ROBERT EARL DALTON d/b/a B. DALTON & COMPANY v. DAVID CAMP, NANCY J. MENIUS, and MILLENNIUM COMMUNICATION CONCEPTS, INC.
Case Details
- Citation
- 353 N.C. 647
- Procedural Posture — the stage the case had reached
- summary judgment
- State
- North Carolina
- Circuit
- 4th Circuit
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The North Carolina Supreme Court affirmed summary judgment for all defendants (employer's former employee David Camp, Nancy Menius, and their company MCC) on all claims brought by employer Robert Dalton, including breach of fiduciary duty, breach of duty of loyalty, tortious interference with prospective advantage, and unfair trade practices. The court held that Camp's position as a production manager did not create a fiduciary relationship sufficient to support such claims, and that no independent tort for breach of duty of loyalty exists under North Carolina law.
Excerpt
ROBERT EARL DALTON d/b/a B. DALTON & COMPANY v. DAVID CAMP, NANCY J. MENIUS, and MILLENNIUM COMMUNICATION CONCEPTS, INC. No. 495PA99-2 (Filed 20 July 2001) 1. Employer and Employee— breach of fiduciary duty — forming rival company The trial court properly granted summary judgment in favor of defendant Camp on a claim for breach of fiduciary duty arising from defendant leaving plaintiff’s employment and starting a rival company, because plaintiff employer failed to establish facts supporting a breach of fiduciary duty when no evidence suggests that defendant’s position in the workplace resulted in domination and influence over plaintiff. 2. Employer and Employee— breach of loyalty — forming rival company The trial court properly granted summary judgment in favor of defendant Camp on a claim for breach of duty of loyalty arising from defendant leaving plaintiff’s employment and starting a rival company, because plaintiff failed to establish that any independent tort for breach of duty of loyalty exists under our state law. 3. Wrongful Interference— interference with prospective advantage — employee founding rival business The trial court properly granted summary judgment in favor of defendants Camp and MCC on a claim for tortious interference with prospective advantage arising from defendant Camp leaving plaintiff’s employment and starting a rival business publishing employment newsletters, because: (1) there is no evidence that defendant Camp induced KFI into entering a contract; and (2) plaintiff employer offers no evidence showing that but for defendant Camp’s alleged interference, a contract with KFI would have ensued. 4. Unfair Trade Practices— employee founding rival business — no fiduciary relationship — no egregious or aggravating conduct The trial court properly granted summary judgment in favor of defendants Camp and MCC on a claim for unfair and deceptive trade practices under N.C.G.S. § 75-1.1 arising from defendant Camp leaving plaintiff’s employment and starting a rival business, because: (1) defendant Camp did not have a fiduciary relationship with plaintiff employer when defendant’s duties as a production manager for plaintiff were limited to those commonly associated with any employee; (2) defendant Camp did not serve his employer in the capacity of either a buyer or a seller, nor did he serve in any alternative capacity suggesting that his employment was such that it otherwise qualified as “in or affecting commerce”; and (3) there is no evidence of attendant circumstances to indicate that defendant Camp’s conduct was especially egregious or aggravating. On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals, 138 N.C. App. 201, 531 S.E.2d 258 (2000), affirming in part, reversing in part, and remanding for a new trial an order for summary judgment entered 13 July 1998 by Zimmerman, J., in Superior Court, Randolph County. This case was previously remanded by order of the Supreme Court of North Carolina for the Court of Appeals’ reconsideration in light of Sara Lee Corp. v. Carter, 351 N.C. 27, 519 S.E.2d 308 (1999). Dalton v. Camp, 135 N.C. App. 32, 519 S.E.2d 82 (1999). Heard in the Supreme Court 12 March 2001. Moser Schmidly Mason & Roose, by Stephen S. Schmidly; and Murchison, Taylor & Gibson, by Andrew K. McVey, for plaintiff-appellee. Wyatt Early Harris & Wheeler, L.L.R, by William E. Wheeler, for defendant-appellants David Camp and Millennium Communication Concepts, Inc. Moore & Van Allen, P.L.L.C., by George M. Teague, on behalf of North Carolina Citizens for Business and, Industry, amicus curiae. ORR, Justice. This case arises out of an employer’s allegations of unfair competitive activity by former employees and a new corporation formed by them. Plaintiff Robert Earl Dalton d/b/a B. Dalton & Company (“Dalton”) produced, under a thirty-six month contract, an employee newspaper for Klaussner Furniture Industries (“KFI”). Dalton hired defendant David Camp (“Camp”) to produce the publication and subsequently hired Nancy Menius (“Menius”) to assist in the production of the employee newspaper. Near the conclusion of the contract period, Dalton began negotiations with KFI to continue publication. After the contract had expired, Dalton continued to publish the employee newspaper without benefit of a contract while talks between the parties continued. During this period, Camp, who was contemplating leaving Dalton’s employ, established a competing publications entity, Millennium Communication Concepts, Inc. (“MCC”), and discussed with KFI officials the possibility of replacing Dalton as publisher of KFI’s employee newspaper. Soon thereafter, Camp entered into a contract with KFI to produce the newspaper. He resigned from Dalton’s employment approximately two weeks later. In the wake of Camp’s resignation, Dalton sued Camp, Menius, and MCC for breach of the fiduciary duty of loyalty, conspiracy to appropriate customers, tortious interference with contract, interference with prospective advantage, and unfair and deceptive acts or practices under chapter 75 of the North Carolina General Statutes. The trial court first dismissed Dalton’s claim for tortious interference with contract and subsequently granted Camp’s motion for summary judgment against Dalton for the remaining claims. In its initial review of the case, the Court of Appeals held that the trial court had properly granted summary judgment for all defendants as to the claim for unfair and deceptive trade practices. As for the claim for breach of duty of loyalty, the Court of Appeals held that summary judgment was proper for defendant Menius and improper for defendant Camp. As for Dalton’s claim of tortious interference with prospective advantage, the Court of Appeals again held that summary judgment was properly granted for defendant Menius and improperly granted for defendant Camp. Dalton v. Camp, 135 N.C. App. 32, 519 S.E.2d 82 (1999). After this Court remanded