Since the enactment of Chapter 583, Section 2 of the 1949
North Carolina Session Laws, section 20-158 of our General Statutes
have prohibited motorists from entering an intersection while a
stoplight is emitting a red light.
See N.C. Gen. Stat. § 20-
158(b)(2) (2003)
, amended by 2004 N.C. Sess. Laws ch. 141, §§ 1, 2
and ch. 172, § 2. Under the General Statutes, failure to stop fora red stoplight is an infraction, and a violator “may be ordered to
pay a penalty of not more than one hundred dollars.” N.C. Gen.
Stat. § 20-176(a), (b) (2005).
Beginning in 1997, certain specified municipalities were
legislatively imbued with the authority to “adopt ordinances for
the civil enforcement of [section] 20-158 [of the General Statutes]
by means of a traffic control photographic system,” or as such
systems are referred to in the vernacular, “red light cameras.”
N.C. Gen. Stat. § 160A-300.1(c) (2005),
enacted by 1997 N.C. Sess.
Laws ch. 216, §§ 1, 2;
see also id. § 160A-300.1(a) (providing a
technical definition for “traffic control photographic system”).
The enabling legislation, section 160A-300.1(c), provides that,
“[n]otwithstanding the provisions of [section] 20-176 [of the
General Statutes], in the event that a municipality adopts [a red
light camera] ordinance . . . , a violation of [section] 20-158 at
a location at which a traffic control photographic system is in
operation shall not be an infraction.”
Id. § 160A-300.1(c). The
statute further requires red light camera ordinances to contain
language to the following effect:
(2) A violation detected by a traffic control
photographic system shall be deemed a noncriminal
violation for which a civil penalty of fifty
dollars ($50.00) shall be assessed, and for which
no points authorized by [section] 20-16(c) [of the
General Statutes] shall be assigned to the owner or
driver of the vehicle nor insurance points as
authorized by [section] 58-36-65 [of the General
Statutes].
(3) The owner of the vehicle shall be issued a citation
which shall clearly state the manner in which the
violation may be challenged, and the owner shallcomply with the directions on the citation. The
citation shall be processed by officials or agents
of the municipality and shall be forwarded by
personal service or first-class mail to the address
given on the motor vehicle registration. If the
owner fails to pay the civil penalty or to respond
to the citation within the time period specified on
the citation, the owner shall have waived the right
to contest responsibility for the violation, and
shall be subject to a civil penalty not to exceed
one hundred dollars ($100.00). The municipality may
establish procedures for the collection of these
penalties and may enforce the penalties by civil
action in the nature of debt.
(4) The municipality shall institute a nonjudicial
administrative hearing to review objections to
citations or penalties issued or assessed under
this section.
Id. § 160A-300.1(c)(2), (3), (4). In 1999, the City of High Point
was granted the authority to enact a red light camera ordinance.
See id. § 160A-300.1(d),
as amended by 1999 N.C. Sess. Laws ch.
181, § 2.
Shortly thereafter, High Point enacted section 10-1-306 of its
Code of Ordinances, which provided as follows:
(a)
Administration. The City of High Point
shall implement a system for capturing traffic
control violations, as defined under [section]
20-158 [of the General Statutes], with a
traffic control photographic system that will
use the photographic images as prima facie
evidence of the traffic violations and will
authorize the High Point Department of
Transportation or an agent of the department
to issue civil citations.
The City of High Point Department of
Transportation shall administer the traffic
control photographic program and shall
maintain a list of system locations where
traffic control photographic systems are
installed.
Any citation for a violation for [section]
20-158 [of the General Statutes] or other
traffic violation, issued by a duly authorized
law enforcement officer at a system location
shall be treated, pursuant to [section] 20-176
[of the General Statutes], as an infraction so
long as the system photographic images are not
used as prima facie evidence of the violation.
The citation shall clearly state the manner in
which the violation may be reviewed. The
citation shall be processed by officials or
agents of the city and shall be forwarded by
personal service or first-class mail to the
owner's address as given on the motor vehicle
registration.
(b)
Offense
(1) It shall be unlawful for a vehicle to
cross the stop line at a system location when
the traffic signal for that vehicle's
direction of travel is emitting a steady red
light, or for a vehicle to violate any other
traffic regulation specified in [section]
20-158 [of the General Statutes].
(2) The owner of a vehicle shall be
responsible for a violation under this
section, unless the owner can furnish evidence
that the vehicle was in the care, custody or
control of another person at the time of the
violation . . . .
* * * *
(c) Penalty. Any violation of this section
shall be deemed a noncriminal violation for
which a civil penalty of $50.00 shall be
assessed, and for which no points authorized
by [section] 20-16(c) [of the General
Statutes] shall be assigned to the owner or
driver of the vehicle, nor insurance points as
authorized by [section] 58-36[-]65 [of the
General Statutes]. Failure to pay the civil
penalty or to respond to the citation within
21 days shall constitute a waiver of the right
to contest responsibility for the violation
and shall subject the owner to a civil penalty
not to exceed $100.00. The city shall
establish procedures for the collection of thecivil penalties and shall enforce the
penalties by a civil action in the nature of a
debt.
(d) Nonjudicial administrative hearing. The
City of High Point Department of
Transportation shall establish an
administrati[ve] process to review objections
to citations or penalties issued or assessed.
