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THE LIBRARY OF THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL THE COLLECTION OF NORTH CAROLINIANA C3U0 N87a v.hQ 1978/79 UNIVERSITY OF N.C. AT CHAPEL HILL 00033947392 FOR USE ONLY IN THE NORTH CAROLINA COLLECTION NORTH CAROLINA VOLUME 48 Number 1 FUS L. EDMISTEN TORNEY GENERAL ^8 N.C.A.G. No. 1 Pages 1 through 83 NORTH CAROLINA ATTORNEY GENERAL REPORTS Opinions of the Attorney General July 1, 1978 through December 31, 1978 MAILING ADDRESS: Post Office Box 629 Raleigh, North CaroHna 27602 I AlS7a ^ RUFUS L. EDMISTEN j^'Tihi Attorney General ^ames F. Bullock Andrew A. Vanore, Jr. Jenior Deputy Senior Deputy Attorney General Attorney General Robert Bruce White, Jr. Senior Deputy Attorney General fean A. Benoy William W. Melvin deputy Attorney General Deputy Attorney General Millard R. Rich, Jr. Deputy Attorney General harles H. Smith Howard A. Kramer \dministrative Deputy Deputy Attorney General Attorney General for Legal Affairs John A. Elmore, II Special Assistant to the Attorney General ^yron C. Banks Charles J. Murray >ster V. Chalmers, Jr. Dennis P. Myers Buie Costen WilHam F. O'Connell bavid S. Crump William A. Raney, Jr. Ann Reed Dunn James B. Richmond Herbert Lamson, Jr. Jacob L. Safron John R. B. Matthis Eugene A. Smith Edwin M. Speas, Jr. Special Deputy Attorneys General Archie W. Anders Rudolph A. Ashton, III Isaac I. Avery, III Rebecca R. Bevacqua David R. Blackwell George W. Boylan WiUiam F. Briley EHsha Harry Bunting, Jr. Ehzabeth C. Bunting Joan H. Byers James M. Carpenter H. Al Cole, Jr. John C. Daniel, Jr. Thomas H. Davis, Jr. Amos C. Dawson, III Roy A. Giles, Jr. Frank Graham Richard L. Griffin Donald W. Grimes Guy A. Hamlin Norma S. Harrell Claude W. Harris Ralf F. Haskell Charles M. Hensey Alan S. Hirsh Patricia B. HoduHk I. B. Hudson, Jr. Ben G. Irons, II Douglas A. Johnston Sandra M. King Leigh E. Koman Richard N. League George W. Lennon James E. Magner, Jr. Nonnie F. Midgette Thomas F. Moffitt Mary I. Murrill Robert W. Newson, III Daniel C. Oakley George J. Oliver WilHam B. Ray Robert R. Reilly Marilyn Y. Rich Alfred N. Salley Jo Ann Sanford James P. Smith Donald W. Stephens | James L. Stuart Jane R. Thompson James M. Wallace, Jr. Acie L. Ward Robert G. Webb W. Woodward Webb Thomas B. Wood , Assistant Attorneys General Benjamin G. Alford Sylvia X. Allen Jean Boyles Christopher P. Brewer Henry H. Burgwyn Robert E. Cansler Lucien Capone, III Francis W. Crawley Christopher S. Crosby Susan L. Hartzoge Robert L. Hillman Lemuel W. Hinton Grayson G. Kelley R. James Lore C. Jan Napowsa Mary E. Noonan John C. Prather Marvin Schiller Steven M. Shaber Tiara B. Smiley JuHa A. Talbutt T. Michael Todd Kaye R. Webb Sarah C. Young Associate Attorneys 5 July 1978 Subject : Requested by: Question: Conclusion: Motor Vehicles; Chauffeur's License Toni Foxwell Transportation Planning Section Department of Transportation Does North Carolina law require volunteer operators, operating their own vehicle of less than nine passenger capacity, transporting elderly citizens to nutrition sites, to hold a chauffeur's hcense if such owner/operator is reimbursed once for mileage at the rate of 15 cents per mile? No, reimbursement at the rate of 15 cents per mile would not be transporting persons or property for compensation. The generally accepted reimbursement rate is 15 cents per mile for a private passenger vehicle and, as such, is considered reimbursement for actual costs. Under the requirements for chauffeur's license, reimbursement for actual costs would not fall within the definition "... transportation of persons or property for compensation." In our opinion, such reimbursement would not be for compensation. Rufus Edmisten, Attorney General William W. Melvin Deputy Attorney General 5 July 1978 Subject: Mental Health; Area Mental Health Authorities; Licenses and Licensing; Requirement for Hcensing of Local Mental Health Facilities Requested by: R. J. Bickel Deputy Director for Administration Division of Mental Health and Mental Retardation Services Question: Under current statutes dealing with Area Mental Health Authorities are the following required to be licensed: (A) Satellite units of an Area Mental Health Authority? (B) Agencies with which the Area Mental Health Authority contracts for services statutorily required of the Area Mental Health Authority? Conclusion: The entities described in both (A) and (B) above are required to obtain hcenses. This Office has previously issued an opinion dealing with the Hcensing of various types of local mental health facilities. See 45 N.C.A.G. 51 (1975). Since the date of that prior opinion, however, the statutory basis for Area Mental Health Programs and Area Mental Health Authorities has been completely rewritten. The answers to the questions posed here are now found in Article 2F, Chapter 122 and G.S. 143B-147a(2)e. G.S. 122-35.51, effective July 1, 1977, provides as follows: "An area mental health facility operated under the provisions of Chapter 1 22 of the General Statutes shall obtain a license permitting such operation. Subject to standards governing the operation and hcensing of these facilities set by the Commission for Mental Health and Mental Retardation Services, the Department of Human Resources shall be responsible for issuing licenses." An "Area Mental Health Facility" is defined by G.S. 122-35.36(3) in the following language: "(3) Area Mental Health Facility. - A mental health facility, pubhc or private, estabhshed to serve the needs of a designated catchment area in mental health, mental retardation, or substance abuse." Significantly, G.S. 143B-147a(2)e authorizes and requires the Commission for Mental Health and Mental Retardation Services to estabUsh standards and adopt rules and regulations for the Ucensing of all area or community mental health facihties "of whatsoever nature" pursuant to Article 2F of Chapter 122. As a result of the above-described provisions, it is clearly the intent of the General Assembly that all units and service-providing agencies to the Area Mental Health Authorities be hcensed by the Department of Human Resources utilizing standards, rules and regulations promulgated by the Commission for Mental Health and Mental Retardation Services. Rufus L. Edmisten, Attorney General WiUiam F. O'Connell Special Deputy Attorney General 5 July 1978 Subject: Requested by: Question: Education; Superintendent; Duration of contract of employment of new superintendent where vacancy occurs in the office of superintendent. John W. Hardy, Attorney for the Guilford County Board of Education Where the superintendent resigns before the end of his contract period, or a vacancy occurs in the superintendency for whatever reason, may the Board of Education extend to the new superintendent a two or four year contract? -3- Conclusion: Yes. Where a vacancy occurs in the office of the superintendent, the vacancy may be filled on a temporary basis, or it may be filled for a specific two or four year period. The former superintendent of the Guilford County schools submitted his resignation effective June 30, 1978, with one year remaining on his contract. The question arises whether the new superintendent may be hired for a two or four year term, or is the Board restricted to offering the new superintendent a contract of only one year, which is the period remaining on the former superintendent's contract. G.S. 115-55 provides in pertinent part: "In case of vacancy by death, resignation or otherwise in the office of a county or city superintendent, such vacancy shall be filled by the county or city board of education in which such vacancy appears." G.S. 115-39 provides in pertinent part: "Such superintendent shall take office on the following July 1 and shall serve for a term of two or four years or until his successor is elected and quaUfied. The superintendent shall be elected for a term of either two or four years, which term shall be in the discretion of the county board of education." Construing G.S. 115-39 and 115-55, particularly those portions of each statute above quoted, it would appear that the superintendent of a county school administrative unit shall serve a term of two or four years, or until his successor is elected and qualified, and that in choosing a successor the board of education has the discretion in electing the successor for either two or four years. To interpret these statutes in such a way that would restrict a board of education from contracting with a successor to a resigning superintendent for any period of time greater than the length of time remaining on his unexpired contract, would create a difficult situation in employing such a successor. For example, in the event a superintendent died while in office leaving six months on his -4- contract, one can readily see that a qualified person would be very reluctant to enter into a contract for six months without any assurance that he could obtain a new contract for either two or four years. It is our opinion that the language contained in either G.S. 115-39 or 115-55 does not require such an interpretation and in fact does give a board of education sufficient discretion to fill a vacancy with a new contract term of either two or four years. The conclusion stated herein does not in any way affect or overturn an earlier opinion issued by this Office and reported in 40 N.C.A.G.R. 261, wherein it was concluded that a local board of education does not have the authority, with the superintendent's consent, to terminate the superintendent's current contract of employment prior to the specified termination date set out in the contract and to thereafter enter into a new contract of employment as superintendent with the same individual. The opinion rendered today deals only with a situation where a vacancy occurs in the office of superintendent and a new contract is entered into with an individual other than the previous superintendent. Rufus L. Edmisten, Attorney General Andrew A. Vanore, Jr., Senior Deputy Attorney General 7 July 1978 Subject: Counties; Cities; Collection of Taxes; Interlocal Cooperation; G.S. 160A-460 et seq; G.S. r60A-146. Requested by: Robert C. Cogswell, Jr. City Attorney City of Fayetteville Question: May a city and the county in which it is situated enter into an interlocal undertaking under which the city agrees to designate the county tax collector as city tax collector? -5- Conclusion: Yes. Article 20 of Chapter 1 60A of the North Carolina General Statutes, entitled Interlocal Cooperation, authorizes any unit of local government (defined in G.S. 160A-460 to include cities and counties) to enter into an agreement with any other such unit or units for the purpose of carrying on an undertaking. G.S. 160A-460 defines an undertaking as "the joint exercise by two or more units of local government, or the contractual exercise by one unit for one or more other units, or any administrative or governmental power, function, public enterprise, right, privilege, or immunity of local government." Since taxation is a governmental power and function, a contractual arrangement for the collection of taxes-including an agreement whereby one unit of local government designates another unit's tax collector as its own-would seem to be the very kind of interlocal undertaking contemplated by Article 20. G.S. 160A-146, Council to organize city government, in no way defeats the conclusion that such an agreement is a proper one. G.S. 160A-146 relates only to the powers of the city council with respect to the allocation of duties within municipal government. It has no application to the matter of interlocal cooperation, which is governed exclusively by G.S. 160A-460 et seq. Moreover, even if G.S. 160A-146 were apphcable, it would not be violated by the agreement in question. The office of city tax collector is not abolished by the agreement, nor are the duties of the city tax collector assigned elsewhere. The position continues to exist; it is simply occupied by an individual who happens also to serve as county tax collector. Rufus L. Edmisten, Attorney General Marilyn R. Rich Associate Attorney 24 July 1978 Subject: Requested by: Question: Conclusion: Insurance; Tax on group insurance premiums; group insurance procured by North Carolina Farm Bureau agents through a North CaroHna Farm Bureau insurance agency from an IlUnois agency and holder of a group policy issued by a California insurance company. John R. Ingram Commissioner of Insurance Are premiums collected from various insureds in state by a North Carolina insurance agency and remitted out of state for group insurance issued by an insurance company that is not Ucensed in North CaroUna subject to a 5% premium tax imposed by G.S, 58-53.3? Yes. Sequoia Insurance Company (hereafter Sequoia), a California corporation that is not Hcensed to sell insurance in North Carolina, has issued an "Errors and Omissions" master group policy (No. EL 20-10-11) to American Agricultural Insurance Agency, Inc. (hereafter