If the State of North Carolina decides not to provide for a state employee's defense in a civil or criminal case under G.S. § 143-300.3 or § 143-300.4, can the State still pay the final judgment against the employee under G.S. § 143-300.6 when the case is over?

Plain-English summary

The University of North Carolina asked whether the State could pay a final judgment against an employee even after deciding not to provide a defense under Article 31A. The AG answered no under G.S. § 143-300.6(a). The statute authorized payment of judgments in “actions or suits to which this Article applies.” The opinion read that phrase as covering cases in which the State had agreed to provide the employee’s defense under G.S. § 143-300.3.

That distinction is about authority to pay. The opinion says that G.S. § 143-300.6(a) does not authorize payment when the State did not provide a defense through one of the methods in G.S. § 143-300.5. It does not say that every judgment in a defended case must be paid. The statute, as quoted by the AG, “authorizes the State to pay” final judgments up to the amount payable for a claim under the Tort Claims Act.

Currency note

This opinion interprets Article 31A as it stood in 1989. Check current defense and payment provisions for a present employee claim.

Background and statutory framework

G.S. § 143-300.3 allowed the State, on an employee’s request, to provide a defense for an action based on conduct within the scope and course of state employment, subject to G.S. § 143-300.4. The opinion stresses that the decision whether to defend was discretionary. G.S. § 143-300.5 listed four available ways to provide that defense: Attorney General staff, outside counsel, insurance with a defense duty, or an agency attorney. The State was not required to choose any particular method.

The AG then read G.S. § 143-300.6(a) in that defense framework. It concluded that the payment provision did not reach a judgment in a case where the State had not provided the defense. That was the question asked; the opinion did not resolve whether some other source of funds or authority could cover an employee’s judgment.

Common questions

If the State declined to defend an employee, can it pay the judgment under G.S. § 143-300.6(a)?

The AG said no. It concluded that provision did not authorize payment when the State had not provided the defense through one of the methods in G.S. § 143-300.5.

If the State provided a defense, is it required to pay every judgment?

The opinion does not say that. It describes § 143-300.6(a) as authorizing payment, subject to the statutory limit, in actions to which Article 31A applies. It decides only that the authority is absent when the State did not provide the defense.

Could the State be required to defend every employee who asks?

No. The opinion says § 143-300.3 authorizes but does not obligate a defense. It describes limits relating to the employee’s request, the scope of employment, and determinations under § 143-300.4(a).

Citations

• G.S. § 143-300.3
• G.S. § 143-300.4, G.S. § 143-300.4(a)
• G.S. § 143-300.5
• G.S. § 143-300.6, G.S. § 143-300.6(a)
• G.S. § 143-291 et seq. (Tort Claims Act)
• G.S. § 147-17

Source

• Landing page: https://ncdoj.gov/opinions/defense-of-state-employees-medical-contractors-and-sanitarians/

Original opinion text

Requested By: Mr. Richard H. Robinson, Jr., Assistant to the President, The University of North Carolina

Question: Does G.S. § 143-300.6 permit the State to pay a final judgment awarded against a State employee in a civil or criminal proceeding brought against him on account of an act done or omission made in the scope and course of his employment, despite the State's decision not to provide for the employee's defense under G.S. § 143-300.3 or G.S. § 143-300.4?

Conclusion: No.

The basic provisions of Article 31A appear in G.S. § 143-300.3. That statute reads:

Except as otherwise provided in G.S. § 143-300.4, upon request of an employee or former employee, the State may provide for the defense of any civil or criminal action or proceeding brought against him in his official or individual capacity, or both, on account of an act done or omission made in the scope and course of his employment as a State employee.

G.S. § 143-300.3 simply authorizes the State to provide for the defense of State employees under certain circumstances. This statute does not obligate the State to provide for the defense of any employee under any circumstances; the decision to exercise the authority granted in G.S. § 143-300.3 lies entirely within the State's discretion.

Under G.S. § 143-300.3 the authority to provide for the defense of a State employee is dependent on three distinct factors. First, the State may exercise its authority to represent an employee only upon the request of the employee. If an employee does not want the State to provide for his defense, G.S. § 143-300.3 does not authorize the State to assume responsibility for or control over the lawsuit. Second, the State may provide for the defense of an employee only when the action or proceeding in question is brought against him on account of an act done or omission made in the scope and course of his State employment. Third and finally, the State is prohibited from providing for the defense of any employee if the Attorney General determines that any of the four conditions described in G.S. § 143-300.4(a) obtains. In particular G.S. § 143-300.4(a) prohibits the State from providing for an employee's defense whenever the Attorney General determines that the "[d]efense of the action or proceeding would not be in the best interests of the State."

Once the State has decided to "provide for the defense" of a State employee, G.S. § 143-300.5 specifies the means by which that defense may be provided. Under G.S. § 143-300.5 the State may "provide for the defense" of a State employee by assigning a member of the Attorney General's staff to represent the employee, by employing outside counsel in accordance with the provisions of G.S. § 147-17 to represent the employee, by authorizing the purchase of insurance which requires the insurer to defend actions against State employees, or by authorizing an attorney assigned to or employed by the agency which employed the defendant State employee to represent the employee. G.S. § 143-300.5 does not obligate the State to utilize any one of those four methods in any particular case. Rather, the State has the discretion under G.S. § 143-300.5 to provide for an employee's defense through any one of the four methods "as may be appropriate to the employee or class of employees in question."

G.S. § 143-300.6(a) authorizes the State to pay "[a]ll final judgments awarded in courts of competent jurisdiction against State employees in actions or suits to which this Article applies," provided that the payment does not exceed the amount payable for any claim under the Tort Claims Act, G.S. § 143-291 et seq. Whether the State's decision not to provide for the defense of an employee under G.S. § 143-300.3 or 300.4 relieves the State of its authority to pay a judgment against a state employee under G.S. § 143-300.6 depends on the meaning of the phrase "actions or suits to which this Article applies" as used in G.S. § 143-300.6(a).

It is the opinion of this office that the General Assembly intended the phrase "actions or suits to which this Article applies" to describe those actions or suits against a State employee for which the State has agreed to provide the defense under G.S. § 143-300.3. Therefore, it is the opinion of this office that G.S. § 143-300.6(a) does not authorize the State to pay any judgment rendered in any case where the State does not provide the defense for the employee under one of the methods specified in G.S. § 143-300.5.

Lacy H. Thornburg, Attorney General

Thomas J. Ziko, Assistant Attorney General