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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.
STATE OF NORTH CAROLINA v. VERNON WEBSTER HATLEY, Defendant
Filed: 7 August 2007
1. Criminal Law_withdrawal of guilty plea_greater than agreed to sentence
The trial court did not err by giving defendant a sentence greater than that set in a plea
agreement where the agreement explicitly stated that the district attorney was not bound to the
less stringent sentence if defendant did not comply with the terms. There was no ambiguity,
defendant did not abide by the terms of his agreement, and N.C.G.S. § 15A-1024 thus did not
2. Criminal Law_withdrawal of plea agreement denied_failure to cooperate_terms of
The trial court did not err by denying defendant's motion to withdraw his guilty plea
where defendant asserted that the State breached the plea agreement by not making a sentencing
recommendation, and the State asserted that defendant breached the contract by not cooperating.
A defendant who breaches a plea agreement is not entitled to go to trial if the agreement provides
3. Criminal Law_withdrawal of guilty plea_fair and just reason not shown
The trial court did not err by denying defendant's motion to withdraw his guilty plea,
made before sentencing, where defendant did not carry his burden of showing a fair and just
reason for the withdrawal
Appeal by defendant from judgment entered 3 February 2006 by
Judge Donald W. Stephens in Wake County Superior Court. Heard in
the Court of Appeals 15 March 2007.
Roy Cooper, Attorney General, by Joan M. Cunningham, Assistant
Attorney General, for the State.
Barry Nakell for defendant.
Defendant Vernon Webster Hatley (defendant) became the Senior
Director of Transportation for the Wake County Public School System
(the school system) in 2001 and was responsible for both school busoperations and budgeting. During the 2003 and 2004 fiscal years,
defendant participated in a
scheme to obtain money or property in excess
of $100,000 in value from the Wake County
school system by signing and allowing the
submission of false invoices to the school
system, for which no parts or products were
purchased from Barnes Motor and Parts Company,
Incorporated, at the time payment on the
invoices was made by the school system.
Barnes Motor and Parts Company, Incorporated (Barnes) supplied
inventory, including parts, office supplies, and furniture, to the
school system. Defendant and other employees of the school system
received gifts from Barnes, including laptops and gift cards
exceeding $600,000.00 in value. Defendant also received new carpet
in his home. In exchange for these and other gifts, defendant
engaged in pre-billing with Barnes. [T]he pre-bill meant that
Wake County would advance funds to Barnes pursuant to invoices that
[the school system] would generate. Later, the school system made
purchases from Barnes to recover the amounts advanced. The purpose
of the pre-billing scheme was so Wake County could spend its
entire budget before the end of the fiscal year without having to
give back some of the budget money. Over the course of the year,
Barnes delivered items to the school system and deducted the items
from the pre-bill, rather than charging for each item. School
system accounting procedures at the time did not allow for advance
payments; payments were made only upon receipt of the purchased
Barnes benefitted from this arrangement by providing motor
parts and bus maintenance supplies to the school system from itsinventory, as well as by purchasing the items from other vendors,
often at full retail price. Barnes then sold those items to the
school system with at least a thirty percent markup. As a result,
the school system paid more for those supplies than it would have
paid if the supplies had been ordered directly from the vendors.
The pre-billing scheme was not uncovered until 2004, despite
a 2003 audit prompted by a cost overrun of $4,000,000.00 for
supplies ordered by the Transportation Department of the Wake
County Public Schools (the Department). In one instance, defendant
and his assistant explained that safety seats installed in every
school bus had cost about $1,200.00 per bus, and that other school
bus readiness expenses had contributed to the cost overrun. The
school system had 727 buses at the time, which would have cost
$800,000.00 to equip with safety seats by defendant's calculation.
An independent estimate of the cost to equip the school system's
buses with safety seats was only $30,000.00.
Shortly before the 2004 audit, defendant asked Barnes to
prepare a lease for the large screen television, previously
purchased from Barnes, located in the school system's conference
room. Defendant told Barnes that he thought a lease would look
better to the auditors than a sale because the amount that the
school system paid for the television exceeded $2,500.00, the
amount defendant was authorized to approve without an outside bid.
Barnes prepared a lease for the television, and defendant signed it
and backdated it to 15 May 2001. A subsequent investigation by the State Bureau of
Investigation (SBI) showed that during the 2003 fiscal year,
defendant signed and submitted to the accounting department 1,451
invoices for payment to Barnes, totaling $2,612,003.00. During the
2004 fiscal year, defendant signed and submitted 1,084 invoices for
payment to Barnes, for a total of $1,200,547.00. Each invoice was
less than $2,500.00.
On 13 September 2005, as a result of the SBI investigation,
defendant was indicted for one count of obtaining property in
excess of $100,000.00 by false pretenses and one count of
conspiracy to obtain property in excess of $100,000.00 by false
pretenses. On 12 October 2005, defendant entered pleas of guilty
to both counts. Defendant entered these pleas pursuant to a plea
agreement with the State, whereby the State would recommend a
sentence of fifty-eight months to seventy-nine months, which is at
the low end of the presumptive sentencing range for these crimes.