AAIAI. AAIAI is an Ilhnois corporation and is not licensed in North Carolina. In turn, AAIAI issues certificates of "" insurance to, among others, 100 and more North Carolina Farm Bureau agencies. Premiums for such insurance are paid annually by each county agency to the North Carolina Farm Bureau Insurance Agency, Inc. (hereafter N. C. Agency). When all premiums for each covered agency or agency have been collected, the N. C. Agency forwards its single check for the premiums to AAIAI. AAIAI responds by issuing renewal certificates to the covered agents or agencies. No payment is made by anyone to the State of North Carolina as a tax on the premiums. G.S. 58-53.3 requires that: -7- "When any person procures insurance on any risk located in this state with an insurance company not licensed to do business in this state, it shall be the duty of such person to deduct from the premium charged on the policy or policies for such insurance five per centum (5%) of the premium and remit same to the Commissioner of Insurance of the state...." There are several statutory requirements for tax liability: (1) The tax is imposed on a person. G.S. 58-2(7) defines a person as "an individual, aggregation of individuals, corporation, company, association and partnership." The N. C. Agency comes within the statutory definition of person. (2) There must be a procurement. The N. C. Agency collects the premium money, accounts for it, administers to the program statewide, and forwards the gross premium to AAIAI for the commodity. A 5% brokerage commission is withheld from gross premiums by the N. C. Agency for its services. Upon receipt of the premium from the N. C. Agency, AAIAI issues the several certificates of insurance to the county agencies. These actions of the N. C. Agency clearly constitute a procurement. (3) Insurance must be procured. There is no controversy but that the certificates issued by AAIAI under the Sequoia master policy constitute insurance. (4) The insurance must cover a risk located in this state. Here the risk is to protect against liabihty from errors and omissions of several hundred agents in the performance of their jobs at 100 and more locations in the state. It is quite Ukely that the potential risk is exclusively within the geographic hmits of North Carolina. Consequently the risk is located within North Carolina. (5) The insurance company must not be licensed in North Carolina. Again there is no controversy. Sequoia is an insurance company and is not licensed to do business in North Carolina. • , Each of the statutory requirements is met. Under the statute, the N. C. Agency has a duty to deduct 5% of the gross premiums and remit same to the Commissioner of Insurance. Failure of the N. C. Agency to deduct and remit that percentage would constitute a violation of G.S. 58-53.3. Counsel for Sequoia cites several cases to the effect that levy of the tax would constitute a deprivation of federal constitutional -8- rights. State Bd. of Insurance v. Todd Shipyards Corp., 82 S.Ct. 1380 (1962); Connecticut General Life Ins. Co. v. Johnson, 58 S.Ct. 436 (1938); St. Louis Cotton Compress Co. v. State of Arkansas, 43 S.Ct. 125 (1922); Alleger v. State of Louisiana, 17 S.Ct. 427 (1897). Those cases are distinguishable because no tax is sought to be levied against Sequoia. Moreover, the insurance is against errors and omissions. Claims would be made by North CaroHna residents on North CaroUna transactions. Claims would have to be adjusted and settled in North Carolina. Additionally, the 100 or more N. C. County Farm Bureaus, (the insureds) deal with the N. C. Agency to obtain the insurance and make payment of annual premiums within the state to that same corporation. Thus, a substantial portion of the recurring negotiation for the insurance occurs in North Carolina. The totality of those transactions between the local agencies and the N. C. Agency are intrastate in nature. These activities are not slight and casual as in Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.S. 143, 78 LEd. 1178 (1934) but are substantial as in Clay v. Sun Ins. Office, 377 U.S. 179, 12 LEd. 2d 229 (1964). These facts are sufficient to provide North Carolina with a substantial nexus for the tax purposes. See Texas v. New Jersey, 379 U.S. 674, 13 LEd. 2d 596, 85 S.Ct. 626 (1965). Rufus L. Edmisten, Attorney General Richard L. Griffin Assistant Attorney General 31 July 1978 Subject: Mental Health; Area Mental Health Authorities; Patients' Rights Entitlement Where Services Are On A Contractual Basis Requested by: R. J. Bickel Deputy Director for Administration Division of Mental Health and Mental Retardation Services Question: Do the provisions of G.S. 122-55.1 through G.S. 122-55.14 apply to services provided for an Area Mental Health Authority (by a general hospital, etc.) on a contractual basis? Conclusion: Yes. The statutes referred to in the question posed are part of the "Patients' Rights Bill" enacted by the General Assembly to afford statutory protection for "basic human rights" of mental patients in our treatment facilities. See G.S. 122-55.1 and G.S. 122-55.13. G.S. 122-36(g) contains the following general definition of the term " treatment facility " : "(g) The words 'treatment facility' shall mean any hospital or institution operated by the State of North Carolina and designated for the admission of any person in need of care and treatment due to mental illness or mental retardation, any center or facility operated by the State of North Carolina for the care, treatment or rehabihtation of inebriates, and any community mental health clinic or center administered by the State of North Carolina." A similar definition of the term "treatment facility" as utilized in the voluntary admission provisions is set forth in G.S. 122-56.2. G.S. 122-35.49 permits an Area Mental Health Authority to contract for services statutorily required of it, subject to the following conditions: "The area mental health authority may contract with other pubhc or private agencies, institutions, or resources for the provision of services, but it shall be the responsibility of the area mental health authority to insure that such contracted services meet the rules and regulations as set by the Commission for Mental Health and Mental Retardation Services. Terms of the contract shall require the area mental health authority to monitor the contract to assure that minimum standards are met." -10- From the above, it is clear that patients served by an Area Mental Health Authority must be guaranteed the same rights whether they are served "in-house" or through a contract with a general hospital or other such facility. This is clearly the intent of the statutes. Further, the failure to guarantee these same rights regardless of where services are rendered would probably raise a serious question under the Equal Protection Clauses of the North Carolina Constitution and the Constitution of the United States. Rufus L. Edmisten, Attorney General William F. O'Connell Special Deputy Attorney General 2 August 1978 Subject : Public Offices, Constitutional Law; Double Office Holding; Counties, Municipalities; PoUce Officer Elected as County Commissioner, Article VI, Section 9, North Carolina Constitution; G.S. 160A-284; G.S. 128-1.1. Requested by: Question: Paul S. Messick, Jr. Town Attorney May a town policeman hold concurrently an elective office? Conclusion: No. Article VI, Section 9 of the North Carolina Constitution provides that no person shall hold concurrently any two or more appointive offices or any combination of elective and appointive offices except as the General Assembly shall provide by general law. Thus without specific authority from the General Assembly, no person could hold an elective and appointive office concurrently. II- On June 30, 1971, the General Assembly enacted Chapter 697, Session Laws of 1971 which contained G.S. 128-1.1, and which authorizes "any person who holds an elective office in State or local government to hold concurrently one other appointive office ... in State or local government ...". Also, on June 30, 1971, the General Assembly enacted Chapter 698, Session Laws of 1971, which contained G.S. 160A-284, and which authorizes a policeman, a chief of police and auxiliary policemen to hold concurrently any other appointive office pursuant to Article VI, Section 9 of the Constitution. In 1975, G.S. 160A-284 was amended to permit an auxihary policeman to hold concurrently any elective office. Statutes dealing with the same subject matter must be construed in pari materia, and harmonized, if possible, to give effect to each. Where one statute deals with the subject matter in detail with reference to a particular situation and another statute deals with the same subject matter in general terms, the particular statute controls unless it appears that the General Assembly intended to make the general act controlling. 12 Strong's N.C. Index 3d, Statutes, Sec. 5. Applying the rules of statutory construction, and the rule of ascertaining the legislative intent, it is our opinion that G.S. 1 60A-284 is the controlling statute and that a policeman other than an auxiliary policeman, is not authorized to hold concurrently an elective office. Thus should the person in question be elected to the office of County Commissioner, he would, upon acceptance of said office, be disqualified to serve as a municipal police officer. Rufus L. Edmisten, Attorney General James F. Bullock Senior Deputy Attorney General •12- 2 August 1978 Subject: Requested by: Question: Conclusion: Municipalities; Powell Bill Fund; Village of Pinehurst Joseph R. Monroe, Jr. Attorney for Village of Pinehurst Is Pinehurst, Inc., a private real estate and development corporation which renders fire and police protection and maintains streets for the Village of Pinehurst, eligible to receive Powell Bill Funds (gasoline tax funds) under Section 5 of the provisions of Chapter 993 of the 1949 Session Laws? No. The Village of Pinehurst is constituted a municipal corporation only for such purposes as are listed in Chapter 993 of the 1949 Session Laws and it cannot comply with the conditions of eligibility to receive Powell Bill Funds as it is not a municipal corporation for those purposes. The gasoline tax funds appropriated to municipalities for use in the construction and maintenance of municipal streets are referred to as Powell Bill Funds. G.S. 136-41.1. The question is presented as to the right of Pinehurst, Inc. to receive Powell Bill Funds under the provisions of Section 5 of Chapter 993 of the 1949 Session Laws. Section 1 of the Act provides that "For all purposes of this Act, but only for such purposes'' the- area described constitutes "the municipal corporation to be known and hereafter referred to as Pinehurst " . Section 5 of the Act provides that "the municipality of Pinehurst as herein defined shall be entitled to all such refunds and moneys as are allowed or conferred upon towns and cities of the State" and "shall be entitled likewise to all such gasoline taxes on account of roads . . , that other cities and towns may be entitled to and to the same extent as if the said Pinehurst was a regularly incorporated town or city." A private corporation, Pinehurst, Inc., 13- developed the Village of Pinehurst and performs services such as the maintenance of roads and sidewalks, fire protection and police protection for some of its residents. The Act provides that inasmuch as "Pinehurst, Incorporated, . . . maintains and operates at its own expense all public streets and sidewalks in Pinehurst and furnishes at its own expense all the pubHc facilities and utilities enjoyed by the public within said territory of Pinehurst, all such refunds, moneys or property as would be payable or belong to Pinehurst as a regular municipahty under the provisions of this Act shall be paid and delivered to Pinehurst, Inc. to reimburse it for such expenditures in behalf of Pinehurst in its capacity as a municipal corporation." G.S. 136-41.1 provides for the distribution of "Powell Bill Funds" "among the several eligible municipalities of the State." G.S. 136-41.2 contains the provisions for eligibility for receiving the funds. It provides that (a) no municipality shall be eligible to receive funds under G.S. 136-41.1 unless it has conducted the most recent election required by its Charter or general law, whichever is appHcable, for the purpose of electing the municipal officials. Subsection (b) provides that no municipality shall be eligible to receive funds under G.S. 136-41.1 unless it is levied an ad valorem tax for the current fiscal year of at least five-cents on the $100 valuation upon all taxable property within the corporate limits, and unless it has actually collected at least 50% of the total ad valorem taxes levied for the preceding fiscal year. Subsection (c) provides that no municipality shall be ehgible to receive funds under 136-41.1 unless it has formally adopted a budget ordinance and appropriated funds