Oates, et al v. North Carolina Department of State Treasurer, et al

Filing 146

ORDER - Defendant Longs motion to dismiss 134 is GRANTED, and plaintiffs claim against defendant Long is DISMISSED as time barred. The remaining motions 130 , 132 , 136 , are GRANTED IN PART and DENIED IN PART as set fort h herein. In particular, the court STRIKES: 1) references to All defendants in the headings for the first and second causes of action, and 2) references to the Doe defendants and to non-party LGC as a Defendant in the first amended complaint. The cle rk is DIRECTED to STRIKE DOES 1-100 and NORTH CAROLINA STATE AUDITOR from the case caption. In all other respects the remaining motions are DENIED as set forth herein. In addition, stay regarding scheduling activities imposed November 7, 2016, is LIF TED, and the parties are DIRECTED to file within 14 days of the date of this order an updated joint report and plan, pursuant to Federal Rule of Civil Procedure 26(f) and the courts July 1, 2016, initial order regarding planning and scheduling. Counsel is reminded to read the order in its entirety for critical deadlines and information. Signed by District Judge Louise Wood Flanagan on 10/31/2017. (Collins, S.) M

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
NO. 5:16-CV-623-FL

PRISCILLA EVERETTE-OATES,
Plaintiff,
v.
LOLITA CHAPMAN In Her Individual
Capacity; BETH WOOD In Her Individual
Capacity; T. VANCE HOLLOMAN In His
Individual Capacity; ROBIN HAMMOND
In Her Individual Capacity; SHARON
EDMUNDSON In Her Individual
Capacity; NORTH CAROLINA STATE
AUDITOR; and BARRY LONG,
Defendants.

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ORDER

This matter is before the court on motions to dismiss and to strike by defendants Lolita
Chapman (“Chapman”), Beth Wood (“Wood”), T. Vance Holloman (“Holloman”), Robin Hammond
(“Hammond”), Sharon Edmundson (“Edmundson”), and Barry Long (“Long”) (DE 130, 132, 134,
136). These motions have been fully briefed and the issues raised are ripe for ruling. For the
following reasons, the motion to dismiss by defendant Long is granted, and the remaining motions
are granted in part and denied in part.
STATEMENT OF THE CASE
Plaintiff, along with former-plaintiff Duarthur Oates, commenced this action on November
10, 2015, in the United States District Court for the Western District of North Carolina, asserting

federal constitutional claims and state common law tort claims arising out of a criminal investigation
and indictment of plaintiff.
On September 28, 2016, the court dismissed without prejudice all claims, except for one
claim against defendant Wood in her individual capacity (False Public Statements and Seizure,
under 42 U.S.C. § 1983). Upon plaintiff’s motion construed as a motion to amend complaint, the
court on May 23, 2017, allowed plaintiff to file an amended complaint with only certain claims as
proposed by plaintiff but not others. In particular, the court allowed plaintiff to proceed on the
following claims:
1)

Concealment of Evidence and Seizure § 1983 (count two) against defendant Chapman;

2)

Fabrication of Evidence and Seizure § 1983 (count three) against defendant Chapman; and

3)

Civil Conspiracy and Causing § 1983 violation (count four) against defendants Chapman,
Wood, Holloman, Hammond, Edmundson, and Long.

Plaintiff’s other proposed claims for malicious prosecution (count one) and denial of equal
protection (counts five and six), as well as all claims against former-defendants Gregory McLeod,
Gwendolyn Knight, and Ann Howell, were dismissed as futile for failure to state a claim. The court
directed plaintiff to file an amended complaint setting forth only those claims and defendants
remaining in accordance with the court’s May 23, 2017, order. The court directed plaintiff to serve
her first amended complaint on defendants Chapman, Wood, Holloman, Hammond, Edmundson,
and Long, and directed these defendants to respond after service of the first amended complaint.
Plaintiff filed a first amended complaint on June 5, 2017, largely in accord with the court’s
directions in the May 23, 2017, but with certain portions foreclosed by the court’s order and/or now

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subject to challenge by defendants as further discussed herein. Moving defendants seek to dismiss
and/or strike portions of plaintiff’s first amended complaint as follows:
A.

