Cities and Towns_-health and dental benefits_former deputy sheriff-_disability
retirement_authority of board of county commissioners and county manager
A de novo review revealed that the trial court erred by entering judgment in favor of
plaintiff former deputy sheriff who is on disability retirement on his claim against defendant
county for continuation of health and dental benefits and by denying defendant county's motion
for judgment notwithstanding the verdict, because: (1) plaintiff failed to present evidence of a
valid and binding contract for the claimed insurance benefits formally entered by the board of
county commissioners acting in its corporate capacity; and (2) plaintiff failed to show that the
county manager had the authority to enter into such a contract.
Robert S. Pleasant, for plaintiff-appellee.
Womble Carlyle Sandridge and Rice, PLLC, by Tyrus V. Dahl, Jr.
and Alison R. Bost, for defendant-appellant.
STEELMAN, Judge.
Plaintiff Daryl Denson (“plaintiff”) was a deputy sheriff for
Richmond County (“County” or “defendant”) from 1986 to 1994. On 5
November 1993, plaintiff was directing traffic as part of his
duties when he was struck by a drunk driver and severely injured.
At the time of his injury, defendant provided plaintiff with health
insurance coverage as an incident of his employment.
Plaintiff's injuries prevented him from returning to active
duty as a deputy sheriff. He was not offered another position with
the County Sheriff's Department, but he discussed with County
Manager Richard Tillis (“Tillis”) other available employment withthe County. After learning that none of the County's available
positions offered compensation comparable to that he had received
as a deputy sheriff, plaintiff applied for disability benefits. He
received a determination from the North Carolina Local Government
Employees Retirement System that he was eligible for disability
retirement benefits.
Before deciding to retire, plaintiff discussed with County
employees and individual County Commissioners whether the County
would continue providing health and dental insurance coverage after
his retirement. Plaintiff met with Tillis and asked whether his
health and dental insurance with the County would continue if he
accepted disability retirement. As a result of his discussion with
Tillis, plaintiff understood that he would continue to receive
health insurance through the County after his retirement.
Plaintiff also discussed with Jimmy Maske, Bill McQuage and
Herbert Diggs, all County Commissioners, whether he would continue
to receive health insurance if he accepted disability retirement
benefits. None of the Commissioners told plaintiff he would
continue receiving health insurance, but “every one of them did say
that they would do whatever deemed necessary to take care of it.”
These discussions occurred in the community or at the
Commissioners' private places of business, not during a meeting of
the Board of County Commissioners.
Plaintiff also asked Sara Kirk, payroll clerk for the County
Finance Office, if his health and dental insurance would continue
if he accepted disability retirement benefits, and Kirk responded
affirmatively. Plaintiff testified that these discussions playedan important role in his decision to retire and to accept
disability retirement benefits rather than taking a different job
with the County.
After plaintiff retired, the County paid his health insurance
premiums from June 1994 until February 1997, while he also received
disability retirement benefits. In July 1996, plaintiff executed
a settlement and release of his workers' compensation claim against
the County. The County had a practice of continuing to provide
health insurance coverage for employees after retirement if they
had pending workers' compensation claims but terminated coverage
when their claims were resolved.
Plaintiff's attorney, Kelly Williams (“Williams”), received a
letter dated 3 February 1997 from County attorney John T. Page, Jr.
(“Page”), which informed Williams that Page had “instructed the
[C]ounty officials they can no longer pay medical or dental
benefits for [plaintiff]. His medical and dental benefits under
[C]ounty policies will terminate on the 28th day of February,
1997.” Plaintiff testified that this was the first indication that
his health insurance coverage would terminate.
Plaintiff also received a letter dated 3 February 1997 from
Jimmy Quick (“Quick”), County Human Resources Officer, stating that
the County would no longer pay his medical and dental insurance
premiums. This letter recited the County personnel policy
providing “both individual hospitalization and dental insurance to
all employees occupying budgeted positions established full time.”
The letter further stated that since plaintiff no longer occupied
a budgeted position with the County and the County had not paidmedical and dental insurance premiums for other employees who were
unable to return to work, he was no longer eligible for the
benefit.
