              IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA18-62

                               Filed: 6 November 2018

Burke County, No. 14 CVS 783

LEWIS SCOTT CARLTON and THOMAS P. WOOD, Plaintiffs,

             v.

BURKE COUNTY BOARD OF EDUCATION, Defendant.


      Appeal by Defendant from order entered 6 June 2016 by Judge Yvonne Mims

Evans and judgment entered 12 October 2016 and order entered 22 November 2016

by Judge W. Todd Pomeroy in Burke County Superior Court. Heard in the Court of

Appeals 4 September 2018.


      Kennedy, Kennedy, Kennedy and Kennedy, L.L.P., by Harold L. Kennedy, III
      and Harvey L. Kennedy, for plaintiff-appellees.

      Cranfill Sumner & Hartzog LLP, by Katie Weaver Hartzog and Meredith
      Taylor Berard, for defendant-appellant.


      HUNTER, JR., Robert N., Judge.


      Burke County Board of Education (“Defendant”) appeals following jury

verdicts finding Defendant liable for negligent infliction of emotional distress and

invasion of privacy. On appeal, Defendant argues the trial court committed the

following errors: (1) denying its motion to dismiss based on sovereign immunity; (2)

denying its motion to dismiss for failure to state a claim, motion for directed verdict,
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                                      Opinion of the Court



and motion for judgment notwithstanding the verdict; (3) denying its motion for new

trial; and (4) awarding Plaintiffs costs and expenses. We affirm.

                       I. Factual and Procedural Background

       On 29 July 2014, Lewis Scott Carlton and Thomas P. Wood (“Plaintiffs”) filed

a complaint for invasion of privacy, breach of contract, negligent infliction of

emotional distress, and civil conspiracy.1 Plaintiffs asserted Defendant waived its

right to assert sovereign immunity by purchasing liability insurance coverage. The

complaint alleged the following narrative.

       On 28 March 2011, Wood attended a “closed” session of a Burke County Board

of Education (“Board”) meeting. Speaking on behalf of himself and Carlton, Wood

addressed the Board “about a highly confidential matter.” The Board asked him to

submit the information in a written statement. Through its chairperson,2 Defendant

“represented . . . it would maintain the confidentiality” of the information.

       On 11 April 2011, Plaintiffs “confidentially” sent envelopes to every member of

the Board.       In each envelope, Plaintiffs included a letter and “supporting

documentation.” All papers were placed “under seal[,]” with “Confidential” written

on the envelope. (Emphasis in original). In the letter, Plaintiffs “raised serious

concerns” about the superintendent of the Board, Dr. Arthur Stellar. Specifically,



       1  Plaintiffs initially included Dr. Arthur Stellar as a defendant, but dismissed, without
prejudice, their claims against Stellar on 17 March 2016.
        2 The complaint did not state who chaired the Board.



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Plaintiffs alleged Stellar engaged in an “improper relationship” with Amy Morgan, a

Board employee. Had Defendant not assured Plaintiffs of confidentiality, Plaintiffs

“would never have submitted said materials[.]”

      A member of the Board gave a copy of the letter and supporting documents to

Stellar. In August 2011, Stellar gave a copy to Morgan. On 11 August 2011, the

Board voted to “buy out” Stellar’s contract, and Morgan resigned from her position in

the school system.

      On 31 October 2011, Morgan sued Plaintiffs for libel. As a result of the lawsuit,

Plaintiffs “were viciously and maliciously attacked in the media and on the internet.”

Plaintiffs feared for their safety, suffered damage to their reputations and businesses,

suffered severe mental and emotional distress, and spent “large sums” of money

defending themselves in the Morgan lawsuit. On 1 April 2013, a court dismissed

Morgan’s lawsuit.

      On 14 October 2014, Defendant filed a motion to dismiss, pursuant to Rule

12(b)(1)-(2), (4)-(6) of the Rules of Civil Procedure. After a hearing on 20 January

2015, the court entered an order on 10 February 2015 on Defendant’s motion to

dismiss pursuant to Rule 12(b)(6). The court dismissed Plaintiffs’ breach of contract

claim. The court denied Defendant’s motion on the invasion of privacy, negligent

infliction of emotional distress, and civil conspiracy claims.




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       On 16 March 2015, Defendant filed its answer. Defendant raised the defenses

of contributory negligence, sovereign immunity, and expiration of the statute of

limitations.

       On 20 May 2016, Defendant filed a notice of hearing for 31 May 2016 on its

motion to dismiss pursuant to Rule (12)(b)(1)-(2). That same day, Defendant filed an

affidavit by Keith Lawson, its finance officer. Lawson asserted Defendant did not

waive the defense of sovereign immunity as to the invasion of privacy claim by

purchasing liability insurance. Lawson highlighted specific portions of Defendant’s

insurance policy, which covered only bodily injury and property damage caused by an

accident. The policy, as explained by Lawson, did not cover “Personal and advertising

injury[,]” including “Knowing Violation Of Rights of Another” or any injury arising

from “Oral or written publication, in any manner, of material that violates a person’s

right to privacy[.]” Defendant attached its insurance policy as an exhibit to the

affidavit.

