HUNTER, et al v. TOWN OF MOCKSVILLE, NORTH CAROLINA, et al

Filing 209

MEMORANDUM OPINION AND ORDER signed by JUDGE THOMAS D. SCHROEDER on 2/21/2017; that Plaintiffs' motion to supplement the record (Doc. 206 ) is GRANTED IN PART as to Exhibit A (Doc. 206-1) as noted herein, that Plaintiffs' motion to recons ider equitable remedies (Doc. 191 ) is GRANTED IN PART AND DENIED IN PART, and the Town is DIRECTED to reinstate Donathan to his former position as MPD lieutenant as soon as a position becomes available. Once the Town reinstates Donathan, its obliga tion to pay any prorated unpaid front pay awarded herein shall terminate. FURTHER that the Fund's motion to intervene (Doc. 195 ) is GRANTED, and the court concludes that insurance coverage under the Fund's policy for judgment as to Plaintiffs' wrongful discharge claim against the Town under State law (second claim for relief) is limited to a total of $1 million for the combined Plaintiffs' claims. A Judgment reflecting these rulings will be entered. (Sheets, Jamie)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
KENNETH HUNTER, RICK A.
DONATHAN, and JERRY D. MEDLIN,
Plaintiffs,
v.
TOWN OF MOCKSVILLE, NORTH
CAROLINA; ROBERT W. COOK, in
his official capacity as
Administrative Chief of Police
of the Mocksville Police
Department and in his
individual capacity; and
CHRISTINE W. BRALLEY, in her
official capacity as Town
Manager of the Town of
Mocksville and in her
individual capacity,
Defendants,
and THE INTERLOCAL RISK
FINANCING FUND OF NORTH
CAROLINA,
Intervenors.

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1:12cv333

MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.
This case is before the court on various post-trial motions
of the parties and a proposed intervenor following a jury verdict
for Plaintiffs and the court’s award of equitable relief in this
action for wrongful discharge in violation of the First Amendment
under 42 U.S.C. § 1983 and State law.

The purpose of this

memorandum opinion and order is to resolve all outstanding motions

so that a final judgment may be entered.
I.

BACKGROUND
A more complete recitation of the background is set forth in

the court’s August 12, 2016 memorandum opinion and order (Doc.
176) and need not be repeated here.
Based on this court’s rulings on post-trial equitable relief,
and incorporating the information submitted by the parties at the
court’s request (Doc. 178), Plaintiffs’ recovery against the Town
of Mocksville (“Town”) and Defendants Robert W. Cook and Christine
W. Bralley 1 as to Plaintiffs’ First Amendment Free Speech claim
under § 1983 (first claim for relief) and wrongful termination
claim under North Carolina law (third claim for relief) is as
follows:
Kenneth L. Hunter:
Compensatory Damages:

$805,706

Front Pay:

$211,893

Rick A. Donathan:
Compensatory Damages:

$310,830

Front Pay:

$197,523

Jerry D. Medlin:
Compensatory Damages:

$288,293

1

Counsel for Defendants Cook and Bralley contended for the first time
during a February 1, 2017 telephonic hearing that these Defendants should
not be liable for equitable relief on the § 1983 claim. Insofar as this
issue has not been briefed or raised before, the court declines to
consider it now.

2

Front Pay:

$176,299

In addition, on their § 1983 claims each Plaintiff was awarded,
and shall recover, $10,000 in punitive damages against Defendants
Cook

and

Bralley,

Plaintiff.

individually,

for

a

total

of

$20,000

per

(Doc. 167.)

In the current motions before the court, the following issues
are raised.

First, Plaintiffs Donathan and Medlin ask the court

to reconsider its denial of reinstatement of their employment.
(Doc. 191.)

Second, the Interlocal Risk Financing Fund of North

Carolina (“Fund”), the Town’s municipal risk pool trust carrier
which provides liability coverage for the Town, moves to intervene
in order to argue that its policy limits total insurance coverage
for Plaintiffs’ combined claims to $1 million. (Doc. 195.) Third,
the Town argues that its governmental immunity makes it liable
only to the extent it has insurance coverage and that the court is
precluded from awarding judgment for any amount in excess of such
coverage.

(Doc. 186.)

Each issue will be addressed in turn.
II.

ANALYSIS
A.

Motion for Reconsideration and Reinstatement

Plaintiffs Donathan and Medlin move the court to reconsider
its post-trial decision to deny their request for reinstatement to
their previous employment as lieutenants in the Mocksville Police
Department (“MPD”).

(Doc. 191.)
3

Both men had been promoted to

that position just before their termination. They argue that since
the court’s ruling, two factual circumstances relied upon by the
court have changed: Town Manager Bralley retired from her position,
and even more recently a MPD lieutenant has departed, thus creating
(Doc. 204-1 at 2.) 2

an open position.

oppose reinstatement.

The Town continues to

It relies on the opinion expressed by its

current Chief of Police, Todd Penley, that reinstatement “would
result in hostility and antagonism within the [MPD]” because the
litigation has “damaged the relationships between the plaintiffs
and individuals in the local law enforcement community to such an
extent

that

reinstatement

public safety.”

of

the

plaintiffs

(Doc. 197-1 at 2.)

would

jeopardize

The Town also argues that no

funding exists to create a new officer position and states that it
does

not

wish

to

terminate

reinstate either Plaintiff.

any

current

(Id.)

officer

in

order

to

Of course, to the extent there

is an opening within the MPD, the latter concerns would be moot.
As

the

court

preferred remedy.
in

part

because

acknowledged

earlier,

(Doc. 176 at 11.)
there

was

no

reinstatement

is

the

Reinstatement was declined

position

available,

Defendants

indicated there was no budget money to fund additional positions,

2

Medlin has also filed a declaration in which he states that based on
a conversation with a former MPD officer who spoke with “close
acquaintances” at the MPD, a lieutenant intends to retire in June 2017
and a “reliable source” indicates that at least three other MPD officers
intend to give notice of their resignations. (Doc. 206-2 at 2.) As
Defendants note (Doc. 207 at 1), this is unreliable hearsay that the
court declines to credit.

4

and the Town Manager opposed it.

The Town also presented evidence

that, in its view, a working relationship would be infeasible in
light of all that has transpired.

That was based in part on the

opinion of Bralley, who has since left.

(See Doc. 170-1 at 1

(Bralley testifying that the trial “damaged the relationships
between the plaintiffs and individuals employed by the Town,”
making reinstatement “unworkable”).)

Chief Penley also stated

that mutual trust is vital to effective police work (Doc. 170-2 at
2), that the events of the case “damaged the relationships between
the

plaintiffs

and

individuals

in

the

local

law

enforcement

community,” and that reinstatement “would result in hostility and
antagonism within the Department” (id. at 1-2).
As to Medlin, there is evidence that his relationship with
the MPD following these events has only deteriorated.

On August

28, 2016, after trial in this case, Medlin posted on social media
that Mocksville is a “crooked [expletive] hole of a town.”
197-1 at 2.)

(Doc.

On November 13, 2016, he offered another online

posting that questioned law enforcement’s actions as to an active
investigation, an action Medlin seems to acknowledge was at best
ill-advised.