After receiving the letters regarding the termination of his
health insurance coverage, plaintiff filed a complaint against
defendant. Plaintiff's amended complaint sought the following
relief: (1) recovery of $7,044.00, the difference between his
salary and his workers' compensation benefits, which he contended
defendant had agreed to pay him; (2) continuation of health and
dental insurance benefits based upon an agreement with defendant;
(3) payment of holiday pay; and (4) injunctive relief. On 8 March
1999, Judge Michael E. Helms granted summary judgment for defendant
as to plaintiff's claim for $7,044.00 but denied the motion as to
the remaining claims.
Judge Larry G. Ford presided over a jury trial on the claims
of continuation of health and dental insurance benefits and holiday
pay. The jury found in favor of plaintiff on the health and dental
insurance benefits issue and in favor of defendant on the holiday
pay issue. The trial court denied defendant's motions for a
directed verdict at the close of plaintiff's evidence and at the
close of all evidence and denied defendant's motion for judgment
notwithstanding the verdict.
Defendant asserts two assignments of error: (1) the trial
court erred by entering judgment in favor of plaintiff on the claim
for health and dental insurance benefits; and (2) the trial court
erred by denying defendant's motion for judgment notwithstanding
the verdict on the issue of health and dental insurance benefits. Our standard of review of the denial of a motion for directed
verdict and of the denial of a motion for judgment notwithstanding
the verdict are identical. Abels v. Renfro Corp., 335 N.C. 209,
214, 436 S.E.2d 822, 825 (1993) (“the same standard should be used
in the determination of the sufficiency of the evidence with regard
to both motions”).
The standard of review of a ruling entered
upon a motion for judgment notwithstanding the
verdict [or a motion for directed verdict] is
whether upon examination of all the evidence
in the light most favorable to the non-moving
party, and that party being given the benefit
of every reasonable inference drawn therefrom
and resolving all conflicts of any evidence in
favor of the non-movant, the evidence is
sufficient to be submitted to the jury.
Branch v. Highrock Realty, 151 N.C. App. 244, 249-50, 565 S.E.2d
248, 252 (2002), disc. review denied, 356 N.C. 667, 576 S.E.2d 330
(2003) (quoting Fulk v. Piedmont Music Center, 138 N.C. App. 425,
429, 531 S.E.2d 476, 479 (2000)). We apply de novo review to both
a trial court's denial of a motion for directed verdict and denial
of a motion for judgment notwithstanding the verdict. See In re
Will of Buck, 350 N.C. 621, 624, 516 S.E.2d 858, 860 (1999)
(“questions concerning the sufficiency of the evidence to withstand
a Rule 50 motion for directed verdict or judgment notwithstanding
the verdict present an issue of law”). A motion for either
directed verdict or judgment notwithstanding the verdict “'should
be denied if there is more than a scintilla of evidence supporting
each element of the non-movant's claim.'” Id. at 250, 565 S.E.2d
at 252 (quoting Norman Owen Trucking Inc. v. Morkoski, 131 N.C.
App. 168, 172, 506 S.E.2d 267, 270 (1998)).
At trial, plaintiff asserted that by virtue of an agreementwith defendant, he was entitled to receive health and dental
insurance benefits until he becomes eligible for medicare benefits.
It is important to note that this claim was tried and submitted to
the jury solely upon the theory of an express contract between
plaintiff and the County. It was not tried upon a theory of
estoppel, quasi-contract or any other equitable theory. The trial
court charged the jury as follows on the health and dental
insurance benefits issue:
The burden of proof on this issue is on Daryl
Denson, the plaintiff, to satisfy you by the
greater weight of the evidence that the County
of Richmond did contract to provide health
insurance benefits coverage as part of his
retirement.
A contract is a promise or a set of promises
which the law will enforce. A contract is an
agreement to do or not to do a particular
thing.
N.C. Gen. Stat. § 153A-92 provides that “the board of [county]
commissioners shall fix or approve the schedule of pay, expense
allowances, and other compensation of all county officers and
employees....” N.C. Gen. Stat. § 153A-92(a) (2001) (emphasis
added). “A county may purchase life insurance or health insurance
or both for the benefit of all or any class of county officers and
employees as part of their compensation.” N.C. Gen. Stat. § 153A-
92(d). A county has the power to enter into contracts. N.C. Gen.
Stat. § 153A-11.