Defendant Chapman moves to strike 1) references to “Doe” defendants, 2) references to “All
Defendants” in headings for claims now denominated as plaintiff’s first and second causes
of action (concealment and fabrication of evidence in violation of § 1983 against defendant
Chapman), and 3) references to conspiracy and conduct of other defendants in allegations
regarding the first and second causes of action.

B.

Defendants Holloman, Hammond, and Edmundson move to strike 1) references to “Doe”
defendants and “Defendant LGC,” 2) references to “All Defendants” in headings for
plaintiff’s first and second causes of action, and 3) references to conduct of all defendants
in allegations regarding the first and second causes of action.

C.

Defendant Long moves to dismiss plaintiff’s third cause of action (§ 1983 conspiracy and
causing a Fourth Amendment violation) on the basis of statute of limitations. In addition
defendant Long moves to dismiss the claim for failure to state a claim and moves in the
alternative to dismiss or strike allegations regarding all defendants in the first and second
causes of action, and other allegations inconsistent with the court’s May 23, 2017, order.

D.

Defendant Wood moves to dismiss plaintiff’s third cause of action for failure to state a claim
and moves in the alternative to dismiss or strike allegations regarding all defendants in the
first and second causes of action, and other allegations inconsistent with the court’s May 23,
2017, order.

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In response, plaintiff contends that certain references in the first amended complaint were included
as scrivener’s errors and, otherwise, plaintiff suggests the first amended complaint reasonably
reflects the directions in the court’s order.
COURT’S DISCUSSION
A.

Standard of Review
Federal Rule of Civil Procedure 12(f) permits the court to “strike from a pleading an

insufficient defense or any redundant, immaterial, impertinent, or scandalous matter,” on its own
initiative or on motion by a party.
A complaint is subject to dismissal if it does not contain “sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Asking for plausible
grounds . . . does not impose a probability requirement at the pleading stage; it simply calls for
enough fact to raise a reasonable expectation that discovery will reveal [the] evidence” required to
prove the claim. Twombly, 550 U.S. at 556. In evaluating the complaint, “[the] court accepts all
well-pled facts as true and construes these facts in the light most favorable to the plaintiff,” but does
not consider “legal conclusions, elements of a cause of action, . . . bare assertions devoid of further
factual enhancement[,] . . . unwarranted inferences, unreasonable conclusions, or arguments.”
Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009).
B.

Analysis
1.

Motions to Strike
a.

Errors in referencing parties

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Certain references that moving defendants seek to strike properly may be considered
scrivener’s errors on the part of plaintiff. These comprise 1) references “LGC,” as “Defendant
LGC,” 2) and references to “All Defendants” in headings for first and second causes of action. The
parties may disregard these references, and in that respect moving defendants’ motions to strike are
granted.
In addition, plaintiff references “DOES 1-100” and “NORTH CAROLINA STATE
AUDITOR” in the caption of her first amended complaint, and describes the “Doe defendants” at
paragraph 10 of same. The court, however, did not permit plaintiff to proceed with any claims
against unnamed defendants Does, or against the entity North Carolina State Auditor, in its order
on plaintiff’s motion to amend. (See DE 121 at 28-29). Although plaintiff contends she may seek
to amend the complaint at a future date to add heretofore unnamed defendants, plaintiff has not
shown good cause for doing so at this juncture. Therefore, the court DIRECTS the clerk to STRIKE
“Does 1-100” and “NORTH CAROLINA STATE AUDITOR” from the caption of the case, and the
parties may disregard references to Doe Defendants at paragraph 10 of the first amended complaint.
Accordingly, in this part, moving defendants’ motions to strike are granted.
b.