A notice requesting a hearing to review
objections shall be filed within 21 days after
notification of the violation. An individual
desiring a nonjudicial hearing must post a
bond in the amount of $50.00 before a hearing
will be scheduled. The determination of the
hearing officer will be final.
High Point, N.C., Code of Ordinances § 10-1-306 (2001), amended by High
Point, N.C., Ordinance No. 01-68, § 1 (Aug. 16, 2001), No. 6071/03-45,
§ 1 (Aug. 21, 2003), and No. 6074/03-48, § 1 (Sept. 2, 2003).
In implementing this ordinance, High Point entered into a
contract with Peek Traffic, Inc., pursuant to which Peek was to
install red light cameras at several of the City's intersections.
Peek also agreed to, inter alia, collect the photographs from the
cameras and prepare potential citations. Peek entered into a
subcontract with Electronic Data Systems Corporation (EDS) pursuant
to which EDS was to perform some of Peek's contractual duties to
High Point.
Under its contract with Peek, EDS reviewed the red light
camera photographs for potential violations. EDS eliminated from
consideration for a citation those photographs which demonstrated
an obvious legitimate explanation for the motorist's behavior, such
as a lawful right turn at a red light, and those photographs which
failed to contain a legible image of the offending vehicle'slicense plate. For the remaining photographs, EDS identified the
registered owner of the pictured vehicle and printed a “candidate”
citation for the pictured violation. A police officer employed by
the City of High Point then reviewed each candidate citation and
made a determination as to whether an official citation should be
issued. EDS then mailed the approved citations to the owners of
the vehicles appearing in the corresponding photographs.
The citation received by each unhappy motorist contained,
inter alia, reproductions of the images captured by the red light
camera, a record of the date and time that the images were taken,
and the following statement: “The civil penalty for this violation
is $50.00. . . . Failure to pay the civil penalty or respond to the
citation within 21 days of notification will result in the
automatic waiver of right to appeal and will result in an
additional late penalty of $50.00.” The back of the citation
contained the following notice:
If you wish to contest this citation, fill out
the Appeal section and return this form along
with a deposit of $50.00, which shall
constitute a bond. Once your appeal is
received, you will be contacted so that an
administrative hearing can be scheduled. An
independent hearing officer will hear your
appeal.
. . . If your citation is dismissed, your
deposit will be refunded.
A space for registering the reasons for an appeal was included.
Appeals from red light camera citations were heard by one of
two High Point University professors who agreed to serve as appeal
hearing officers. These appeal hearing officers were compensatedat a rate of $25.00 per hearing, regardless of the decision
rendered.
High Point placed the money collected in connection with the
red light camera citations in the “Red Light Camera Campaign
Penalties Fund,” which is separate from the City's general
operating fund. Pursuant to its contractual obligations, High
Point dispersed seventy percent of the revenue in the Red Light
Camera Campaign Penalties Fund to pay Peek for the installation and
operation of the red light camera system; this expense amounted to
$35 of each $50 ticket. Monies from the fund were also used to
compensate the appeal hearing officers, and a small amount was
expended from the Fund to educate the public about the red light
camera system. The remaining balance, if any, was dedicated for
traffic safety programs and for safety-related transportation
improvements.
On 4 April 2001, a red light camera recorded Henry H. Shavitz
failing to observe a red stoplight at the intersection of Main and
College Streets in High Point. On 3 May 2001, a citation was
issued to Shavitz in accordance with High Point's red light camera
ordinance. Shavitz refused to pay the $50.00 fine in the
prescribed twenty-one day period, and on 25 May 2001, he was issued
a citation for $100.00, which included the cost of the red light
violation and the penalty for failing to timely pay or appeal the
original citation. Shavitz responded by filing a lawsuit in Guilford County
Superior Court against the City of High Point, its mayor, city
manager, and city council members, the Guilford County Board of
Education, Peek, and EDS. Shavitz' complaint sought declarations
that section 160A-300.1 of the General Statutes and section 10-1-
306 of the High Point City Code of Ordinances were repugnant to the
North Carolina Constitution; that the contracts between High Point,
Peek and EDS were illegal; that the penalties collected constituted
an illegal tax; and that statutory section 160A-300.1 and ordinance
section 10-1-306 and the contracts entered into between High Point,
Peek, and EDS established a scheme which violated the equal
protection and due process guarantees of the United States
Constitution and the “law of the land” clause of the North Carolina
Constitution. Shavitz' complaint further sought, as an alternative
basis for relief in the event that the superior court found that
the red light camera program was valid, a declaration that Article
IX, Section 7 of the North Carolina Constitution required High
Point to pay the clear proceeds of all past and present fines
collected by the red light camera program to the Guilford County
Board of Education.
The action was removed to the Federal District Court for the
Middle District of North Carolina. While the action was pending in
federal court, the Guilford County Board of Education filed an
answer to Shavitz' lawsuit and a request for declaratory judgment
that it was entitled to the clear proceeds of the red light camerafines pursuant to Article IX, Section 7 of the North Carolina
Constitution.