the case to the Court of Appeals for further review in light of, inter alia, our holding in Sara Lee Corp. v. Carter, 351 N.C. 27, 519 S.E.2d 308 (1999), the Court of Appeals ultimately concluded that summary judgment was properly granted for: (1) all claims against Menius, and (2) the conspiracy to appropriate customers claim against Camp and MCC. The court also held that summary judgment was improperly granted for: (1) the breach of duty of loyalty claim against Camp, (2) the interference with prospective advantage claim against Camp and MCC, and (3) the unfair and deceptive trade practices claim against Camp and MCC. For the reasons set forth below, we hold that the trial court properly granted summary judgment for all applicable claims, and we reverse those portions of the Court of Appeals opinion that hold otherwise. Thus, in sum, none of plaintiff Dalton’s claims survive. I. We begin our analysis with an examination of Dalton’s first claim against Camp which, as described in Dalton’s complaint, constituted a breach of fiduciary duty, including a duty of loyalty. From the outset, we note that Dalton argues this claim from two distinct vantage points. First, he alleges that Camp breached his fiduciary duty by being disloyal. See Long v. Vertical Techs., Inc., 113 N.C. App. 598, 604, 439 S.E.2d 797, 802 (1994) (defining fiduciary duty as one requiring good faith, fair dealing, and loyalty). Second, he argues that a separate and distinct action for breach of duty of loyalty exists and that Camp’s conduct constituted a breach of that duty. We disagree with both contentions, holding that Dalton has failed to establish: (1) facts supporting a breach of fiduciary duty, and (2) that any independent tort for breach of duty of loyalty exists under state law. Prior to trial, the trial court granted defendants’ motion for summary judgment as to all pending claims. Summary judgment is a device whereby judgment is rendered if the pleadings, depositions, interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue as to any material fact and that any party is entitled to judgment as a matter of law. N.C. R. Civ. P. 56(c); accord Fordham v. Eason, 351 N.C. 151, 159, 521 S.E.2d 701, 706 (1999). The rule is designed to eliminate the necessity of a formal trial where only questions of law are involved and a fatal weakness in the claim of a party is exposed. Econo-Travel Motor Hotel Corp. v. Taylor, 301 N.C. 200, 271 S.E.2d 54 (1980). When considering a motion for summary judgment, the trial judge must view the presented evidence in a light most favorable to the nonmoving party. Coats v. Jones, 63 N.C. App. 151, 303 S.E.2d 655, aff’d, 309 N.C. 815, 309 S.E.2d 253 (1983). Moreover, the party moving for summary judgment bears the burden of establishing the lack of any triable issue. Boudreau v. Baughman, 322 N.C. 331, 368 S.E.2d 849 (1988). Thus, the question before us is whether the Court of Appeals properly concluded that genuine issues of material fact existed as to Dalton’s claims against Camp for breach of fiduciary duty and/or breach of duty of loyalty. We address the specifics of Dalton’s arguments supporting the Court of Appeals decision in successive order. For a breach of fiduciary duty to exist, there must first be a fiduciary relationship between the parties. Curl v. Key, 311 N.C. 259, 264, 316 S.E.2d 272, 275 (1984); Link v. Link, 278 N.C. 181, 192, 179 S.E.2d 697, 704 (1971). Such a relationship has been broadly defined by this Court as one in which “there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence ..., [and] ‘it extends to any possible case in which a fiduciary relationship exists in fact, and in which there is confidence reposed on one side, and resulting domination and influence on the other: ” Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931) (quoting 25 C.J. Fiduciary § 9, at 1119 (1921)) (emphasis added), quoted in Patterson v. Strickland, 133 N.C. App. 510, 516, 515 S.E.2d 915, 919 (1999). However, the broad parameters accorded the term have been specifically limited in the context of employment situations. Under the general rule, “the relation of employer and employee is not one of those regarded as confidential.” King v. Atlantic Coast Line R.R. Co., 157 N.C. 44, 72 S.E. 801 (1911); see also Hiatt v. Burlington Indus., Inc., 55 N.C. App. 523, 529, 286 S.E.2d 566, 569, disc. rev. denied, 305 N.C. 395, 290 S.E.2d 365 (1982). In applying this Court’s definition of fiduciary relationship to the facts and circumstances of the instant case — in which employee Camp served as production manager for a division of employer Dalton’s publishing business — we note the following: (1) the managerial duties of Camp were such that a certain level of confidence was reposed in him by Dalton; and (2) as a confidant of his employer, Camp was therefore bound to act in good faith and with due regard to the interests of Dalton. In our view, such circumstances, as shown here, merely serve to define the nature of virtually all employer-employee relationships; without more, they are inadequate to establish Camp’s obligations as fiduciary in nature. No evidence suggests that his position in the workplace resulted in “domination and influence on the other [Dalton],” an essential component of any fiduciary relationship. See Abbitt, 201 N.C. at 598, 160 S.E. at 906. Camp was hired as an at-will employee to manage the production of a publication. His duties were those delegated to him by his employer, such as overseeing the business’s day-to-day operations by ordering parts and supplies, operating within budgetary constraints, and meeting production deadlines. In sum, his responsibilities were not unlike those of employees in other businesses and can hardly be construed as uniquely positioning him to exercise dominion over Dalton. Thus, absent a finding that the employer in the instant case was somehow subjugated to the improper influences or domination of his employee — an unlikely scenario as a general proposition and one not evidenced by these facts in particular — we cannot conclude that a fiduciary relationship existed between the two. As a result, we hold that the trial court properly granted defendant Camp’s motion for summary judgment as to Dalton’s claim alleging a breach of fiduciary duty and reverse the Court of Appeals on this issue. As for any claim asserted by Dalton for breach of a duty of loyalty (in an employment-related circumstance) outside the purview of a fiduciary relationship, we note from the outset that: (1) no case cited by plaintiff recognizes or supports the existence of such an independent claim, and (2) no pattern jury instruction exists for any such separate action. We additionally note that Dalton relies on cases he views as defining an independent duty of loyalty, see McKnight v. Simpson’s Beauty Supply, 86 N.C. App. 451, 358 S.E.2d 107 (1987); In re Discharge of Burris, 263 N.C. 793, 140 S.E.2d 408 (1965) (per curiam), even though those cases were devoid of claims or counterclaims alleging a breach of such duty. In McKnight, the Court of Appeals held that every employee was obliged to “serve his employer faithfully and discharge his duties with reasonable diligence, care and attention.” 