for at least two municipal services. Chapter 993 of the 1949 Session Laws constitutes the Village of Pinehurst as a municipal corporation only for the purposes Hsted in that Act. The purposes listed do not include any of the acts Hsted which are conditions for eligibility for receipt of Powell Bill Funds. It is not a municipal corporation for the purpose of (a) electing municipal officials; (b) the levying of an ad valorem tax; nor (c) the adoption of a budget ordinance. Therefore, this Office is of the opinion that Pinehurst, Inc. is not entitled to receive distribution of Powell Bill Funds. •14- Rufus L. Edmisten, Attorney General Eugene A. Smith Special Deputy Attorney General 8 August 1978 Subject: Requested by: Question: Conclusion: Mental Health; Area Mental Health Authority; Involuntary Commitment; Temporary Custody of Respondent by Out-Patient Facility Pending Commitment Hearing R. J. Bickel Assistant Administrator for Administration Division of Mental Health and Mental Retardation Services Can a mental health facility without an in-patient capabihty legally accept a patient for temporary custody, observation and treatment prior to his involuntary commitment hearing in District Court as required by G.S. 122-58.7? Yes, if that facihty can meet the needs for control, safety, care and treatment of the individual patient involved. G.S. 122-58.7 provides for a hearing to determine if a respondent should be involuntarily commited within ten days of the date that he is taken into custody. Initially, when an individual has been taken into custody, the respondent is taken before an evaluating physician who determines if he meets the standards for involuntary commitment. If the evaluating physician determines that the respondent does meet the standards for involuntary commitment, then the law enforcement officer is required to take the respondent to ". . .a community mental health facility or pubhc or private facility designated or licensed by the Department of Human Resources for temporary custody, observation, and treatment of 15- mentally ill or inebriate persons pending a District Court hearing." (G.S. 122-58.4(c)) Upon arrival at that facility, the respondent must then be examined by a second qualified physician for a determination of whether he meets the standards for involuntary commitment. If this physician finds that the respondent does meet the standards, "... he shall hold the respondent at the facility pending the District Court hearing." (G.S. 122-58.6(a)) The situation described in the question posed is quite different from that wherein either of the two physicians decides that the respondent does not meet the standards for involuntary commitment~i.e., in those situations the first physician may release the individual and the proceedings will terminate (G.S. 122-5 8.4(c)), and the second physician may release the respondent without any further treatment but with the proviso that he appear for his hearing (G.S. 122-58.6(a)). From the description of the facility under discussion, it is obvious ; that it is not capable of accepting a patient in a twenty-four hour a day in-patient status. Thus, the answer to the question really turns on the interpretation of the words "custody, observation and treatment" (G.S. 122-58.4) and "hold" (G.S. 122-58.6). In so. interpreting this language, the following expressed intention of the General Assembly must be considered: ". . . It is further the policy of the State that each treatment facihty shall insure to each patient the right to live as normally as possible while receiving care and treatment." (G.S. 122-55.1) Further, the General Assembly has specifically empowered the trial 1 judge at the time of the commitment hearing to commit the; respondent to either in-patient or out-patient treatment. (G.S. 122-58. 8(b)). Additionally, in interpreting the statutory provisions, it is very important to recognize that it is presently generally accepted that an individaul who is involuntarily detained or committed as a mental patient has a constitutional entitlement to treatment in the least restrictive setting available, consistent with legitimate control, safety, care and treatment objectives. -16- The term "custody" would seem to have different meanings as (applicable to different settings-e.g., a quite different situation is , {contemplated when referring to the imprisonment of a convicted . 'prisoner from that involved in the custody of children. As affecting the detention involved of a mental patient prior to his hearing, the fulfillment of the requirement for custody would seem to be met if conditions are imposed which significantly confine or restrain the freedom or liberty of the individual if those measures are appropriate in that particular situation. CompaiQ Jones v. Cunningham, 371 U.S. 236 (1963); Calley v. Callaway, C.A.Ga., 519 Fed. 2d 184 (1975). G.S. 122-58.6 (c) authorizes the quahfied physician attending the respondent to administer reasonable and appropriate medication and treatment that is consistent with accepted medical standards. It would seem that, in a situation where out-patient treatment, probably including medications, would suffice to meet the needs for control, safety, care and treatment under accepted medical standards, then the receipt of a respondent at a facihty capable of rendering these services would be permissible. As with the situations wherein the District Court judge at the : commitment hearing directs out-patient treatment rather than ' in-patient treatment, it is perhaps conjectural exactly what ij percentage of respondents who meet the standard of "being J imminently dangerous" can be satisfactorily handled as out-patients at such early stages of treatment. However, the determination of !!l appropriateness of this mode of custody must be made on an ad ^ hoc basis. It might also be noted that the delineation of facilities k capable of being utilized as pre-hearing treatment facilities and the degree of services they are capable of. rendering is properly a matter included in the local plans required by G.S. 122-58.16. Rufus L. Edmisten, Attorney General Wilham F. O'Connell Special Deputy Attorney General 10 August 1978 Subject: State Departments, Institutions and Agencies; Department of Transportation; -17- k Municipalities; Streets and Highways; Weight Limits; Special Permits Requested by: Mr. F. Douglas Canty Assistant City Attorney for Charlotte Question: 1. Does the City of Charlotte have the authority to issue special permits authorizing the operation, over city-maintained streets, of passenger buses of a weight exceeding the maximum specified in G.S. 20-118(8)? 2. Does the North Carolina Department of Transportation have the authority to issue special permits authorizing the operation, over both state-maintained and city-maintained streets, of passenger buses of a weight exceeding the maximum specified in G.S. 20-118(8)? Conclusion: 1. No. Although the municipality has authority under the provisions of G.S. 160A-296 and 300 to restrict and regulate traffic on municipal streets, including authority for the issuance of special permits for the purpose of the ( , licensing of overweight passenger buses under the provisions of G.S. 2()-118(8). 2. Yes. The Department of Transportation has the authority to issue special permits for overweight passenger buses in order that the applicant may obtain a license to operate the passenger bus on both the state-maintained and ^ city-maintained streets pursuant to the provisions of G.S. 20-118(8). The City of Charlotte has on order thirty-four new passenger buses for use by its public transit system, which, when fully loaded, will -18- n exceed the statutory weight limits estabhshed by G.S. 20-118(8), G.S. 20-115 provides that the maximum size and weight of vehicles specified in the article shall be lawful throughout the State and local authorities shall have no power or authority to alter said limitations except as express authority shall be granted in this Article. The foregoing restriction raises the question of the authority of a municipaUty to grant special permits for the operation of overweight vehicles on municipal streets as G.S. 20-119 provides that municipalities may grant permits in writing authorizing the applicant to move a vehicle over the streets of the city or town, the size or width exceeding the maximum expressed in the article. We find no express authority in the Article for municipalities to alter the weight limitations nor to issue special permits for the operation of overweight vehicles on the streets. The municipahty has specific statutory authority to adopt such ordinances for the regulation and use of its streets as it deems best for the pubhc welfare of its citizens and to provide for the regulation and diversion of vehicular traffic upon its streets. Genes, Inc. v. Charlotte, 259 N.C. 118, 120 (1963). G.S. 160A-296 provides that a city shall have general authority and control over all public streets p which includes but is not Umited to (1) the duty to keep pubHc streets in proper repair; (5) the power to regulate the use of public |s streets. G.S. 160A-300 provides that a city may by ordinance prohibit, regulate, divert, control and limit pedestrian or vehicular traffic upon the public streets, sidewalks, alleys and bridges of the city. Unless otherwise restricted by State law, the municipality has the authority to regulate the weight of vehicles using its streets and to issue permits for the operation of overweight vehicles on < municipal streets under the authority of those statutes. 75 ALR 2d 396 Anno. Highways - Weight Limitations. The foregoing cited statutes authorizing municipalities to regulate streets and traffic have been in effect since 1919. Chapter 136, 1919 Session Laws. These statutes however were rewritten and reenacted in 1971. Chapter 968, 1971 Session Laws. G.S. 20-115 and G.S. 20-1 19 were originally passed 1927. At that time the language in the first sentence of G.S. 20-119 authorized local governments and the State Highway Commission to issue special permits for oversize or overweight vehicles. The 1927 Statute provided in part as follows: -19- "The State Highway Commision and local authorities in their respective jurisdiction may in their discretion, upon appUcation in writing and good cause being shown therefore, issue a special permit in writing authorizing the applicant to operate or move a vehicle of its size or weight exceeding the maximum specified in this Act upon any highway under the jurisdiction for the maintenance of which the body granting the permit is responsible." Chapter 148, Section 38, 1927 Session Laws. However, after the county road system was taken over by the State i Highway Commission, the 1937 Legislature rewrote the motor, vehicle statutes. G.S. 20-1 19 was amended by deleting the foregoing underlined portion which authorized local governments to issue overweight permits. The purpose was apparently an attempt to reflect the change in the jurisdiction over county roads. The proviso as now appears was added, which provides that municipalities may issue special permits to move a vehicle over the streets of thei municipalities may issue special permits to move a vehicle over thej streets of the municipality, the size or width exceeding the maximumj expressed in the Act. Chapter 407, Section 83, 1937 Session Laws.; This left G.S. 20-115 somewhat ambiguous. The use of the termj "size or width" in the proviso, rather than "size or weight" mays also have been an oversight. An unsuccessful attempt was made in, 1957 to clarify G.S. 20-119 by the passage of Chapter 1129 of the 1959 Session Laws. That session law is entitled "An act to clarify the issuance by the State Highway Commission of special permits for vehicles of excessive size or weight." It was still ambiguous after! the amendment. A further review of the legislative history for the! purpose of this opinion would serve no purpose except to show, that G.S. 20-1 19 was ambiguous when rewritten in 1937 and is still j ambiguous after an attempted clarification in 1959. 