(Id.)

Chief

Penley

finds

these

statements

“unprofessional and incompatible with employment as a Mocksville
police officer.”

(Id.)

The Town argues that these actions

reinforce its concern that Medlin lacks trust within the MPD.
The court accepts the Town’s statement that trust within a
5

law enforcement department is serious.

See Wootten v. Virginia,

No. 6:12-cv-00013, 2016 WL 7496145, at *3 (W.D. Va. Dec. 30, 2016)
(finding

unique

need

for

deference

to

law

enforcement

decisionmaking as to personnel in the chain of command), appeal
docketed, No. 17-1117 (4th Cir. Jan. 26, 2017).

MPD officers

testified at trial that Medlin was “insubordinate” because he
refused to follow orders (Doc. 37-1 at 3-4; Doc. 37-2 at 5), used
MPD property for personal use (Doc. 37-1 at 3-4, 6), and colluded
with Hunter to intimidate fellow MPD employees (id. at 3-4; Doc.
37-2 at 5).

An additional problem for Medlin is that he is no

longer certified as a law enforcement officer and thus lacks the
minimum qualification to be an MPD officer.

(Doc. 197-1 at 2.)

Considering the complete record as to Medlin and considering his
negative

post-trial

comments

about

the

Town

and

ongoing

law

enforcement, the court will not change its ruling.
Donathan is in a more favorable posture, however.
at trial revealed he is a decorated officer.

Testimony

Donathan received

the “Silver Star” in 2007 for his involvement in saving several
elderly residents of a nursing home during a fire.

For his

actions, he was inducted into the National Police Hall of Fame and
received a letter of commendation from then-President George W.
Bush.

Donathan also received the “outstanding officer of the year

award” in 2002 and 2007.

The Davie County Sheriff, Andy Stokes,

whom the court found credible, testified that he knew Donathan
6

personally when they both worked the nursing home fire and was
“very impressed” by him. The trial evidence revealed that Donathan
was invited to Chief Cook’s house a month before he was terminated,
told he was a good officer, promoted to lieutenant, and advised
that he was likely to be promoted to captain.

Cook warned him,

however, that he needed to adhere to MPD politics.

(Doc. 43-2 at

8.)
Concerns of trust expressed as to Medlin 3 are not evident with
respect to Donathan.

At trial, Defendants contended that they

terminated Donathan largely because he was distracted by his
operation of his personal business.

The jury necessarily rejected

this conclusion, and in any event there is no indication that
Donathan still operates this business. 4

Unlike Medlin, Donathan

remains a certified law enforcement officer, ready to go to work.
It has been over five years since his termination.

Unlike as to

Medlin, the Town has not offered any specific example of animosity
as to Donathan; indeed, Chief Penley encountered him after the
trial and told him he has “no preconceived notions” about him and
an “open door” if he wished to talk.

(Doc. 197-1 at 2-3.)

Any

lingering resentment within the MPD as to Donathan has likely

3

Sheriff Stokes’ knowledge of Medlin was not based on personal
information, and Medlin left the sheriff’s office before Stokes became
sheriff.

4

Indeed, Donathan explained during his deposition in November of 2012
that the business was in the process of being sold. (Doc. 37-5 at 2.)

7

dissipated, and he would start with a new Chief of Police who was
not involved in the MPD at the time of the events leading to his
termination.

It is thus difficult to say that the employment

relationship is irreparably damaged as to Donathan.

Moreover,

Chief Penley’s concerns about any damaged relationships between
other Plaintiffs and local law enforcement do not appear to be an
issue with respect to Donathan.
However, the Town acknowledged during the February 1, 2017
telephonic hearing that the only MPD position presently available
is at the entry level. 5
Plaintiffs

would

not

Despite the court’s inquiry, counsel for
commit

interested in that position.

that

Donathan

(or

Medlin)

was

As the court noted before, it is

disinclined to order immediate reinstatement to a position where
there

are

no

funds

to

support

it

displacement of a current employee.

or

it

would

(Doc. 176

require

the

at 11-12 (citing

Duke v. Uniroyal, Inc., 928 F.2d 1413, 1423 (4th Cir. 1991); Roush
v. KFC Nat’l Mgmt. Co., 10 F.3d 392, 398 (6th Cir. 1993)).)

The

court will therefore not require the Town, which operates a small
police department, to fund a new position or displace a current
lieutenant.
Having carefully considered Plaintiffs’ request in light of

5

The Town represents that the opening was created by the departure of
an MPD lieutenant, but by the time Plaintiffs raised the issue with the
court, that position had been filled by a promotion and only an entry
level position remained open. (See Doc. 206-1.)

8

the new circumstances and conscious of the law’s preference for
reinstatement,

the

Donathan

to

lieutenant’s

opening.

Until then, Donathan will be entitled to the equitable

a

court

will

order

that

the

Town

reinstate

position

upon

the

next

available

relief of front pay up to the expiration of that award.

Spagnuolo

v. Whirlpool Corp., 717 F.2d 114, 121 (4th Cir. 1983) (explaining
that district court’s order that the employer reinstate employee
to a comparable position if it so chose and pay the employeeplaintiff in the meantime was “fully authorized”); Patterson v.
Am. Tobacco Co., 535 F.2d 257, 269 (4th Cir. 1976) (ordering that
employees who were unlawfully denied promotions receive pay until
they “obtain a job commensurate with their status”); see also
Briseno v. Cent. Tech. Cmty. Coll. Area, 739 F.2d 344, 348 (8th
Cir. 1984) (remanding to district court to order that plaintiff be
reinstated to a comparable position and be paid “monthly payment
equal to the difference between what he would have earned in a
comparable position and the amount that he earns in mitigation of
damages” until he is placed in that position).
If Donathan is returned to his former position, his award of
front pay must be prorated, as the remedies are mutually exclusive.
His front pay award of $197,523 was broken down into future loss
of compensation and benefits ($89,063), future loss of retirement
benefits ($88,631), and future loss of supplemental separation
allowance ($19,829).

(Doc. 178-2.)
9

The court will exercise its

authority to make a reasonable approximation of present value in
determining front pay, Xiao-Yue Gu v. Hughes, STX Corp., 127 F.
Supp. 2d 751, 763 (D. Md. 2001), and will simply divide Donathan’s
total award of front pay ($197,523) by the number of months it
covered (21) to arrive at a prorated amount of $9,405 per month.
He is thus entitled to that monthly amount until he is reinstated
or until the 21 month front pay period expires, whichever occurs
first.
B.

Intervention by the Fund

The

Town

enjoys

sovereign

immunity

from

damages

claims

arising from actions of their officers and employees committed
while performing a governmental function.

Clayton v. Branson,

153 N.C. App. 488, 493, 570 S.E.2d 253, 256-57 (2002).

Under

North Carolina law, the Town waives its immunity to the extent it
has purchased insurance.

N.C. Gen. Stat. § 160A-485; Combs v.

Town of Bellhaven, 106 N.C. App. 71, 73, 415 S.E.2d 91, 92 (1992).
Beyond the extent of its insurance coverage, however, there is no
waiver.