86 N.C. App. at 453, 358 S.E.2d at 109. However, the rule’s role in deciding the case was limited; it was but a factor in determining whether an employer was justified in terminating an employee. The circumstance and conclusion reached in Burris are strikingly similar. At issue in that case was whether a civil service employee was properly discharged after he “knowingly... brought about a conflict of interest between himself and his employer.” Burris, 263 N.C. at 795, 140 S.E.2d at 410. In deciding the case, this Court wrote “[w]here an employee deliberately acquires an interest adverse to his employer, he is disloyal, and his discharge is justified.” Id. (emphasis added). Conspicuously absent from the Burris Court’s consideration was any claim or counterclaim seeking damages resulting from an alleged breach of a duty of loyalty. In our view, if McKnight and Burris indeed serve to define an employee’s duty of loyalty to his employer, the net effect of their respective holdings is limited to providing an employer with a defense to a claim of wrongful termination. No such circumstance is at issue in the instant case, in which Camp resigned from Dalton’s employ. Thus, we hold that: (1) there is no basis for recognizing an independent tort claim for a breach of duty of loyalty; and (2) since there was no genuine issue as to any material fact surrounding the claim as stated in the complaint (breach of fiduciary duty, including a duty of loyalty), the trial court properly concluded as a matter of law that summary judgment was appropriate for Camp. To the extent that the holding in Food Lion, Inc. v. Capital Cities/ABC, Inc., 951 F. Supp. 1224 (M.D.N.C. 1996), can be read to sanction an independent action for breach of duty of loyalty, see id. at 1229 (“There is a cause of action for violation of the duty of loyalty.”), we conclude that the federal district court incorrectly interpreted our state case law by assuming that: (1) “[sjince the [state’s] courts recognize the existence of the duty of loyalty, it follows that they would recognize a claim for breach of that duty,” id. (emphasis added); and (2) the “North Carolina . . . Supreme Court[] likely would recognize a broader claim” for a breach of fiduciary duty, id. (emphasis added). As previously explained, although our state courts recognize the existence of an employee’s duty of loyalty, we do not recognize its breach as an independent claim. Evidence of such a breach serves only as a justification for a defendant-employer in a wrongful termination action by an employee. Moreover, an examination of our state’s case law fails to reveal support for the federal district court’s contention that this Court would broaden the scope of fiduciary duty to include food-counter clerks employed by a grocery store chain. As for the holding in Long, we note that the corporate employer in that case was awarded damages for “a material breach of. . . fiduciary duty of good faith, fair dealing and loyalty” by its employees. 113 N.C. App. at 604, 439 S.E.2d at 802. Essentially, the Long court determined that the employees, who originally founded the company in question and served respectively as its president and senior vice president, owed a fiduciary duty to the parent firm and that they breached that duty by taking actions contrary to the parent firm’s best interests. Thus, the claim and damages awarded in Long resulted from: (1) a showing of a fiduciary relationship, (2) thereby establishing a fiduciary duty, and (3) a breach of that duty. No such fiduciary relationship or duty is evidenced by the circumstances of the instant case. II. As for Dalton’s claim against Camp and MCC for tortious interference with prospective advantage, this Court has held that “interfere [nee] with a man’s business, trade or occupation by maliciously inducing a person not to enter a contract with a third person, which he would have entered into but for the interference, is actionable if damage proximately ensues.” Spartan Equip. Co. v. Air Placement Equip. Co., 263 N.C. 549, 559, 140 S.E.2d 3, 11 (1965); see also Cameron v. New Hanover Mem’l Hosp., Inc., 58 N.C. App. 414, 440, 293 S.E.2d 901, 917 (affirming view that plaintiff must show that contract would have ensued but for defendant’s interference), appeal dismissed and disc. rev. denied, 307 N.C. 127, 297 S.E.2d 399 (1982). In applying the law to the circumstances of the instant case, we note the following: (1) under contract, Dalton had published a newsletter to the expressed satisfaction of KFI for thirty-six months; (2) at or about the time that the original contract expired, Dalton and KFI discussed renewing the deal; (3) such negotiations reached an impasse over two key terms (duration of the new contract and price); (4) in the aftermath of the expired original contract, the parties agreed that Dalton would continue to publish the newsletter on a month-to-month basis; (5) during this negotiating period, Camp formed a rival publishing company (MCC); and (6) while still in the employ of Dalton, Camp (representing MCC) entered into a contract with KFI to publish its newsletter. Approximately two weeks after signing the KFI deal, Camp resigned his position with Dalton, presumably in order to run MCC with his partner, Menius. Although the facts confirm that Camp joined the negotiating fray at a time when Dalton and KFI were still considering a contract between themselves, thereby establishing a proper time frame for tortious interference, two other obstacles undermine Dalton’s claim. First, there is no evidence suggesting that Camp induced, no less maliciously induced, KFI into entering a contract. According to testimony from the deposition of Mark Walker, KFI’s human resources director, it was he who approached Camp about assuming the newsletter contract, not vice versa. Moreover, Dalton admitted in his own deposition that he had no personal knowledge as to the specifics of who offered what amid conversations between Camp and Walker. Thus, nothing in the record reflects an improper inducement on the part of Camp. Second, while Dalton may have had an expectation of a continuing business relationship with KFI, at least in the short term, he offers no evidence showing that but for Camp’s alleged interference a contract would have ensued. After Dalton’s original contract expired, he met with KFI to discuss terms for a possible renewal. During the negotiation period, the parties agreed that Dalton would continue publishing the newsletter on an interim basis. However, with regard to a new contract, KF