In exchange, defendant was required to cooperate truthfully with
the ongoing investigation. The specific terms of the plea were
articulated in a letter from the prosecutor to defendant's
I am willing to recommend that your client
receive an active sentence of not less than
fifty-eight (58) months nor more than seventy-
nine (79) months. Any other terms of the
sentence would be at the discretion of the
sentencing judge. This sentencing
recommendation would be conditioned on the
truthfulness of your client in the statements
he has made to SBI S/A Gil Whitford and his
continued complete cooperation and
truthfulness. Should we find that your client
has made, or does make, false materialstatements, or fails to cooperate, I would not
be bound to recommend the above-described
Defendant entered his pleas at the same time as two Barnes
employees. The trial judge continued the case until the State
prayed judgment to allow defendant time to truthfully cooperate
with the investigation. After defendant's guilty plea, the SBI
interviewed him. Based on that interview, the prosecutor
determined that defendant was not being truthful as required by the
plea agreement, and defendant was therefore not entitled to the
sentencing recommendation in the plea agreement. On 12 January
2006, defendant filed a motion to withdraw his guilty pleas, which
the trial judge denied on 1 February 2006. Defendant received a
sentence of 89 to 119 months.
 Defendant first argues that the trial court erred by
imposing a sentence greater than the sentence that had been set in
the plea agreement, and also that the trial court erred by not
giving defendant an opportunity to withdraw his guilty plea and
proceed to trial.
Defendant cites N.C. Gen. Stat. § 15A-1024, which states:
If at the time of sentencing, the judge for
any reason determines to impose a sentence
other than provided for in a plea arrangement
between the parties, the judge must inform the
defendant of that fact and inform the
defendant that he may withdraw his plea. Upon
withdrawal, the defendant is entitled to a
continuance until the next session of court.
N.C. Gen. Stat. § 15A-1024 (2005). In this case, the judge imposed
a sentence greater than the one provided for in the plea agreement,
and did not inform defendant that he could withdraw his plea.
However, the State avers that section 15A-1024 does not apply
in this case because the trial judge found that defendant had
failed to comply with the plea agreement, and thus no plea
agreement was in place at the time of defendant's sentencing. This
Court has held that [a] plea agreement is treated as contractual
in nature, and the parties are bound by its terms. State v.
Russell, 153 N.C. App. 508, 509, 570 S.E.2d 245, 247 (2002)
(citation omitted). In Russell, the defendant,
in accordance with a plea agreement, which
provided a prayer for judgment would be
entered until Defendant had the opportunity to
testify against co-defendants in the case.
The plea agreement further provided if
Defendant complied with its terms, the State
would agree to an active sentence of
ten-twelve months to run concurrently with
other sentences Defendant was already serving.
If Defendant refused to testify against his
co-defendants, the State, at its option,
[could] declare this agreement null and void
or pray judgment on this plea.
Id. at 508-09, 570 S.E.2d at 246 (alteration in original). The
defendant did not testify against his co-defendants, and the trial
court subsequently sentenced him to an active sentence of ten to
twelve months to run consecutively with the defendant's prior
sentences. Id. at 509, 570 S.E.2d at 246. This Court affirmed the
trial court's decision because [t]here was no ambiguity in the
plea agreement. It simply stated that if Defendant refused to
testify against his co-defendants the State had the option ofdeclaring the plea 'null and void,'
necessitating a trial, or
praying for judgment. Id. at 510, 570 S.E.2d at 247.
In the plea agreement here,
the agreement explicitly states
that the district attorney is not bound to recommend the less
stringent sentence if defendant does not comply with the
agreement's terms. N.C. Gen. Stat. § 15A-1024 does not apply in
this case because, as in Russell, there is no ambiguity in the
terms of the plea agreement. Defendant did not abide by the terms
of his plea agreement, and the agreement specifically allowed the
district attorney to withdraw from his obligation.
 We turn now to defendant's second argument, that the trial
court erred in denying defendant's motion to withdraw his guilty
plea after the State did not make the sentencing recommendation
anticipated by the plea agreement. Defendant argues that he should
have been allowed to withdraw his guilty plea because the district
attorney failed to comply with a material provision of the
In analyzing plea agreements, 'contract principles will be
'wholly dispositive' because 'neither side should be able . . .
unilaterally to renege or seek modification simply because of
uninduced mistake or change of mind.' State v. Lacey, 175 N.C.
App. 370, 372, 623 S.E.2d 351, 352-53 (2006) (quoting United States
v. Wood, 378 F.3d 342, 348 (4th Cir. 2004)). Each side argues that
the other party violated the contract first. The State asserts
that defendant breached the contract by failing to cooperate and betruthful, and defendant asserts that the State breached the
contract by making no sentencing recommendation.
Defendant supports his position by citing Nags Head v.
Tillett, 314 N.C. 627, 632, 336 S.E.2d 394, 398 (1985) for the
proposition that, When one party to a plea agreement, as to a
contract, fails to comply with a material provision, thereby
defeating the very purpose of the contract, the other party is
entitled to be restored to the position he occupied when the plea
agreement was entered into. This reliance is wholly unfounded.