Wilhelm v. City of Fayetteville, 121 N.C. App. 87, 89,

464 S.E.2d 299, 300 (1995); see also Cunningham v. Riley, 169 N.C.
App. 600, 602, 611 S.E.2d 423, 424 (2005) (“A county may waive
sovereign immunity by purchasing liability insurance, but only to
the extent of coverage provided.” (citations omitted)).
Carolina

law

prohibits

the

entry

of

judgment

against

municipality to the extent of the municipality’s immunity.
10

North
a
See

N.C. Gen. Stat. § 160A-485(c) (“No judgment may be entered against
a city in excess of its insurance policy limits on any tort claim
for which it would have been immune but for the purchase of
liability

insurance

pursuant

to

this

section.”).

Thus,

the

parties agree that it is incumbent on the court to determine the
extent of the Town’s insurance coverage before entering final
judgment.
The Fund seeks to intervene as of right, and permissively,
pursuant

to

Federal

Rules

of

Civil

Procedure

24(a)(2)

(b)(1)(B), respectively, to argue the limits of coverage.
195.)

and

(Doc.

It argues that failure to permit intervention would impair

its ability to protect the Fund’s interests.

(Doc. 196 at 2.)

Plaintiffs oppose intervention, contending that the motion is
untimely and unnecessary because the Fund’s position is adequately
advocated by Defendants.

(Doc. 202 at 2-3.)

It argues further

that if intervention is permitted, no additional delay or briefing
should be allowed.
“Under

Rule

(Id. at 3.)
24(a)(2),

a

district

court

must

permit

intervention as a matter of right if the movant can demonstrate
‘(1) an interest in the subject matter of the action; (2) that
the protection of this interest would be impaired because of the
action; and (3) that the applicant’s interest is not adequately
represented by existing parties to the litigation.’”

Stuart v.

Huff, 706 F.3d 345, 349 (4th Cir. 2013) (quoting Teague v. Bakker,
11

931 F.2d 259, 260–61 (4th Cir. 1991)).

Under Rule 24(b), the

court may permit anyone who “has a claim or defense that shares
with the main action a common question of law or fact” to intervene
on timely motion.

Fed. R. Civ. P. 24(b)(1)(B).

“In exercising

its discretion, the court must consider whether the intervention
will unduly delay or prejudice the adjudication of the original
parties’ rights.”

Fed. R. Civ. P. 24(b)(3).

Thus, where a movant

seeks permissive intervention as a defendant, the movant must
satisfy three requirements: (1) the motion must be timely; (2)
the defenses or counterclaims must have a question of law or fact
in common with the main action; and (3) intervention must not
result in undue delay or prejudice to the existing parties.

See

Wright v. Krispy Kreme Doughnuts, Inc., 231 F.R.D. 475, 479
(M.D.N.C. 2005); Solo Cup Operating Corp. v. GGCY Energy LLC,
Civil No. WDQ-12-3194, 2013 WL 2151503, at *2 (D. Md. May 15,
2013); Shanghai Meihao Elec., Inc. v. Leviton Mfg. Co., 223 F.R.D.
386, 387 (D. Md. 2004). 6
Rule

24

liberally

to

Trial courts are directed to construe

allow

intervention,

where

appropriate.

Feller v. Brock, 802 F.2d 722, 729 (4th Cir. 1986) (noting that
“liberal intervention is desirable to dispose of as much of a
controversy involving as many apparently concerned persons as is

6

Intervention will not upset the court’s subject matter jurisdiction,
which is based on the presence of a federal question.
See, e.g.,
Radchyshyn v. Allstate Indem. Co., 311 F.R.D. 156, 158–61 (W.D.N.C.
2015).

12

compatible

with

efficiency

and

due

process”

(citations

and

internal quotation marks omitted)); Capacchione v. CharlotteMecklenburg Bd. of Educ., 179 F.R.D. 505, 507 (W.D.N.C. 1998)
(same).
The scope of coverage under the Fund’s insurance policy is
surely an interest in the action that would be impaired by the
court’s

interpretation

of

the

policy.

Plaintiffs

argue,

nevertheless, that the Town is an adequate advocate for the Fund’s
position.

In light of the potential conflict of interest between

the Town, as insured, and the Fund, as insurer, and considering
the Fund’s clear interest in construing its policy limits, the
court cannot agree.
Moreover, even if there were any serious doubt about that
question,

the

motion

should

be

permissive intervention standards.

granted

under

Rule

24(b)’s

The Fund’s motion is timely.

The question of insurance coverage has arisen only recently.
Plaintiffs’ argument that the Fund should have sought intervention
much earlier ignores reality.

No one knew what verdict the jury

would return, and until a verdict in excess of the alleged $1
million coverage amount was rendered, the court had no reason to
have entertained any such request.
Moreover, the Fund shares common questions of law and fact
with the parties to this action.

Indeed, the Fund’s arguments

directly address the scope of coverage, the resolution of which
13

is essential to this court’s entry of a final judgment because
the Town’s liability rises or falls on it. N.C. Gen. Stat. § 160A485(c).
Finally, the addition of the Fund will not cause undue delay
or prejudice to the parties. 7

As the Fund’s contentions directly

overlap the legal and factual issues already present in the case,
the addition of the Fund will not complicate the proceedings or
expand their scope.

In fact, the Fund has already filed its brief

and evidence as to coverage, and all parties agreed during the
February 1, 2017 telephonic hearing that the court should decide
the coverage issue on the current record with no additional
proceedings.

Thus, apart from what delay has already transpired,

the addition of the Fund does not prove to provide any further
delay.
For these reasons, the court will allow the Fund to intervene
to present its contentions as to the nature of insurance coverage
provided the Town under the Fund’s policy.
C.

Scope of Insurance Coverage and Governmental Immunity

Next, the court must determine the scope of insurance coverage
and the extent of governmental immunity. Two issues are presented.
First, what is the extent of coverage in this case under the Fund’s

7

While the court has pressed to resolve all post-trial motions and enter
final judgment, it is notable that Plaintiffs consented to much of
Defendants’ requests for additional time. See, e.g., Docs. 185, 188,
and docket text entries dated October 7, 2016, and October 17, 2016.

14

policy?

Second, if that insurance fails to cover the complete

award in this case, are Plaintiffs entitled to additional recovery
for which immunity is waived pursuant to their claim for violation
of the North Carolina Constitution (second claim for relief)? Each
question will be addressed below.
1.

Scope of Coverage under the Fund’s Policy

The parties and the Fund agree that Plaintiffs’ claims are
covered by the Fund’s policy; their disagreement is as to the
extent of coverage.

Plaintiffs argue that the policy provides up

to $1 million for each Plaintiff and $3 million in the aggregate,
while the Fund and Town contend that all three Plaintiffs’ claims
are limited to a total of $1 million.
The interpretation of an insurance policy presents a question
of law, and the parties accept that the Fund’s policy must be
interpreted under the law of the State of North Carolina.

Under

North Carolina law, “an insurance policy is a contract between the
parties which must be construed and enforced according to its
terms.”