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Frustrated with this lack of progress, plaintiff hired a lawyer and threatened to sue under the North Carolina Wage and Hour Act (“WHA”) for the $210,000 in bonuses owed. The parties dispute the events that followed. Plaintiff claimed that Scenera fired him in retaliation for his threatening to bring a lawsuit, thereby violating the North Carolina Retaliatory Employment Discrimination Act (“REDA”). Defendants countered that plaintiff clearly intended to leave the company and that his lawyer indicated the only option was to negotiate a severance package — thus, plaintiff “effectively resigned” and defendants merely accepted the resignation. Defendants tendered plaintiff a check for $210,000 on the condition that he acknowledge Scenera’s ownership of patent applications filed and patents issued between 1 January 2008 and 17 June 2009. Plaintiff did not accept defendants’ offer. Plaintiff filed a complaint against defendants alleging breach of contract, fraudulent inducement, uujust enrichment, and WHA and REDA violations. On 1 April 2011, the Chief Justice designated this action as a complex business case and assigned it to the North Carolina Business Court. Defendants asserted a counterclaim for declaratory judgment that (1) Scenera owns all inventions plaintiff developed during his employment, and (2) plaintiff was not entitled to bonuses for patent applications filed or patents issued any time after January 2008. Defendants also sought damages for breach of fiduciary duty and for plaintiffs failure to support prosecution of patent applications to the PTO. Both parties moved for summary judgment. 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The trial court further ruled that Scenera owned all of the inventions, patents, and patent applications listed in plaintiffs complaint, required plaintiff to assign any unassigned patent applications to Scenera, and ruled that Scenera could not recover damages under its counterclaims. Defendants moved for judgment notwithstanding the verdict (JNOV), and the trial court denied the motion. All parties appealed. The Court of Appeals affirmed the trial court’s ruling on the motions for directed verdict and JNOV, liquidated damages, WHA damages, and REDA damages. The court reversed, however, the trial court’s ruling that plaintiff could not pursue rescission. Morris v. Scenera Research, LLC, 229 N.C. App. 31, 747 S.E.2d 362 (2013). All parties appealed. I A Defendants contend that the trial court should have granted their motions for directed verdict and JNOV as to whether plaintiff was entitled to patent issuance bonuses for patents still pending when his employment with Scenera ended. To survive a motion for directed verdict or JNOV, the non-movant must present “more than a scintilla of evidence” to support its claim. Stark v. Ford Motor Co., 365 N.C. 468, 480, 723 S.E.2d 753, 761 (2012) (citation omitted). While a scintilla is “very slight evidence,” State v. Hawkins, 155 N.C. 466, 470, 71 S.E. 326, 328 (1911) (quoting State v. White, 89 N.C. 462, 464-65 (1883)), the non-movant’s evidence must still “do more than raise a suspicion, conjecture, guess, surmise, or speculation as to the pertinent facts in order to justify its submission to the jury,” Jenrette Transp. Co. v. Atl. Fire Ins. Co., 236 N.C. 534, 539, 73 S.E.2d 481, 485 (1952) (citation omitted). The trial court must construe the evidence in the light most favorable to the non-movant and resolve all evidentiary conflicts in the non-movant’s favor. Smith v. Price, 315 N.C. 523, 527, 340 S.E.2d 408, 411 (1986) (citations omitted). We review this question of law de novo. Green v. Freeman, 367 N.C. 136, 141, 749 S.E.2d 262, 267 (2013) (citations omitted). The WHA provides: Employees whose employment is discontinued for any reason shall be paid all wages due on or before the next regular payday either through the regular pay channels or by mail if requested by the employee. Wages based on bonuses, commissions or other forms of calculation shall be paid on the first regular payday after the amount becomes calculable when a separation occurs. N.C.G.S. § 95-25.7 (2015). At trial, plaintiff testified that he, like other Scenera employees, had a unique bonus plan, and that he was never informed that continued employment with Scenera was a prerequisite for receiving patent issuance bonuses. Plaintiff confirmed in his testimony that “the issuance bonus . . . was earned at the time the patent application was filed.” He further testified that after a patent was filed and he assigned the corresponding rights to Scenera, “I was entitled to $5,000.... There was nothing as far as work with respect to the patent that I needed to do in order to earn that bonus.” Moreover, Mona Singh, an inventor and witness for Scenera, confirmed that “whatever bonuses applied to [her] agreement became earned and due at the time the patent was filed.” Singh also testified that she had received five or six issuance bonuses after leaving Scenera. We hold that plaintiff has carried his minimal burden of presenting more than a scintilla of evidence supporting his WHA claim. While defendants cite conflicting evidence (some of which we discuss below), in the context of a directed verdict and JNOV, the trial court must resolve these conflicts in plaintiff’s favor. Accordingly, we affirm the Court of Appeals’ holding that the trial court properly submitted the question of whether plaintiff was entitled to the issuance bonuses to the jury and properly denied defendants’ directed verdict and JNOV motions. B Defendants further argue that the Court of Appeals erred in construing the term “calculable” under the WHA to mean capable of being estimated. As a preliminary matter, we address the Court of Appeals’ holding that the question of whether a wage is “calculable” under the WHA is one of fact, not law, and that therefore the trial court could properly submit the question to the jury. The Court of Appeals explained that determining whether a wage is calculable “requires a weighing of the evidence and, thus, falls in a jury trial within the exclusive purview of the jury.” Morris, 229 N.C. App. at 44, 747 S.E.2d at 370 (citations omitted). As we have explained, it is for the trial court “to determine whether the evidence ... is sufficient to permit a legitimate inference of the facts essential to recovery; and it is the province of the jury to weigh the evidence and to determine what it proves or fails to prove.” Sneed v. Lions Club of Murphy, N.C., Inc., 273 N.C. 98, 101, 159 S.E.2d 770, 772 (1968) (citations omitted). “It is still for the jury if reasonable [minds] may differ as to its truth or if conflicting inferences may reasonably be drawn from” the evidence. Cutts v. Casey, 278 N.C. 390, 421, 180 S.E.2d 297, 314 (1971) (citations omitted). Because determining whether a wage is calculable involves a weighing of the evidence, we affirm the Court of Appeals’ holding that this issue presents a question of fact. At trial, plaintiff argued that the value of the patent issuance bonuses for patent applications still pending with the PTO could be calculated using the following formula: 150 outstanding patents x $5,000 for each successfully issued patent x 90% patent issuance success rate = $675,000. The trial court instructed the jury to determine whether it could calculate the issuance bonuses owed, and if so, to compute that amount. The Court of Appeals first noted that neither the WHA nor case law define the term “calculable.” The court therefore consulted the American Heritage College Dictionary, which defined calculable as “ ‘[t]hat [which] can be calculated or estimated.'’ ” Morris, 229 N.C. App. at 45, 747 S.E.2d at 371 (quoting The American Heritage College Dictionary 198 (3d ed. 1997) (emphasis added)). The court concluded that plaintiffs proffered formula "was at least one reasonable way to calculate” the bonuses and therefore held that the trial court did not err in submitting this question to the jury. Id. at 45, 747 S.E.2d at 371. Defendants again argue that “calculable” does not mean capable of being estimated because this interpretation would allow impermissible speculation as to future wages. Defendants cite the rule that “the party seeking damages must show that the amount of damages is based upon a standard that will allow the finder of fact to calculate the amount of damages with reasonable certainty.” Olivetti Corp. v. Ames Bus. Sys., Inc., 319 N.C. 534, 547-48, 356 S.E.2d 578, 586 (1987) (citation omitted). Plaintiffs formula, they contend, does not allow for the reasonably certain determination of issuance bonuses associated with pending patent applications. We disagree. In other contexts in which a party seeks to recover lost profits, that party must show “both the amount and [the] cause of his loss. Absolute certainty, however, is not required, but both the cause and the amount of the loss must be shown with reasonable certainty.” Cary v. Harris, 178 N.C. 624, 628, 101 S.E. 486, 488 (1919) (quoting Nance v. W. Union Tel. Co., 177 N.C. 314, 317, 98 S.E. 838, 840 (1919)). The evidence indicated that plaintiff had completed all the work required for the patents to issue. An employer must pay “those wages and benefits due when the employee has actually performed the work required to earn them." Kornegay v. Aspen Asset Grp., 204 N.C. App. 213, 229, 693 S.E.2d 723, 735 (2010) (quoting Narron v. Hardee’s Food Sys., Inc., 75 N.C. App. 579, 583, 331 S.E.2d 205, 208 (emphasis added), disc. rev. denied, 314 N.C. 542, 335 S.E.2d 316 (1985)). We further note that defendants presented no evidence at trial challenging the adequacy of plaintiff’s formula. Because defendants offered no other formula, this Court need only be concerned that the result reached, based on the evidence presented, is reasonable. See Jenrette Transp. Co., 236 N.C. at 539-40, 73 S.E.2d at 485. We therefore affirm the Court of Appeals’ holding that determining calculability of wages under the WHA is a question of fact to be submitted to a jury. II We next address plaintiff’s argument that the Court of Appeals erred in affirming the trial court’s decision to refrain from awarding plaintiff liquidated damages on the jury’s award of issuance bonuses associated with unissued patents. First, we must determine the appropriate standard of review. Plaintiff contends that de novo review applies, while defendants contend that we should apply a three-tiered standard as used by federal courts addressing claims under the Fair Labor Standards Act (“FLSA”). In Kornegay v. Aspen Asset Group, LLC, the Court of Appeals adopted the latter approach. [T]he traditional standard of review that applies to a trial court’s factual findings — in federal court, the “clearly erroneous” standard and in North Carolina, the “competent evidence” standard — applies to findings of fact made by a trial court in addressing a claim for liquidated damages. In reviewing the trial court’s conclusions of law, the courts have held that review is de novo, including on the issue whether the findings of fact support the conclusions of law. 204 N.C. App. at 245, 693 S.E.2d at 745. The trial court’s final decision to award or refrain from awarding liquidated damages is then reviewed for abuse of discretion. Id. at 244, 693 S.E.2d at 744. We adopt the Court of Appeals’ reasoning in Kornegay and review the trial court’s decision to not award plaintiff liquidated damages for an abuse of discretion. We hold that the trial court did not abuse its discretion in concluding that plaintiff was not entitled to liquidated damages. The WHA provides: In addition to the amounts awarded pursuant to subsection (a) of this section, the court shall award liquidated damages in an amount equal to the amount found to be due as provided in subsection (a) of this section, provided that if the employer shows to the satisfaction of the court that the act or omission constituting the violation was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of this Article, the court ma
DEWEY D. MEHAFFEY, Employee v. BURGER KING, Employer, LIBERTY MUTUAL INSURANCE COMPANY, Carrier No. 24PA12 (Filed 8 November 2013) Workers’ Compensation — attendant care services — family member — prior approval The Industrial Commission exceeded its authority in workers’ compensation case by promulgating the Medical Fee Schedule that prevented the award of retroactive compensation for the attendant care services provided before Commission approval was obtained. While good policy reasons may exist for the prerequisites created in the Schedule, this matter is a legislative determination, not one to be made by the Commission without statutory authorization. However, the matter was remanded for necessary findings and conclusions on the issue of reasonableness of the timing of plaintiff’s request for reimbursement. Justice BEASLEY did not participate in the consideration or decision of this case. Justice NEWBY dissenting in part and concurring in part. On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals,_N.C. App._, 718 S.E.2d 720 (2011), affirming in part and reversing in part an opinion and award filed on 18 August 2010 by the North Carolina Industrial Commission. Heard in the Supreme Court on 14 November 2012. Sumwalt Law Firm, by Mark T. Sumwalt and Vernon Sumwalt; and Grimes Teich Anderson LLP, by Henry E. Teich, for plaintiff-appellant. Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., by M. Duane Jones and Jeremy T. Canipe, for defendant-appellees. HUDSON, Justice. This case presents the question whether the Medical Fee Schedule promulgated by the North Carolina Industrial Commission (Commission) may bar certain individuals from receiving compensation for attendant care services they provided before obtaining approval for those services from the Commission. We hold that the Commission may not do so since such action would exceed the power granted to the Commission by the General Assembly. Because the Court of Appeals enforced that provision of the Commission’s Medical Fee Schedule, which we conclude was adopted in excess of the Commission’s authority, we reverse in part the decision of the Court of Appeals. But because defendants here have challenged the reasonableness of the timing of plaintiff’s request for approval of attendant care and the Commission’s findings do not address this issue, we remand for the Commission to do so. On 13 August 2007, plaintiff suffered a compensable injury to his left knee while working as a restaurant manager for defendant Burger King, where he had been employed for approximately eighteen years. As a result of his injury, plaintiff underwent a “left knee arthroscopy with a partial medial meniscectomy” at Transylvania Community Hospital. Plaintiff’s condition failed to improve after surgery, and he ultimately developed “reflex sympathetic dystrophy” (“RSD”). Despite undergoing a number of additional procedures, plaintiff continued to suffer pain. Plaintiff eventually was diagnosed with depression related to the injury and resulting RSD, and his psychiatrist concluded that it was unlikely plaintiff’s “mood w[ould] much improve until his pain is under better control.” Likely due to pain, plaintiff increasingly attempted to limit his movements following his diagnosis of RSD. By 8 April 2008, plaintiff was using “an assistive device” to move or walk around. On 21 April 2008, John Stringfield, M.D., plaintiff’s family physician, prescribed a mobility scooter for plaintiff, and medical records show that by 20 June 2008, plaintiff was using a walker. On 18 December 2008, plaintiff requested a prescription for a hospital bed from Eugene Mironer, M.D., a pain management specialist with Carolina Center for Advanced Management of Pain, to whom plaintiff had been referred as a result of his diagnosis with RSD. Dr. Mironer’s office declined to recommend a hospital bed, instructing plaintiff to see his family physician instead. That same day plaintiff visited his family physician, Dr. Stringfield, who prescribed both a hospital bed and a motorized wheelchair. Since plaintiff’s injury, his wife has assisted him with his daily activities in the home. Until 14 August 2008, plaintiff’s wife attended to his needs approximately four hours per day. On 15 August 2008, Mrs. Mehaffey discontinued her outside employment, and since then she has attended to plaintiff’s needs approximately sixteen hours per day. In her caregiver role, Mrs. Mehaffey helps “plaintiff out of bed in the morning, gives him a sponge bath, and assists [him] in dressing.” She also helps “get [him] onto the scooter and transfers [him] from the scooter to a recliner, where plaintiff sits most of the day.” She prepares plaintiffs meals and attends to his bodily needs. At the end of each day, Mrs. Mehaffey helps “plaintiff dress for bed and helps him into bed.” Despite plaintiffs efforts to limit his activity and movement, the medical providers plaintiff saw for pain management indicated that he would derive greater benefit if he attempted to move under his own strength, which would force him to rehabilitate his injury. James North, M.D., the codirector of pain management at Wake Forest Baptist Hospital and plaintiffs preferred treating physician, “opined that providing plaintiff with a power wheelchair was counterproductive to his recovery” because “people using wheelchairs tend to gain weight and avoid using the extremity that causes their pain, both of which impede[ ] the recovery process.” Dr. North reasoned that “the less an injured extremity is used, the worse the condition will become.” Likewise, Dr. North concluded “that there was no scientific or medical basis for requiring a hospital bed for patients with RSD.” Dr. North’s medical opinion was echoed by Dr. Mironer. Nonetheless, plaintiff used these mobility aids and comfort devices, procuring for himself the hospital bed and motorized scooter. Plaintiff’s family physician and other individuals began to recommend that plaintiff receive attendant care services. On 9 March 2009, Judy Clouse, a nurse consultant employed by the Commission, recommended that plaintiff receive eight hours of attendant care daily, Monday through Friday, from a Certified Nursing Assistant. On 5 June 2009, Dr. Stringfield recommended that plaintiff have sixteen hours a day of attendant care services, retroactive to the day plaintiff was diagnosed with RSD, thereby including the almost two years of attendant care plaintiff’s wife had already provided. Bruce Holt, a certified life care planner, also opined that plaintiff “needs attendant care for at least 16 hours per day, seven days a week.” In light of these recommendations regarding his needs, plaintiff sought a hearing before the Commission to clarify the extent of medical compensation owed to him. Defendants denied any failure to pay for necessary medical treatment. Relevant for our purposes, plaintiff and defendants disagree whether plaintiff’s wife should be compensated for the attendant care she provided plaintiff before the Commission approved her rendering that service. Defendants contend that the Commission’s Medical Fee Schedule prevents such an award of retroactive compensation to Mrs. Mehaffey. Plaintiff, on the other hand, views Mrs. Mehaffey’s attendant care services as simply another component of medical compensation within the meaning of N.C.G.S. § 97-2(19) (2007), for which defendants are responsible under N.C.G.S. § 97-25 (2007). The Commission agreed with plaintiff on this issue, choosing not to follow its own fee schedule, perhaps in recognition that it was not authorized to deny reimbursement for these services. First, in an opinion and award filed on 29 January 2010, a deputy commissioner directed defendants to compensate Mrs. Mehaffey for the “attendant care services rendered to plaintiff at the rate of $12.50 per hour, 16 hours per day and seven days per week, from 15 August 2008, through the present and continuing until further order of the Commission.” On appeal the Full Commission affirmed in pertinent part the deputy commissioner’s opinion and award, concluding that Mrs. Mehaffey’s attendant care services were medical compensation for which defendants were responsible under sections 97-2(19) and 97-25 of our General Statutes. In addition, the Full Commission further compensated Mrs. Mehaffey for the attendant care services previously provided from 15 November 2007 through 14 August 2008, while she was still employed outside the home. For those attendant care services the Full Commission awarded compensation for four hours daily, seven days a week, also at a rate of $12.50 per hour. The Court of Appeals, relying on our decision in Hatchett v. Hitchcock Corp., 240 N.C. 591, 83 S.E.2d 539 (1954), reversed the Commission’s decision to provide compensation for Mrs. Mehaffey’s past attendant care services. Mehaffey v. Burger King,_N.C. App _,_, 718 S.E.2d 720, 723-24 (2011). In Hatchett we were presented with a situation in which the Commission had awarded financial compensation to an injured worker’s mother under sections 97-25 and 97-26 of our General Statutes for practical nursing services that she provided to her son without prior approval from the Commission. 