1 MunicipaUties have the duty and authority to maintain the Municipal j Street System and the Department of Transportation has the duty and authority to maintain the State Highway System. G.S. 136-66.1. Both are given authority to regulate traffic and the use of public^ streets. The Department of Transportation is given express authority; to (1) classify county roads as light traffic roads and to post those j roads, G.S. 20-1 18(5); (2) to establish truck routes and to prohibit -20- trucks from using certain routes, G.S. 20-116(h), G.S. 20-141(i); (3) to issue special permits for overweight vehicles, G.S. 20-119; (4) and to restrict load limits on bridges on the State Highway System, G.S. 136-72, Express authority is not given to municipaUties to Hmit the load Hmits on bridges, to post and restrict roads, to establish truck routes over municipal streets, nor to issue special permits for overweight vehicles. A review of the legislative history of the municipal laws and G.S. 20-1 19 and G.S. 20-1 16 does not indicate an intent to exclude municipal regulations in these areas. This Office has in the past advised that State law does not prohibit municipalities (1) from posting weight hmits on bridges on the 'Municipal Street System; (2) from restricting trucks on certain streets to prevent damage or destruction by vehicles carrying the 'legal load limit; (3) and from establishing truck routes, so long as ithe regulations are reasonable. This Office is of the opinion that municipalities have authority to issue special permits for the movement of overweight vehicles over municipal streets, and that the issuance of such permits is not an alteration of the weight hmits in contravention of G.S. 20-115. However, the municipality has no ^ authority to issue such special permits for operation of overweight [passenger buses for the reasons hereinafter discussed. (\ The Ucensing of "passenger buses" for operation on the highways J* of the State is handled differently from the Ucensing of other J vehicles. A certification as to the weight of a passenger bus is ^ required before it can be Hcensed to operate on the highways. Prior to the 1978 Amendment by the General Assembly, G.S. 20-118(8) prohibited the issuance of a special permit for the operation of a passenger bus exceeding the statutory weight hmits. The 1977 < General Assembly on June 16, 1978, amended G.S. 20-118(8) by repealing the prohibition against the issuance of overweight permits for passenger buses, and by providing that "Unless the apphcant holds a special permit from the Department of Transportation, no license shall be issued to any passenger bus", for operation on the highways, which exceeds the weight limits specified therein. Chapter 1178, 1977 Session Laws. The license issued by the Commissioner of Motor Vehicles authorizes the operation of the "passenger bus" upon the highways of the State, including those maintained by the municipahty. A permit from the Department of Transportation is a prerequisite for the Ucensing of "passenger buses", which will exceed the weight Umits in G.S. 20-118(8). Therefore, this Office -21- is of the opinion that the State has preempted the issuance of specia; permits for overweight passenger buses for the purpose of Hcensinj under the provisions of G.S. 20-118(8). Rufus L. Edmisten, Attorney General Eugene A. Smith Special Deputy Attorney General 14 August 1978 Subject: Requested by: Question: Employment Agency; G.S. 95-37; Definition includes a For Profit Business.; Mr. John H. Boddie, Director Private Employment Agency Division N.C. Department of Labor Does the definition of employment agencyi in G.S. 95-37 include a for profit business that makes a charge on persons seeking! employment for the service of providing! them with information about employment! opportunities, when: (1) the business advertises specific positions of employment in the classified section of one or more newspapers of general circulation but tells job seekers the name of the employer offering an advertised position only after they pay a "subscription" charge; (2) the business publishes no printed on written list of available jobs; (3) the business disseminates no materiaJ| or information other than informationi about employment opportunities; and | -22- n (4) persons who pay for the service are told about employment opportunities by means of telephone conversations with employees of the business and by no other means? Conclusion: Yes. Chapter 95, Article 5 of the General Statutes of North Carolina authorizes and empowers the North Carolina Department of Labor to Hcense and regulate individuals and businesses engaged in the operation of an employment agency. G.S. 95-37 is hereinafter set forth verbatim: "§95-37. Employment agency defined.-Employment agency within the meaning of this Article shall include any business operated by any person, firm or corporation for profit and engaged in procuring employment for any person, firm or corporation in the State of North Carolina and making a charge on the employee or employer for the service." (> To be classified as an employment agency, a business must be: j^ 1. Operated for profit; 2. Engaged in procuring employment "for any person, firm or corporation in the State of North i^ Carolina;" and < 3. Charging the prospective employee or employer for the service. irhe business described above clearly falls within the parameters of [;. this statutory definition and is an employment agency within the s meanmg of G.S. 95-37. Rufus L. Edmisten, Attorney General George W. Lennon Associate Attorney General -23- 23 August 1978 Subject: Requested by: Question: Conclusion: Social Services; Welfare Fraud; Client Interviews; Warnings as to Constitutional Rights Mr. Robert H. Ward, Director Division of Social Services Must a social worker, before questioning a client in a suspected welfare fraud case, inform the cHent of his constitutional rights? No, so long as nothing about the questioning might reasonably cause the client to believe he was in custody or^ otherwise significantly deprived of his freedom. The Fourteenth Amendment to the U.S. Constitution prohibits the use of a confession which is coerced, either by physical or mental means. State v. Chamberlain, 263 N.C. 406 (1965). "The test of admissibiUty of a confession is whether the statements made by the \ defendant were in fact voluntarily and understandingly made. " State V. Jones, 278 N.C. 88 at 92 (1971). The state courts are bound by the United States Supreme Court's interpretation of thei Fourteenth Amendment in Miranda v. Arizona, 384 U.S. 436 (1966), ' which requires that to insure voluntariness a suspect be warned, priori to interrogation, of his Fifth and Sixth Amendment rights. The^^ situation that triggers this requirement is a "custodial interrogation". \ Id. at 444. Prior to Miranda, the Court had seemed to hold that I the decisive stage was reached when the investigation "had begun j to focus on a particular suspect." Escobedo v. Illinois, 378 U.S. | 478 at 490 (1964). But Miranda expHcitly Hmited the requirement! to "custodial interrogations", and the warnings have since been I required only in such situations. State v. Dollar, 292 N.C. 344^' (1977); State v. Meadows, 272 N.C. 327 (1968). Our question now becomes: Is an interview by a social worker concerning suspected fraud a "custodial interrogation"? \n Miranda -24- a custodial interrogation is defined as "questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way". Miranda v. Arizona, 384 U.S. at 444. A client brought to the Department of Social Services for a normal interview of this type has not been arrested, restrained, or deprived of his freedom. He is free to leave, is not being questioned in a coercive atmosphere, and is not at a police station. There are no factors compelling involuntary testimony. In accordance with this argument, the New Jersey Supreme Court has held that social workers need not give Miranda warnings during investigations of suspected fraud. State v. Graves, 60 N.J. 441 (1972). The Colorado Supreme Court arrived at the same conclusion, though it was not essential to the holding in that case. People v. Parada, 533 P.2d 1121 (Colo., 1975). Similarly, in a decision by the United States Supreme Court, an Internal Revenue Service special agent investigating potential criminal tax violations was not required to inform the suspect of his rights. Beckwith v. United States, 425 U.S. 341 (1976). The Supreme Court distinguished H between the "focus of the investigation" test and the "custodial ^ interrogation" test, and emphatically apphed the latter. Id. at 345. ^ iln so doing, the Supreme Court affirmed decisions in nine of the 1^ Circuits including the Fourfli Circuit. See, United States v. Browney, jj 421 F.2d 48 (4th Cir., 1970). !J I It should be remembered that the Miranda, warnings are merely a procedural device to ensure the voluntariness of a defendant's 'statement. Though they are not required in these interviews, any ^ statement, to be admitted, must have been given voluntarily. It "must not be extracted by any sort of threats or violence, nor obtained by any direct or implied promises, however sHght, nor by the exertion of any improper influence." Brady v. United States, 397 U.S. 742 at 753 (1970). Social workers should avoid such influences. See, People v. Paranda, supra. Rufus L. Edmisten, Attorney General Steven Mansfield Shaber Associate Attorney -25- 29 August 1978 Subject: Requested by: Question: Health; Certificate of Need; Coverage of projects commenced before January 1, 1979; G.S. 131-170 et seq. Mr. Charles W. Houseworth, Jr., Health Planner, State Health Planning and Development Agency Department of Human Resources If work has commenced, but not completed by January 1, 1979, on a "new institutional health service" proposal and the proposal has not received approval under Section 1122 of the Social Security Act, 42 U.S.C.A. 1320a-l, is the person; required to obtain a Certificate of Need pursuant to Chapter 1182, 1977 Session Laws (Second Session, 1978), (to be codified at G.S. 131-170 et seq.) before proceeding further with work on the proposal? No, if prior to ratification of the Act he has proceeded with development of the new institutional health service as explained below. The North Carohna Health Planning and Resource Development Act ( of 1978, ratified by the General Assembly on June 16, 1978, addsj a new Article 18 to Chapter 131 of the General Statutes which! requires that before a person undertakes, develops, or offers a new.; institutional health service he must obtain a Certificate of Need from j the Department of Human Resources. Chapter 1182, 1977 Session Laws (Second Session, 1978). Section 4 of the Act provides that it will be effective January 1, 1979. In addition. Section 4 provides two exemptions from coverage: 1) those proposals which received approval for capital reimbursement under Section 1 1 22 of the Social Security Act, 42 U.S.C.A., 1320a-l, prior to January 1, 1979, as long as construction commences before January 1, 1980; and 2) -26- Conelusion: n those proposals for which application is made between July 1 , 1 978 and January 1 , 1 979 under the Section 1 1 22 program, if the application is approved and if construction commences before January 1, 1980. The question at hand is whether a Certificate of Need is required for a proposal which does not qualify under the two exemptions and which is not completed by January 1, 1979. A Certificate of Need "affords the person so designated as the legal proponent of the proposed project the opportunity to proceed with the development of such project." Section 131-171(3) of Section 2, Chapter 1182, 1977 Session Laws (Second Session 1978). The Act reveals that a Certificate of Need will be granted only to those proposals which the Department of Human Resources finds to be needed and in conformity with other standards and criteria as set forth in the Act and developed by the Department. Immediately prior to ratification a new institutional health service would be submitted to the Department of Human Resources for a finding of need only if the proponent desired reimbursement for capital expenditures under Titles V, XVIH, and XIX of the Social Security Act, 42 U.S.C.A. 1320A-1. The passage of the Act by the General Assembly imposes an entirely new Umitation on the opportunity to proceed with the development of the new institutional health 0" service. {j- If the Act is interpreted to require a Certificate of Need when prior J to the ratification of the Act the proponent had already proceeded U with development of the new institutional health service and "^ incurred substantial expense the Act would invade personal and J property rights protected under the Constitution of this State. See, < Whaley v. Lenoir County, 5 N.C.App. 319 (1969). On the other hand, if the Act is interpreted so that it does not apply where a proponent, prior to ratification, had already proceeded with development of the new institutional health service such rights will be protected. The basic rules of statutory construction require the latter, if reasonable, as a statute will not be construed so as to raise questions as to its constitutionality if a different construction which will avoid such question of constitutionality is reasonable. State Milk Commission v. National Food Stores, Inc. 270 N.C. 323 (1967); State V. Barber, 180 N.C. 711 (1920). The definition of Certificate of Need reasonably supports a construction of the Statute which makes it inapphcable to someone who prior to ratification has -27- already proceeded with development of the new institutional health service. As previously noted, the Certificate of Need allows the proponent to proceed with development. If the proponent had done so prior to ratification the Certificate of Need, by definition, would be unnecessary. Such a construction is also consistent with the provision that the