       On 31 May 2016, the court held a hearing on Defendant’s motion to dismiss.

Plaintiffs objected to the court’s consideration of Lawson’s affidavit and

accompanying attachments.3 Plaintiffs asserted Defendant violated Rule 26(c) of the

Rules of Civil Procedure because Defendant did not list Lawson as a person with

knowledge of the matter in its answer to Plaintiffs’ request for interrogatories.



       3   Plaintiffs filed a written version of their objection on 2 June 2016.

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Defendant argued it only waived sovereign immunity to the extent its insurance

covered the claims. Defendant further asserted its insurance policies did not cover

intentional torts.

       In an order entered 6 June 2016, the court sustained Plaintiffs’ objection to

consideration of Lawson’s affidavit and accompanying attachments. The court also

concluded: (1) Defendant should have disclosed the identity of Lawson and the

insurance policy earlier in discovery; (2) the “unseasonable” disclosure prejudiced

Plaintiffs; (3) the late disclosure deprived Plaintiffs of the opportunity to depose

Lawson; and (4) Defendant violated Rules 26, 33, and 34 of the Rules of Civil

Procedure. Accordingly, the court denied Defendant’s motion to dismiss pursuant to

Rule (12)(b)(1)-(2).

       The court called the case for trial on 20 September 2016.4 Plaintiff Wood

testified on his own behalf. Wood lived in Burke County and owned a photography

business.    Wood had two school-aged children and was “[v]ery active” in their

education. At a Board meeting in January 2011, Wood heard rumors about Stellar

closing the schools in Burke County. One of the county principals, Ross Rumbaugh,

suggested someone else “speak . . . for the school.” The parents at the meeting asked

Wood to act as a spokesman and talk with Stellar. After coordinating with other

parents and the parent teacher organization, Wood, other parents, Rumbaugh, and


       4 The court originally called the case for trial on or about 8 June 2016. However, on 29 June
2016, the court declared a mistrial.

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Stellar met. Stellar “in a whirlwind[,]” told others he would have to close the schools

because of a “huge” budget deficit.

       On 28 March 2011, the Board held a meeting to vote on closing the schools in

Burke County. Twelve to fifteen hundred people attended. Wood presented, began

to comment about a county employee (Morgan), and read a letter from a school

employee, in which the school employee called Stellar a “bully.”                      The Board

chairperson, Catherine Thomas, “cut [him] off[.]” Thomas told Wood any personnel

issues must be discussed in a closed session.

       At the end of the open session, the Board went into closed session. Wood told

the Board he presented on behalf of himself and Carlton. Wood wanted to bring

forward “sensitive issues” and “needed to know that they could be kept confidential.”

Thomas responded, “[T]hat’s fine[,]” and the other Board members remained silent.

Wood started his statement about “the manager of strategic alliance position[,]” but

the Board cut him off.5

       After the closed session ended, Wood and Thomas spoke. Wood told Thomas

both he and Carlton had more information about Stellar and Morgan and asked if he

needed to attend another closed Board session. Thomas instructed Wood to “submit

it to the board confidentially in writing . . . so that they can take a look at it.”




       5   Wood did not testify about which Board member interrupted his statement.

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      The next day, Plaintiffs met and started drafting a letter. On 11 April 2011,

prior to another Board meeting, Plaintiffs again met and assembled envelopes for

each Board member and the Board attorney, Chris Campbell. On the outside of each

envelope, Carlton wrote “Confidential.” The envelope included a letter, which stated:

             Please find attached documentation of several issues we
             wish to bring before the Burke County School Board
             detailing disturbing allegations regarding Dr[.] Arthur
             Stellar and others within our school system. As concerned
             business owners, parents and stakeholders in Burke
             County we wish to respectfully request further
             investigation into these issues to ensure the optimal
             operation of our schools and more importantly the welfare
             of our children and this county.

             We are not lawyers or educators. Although we cannot
             personally attest to the veracity of the claims herein and
             make no representation any or all of the claims are factual
             or presented in their entirety, we do ask for a complete and
             thorough investigation. We trust you to ascertain the facts
             as our elected officials[.]

             We chose to represent these items for individuals within
             the school system and our county who say they are simply
             too afraid to speak on their own behalf. These people need
             their jobs, especially in such tough economic times.
             However they do not need to perform their jobs under such
             stressful and hostile conditions. For this reason please
             consider the source of all items herein to be anonymous or
             strictly confidential.

             We wish to apologize for the obvious lack of complete
             supporting documentation in some of the areas we present.
             This is intentional because we fear destruction of pertinent
             evidence if requested through normal channels. We have
             already been informed of such incidents with key
             documents related to the claims herein.


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             We will gladly cooperate with the board in any way possible
             that does not endanger jobs or personal assets. We request
             these communications remain confidential to protect the
             reputations of anyone innocently accused. We fully trust
             that the appropriate action can and will be taken without
             the necessity of the Stakeholders of Burke County having
             to seek legal counsel[.]

