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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
THE ESTATE OF GILBERT BARBER, by and through its administrators,
JESSIE BARBER and CALVERT STEWART; and JESSIE BARBER and CALVERT
STEWART, as Parents of the Decedent, Plaintiffs, v. GUILFORD
COUNTY SHERIFF'S DEPARTMENT and THOMAS GORDY, in his official
Filed: 16 December 2003
1. Specific Performance_enforcement_original action dismissed
The trial court erred by ordering specific performance of a settlement agreement based
upon a motion for sanctions where the moving party had dismissed the original action after the
agreement was signed. After taking a voluntary dismissal with prejudice, the moving party
(defendant) could only institute a new action or file a motion to set aside the dismissal.
2. Civil Procedure_voluntary dismissal_proceeding under Rule 60(b)_motion to set
A voluntary dismissal without prejudice is a proceeding under Rule 60(b), and the trial
court should have ruled on defendant's motion to set aside his voluntary dismissal of a
counterclaim pursuant to Rule 60(b) on the basis of misrepresentation and misconduct by
3. Constitutional Law_Free Speech_settlement agreement_voluntary waiver
A settlement agreement limiting the things that wrongful death plaintiffs could say
constituted a voluntary, knowing, and intelligent waiver of the First Amendment right to free
4. Arbitration and Mediation_mediated settlement
The trial court erred by imposing sanctions on a party who violated a settlement
agreement. The Mediation Rules require attendance at a conference, but do not require that a
party abide by the terms of an agreement entered into at a mediated settlement conference where
the agreement is not entered as a consent judgment of the court.
Appeal by plaintiffs Jessie Barber and Calvert Stewart from
order entered 15 October 2002 by Judge John O. Craig, III in
Guilford County Superior Court. Heard in the Court of Appeals 29
Lawyers' Committee for Civil Rights Under Law, by Anita S.
Hodgkiss for plaintiffs-appellants.
Moss, Mason & Hill, by Matthew L. Mason and William L. Hill,
for defendant-appellee Thomas Gordy.
Jessie Barber and Calvert Stewart (plaintiffs) appeal from
an order imposing sanctions on plaintiffs and specifically
enforcing a settlement agreement between plaintiffs and Thomas
On 15 July 2002, plaintiffs and defendant attended a mediated
settlement conference. The mediated settlement conference
concluded after plaintiffs and defendant signed a settlement
agreement. The settlement agreement contained, among others, the
2. Mr. Stewart and Ms. Barber shall focus
their public discussion of the death of their
son upon the institutions involved and the
people heading those institutions and their
immediate advisers - not upon Deputy Gordy;
3. Mr. Stewart and Ms. Barber agree not to
use the word murder with respect to Deputy
Gordy in the future and further agree that
neither the results of the Sheriff
Department's investigation nor their discovery
in this action provide a basis for accusing
Deputy Gordy of committing a crime.
Paragraph three was included in the settlement agreement at the
specific request of the plaintiffs. Plaintiffs and their attorney
signed the settlement agreement, as did defendant and his attorney.
The settlement agreement did not provide that it would be entered
as a consent judgment by the court. To comply with the settlement
agreement, defendant dismissed his counterclaims with prejudice on
19 July 2002. Later that day, plaintiffs called a press conference
at the Guilford County Courthouse. Plaintiff Barber stated that
she did not intend to abide by the settlement agreement. Shepublicly stated, Pysche! I lied. I will not honor it and also
called defendant a murderer. Plaintiff Stewart also spoke at the
press conference and called defendant various names, including
assassin, executioner, and butcher. Plaintiffs also stated
they would not apologize to defendant as they had agreed in the
On 26 July 2002, defendant filed a motion for sanctions
against plaintiffs for violations of the settlement agreement and,
in the alternative, to set aside defendant's entry of dismissal.
The trial court granted defendant's motion for sanctions and
ordered the settlement agreement specifically enforced. The court
did not rule on defendant's motion to set aside the defendant's
entry of dismissal with prejudice of his counterclaims. Plaintiffs
The issues are whether: (1) the trial court erred in
approving and adopting the terms of the settlement agreement and in
ordering specific performance of that settlement agreement; (2) the
settlement agreement is unenforceable because it violates the
freedom of speech guaranteed by the First Amendment to the United
States Constitution and Article I and XIV of the North Carolina
Constitution by placing a prior restraint on plaintiffs' speech;
and (3) the trial court exceeded its authority in imposing
sanctions on plaintiffs.