Remaining references to defendants

Moving defendants seek to strike references to conspiracy and conduct of defendants other
than defendant Chapman in allegations regarding the first and second causes of action in plaintiff’s
first amended complaint. (See, e.g., First Am. Compl. ¶¶ 129-133, 137-143). Moving defendants
contend these allegations are contrary to the directions in the court’s May 23, 2017, order. In so
arguing, however, moving defendants adopt an approach to the first amended complaint that is too
formalistic. Plaintiffs claims unequivocally are limited to the extent set out in the court’s May 23,

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2017, order. Read in conjunction with that order, and in light of those parts stricken as set forth
above, plaintiff’s first amended complaint states claims only as set forth in the court’s May 23, 2017,
order.
Where plaintiff includes legal assertions and factual allegations within the headings of the
first and second causes of action that reference conspiracy and conduct of defendants other than
defendant Chapman, these legal assertions and factual allegations must be construed to relate only
to the claim identified in the court’s May 23, 2017, order, specified as “Civil Conspiracy and
Causing § 1983 violation (count four) against defendants Chapman, Wood, Holloman, Hammond,
Edmundson, and Long.” (DE 121 at 28). As discussed in the court’s order:
plaintiff has not stated a claim against [defendants other than defendant Chapman]
for concealing or fabricating evidence in violation of the Fourth Amendment.
Plaintiff may, however, state a claim against these remaining defendants if they
caused defendant Chapman to fabricate or conceal evidence before the grand jury in
violation of plaintiff’s Fourth Amendment rights, or if they conspired with defendant
Chapman to do so. The court addresses these theories of relief in conjunction with
plaintiff’s conspiracy claim in the next section below.
(Id. at 22-23) (emphasis added). The court then determined in its analysis that “plaintiff has stated
a claim for causing a § 1983 violation and for § 1983 conspiracy.” (Id. at 26).
While plaintiff could have structured the first amended complaint to reorganize legal
assertions and factual allegations more precisely on a claim by claim basis, pleading rules do not
require a plaintiff to compartmentalize assertions or allegations as strictly as defendants suggest
here. See Iqbal, 556 U.S. at 678 (“Rule 8 marks a notable and generous departure from the
hypertechnical, code-pleading regime of a prior era.”). Although there are limits to the extent to
which a court and defendants must scour complaints for operable factual allegations, see, e.g., Evans
v. Chalmers, 703 F.3d 636, 651 (4th Cir. 2012) (noting “[w]e reject plaintiffs’ suggestion that

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defendants—and courts—should scour several-hundred page complaints to discover which affidavit
statements plaintiffs allege are fabricated or misleading”), those limits are not exceeded here where
the court already has discussed and identified the allegations supporting the claims in this case.
In sum, moving defendants’ motions to strike are denied in the part where they seek to strike
references to conspiracy and conduct of defendants other than defendant Chapman in allegations
regarding the first and second causes of action in plaintiff’s first amended complaint.
2.

Motions to Dismiss
b.

Defendant Long

Defendant Long argues that the claim asserted against him is time barred, where plaintiff
amended her complaint to add defendant Long as a defendant on June 5, 2017, after the statute of
limitations had run on the claim.
Plaintiff’s § 1983 claims are subject to a three year statute of limitations. See Love v.
Alamance Cty. Bd. of Educ., 757 F.2d 1504, 1506 n. 2 (4th Cir. 1985). “Under federal law a cause
of action accrues when the plaintiff possesses sufficient facts about the harm done to him that
reasonable inquiry will reveal his cause of action.” Nasim v. Warden, Maryland House of
Correction, 64 F.3d 951, 955 (4th Cir. 1995). Accordingly, the issue raised by defendant Long’s
motion is whether, based on the allegations in the complaint, plaintiff possessed sufficient facts
about the harm done to her on or before June 5, 2014, that reasonable inquiry would reveal the cause
of action against defendant Long.
According to the first amended complaint, plaintiff was charged in indictment on August 6,
2013, and that indictment and her arrest on August 7, 2013, procured through fabrication and
concealment of evidence, constitute an unlawful seizure in violation of her Fourth Amendment

