- The Richmond County Board of Education is seeking North Carolina courts' help in enforcing a 10-year-old $272,000 judgment against state government.
- A trial judge initially ruled in the Richmond schools' favor in 2014. He determined that the schools should collect all of the money related to a $50 improper equipment violation fee for drivers created by the General Assembly in 2011.
- Courts have upheld the judgment, but the state Appeals Court refused to order state executive branch officials to pay the money.
- State Treasurer Dale Folwell and Controller Nels Roseland are taking the case to the state Court of Appeals. They are asking appellate judges to reverse a trial court's ruling in June favoring the Richmond schools.
The Richmond County Board of Education is seeking help from North Carolina’s courts in securing a 10-year-old judgment of $272,300 against state government. The case is heading to the state Court of Appeals.
A trial judge initially ruled in the Richmond County schools’ favor in June 2014. A second judge set the $272,300 figure in October 2016. State officials have taken no action to pay the bill.
The legal action started in February 2012. The Richmond County school board sued the state treasurer, controller, budget director, public safety secretary, and attorney general. None of the original defendants, all Democrats, serves in the same office today.
“The complaint alleged that a $50.00 improper equipment violation fee enacted in 2011 by the North Carolina General Assembly was unconstitutional because it collected a penalty in Richmond County and diverted the penalty from the Richmond County School Fund into the general revenue of the State of North Carolina,” according to a lawsuit filed in February 2024 in Wake County Superior Court.
This year’s lawsuit names the current state treasurer, controller, budget director, public safety secretary, and attorney general as defendants.
Trial and appellate judges rejected state officials’ attempt to have the original lawsuit thrown out based on sovereign immunity. Then-Superior Court Judge Michael Morgan granted summary judgment to the school board on June 27, 2014.
“The Court concluded as a matter of law that the $50.00 improper equipment violation fee is a fine, it is not a cost of court, that it is subject to the North Carolina Constitution, Article IX, Section 7(a), and that G.S. § 7A-304(a)(4b) is in violation of the North Carolina Constitution, Article IX, Section 7(a),” according to the 2024 complaint.
Article IX, Section 7(a) of the North Carolina Constitution directs that the “clear proceeds of all penalties and forfeitures and of all fines collected in the several counties for any breach of the penal laws of the State, shall belong to and remain in the several counties, and shall be faithfully appropriated and used exclusively for maintaining free public schools.”
G.S. § 7A-304(a)(4b) was the challenged law setting the fee for an improper equipment violation.
Morgan’s order directed state officials to “render an accounting to Richmond County of all $50 improper equipment violation fees collected in Richmond County pursuant to G.S. § 7A-304(a)(4b), to pay all such sums to Richmond County, and to pay the costs of court.”
The judge limited his order to Richmond County. He rejected the school board’s request to extend his ruling to other school systems across North Carolina.
Morgan won election in 2016 to the state Supreme Court. He resigned last year to seek the Democratic nomination for governor. He lost in the primary to Attorney General Josh Stein, now one of the named defendants in the Richmond County schools’ current lawsuit.
The state Appeals Court upheld Morgan’s order in 2015. When state officials took no action to address the court decision, the Richmond County school board returned to court.
In October 2016, Wake County Superior Court Judge Donald Stephens ruled in favor of the school board. Stephens set the $272,300 figure. That total represented all $50 improper equipment fees collected in Richmond County under the challenged state law from 2011 through Sept. 19, 2015. On that date, the General Assembly amended the challenged law.
Stephens ordered the state controller and state treasurer to pay the school board. The state Appeals Court overturned Stephens’ order in November 2016.
The Appeals Court “acknowledged the validity of the plaintiffs’ judgment,” according to the 2024 lawsuit. Yet appellate judges held, “Thus, when the courts enter a judgment against the state, and no funds already are available to satisfy that judgment, the judicial branch has no power to order State Officials to draw money from the State Treasury to satisfy it.”
The state Supreme Court decided in 2018 not to take the Richmond school board’s appeal.
“The defendants have failed to pay in its entirety the $272,300.00 owed to the plaintiff pursuant to the summary judgment Order dated June 27, 2014 by the Honorable Michael R. Morgan, Superior Court Judge, and affirmed by the North Carolina Court of Appeals,” according to the February 2024 complaint. “Now Therefore, the plaintiff, the Richmond County Board of Education herein prays: 1. That the plaintiff have and recover judgment of the Defendants in their official capacities the principal sum of $272,300.00. 2. That the defendants in their official capacities pay the costs of this action.”
Superior Court Judge James Ammons ruled in July against state officials’ motion to dismiss the latest lawsuit. State Treasurer Dale Folwell and Controller Nels Roseland are appealing Ammons’ decision.