North Carolina’s highest court will decide in the months ahead whether the Richmond County school board can renew its decade-old legal judgment of $272,300 against state government.
The dispute stems from a 2011 state law that steered money from a new government fee to cover prison maintenance costs instead of education expenses.
State Treasurer Brad Briner and Controller Nels Roseland oppose the school board in court. Both sat in the front row as the North Carolina Supreme Court heard 40 minutes of oral argument in the dispute Wednesday morning.
A court order more than a decade ago called on state government to pay the money. The General Assembly never has acted on that order.
The North Carolina Court of Appeals split, 2-1, in April when allowing the school board to proceed with its legal battle.
“The board’s claim is defective because the board does not have an executable judgment,” lawyer Craig Schauer argued on behalf of the treasurer and controller.
“The board contends that if it has a judgment — and it’s entitled to a judgment — if it has a judgement, that judgment is good for 10 years,” responded George Crump, the lawyer representing the Richmond school board. “That judgment will be good through 2036. There’s a reasonable possibility that the General Assembly will pay it.”
Without a renewed legal judgment, the board’s likelihood of collecting the money is “zero,” Crump added.
“What’s the practical value to the school board of renewing this judgment that can’t be enforced?” Justice Trey Allen asked Crump. “It seems like your remedy is to go the legislature and seek an appropriation.”
Justice Allison Riggs focused on the potential political impact of a renewed judgment.
“Does having a judgment pending — an actual legal liability — doesn’t that change the dialogue in terms of legislative elections?” Riggs asked. “Send someone to Raleigh who will pay our bills.”
“The board has been quiet,” Crump responded. “The board has walked the high road. … We haven’t been trashing the legislature. We haven’t been going to the people.”
The situation could change if the board has a renewed judgment and has not been paid seven or eight years down the road, Crump said. “The board very well at that time might decide to take its case to the people.”
Crump contrasted the school board’s $272,300 judgment to a $729 million judgment against the state dating that was renewed in 2019. The North Carolina School Boards Association and local school boards sought that judgment in connection with state fines originally connected between 1996 and 2005.
“It’s a whole lot easier to collect $272,000 than it is to collect $729 million,” Crump said.
“There’s no practical benefit of an action upon a judgment in this case because it would yield them the exact same thing which they have today, which is a judgment that they cannot execute on,” Schauer said.
“There is absolutely no practical value to an action upon a judgment in this case,” he added.
While the school board would reap no benefits, the treasurer and controller face the burden of dealing with the lawsuit, Schauer explained.
“The remedy is the political realm,” he said. “It’s down at Jones Street. It’s not in front of the court system.”
“Would the theory be that under this type of constitutional claim, that once the court recognizes an amount, that is an amount that continues on, regardless of whether the judgment is renewed?” Chief Justice Paul Newby asked Schauer. “If it at some point a General Assembly were to decide it wanted to remedy any constitutional violations, it could at that point go back and discern to who the funds should be distributed.”
“Yes, your honor,” Schauer replied. “Looking back at the original judgment — whether you’re five years, 15 years, 25 years away — you still have a judgment against the state. The judgment doesn’t disappear at the end of 10 years. You’re just not able to execute on it.”
“When it comes to a judgment against the state, you’re not able to execute on it anyway,” he added.
The school board filed a July brief defending its case.
“The determination as to whether the State of North Carolina will honor a new judgment is up to the North Carolina General Assembly and the Governor,” Crump wrote.
“A new judgment opens the reasonable possibility that the North Carolina General Assembly will within the next ten years honor a judgment that will greatly benefit school children within the Richmond County Schools system,” he added.
The state Supreme Court issued a May 23 order blocking a lower court ruling favoring the Richmond County schools.
Briner and Roseland filed a brief on July 23 calling on Supreme Court justices to end the legal battle.
“This lawsuit — an action on a judgment — should have been dead upon arrival,” lawyers for Briner and Roseland wrote. “A decade ago, the Richmond County Board of Education secured a monetary judgment against the state. The monetary judgment, though, was later reversed and vacated by the Court of Appeals.”
“In reversing the judgment, the Court of Appeals declared that the role of the courts in the dispute was over, because the constitution prevented the judiciary from compelling the state or its officers to pay the Board any money owed,” the court filing continued.
“The Board disagreed that the role of the courts was over,” lawyers for Briner and Roseland wrote. “Ignoring the Court of Appeals’ declaration, the Board filed this action on a judgment, to try to enforce the monetary judgment that the Court of Appeals had reversed and vacated. The Board named, among others, the State Treasurer and the State Controller as defendants, apparently hoping the courts would force these two state officials to open the doors to the public treasury — despite the Court of Appeals saying the constitution foreclosed such a possibility.”