Graham v. James F. Jackson Assoc., Inc., 84 N.C. App.

427, 430, 352 S.E.2d 878, 880 (1987) (citing Allstate Ins. Co. v.
Shelby Mut. Ins. Co., 269 N.C. 341, 152 S.E.2d 436 (1967)).

The

court is obliged to use the definitions supplied in the policy to
determine the meaning of words contained in it.

Durham City Bd.

of Educ. v. Nat’l Union Fire Ins. Co., 109 N.C. App. 152, 156, 426
S.E.2d 451, 453 (1993) (quoting Wachovia Bank & Trust Co. v.
15

Westchester Fire Ins. Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522
(1970)). “In the absence of such definition[s], nontechnical words
are to be given a meaning consistent with the sense in which they
are used in ordinary speech . . . .”

Id. (quoting Wachovia Bank

& Trust Co., 276 N.C. at 354, 172 S.E.2d at 522) (alterations in
original).
Any ambiguity in a policy must be strictly construed in favor
of providing coverage to the insured.

City of Greenville v.

Hayward, 130 N.C. App. 271, 275, 502 S.E.2d 430, 433 (1998); Maddox
v. Colonial Life & Accident Ins. Co., 303 N.C. 648, 650, 280 S.E.2d
907, 908 (1981).

In other words, when confronting ambiguity,

courts should interpret the policy as having greater coverage.
Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield L.L.C., 364
N.C. 1, 9-10, 692 S.E.2d 605, 612 (2010) (policy provisions that
extend coverage must be liberally construed in order to provide
coverage

wherever

ambiguity

exists

susceptible

to

interpretations.”

possible
when

the

by

reasonable

language

different,

used

and

construction).
in

perhaps

the

policy

“An
is

conflicting,

McLeod v. Nationwide Mut. Ins. Co., 115 N.C.

App. 283, 290, 444 S.E.2d 487, 492 (1994).

The court cannot assume

the existence of an ambiguity, however, “simply because a plaintiff
makes a claim based on a construction of the insurance policy’s
language contrary to that of the company’s interpretation.” Christ
Lutheran Church by & Through Matthews v. State Farm Fire & Cas.
16

Co., 122 N.C. App. 614, 471 S.E.2d 124, 125 (1996).
If the policy is not ambiguous, “the court must enforce the
contract as the parties have made it and may not, under the guise
of interpreting an [allegedly] ambiguous provision, remake the
contract and impose liability upon the insurance company which it
did not assume and for which the policyholder did not pay.”
Wachovia Bank & Trust Co., 276 N.C. at 354, 172 S.E.2d at 522.
Here, the Fund’s insurance is a “claims made” policy, which
means it covers claims actually made during the policy period of
July 1, 2011, to July 1, 2012.

(Doc. 186-1 at 6.)

Section I of

the policy provides: “We will pay those sums that the insured
becomes

legally

obligated

to

pay

as

damages

resulting

from

‘claims’, to which this insurance applies, against the insured by
reason of ‘employment wrongful act(s).’” (Id. at 27.) “Employment
wrongful acts” are broadly defined and include “termination of
employment.”

(Id. at 36.)

The insuring agreement further provides: “The amount we will
pay for damages is limited as described in SECTION III - LIMITS OF
INSURANCE.”

(Id. at 27.)

Section III provides:

SECTION III - LIMITS OF INSURANCE
1.

The Limits of Insurance shown in the Declarations
and the rules below fix the most we will pay
regardless of the number of:
a. Insureds;
b. “Claims” made or “suits” brought; or

17

c.

Persons or organizations
bringing “suits.”

making

“claims”

or

2.

The Annual Aggregate Limit is the most we will pay
for all damages.

3.

Subject to 2. above, the Each Claim Limit is the
most we will pay for all loss arising out of any
“employment wrongful act(s)” covered by this
policy. “Claims” based on and arising out of the
same act or interrelated acts of one or more
insureds shall be considered to be a single
“claim.”

(Id. at 31 (emphasis added).)

The pertinent Declarations page

provides:
Each Claim Limit

$1,000,000

Annual Aggregate Limit
for all Claims

$3,000,000

Deductible (Each Claim)

$5,000

(Id. at 6.)

Section IV defines a “claim”:

5. “Claim” means a demand received by the insured for
money damages, non monetary damages as provided in the
SUPPLEMENTARY PAYMENTS, filing and or service of suit
papers or arbitration proceedings filed against the
insured arising out of “employment wrongful act(s)” to
which this insurance applies.
(Id. at 36.)
8.

Finally, the policy provides:

Deductible
a.

Our obligation under Section I of this policy
to pay damages on behalf of the insured
applies only to the amount of damages in
excess of any deductible amount stated in the
Declarations.

b.

The deductible amount stated in the
Declarations, if any, applies to all damages
sustained by any person or organization as the
result of any one “claim”. “Claims” based on
18

or arising out of the same act or interrelated
acts of one or more insureds shall be
considered a single “claim”.
*

*

*

(Id. at 33 (emphasis added).)
Plaintiffs argue that the policy provides $1 million for each
Plaintiff for a total of $3 million coverage. 8

They reason that

“each plaintiff’s loss resulting from an independent ‘wrongful
employment act[]’ constitutes a separate claim subject to the Each
Claim Limit of $1M.”

(Doc. 193 at 4.)

Consequently, they read

paragraph 3 of Section III to “subject[] a single claimant with
multiple claims for loss arising from ‘employment wrongful acts’
to the ‘Each Claim Limit’” of $1 million.

(Id. at 6.)

They

contend that this interpretation reflects the policy objective “to
limit the losses of multiple persons to the $3M Annual Aggregate,
and the loss of a single claimant to the $1M limit.”

(Id. at 7.)

As further support for their argument, Plaintiffs contend
that the use of the term “loss” in paragraph 3 of Section III (“the
Each Claim Limit is the most we will pay for all loss arising out

8

Plaintiffs object to two items attached to the Town’s brief: a letter
from the Fund’s counsel explaining her opinion as to the scope of
coverage under the policy (Doc. 186-1 at 39-42); and a statement in an
affidavit of the Fund’s director of claims that expresses his opinion
that Plaintiffs’ claims collectively constitute a single claim under the
policy that is subject to the $1 million “each claim” limit (id. at 12).
The court sustains the objection to the extent the court
acknowledges it is not bound by an insurer’s interpretation of its
coverage, Wiggins v. City of Monroe, 73 N.C. App. 44, 50, 326 S.E.2d 39,
44 (1985), and the court will treat the argument of counsel as just that.

19

of any ‘employment wrongful acts’” (Doc. 186-1 at 31)) describes
a singular “loss” of an individual and not the “losses” of multiple
persons (id. at 8).

The use of the phrase “arising out of an

employment wrongful act” is further proof of this, they contend,
because a singular “loss” must be caused by the termination of a
single claimant and not by the termination of some other claimant.
(Id.)

Finally, they note that the absence of the word “persons”

in paragraph 3, in light of the inclusion of the words “claims”
and “insureds,” reflects an intent to apply the Each Claim Limit
to a claimant irrespective of only the number of “claims” or
“insureds,” but not as to the number of “persons” bringing claims.
(Id.)