On cross motions for summary judgment filed by a number of the
parties, the district court ruled against Shavitz on all federal-
law claims and certain state law claims and remanded to state court
all but one of Shavitz' state-law claims. Shavitz v. City of High
Point, 270 F. Supp. 2d 702 (M.D.N.C. 2003), vacated in part sub
nom., Shavitz v. Guilford County Bd. Of Educ., 100 Fed. Appx. 146
(4th Cir. 2004). The court retained Shavitz' claim under Article
IX, Section 7 of the North Carolina Constitution and ruled that
High Point did not owe the clear proceeds of its red light camera
penalties to the Guilford County Board of Education. Id. at 729-
30. On an appeal by the Board of Education, the United States
Court of Appeals for the Fourth Circuit issued an unpublished, per
curiam opinion vacating the district court's ruling as to Article
IX, Section 7 and instructing the district court to remand that
claim to state court. Shavitz v. Guilford County Bd. Of Educ., 100
Fed. Appx. at 151-52.
Once the matter was remanded to the superior court, Shavitz
voluntarily dismissed all of his claims. There remained, however,
a dispute between High Point and the Board of Education concerning
whether the Board was entitled to the clear proceeds of the
penalties collected by the red light camera program. See Jennette
Fruit v. Seafare Corp., 75 N.C. App. 478, 483, 331 S.E.2d 305, 308
(1985) (“[U]nless a crossclaim is dependent upon plaintiff's
original claim (as would be, e.g., a crossclaim for indemnity orcontribution) or is purely defensive, a plaintiff's dismissal of
its claims against all defendants does not require dismissal of
crossclaims properly filed in the same action.”). Both High Point
and the Board of Education moved for summary judgment on this
issue.
The superior court ruled that Article IX, Section 7 of the
North Carolina Constitution was applicable to High Point's red
light camera program and that it required the clear proceeds of the
penalties collected thereunder to be paid the Board of Education.
Thereafter, the superior court entered a judgment awarding to the
School Board
90% of all amounts collected by or on behalf
of the City from the inception of [the red
light camera program] through its termination,
such amount to include $1,453,703.40 through
December 21, 2004, and 90% of all amounts
collected thereafter, less any amounts
returned by or on behalf of the City to
drivers who successfully appeal their
penalties.
High Point was further ordered to pay post-judgment interest
pursuant to section 24-5 of the General Statutes.
High Point now appeals to this Court, contending that the
superior court erred by (1) ruling that Article IX, Section 7 of
the North Carolina Constitution applies to its red light camera
program, (2) miscalculating the amount of the clear proceeds to be
paid to the Board under this provision if it is applicable, and (3)
awarding post-judgment interest.
Summary judgment is proper “if the pleadings, depositions,answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that any party is entitled to a judgment as
a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2005). On
a motion for summary judgment, “[t]he evidence is to be viewed in
the light most favorable to the nonmoving party.”
Moore v.
Coachmen Industries, Inc., 129 N.C. App. 389, 394, 499 S.E.2d 772,
775 (1998). When determining whether the trial court properly
ruled on a motion for summary judgment, this Court conducts a
de
novo review.
Va. Electric and Power Co. v. Tillett, 80 N.C. App.
383, 385, 343 S.E.2d 188, 191,
cert. denied, 317 N.C. 715, 347
S.E.2d 457 (1986). There is no dispute as to the facts in the
instant case; therefore, our analysis is confined to issues of law.
Discussion of the Issues
I.
The applicability of Article IX, Section 7 of the North
Carolina Constitution to High Point's Red Light Camera Program
[1] Article IX, Section 7 controls the disposition of
“penalties” and “fines” which are imposed for “breach[es] of the
penal laws of the State.” High Point contends that it has not
imposed the type of penalty which falls under the ambit of this
constitutional provision. We disagree.
Our Supreme Court has defined a penalty to be a sum collected
under a “penal law[],” or a “law[] that impose[s] a monetary
payment for [its] violation [where] [t]he payment is punitive
rather than remedial in nature and is intended to penalize the
wrongdoer rather than compensate a particular party.”
Mussallam v.Mussallam, 321 N.C. 504, 509, 364 S.E.2d 364, 366-67,
reh'g denied,
322 N.C. 116, 367 S.E.2d 915 (1988). In the technical sense, “[a]
'fine' is the sentence pronounced by the court for a violation of
the criminal law . . . .”
Board of Education v. Henderson, 126
N.C. 689, 691, 36 S.E. 158, 159 (1900).
Our courts do not employ an “unduly restrictive” test to
differentiate between fines and penalties:
The heart of th[e] . . . distinction lies not
in whether the monies are
denominated “fines”
or “penalties.” [T]he label attached to the
money does not control. Neither does the heart
of the distinction rest in whether there has
been an actual criminal prosecution resulting
in a “sentence pronounced by the court.” The
crux of the distinction lies in the
nature of
the
offense committed, and not in the
method
employed by the municipality to collect fines
for commission of the offense.
Cauble v. Asheville, 301 N.C. 340, 344, 271 S.E.2d 258, 260 (1980)
(“
Cauble II”) (citations omitted),
aff'g in part and rev'g in part,
45 N.C. App. 152, 263 S.E.2d 8 (1980) (“
Cauble I”). Thus, an
assessment is a penalty or a fine if it is “imposed to deter future
violations and to extract retribution from the violator” for his
illegal behavior.