III. Specific Performance
 Plaintiffs contend that the trial court erred in ordering
them to specifically perform all terms in the settlement agreement. This Court, in State ex rel. Howes v. Ormond Oil & Gas Co.,
stated it is well-settled in North Carolina that compromises and
settlements of controversies between parties are favored by our
courts. 128 N.C. App. 130, 136, 493 S.E.2d 793, 796 (1997)
(citing PCI Energy Services, Inc. v. Wachs Technical Services,
Inc., 122 N.C. App. 436, 439, 470 S.E.2d 565, 567 (1996)).
We explained that [a]lthough our courts have not laid down a
precise method for the enforcement of such agreements, the general
rule in other jurisdictions is that a party may enforce a
settlement agreement by filing a voluntary dismissal of its
original claim and then instituting another action on the contract,
or it may simply seek to enforce the settlement agreement 'by
petition or motion in the original action.' Id. at 136, 493
S.E.2d at 796-797 (emphasis supplied) (quoting Beirne v. Fitch
Sanitarium, Inc., 167 F. Supp. 652, 654 (S.D.N.Y. 1958)).
Instead of instituting an action to enforce a
compromise agreement, a [party] who has
already commenced an action on an antecedent
claim may seek to enforce a [compromise]
which was entered into subsequently to the
commencement of the action, and he may have
the compromise enforced simply by moving for
judgment in accordance with the terms of the
compromise. Even where a [party] is seeking
to obtain some form of equitable relief,
rather than a payment of money, he may obtain
a judgment in accordance with the terms of a
compromise agreement and may thereby obtain
whatever performance the [other party] agreed
to in the compromise agreement.
Id. at 136-137, 493 S.E.2d at 797 (quoting 15 Am. Jur. 2d
Compromise and Settlement § 38). This Court held that the trial
court had the authority to enter specific performance since the
parties and their action were still pending before the court whenthe State sought specific performance of the agreement on the
State's original action. Id.
Here, plaintiffs originally brought suit against defendant and
the Guilford County Sheriff's Department for violations of North
Carolina constitutional rights and wrongful death. Defendant filed
counterclaims against plaintiffs alleging defamation, abuse of
process, intentional infliction of emotional distress, and
negligent infliction of emotional distress. Plaintiffs
subsequently took a voluntary dismissal of their claims without
Defendant's claims remained before the court, which ordered
the parties to attend a pretrial mediated settlement conference in
order to settle defendant's claims. A settlement was reached
between the parties. On 19 July 2002, defendant voluntarily
dismissed his counterclaims with prejudice after the settlement
agreement was executed. Later that day, plaintiffs violated the
settlement agreement by referring to defendant as a murderer at
a public rally.
As stated above, defendant had two options in deciding how to
specifically enforce the terms of the settlement agreement.
Defendant could: (1) take a voluntary dismissal of his original
action and then institute a new action on the contract, or (2) seek
to enforce the settlement agreement by petition or motion in the
original action. Id. at 136, 493 S.E.2d at 796-797 (emphasis
supplied). Defendant chose the former of these two options and
voluntarily dismissed his claims against plaintiffs. Defendant
asks this Court to affirm the trial court's order of specificperformance of the settlement agreement through his motion for
sanctions under the second option.
Once defendant voluntarily dismissed his claims with
prejudice, the only options defendant had left were to either
institute a new action on the settlement agreement itself or to
file a motion to set aside the dismissal with prejudice of his
counterclaims. Defendant no longer had the option of seeking to
specifically enforce the settlement agreement in the original
action because the original action had been dismissed with
The trial court erred in ordering specific performance of the
settlement agreement based upon defendant's motion for sanctions.
We reverse the order of the trial court granting specific
performance of the settlement agreement.
IV. Motion to Set Aside the Entry of Dismissal with Prejudice
 On 19 July 2002, after defendant voluntarily dismissed his
counterclaims with prejudice to comply with the executed settlement
agreement, plaintiffs breached the settlement agreement. Defendant
filed a motion for sanctions and, in the alternative, to set aside
the entry of dismissal of his counterclaims.