certificate shall be valid only for the time specified by the Department of Human Resources, not to exceed 18 months, and that within such time the proponent must fulfill the specific performance requirements set forth in the Act for incurring a financial obligation. Section 131-174 (a) and (b) of Section 2, Chapter 1182, 1977 Session Laws (Second Session, 1978). In order to be exempt from the Act, the proponent must have proceeded with development prior to ratification. Subsequent to June 16, 1978 and prior to January 1, 1979, the proponent may be protected only if he receives approval under Section 1122 of the Social Security Act, 42 U.S.C.A. 1320a-l, in accordance with Section 4 of the Act. A person proceeds with development when he "undertake(s) those activities which will result in the offering of institutional health service not provided in the previous 12 month reporting period or the incurring of a financial obHgation in relation to the offering of such a service." Section 131-171 (8) of Section 2, Chapter 1 182, 1977 Session Laws (Second Session, 1978). Whether or not a person has undertaken such activities is a question of fact to be settled on a case-by-case method. It should be noted that this opinion does not address the application of the Act to those who, subsequent to January 1, 1979, proceed with development of a new institutional health service without a Certificate of Need. Rufus L. Edmisten, Attorney General Robert L. Hillman Associate Attorney General -28- 5 September 1978 Subject: Requested by: Questions: Conclusions: Education; County Board of Education; Condition Subsequent; Undue Restraint Upon Right of Alienation Lucas, Rand, Rose, Meyer, Jones and Orcutt Attorneys for the Wilson County Board of Education (1) Whether the language contained in a deed to the Wilson County Board of Education (as it appears below), restricting the use of land for school purposes and giving to the grantor, his heirs or assigns the right to repurchase at a set price if said condition is breached, constitutes a condition subsequent? (2) Whether said language, by attempting to vest a right to repurchase the subject property in the grantor, his heirs or assigns at a set price if the land is no longer used for school purposes, constitutes an undue restraint upon the right of alienation? (3) Whether the heirs or assigns of the grantor may assert a valid contract to repurchase or may the School Board, if it chooses to dispose of the property, follow the pubhc auction procedures of N.C.G.S. 115-126? (1) No. (2) Yes. (3) The School Board may follow the public auction procedures of n 29- N.C.G.S. 115-126 if it should choose to dispose of the property. The following facts have been provided: On 20 April, 1922, "H" and his wife, "W", did convey by warranty deed approximately five acres of land to Wilson County Board of Education. The consideration recited in the deed was $750. The following language appears in the deed after the metes and bounds description: "It is agreed by the County Board of Education that if this site is ever abandoned for school purposes that the site shall be offered for sale first to (the grantor) or his heirs or assigns at the purchase price herein named; then in case said (grantor) or his heirs or assigns do not care to purchase this school site at the price above named, then the County Board of Education may sell the same to any other person or persons at such price as they may consider reasonable and just." As to Conclusion (1), the North CaroHna courts have held that despite the other language used in an instrument, a condition subsequent is not created unless the grantor expressly reserves the right to re-enter, or provides for a forfeiture or for a reversion, or that the instrument shall be null and void. First Presbyterian Church V. Sinclair Refining Company, 200 NC 469 (1931); Lassiter v. Jones, 215 NC 298 (1939). The clause in question here fails to reserve any of these rights in the grantor, his heirs or assigns. It instead attempts to reserve an option to repurchase the land upon the : discontinued use of the land for school purposes and at the price of $750. Thus, it would seem that technically such a clause falls i short of creating a fee simple or condition subsequent. As is pointed out in Webster, Real Estate Law in North Carolina, §345, p. 434 (1971) "(v)ery clear language of condition, indicating that title is; subject to revert upon the occurence of a specified event, must be ; used. While express language of reverter is not required, anything less may cause the court to construe the language to create simply a covenant, charge or trust, or to be mere surplusage". As to Conclusion (2), the general rule seems to be that there is a policy in favor of the free alienation of land. As a result, any -30- provision in a conveyance which unduly restricts the right of transfer of the title in any way has been held to be void. Webster, Real Estate Law in North Carolina, §346(0(2) (1971). The North Carolina court was faced with a similar fact situation in the case oi Hardy v. Galloway, 111 NC 519 (1892). There the deed that was conveyed provided that upon a decision by the grantee to sell, the grantor would have the first change to repurchase. There was no reservation as to the exact time for the performance of the provision or for the price that was to be paid. The court held that the restriction to reconvey to the grantor upon a decision to sell the property not only was void for uncertainty in fixing no price for the repurchase and no time for the performance of the provision, but also as an unlawful restraint upon alienation. The Court stated that: "(t)he restriction is certainly inconsistent with the ownership of the fee as well, it would seem, as against pubhc pohcy... In other words, we have an estate in fee without the power to dispose of or encumber it, unless first offering it for no definite price to the grantors, their heirs and assigns. The condition is ^s repugnant to the grant, and therefore void." Ill NC di at 524. The principle of Hardy v. Galloway was reaffirmed by the Court of Appeals in Jenkins v. Coombs, 21 NC App. 683 (1974). Ci The first situation here is similar to the Hardy case in that there is no definite time set for the performance of the option to repurchase. Although there is a set price, there is precedent that [j a fixed price set below the present fair-market value is also an undue restraint on the fee simple estate and should be held void. Simes, tji The Law of Future Interest, §114 (2d Ed. 1966). Since there is no condition subsequent created by the language in question (as is discussed under Conclusion (1)), the opinion of this Office is that the attempt to create an option to repurchase the property in the grantor, his heirs or assigns at a set price upon the condition that the land is no longer used for estate granted. Not only is there no set time that such an option will remain open but -31- also there is a set price that would fall substantially below the present fair-market value of the land. As to Conclusion (3), it would be suggested that the grantor's heirs or assigns be notified as to any actions taken by the School Board, but it would be the opinion of this Office that there is no obHgation encumbent upon the Wilson County School Board to offer the land in question to the grantor's heirs or assigns should the School Board decide to no longer use said land for school purposes (for the above stated reasons). The School Board may proceed to dispose of the property if it so chooses by the normal pubhc auction procedures of North Carolina General Statute 115-126. Rufus L. Edmisten, Attorney General T. Buie Costen Special Deputy Attorney General 15 September 1978 Subject: Requested by: Question: Conclusion: Health, Chiropractors; Access to X-Rays In Possession of Hospitals The Honorable Ramey F. Kemp Member of The House of Representatives North Carolina General Assembly Under current statutes may a chiropractor review the diagnostic X-ray records of his patient when such records are in the possession of a hospital wliich receives aid or support from the public? Yes. As amended by the 1977 General Assembly, G.S. 90-153 provided as follows: "A licensed chiropractor in this State may have access to and practice chiropractic in any hospital or -32- I sanitarium in this State that received aid or support from the pubhc, and shall have access to diagnostic X-ray records and laboratory records relating to the chiropractor's patient.'^ (Emphasis SuppHed) This statute clearly authorizes a chiropractor to review the records described in the question, which such entitlement including access to the X-rays themselves. It would seem that the intent of the General Assembly in enacting this legislation was threefold: (a) to obviate unnecessary costs in the delivery of health care; (b) to prevent unnecessary explosure of patients to radiation; and (c) to enable chiropractors to engage fully in the practice of chiropractic. Rufus L. Edmisten, Attorney General Wilham F. O'Connell Special Deputy Attorney General Robert R. Reilly Assistant Attorney General 18 September 1978 Subject: Requested by: Questions: Administration of Estates; Probate of Wills Honorable Carl G. Smith Clerk of Superior Court Iredell County (1) May .a will be admitted to probate where it includes a certificate executed in the form prescribed by N.C.G.S. §31-11.6 (relating to self-proved wills), but where no separate attestation was made? (2) If the answer to question (1) is no, may the witnesses who signed the certificate later go before the court and attest the will and thereby have the will admitted to probate? -33- Conclusions: (1) No. (2) No. N.C.G.S. §31-11.6 (Supp. 1977) provides that: An attested written will executed as provided by G.S. 31-3.3 may at the time of its execution or at any subsequent date be made self-proved by the acknowledgement thereof by the testator and the affidavits of the attesting witnesses, each made before an officer authorized to administer oaths under the laws of this state, and evidenced by the officer's certificate, under official seal, attached or annexed to the will in form and content substantially as follows.... The certificate is set out in the statute. It states, in part, that the testator declared that he had signed the will and executed it in the presence of the witnesses or acknowledged his signature to them. The witnesses make a similar declaration. Space is provided for the signatures of the testator, witnesses and acknowledging officer. The statute then provides that "The sworn statement of any such witnesses taken as herein provided shall be accepted by the court as if it had been taken before such court." The purpose of this provision is to allow for the ante-mortem proof of a written attested will. It simply provides an alternative method of probate to the others set out in N.C. G.S. 31-11.6 does not in any respect displace of amend the requirements of N.C. G.S. 31-3.3 governing attestation of wills. See, e.g., In Re Estate of Kavcic, 341 So.2d 278 (Fla. App.1977). The whole thrust of the statute contemplates a will that has already been attested by the testator and witnesses. This is self-evident from the language of the certificate which requires a declaration by the testator and witnesses that they had signed the will. It is interesting to note that Section 2-504 of the Uniform Probate Code (U.L.A.) §2-504 (1977) read substantially Uke N.C. G.S. 31-11.6. However, Section 2-504 was amended (Supp. 1978) to read, in part. -34- (a) Any will may be simultaneously executed, attested, and made self proved by acknowledgment thereof by the testator and affidavits of the witnesses, each made before an officer authorized to administer oaths.... The comment to this amendment states that: (T)he original text (of this section) authorized only the addition to an already signed and witnessed will, of an acknowledgment of the testator and affidavits of the witnesses thereby requiring testator and witnesses to sign twice even though the entire execution ceremony occurred in the presence of a notary or other official. If the will was not properly attested, the witnesses who signed the certificate may not later go before the court and attest the will and thereby have the will admitted to probate. Attestation must be made in accordance with N.C. G.S. 31-3.3 which requires that the witnesses sign after the testator and in his presence. In re Thomas, 111 N.C. 409,16 S.E.226 (1892). This could obviously not be done if the testator had also failed to sign the will in accordance with N.C. G.S. 31-3.3. Rufus L. Edmisten, Attorney General Lucien Capone, III Associate Attorney General 22 September 1978 Subject: Social Services; North Carolina Grant under the Child Abuse Prevention and Treatment Act Requested by: Carl H. Harper, Regional Attorney, Region IV, United States Department of Health, Education and Welfare -35- Question: Is the definition of "sexual abuse" as set forth in the recent amendments to the Child Abuse Prevention and Treatment Act (42 U.S.C. §5101 et seq., as amended by P.L. 95-266) encompassed within the definition of "abused child" as set forth in The North Carolina Child Abuse Reporting Law (G.S. 110-117) and the definition of "neglected child" as set forth in The North Carolina Juvenile Jurisdiction and Procedure Law (G.S. 7A-278(4))? Conclusion: Yes. This opinion is in response to a question posed by the Office of Regional Attorney, Region IV, United States Department of Health Education and Welfare in connection with the North Carolina grant under the Child Abuse Prevention and Treatment Act (42 U.S.C. § 5101, ef seq.). In April of 1977 the Act was amended to include "sexual exploitation" within the definition of "child abuse and neglect" (42 U.S.C. § 5102 as amended by Section 102(1) of Public Law 95-266). In addition, the term "sexual abuse" was defined as including: "... The obscene or pornographic photographing, filming, or depiction of children for commercial purposes, or the rape, molestation, incest, prostitution, or other such forms of sexual exploitation of children under circumstances which indicate that the child's health or welfare is harmed or threatened thereby, as determined in accordance with regulations prescribed by the Secretary (of HEW) ..." 