To interpret the policy otherwise, they contend, would

“potentially

obliterate

the

coverage ‘for all claims.’”

insurer’s

promise

to

provide

$3M

(Id.)

The Fund 9 disagrees and contends that Plaintiffs’ argument
misreads the policy and reads out Section III(1)(c), which provides
that the Declarations limits (i.e., the Each Claim and Annual
Aggregate limits) and “the rules below” (i.e., the provisions of
Section III(3)) “fix the most we will pay regardless of the number
of . . . Persons
203 at 9.)

. . . making ‘claims’ or bringing ‘suits’”

(Doc.

The “rules below,” the Fund notes, refers to Section

9

The Town does not contest the Fund’s construction of the policy. (Doc.
186 at 2.) This may be because the Town enjoys governmental immunity
otherwise.

20

(3), which declares all “Claims based on and arising out of the
same or interrelated acts of one or more insureds” to be a “single
‘claim’” and limits “all loss arising out of” such “employment
wrongful acts” to the Each Claim Limit.

(Id. at 2-3.)

The Fund

concludes, therefore, that when all provisions are given meaning
and read together, they reflect a clear intent that, “regardless
of the number of . . . Persons . . . making ‘claims’ or bringing
‘suits,’” all “[c]laims based on and arising out of the same or
interrelated acts of one or more insureds” will be treated as a
single claim, subjecting “all loss” to the $1 million Each Claim
Limit. 10
No party cites binding authority from North Carolina that
addresses this situation.

However, application of the appropriate

rules of construction employed by North Carolina courts compels
the court to agree with the Fund.
All provisions of an insurance policy must be read together
so as to give each provision meaning.

Woods v. Nationwide Mut.

Ins. Co., 295 N.C. 500, 506, 246 S.E.2d 773, 777 (1978); Wachovia
Bank & Trust Co., 276 N.C. at 355, 172 S.E.2d at 522.

The policy

should also be construed in the context of the facts of the
particular case, and not simply in the abstract.

10

Highwoods Prop.,

Of course, under no circumstance would the Fund be obligated to pay
more than $3 million during the policy period for the combination of
these and other unrelated claims.

21

Inc. v. Exec. Risk Indem., Inc., 407 F.3d 917, 923 (8th Cir. 2005)
(applying North Carolina law, noting that “the same language may
be found both ambiguous and unambiguous as applied to different
facts”);

Lexington Ins. Co. v. Lexington Healthcare Grp., Inc.,

311 Conn. 29, 42, 84 A.3d 1167, 1175 (2014).

Here, the unambiguous

language of Section III, read as a whole, provides that all
Plaintiffs’ claims based on and arising out of the insured’s
interrelated

wrongful

employment

acts

are

subject

to

the

$1,000,000 Each Claim Limit, regardless of the number of persons
bringing claims.

To adopt Plaintiffs’ construction - that the

provisions of Section III limit only each Plaintiff’s recovery for
multiple claims, but no more - requires a strained reading of
unambiguous terms and would read out of the policy the express
reference to the limitation as to “persons.”
Plaintiffs’

interpretation

also

misreads

“claim,” ascribing it too narrow a scope.

the

meaning

of

The policy defines

“claim” as “a demand received by the insured for money damages,
non monetary damages . . ., filing and or service of suit papers
or arbitration proceedings filed against the insured arising out
of ‘employment wrongful act(s)’ to which this insurance applies.”
(Doc. 186-1 at 36.)

Plaintiffs attempt to equate “claim” with

each cause of action (or “claim for relief”) alleged by each
Plaintiff in the complaint while simultaneously limiting “claim”
to only those causes of action of a single Plaintiff.
22

This

construction finds no support in the definition, which is not
limited to any number of claimants.

Here (putting aside the

possibility that the single complaint filed by the three Plaintiffs
may constitute a single “claim”), each Plaintiff’s demand for
damages and reinstatement constitutes at best a separate “claim.”
Indeed, Plaintiffs seem to accept this much when they argue that
“each plaintiff’s loss resulting from an independent ‘wrongful
employment act,’ constitutes a separate claim.”

(Doc. 193 at 4.)

When the provisions of Section III(3) are applied, therefore, the
multiple claims made by Plaintiffs are “considered to be a single
‘claim’” if they are “based on and aris[e] out of the same act or
interrelated acts” of the insured.

(Doc. 186-1 at 31.)

Plaintiffs argue that the terminations of three Plaintiffs
was not “one act” or “interrelated acts” under the policy.
193 at 7-10.)

(Doc.

But Plaintiffs do not address why their claims are

not “based on and aris[e] out of 11 the same act or interrelated
acts” of the Town, which is the precise language of the policy.
(Doc. 186-1 at 31.)

As Plaintiffs point out elsewhere, it was the

11

“The words ‘arising out of’ are not words of narrow and specific
limitation but are broad, general, and comprehensive terms affecting
broad coverage. They are intended to, and do, afford protection to the
insured against liability imposed upon him for all damages caused by
acts done in connection with or arising out of such use. They are words
of much broader significance than ‘caused by.’ They are ordinarily
understood
to
mean . . . ’incident
to,’
or
‘having
connection
with . . . .’” State Capital Ins. Co. v. Nationwide Mut. Ins. Co., 318
N.C. 534, 539, 350 S.E.2d 66, 69 (1986).

23

Town that defended the action by arguing that each Plaintiff was
fired

for

separate

employment-related

reasons

Plaintiffs argued against and the jury rejected.

-

a

defense

Bound by that

position, Plaintiffs now suggest that the Town’s defenses raised
distinct issues and Plaintiffs’ damages were different.
at 10 n.3.)

(Doc. 193

But the policy covers “claims” as articulated by

claimants, not defenses.

And the fact that each Plaintiff may

have different damages based on years of service does not mean
that his claim was not based on or arose out of the same or
interrelated employment wrongful acts.
Given the jury’s verdict, the jury necessarily found that the
reason Bralley and Cook terminated all three Plaintiffs was because
Bralley and Cook learned that Plaintiffs had jointly participated
in a call to the Governor’s office on December 14, 2011, to
complain about the MPD, which these Defendants viewed as an act of
insubordination, as alleged in the complaint.
The trial evidence supported this conclusion.
Plaintiffs

were

fired,

Bralley

and

Cook

met

(Doc. 1 at 18.)
On the day before
with

the

Town’s

attorney to discuss the prospect of firing Plaintiffs and to review
the letters of terminations.

All three Plaintiffs were fired on

the same day within hours of each other.

Prior to that, Cook had

never terminated anyone before for the reasons Cook, Bralley, and
the Town asserted as a defense.

Donathan had been told shortly

before that he had to “fall in line” with Cook’s leadership and
24

the “politics” of the MPD.

On the day of the terminations, Cook

posted a note in the MPD that “it was a tough but clear decision
to make” and “[a]ny further rumors will be dealt with swiftly.”
Cook had described his opinion that “it was the purpose of these
gentlemen [Plaintiffs] to degrade the department.”

