C.G.S. § 160A-167, waives
governmental immunity.” Blackwelder, however, does not control here. In
Blackwelder this Court stated that “[a]ction by the City under N.C.G.S. § 160A-167
does not waive immunity” in the context of a tort action, noting that “N.C.G.S. § 160A-
485 provides that the only way a city may waive its governmental immunity is by the
purchase of liability insurance.” 332 N.C. at 324, 420 S.E.2d at 436 (emphasis added).
Section 160A-485 of the North Carolina General Statutes specifically addresses
waiver of immunity from civil liability in tort. N.C.G.S. § 160A-485(a) (2015) (“Any
city is authorized to waive its immunity from civil liability in tort by the act of
purchasing liability insurance.”). Here, in the context of a contract action, rather
than a tort action, section 160A-485 has no application and does not limit how
governmental immunity may be waived. Because there is no analogous statute
limiting mechanisms for waiver of governmental immunity in the context of contract
actions, the reasoning in Blackwelder does not control here.
We conclude that plaintiff’s first amended complaint sufficiently presents
allegations of a claim sounding in contract. As such, we further conclude that the
complaint sufficiently alleges that the City has consented to be sued to the extent of
any such contract. These allegations are adequate to raise a waiver of governmental
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Opinion of the Court
immunity, and thus, to survive the City’s motion to dismiss. For these reasons, we
affirm the decision of the Court of Appeals reversing the trial court’s order of
dismissal and remanding the matter for further proceedings.
AFFIRMED.
Justice ERVIN dissenting.
As a result of its reliance upon what I believe to be an excessively “low bar for
notice pleading under [N.C.G.S. § 1A-1,] Rule 12(b)(6),” the Court has determined
that plaintiff “adequately pleaded a contract action: that he had an employment
relationship with the City that included the obligation on the part of the City to pay
for his defense and that the City failed to do so.” In view of my belief that plaintiff
did not sufficiently allege the existence of a contractual relationship between himself
and the City that encompassed a right to obtain reimbursement for the costs of
defending the civil actions brought against him in the Alexander, Fulmore, and
Hinson suits, I am unable to agree with the Court’s conclusion that plaintiff’s
amended complaint adequately alleged the necessary waiver of governmental
immunity. As a result, I respectfully dissent from the Court’s decision to affirm the
Court of Appeals’ opinion in this case.
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Ervin, J., dissenting
The trial court dismissed plaintiff’s first amended complaint on the grounds
that the City had not waived its right to assert governmental immunity in this case,
with “[n]either the institution of a plan adopted pursuant to N.C.G.S. § 160A-167,
under which a city may pay all or part of some claims against employees of the city,
nor action taken by the city under N.C.G.S. § 160A-167” sufficing to work such a
waiver. In reversing the trial court’s order, the Court of Appeals determined that
plaintiff “has essentially pleaded that he had an employment relationship with the
City and that the City has contractually obligated itself to pay for his defense as a
benefit of his contract,” with the issue of “[w]hether the City is, in fact, obligated to
pay contractually by virtue of its passage of the City Policy [going] to the merits”
rather than being “the subject of this appeal.” Wray v. City of Greensboro, ___ N.C.
App. ___, ____, 787 S.E.2d 433, 437 (2016). In upholding this determination, this
Court has held that “plaintiff’s first amended complaint sufficiently presents
allegations of a claim sounding in contract” and “sufficiently alleges that the City
consents to be sued to the extent of any such contract.” As a result, the ultimate issue
before the Court in this case is the extent, if any, to which plaintiff’s first amended
complaint adequately alleges that the City breached a contract with plaintiff under
which plaintiff was entitled to obtain reimbursement for the cost of defending civil
actions brought against him in connection with actions that he had taken in the
course and scope of his employment by the City.
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Ervin, J., dissenting
According to Rule 12(b)(6) of our Rules of Civil Procedure, a complaint is
subject to dismissal in the event that it fails “to state a claim upon which relief can
be granted.” N.C.G.S. § 1A-1, Rule 12(b)(6) (2015). “When the complaint on its face
reveals that no law supports the claim, reveals an absence of facts sufficient to make
a valid claim, or discloses facts that necessarily defeat the claim, dismissal is proper.”