The trial court held a hearing on these motions, granted
defendant's motion for sanctions, and erroneously ordered the terms
of the settlement agreement to be specifically performed. The
trial court did not rule on defendant's motion to set aside the
dismissal of his counterclaims.
Under N.C. Gen. Stat. § 1A-1, Rule 41(a)(1) (2001), a
plaintiff may voluntarily dismiss a suit by filing a notice ofdismissal at any time before resting his case. The rule provides
that dismissal is without prejudice, unless otherwise stated, and
allows a plaintiff to commence a new action on the same claim
within one year. Carter v. Clowers, 102 N.C. App. 247, 251, 401
S.E.2d 662, 664 (1991); see also N.C. Gen. Stat. § 1A-1, Rule
41(a)(1) (2001). A dismissal taken with prejudice, however,
'indicates a disposition on the merits, [and] is said to preclude
subsequent litigation to the same extent as if the action had been
prosecuted to a final adjudication.' Id. (quoting Johnson v.
Bollinger, 86 N.C. App. 1, 8, 356 S.E.2d 378, 383 (1987).
N.C. Gen. Stat. § 1A-1, Rule 60(b) (2001) states:
On motion and upon such terms as just, the
court may relieve a party . . . from a final
judgment, order, or proceeding for the
following reasons . . . (3) Fraud . . .
misrepresentation, or other misconduct of an
adverse party . . . .
To proceed under Rule 60(b), however, requires an initial
determination of whether a notice of dismissal constitutes a
'judgment, order or proceeding.' Carter, 102 N.C. App. at 252,
401 S.E.2d at 665. This Court followed a United States District
Court decision and held that a voluntary dismissal can be
considered a 'proceeding' thus allowing relief via Rule 60(b).
Id. (quoting Noland v. Flohr Metal Fabricators, Inc., 104 F.R.D.
83, 85 (1984)). We explained that [t]he purpose of Rule 60(b) is
to strike a proper balance between the conflicting principles of
finality and relief from unjust judgments. Id. at 254, 401 S.E.2d
at 666. Procedural actions that prevent litigants from having the
opportunity to dispose of their case on the merits are not
favored. Id. Here, defendant specifically requested the trial court to set
aside his voluntary dismissal pursuant to Rule 60(b) of the North
Carolina Rules of Civil Procedure on the basis of misrepresentation
and misconduct by plaintiffs. The trial court granted sanctions
and erroneously ordered the terms of the settlement agreement to be
specifically performed by plaintiffs. The court did not rule on
defendant's motion to set aside.
A voluntary dismissal with prejudice is a proceeding under
Rule 60(b). Id. at 252, 401 S.E.2d at 665. The trial court should
have ruled on defendant's motion. We remand this portion of the
court's order for a ruling on defendant's motion to set aside his
dismissal pursuant to N.C. Gen. Stat. § 1A-1, Rule 60(b). In the
event the trial court sets aside defendant's dismissal, defendant
may assert a claim for breach of the settlement agreement in
addition to his original claims and may seek specific performance
and damages as remedies. McLean v. Keith, 236 N.C. 59, 71, 72
S.E.2d 44, 53 (1952). If the trial court does not set aside
defendant's dismissal, defendant is free to bring a new action for
breach of the settlement agreement and seek specific performance
and damages as remedies. State ex rel. Howes, 128 N.C. App. at
136, 493 S.E.2d at 796-797.
V. Prior Restraint on Speech
 Plaintiffs contend that the settlement agreement is
unenforceable because it violates their freedom of speech by
placing a prior restraint on their speech. We disagree.
The general rule is that prior restraints on speech are not
per se unconstitutional, but there is a heavy presumption againstits constitutional validity. Southeastern Promotions, Ltd. v.
Conrad, 420 U.S. 546, 558, 43 L. Ed. 2d 448, 459 (1975). However,
the law permits parties to knowingly and intelligently waive their
constitutional rights. The Supreme Court has held that First
Amendment rights may be waived upon clear and convincing evidence
that the waiver is knowing, voluntary and intelligent. Leonard v.