Cook also told

the local District Attorney, “You can’t have three people in house
undercutting you and causing trouble.”

In light of the verdict,

the only conclusion that can be drawn from the evidence is that
the jury determined that Plaintiffs’ terminations were “based on
and aros[e] out of the same act” by the Town; namely, the Town’s
approval of Plaintiffs’ joint terminations upon the urging of
Bralley

and

Cook,

who

viewed

their

call

to

the

Governor

as

insubordinate.
Even if that were not so, the wrongful termination of each
Plaintiff was at least “interrelated” under the terms of the
policy.

Plaintiffs

argue

that

the

phrase

“interrelated”

ambiguous and “more restrictive” than “related.”

is

(Id. at 9-10.)

They contend therefore that “it must be interpreted in favor of
coverage.”

(Id. at 10.)

But they do not say why this would be

so, other than to say that it does not necessarily mean “related.”
(Id.)
Plaintiffs offer no competing definition of “interrelated”
that would render the term ambiguous in the context of this case.
There is no need to search for guidance on construing the term
25

“related,”

because

it

is

defined

in

the

policy:

“Related

‘employment wrongful act(s)’ means two or more wrongful acts that
have as a common nexus any fact, circumstance, situation, event,
transaction, cause, or series of related facts, circumstances,
situations, events, transactions, or causes.”

(Doc. 186-1 at 27.)

“Interrelated” is not defined in the policy.

But it is commonly

defined as meaning “having a mutual or reciprocal relation.”
Webster’s Third New International Dictionary 1182 (1986).
means “shared

in

common,”

id.

at

1493,

and

“shared” or “mutually existing,” id. at 1895. 12
found

the

term

“interrelated”

to

be

more

Mutual

reciprocal

means

Some courts have
restrictive

than

“related,” while others have been more willing to find acts to be
interrelated.

See Sigma Fin. Corp. v. Am. Intern. Specialty Lines

Ins. Co., 200 F. Supp. 2d 697, 704-05 (E.D. Mich. 2001) (analyzing
cases

and

finding

“interrelated”

to

mean

relationship’” and narrower than “related”).

“having

a

‘mutual

One court has noted

that some insurers have defined “interrelated wrongful acts” as
acts

“which

have

as

a

common

nexus

any

fact,

circumstance,

situation, event, transaction or series of facts, circumstances,
situations, events or transactions.”

Informix Corp. v. Lloyd’s of

London, No. C-91-1506-FMS, 1992 WL 469802, at *3 (N.D. Cal. Oct.
15, 1992).

This is, of course, the definition the Fund gave to

12

These same definitions can be found at https://www.merriamwebster.com/dictionary, last accessed Feb. 16, 2017.

26

the term “related” in this case.
Even if the term “interrelated” could be said to be ambiguous
in the abstract, the use of the term is not ambiguous when applied
to the facts of Plaintiffs’ case.

For Plaintiffs’ claims to be

considered a single claim because they are interrelated, the
employment wrongful acts must have some common nexus of fact,
circumstance, situation, event, transaction, or cause that is
shared or mutually existing.

The claims of the Plaintiffs easily

meet this standard, as they allege – indeed the jury found – that
all three Plaintiffs were wrongfully terminated on the same day
for the same reason as already discussed - their jointly having
exercised

their

First

Amendment

rights

by

calling

the

North

Carolina Governor’s office to complain about misconduct within the
MPD. 13
a

Given the jury verdict, the terminations had, at a minimum,

common

cause.

Plaintiffs’

claims

Thus,
were

in

the

“based

context

on”

and

of

Section

“aros[e]

out

III(3),
of”

the

insured’s “interrelated acts” in firing them and constitute a
single claim.

Cf. Gregory v. Home Ins. Co., 876 F.2d 602, 606

(7th Cir. 1989) (noting that the term “related” should be found
unambiguous where the facts comfortably fit within the commonly
accepted definition).

13

As noted, in doing so the jury necessarily rejected Defendants’ defense
and evidence that each Plaintiff was terminated for independent reasons.
Plaintiffs’ contention that the Fund’s interpretation “would transform
most claims into a ‘single claim’ subject to the $1M limitation” (Doc.
193 at 8-9) is wholly unsupported.

27

Furthermore, Plaintiffs offer no plausible explanation for
the inclusion of the limitation of “Persons or organizations making
‘claims’” in Section III(1)(c).
“reiterate

that

multiple

They contend that it serves to

‘persons’

with

limited to the Annual Aggregate of $3M.”

multiple

claims

are

(Doc. 193 at 7.)

If

that were the case, it would be a redundancy.

Courts should not

reach interpretations that render contractual terms meaningless or
redundant.

Lane v. United States, 286 F.3d 723, 731 (4th Cir.

2002) (noting it is a basic principle of statutory interpretation
to “avoid a reading which renders some words altogether redundant”
(quoting Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995)));
Maddox v. Colonial Life & Acc. Ins. Co., 303 N.C. 648, 654, 280
S.E.2d 907, 910 (1981) (discussing the “general rules of insurance
contract construction” to interpret a policy in a way that does
not render “any provision of the [insurance] policy redundant or
ineffectual”).
It is true that exclusions to coverage should be strictly
construed.

City of Greenville v. Hayward, 130 N.C. App. 271, 276,

502 S.E.2d 430, 433 (1988).

But this does not give license to

expand coverage where none was bargained for between the insurer
and the insured.

Wachovia Bank & Trust Co., 276 N.C. at 354, 172

S.E.2d at 522; Ledford v. Nationwide Mut. Ins. Co., 118 N.C. App.
44, 453 S.E.2d 866, 869 (1995) (stating that “the court must
enforce the [insurance] policy as written and may not reconstruct
28

[it] under the guise of interpreting an ambiguous provision”
(citations omitted)).
The court’s construction is consistent with other provisions
of the policy.

For example, the insurance agreement provides

coverage for all “claims” made within the policy period, and it
deems “all ‘claims’ based on or arising out of the same or related
‘employment wrongful act(s)’ or offenses by one or more insureds”
to have been “first made when the first of such ‘claims’ is made.”
(Doc. 186-1 at 27.)

In addition, the policy treats multiple

“claims” that are “based on or arising out of the same act or
interrelated acts of one of more insureds” to be a “single ‘claim’”
for purposes of the deductible.

(Id. at 33.)

The deductible

applies to “all damages sustained by any person or organization as
the result of any one ‘claim.’”

(Id.)

In this case, therefore,

the policy applies only one deductible to Plaintiffs’ claims.14
These provisions reflect an intent across the policy to treat all
claims arising out of the same or related employment wrongful
act(s) as a single claim.
This
similar

result

policies.

is

also
See,

consistent
e.g.,

with

Gregory,

cases
876

interpreting

F.2d

at

604-06

(rejecting claim that the “each claim” limit of $500,000 applied

14

Indeed, counsel for the Fund confirmed during the telephonic hearing
on February 1, 2017, that the Town is subject to one deductible in order
to receive coverage for Plaintiffs’ claims.