Arnesen v. Rivers Edge Golf Club & Plantation, Inc., 368 N.C. 440, 448, 781 S.E.2d 1,
8 (2015) (citing Wood v. Guilford County, 355 N.C. 161, 166, 558 S.E.2d 490, 494
(2002)). In determining whether a motion to dismiss for failure to state a claim for
relief should be allowed or denied, “the well-pleaded material allegations of the
complaint are taken as admitted; but conclusions of law or unwarranted deductions
of fact are not.” Sutton v. Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970) (quoting
2A James Wm. Moore et al., Moore’s Federal Practice ¶ 12.08 (2d ed. 1968)).
Rule 8(a)(1) of our Rules of Civil Procedure requires civil complaints to include
“[a] short and plain statement of the claim sufficiently particular to give the court
and the parties notice of the transactions, occurrences, or series of transactions or
occurrences, intended to be proved showing that the pleader is entitled to relief.”
N.C.G.S. § 1A-1, Rule 8(a)(1) (2015). Thus, pursuant to Rule 8(a)(1), a complaint is
sufficient to state a claim upon which relief can be granted in the event that
“it gives sufficient notice of the events or transactions
which produced the claim to enable the adverse party to
understand the nature of it and the basis for it, to file a
responsive pleading, and by using the rules provided for
obtaining pretrial discovery to get any additional
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Ervin, J., dissenting
information he may need to prepare for trial.”
Nevertheless, the plaintiff’s complaint must allege enough
“to give the substantive elements of his claim.”
RGK, Inc. v. U.S. Fid. & Guar. Co., 292 N.C. 668, 674, 235 S.E.2d 234, 238 (1977)
(quoting Sutton, 277 N.C. at 104-05, 176 S.E.2d at 167); see also United Leasing Corp.
v. Miller, 45 N.C. App. 400, 405, 263 S.E.2d 313, 317 (stating that “[a] claim for relief
must still satisfy the requirements of the substantive law which gave rise to the
pleadings, and no amount of liberalization should seduce the pleader into failing to
state enough to give the substantive elements of his claim”), disc. rev. denied, 300
N.C. 374, 267 S.E.2d 685 (1980). As this Court stated shortly after the enactment of
the North Carolina Rules of Civil Procedure, “the additional requirements in our Rule
8(a)(1) manifest the legislative intent to require a more specific statement, or notice
in more detail, than Federal Rule 8(a)(2) requires.” Sutton, 277 N.C. at 100, 176
S.E.2d at 164.
Governmental immunity1 “shields a defendant entirely from having to answer
for its conduct at all in a civil suit for damages.” Craig v. New Hanover Cty. Bd. of
Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (citation omitted). “Under the
doctrine of sovereign immunity, the State is immune from suit absent waiver of
1 Although “[t]he State’s sovereign immunity applies to both its governmental and
proprietary functions, while the more limited governmental immunity covers only the acts of
a municipality or a municipal corporation committed pursuant to its governmental
functions,” Evans ex rel. Horton v. Hous. Auth., 359 N.C. 50, 53, 602 S.E.2d 668, 670 (2004)
(citations omitted), “[i]n application here, the distinction is immaterial,” Craig, 363 N.C. at
335 n.3, 678 S.E.2d at 353 n.3, given the obviously governmental nature of the law
enforcement function.
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Ervin, J., dissenting
immunity.” Evans ex rel. Horton v. Hous. Auth., 359 N.C. 50, 53, 602 S.E.2d 668, 670
(2004) (quoting Meyer v. Walls, 347 N.C. 97, 104, 489 S.E.2d 880, 884 (1997)). A
“complaint [against a local governmental entity] does not state a cause of action”
unless it alleges a waiver of governmental immunity. Fields v. Durham City Bd. of
Educ., 251 N.C. 699, 701, 111 S.E.2d 910, 912 (1960).