(Emphasis omitted).

      At the 11 April 2011 Board meeting, which Wood did not attend, Carlton

handed out the envelopes. Without Thomas’s promise of confidentiality, Wood would

not have compiled or submitted the information.

      In November 2011, Morgan sued Plaintiffs for defamation of character. Prior

to the suit, Wood did not know the Board broke the confidentiality of the letter. Three

newspapers, a radio station, and a local blogger covered the lawsuit. The media

coverage was “embarrassing” and “humiliating” and “destroyed [his] reputation.”

Clients stopped using his photography business because “[n]obody wants to be

associated with, with that.”

      Plaintiffs called Donald Vaughan and tendered him as an expert in the field of

state and local government administration and leadership.          Vaughan reviewed

Plaintiffs’ complaint, Defendant’s answer, affidavits, and depositions. Vaughan also

reviewed the applicable statutes. Vaughan explained the difference between open

and closed Board sessions, specifically stating “the information that is brought into




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that [closed] session is expected to be closed.” He opined “a citizen ought to be able

to rely on the promise of a chairman of the board.”6

       Plaintiff Carlton testified on his own behalf. Carlton lived in Burke County

and owned Express Lube and Wash, a car maintenance business. Carlton had one

son, who attended school in Burke County. In 2011, Carlton attended several Board

meetings. Stellar, the superintendent at the time, discussed closing schools in Burke

County, claiming the Board suffered from a deficit. However, in June 2011, financial

records showed the county actually had a ten to twelve million dollar surplus.

       On 28 March 2011, Carlton could not attend a Board meeting, but Wood spoke

on his behalf. After the meeting, Plaintiffs compiled an envelope to give to the Board

about issues with Stellar. Carlton thought the information needed to be confidential

for two reasons—to protect the people mentioned and to protect Plaintiffs from

retaliation.   Carlton attended the Board meeting on 11 April 2011.                   Before the

meeting began, pursuant to Board procedures, Carlton gave eight envelopes to the

Board’s secretary for distribution to Board members.

       On 18 August 2011, the Board bought out Stellar’s contract, releasing him

prior to the end of his contract. The next morning, Morgan resigned. Carlton first

learned of the breach of confidentiality and Morgan’s lawsuit through rumors online.



       6  Defendant objected and moved to strike this portion of Vaughan’s testimony. The court had
Plaintiffs’ counsel reword the question and instructed Vaughan to answer “that limited question.”
Vaughan answered, “Should be able to rely on it.”

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After reading about the suit on a local blogger’s website, a deputy served Carlton with

the complaint at his business, in front of customers. Three newspapers, a radio

station, and a local blogger covered the lawsuit. As a result of the suit and coverage,

Carlton resigned from his deaconship at his church. Longstanding customers stopped

coming to Carlton’s business. Consequently, Carlton closed the car wash portion of

his business

      Plaintiff called Catherine Thomas, a former member and Chair of the Board.

In fall 2010, the Board hired an outside attorney, Chris Campbell, to investigate

complaints about Stellar.    In a closed session on 22 November 2010, Campbell

reported his findings to the Board and the Board’s attorney. After his report, the

Board gave “[t]hose documents” back to Campbell, to store at his office, so they did

not become public.

      On 28 March 2011, the Board held an open session. Wood spoke at the session,

first about schools closing and then about Stellar and Morgan. Thomas interrupted

Wood and told him, “You can’t discuss personnel matters in, in public like that.”

Thomas told Wood he could finish his speech during a closed session. When Wood

later attended a closed session, “he complained about Dr. Stellar . . . [and] probably

talked about Amy Morgan as well[,]” though Thomas did not recall “specifically” what

Wood said. The closed session ended before Wood could finish his speech. Thomas

instructed Wood to “put it in writing and submit it confidentially.” It was Thomas’s



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“intention” to tell Wood to “submit it so that it could be reviewed in closed session[.]”7

At that time, Thomas did not expect that the information Wood gave would be turned

over to Stellar.

       At the next Board meeting, on 11 April 2011, each Board member’s seat had

an envelope marked “Confidential.” Inside the envelope, Board members found a

cover letter and other documents “that detailed allegations about Dr. Stellar and

Ms. . . . Amy [Morgan.]”      During a following closed session, Thomas read the

materials. When other members asked what to do with the envelope, Thomas replied,

“It’s confidential and we’ll discuss it later.” Additionally, “[t]he school board knew

that personnel matters were confidential and had been trained on that many times.”

Thomas gave her envelope to attorney Campbell. Other members of the Board took

the envelope and documents home.

       Sometime after the meeting, Thomas asked Campbell to investigate the

allegations in the report. On 25 April 2011, Campbell reported his findings in a closed

session, without Stellar present. The Board did not take any action on the allegations

at that meeting.