N.C. School Bds. Ass'n v. Moore, 359 N.C. 474,
496, 614 S.E.2d 504, 517 (2005).
In large measure, High Point's argument to this Court is
premised upon our Supreme Court's early Twentieth Century opinion
in
Board of Education v. Henderson, 126 N.C. [439] 689, 36 S.E. 158
(1900). In the
Henderson case, the Vance County Board of Education
sued the Town of Henderson seeking the proceeds of fines and
penalties collected by the Town.
Id. at 690-91, 36 S.E. at 158-59. In a decision predating the Court's subsequent declaration that no
restrictive test should be employed to differentiate fines and
penalties, the justices noted that
[a] municipal corporation has the right, by
means of its corporate legislation, commonly
called town ordinances, to create offenses,
and fix penalties for the violation of its
ordinances, and may enforce these penalties by
civil action; but it has no right to create
criminal offenses. And this being so, it was
found to be almost impossible to administer
and enforce a proper police government in
towns and cities by means of penalties alone.
It therefore became necessary to make the
violation of town ordinances . . . --a
criminal offense--which was done by [section
14-4 of the General Statutes].
Id. at 691, 36 S.E. at 159. The Supreme Court drew a now somewhat
outdated distinction between fines and penalties, and issued the
following ruling:
[A]ll the fines the [Town] has collected upon
prosecutions for violations of the
criminal
laws of the State, whether for violations of
its ordinances made criminal by section [14-4
of the General Statutes], or by other criminal
statutes, such fines belong to the common
school fund of the county. It is thus
appropriated by the Constitution, and it can
not be diverted or withheld from this fund
without violating the Constitution. This is
not so with regard to “penalties” which the
[Town] may have sued for and collected out of
offenders violating its ordinances. These are
not penalties collected for the
violation of a
law of the State, but of a town ordinance. But
wherever there was a fine imposed in a State
prosecution for a misdemeanor under section
[14-4] of the [General Statutes], it belongs
to the school fund, and, as we have said, must
go to that fund.
Id. at 692, 36 S.E. at 159;
see also School Directors v. Asheville,
137 N.C. 503, 508-09, 50 S.E. 279, 281 (1905) (“It is settled thatthe Legislature may give to cities and towns the entire penalty
incurred for the violation of ordinances to be recovered in a civil
action, but when the State interposes and declares the violation of
an ordinance a misdemeanor, the fine imposed for the criminal
offense must go in the way directed by the Constitution.”).
Eighty years after
Henderson, the Supreme Court decided
Cauble
II, 301 N.C. 340, 271 S.E.2d 258 (1980). The
Cauble II case
involved a suit by citizens seeking to have the proceeds of the
penalties imposed by the City of Asheville for overtime parking
given to the public schools in accordance with Article IX, Section
7. After indicating that an “unduly restrictive” test should not
be utilized to distinguish between penalties and fines,
id. at 344,
271 S.E.2d at 260, the Court issued the following holding:
The Asheville Code makes it unlawful to park
overtime. [Section] 14-4 [of the General
Statutes] specifically makes criminal the
violation of a city ordinance, unless “the
council shall provide otherwise” . . . . Thus,
where, as here, the ordinances do not provide
otherwise, a person who violates the overtime
parking ordinance also breaches the penal law
of the State. Consequently, fines collected
for overtime parking constitute fines
collected for a breach of the penal laws of
the State. We, therefore, hold that the clear
proceeds of all penalties, forfeitures and
fines collected for breaches of the ordinances
in question remain in Buncombe County and be
used exclusively for the maintenance of free
public schools.
Id. at 345, 271 S.E.2d at 261.
For the sake of clarity, we note that, in the
Henderson and
Cauble cases, section 14-4 of the General Statutes was the “penal
law[]
of the State” which triggered the operation of theConstitution. Pursuant to section 14-4, a person commits a
misdemeanor if he “violate[s] an ordinance of a . . . city . . .
sewerage district” and commits an infraction if he “violate[s] an
ordinance of a . . . city . . . regulating the operation or parking
of vehicles.” N.C. Gen. Stat. §§ 14-4(a), (b) (2005). Unless a
municipality provides otherwise, the
violation of a city ordinance is a misdemeanor
or infraction as provided by [section] 14-4.
An ordinance may provide by express statement
that the maximum fine, term of imprisonment,
or infraction penalty to be imposed for a
violation is some amount of money or number of
days less than the maximum imposed by
[section] 14-4.
N.C. Gen. Stat. § 160A-175(b) (2005).
In 2002, this Court decided the case of
Donoho v. City of
Asheville, 153 N.C. App. 110, 569 S.E.2d 19 (2002),
disc. reviews
denied and cert. denied, 356 N.C. 669, 576 S.E.2d 110 (2003). The
Donoho case involved penalties under a local air pollution control
program. The local program used penalties to enforce state
environmental laws.
Id. at 113-15, 569 S.E.2d at 21-22. When
environmental laws were enforced by penalties imposed by the North
Carolina Department of Environment and Natural Resources, the
proceeds of the penalties were disposed of in accordance with
Article IX, Section 7.
Id. at 113, 569 S.E.2d at 21. However,
when penalties were imposed under the local program, the proceeds
were not given to the public schools.
Id. at 115, 569 S.E.2d 22.