29

separately to claims against the insured law firm brought by a
class of investors who purchased a securities offering (alleging
securities fraud, common law fraud, and RICO violations) and
crossclaims

brought

by

the

investment

broker

(alleging

malpractice) where the policy provided that “[t]wo or more claims
arising out of a single act, error, omission or personal injury or
a series of related acts, errors, omissions or personal injuries
shall be treated as a single claim”); Highwoods Props., Inc., 407
F.3d at 924 (applying North Carolina law and holding that a class
action brought after dismissal of a prior putative class action
nevertheless constituted a “related” claim subject to the policy’s
“single claim” limit even though it alleged different legal claims
and “the two cases did not arise out of identical facts,” but “were
grounded in actions taken by the defendants in relation to the
[same company’s] acquisition”); Liberty Ins. Underwriters, Inc. v.
Davies Lemmis Raphaely Law Corp., 162 F. Supp. 3d 1068, 1078-79
(C.D. Cal. 2016) (finding that seven separate lawsuits against a
law firm, each alleging false representations as to sales of
properties,

constituted

a

“single

claim”

under

the

policy

provision stating, “Claims alleging, based upon, arising out of or
attributable to the same or related wrongful acts shall be treated
as a single claim regardless of whether made against one or more
than one of you” because they were “related” and arose out of a
“single course of conduct” reflecting a fraudulent scheme), appeal
30

docketed,

No. 16-55711 (9th Cir. May 16, 2016); Barr v. Colo.

Ins. Guar. Ass’n & W. Guar. Fund Servs., 926 P.2d 102, 104-05
(Colo. Ct. App. 1995) (finding that claims against officers and
directors of cooperative of member grocery stores for damages
relating to a failed loan asserted a single claim under policy
providing “Losses arising out of the same Wrongful Act by one or
more of the Directors and/or Officers or interrelated Wrongful
Acts by one or more of the Directors and/or Officers shall be
considered a single Loss”); cf. Lexington Ins. Co. v. Lexington
Healthcare Grp., Inc., 311 Conn. 29, 39, 44, 84 A.3d 1167, 1174,
1176 (2014) (finding multiple claims by nursing home residents
injured by a fire not to be “related” under policy providing that
“[a]ll

claims

arising

from

continuous,

related,

or

repeated

medical incidents shall be treated as arising out of one medical
incident”;

the

court

noted

that

“each

individual

defendant

[claimant] was differently situated . . . [and] the particular
array of negligent shortcomings that ultimately led to his or her
injury or death necessarily varied”).
Plaintiffs rely on Beaufort County School District v. United
National Ins. Co., 392 S.C. 506, 709 S.E.2d 85 (2011).

There, the

court, applying South Carolina law, found no error in the trial
court’s conclusion that the claims of seven students who brought
two lawsuits against the school district for sexual abuse were not
subject

to

the

district’s

insurance
31

policy

combining

related

claims.

Id. at 523.

The case is readily distinguishable.

The

policy defined “claim” as “all notices or suits . . . based on, or
arising out of the same sexual abuse or series of sexual abuses by
one or more employees.”

Id. at 516-17.

“Sexual abuse” was defined

as “any actual, attempted or alleged criminal sexual conduct of a
person by another person.”

Id. at 514 (emphasis added).

The

endorsement provided that “related sexual abuses” would be deemed
“one sexual abuse” for “all claims based on or arising out of the
same sexual abuse or a series of related sexual abuses by one or
more employees.”

Id. at 514, 517.

The court reasoned that the

policy’s inclusion of “sexual abuse” in the definition of “claim”
reflected an intent to use the singular “person” in reference to
the victim.

Id. at 517.

Thus, the court concluded, a series of

sexual abuses refers to a series of abuses against “a person.”
Id. at 517-19.

In contrast to these facts, the Fund’s policy

contains no such specific terms upon which to make an analogous
finding.
The present case is also distinguishable from the line of
cases finding that claims brought by separate claimants are not
“related” for purposes of being treated as a single claim under a
claims made policy.

In those cases, while some courts refer to

the fact that each plaintiff has separate damages, they frequently
rely on the fact that the insureds owed separate and different
duties to each claimant that resulted in different and distinct
32

harms.
2d

See, e.g., Scott v. Am. Nat’l Fire Ins. Co., 216 F. Supp.

689,

different

693-95

(N.D.

duties

to

Ohio
a

2002)

(finding

corporate

that

claimant

insured

and

owed

individual

investors); St. Paul Fire & Marine Ins. Co. v. Chong, 787 F. Supp.
183, 188 (D. Kan. 1992) (finding three malpractice claims arising
out of an attorney’s joint representation of three clients in a
criminal trial to be unrelated because the attorney owed each
client a separate legal duty and rendered separate legal services
to each); Beale v. Am. Nat’l Laws. Ins. Reciprocal, 379 Md. 643,
666, 843 A.2d 78, 92-93 (2004) (finding unrelated claims on behalf
of children injured by lead exposure where the attorney/insured
owed separate duties to each child).

Here, the duty owed to each

Plaintiff, employed at will, was the same, and the harm caused –
termination of employment – is identical.

Only the calculation of

damages differs, but not because of any different conduct by the
insured,

but

based

on

the

circumstances

of

the

Plaintiff’s

that

Plaintiffs’

employment history.
For

these

reasons,

the

court

finds

collective claims constitute a “single claim” within the Fund’s
policy, which limits coverage to $1 million for the loss claimed
by them. 15

15 Neither the Fund nor any party raises any argument regarding the Fund’s
policy endorsement and provisions as to “back pay.” The court therefore
reaches no conclusion as to it.

33

2.

Governmental Immunity and State Constitutional
Claim

Based on the court’s finding that the Fund’s policy is limited
to $1 million for Plaintiffs’ aggregated claims, the Town enjoys
governmental

immunity

for

damages

exceeding

that

coverage.

Plaintiffs argue, however, that they are entitled to recover
against the Town their full damages beyond the insurance coverage
based on their second cause of action under the Declaration of
Rights contained in Article I of the North Carolina Constitution. 16
They contend that the lack of adequate insurance coverage and the
barrier of governmental immunity render their remedies inadequate
as a matter of law, entitling them to recovery under the North
Carolina Constitution.

(Doc. 193 at 12-20.)

In Corum v. University of North Carolina, where a university
faculty member discharged for exercising his free speech rights
brought an action under the Declaration of Rights in Article I of
the North Carolina Constitution, the North Carolina Supreme Court
held that “in the absence of an adequate state remedy, one whose

16

The Town argues that the State constitutional claim cannot proceed
because it was not submitted to the jury. (Doc. 186 at 3.) But, as
Plaintiffs properly point out, Defendants conceded during the September
16, 2016 telephonic hearing that the elements of the State constitutional
claim are subsumed in the jury interrogatory for Plaintiff’s claim for
wrongful discharge based on the North Carolina Constitution (question 2
on the verdict sheet). (Doc. 167 at 1-2.) Indeed, this was the intent
expressed at the charge conference in order to simplify the verdict sheet
in this case, as all parties agreed that the viability of a remedy under
the constitutional claim presented a post-verdict question of law for
the court if the jury found in Plaintiffs’ favor on the wrongful
discharge claim.