       In August 2011, the Board decided to buy out Stellar’s contract. The next day,

Morgan resigned from her position. Thomas did not “think” the Board took any

adverse action against Morgan.         Thomas voted in favor of buying out Stellar’s


       7  This wording is from Plaintiffs’ counsel’s question, to which Thomas responded in the
affirmative.

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contract, in part based on the allegations in the envelope Plaintiffs submitted. On 31

October 2011, Thomas learned the documents became public because of a local blog.

However, she did not give the documents to anyone besides Campbell.

      Plaintiff next called Susan Stroup, a former Board member. At the March 2011

closed session, Wood, amongst others, lodged complaints against Stellar. When asked

about the complaints she heard from others and if Wood specifically mentioned an

inappropriate relationship between Stellar and Morgan, Stroup answered, “I don’t

remember that specifically. I just --. I just know that it was directed towards Dr.

Stellar’s -- lots of things about him, just various issues about him. Inappropriate

relationships, as well as, other things, but I, I don’t remember exactly what it was.”

      At the 11 April 2011 meeting, Stroup found an envelope marked “Confidential”

in her seat. She was not surprised to see an envelope in her seat, because Stellar

often left packets out for Board members. Stroup “glanc[ed]” at the documents, which

did not contain any information she did not already know. The information “was

pretty common knowledge[.]” Stroup took the documents home with her. However,

another Board member, Rob Hairfield, left his envelope on the desk. Hairfield, due

to health difficulties, often left things on his desk, and Stellar’s secretary “usual[ly]”

got what Hairfield left. Stroup could not specifically remember if the secretary picked

up Hairfield’s envelope at the April 2011 meeting. The Board never voted to keep the




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documents away from Stellar and Morgan. After her last Board meeting, Stroup gave

the envelope and documents to “the central office to the superintendent’s secretary.”

        Plaintiffs rested.8 Defendant moved for directed verdict. The trial court denied

the motion for directed verdict.

        Defendant called Robert Armour, a current member of the Board. At the 11

April 2011 meeting, Armour saw an envelope in his chair. Armour did “nothing” with

the materials at the meeting and took the envelope home. At home, he opened the

envelope and read documents “that implied . . . that referred to rumors and

conjecture” he already heard about Stellar and Morgan. Armour did not give the

documents to another.

        Armour also described Board practice during closed sessions. When in closed

session, the Board members “are trained . . . to keep whatever goes on in closed

session meeting quiet.” “Quiet” means “[n]ot to discuss it with anyone else outside

the meeting.” However, at the meeting, the Board did not explicitly vote to keep the

information Plaintiffs gave confidential.

        Defendant called Karen Sain, another former Board member. Sain attended

the 11 April 2011 Board meeting and received the envelope from Plaintiffs. She

opened the envelope at the meeting, but did not review it there. Sain took the

envelope and documents home and burned them. The Board did not vote to keep the


        8
        Plaintiffs also called five other witnesses, but their testimonies are not pertinent to the issues
on appeal.

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documents confidential or from Stellar. Sain also described how the Board acts in

closed sessions. Specifically, Sain testified the chairperson cannot make a decision

on her own, as the Board “perform[s] as a body.”

      Defendant called Samuel Wilkinson, a member of the Board.          Wilkinson

attended the 11 April 2011 meeting.       However, Wilkinson did not “specifically

remember receiving” the envelope and documents, though he was “sure that packet

was delivered.” He also did not remember receiving anything from Plaintiffs. He did

not give any materials received as a member of the Board to Stellar or Morgan.

      Defendant called Timothy Buff, another former Board member. Buff attended

the 11 April 2011 meeting, where there was an envelope in his seat. Buff did not

review the materials at the meeting and took the envelope home. At the meeting,

Thomas did not say the information in the envelope must remain confidential, and

the Board did not vote to keep the information confidential. Buff did not give the

envelope to anyone.

      Defendant called Chris Campbell. Campbell did not work “in-house” as the

Board’s attorney, but as “an independent attorney hired for legal matters.” In 2010,

the Board hired Campbell to investigate Stellar. In April 2011, Campbell received

one of the envelopes distributed to Board members. In August 2011, Stellar asked

Campbell for copies of complaints “made against him in the process of the review[.]”

Campbell did not consult with the Board and sent Stellar the cover letter and other



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documents which were in the envelopes Plaintiffs compiled. Campbell considered the

complaint to be a part of Stellar’s personnel file.

       Defendant rested and renewed its motion for directed verdict. The court denied

the motion.9 The jury found Defendant liable for invasion of privacy and negligent

infliction of emotional distress as to both Plaintiffs. The jury awarded Plaintiffs

$250,000 each. On 12 October 2016, the trial court entered judgment in accordance

with the jury verdicts.

          On 24 October 2016, Defendant filed a motion for judgment notwithstanding

the verdict and a motion for new trial, pursuant to Rule 59(a)(1), (7)-(9). On 16

November 2016, Plaintiffs filed a motion for recovery of litigation costs and expenses.

On 22 November 2016, the court held a hearing on the parties’ motions. After

argument, the court denied Defendant’s motions.                 The court awarded Plaintiffs

$4,281.85 in costs and expenses.             The same day, the court entered orders in

accordance with its oral rulings. On 20 December 2016, Defendant filed notice of

appeal.