42 U.S.C. § 5104 as amended by Section 104(2) of Public Law 95-266 The precise question raised by the Regional Attorney's Office is whether the definition of "abused child" as set forth in G.S. 110-117 (1) c. and the definition of "neglected child" under G.S. 7A-278(4) may be interpreted to include "sexual abuse or exploitation" as currently defined by the Child Abuse Prevention and Treatment Act. . -36- Although G.S. 110-117(1) c. defines an "abused child" as "a child less than 1 8 years of age whose parent or other person responsible for his care commits or allows to be committed any sex act upon a child in violation of law," the preamble to this section states: "As used in this Article, unless the contex otherwise requires:^' (Emphasis supplied) It is our opinion that if sexual abuse or exploitation of children for commercial purposes does not fall squarely within the purview of G.S. 1 10-1 17(1 )c., the preamble to said section would nonetheless bring it within the State law definition of "abused child." Moreover, as we asserted in our prior opinion relative to the North CaroUna appHcation for a grant under the Child Abuse Prevention and Treatment Act (March 28, 1978), it has always been our position that abuse is impUcitly encompassed within the definition of "neglected child" under G.S. 7A-278(4). This would still hold true now that we have concluded that sexual abuse or exploitation of children for commercial purposes is included within the definition of "abused child" under G.S. 110-117. Rufus L. Edmisten, Attorney General WilUam Woodward Webb Assistant Attorney General 5 October 1978 Subject: Motor Vehicles; On-street Parking; Prima Facie Rule of Evidence Requested by: Question: Mr. Miles B. Fowler, City Attorney Clinton, N. C. May a city ordinance providing a penalty of more than One Dollar ($1.00) for overtime parking be enforced under the prima facie rule of evidence as provided in G.S. 20-162.1? -37- Conclusion: No, G.S. 20-162.1 provides for a One Dollar ($1.00) penalty only. If a penalty of more than One Dollar (1.00) is sought, the prima facie rule of evidence provided in G.S. 20-162.1 would not be applicable. Rufus L. Edmisten, Attorney General William W. Melvin Deputy Attorney General 6 October 1978 Subject: Requested by: Question: Conclusion: Antitrust; Real Estate Brokers and Agents. Blanton Little, Secretary-1 reasurer N. C. Real Estate Licensing Board May a local Board of Realtors, a private trade association, require a Ucensed real estate agent to become a member of the Board in order to be eligible to apply for membership in or association with a multiple Hsting service corporation estabhshed by the Board? No, if the multiple listing service is found to be an essential competitive tool in the real estate market it serves. Real estate brokering is a "trade" within the meaning of the federal and state antitrust laws. United States v. National Association of Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 LEd. 1007 (1950); Love v. Pressley, 34 N.C. App. App. 503, 239 S.E.2d 574 (1977). The business practices of real estate agents individually and jointly as members of a Board of Realtors are subject to antitrust enforcement. -38- Unreasonable restraints of trade are prohibited by G.S. 75-1 and 75-2, and § 1 of the Sherman Act. Where members of a trade band together for the purpose of advancing business interests the antitrust laws condemn group activities which restrain trade. The law prohibits businessmen from becoming associates in a common plan which has the purpose and effect of reducing their competitors' opportunity to buy or sell the things in which the groups compete. Associated Press V. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 LEd. 2013 (1945). In Associated Press, the court held that where a facility created by a combination of competitors became essential to effective competition in a particular market such that exclusion from membership in that facility placed an enterprise at a competitive disadvantage, exclusion was unlawful under the Sherman Act. This is true even if competing facilities exist or even if competition has not been completely prevented by the presence of the facihty. See also American Federation of Tobacco Growers v. Neal, 183 F.2d 869 (4th Cir. 1950); Gamco, Inc. v. Providence Fruit and Produce Bldg., 194 F.2d 484 (1st Cir.), cert, denied, 344 U.S. 817 (1952). Denial of access to the Hstings of a multiple listing service reduces the "opportunity to buy or sell the things in which the groups compete" of non-members. Where a multiple listing service estabUshed by a Board of Realtors has become so dominant an economic force in a particular market that exclusion from membership places a broker at a competitive disadvantage, exclusion is unlawful under federal and state antitrust laws. It is not enough that Board membership is open to any Hcensed real estate agent. United States v. Terminal R.R. Association of St. Louis, 224 U.S. 383, 32 S.Ct. 507, 56 LEd. 810 (1912). While your question has not been Htigated in North Carolina, other jurisdictions have held that conditioning membership in a multiple listing service on membership in the Board of Realtors is an unreasonable restraint of trade. The court in Marin County Board of Realtors v. Palsson, 130 Cal. Rptr. 1, 549 P.2d 833, 843 (1976), said: An association's freedom to exclude non-members from its activities is not absolute. It must yield to -39- antitrust laws when (1) its activities begin to correspond directly with and touch upon the business activities of its members; and (2) the association has the power to shape and influence the economic environment of its particular market. The court held that for non-members to compete effectively access must be granted to all licensed real estate agents who choose to use the service. Accord, Pomanowski v. Monmouth County Bd. of Realtors, 152 N.J. Super. 100, 377 A.2d 791 (1977); Oates v. Eastern Bergen County Multiple List. Serv., Inc., 133 N.J. Super. 371, 273 A.2d 795 (1971); but see, Barrows v. Grand Rapids Real Estate Bd., 51 Mich. App. 75, 214 N.W.2d 532 (1974) (exclusion of non-members of real estate board from multiple listing service upheld where non-members were substantially able to complete and majority of sales in the area were not made through the service). Thus, where the multiple listing service is a vital competitive tool, requiring membership in the Board of Realtors is a violation of G.S. 75-1 and § 1 of the Sherman Act. G.S. 75-2 prohibits any act in restraint of trade which violates the common law. Predicating MLS participation on Board membership where access to the multiple is an economic competitive necessity violates common law principles. See Collins v. Main Line Board of Realtors, 452 Pa. 342, 304 A.2d 493 (1973) (exclusion of non-members from multiple listing service held per se common law restraint of trade); Grillo v. Bd. of Realtors of Plainfield Area, 91 N.J. Super. 202, 219 A.2d 635 (1966) (denial of access to non-members found to be unreasonable restraint of trade under common law principles). Rufus L. Edmisten, Attorney General Tiare Smiley Farris Associate Attorney General 20 October 1978 Subject: Health; Immunization; Exclusion of Students from School under G.S. 130-90 -40- Requested by: Dr. J. N. MacCormack, Head Communicable Disease Control Branch Division of Health Services Questions: 1. Does G.S. 130-90, after amendment of G.S. 130-87 by Chapter 191, 1971 Session Laws and by Chapter 160, 1977 Session Laws, require all children presently attending school in North Carolina to be immunized against red measles (rubeola) and rubella? 2. Are school authorities now prevented from excluding student from school in accordance with G.S. 130-90 for not obtaining the immunizations required by G.S. 130-87 (at the time such students were first enrolled in school in North Carolina) when such students have been allowed to continue in school after expiration of the thirty (30) day grace period during which evidence that the child had received the required immunizations should have been presented to school authorities? Conclusion: 1. All children presently attending school in North Carolina are not required to be immunized against red measles (rubeola) and rubella as a requirement for continuance in school. All children enrolled in school for the first time in North Carohna after April 13, 1971 are required to be immunized against red measles (rubeola) as well as the other previously required immunizations and all children enrolled in school for the first time in North Carolina after July 1, 1977 must also be immunized against rubella as a requirement for continuance in school. ^1- 2. Under G.S. 130-90, school authorities are able to exclude students from school who have not received the immunizations required by G.S. 130-87 (at the time such students were first enrolled in school in North Carolina) even though such students were allowed to continue in school after expiration of the thirty (30) day grace period, set forth in G.S. 130-90. As to the first question presented, the conclusion reached is based on the same reasoning and in accordance with the Opinion of the Attorney General to Dr. J. N. MacCormack concerning rubella immunization dated November 29, 1977 and reported at 47 NCAG 130. As to the second question presented, are school authorities prevented by the doctrine of estoppel from enforcing G.S. 130-90? Generally, laches and estoppel may not be relied upon to deprive the public of protection of a statute because of mistaken action or lack of action on the part of public officials. McComb v. Homeowners' Handicraft Coop., 176 F. 2d 633, cert, denied, 70 S. Ct. 250, 358 U.S. 900, 94 LEd. 553 (N.C. App. \9A9y, accord, S.S. Kresge Co. v. Davis, 277 N.C. 654, 178 S.E. 2d 382 (1971). However, the doctrine of estoppel may be applied cautiously because ,; of the pubhc interest involved. See, Goldhlath v. Chicago, 39 111. App. 2d 211, 174 N.E. 2d 222 {\96\), accord, Lanier v. Williams, 361 F. Supp. 944 (D.C.N.C. 1973). The purpose of G.S. 130-90 is to protect the pubhc health by conditioning a child's continuance in school on his obtaining the immunizations required by G.S. 130-87. It is stated in 39 Am Jur 2d, Health, Section 1, that: "The preservation of the public health is one of the duties devolving on the State as a sovereign power. In fact, among all the objects sought to be secured by governmental laws, none is more important, and an imperative obUgation rests on the State, through its proper instrumentalities or agencies, to take all necessary steps to promote this object." -42- If suitable information is given to parents of unimmunized children concerning the required immunizations and if an adequate time for compliance is provided; it would seem that the exclusion of such children from school would not result in manifest injustice as long as any constitutional requirements of due process are met concerning such explusion, especially in light of the pubhc interest involved. For the above reasons, it is our opinion that G.S. 130-90 would require a child to only receive the immunizations required by G.S. 130-87 when he was first enrolled in school either as a result of his attaining the age required by G.S. 115-162 or G.S. 1 1 5-205. 1 2 or as the result of his parents or guardian becoming residents of this State and that the duty of school authorities to exclude children who do not receive such immunizations arises thirty (30) days after their admittance to school and is enforceable at any time thereafter. 