240 N.C. at 592-93, 83 S.E.2d at 540-41. Ultimately, this Court determined that the Commission’s fee schedule, promulgated pursuant to the Commission’s rulemaking authority under the Workers’ Compensation Act (the Act), prohibited such an award of compensation for practical nursing services unless that conduct had been first approved by the Commission. Id. at 593-94, 83 S.E.2d at 541-42. As a result, we reversed the Commission’s award. The Court of Appeals reasoned that the outcome in the present case is controlled by our decision in Hatchett. First, that court observed that the claim for payment in this case was brought under sections 97-25 and 97-26 of our General Statutes, the same provisions that were at issue in Hatchett. Mehaffey, _N.C. App. at_, 718 S.E.2d at 724. Additionally, the Court of Appeals explained that the language of the rule at issue in Hatchett, which said, “Fees for practical nursing service by a member of claimant’s family or anyone else will not be honored unless written authority has been obtained in advance,” is nearly identical to the language now found in the Commission’s Medical Fee Schedule. Id. at_, 718 S.E.2d at 723-24 (citations and quotation marks omitted). As a result, the Court of Appeals concluded that the Commission should have followed the holding of Hatchett and thus declined to award compensation for Mrs. Mehaffey’s past provision of attendant care services. Id. at_, 718 S.E.2d at 724. We allowed plaintiff’s petition for discretionary review to consider the Court of Appeals’ decision regarding the Commission’s award of compensation for past attendant care services provided before approval was obtained from the Commission. Mehaffey v. Burger King,_N.C. __, 726 S.E.2d 177 (2012). Plaintiff contends that the Court of Appeals erred by following the holding of Hatchett. Instead, plaintiff asserts that the Commission does not have statutory authority under section 97-26(a) to prohibit compensation of an immediate family member for the provision of attendant care services unless prior authorization was obtained. Defendants, on the other hand, contend that the Court of Appeals properly followed our decision in Hatchett. Moreover, defendants argue that allowing members of an injured employee’s immediate family to be compensated for providing attendant care without the Commission’s having first approved that service would contravene one of the underlying purposes of the Act, which is to control medical expenses. To resolve this dispute we turn first to the provisions of the Act. Generally speaking, the Act provides for the compensation of employees who sustain workplace injuries. N.C.G.S. §§ 97-1 to -101.1 (2011). The Act places upon an employer the responsibility to furnish “medical compensation” to an injured employee. Id. § 97-25. At the time of plaintiff’s injury, the Act defined “medical compensation” as: Medical Compensation. — The term “medical compensation” means medical, surgical, hospital, nursing, and rehabilitative services, and medicines, sick travel, and other treatment, including medical and surgical supplies, as may reasonably be required to effect a cure or give relief and for such additional time as, in the judgment of the Commission, will tend to lessen the period of disability; and any original artificial members as may reasonably be necessary at the end of the healing period and the replacement of such artificial members when reasonably necessitated by ordinary use or medical circumstances. Id. § 97-2(19) (2007). The Act’s catch-all provision for “other treatment” has been understood to include attendant care services. See, e.g., Ruiz v. Belk Masonry Co., 148 N.C. App. 675, 681, 559 S.E.2d 249, 253-54 (upholding an award of attendant care benefits), appeal dismissed and disc. rev. denied, 356 N.C. 166, 568 S.E.2d 610 (2002). Moreover, the parties do not dispute that attendant care services fall under the version of section 97-2(19) in effect when plaintiff was injured and that the current version of that statute expressly includes “attendant care services,” N.C.G.S. § 97-2(19) (2011). The Act is designed also to control medical costs. Indeed, as we said in Charlotte-Mecklenburg Hospital Authority v. North Carolina Industrial Commission, “The General Assembly enacted the Act in 1929 to both provide swift and sure compensation to injured workers without the necessity of protracted litigation, arid to insure a limited and determinate liability for employers.” 336 N.C. 200, 203, 443 S.E.2d 716, 718-19 (1994) (citation, alteration, and internal quotation marks omitted)), superseded by statute, The Workers’ Compensation Reform Act of 1994, ch. 679, sec. 2.3, 1993 N.C. Sess. Laws (Reg. Sess. 1994) 394, 398 (amending N.C.G.S. § 97-26(b) effective 1 October 1994). The latter is essentially a trade-off for the former. In keeping with its desire to control medical costs, in 1994 the legislature directed the Commission to “adopt a schedule of maximum fees for medical compensation,” which would enable employers more accurately to predict their potential financial exposure following an employee’s injury. The Workers’ Compensation Reform Act of 1994, ch. 679, sec. 2.3, 1993 N.C. Sess. Laws (Reg. Sess. 1994) 394, 397 (codified at N.C.G.S. § 97-26(a)). Before that time an employer’s pecuniary liability was tethered to the costs that prevailed “in the same community for similar treatment of injured persons of a like standard of living when such treatment is paid for by the injured person.” Id. Departing from its previous standard, the General Assembly instructed that this new Medical Fee Schedule “shall be adequate to ensure that (i) injured workers are provided the standard of services and care intended by this Chapter, (ii) providers are reimbursed reasonable fees for providing these services, and (iii) medical costs are adequately contained.” Id. The adoption of a Medical Fee Schedule aids in fulfilling a purpose of the Act by indicating