Clark, 12 F.3d 885, 889 (9th Cir. 1993) (citing D.H. Overmyer Co.
v. Frick Co., 405 U.S. 174, 185, 31 L. Ed. 2d 124, 134 (1972)).
The United States Court of Appeals for the Fourth Circuit has
stated that [t]he contractual waiver of a constitutional right
must be a knowing waiver, must be voluntarily given, and must not
undermine the relevant public interest in order to be enforceable.
Lake James Fire Dep't, Inc. v. Burke County, N.C., 149 F.3d 277,
280 (4th Cir. 1998).
Here, plaintiffs offered no evidence to show that their First
Amendment right to freedom of speech was not knowingly,
voluntarily, and intelligently waived. Plaintiffs and their
attorney agreed to and executed the mediated settlement agreement.
Plaintiffs agreed to paragraph two and insisted on the inclusion of
paragraph three, which specifically limited their speech regarding
defendant. At the hearing on defendant's motion for sanctions,
plaintiffs' attorney stated, I'm not contesting the agreement or
the validity of it or that it was voluntary. Plaintiffs offered
no evidence that their First Amendment rights were not voluntarily,
knowingly, or intelligently waived. This assignment of error is
 Plaintiffs contend that the trial court erred by exceeding
its authority in imposing sanctions on plaintiffs for bad faith
actions at the mediated settlement agreement. We agree.
Trial courts have authority, pursuant to N.C. Gen. Stat. § 7A-
38.1(g) (Mediation Rule 5), to impose any appropriate monetary
sanction on a person required to attend a mediated settlement
conference who fails to attend without good cause. N.C. Gen. Stat.
§ 7A-38.1(g) (2001). N.C. Gen. Stat. § 7A-38.1(g) does not
expressly provide for sanctions under any other circumstances. In
Few v. Hammack Enterprises, Inc., however, this Court held that
[e]ven absent an express grant of authority, however, trial courts
have inherent authority to impose sanctions for wilful failure to
comply with the rules of court. 132 N.C. App. 291, 298, 511
S.E.2d 665, 670 (1999) (citing Lee v. Rhodes, 227 N.C. 240, 242, 41
S.E.2d 747, 749 (1947)). Accordingly, the trial court has
inherent authority to sanction a party for wilful failure to comply
with the Mediation Rules. Id.
Here, plaintiffs complied with the Mediation Rules and
attended the mediated settlement conference. Plaintiffs
participated in the mediated settlement conference and ultimately
reached an agreement with defendant. This agreement was reduced to
writing and signed by the parties and their attorneys. Plaintiffs
subsequently decided not to abide by the terms of the settlement
agreement and violated it. The Mediation Rules do not require a
party to abide by the terms of a settlement agreement entered into
at a mediated settlement conference that is not entered as a
consent judgment of the court. Further, nothing in N.C. Gen. Stat.§ 7A-38.1(g) grants the trial court the authority to sanction a
party who subsequently violates a settlement agreement that has not
been incorporated into a consent judgment. Id. The trial court
was without authority under N.C. Gen. Stat. § 7A-38.1(g) or its
inherent authority to sanction plaintiffs for violating the terms
of the settlement agreement. Defendant's remedy is to bring a new
action on the settlement agreement or to seek relief in the present
action if the trial court grants defendant's motion to set aside
the dismissal. State ex rel. Howes, 128 N.C. App. at 136, 493
S.E.2d at 796-797. We reverse that part of the trial court's order
imposing sanctions on plaintiffs.
We affirm that portion of the trial court's order which holds
that plaintiffs' waiver of their First Amendment rights was
voluntarily, knowingly, and intelligently given. The trial court
was without authority to impose sanctions on plaintiffs and to
order plaintiffs to specifically perform the terms of the
settlement agreement. We vacate those portions of the trial
court's order. This action is remanded for a ruling on defendant's
motion to set aside his dismissal with prejudice of his
counterclaims pursuant to North Carolina Rules of Civil Procedure,
Rule 60(b). Carter
, 102 N.C. App. at 252, 401 S.E.2d at 665.
Affirmed in part, Vacated in part, and Remanded.
Judges MCCULLOUGH and BRYANT concur.
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