                                        II. Jurisdiction

       Our Court has jurisdiction pursuant to N.C. Gen. Stat. §§ 1-277(a), 7A-27(b)(1)

(2017).

                                  III. Standard of Review


       9 Plaintiffs moved for directed verdict on Defendant’s defense of contributory negligence. The
court granted Plaintiffs’ motion.

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       We apply several standards of review to examine Defendant’s appeal.

       First, we review a trial court’s determination on sovereign immunity de novo.10

White v. Trew, 366 N.C. 360, 362-63, 736 S.E.2d 166, 168 (2013) (citations omitted)

(“[A]lthough not explicitly stated previously, it is apparent that we have employed a

de novo standard of review in other cases involving sovereign immunity.”).

       Second, the standard of review for a Rule 12(b)(6) motion to dismiss is de novo.

Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4 (2003). We

use the same standard of review for the denial of a motion for directed verdict and

the denial of a motion for judgment notwithstanding the verdict. Tomika Invs., Inc.

v. Macedonia True Vine Pentecostal Holiness Church of God, Inc., 136 N.C. App. 493,

498-99, 524 S.E.2d 591, 595 (2000) (citation omitted). The standard is “whether the

evidence, taken in the light most favorable to the non-moving party, is sufficient as a

matter of law to be submitted to the jury.” Davis v. Dennis Lilly Co., 330 N.C. 314,

322-23, 411 S.E.2d 133, 138 (1991) (citing Kelly v. Int’l Harvester Co., 278 N.C. 153,

179 S.E.2d 396 (1971)).

               In determining the sufficiency of the evidence to withstand
               a motion for a directed verdict, all of the evidence which
               supports the non-movant’s claim must be taken as true and
               considered in the light most favorable to the non-movant,


       10  We note whether sovereign immunity is a challenge to personal jurisdiction or subject
matter jurisdiction is unsettled in North Carolina law. See M. Series Rebuild, LLC v. Town of Mount
Pleasant, Inc., 222 N.C. App. 59, 62, 730 S.E.2d 254, 257 (2012) (citations omitted) (“A motion to
dismiss based on sovereign immunity is a jurisdictional issue; whether sovereign immunity is
grounded in a lack of subject matter jurisdiction or personal jurisdiction is unsettled in North
Carolina.”).

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             giving the non-movant the benefit of every reasonable
             inference which may legitimately be drawn therefrom and
             resolving contradictions, conflicts, and inconsistencies in
             the non-movant’s favor.

Turner v. Duke Univ., 325 N.C. 152, 158, 381 S.E.2d 706, 710 (1989) (citation

omitted).

      There must be more than a “scintilla of evidence supporting each element of

the non-movant’s claim.” Denson v. Richmond Cty., 159 N.C. App. 408, 412, 583

S.E.2d 318, 320 (2003) (quotation marks and citation omitted). “A scintilla is some

evidence, and is defined by this Court ‘as very slight evidence.’ ” Mace v. Pyatt, 203

N.C. App. 245, 251, 691 S.E.2d 81, 87 (2010) (some quotation marks and citation

omitted). “If there is evidence to support each element of the nonmoving party’s cause

of action, then the motion for directed verdict and any subsequent motion for

[judgment notwithstanding the verdict] should be denied.” Green v. Freeman, 367

N.C. 136, 140-41, 749 S.E.2d 262, 267 (2013) (quotation marks, citation, and

alteration omitted). We review the trial court’s denial de novo. Denson, 159 N.C.

App. at 411, 583 S.E.2d at 320 (citation omitted).

      Third, “an appellate court’s review of a trial judge’s discretionary ruling either

granting or denying a motion to set aside a verdict and order a new trial is strictly

limited to the determination of whether the record affirmatively demonstrates a

manifest abuse of discretion by the judge.” Worthington v. Bynum, 305 N.C. 478, 482,

290 S.E.2d 599, 602 (1982) (citations omitted). “Consequently, an appellate court


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should not disturb a discretionary Rule 59 order unless it is reasonably convinced by

the cold record that the trial judge’s ruling probably amounted to a substantial

miscarriage of justice.” Id. at 487, 290 S.E.2d at 605. However, if the motion for a

new trial is based on an error in law occurring at the trial and objected to by the party

making the motion, our Court reviews de novo. Greene v. Royster, 187 N.C. App. 71,

78, 652 S.E.2d 277, 282 (2007) (citations omitted).

                                     IV. Analysis

      Defendant contends the trial court erred in the following ways: (1) denying its

motion to dismiss based on immunity; (2) denying its motion to dismiss for failure to

state a claim, motion for directed verdict, and motion for judgment notwithstanding

the verdict; (3) denying its motion for new trial; and (4) awarding Plaintiffs costs and

expenses.