This Court ruled that Article IX, Section 7 applied to the
penalties assessed by the local program: It would be anomalous for violations of
state-mandated air quality standards to result
in civil penalties allocated to local school
boards in all counties where the Commission
enforces the state air pollution laws but a
similar violation in the counties with local
programs approved by the Commission
experienced a different result. If such were
the case, every county and local governmental
unit could circumvent the state constitution
by setting up a local air quality enforcement
unit pursuant to state-delegated authority,
and thereby develop a new revenue stream,
while depriving the schools of funds directed
to them by Article IX, Section 7 of the North
Carolina Constitution.
Id. at 118, 569 S.E.2d at 24.
Finally, in 2005, our Supreme Court decided
North Carolina
School Boards Association v. Moore, 359 N.C. 474, 614 S.E.2d 504
(2005).
Moore involved the applicability of Article IX, Section 7
to monies collected by the University of North Carolina campuses
for violations of vehicle registration, traffic, and parking
ordinances adopted by the board of trustees of the state's
university system.
Id. at 494, 614 S.E.2d at 516. The General
Assembly authorized the board of trustees to provide that the
violation of one of its ordinances would “'subject[] the offender
to a civil penalty'” to be collected “'by civil action in the
nature of debt.'”
Id. (quoting N.C. Gen. Stat. § 116-44.4(h)
(2003)). If the system did not provide for such a penalty, then
ordinance violations were nevertheless infractions punishable by a
monetary penalty under section 116-44.4(g) of the General Statutes.
Id. The university system did provide for the imposition of its
own civil penalties and argued that “the payments collected[thereunder] by the constituent institutions for violation of
parking, traffic, and vehicle registration ordinances [were] not
civil penalties collected for a breach of the State's penal laws.”
Id. at 495, 614 S.E.2d at 517. In an analysis that mostly
concerned the penal nature of the assessments at issue, the Supreme
Court held that Article IX, Section 7 controlled the disposition of
the funds.
Id. at 497, 614 S.E.2d at 518.
The foregoing authorities establish, at the very least, that
if money is collected for the transgression of both a municipal
ordinance and a coordinate state statute, then the penal laws of
our state are implicated and Article IX, Section 7 controls the
disposition of the funds. Thus, in the instant case, the
Constitution applies to the High Point red light camera program if
the program exacts penalties for violations of the City's red light
camera ordinance and also exacts penalties to enforce the penal
laws of our state.
It is uncontested that the failure to observe a red stoplight
is illegal by virtue of section 20-158(b)(2) of the General
Statutes. Generally, section 20-158(b)(2) is enforced by statutory
section 20-176(b), which makes a violation an infraction,
punishable by a fine. When this method of enforcement is employed,
section 20-158 is clearly a penal law of the state.
See ante, slip
op. at 13-14, __ N.C. App. at __, __ S.E.2d at __ (discussing what
constitutes a penal law); David M. Lawrence,
Fines Penalties, and
Forfeitures: An Historical and Comparative Analysis, 65 N.C.L. Rev.
49, 81 (1986) (“A law that is enforced as an infraction is clearlya penal law. A monetary payment is imposed upon proof of its
violation, and the penalty is clearly intended to be punitive
rather than compensatory.”).
Section 160A-300.1, which authorizes municipal red light
camera programs, merely creates an alternative mechanism for
enforcement of section 20-158(b)(2). Specifically, section 160A-
300.1 delegates enforcement to municipalities, and decriminalizes
violations of section 20-158(b)(2) by providing that
“[n]otwithstanding the provisions of [section] 20-176, in the event
that a municipality adopts [a red light camera] ordinance . . . ,
a violation of [section] 20-158
shall not be an infraction” and by
making red light camera violations “noncriminal violation[s] for
which a civil penalty of fifty dollars ($50.00) shall be assessed.”
N.C. Gen. Stat. §§
160A-300.1(c), (c)(2).
High Point Ordinance 10-1-306 establishes the red light camera
program authorized by section 160A-300.1 of the General Statutes.
High Point's ordinance implements a system for “capturing traffic
control violations, as defined under [section] 20-158 [of the
General Statutes]” with red light cameras, “us[ing] the
photographic images as prima facie evidence of traffic violations,”
and having “the High Point Department of Transportation or an agent
. . . issue civil citations” based on the photographs.
High Point,
N.C., Code of Ordinances
§ 10-1-306(a).
If a motorist fails to observe a red stoplight at an
intersection at which High Point has placed a red light camera,
that motorist undoubtedly has violated section 20-158(b)(2) of theGeneral Statutes. If High Point punishes that motorist by imposing
the civil penalty established by its red light camera ordinance,
then High Point is enforcing a penal law of the state because the
City is acting under the authority of section 160A-300.1 of the
General Statutes, which provides for municipal civil enforcement of
section 20-158. To hold otherwise would be to permit High Point to
“circumvent the state constitution by setting up a local [penalty
program] pursuant to state-delegated authority, and thereby develop
a new revenue stream, while depriving the schools of funds directed
to them by Article IX, Section 7 of the North Carolina
Constitution.”
Donoho, 153 N.C. App. at 118, 569 S.E.2d at 24.