20 October 1978 Subject: Requested by: Questions: Rufus L. Edmisten, Attorney General Jan Napowsa Associate Attorney Infants and Incompetents; Day-Care Licensing; Construction of Criminal Statutes Senator Harold W. Hardison North Carohna General Assembly (1) Should children who receive care in a child-care arrangement for less than four hours per day be counted in determining whether the arrangement must be Ucensed as a day-care facility? (2) Do children in the care of great-aunts or other relatives come within the exclusion to the definition of "day-care" -43- set out in G.S. 110-86(2) so that such children would not be counted in determining whether a child-care arrangement was caring for more than five children? Conclusions: (1) Children who receive care in a child-care arrangement for less than four hours per day should not be counted in determining whether the arrangement must be licensed as a day-care facility. (2) The exclusion from the definition of "Day care" set out in G.S. 110-86(2) is limited to children who are cared for by their parents, grandparents, guardians or I full-time custodians; therefore, children in ' the care of great-aunts or other relatives who are not their parents, grandparents, guardians or full-time custodians must be ; , counted in determining how many children I ' ; are receiving day care. I I G.S. 1 10-98 provides that it shall be unlawful to operate a day-care j facility without being Ucensed under the provisions of Article 7 of I Chapter 110 of the General Statutes. G.S. 110-103 provides that a violation of the provisions of G.S. 110-98 through 110-102 is a general misdemeanor, which is punishable by imprisonment for a term not exceeding two years or by a fine or by both, in the discretion of the court. (G.S. 14-3). In requiring that day-care facilities be Hcensed, the legislature stated its purpose in G.S. 110-85: The General Assembly hereby declares its intent with respect to day care of children: (1) The State should protect the growing number of children who are placed in day-care ' facilities or in child-care arrangements when these children are under the supervision and in the care of persons other than their parents, I -44- grandparents, guardians or full-time custodians during the day. (2) This protection should assure that such children are cared for by persons of good moral character, that their physical safety and moral environment are protected, and that the day-care resources conform to minimum standards relating to the health and safety of the children receiving day care. (3) This protection requires the following elements for a comprehensive approach: mandatory licensing of day-care facilities under minimum standards; promotion of higher levels of day care than required for a license through the development of higher standards which operators may comply with on a voluntary basis; registration of day-care plans which are too small to be regulated through hcensing; and a program of education to help operators improve their programs and to develop public understanding of day-care needs and problems." in Article 7 of Chapter 110 makes a distinction between two types j* of child-care arrangements providing day care: day-care plans and xiay-care facilities. Only facilities are required to be licensed. A day-care faciUty is defined as "any day-care center or child-care arrangement which provides day care on a regular basis for more than four hours per day for more than five children, wherever operated and whether or not operated for profit...." A day-care plan is defined as "any day-care program or child-care arrangement where any person provides day care for more than one child and less than six children, wherever operated and whether or not operated for profit." jit is common for both day-care plans and day-care facihties to provide care for after-school children and other children who are generally present for less than four hours per day. Because of the I clearly stated legislative intent to protect children who receive care away from their homes, it is tempting to include these after-school -45- children in the number of children used to determine whether or not a child-care arrangement is a day-care facility which must be licensed in order to operate or a day-care plan which must be registered in order to operate. In 1975, at 44 N.C.A.G. 234, this Office dealt with the question of the maximum number of children for whom care could be provided in a day-care plan, and concluded that the maximum number, including after-school children, was five. However, since a violation of the day-care licensing requirements is a criminal offense, and since criminal provisions must be strictly construed, with all conflicts or ambiguities resolved in favor of the defendant, the definition of a day-care facility must be interpreted so as to exclude any after-school children or other children who receive care for less than four hours per day when determining whether more than five children are receiving care. Thus, if a child-care arrangement provides care on a regular basis for five children under 13 years of age for more than four hours per day (excluding children, grandchildren, wards, or children in full-time custody) and for any number of children for less than four hours per day, that arrangement would be considered a day-care plan which would not be required to obtain a license to operate. Any previous interpretations which conflict with this Opinion are hereby overruled to the extent of the conflict. G.S. 110-86(2) defines "Day-care" to include "any child-care arrangement under which a child less than 1 3 years of age receives care away from his own home by persons other than his parents, grandparents, guardians or full-time custodians." The exclusion as to parents, grandparents, guardians and full-time custodians is very specific and unambiguous. In light of the clearly stated purpose of the day-care hcensing laws, there is no basis for expanding the exclusion to include any other relatives who are not guardians or full-time custodians. Rufus L. Edmisten, Attorney General ^^ Ann Reed Special Deputy Attorney General -46- 20 October 1978 Subject: Requested by: Mental Health; Involuntary Commitment; Transfer of a Respondent to a Private Hospital Honorable James E. Lanning District Court Judge 26th Judicial District Question: Conclusion: In a situation wherein a District Court Judge has involuntarily committed a respondent to a State Hospital under the provisions of Article 5A, Chapter 122, is it necessary to obtain an additional order from the Court in order to permit later transfer of the respondent to a private hospital? No, the respondent may be transferred by order of the Department of Human Resources pursuant to G.S. 122-80. G.S. 122-58.8 provides that, upon determination that involuntary commitment is warranted, the District Court may "...order treatment, inpatient or outpatient, for a period not in excess of 90 days, at a mental health facihty, pubHc or private, designated or licensed by the Department of Human Resources." Thus, in the initial order, commitment to a private hospital (if the respondent, his family, or representatives are amendable to bearing the cost of hospitaUzation) may be made if the Judge, in his discretion, feels such is appropriate. After the original commitment, the provisions of G.S. 122-80, as follows, would appear to apply: "Patients transferred from State hospital to private hospital-When it is deemed desirable that any patient of any State hospital be transferred to any Hcensed private hospital within the State, the Department of Human Resources may so order. A certified copy of -47- j the hospitalization order on file at the State hospital f shall be sent to the private hospital which, together I with the order of the Department of Human ^ Resources, shall be sufficient warrant for holding the i mentally ill or mentally retarded person, or inebriate by the officers of the private hospital. A certified copy of the order of transfer shall be filed with the clerk i of superior court of the county from which such mentally ill or mentally retarded person, or inebriate was hospitahzed. After such transfer the State hospital from which such patient was transferred shall be relieved of all future responsibility for the care and treatment of such patient." Literal reading of this statute compels the conclusion that it was not the intent of the General Assembly to require that an additional court order be obtained in order to effect the transfer described in the question. To the contrary, the statute permits a determination of the appropriateness of the transfer to be made by the Department of Human Resources. Like other functions of that Department, the authority to take this action may be delegated to a subordinate agency of such Department. Of course, this action can only be taken if the patient, his family, or representatives are wilUng to pay the costs of the hospitahzation and if the private hospital involved is capable and willing to accept the respondent. Rufus L. Edmisten, Attorney General , , William F. O'Connell Special Deputy Attorney General 26 October 1978 Subject: Mental Health; Involuntary Commitments; Petitioner in Involuntary Commitment ^^ Proceedings Involving a Prisoner. Requested by: Ms. Judith L. Komegay, Special Counsel - Dorothea Dix Hospital -48- Question: In a case involving a prisoner in a state correctional institution who becomes mentally ill and dangerous to himself or others, who is the person responsible for acting as petitioner for involuntary commitment of the prisoner to a treatment facility under Article 5 A, Chapter 122? I^onclusion: A staff psychiatrist of the correctional institution must be the petitioner. i^or ordinary situations, the initiation of involuntary commitment proceedings to treatment facilities is dealt with by G.S. 122-58.3. Subsection (a) of that statute provides that any person having Adequate knowledge may execute the requisite affidavit and petition lecessary for the institution of involuntary commitment proceedings. Apparently some discussion has been encountered as ;o the applicability of this statute to a prisoner in a correctional nstitution. a.S. 122-85 addresses the subject of commitment of prisoners iirectly and serves to resolve the issue with the following language: "(a) A convict who becomes mentally ill and imminently dangerous to himself or others after commitment to any penal institution in the State shall be processed in accordance with Article 5A of this Chapter, as modified by this Section, except when the provisions of Article 5A are manifestly inappropriate. A staff psychiatrist of the prison shall execute the affidavit required by G.S. 122-58.3, and send it to the Clerk of Superior Court of the county in which the penal facility is located." (Emphasis suppHed) The specific language of the second sentence of G.S. 122-85 'a)-particularly when coupled with the emphasized words in the first sentence-clearly identifies the intent of the General Assembly relative to the involuntary commitment to treatment faciHties of prisoners in correctional institutions. As a result of this language, only a staff psychiatrist of such institution is authorized to execute the requisite affidavit and accompanying petition. •49- The rationale behind this statute is readily apparent aftei consideration of the nature and location of such type of respondent This distinction as to the manner of initiation of these proceedings presents no problems under the equal protection clause of the Constitution; further, the statute fully grants a prisoner the due process protection in all succeeding proceedings vital to deprivation of any of his rights. Rufus L. Edmisten, Attorney General William F. O'Connell Special Deputy Attorney General 'Sill 27 October 1978 Subject : Requested by: Questions: ^ Register of Deeds; Mortgages and Deeds of| Trust - Cancellation Howard P. Neumann Assistant County Attorney Washington County (1) The beneficiary of a deed of trust marks both the note and deed of trust as satisfied and paid in full. Upon presenting these to the Register of Deeds, is the beneficiary entitled to have the deed of trust cancelled of record? (2) A note and deed of trust are given to secure an obligation. The payee on the note and the beneficiary of the deed of trust are the same party. The payee endorses the note to a third party but no physical assignment of the deed of trust is made. The third party marks the note satisfied and paid in full, and the beneficiary marks the deed of trust satisfied and paid in full. May the Register of Deeds cancel the deed of Trust of record? -50- iii Conclusions: (1) No. (2) No. la The discharge of record of mortgages, deeds of trust and other 101 jinstruments is governed by G.S. 45-37. That statute sets out several methods of discharge. However, there must be strict compliance with the statute, regardless of the particular method chosen. Mills v. Kemp, 196 N.C. 309, 145 S.E. 557 (1928). Cancellation under the facts presented is governed by G.S. 45-37(2). The deed of trust, mortgage or other instrument along with the bond, note or other instrument thereby secured must be exhibited to the Register of Deeds, with the endorsement of payment and satisfaction by (a) The obhgee (b) The mortgagee (c) The trustee (d) An assignee of the obhgee, mortgagee, or trustee or (e) Any chartered banking institution, national or state, or credit union, quahfied to do business in and having an office in the State of North Carohna, where so endorsed in the name of the institution by an officer thereof. 