RCSB wins appeal for $272K — but the money is gone

RICHMOND COUNTY — Richmond County School District chalked up a win as the North Carolina Court of Appeals is allowing the Richmond County School Board to continue its more than decade-long legal battle for $272,000 from the state government.

A split 2-1 decision on April 2 rejected state officials’ motion to have the case dismissed.

A little backstory …

In 2011, a bill was passed and signed into law that required people convicted of driving with improper equipment in the state of North Carolina to pay a $50 fee. The fee was designated to cover prison maintenance costs, officials said at the time.

The problem was the N.C. State Constitution specifically says “… the clear proceeds of all penalties and [ ] fines collected in the several counties … shall belong to and remain in the several counties, and shall be faithfully appropriated and used exclusively for maintaining free public schools.” (N.C. Const. art. IX, § 7(a).

So the Richmond School Board sued, arguing that the money (a total of $272,300) should have gone to the schools — not towards prison maintenance — as per the constitution.

They won — but the state appealed. 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 court ordered state officials to pay the schools $272,300 in fines connected to the 2011 law.

Here’s where things went sideways: The third appeal reversed the trial judge’s order to actually pay the money.

“ … 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,” Chief Judge Chris Dillon wrote.

In short, while the court agreed the money should have gone to the schools, since it didn’t — and more importantly, because the money had already been spent — there wasn’t anything else for the court to do. The matter now lay at the hands of the General Assembly.

“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.

Also, the statute of limitations (10 years) had passed.

Case closed? Not necessarily …

The new judgement gives Richmond County School Board a chance to fight on.

“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,” Dillon wrote. “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.”

Judge Allegra Collins joined Dillon’s opinion. Judge Julee Flood dissented.

While the statute of limitations is no longer a pressing issue, the fact the money has already been spent is.

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 ruling said.

Of course, this case is no mere contract dispute. The state violated the North Carolina Constitution when it moved money otherwise destined for Richmond County schools to a separate state fund to pay for county jail programs throughout the state. As a result, the court held that it is appropriate — as the trial court ordered — that the money be paid back to the clerk’s office in Richmond County.

It was well within the judicial branch’s power to order this money — taken from Richmond County in violation of the constitution — to be returned. This, in turn, means that if the money collected from these fines still rested within the Statewide Misdemeanant Confinement Fund, awaiting the outcome of this protracted litigation, the courts could order state officials to return the money to Richmond County and the other affected counties.

But, as the parties concede, this cannot be done because the money is gone.

“[Plaintiff] did not obtain a preliminary injunction to prevent the state from spending money while it litigated the case[.] … As a result, the only way the state can satisfy the judgment entered by the trial court is to pay new money from the State Treasury — money not obtained from the improper equipment fees, but from the taxpayers and other sources of general State revenue,” the opinion reads.

“In sum, the role of the courts in this constitutional dispute is over. As the framers of our constitution intended, the judiciary performed its function to the limit of its constitutional powers by entering a judgment against the state and in favor of [Plaintiff]. The state must honor that judgment. But it is now up to the legislative and executive branches, in the discharge of their constitutional duties, to do so,” wrote Dillon. “The Separation of Powers Clause prevents the courts from stepping into the shoes of the other branches of government and assuming their constitutional duties.”

“We have pronounced our judgment,” wrote Dillon. “If the other branches of government still ignore it, the remedy lies not with the courts, but at the ballot box.”