Tillett has no relation to plea agreements, and any analogy between
the contract of sale in Tillett and the plea agreement here is
tenuous at best, especially in light of Russell, which clearly
states that when a defendant violates his plea agreement, he is not
entitled to go to trial if the agreement provides otherwise.
Russell, 153 N.C. App. at 510, 570 S.E.2d at 247.
 Finally, defendant argues that the trial court erred in
denying his motion to withdraw his guilty plea because he made his
motion before sentencing, asserted his innocence, maintained that
he had truthfully cooperated with the prosecution as required by
the plea agreement, and showed a good, fair, and just reason for
withdrawal of his plea.
There is no question that defendant made his motion to
withdraw his guilty plea before sentencing. Although there is no
absolute right to withdraw a plea of guilty, a criminal defendant
seeking to withdraw such a plea, prior to sentencing, is 'generallyaccorded that right if he can show any fair and just reason.'
State v. Marshburn
, 109 N.C. App. 105, 107-08, 425 S.E.2d 715, 717
(1993) (quoting State v. Handy
, 326 N.C. 532, 536, 391 S.E.2d 159,
161 (1990)). In reviewing the denial of a pre-sentence motion to
withdraw a guilty plea, this Court conducts an independent review
of the record. Id.
at 108, 425 S.E.2d at 718.
The defendant has the burden of showing that
his motion to withdraw is supported by some
fair and just reason. Whether the reason is
fair and just requires a consideration of a
variety of factors. Factors which support a
determination that the reason is fair and
just include: the defendant's assertion of
legal innocence; the weakness of the State's
case; a short length of time between the entry
of the guilty plea and the motion to withdraw;
that the defendant did not have competent
counsel at all times; that the defendant did
not understand the consequences of the guilty
plea; and that the plea was entered in haste,
under coercion or at a time when the defendant
was confused. If the defendant meets his
burden, the court must then consider any
substantial prejudice to the State caused by
the withdrawal of the plea. Prejudice to the
State is a germane factor against granting a
motion to withdraw.
at 108, 425 S.E.2d 715, 717-18 (1993) (citations and quotations
We examine now the factors that support defendant's contention
that his motion to withdraw is supported by a fair and just
First, although defendant asserted his legal innocence, the
State argues that these assertions were not credible and were
wholly inconsistent with his behavior because defendant: admitted
to the Superior Court that he lied under oath when he entered hisplea; claimed to have been misled by television coverage of other
corporate scandals despite having been fully informed of the legal
theories of his case; testified that he changed his mind about
being guilty after seeing the weakness of the State's evidence; and
acknowledged under oath that he was guilty of these crimes.
Defendant offers no factual or legal support for his assertion of
Second, defendant asserts that he filed his motion on the
basis of a significant change of circumstances in that the
District Attorney had withdrawn from the plea arrangement. As
discussed above, the district attorney was within his rights to
withdraw from the plea agreement once defendant had breached it.
Third, defendant submits that he filed his motion promptly
after the change of circumstances, although three months had
elapsed. Defendant relies on two cases to support his position.
The first, State v. Loza-Rivera
, is unpublished. The second, State
, 99 N.C. App. 456, 393 S.E.2d 317 (1990), vacated a
judgment resulting from a plea agreement made by a middle-school
drop out who could read and write at the second grade level. Id.
at 458, 393 S.E.2d at 318. This Court noted that the defendant in
waited four months to withdraw his plea, but explained that
this appears to have resulted from his erroneous expectations and
lack of communication with his attorney. Id.
at 464, 393 S.E.2d
at 321. In this case, defendant is well-educated and appears to
have had adequate communication with his attorney. Fourth, defendant avers that [t]he State had evidence against
Defendant, but 'there was clearly a defense.' The State, however,
explains that [e]ven defendant's appellate counsel had to concede
that the State had 'substantial' evidence against defendant. This
evidence includes testimony by three witnesses that they were privy
to a phone conversation with defendant during which the pre-bill
was discussed; signatures by defendant on almost 2,500 invoices,
each under $2,500.00, in the few days near the close of the 2003
and 2004 fiscal years; and defendant's receipt of gifts from
Barnes, along with knowledge that his colleagues had received
similar, if not more substantial, gifts. This evidence strongly
suggests that defendant had knowledge of and willingly participated
in the criminal scheme.
Fifth, Defendant believed that he had been truthful and
cooperative with the prosecution, and that he had complied with his
obligations under the plea agreement. Defendant's own brief,
however, states that the evidence may have suggested that he
should have been more aware or that the gifts may have made him
more reluctant to challenge [Department Budget Officer Carol]
Finally, defendant asserts that the State suffered no
prejudice, despite a finding by the trial court to the contrary.
, we only reach the question of substantial
prejudice to the State if defendant has carried his burden of proof
that a fair and just reason supports his motion to withdraw.
N.C. App. at 108, 425 S.E.2d at 718.
We hold that defendant hasnot met this burden of proof and therefore do not reach the
question of substantial prejudice.
Accordingly, we affirm the order of the trial judge.
Chief Judge MARTIN and Judge MCGEE concur.
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