A. Motion to Dismiss Based on Sovereign Immunity

      Defendant first contends the court erred by denying its motion to dismiss based

on immunity. In its brief, Defendant asserts sovereign immunity barred both the

invasion of privacy and negligent infliction of emotional distress claims. At oral

argument, however, Defendant conceded it failed to argue below sovereign immunity

barred Plaintiffs’ claim for negligent infliction of emotional distress.           Thus,

Defendant’s argument as to the negligence claim is not properly before this Court,

and we do not address it. For reasons stated infra, we need not address whether



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Defendant’s argument that sovereign immunity barred Plaintiffs’ invasion of privacy

claim would have been meritorious.

B. Motion to Dismiss Based on Failure to State a Claim, Motion for Directed
Verdict, and Motion for Judgment Notwithstanding the Verdict

      Defendant next contends the trial court erred by denying its motions to dismiss

pursuant to Rule 12(b)(6), for directed verdict, and for judgment notwithstanding the

verdict. Defendant argues Plaintiffs failed to present sufficient evidence of duty,

breach of duty, and reasonable foreseeability in support of their claim for negligent

infliction of emotional distress.

      First, Defendant argues it did not, and could not, owe Plaintiffs any duty for

three reasons: (1) the documents submitted (and information contained therein) were

public information; (2) the closed nature of the Board session did not mean the

matters were confidential; and (3) Thomas’s assertions of confidentiality did not bind

the Board because she acted alone.          Plaintiffs contend a duty arose from the

circumstances.

      Vaughan, Plaintiffs’ expert on state and local government and administration

and leadership, testified:


             BY [PLAINTIFFS’ COUNSEL]:
             Q. Well, let me just ask you, in terms of the closed session
             in this case, could you explain what we’re talking about and
             how that impacts --

             A. Sure.


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Q. -- the issues in this case?

A. In a closed session, information is presented to a body
without the public being in. The public could be in this
particular meeting. They could, could fill the whole
courthouse if they were interested enough in this
particular case. A closed session is the participants in the
closed meeting of, of the board. In this case they had
requested that their information be held confidential.

[DEFENDANT’S COUNSEL]: Objection. Move to strike.

THE COURT: Sustained. Motion to strike is allowed as to
the “keep it confidential.” Next question, please.

BY [PLAINTIFFS’ COUNSEL]:
Q. Let me ask you, in this case is it typical when a, a school
board or any public entity wants to go into closed session,
they have to make a motion to go into closed session and
that has to be voted on by the school board?

A. That’s correct. The statutes are pretty specific. Closed
sessions are a rare animal. Ninety -- I would guess 90
percent of, of all -- 95 percent of all sessions of every board,
board meeting in North Carolina this week would be in
open session. There are just particular things that allow a
board to go into closed session.

Q. Okay.     And in this case the board went into closed
session --

A. That’s correct.

Q. -- correct? And then once the board went into closed
session, tell the jury about the importance of citizens being
able to share information with a school board or city council
or county commissioners in closed session.

A. It’s --


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                      Opinion of the Court




Q. What, what does that mean?

A. It’s the reason -- It’s the whole basis of democracy. You
have elected the people on a school board to represent you
and your best interest on school-board-type related
matters. They are the people’s representative, and they
make the decisions based on the information that they
have.
        And it’s the right of citizens, it’s the basic tenant of
government in North Carolina, that, that citizens can go
before those boards and express their concerns, grievances,
whatever they want to express. That’s, that’s why we have
government and not monarchs and dictators and other
things. That’s why we have the government the way we
have it in North Carolina.

Q. Okay. And once the citizens go before a governmental
entity like a school board in closed session and whatever
statements they make or discussions there are in that
closed session, is that information that they say or people
question, promises made -- is that information that would
be open or public or would that information be --

A. “Closed” means closed.

[DEFENDANT’S COUNSEL]: Objection, Your Honor.
Move to strike.

THE COURT: Overruled.

BY [PLAINTIFFS’ COUNSEL]:
Q. Go, go ahead and explain your answer.

A. Closed sessions are closed sessions. They are not open
to the public. And the information that is brought into that
session is expected to be closed.

Q. Now, let me ask you this: Assuming that the evidence in
this case will tend to show by its greater weight that during


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                     Opinion of the Court



the first closed session in which Mr. Wood made a
presentation to the Burke County Board of Education in
their closed session and made a statement that he wanted
whatever information he shared or gave to the school board
to be kept in confidence, do you have an opinion
satisfactory to yourself as to whether or not during the
course of that actual session that if the chairperson of the
school board told him that the information would be kept
confidential that he could rely on her promise?

[DEFENDANT’S COUNSEL]: Objection, Your Honor.

THE COURT: Sustained as to the form.

[PLAINTIFFS’ COUNSEL]: Okay.

BY [PLAINTIFFS’ COUNSEL]:
Q. State whether or not in a closed session that citizens can
rely on a promise of confidentiality by the chair of, of a
school.

[DEFENDANT’S COUNSEL]: Objection, Your Honor.

THE COURT: Sustained as to the form.

BY [PLAINTIFFS’ COUNSEL]:
Q. Just explain to us the significance of a -- the closed
session as it relates to whatever is promised or said in a
closed session by the chairman of the governmental --

A. I think a citizen ought to be able to rely on the promise
of the chairman of a board.

[DEFENDANT’S COUNSEL]: Objection. Move to strike.
Your Honor, may we approach?