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rights. (First Am. Compl. ¶¶ 93-100; 134-140). Defendants, including defendant Long, allegedly
caused defendant Chapman to testify falsely to secure that indictment, and conspired to do so. (Id.
¶¶ 35, 40, 74, 93-100; 129-140). As such, by August 7, 2013, plaintiff possessed sufficient facts
about the harm done to her that reasonable inquiry would reveal her cause of action based upon
conspiracy to effectuate unlawful seizure in violation of the Fourth Amendment.
Plaintiff argues, nonetheless, that her Fourth Amendment rights continued to be violated
during the pendency of her prosecution, citing Manuel v. City of Joliet, 137 S.Ct. 911, 918 (2017).
Manuel, however, expressly reserved the question of the time period for accrual of a Fourth
Amendment claim based upon a prosecution commenced through unlawful act of fabrication or
concealment of evidence to obtain warrant or indictment. See id. at 921 (noting argument that such
a Fourth Amendment claim accrues on the date of initiation of legal process, and not on the date of
dismissal of the prosecution). In addition, this court previously dismissed plaintiff’s claim for
“malicious prosecution,” which claim would have had as an element “criminal proceedings
terminated in plaintiff’s favor.” (DE 121 at 18-19 (quoting Evans, 703 F.3d at 647)). Plaintiff’s
remaining Fourth Amendment claims are premised, by contrast, upon “additional conduct preceding
the indictment” constituting concealment and fabrication of evidence to secure indictment. (Id.).
Consistent with the law currently in force, as well as the court’s prior rulings, plaintiff’s Fourth
Amendment claims accrued upon issuance of the indictment secured through fabrication and
concealment of evidence.
Plaintiff also suggests that the § 1983 conspiracy claim did not accrue until the last overt act
in furtherance of the conspiracy was completed, which she contends was refusal by defendant
Edmundson to produce exculpatory evidence by subpoena effectuated on or about September 11,

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2014. (See First Am. Compl. ¶ 116). A § 1983 conspiracy claim accrues, however, upon
completion of “some overt act [that] was done in furtherance of the conspiracy.” Hinkle v. City of
Clarksburg, W. Va., 81 F.3d 416, 421 (4th Cir. 1996) (emphasis added). Here, one overt act, and
the most critical overt act, was defendant Chapman’s testimony to the grand jury on or before
August 6, 2013. (See Order, DE 121 at 24). Accordingly, plaintiff’s § 1983 conspiracy claim
accrued on that date, and plaintiff’s claim against defendant Long is time barred.
Therefore, defendant Long’s motion to dismiss is granted.
a.

Defendant Wood

Defendant Wood moves to dismiss plaintiff’s § 1983 conspiracy claim on the ground that
it is based on an implausible factual allegation regarding a motivation of the moving defendants.1
In particular, she argues that the following allegation is implausible: “During the period of time from
January 2000 to present, DEFENDANTS, and each of them, had possession and control of FEMA
funds totaling approximately $26 Million . . . .” (First Am. Compl. ¶ 13). They contend that
because it is implausible that they had possession of FEMA funds, this discredits “the key theory
chosen by Plaintiff that the Defendants retaliated against Plaintiff because of Plaintiff’s inquiries
about misappropriation of FEMA funds.” (DE 135 at 9; DE 137 at 6).
This argument is irrelevant to whether plaintiff has stated a claim for § 1983 conspiracy. In
particular, the court’s determination that plaintiff has stated a § 1983 conspiracy claim does not
depend on the factual allegation cited by defendants Wood and Long. Rather, as noted by the court
in its May 23, 2017, order:

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Defendant Long raised the same argument as an alternative basis for dismissal of the claim against him.
Where the court has dismissed the claim against defendant Long as time barred, the court addresses this argument only
as it pertains to defendant Wood.