to employers the amount of their potential financial exposure. The central issue in the case sub judice is whether the Commission exceeded its authority in promulgating a provision of its Medical Fee Schedule to create a prerequisite to reimbursement for certain care. To answer this question, like all similar questions, we must ascertain whether the General Assembly authorized the administrative body — here the Industrial Commission — to undertake the challenged conduct. E.g., High Rock Lake Partners, LLC v. N.C. DOT, _N.C._,_, 735 S.E.2d 300, 303-04 (2012). Administrative agencies, as creatures of statute, may act only as authorized by the legislature. In re Broad & Gales Creek Cmty. Ass’n, 300 N.C. 267, 280, 266 S.E.2d 645, 654-55 (1980) (citations omitted). As an administrative agency, the Commission must act consistently with the intent of the General Assembly. See, e.g., Gregory v. W.A. Brown & Sons, 363 N.C. 750, 763-64, 688 S.E.2d 431, 440 (2010). A provision of the Commission’s Medical Fee Schedule that is contrary to our General Statutes is, as a result, without effect. Forrest v. Pitt Cnty. Bd. of Educ., 100 N.C. App. 119, 125-28, 394 S.E.2d 659, 662-64 (1990), aff’d per curiam, 328 N.C. 327, 401 S.E.2d 366 (1991). We understand the difficulty in monitoring home health care, especially when furnished by a family member. In an apparent effort to address this issue, the Commission adopted Section 14 of the Medical Fee Schedule, which states in pertinent part: Except in unusual cases where the treating physician certifies it is required, fees for practical nursing services by members of the immediate family of the injured will not be approved unless written authority for the rendition of such services for pay is first obtained from the Industrial Commission. While good policy reasons may exist for the prerequisites created here in the Schedule, this matter is a legislative determination, not one to be made by the Commission without statutory authorization. Neither section 97-26(a) nor any other provision in our General Statutes grants the Commission the power to create such a requirement. See N.C.G.S. § 97-26(a). In fact, the legislature explicitly stated that the Commission’s Medical Fee Schedule “shall . . . ensure that... providers are reimbursed reasonable fees for” their services. Id. And as the enabling legislation indicates, the fee schedule is designed to facilitate uniformity and predictability in the medical costs employers axe required to pay under the Act. See Ch. 679, sec. 2.3, 1993 N.C. Sess. Laws (Reg. Sess. 1994) at 397. Section 97-26(a) of our General Statutes does not give the Commission the authority to mandate that certain attendant care service providers may not be compensated unless they first obtain approval from the Commission before rendering their assistance. N.C.G.S. § 97-26(a). As a result, we are unable to permit Section 14 of the Commission’s Medical Fee Schedule to prevent the award of retroactive compensation for the attendant care services Mrs. Mehaffey provided her husband. See Forrest, 100 N.C. App. at 125, 394 S.E.2d at 662 (noting that the Commission’s Medical Fee Schedule is “superseded by” our General Statutes). We are mindful that this result may appear on its face to be inconsistent with our decision in Hatchett. When, however, a change occurs in the law upon which a prior decision rests, this Court must look afresh at the questioned provision. See Patterson v. McLean Credit Union, 491 U.S. 164, 173, 109 S. Ct. 2363, 2370, 105 L. Ed. 2d 132, 148 (1989) (“In cases where statutory precedents have been overruled, the primary reason for the Court’s shift in position has been the intervening development of the law, through either the growth of judicial doctrine or further action taken by Congress.”), superseded on other grounds by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071 (enacting 42 U.S.C. § 1981(b)), as recognized in Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 124 S. Ct. 1836, 158 L. Ed. 2d 645 (2004). Our decision in Hatchett was based on the fee schedule (which has remained largely unchanged) and the statutory language of former section 97-26. Under the statutory language at that time, an employer was liable for medical treatment “when ordered by the Commission.” N.C.G.S. § 97-26 (1950). Our decision in Hatchett emphasized that statutory language: “G.S. 97-26 provides for the pecuniary liability of the employer for medical, surgical, hospital service or other treatment required, when ordered by the Commission. ” Hatchett, 240 N.C. at 594, 83 S.E.2d at 542. We reasoned that these “plain and explicit words” meant that the plaintiffs mother should not be compensated for her a
WENDY WHITT v. HARRIS TEETER, INC. and RANDY SHULTZ No. 416A04 (Filed 1 July 2005) Employer and Employee— constructive wrongful discharge— sexual harassment — public policy — directed verdict for employer The decision by the Court of Appeals that the trial court erred by granting a directed verdict for defendant employer on a claim for constructive wrongful discharge in violation of public policy based upon sexual harassment is reversed for the reasons stated in the dissenting opinion that (1) a claim of constructive discharge based upon either a hostile work environment or in retaliation is not authorized under the public policy exception to the employee-at-will doctrine, and (2) even if a constructive discharge claim is so authorized, plaintiff presented insufficient evidence on the element of the claim that defendant employer’s handling of plaintiff’s complaints of sexual harassment amounted to a deliberate attempted to make her workplace so intolerable that she would resign. Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 165 N.C. App. 32, 598 S.E.2d 151 (2004), reversing a judgment entered upon a directed verdict on 2 April 2002 by Judge Sanford L. Steelman, Jr. in Superior Court, Forsyth County. Heard in the Supreme Court 18 May 2005. Kennedy, Kennedy, Kennedy and Kennedy, L.L.P., by Harvey L. Kennedy, Harold L. Kennedy, III, and Annie Brown Kennedy, for plaintiff-appellee. Womble Carlyle Sandridge & Rice, by Lucretia D. Guia, and J. Mark Sampson, for defendant-appellant Harris Teeter, Inc. Patterson Harkavy LLP, by Burton Craige, for North Carolina Association of Women Attorneys, North Carolina Academy of Trial Lawyers, Southern States Police Benevolent Association, Inc., North Carolina Police Benevolent Association, Inc., and North Carolina Association of Educators; Suzanne Reynolds for North Carolina Association of Women Attorneys, and Charles E. Daye for North Carolina Academy of Trial Lawyers, amici curiae. PER CURIAM. For the reasons stated in the dissenting opinion, the decision of the Court of Appeals is reversed. REVERSED.
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