THE COURT: Yes. Wait one second. The response is
nonresponsive to the question. Restate your question.
Listen to the question. Answer the question. The question
again, please.


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                                  Opinion of the Court




             BY [PLAINTIFFS’ COUNSEL]:
             Q. Well, the question is: Explain to the jury how the closed
             session relates to any statements made in closed session by
             the citizens going before the, the governmental body or any
             statements made by the chairman of, of a school board or
             any promises made by the chairman of the school board.
             How, how do those two things fit together?

             [DEFENDANT’S COUNSEL]: Objection, Your Honor.

             THE COURT: Overruled as to that. You may answer to
             that limited question. Answer, please.

             BY [PLAINTIFFS’ COUNSEL]:
             A. Should be able to rely on it. That’s the whole basis--

      Additionally,    Thomas    instructed       Wood   to   submit   the   information

confidentially.   Plaintiffs both testified about how the promise of confidentiality

influenced their decision to submit the letter and supporting documents. Plaintiffs

marked “Confidential” on the front of each envelope and asked for confidentiality in

the letter. Wood testified he began his speech during the closed session by saying he

wanted to bring forward “sensitive issues” and “needed to know that they could be

kept confidential.” Former Board member, Robert Armour, testified when in closed

session, Board members “are trained . . . to keep whatever goes on in closed session

meeting quiet.” “Quiet” means “[n]ot to discuss it with anyone else outside the

meeting.” After reviewing the evidence in the light most favorable to the non-movant




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                                          Opinion of the Court



Plaintiffs, we conclude Plaintiffs produced sufficient evidence of Defendant’s duty

owed.11

        Second, Defendant argues Plaintiffs failed to present more than a scintilla of

evidence Defendant breached any duty. Specifically, Defendant contends Plaintiffs

only presented evidence showing attorney Campbell, who did not work as the Board’s

attorney at the time, gave Stellar Plaintiffs’ identities. Defendant further argues that

at trial, Plaintiffs proceeded under a “fail[ure] to secure” theory of negligence—that

Defendant failed to properly secure the confidential information. However, viewing



        11  Defendant also contends the Public Records Act required it to provide Stellar and Morgan
with their personnel files, which included Plaintiffs’ identities. N.C. Gen. Stat. § 115C-319 defines a
personnel file as:
                 Personnel files of employees of local boards of education, former
                 employees of local boards of education, or applicants for employment
                 with local boards of education shall not be subject to inspection and
                 examination as authorized by G.S. 132-6. For purposes of this Article,
                 a personnel file consists of any information gathered by the local board
                 of education which employs an individual, previously employed an
                 individual, or considered an individual’s application for employment,
                 and which information relates to the individual’s application, selection
                 or nonselection, promotion, demotion, transfer, leave, salary,
                 suspension, performance evaluation, disciplinary action, or
                 termination of employment wherever located or in whatever form.
N.C. Gen. Stat. § 115C-319 (2017).
        Defendant argues because Plaintiffs asked the Board to terminate or put Stellar and Morgan
on leave, the letter (and Plaintiffs’ identities) were a part of Stellar’s and Morgan’s personnel files. In
a footnote, Defendant argues the information was not confidential because Stellar has a “right to
judicial review of the reasons and validity of his removal.” Plaintiffs argue “[t]he information
submitted by Plaintiffs does not relate to any promotion, demotion, [or] termination . . . .” Plaintiffs
argue the Board bought out Stellar’s contract—did not demote or terminate him—and Morgan
resigned. While Defendant is correct Stellar would have a right to his personnel file, Plaintiffs made
clear in their letter and at the trial court the confidential information was not just the allegations
within the letter, but also Plaintiffs’ identities as the source of the information. Indeed, the cover
letter explicitly stated, “please consider the source of all items herein to be anonymous or strictly
confidential.” Thus, the Board could inform Stellar of the reasons for the buyout, without disclosing
Plaintiffs’ confidential information—their identities.

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                                  Opinion of the Court



the evidence in the light most favorable to Plaintiffs and resolving all contradictions

in Plaintiffs’ favor, we conclude Plaintiffs presented sufficient evidence—more than

mere speculation—Defendant breach its duty to keep Plaintiffs’ identities

confidential.

      Finally, Defendant argues Plaintiffs failed to present sufficient evidence of the

reasonable foreseeability they would suffer severe emotional distress. Defendant

points to evidence Wood attempted to openly discuss Stellar’s and Morgan’s alleged

behavior and relationship at the 28 March 2011 Board meeting. Our review of the

evidence, in the light most favorable to Plaintiffs, reveals sufficient evidence of

reasonable foreseeability.    Plaintiffs explicitly marked “Confidential” on each

envelope and stated several times in the letter their request for confidentiality. Wood

testified when he attended the Board’s closed session, he told the Board he needed to

discuss “sensitive issues” and “needed to know that they could be kept confidential.”