“[I]n order to make a valid and binding contract[,] the board
of commissioners must act in its corporate capacity in a meeting
duly held as prescribed by law.” Jefferson Standard Life Ins. Co.
v. Guilford County, 225 N.C. 293, 301-02, 34 S.E.2d 430, 436 (1945)(citations omitted); see also Land-of-Sky Regional Council v.
County of Henderson, 78 N.C. App. 85, 336 S.E.2d 653 (1985), disc.
review denied, 316 N.C. 553, 344 S.E.2d 7 (1986). A member of the
board of county commissioners cannot contractually bind the county
when she acts “individually, informally, and separately.” Iredell
County Board of Education v. Dickson, 235 N.C. 359, 362, 70 S.E.2d
14, 18 (1952); see also Davenport v. Pitt County Drainage Dist.,
220 N.C. 237, 17 S.E.2d 1 (1941), O'Neal v. Wake County, 196 N.C.
184, 145 S.E. 28 (1928). An individual commissioner acting in her
official capacity may make a contract binding on the county if so
authorized by a formal action of the entire board. Iredell, supra;
London v. Board of Comm'rs, 193 N.C. 100, 136 S.E. 356 (1927),
appeal after remand, 195 N.C. 10, 141 S.E. 284 (1928).
We must therefore determine whether there is more than a
scintilla of evidence that an agreement with plaintiff was made,
authorized, or approved by the Board of County Commissioners, or
that an official policy was adopted by the Board in its corporate
capacity and applicable to all County employees at the time of
plaintiff's retirement.
There is no evidence in the record of any written contract
between plaintiff and defendant obligating defendant to provide
health and dental insurance benefits to plaintiff until he becomes
eligible for medicare. However, plaintiff points out there is
evidence in the record that plaintiff had several conversations
with individual County Commissioners and County employees
concerning the continuation of health and dental insurance. These
conversations included discussions with, among others, threeindividual County Commissioners and the County Manager.
Taken in a light most favorable to plaintiff, there is
evidence that plaintiff had conversations with three individual
County Commissioners who each assured plaintiff they would do
whatever was needed to take care of the issue of plaintiff's health
and dental benefits. However, there is no evidence that the full
Board of County Commissioners ever took action on these assurances
to continue plaintiff's health and dental insurance in order to
make, adopt, or approve such an agreement, as would be required to
turn these assurances by individual Commissioners into an agreement
by the County to provide continuing health and dental insurance.
Jefferson Standard Life Ins. Co. v. Guilford County, 225 N.C. 293,
300-01, 34 S.E.2d 430, 435 (1945) (“[I]n order to make a valid and
binding contract the board of commissioners must act in its
corporate capacity in a meeting duly held as prescribed by law.”)
Nevertheless, taken in a light most favorable to plaintiff
there is more than a scintilla of evidence that the County Manager
made assurances to plaintiff that his health and dental benefits
would continue. Further, there is also evidence in the record that
plaintiff did, in fact, continue to be provided health and dental
insurance for an additional thirty-one months.
Thus, the key inquiry is whether the County Manager possessed
the authority to bind the County to continue provision of
plaintiff's health and dental insurance. There is no evidence in
the record of any formal action by the Board of Commissioners
delegating such authority to the County Manager. Therefore, we
must determine whether a County Manager's powers under N.C. Gen.Stat. § 153A-82 allow the County Manager to bind the County in such
a way without such express delegation by the Board of County
Commissioners.
N.C.G.S. § 153A-82 provides:
The manager is the chief administrator of
county government. He is responsible to the
board of commissioners for the administration
of all departments of county government under
the board's general control and has the
following powers and duties:
(1) He shall appoint with the approval of the
board of commissioners and suspend or
remove all county officers, employees,
and agents except those who are elected
by the people or whose appointment is
otherwise provided for by law. The board
may by resolution permit the manager to
appoint officers, employees, and agents
without first securing the board's
approval. The manager shall make his
appointments, suspensions, and removals
in accordance with any general personnel
rules, regulations, policies, or
ordinances that the board may adopt. The
board may require the manager to report
each suspension or removal to the board
at the board's first regular meeting
following the suspension or removal; and,
if the board has permitted the manager to
make appointments without board approval,
the board may require the manager to
report each appointment to the board at
the board's first regular meeting
following the appointment
(2) He shall direct and supervise the
administration of all county offices,
departments, boards, commissions and
agencies under the general control of the
board of commissioners, subject to the
general direction and control of the
board.
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