As the Court acknowledges, a municipality can waive governmental immunity
by entering into a valid express contract. See Whitfield v. Gilchrist, 348 N.C. 39, 42-
43, 497 S.E.2d 412, 414 (1998) (citing Smith v. State, 289 N.C. 303, 320, 222 S.E.2d
412, 423-24 (1976) (holding that, “whenever the State of North Carolina, through its
authorized officers and agencies, enters into a valid contract, the State implicitly
consents to be sued for damages on the contract in the event it breaches the
contract”)). For that reason, the Court correctly notes that “a waiver of governmental
immunity is implied, and effectively alleged, when the plaintiff pleads a contract
claim,” so that, in other words, “an allegation of a valid contract is an allegation of
waiver of governmental immunity.” On the other hand, in the absence of allegations
that the parties entered into “both an express contract and a valid contract, the State
has not waived its sovereign immunity.” Eastway Wrecker Serv., Inc. v. City of
Charlotte, 165 N.C. App. 639, 644, 599 S.E.2d 410, 413 (2004), aff’d per curium, 360
N.C. 167, 622 S.E.2d 495 (2005); see also Whitfield, 348 N.C. at 42-43, 497 S.E.2d at
415 (stating that, “[c]onsistent with the reasoning of Smith, we will not first imply a
contract in law where none exists in fact, then use that implication to support the
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WRAY V. CITY OF GREENSBORO
Ervin, J., dissenting
further implication that the [governmental entity] has intentionally waived its
[governmental immunity] and consented to be sued for damages for breach of the
contract it never entered in fact”).
In order to state a valid express contract claim, the plaintiff “must allege the
existence of a contract between plaintiff and defendant, the specific provisions
breached, the facts constituting the breach, and the amount of damages resulting to
plaintiff from such breach.” RGK, 292 N.C. at 675, 235 S.E.2d at 238 (emphasis
omitted) (quoting Cantrell v. Woodhill Enters., Inc. 273 N.C. 490, 497, 160 S.E.2d 476,
481 (1968)). Admittedly, “[t]here is no rule which requires a plaintiff to set forth in
his complaint the full contents of the contract which is the subject matter of his action
or to incorporate the same in the complaint by reference to a copy thereof attached as
an exhibit” as long as the complaint “allege[s] in a plain and concise manner the
material, ultimate facts which constitute his cause of action.” Id. at 675, 235 S.E.2d
at 238 (quoting City of Wilmington v. Schutt, 228 N.C. 285, 286, 45 S.E.2d 364, 366
(1947)). At a minimum, however, a complaint must “allege such a state of facts as
would put defendants . . . on legal notice of the existence of the contract.” Eller v.
Arnold, 230 N.C. 418, 422, 53 S.E.2d 266, 269 (1949).
In his amended complaint, plaintiff alleged that he “began employment with
the Police Department of the City of Greensboro as a police officer in March of 1981”
and was, “[t]hrough the years, . . . promoted to Sergeant, Lieutenant, Assistant Chief,
and[,] ultimately[,] . . . to the position of Chief of Police in July of 2003.” According to
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WRAY V. CITY OF GREENSBORO
Ervin, J., dissenting
a City Policy adopted on 13 and 17 November 1980,2 a copy of which is attached to
plaintiff’s amended complaint and incorporated in plaintiff’s complaint by reference:
1. [I]t is hereby declared to be the policy of the City of
Greensboro to provide for the defense of its officers and
employees against civil claims and judgments and to
satisfy the same, either through insurance or
otherwise,, when resulting from any act done or
omission made, or any act allegedly done or omission
allegedly made, in the scope and course of their
employment or duty as employees or officers of the City,
except and unless it is determined that an officer or
employee (1) acted or failed to act because of actual
fraud, corruption or actual malice or (2) acted or failed
to act in a wanton or oppressive manner.
2. The City Manager or his designee shall determine
whether or not a claim or suit filed against an officer or
employee, either in his official or his individual
capacity, or both, meets the standards set forth herein
and the standards set forth in the aforementioned
statute as specified herein for providing a defense for
such officer or employee.