Chairperson Thomas replied, “[T]hat’s fine[.]” Wood also testified without Thomas’s

promise of confidentiality, he would not have submitted the letter. Thus, we conclude

Plaintiffs presented sufficient evidence of reasonable foreseeability of emotional

distress.

      Accordingly, the trial court did not err by denying Defendant’s motion to

dismiss, motion for direct verdict, or motion for judgment notwithstanding the verdict




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                                      Opinion of the Court



for Plaintiffs’ negligent infliction of emotional distress claim.12           Below, the jury

awarded both Plaintiffs $250,000 for both negligent infliction of emotional distress

and invasion of privacy. The verdict sheets show the jury awarded the full amount

for both claims to both Plaintiffs and did not divide the amount between the two

claims. Thus, we need not analyze Defendant’s motions as to the invasion of privacy

claim, for the judgment still stands, as we affirm the trial court’s denial of Defendant’s

motions as to the negligence claim.

C. Motion for New Trial

       Defendant next argues the trial court erred by denying its motion for new trial

because the court “allowed inadmissible and highly prejudicial testimony and

instructed the jury on an unsupported theory of negligence.” (All capitalized in

original). Defendant’s argument is three-fold and concerns: (1) testimony on lost

future profits; (2) instructing the jury on failure to secure information; and (3)

“[p]rejudicial and [i]rrelevant” testimony.

       i. Carlton’s Testimony on Lost Profits

       Defendant and Plaintiffs disagree as to whether Defendant preserved this

argument as a ground for its motion for new trial and on appeal. Defendant asserts

it preserved the issue on appeal because it filed and argued a motion in limine and

objected during Carlton’s testimony.           However, as argued at the trial court,


       12 We conclude the allegations in Plaintiffs’ complaint, taken as true, were sufficient to
withstand Defendant’s motion to dismiss for failure to state a claim.

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                                    Opinion of the Court



Defendant did not base its motion in limine on the same grounds now argued on

appeal.   Below, Defendant argued Carlton was not an expert and did not give

Defendant his 2015 tax return. During Carlton’s testimony, Defendant did object

several times, but, again, not on the grounds argued on appeal. N.C. R. App. P.

10(a)(1) (2017) (“In order to preserve an issue for appellate review, a party must have

presented to the trial court a timely . . . motion, stating the specific grounds for the

ruling the party desired the court to make[.]”). Defendant contended some numbers

were based on speculation, Carlton was not an expert, and Plaintiffs’ counsel

impermissibly asked leading questions.          Defendant did not object to Carlton’s

testimony (or to jury instructions) that “lost business profits are not a proper measure

of damage in this type of tort case.” Accordingly, Defendant did not present this

argument below, and it not properly before us on appeal.

       ii. Theory of Negligence Outside the Pleadings

       Defendant next argues the trial court erred in instructing the jury on failure

to secure the information when Plaintiffs did not include this theory of negligence in

their pleadings. Defendant further contends this theory “was directly contrary to the

only basis alleged for their claim – that a Board member actively gave the information

to Stellar.” At the outset, Plaintiffs pled multiple theories, two of which were an

intentional act by the Board and negligence by the Board.            In their complaint,

Plaintiffs did not limit their allegation of a negligent act to a specific act. Plaintiffs’



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                                       Opinion of the Court



complaint alleges “Defendants committed a negligent act[.]” Thus, the negligent act

Plaintiffs forwarded at trial (failure to secure information) was within the pleadings,

as the pleadings were not limited.13

       iii. Prejudicial and Irrelevant Testimony

       Defendant contends “[t]he trial court continually allowed highly inflammatory

and irrelevant testimony about Stellar which had nothing to do with the legal issues

and which, taken together, painted a negative picture of the management of the

school system which easily could have colored the jury’s view of the Board.”

Defendant specifically points to five portions of testimony. However, Defendant did

not include three of the five portions in its motion for new trial (points one, three, and

five). As for the two portions of testimony properly before this Court, we reviewed

the record below and conclude neither warrants a new trial. Accordingly, we affirm

the trial court’s order denying Defendant’s motion for new trial.

D. Costs and Expenses

       Lastly, Defendant contends “[a]s the Board was entitled to dismissal, and/or

directed verdict and/or JNOV and/or new trial, plaintiffs were not entitled to costs

and expenses.” As stated above, we hold the trial court properly denied Defendant’s




       13  Defendant is correct in its assertion Plaintiffs pled “That upon information and belief,
around the early part of August, 2011 when Dr. Stellar was still Superintendent of the Board, he
leaked a copy of the confidential packet to Amy Morgan.” However, Plaintiffs also asserted a broad
claim of negligence in their complaint.

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                                  Opinion of the Court



motions for dismissal, directed verdict, judgment notwithstanding the verdict, and

new trial. Thus, the trial court did not err in awarding Plaintiffs costs and expenses.

                                   V. Conclusion

      For the foregoing reasons, we affirm the trial court’s orders and judgment.

      AFFIRMED.

      Judges BRYANT and ARROWOOD concur.




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