Briner and Roseland “are cloaked with sovereign immunity — which exists to protect the state treasury from monetary judgments — and the Board failed to plead that the state had waived sovereign immunity for this new lawsuit,” the court filing explained.
Based on sovereign immunity and the fact that the money judgment had been “reversed and vacated,” the Richmond school board “had no right to be in court trying to collect money from the state,” lawyers for Briner and Roseland argued.
A trial judge and the North Carolina Court of Appeals both allowed the lawsuit to move forward. Reversing those decisions would “reaffirm that the Board cannot continue to menace the public treasury in court when the Board has no chance of judicial relief,” according to the court filing.
When the high court issued its May order, justices also agreed unanimously to take up the case. Justice Richard Dietz did not take part in the decision. Dietz addressed the case as an Appeals Court judge in 2017.
The Richmond County school board returned to court in February 2024 to renew the judgment. A trial judge rejected state officials’ motion to dismiss the case in July 2024.
The Appeals Court’s 2-1 decision in April allowed the legal proceedings to move forward.
“The decision below is unprecedented,” wrote lawyers representing Briner and Roseland in a May 7 court filing at the state’s highest court. “Never before has a North Carolina appellate court allowed an ‘action on a judgment’ to proceed against state officials acting in their official capacities.”
The dispute stems from a 2011 state law that required defendants convicted of driving with improper equipment in North Carolina to pay a new $50 fee. The fee was designated to cover prison maintenance costs.
The Richmond school board sued, arguing that the money should head instead toward local schools. “Plaintiff based its contention on a provision in our state constitution which mandates that fines collected in a county court be used for the public schools in that county,” Chief Judge Chris Dillon wrote for the Appeals Court majority on April 2.
The state Appeals Court addressed the initial lawsuit three times. First, appellate judges agreed that sovereign immunity did not protect the state from the lawsuit. Second, appellate judges agreed with a trial judge that the money should head to local schools rather than prison maintenance.
After the second appeal, the trial judge ordered state officials to pay the schools $272,300 in fines connected to the 2011 law.
“In the third appeal, however, we reversed the trial court’s order, concluding that it is not in the power of the judiciary to order satisfaction of the judgment against the State; that is, the judgment could be satisfied only if our General Assembly appropriated the money to satisfy the judgment,” Dillon wrote.
Dietz wrote the Appeals Court’s opinion in the third appeal.
In February 2024, the Richmond County school board returned to court, “seeking that a new judgment be entered” based on the earlier judgment of $272,300 against the state, Dillon explained. A trial judge rejected state officials’ motion to dismiss the case in July 2024.
“We agree with Defendants that any judgment that Plaintiff may obtain in this matter may not ever be collectible,” Dillon wrote.
“Plaintiff obtained a valid judgment in the prior action, though Plaintiff at present cannot collect, as our General Assembly has not appropriated the money to pay the judgment,” he added.
That’s not necessarily the end of the story, Dillon explained.
“Our General Assembly has determined that a judgment creditor’s right to collect on a judgment is subject to a ten-year statute of limitations but that a judgment credit may bring a new action to enforce the prior judgment one time, thus effectively renewing a prior judgment for ten more years,” the chief judge wrote.
“Here, Plaintiff seeks to renew the judgment it obtained in the first action,” Dillon explained. “And based on the record before us, it appears that Plaintiff commenced this present action within ten years of that first judgment. Accordingly, we hold that the trial court did not err by denying Defendants’ motion to dismiss.”
“If Plaintiff is successful in this action in ‘renewing’ its prior judgment, Plaintiff still may never collect, depending on whether our General Assembly appropriates money to pay any said new judgment. Nonetheless, Plaintiff is entitled to renew its judgment and hope,” Dillon wrote.
Judge Allegra Collins joined Dillon’s opinion. Judge Julee Flood dissented.
“While the majority concludes that Plaintiff, in filing its complaint (the ‘Complaint’), ‘seeks to renew the judgment it obtained in the first action[,]’ the face of the Complaint reveals an absence of law and fact in support of Plaintiff’s claim, and such a conclusion requires that this Court make inferences impermissible under our standard of review,” Flood wrote.
“[T]he money judgment explicitly identified in Plaintiff’s prayer for relief was reversed by this Court, and therefore no longer exists,” Flood added.
Flood would have ordered the trial judge to grant state officials’ motion to dismiss the case.
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