Cates v. North Carolina Department of Justice

487 S.E.2d 723, 346 N.C. 781, 1997 N.C. LEXIS 482
CourtSupreme Court of North Carolina
DecidedJuly 24, 1997
DocketNo. 111PA96
StatusPublished
Cited by1 cases

This text of 487 S.E.2d 723 (Cates v. North Carolina Department of Justice) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cates v. North Carolina Department of Justice, 487 S.E.2d 723, 346 N.C. 781, 1997 N.C. LEXIS 482 (N.C. 1997).

Opinion

PARKER, Justice.

The issue presented in this case is whether N.C.G.S. § 143-300.8 required the Attorney General to defend a local sanitarian in an action arising out of the sanitarian’s alleged negligence in conducting a preliminary soil evaluation. For the reason stated herein, we conclude that the Attorney General was not required to defend petitioner Philip B. Cates. Accordingly, we modify and affirm the decision of the Court of Appeals.

Cates, a registered sanitarian, was employed by the Environmental Health Division of the Durham County Health Department. On 17, 18, and 21 July 1986, at the request of H&W Developers, Cates conducted a preliminary soil evaluation on a tract of land in Durham County. Cates determined that all but one of fifty proposed lots were suitable for on-site septic systems, and H&W Developers purchased the tract of land in reliance on Cates’ evaluation. After several prospective lot purchasers contacted the Durham County Health Department to obtain improvements permits, the Health Department discovered that twenty of the forty-nine lots deemed suitable by Cates were not suitable for on-site septic systems. In July 1989 H&W Developers filed a civil action against Cates and Durham County alleging that Cates was negligent in conducting the preliminary soils analysis and in issuing the preliminary soils [783]*783analysis report. The negligence action against Cates and Durham County proceeded to trial in 1990. Cates was covered by an insurance policy providing one million dollars in professional liability coverage issued to Durham County, and pursuant to this policy Cates was represented by private counsel. After eleven days of trial, the action was settled for the sum of $495,000.

In the meantime, on 17 October 1989 Cates, through counsel, notified the Secretary of Human Resources that N.C.G.S. § 143-300.8 required the Attorney General to defend Cates and formally requested that the Attorney General defend Cates or authorize private counsel. By letter, dated 9 February 1990, Assistant Attorney General Gayl M. Manthei informed Cates’ counsel that the action was “not one where representation by the Attorney General’s Office is appropriate.” Manthei explained that N.C.G.S. § 143-300.8 was enacted after Cates performed the preliminary soil evaluation and that a local health department sanitarian is not enforcing the rules of the Commission for Health Services (“Commission”) when conducting such evaluations. In March 1990 Cates, through counsel, asked the Attorney General to conduct a review of Manthei’s decision. Chief Deputy Attorney General Andrew A. Vanore, Jr. responded by letter on 10 April 1990 and informed counsel that the decision rendered by Manthei was correct for the reasons stated in Manthei’s 9 February 1990 letter.

On 30 March 1990 Cates filed a petition for administrative review contesting the Attorney General’s decision not to defend Cates. Both the Department of Justice (“DOJ”) and Cates filed motions for summary judgment. On 30 August 1993 Administrative Law Judge Michael Rivers Morgan entered a recommended decision granting Cates’ motion. Morgan recommended that the DOJ provide legal representation to Cates in the negligence action or reimburse Cates for any costs of legal representation incurred by Cates as a direct result of the Attorney General’s decision to deny Cates’ request for legal representation.

On 7 February 1994 the DOJ entered a final agency decision rejecting Morgan’s recommended decision. In the decision Attorney General Michael F. Easley listed several reasons for declining to adopt the recommended decision. The reasons for rejecting the recommended decision included the following: (i) N.C.G.S. § 143-300.8 was not in effect at the time of the acts which prompted the legal action; (ii) preliminary site evaluations are local services which are not provided for by the rules of the Commission and are, therefore, [784]*784not within the scope of N.C.G.S. § 143-300.8; (iii) the underlying action was settled within the limits of Durham County’s commercial liability policy, rendering Cates’ petition for administrative review moot; and (iv) even if an administrative law judge has the power to order the Attorney General to pay damages, the State is protected from such orders by sovereign immunity.

On 7 March 1994 Cates and Durham County filed a petition for judicial review in the Superior Court, Wake County; and the cause was heard by Superior Court Judge Henry W. Hight, Jr. By order dated 29 September 1994, the court ruled inter alia that the question of State responsibility was moot and dismissed the petition for judicial review.

A divided panel of the Court of Appeals affirmed. Cates v. N.C. Dep’t of Justice, 121 N.C. App. 243, 465 S.E.2d 64 (1996). The Court of Appeals determined that N.C.G.S. § 143-300.8 required the Attorney General to defend Cates. Id. at 248, 465 S.E.2d at 68. However, the Court of Appeals concluded that any claim by Cates and Durham County for reimbursement of legal fees incurred in defending the negligence action was barred by the doctrine of sovereign immunity. Id.

The dispositive issue is whether N.C.G.S. § 143-300.8 required the Attorney General to defend Cates in an action arising out of his alleged negligence in conducting a preliminary soil evaluation. N.C.G.S. § 143-300.8 provides, in pertinent part:

Any local health department sanitarian enforcing rules of the Commission for Health Services under the supervision of the Department of Environment, Health and Natural Resources pursuant to G.S. 130A-4(b) shall be defended by the Attorney General, subject to the provisions of G.S. 143-300.4, and shall be protected from liability in accordance with the provisions of this Article in any civil or criminal action or proceeding brought against the sanitarian in his official or individual capacity, or both, on account of an act done or omission made in the scope and course of enforcing the rules of the Commission for Health Services. The Department of Environment, Health, and Natural Resources shall pay any judgment against the sanitarian, or any settlement made on his behalf, subject to the provisions of G.S. 143-300.6.

N.C.G.S. § 143-300.8 (1996).

[785]*785Pursuant to N.C.G.S. § 130-335(e), the Commission has promulgated rules governing the treatment and disposal of domestic type sewage from septic tank systems. See 15A NCAC 18A .1934 (June 1995) (rules .1901 to .1968 of subchapter 18A of title 15A of the North Carolina Administrative Code were transferred and recodified from rules .1901 to .1968 of subchapter 10A of title 10 of the North Carolina Administrative Code, effective 4 April 1990). At the time Cates conducted the soil evaluation, the rules required an improvements permit prior to construction or installation of a sewage treatment and disposal system. 10 NCAC 10A .1937(a) (1986). The rules stated that “[t]he local health department shall issue an Improvements Permit only after it has determined that the [sewage] system is designed and can be installed so as to meet the provisions of these Rules.” 10 NCAC 10A .1937(b). The rules further provided that “[t]he local health department shall investigate each proposed site” and that “[s]ite evaluations shall be made in accordance with Rules .1940 through .1948 of this Section.” 10 NCAC 10A .1939.

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Bluebook (online)
487 S.E.2d 723, 346 N.C. 781, 1997 N.C. LEXIS 482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cates-v-north-carolina-department-of-justice-nc-1997.