Further, the fact that the violation results in a civil penalty
rather than a fine for an infraction is irrelevant if we are to
observe the Supreme Court's admonition to consider “the
nature of
the
offense committed, and not . . . the
method employed by the
municipality to collect fines for commission of the offense.”
Cauble II, 301 N.C. at 344, 271 S.E.2d at 260. Whether red light
violations are punished as infractions or by the assessment of
civil penalties by High Point, monetary payments are nevertheless
“imposed [ ] to deter future violations and to extract retribution
from the violator” for a transgression of section 20-158 of the
General Statutes.
Moore, 359 N.C. at 496, 614 S.E.2d at 517.
It is immaterial that High Point's ordinance also makes
running a red stoplight illegal by providing that
[i]t shall be unlawful for a vehicle to cross
the stop line at a system location when the
traffic signal for that vehicle's direction oftravel is emitting a steady red light, or for
a vehicle to violate any other traffic
regulation specified in [section] 20-158 [of
the General Statutes].
High Point, N.C., Code of Ordinances
§ 10-1-306(b)(1). As the ordinance
provision tacitly indicates, the violation it creates already
exists by virtue of section 20-158. Accordingly, the money
collected under the ordinance serves to punish transgressions of
both local and state penal laws.
Our analysis is borne out by the uncontested evidence that
High Point's enforcement of what it now alleges is an entirely
municipal program remains largely unsegregated from the City's
enforcement of state penal law. High Point's red light camera
ordinance includes a provision for traditional enforcement:
Any citation for a violation of [section] 20-
158 [of the General Statutes] . . . issued by
a duly authorized law enforcement officer at a
[red light camera] system location shall be
treated . . . as an infraction so long as the
system photographic images are not used as
prima facie evidence of the violation.
High Point, N.C., Code of Ordinances § 10-1-306(a). By the terms of the
ordinance, the red light cameras are an alternative means for
“capturing traffic control violations, as defined under [section]
20-158 [of the General Statutes].”
Id. § 10-1-306(a). In both
cases, the ultimate determination as to whether to issue a citation
rests with a city police officer, who determines whether there has
been a violation of section 20-158 of the General Statutes.
Ante,
slip op. at 7, __ N.C. App. at __, __ S.E.2d at __.
Finally, we note that there is no merit in High Point'sargument that the penalties it collects do not accrue to the state.
The reach of Article IX, Section 7 is limited to that portion of a
penalty which accrues to the state; however, this mostly historical
limitation has been construed to exempt only that portion of a
penalty which is due a private citizen who has brought a private
action to enforce state law, also known as a
qui tam action.
See
Donoho, 153 N.C. App. at 117, 569 S.E.2d at 23 (“Several cases have
held that the phrase 'accrue to the State' should be taken in the
context in which it was developed--as opposed to being payable to
a private party.”); Lawrence,
supra, 65 N.C.L. Rev. at 70 (noting
that the phrase “accrue to the State” is to be contrasted with
funds collected in a
qui tam action).
Accordingly, we hold that Article IX, Section 7 applies to the
civil penalties assessed by High Point under its red light camera
ordinance. The superior court's ruling to this effect must be
affirmed.
II.
The Amount of the “Clear Proceeds” Owed to the
Board of Education Under Article IX, Section 7
[2] Article IX, Section 7 requires that the “clear proceeds”
of all penalties, fines and forfeitures be “appropriated and used
exclusively for maintaining free public schools.” N.C. Const. Art.
IX, § 7. “[T]he term 'clear proceeds' as used in Article IX,
Section 7 is synonymous with net proceeds[,] . . . and . . . the
costs of collection should be deducted from the gross proceeds of
monies received for traffic violations in order to determine the
net or 'clear proceeds.'”
Cauble v. Asheville, 314 N.C. 598, 604,336 S.E.2d 59, 63 (1985) (“
Cauble IV”),
aff'g 66 N.C. App. 537, 311
S.E.2d 889 (1984) (“
Cauble III”).
Our Supreme Court has characterized its cases interpreting the
phrase “clear proceeds” as follows:
In [
State v.]
Maultsby the Court stated that
“[b]y 'clear proceeds' is meant the total sum
less only the sheriff's fees for collection,
when the fine and cost[s] are collected in
full." [139] N.C. [583, 585], 51 S.E. 956
[(1905)] (emphasis added). In
Hightower [
v.
Thompson] the Court stated that “the 'clear
proceeds' have been judicially defined as the
amount of the forfeit
less the cost of
collection, meaning thereby the citations and
process against the bondsman usual in the
practice.” 231 N.C. [491] 493-94, 57 S.E.2d
765 [1950] [emphasis added]. In
School
Directors v. Asheville, we emphasize the
language “that the power of the Legislature is
exhausted by giving to the clerk or sheriff a
reasonable commission for collecting the
fines--to be deducted from the amount before
paying it over to the treasurer of the school
fund.” 137 N.C. at 511-12, 50 S.E. at 282.
Cauble IV, 314 N.C. at 605-06, 336 S.E.2d at 64. According to the
Court,
these cases indicate that the costs of
collection do not include the costs associated
with enforcing the ordinance but are limited
to the administrative costs of collecting the
funds. If . . . the costs of enforcing the
penal laws of the State were a part of
collection of fines imposed by the laws, there
could never by any
clear proceeds of such
fines to be used for the support of the public
schools. This would in itself contravene that
portion of Article IX, Section 7 of the North
Carolina Constitution which directs that clear
proceeds of penalties, forfeitures and fines
collected for any breach of the penal laws of
the State shall be applied to the public
schools. We do not believe that the framers of
our Constitution intended such a result.