....
4. The terms “officer” and “employee” as used herein shall
mean present or past officers or employees who might
2 The City’s Policy, upon which plaintiff’s claim rests, was founded, in turn, upon
N.C.G.S. § 160A-167(a), which currently provides, in pertinent part, that, “[u]pon request
made by . . . any . . . employee or officer, or former employee or officer, . . . any city . . . may
provide for the defense of any civil or criminal action or proceeding brought against him either
in his official or in his individual capacity, or both, on account of any act done or omission
made, or any act allegedly done or omission allegedly made, in the scope and course of his
employment or duty as an employee or officer of the city,” with “[n]othing in this section [to]
be deemed to require any city . . . to provide for the defense of any action or proceeding of any
nature.” N.C.G.S. § 160A-167(a) (2015). The payment of any judgments entered against such
municipal employees or officers, which is a subject beyond the scope of the present action
given that plaintiff was not held to be liable in the Alexander, Fulmore, or Hinson suits, is
governed by the provisions of N.C.G.S. § 160A-167(b) and (c).
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WRAY V. CITY OF GREENSBORO
Ervin, J., dissenting
hereafter have claims or judgments entered against
them.
5. This resolution shall not be interpreted in any way to
relieve any insurance company of its obligation under
any insurance policy to protect the interest of any
insured under said policy, or to reduce or eliminate the
rights of any officer or any employee of the City against
any other party. Further, except as expressly stated
herein, this resolution is not to be interpreted as an [sic]
waiver of any rights the City has against any party.
6. The terms of this resolution shall include all pending
claims and litigation, as well as any future claims and
litigation which may arise from the date of adoption of
this resolution. Further, this resolution shall constitute
the uniform standards under which claims made or civil
judgments entered against officers or employees or
former officers or employees of the City shall be paid,
and a copy of this resolution shall be maintained in the
office of the City Clerk for public inspection.
According to plaintiff, the actions of City Manager Mitchell Johnson in changing the
locks on plaintiff’s office on 6 January 2006 “effectively ended [plaintiff’s] ability to
serve as Chief and[,] as a practical matter[,] terminated [plaintiff’s] employment with
the City.” Although plaintiff requested the City to pay for his defense in the
Alexander, Fulmore, and Hinson suits, the City declined to do so. As a result, plaintiff
claimed to be entitled to recover “indemnity and reimbursement of fees incurred by
[him] as a result of failure by the [City] to honor the provisions of the” City’s legal fee
and judgment payment reimbursement policy given that, “[a]t all times material to
the allegations contained in the Fulmore Suit, the Hinson Suits, and the Alexander
Suit, [plaintiff] acted within the course and scope of his employment as the Chief of
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WRAY V. CITY OF GREENSBORO
Ervin, J., dissenting
the Greensboro Police Department”; “[t]he City has refused and continues to refuse
to reimburse [plaintiff] for his legal expenses”; and “[a]s an employee of the City
acting within the course and scope of his employment, and pursuant to the provisions
of the City Policy, [plaintiff] is entitled to indemnification and reimbursement for the
expenses he has incurred as a result of the allegations by and position taken by the
City, as well as costs he has incurred in connection with his defense in the Fulmore
Suit, the Hinson Suits, and the Alexander Suit in the amount of $220,593.71.”
A careful review of the allegations contained in the amended complaint
discloses that plaintiff never alleged that the City had a contractual obligation to
provide, or reimburse him for the cost of, his defense in the Alexander, Fulmore, and
Hinson suits. Aside from the fact that the word “contract” is nowhere to be found in
the amended complaint, plaintiff simply never alleged that the protections available
under the City’s defense cost reimbursement and judgment payment policy
constituted any part of the consideration that plaintiff received in return for his
service as a City employee. Although there is no “mandate that a complaint use any
particular language” and although a complaint “need only allege facts that, if taken
as true, are sufficient to establish a waiver . . . of . . . immunity,” Fabrikant v.