34

state constitutional rights have been abridged has a direct claim
against the State under our Constitution” despite governmental
immunity that would otherwise be present.
413 S.E.2d 276, 289, 291-92 (1992).
definition

of

“adequate”

as

330 N.C. 761, 782, 786,

Relying on Merriam-Webster’s

“sufficient

for

a

specific

requirement; lawfully and reasonably sufficient,” Plaintiffs argue
that “adequacy can only mean the remedy that was awarded by the
jury and then modified by the Court.”

(Doc. 193 at 13.)

Relying

further on a 1985 law review article, Plaintiffs argue that a
recovery limited to the $1 million in insurance coverage would be
inadequate because it denies them the “make-whole relief” to which
they are entitled.

(Id.)

As Defendants point out, adequacy of a remedy for purposes of
a constitutional claim is a matter addressed by North Carolina
case law, not dictionaries.

The North Carolina Supreme Court has

directed that before invoking the “extraordinary exercise of its
inherent constitutional power,” a court “must bow to established
claims and remedies,” Corum, 330 N.C. at 784, 413 S.E.2d at 291,
and find inadequacy only where there is a complete absence of a
remedy under State law, Craig v. New Hanover Cty. Bd. of Educ.,
363 N.C. 334, 339-40, 678 S.E.2d 351, 355 (2009) (finding that “to
be considered adequate in redressing a constitutional wrong, a
plaintiff

must

have

at

least

the

opportunity

courthouse doors and present his claim”).
35

to

enter

the

“[A]dequacy” is found

not in success, but in chance.”

Debaun v. Kuszaj, 238 N.C. App.

36, 41, 767 S.E.2d 353, 357 (2014) (finding that plaintiff’s
failure to overcome public official immunity did not render claim
inadequate to provide for constitutional liability); see Davis v.
Blanchard, 175 F. Supp. 3d 581, 594 n.6 (M.D.N.C. 2016) (equating
an

“adequate

remedy

as

‘an

“available,

existing,

applicable”

[remedy] but not necessar[ily] successful, remedy’” (quoting Frye
v. Brunswick Cty. Bd. of Educ., 612 F. Supp. 2d 694, 704 (E.D.N.C.
2009))).

As this court has explained, “Corum never guaranteed a

recovery; rather, it guarantees an opportunity to seek redress for
the constitutional wrong.”

Edwards v. City of Concord, 827 F.

Supp. 2d 517, 523 (M.D.N.C. 2011) (citing Craig, 363 N.C. at 340,
678 S.E.2d at 355–56).
Where North Carolina courts have found inadequacy, they have
predicated it on the existence of a complete bar to any recovery.
They have noted that the North Carolina Supreme Court has “used
the language of impossibility, noting that governmental immunity
stood as ‘an absolute bar’ to the plaintiff’s claim, ‘entirely’
and

‘automatically’

‘impossible.’”

precluded

recovery,

and

made

relief

Wilcox v. City of Asheville, 222 N.C. App. 285,

299–300, 730 S.E.2d 226, 237 (2012); see also Glenn-Robinson v.
Acker, 140 N.C. App. 606, 631-32, 538 S.E.2d 601, 619 (2000)
(holding that claims under the North Carolina Constitution are
cognizable only if there is no common law cause of action).
36

Consequently, a plaintiff has been found to be left with no remedy
for his alleged constitutional injuries where an excess liability
policy operates to “entirely preclude[]” any recovery so as to
“make relief impossible.”
355-56. 17

Craig, 363 N.C. at 340, 678 S.E.2d at

So, too, will the availability of administrative review

constitute an adequate State law remedy that prohibits a plaintiff
from advancing his State constitutional law claim.

Hawkins v.

State, 117 N.C. App. 615, 629, 453 S.E.2d 233, 241 (1995).

Even

the presence of a statute of limitations that bars a claim will
not render a claim inadequate.

Craig, 363 N.C. at 340, 678 S.E.2d

at 355-56. 18
Thus, because Plaintiffs have a remedy for their free speech
injuries under their State law claim for wrongful discharge to the
extent of the Fund’s $1 million “Each Claim limit,” their recovery
is not completely barred and is deemed “adequate” for purposes of

17

By contrast, in an unpublished decision, the North Carolina Court of
Appeals held that a plaintiff had an adequate remedy under State law
partially because the defendant had waived sovereign immunity to the
extent of the value of a surety bond, even though the plaintiff’s State
constitutional claims failed on the merits. Johnson v. Causey, 207 N.C.
App. 748, 701 S.E.2d 404 (2010). While unpublished opinions of the North
Carolina Court of Appeals are not precedential, the court finds this
reasoning to be further indication that North Carolina courts consider
a remedy adequate where immunity is waived by the purchase of insurance.
State v. Pritchard, 186 N.C. App. 128, 129, 649 S.E.2d 917, 918 (2007)
(recognizing instructive value of unpublished opinion of North Carolina
Court of Appeals).
18 Given the court’s ruling, it need not address Bralley and Cook’s
argument that Plaintiffs had an adequate remedy at State law because
Plaintiffs had other viable State law claims they could have brought
against these Defendants. (Doc. 186 at 4.)

37

the North Carolina constitutional claim.

Phillips v. Gray, 163

N.C. App. 52, 58, 592 S.E.2d 229, 233 (2004) (finding presence of
wrongful discharge claim for violation of free speech rights
adequate so as to render direct constitutional claim unwarranted).
Plaintiffs’ second claim for relief under the North Carolina
Constitution will therefore be dismissed.
3.

Bralley and Cook’s Argument as to Plaintiffs’
Remedies

Bralley and Cook argue that Plaintiffs are entitled to only
one satisfaction of their compensatory damages judgment against
them

and

the

Town

and

that

“this

Court

must

give

the

same

preclusive effect to any satisfaction of the Plaintiffs’ claims
against the Town.”

(Doc. 187 at 7.)

respond to this argument.
post-judgment

remedies,

Plaintiffs do not directly

However, the issue raised relates to
which

are

premature

at

this

time.

Therefore, the court declines to issue what would be an advisory
ruling.
III. CONCLUSION
For the foregoing reasons,
IT IS ORDERED that Plaintiffs’ motion to supplement the record
(Doc. 206) is GRANTED IN PART as to Exhibit A (Doc. 206-1) as noted
herein, that Plaintiffs’ motion to reconsider equitable remedies
(Doc. 191) is GRANTED IN PART AND DENIED IN PART, and the Town is
DIRECTED to reinstate Donathan to his former position as MPD

38

lieutenant as soon as a position becomes available.

Once the Town

reinstates Donathan, its obligation to pay any prorated unpaid
front pay awarded herein shall terminate.
IT IS FURTHER ORDERED that the Fund’s motion to intervene
(Doc. 195) is GRANTED, and the court concludes that insurance
coverage under the Fund’s policy for judgment as to Plaintiffs’
wrongful discharge claim against the Town under State law (second
claim for relief) is limited to a total of $1 million for the
combined Plaintiffs’ claims.
A Judgment reflecting these rulings will be entered.

/s/
Thomas D. Schroeder
United States District Judge
February 21, 2017

39