Conversely it would be an impractical andharsh rule to deny municipalities the
reasonable costs of collections.
Id. at 606, 336 S.E.2d at 64.
Article IX, Section 7 “is not self-executing”; therefore, the
General Assembly may “specify[] how the provision's goals are to be
implemented.”
Moore, 359 N.C. at 512, 614 S.E.2d at 527;
see also
Lawrence,
supra, 65 N.C.L. Rev. at 74 (“[I]t is implicit in the
North Carolina cases and consistently upheld in other states [with
a constitutional provision comparable to Article IX, Section 7]
that the general assembly does have the power to define those
collection related costs that are deductible.”). In exercise of
this authority, the Legislature has enacted section 115C-437 of the
General Statutes:
The clear proceeds of all penalties and
forfeitures and of all fines collected for any
breach of the penal laws of the State, as
referred to in Article IX, Sec[tion] 7 of the
Constitution, shall include the full amount of
all penalties, forfeitures or fines collected
under authority conferred by the State,
diminished only by the actual costs of
collection, not to exceed ten percent (10%) of
the amount collected.
N.C. Gen. Stat. § 115C-437 (2005).
High Point argues that the portion of the penalties it paid to
Peek and the fees it paid to the appeal hearing officers should be
deducted to determine the “clear proceeds” of its red light camera
program. This assertion is nonsensical, as these expenditures
clearly constitute enforcement costs rather than collection costs.
The payments to Peek accomplish enforcement of the traffic laws in
much the same way as paying police officers for traditionalenforcement, and the payment of the appeal hearing officers is
comparable to the payment of judges who preside over traditional
infraction hearings. As the costs of employing police and judges
are not deducted to determine the clear proceeds of a penalty,
ante, slip op. at 24, __ N.C. App. at __, __ S.E.2d at __ (citing
Cauble IV's discussion of enforcement costs versus collection
costs), High Point may not deduct its analogous enforcement costs.
High Point also argues that the General Assembly did not
intend for the ten percent formula of section 115C-437 to apply in
determining the clear proceeds of red light camera penalties. As
the City notes, the statute which enables red light cameras in High
Point and approximately two dozen other cities does not state that
the clear proceeds of the camera program must go to the schools,
but the statutes which specifically authorize red light cameras in
the City of Concord and in the County of Wake do direct that the
clear proceeds of those local programs be paid to the schools.
Contrast N.C. Gen. Stat. § 160A-300.1
with 2001 N.C. Sess. Laws ch.
286, §§ 3, 4,
as amended by 2003 N.C. Sess. Laws ch. 380, §§ 3, 4.
Further, High Point notes that the Concord and Wake County statutes
provide a different definition for the phrase “clear proceeds,” to
wit: “the funds remaining after paying for the lease, lease
purchase, or purchase of the traffic control photographic system;
paying a contractor for operating the system; and paying any
administrative costs incurred by the municipality related to the
use of the system.” 2001 N.C. Sess. Laws ch. 286, §§ 3, 4,
as
amended by 2003 N.C. Sess. Laws ch. 380, §§ 3, 4. However, we are unpersuaded that the laws which, by their
terms, are limited in applicability to the red light camera
programs in Concord and Wake have any bearing on the definition of
“clear proceeds” by which High Point is bound. As indicated in
section I of our discussion, the clear proceeds of the penalties
collected by High Point's red light camera program must be paid to
the Guilford County Board of Education. Further, the General
Assembly's 2001 enactment concerning Concord and Wake makes it
clear that the Legislature feels it has the authority to clarify
the meaning of clear proceeds in the context of red light camera
programs. As the General Assembly has not made a new definition
applicable to High Point, we must conclude that the City is bound
by the definition of clear proceeds set forth in section 115C-437
of the General Statutes.
High Point finally argues that, even if applicable, section
115C-437 cannot limit its collection costs to ten percent of the
amount of the penalties collected because this limitation runs
afoul of the flexible test for determining the costs of collection
established by the Supreme Court in
Cauble IV. The
Cauble IV
decision, which predated the enactment of section 115C-437,
affirmed this Court's reversal of a superior court order
disallowing Asheville's attempt to withhold penalty collection
costs from the local school board.
Cauble IV, 314 N.C. at 605-06,
336 S.E.2d at 64. In reaching this decision, the Supreme Court
held that the Constitution was not so “impractical and harsh” as to
“deny municipalities the reasonable costs of collections.”
Id. at606, 336 S.E.2d at 64. Read closely and in context,
Cauble IV
stands for the proposition that Article IX, Section 7 allows
localities to retain their reasonable collection costs; however,
the decision stops far short of declaring a constitutional mandate
that local governments receive the entirety of their collection
expenses.
Our courts “give[] acts of the General Assembly great
deference, and a statute will not be declared unconstitutional
under our Constitution unless the Constitution clearly prohibits
that statute.”