Currituck County, 174 N.C. App. 30, 38, 621 S.E.2d 19, 25 (2005), plaintiff has
completely failed to allege any basis for a finding that the provisions of the City’s
defense cost reimbursement and judgment payment policy have been incorporated
into plaintiff’s employment contract with the City, such as, for instance, by alleging
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WRAY V. CITY OF GREENSBORO
Ervin, J., dissenting
that the Policy was a component of his contract of employment with the City or that
he had a vested contractual right to be reimbursed for the cost of defending the
Alexander, Fulmore, and Hinson suits in accordance with the Policy. On the
contrary, plaintiff has simply alleged that he was a City employee and that the Policy
exists, without making an effort to establish any nexus between these two facts. I
simply do not believe that these allegations suffice to work a waiver of governmental
immunity on the basis of a valid, express contract.
The ordinary sense of the language utilized in plaintiff’s amended complaint
indicates that, instead of attempting to allege an action for breach of his contract of
employment with the City, plaintiff is attempting to bring a direct action to enforce a
freestanding City policy separate and apart from his contract of employment. Such
a reading of plaintiff’s complaint is bolstered by plaintiff’s repeated references to
having “requested” the City to provide him with a defense or to reimburse him for the
cost of his defense in the Alexander, Fulmore, and Hinson suits without making any
reference to his employment contract with the City. Assuming that I have correctly
interpreted plaintiff’s complaint as asserting a direct claim against the City under
the Policy rather than as asserting a claim for breach of plaintiff’s contract of
employment with the City, it is clear that plaintiff has failed to adequately allege any
basis for a waiver of the City’s governmental immunity defense.
Finally, even if plaintiff has alleged that the Policy was a portion of his contract
of employment with the City, or even if plaintiff is entitled to bring a direct claim
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WRAY V. CITY OF GREENSBORO
Ervin, J., dissenting
against the City on the basis of the Policy, he still cannot properly plead the requisite
waiver of governmental immunity. As the Policy clearly states, “this resolution is not
to be interpreted as [a] waiver of any rights the City has against any party.” 3 When
read in accordance with its plain meaning, the Policy itself clearly states that it
should not be understood as creating any sort of enforceable contractual right or
operating to work a waiver of any claim of governmental immunity that the City
might otherwise be entitled to make. As a result, for all of these reasons, I
respectfully dissent from my colleagues’ decision and would reverse, rather than
affirm, the Court of Appeals’ decision to overturn the trial court’s order dismissing
plaintiff’s complaint.4
Justice BEASLEY joins in this dissenting opinion.
3 The Policy provision quoted in the text is fully consistent with, and possibly
mandated by, the provision in N.C.G.S. § 160A-167(a) that states that “[n]othing in this
section shall be deemed to require any city . . . to provide for the defense of any action or
proceeding of any nature.” In light of this provision, one could argue that a municipality
lacks the necessary statutory authority to contractually obligate itself to reimburse an
officer’s or employee’s defense costs. However, we need not decide that issue given the fact
that plaintiff has, for the reasons discussed in the text, failed to adequately allege the waiver
of governmental immunity necessary to support the claim that he has attempted to assert
against the City in the amended complaint.
4 Although I am not certain that the proper interpretation of our prior decision in
Blackwelder v. City of Winston-Salem, 332 N.C. 319, 420 S.E.2d 432 (1992), is directly
relevant given the manner in which the Court has resolved this case, I disagree with the
manner in which my colleagues have read our statement in Blackwelder to the effect that
“[a]ction by the City under N.C.G.S. § 160A-167 does not waive immunity.” Id., at 324, 420
S.E.2d at 436. Although Blackwelder was, in fact, decided in the context of a tort action, I
see no reason to believe that the statement quoted earlier in this footnote has no bearing on
claims other than those sounding in tort, such as contract actions, and do not wish to be
understood as having agreed with the Court’s contrary view.
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Wray v. City of Greensboro
Court: Supreme Court of North Carolina
Date filed: 2017-08-18
Citations: 802 S.E.2d 894, 370 N.C. 41
Copy CitationsCombined Opinion