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Plaintiff has alleged sufficient facts to state a claim for § 1983 conspiracy to deprive
plaintiff of her Fourth Amendment right to be free from unreasonable seizure, against
defendants Chapman, Wood, Holloman, Hammond, Edmundson, and Long. In
particular, plaintiff alleges that these defendants met and discussed a common
conspiratorial objective: On October 8, 2012, it is alleged, defendant Edmundson met
with defendants Wood, Holloman, Hammond, and Long; they reviewed the entire
folder labeled “Mayor Oates PNC Bank Credit Cards”; and they agreed at that time
“to seek the SBI’s assistance to prosecute plaintiff for embezzlement due to a lack
of ‘supporting documentation’ and receipts, which they had in their possession, had
reviewed, and knew perfectly well were needed by [plaintiff] to prove her
innocence.” ([Prop. Am. Compl.] ¶ 38). In November and December 2012, it is
alleged, defendant Chapman met regularly, two or three times per week, with these
defendants; she reviewed the same documentation with them; and they “discussed
their plan of having [defendant Chapman] present false testimony to the Grand Jury
to secure a ‘True Bill’ Indictment and criminally prosecute [plaintiff],” by concealing
the existence of receipts and supporting documents verifying business purpose of all
expenditures. (Id. ¶¶ 43, 76). Finally, it is alleged that defendant Chapman
ultimately testified in accordance with their plan before the grand jury on August 6,
2013, (Prop. Am. Compl. ¶ 100).
In sum, these alleged facts permit a reasonable inference that defendants Wood,
Holloman, Hammond, Edmundson, and Long caused Chapman to testify as planned,
and that defendant Chapman joined in and carried out an overt act in furtherance of
the conspiratorial objective, resulting in the deprivation of plaintiff’s Fourth
Amendment rights. Therefore, plaintiff states a §1983 claim against defendants
Wood, Holloman, Hammond, Edmundson, and Long, for causing a constitutional
violation and for § 1983 conspiracy, along with defendant Chapman.
(DE 121 at 23-24). Critically, as noted in the May 23, 2017, order, a § 1983 conspiracy requires “a
mutual understanding to try to accomplish a common and unlawful plan.” Hinkle, 81 F.3d at 421.
Here, the court determined that plaintiff alleged a § 1983 conspiracy on the basis of the common and
unlawful plan to obtain an indictment against plaintiff by concealing existence of receipts and
supporting documents verifying business purpose of all expenditures. (First Am. Compl. ¶¶ 35, 40,
74, 94, 98). It is not an element of a § 1983 claim that plaintiff must allege an additional underlying

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“motive” for defendants’ common and unlawful plan. See Hinkle, 81 F.3d at 421.2 Accordingly,
defendants’ argument premised upon a flawed alleged motive is irrelevant to whether plaintiff has
stated a claim for § 1983 conspiracy.
In so holding, the court does not and need not determine whether plaintiff’s factual allegation
concerning control of FEMA funds (see First Am. Compl. ¶ 13) is plausible. However, the court
notes that the plausibility of such allegation must be considered at this stage in conjunction with the
complaint as a whole and by drawing inferences in the light most favorable to plaintiff. The court
leaves for another day whether evidence regarding the issue raised by that allegation may have “any
tendency to make a fact more or less probable than it would be without the evidence.” Fed. R. Evid.
401(a).
Thus, that part of defendant Wood’s motion seeking to dismiss plaintiff’s § 1983 conspiracy
claim for failure to state a claim under Rule 12(b)(6) is denied.
CONCLUSION
Based on the foregoing, defendant Long’s motion to dismiss (DE 134) is GRANTED, and
plaintiff’s claim against defendant Long is DISMISSED as time barred. The remaining motions
(DE 130, 132, 136), are GRANTED IN PART and DENIED IN PART as set forth herein. In
particular, the court STRIKES: 1) references to “All defendants” in the headings for the first and
second causes of action, and 2) references to the Doe defendants and to non-party LGC as a
“Defendant” in the first amended complaint. The clerk is DIRECTED to STRIKE “DOES 1-100”
and “NORTH CAROLINA STATE AUDITOR” from the case caption. In all other respects the
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As also noted by the court in its May 23, 2017, order, a § 1985 conspiracy claim, by contrast, does require
allegation of a particular motive, namely that defendants were “motivated by a specific-class based, invidiously
discriminatory animus.” Buschi v. Kirven, 775 F.2d 1240, 1257 (4th Cir. 1985). Under that standard, the court
determined, plaintiff failed to state a claim for § 1985 conspiracy.

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remaining motions are DENIED as set forth herein. In addition, stay regarding scheduling activities
imposed November 7, 2016, is LIFTED, and the parties are DIRECTED to file within 14 days of
the date of this order an updated joint report and plan, pursuant to Federal Rule of Civil Procedure
26(f) and the court’s July 1, 2016, initial order regarding planning and scheduling.
SO ORDERED, this the 31st day of October, 2017.

_____________________________
LOUISE W. FLANAGAN
United States District Judge

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