In re Spivey, 345 N.C. 404, 413, 480 S.E.2d 693,
698 (1997). In conducting such an analysis, our Constitution will
be given an interpretation “'based upon broad and liberal
principles designed to ascertain the purpose and scope of its
provisions.'”
Moore, 359 N.C. at 513, 614 S.E.2d at 527 (quoting
Elliott v. State Bd. of Equalization, 203 N.C. 749, 753, 166 S.E.
918, 920-21 (1932)). Further, “the General Assembly's actions in
. . . implement[ing] [Article IX, Section 7] must be held to be
constitutional unless the statutory scheme runs counter to the
plain language of or the purpose behind Article IX, Section 7.”
Id. at 512, 614 S.E.2d at 527.
As already indicated, the plain language of Article IX,
Section 7 states that the clear proceeds of applicable penalties,
fines, and forfeitures “shall belong to and remain in the several
counties, and shall be faithfully appropriated and used exclusively
for maintaining free public schools.”
This language is unequivocal
as to its drafters' intent to benefit the public schools as opposedto city treasuries.
We conclude that the statutory limitation on
a municipality's ability to withhold collection costs, as codified
by section 115C-437 of the General Statutes, comports with the
language of Article IX, Section 7. We likewise conclude that
Cauble IV does not require a contrary result.
Accordingly, the superior court did not err by using section
115C-437 to determine the amount of the clear proceeds earned by
High Point's red light camera program. Further, the superior court
correctly applied section 115C-437 to determine that High Point
must pay ninety percent of the amount collected by its red light
camera program to the Guilford County Board of Education. With
regard to this issue, the challenged summary judgment must be
affirmed.
III.
The Applicability of Post-Judgment Interest to
the Judgment Against High Point
[3] Section 24-5 of the General Statutes provides that,
[i]n an action other than contract, any
portion of a money judgment designated by the
fact finder as compensatory damages bears
interest from the date the action is commenced
until the judgment is satisfied. Any other
portion of a money judgment in an action other
than contract, except the costs, bears
interest from the date of entry of judgment
. . . until the judgment is satisfied.
Interest on an award in an action other than
contract shall be at the legal rate.
N.C. Gen. Stat. § 24-5(b) (2005). This statute does not operate
against the state because “interest may not be awarded against the
State unless the State has manifested its willingness to pay
interest by an Act of the General Assembly or by a lawful contractto do so.” Yancey v. Highway Commission, 222 N.C. 106, 109, 22
S.E.2d 256, 259 (1942) (holding that the predecessor of the
Department of Transportation could not be ordered to pay post-
judgment interest because it was an unincorporated agent of the
state). High Point argues that “[b]ecause [s]ection 24-5 cannot be
used to impose interest against the State, and because counties and
cities are political subdivisions of the State, it follows that
[s]ection 24-5 cannot be used to impose interest against a county
or city acting in its sovereign capacity.” We agree.
In holding that post-judgment interest cannot run against the
state absent a statutory declaration to the contrary, our Supreme
Court noted that “'it is a known and firmly established maxim that
general statutes do not bind the sovereign unless expressly
mentioned in them. Laws are prima facie made for the government of
the citizen and not of the State itself.'” Id. at 110, 22 S.E.2d at
260. This maxim has also been applied in favor of the political
subdivisions of the state. See O'Berry, State Treasurer v.
Mecklenburg County, 198 N.C. 357, 363, 151 S.E. 880, 884 (1930)
(“[G]eneral statutes do not bind the sovereign unless the sovereign
is expressly mentioned. . . . [T]he General Assembly did not intend
to include governmental agencies within the [statutory definition
at issue].”).
Indeed, the political subdivisions of the state are “exempt
. . . from the running of time limitations unless the pertinent
statute expressly includes the State” so long as the function at
issue is governmental, not proprietary. Rowan County Bd. ofEducation v. U.S. Gypsum Co., 332 N.C. 1, 8-9, 418 S.E.2d 648, 653-
54 (1992). “[A]n analysis of the various activities that th[e]
Court has held to be proprietary in nature reveals that they
involved a monetary charge of some type,” such as providing water
and sewer services to municipal citizens. Sides v. Hospital, 287
N.C. 14, 22, 213 S.E.2d 297, 302 (1975) (citing Foust v. Durham,
239 N.C. 306, 79 S.E.2d 519 (1954)). “[A]ll of the activities held
to be governmental functions by th[e] Court are those historically
performed by the government, and which are not ordinarily engaged
in by private corporations,” such as the “installation and
maintenance of traffic light signals.” Id. at 23, 213 S.E.2d at
303 (citing Hamilton v. Hamlet, 238 N.C. 741, 78 S.E.2d 770
(1953)).
We conclude that the same rule that applies to general
statutes of limitation should obtain in the case of general
interest statutes. Thus, absent a legislative provision to the
contrary, a municipality should not be ordered to pay interest
pursuant to a general interest statute where the issue which has
been litigated involves a governmental function of the
municipality.
In the present case, High Point was sued for enforcing state
and municipal traffic laws and for its management of the proceeds
collected for violations. These functions were governmental such
that, under the foregoing analysis, the general post-judgment
interest provisions of section 24-5 of the General Statutes did not
apply to any judgment against the City. Accordingly, the superior court erred by ordering High Point
to pay post-judgment interest in this case. The interest portion
of the superior court's judgment is vacated.