1 Cancellation is not authorized by anyone other than those parties r listed in the statute. Faircloth v. Johnson, 189 N.C. 429, 127 S.E. 346 (1925). Thus the underlying question must be whether a beneficiary of a deed of trust is one of the parties listed in the statute - either expressly or by construction. til; "In construing a statute it will be presumed that the legislature fi comprehended the import of the words employed by it to express i;: its intent. Accordingly, technical terms must ordinarily be given their 1 technical connotation." 12 Strong's N.C. Index 3rd, Statutes 5.11 [ (1978). Ci: t! At the outset, there is no indication in the question that the li beneficiary of the deed of trust is a bank or an assignee of the ;;; obhgee, mortgagee or trustee. -51- The term "obligee" refers to a person in favor of whom some obHgation is contracted, but when used in its technical sense includes] only payees of notes, bonds, etc., and not to mortgage parties BLACK'S LAW DICT. 1226 (Rev. 4th ed. 1968). Technically the beneficiary in a deed of trust is also not a mortgagee but a cestui que trust. Osborne, Mortgages, §17(2nd ed. 1970).; There are three parties to a deed of trust - the grantor or trustor^t the trustee and the cestui que trust (beneficiary). There are only two parties to a mortgage, the mortgagor and the mortgagee. The Courts clearly recognize a difference between the true mortgage and a deed of trust as evidenced by the following statement. Upon the execution of a mortgage or deed of trust on real estate, legal title to the land vests in the mortgagee or trustee, as the case may be. Simms v. Hawkins, 1 N.C. App. 168, 160 S.E.2d 514 (1968). (Emphasis added). Unlike the trustee or mortgagee, the beneficiary does not hold legal title. Webster, Real Estate Law In North Carolina, §228-230 (1970)' Thus, the beneficiary in a deed of trust is not synonymous with a mortgagee. \ Finally, although it is theoretically possible for the beneficiary and trustee to be the same person, there is no indication of that here and, indeed, it would be highly unUkely in the typical deed of trusii case. In the opinion of this Office there is no authority for cancellatior of record of the deed of trust upon endorsement of satisfactior by the beneficiary thereof See, also, Mills v. Kemp, supra. Regarding the second question, although the payee (obhgee) is £ proper party to cancellation under G.S. 45-37(2), his endorsement appears only on the note. It has already been estabhshed that thei beneficiary's endorsement in the deed of trust is insufficient. Tht question then becomes whether both the note and the deed of trust must be marked satisfied by the proper party? -52- It would appear that the Legislature intended an answer in the affirmative when one considers the following exception in the statute providing. The exhibition of the mortgage, deed of trust or other instrument alone to the Register of deeds with endorsement of payment, satisfaction, performance or discharge, shall be sufficient if the mortgage, deed of trust or other instrument itself sets forth the obligation secured. ..and does not call for or recite any note, bond or other instrument secured by it. G.S. 45-37(2). flAlso see Webster, Real Estate Law In North Carolina, §225 at p. y316 (1971). Rufus L. Edmisten, Attorney General Lucien Capone, III Associate Attorney General 1 November 1978 Subject: Requested by: Question: Conclusion: Mental Health; Involuntary Commitment; Criminal Law; Preliminary Evaluation of Defendant Incapable of Proceeding With Trial. Dr. William Thomas Chief of Adult Services Division of Mental Health and Mental Retardation Services When a defendant is found incapable of proceeding with a criminal trial and the trial court takes the action directed by G.S. 15A-1003 (a), is the examination by a quahfied physician as described in G.S. 122-58.4 required? Yes. -53- In a situation involving a defendant in a criminal action who is found to lack the mental capacity to proceed with trial, G.S. 1 5 A-1 003(a) provides as follows: "If a defendant is found to be incapable of proceeding, the Court must enter an order directing the initiation of proceedings for involuntary civil commitment, and the Court's order is authority for a magistrate or clerk to order a law-enforcement officer to take the defendant into custody for examination by a qualified physician under G.S. 122-5 8.3(b), or for processing as an emergency case under G.S. 122-58.18." In turn, G.S. 122-58. 3(b) requires the magistrate or clerk to "...issue an order to a law-enforcement officer to take the respondent into custody for examination by a qualified physician." Apparently some disagreement has developed as to whether the law-enforcement officer, when confronted with this type of respondent, is required to take him to one of the facilities described in G.S. 122-58.4. Reportedly, in some instances, arguments have been advanced that the respondent is to be taken directly to a regional hospital. The language of the governing statutes makes it clear that it was I the intent of the General Assembly to afford this type of respondent! the same due process as that available to others. One step of thatj due process is the preliminary evaluation by a local qualified physician as required by G.S. 122-58.4. Only upon a determination, by that physician that the defendant/respondent meets the standards I for involuntary commitment is he to be disposed of in accordance! with G.S. 122-58.4(c) and G.S. 122-58.6(a). Of course, as permitted by G.S. 15 A-1 003(a), situations falling! within the purview of G.S. 122-58.18 should be handled in accordance with that statute. Further, all personnel responsible forj the processing of defendants/respondents should be aware thatf G.S. 15 A-1 004 quite logically makes specific provisions regarding the monitoring, reporting, etc. of individuals of this type. -54- 1 November 1978 Subject: Requested by: Question: Conclusion: Rufus L. Edmisten, Attorney General William F. O'Connell Special Deputy Attorney General Taxation; Ad Valorem Taxes; Mobile Homes; Tax Permits; Seller of Used Mobile Homes as "Retailer"; G.S. 105-316.1 Leon M. Killian, III Haywood County Attorney (1) Is an individual engaged in the business of buying and selling only used mobile homes a "retailer? (2) Is he required to obtain a tax permit before moving a mobile home into his inventory, or before moving a mobile home to the premises of a purchaser? (1) Yes (2) No An individual is engaged in the business of buying and seUing used f((and only used) mobile homes. Presumably he buys them from mobile home wholesalers or from individuals who first bought them at retail; and presumably he sells them at retail and not to others for resale. He is neither a hen holder nor a manufacturer. G.S. 105-3 16. 1(a) requires that a "tax permit" be obtained before a mobile home may be moved by anyone other than a manufacturer or retailer. G.S. 105-3 16. 1(b) specifically provides that "manufacturer, retailers and licensed carriers of mobile homes "shall not be required to obtain such permits. The purpose of the permit is to prevent the avoidance or evasion of tax on highly mobile -55- property, since to obtain the permit requires payment of the tax, and failure to obtain it is a misdemeanor. G.S. 105-3 16. 2, .3, .6. Heretofore, the businessman has been required by the tax collector to pay taxes and obtain permits before moving the units which are his stock in trade. It is not clear whether he has been required to get the permits when he acquires a unit for resale and moves it to liis lot, or when he sells to a consumer and moves it from his lot, or both. However, we believe that under G.S. 105-31 6.4, neither is correct if he is a "retailer". "Retailer" is not defined in the Machinery Act, and has not been judicially construed in the context of G.S. 105-316.1. However, it is defined in the Sales and Use Tax Act as "every person engaged in the business of making sales of tangible personal property at retail". G.S. 105-164.3(14) "Retail" means "the sale of any tangible personal property in any quantity or quantities for any use or purpose on the part of the purchaser other than for resale." G.S. 105-164.3(13). While there is no necessary transfer of meaning between the two Acts, we think that the Sales Tax definition catches the accepted sense of the word in that it is a sale to one for use or consumption and not for resale as part of a retail business. Thus, it is our opinion that the businessman in question is a "retailer" of used mobile homes and is not required to obtain a permit or pay delinquent taxes on a used mobile home when he moves iti from the seller's premises to his lot, or from his lot to the purchaser's! premises, under the provisions of G.S. 105-3 16. 1(a) and (b). It appears to us that any other result would require amendment of the pertinent statutes. If the tax collector if aware of the sale by the owner to the retailer, he might want to consider garnishment upon the retailer before the purchase price is paid to the owner. G.S. 105-368. Unfortunately, it is Ukely that he seldom if ever knows of the sale until after the fact. Rufus L. Edmisten, Attorney General Myron C. Banks Special Deputy Attorney General -56- 8 November 1978 Subject: Requested by: Question: Conclusion: Taxation, Income Tax; Excise and Capital Stock Tax on Savings and Loan Associations; Federal Stock Savings and Loan Associations; G.S. 54-1 (b); G.S. 54A-1 et seq.; G.S. 105-130 et seq.; G.S. 105-228.22 W. L. Cole, Administrator Savings and Loan Division North Carolina Department of Commerce Are federally-chartered stock savings and loan associations subject to tax Uke mutual savings and loan associations, or hke business corporations generally? Federally-chartered savings and loan associations are subject to tax like mutual savings and loan associations In a letter from W. L. Cole, Administrator, Savings and Loan Division, North CaroUna Department of Commerce, the following facts are given: 1. "Pursuant to Federal law. Federal mutual associations may apply to the Federal Home Loan Bank Board for permission to convert into Federal stock associations; however, there is a current moratorium on such conversions." 2. "At present. Federal mutual associations are taxed Hke State mutual associations under Article 8D of Chapter 105 of the General Statutes. Under Article 8D such associations pay a capital stock tax and an excise tax. However, questions have arisen regarding the taxation of Federal mutual associations which convert to Federal stock associations." Mr. Cole has asked "would such Federal stock associations be taxed under Article 8D or would such associations be taxed in the same -57- manner as general business corporations organized under the provisions of Chapter 55 of the General Statutes?" Subchapter I of Chapter 54 of the General Statutes relates to savings and loan associations generally, which are created pursuant to the laws of this State. Chapter 54A relates specifically to stock-owned as opposed to mutual, savings and loan associations created pursuant to State law, and G.S. 54-1 (b) specifically requires such associations ; created under Chapter 54A to "be taxed as a business corporation organized under the provisions of Chapter 55", which is the "Business Corporation Act". The income of such corporations is; taxed under the Corporation Income Tax Act, G.S. 105-130 et seq. Other savings and loan associations are taxed pursuant to Article 8D, Subchapter I of Chapter 105 of the General Statutes, and in that connection, G.S. 105-228.22 provides: "The provisions of this Article shall apply to every building and loan association or savings and loan association organized under the laws of this State or organized under the laws of another state and which maintains one or more places of business in this State and to every savings and loan association organized and existing under the 'Home Owners Act of 1933' and which maintains one or more places of business in this State, all such associations hereinafter to be referred to as Building and Loan Association." Article 8D then proceeds to levy a capital stock tax and an excise; tax upon such associations. Federal savings and loan associations are created pursuant to the] provisions of the "Home Owners Loan Act of 1933", 12 USC § 1461 1 et seq. Since the Corporation Income Tax Act affects only those: associations organized pursuant to Chapter 54A, and since federal | associations are not organized pursuant to that Act but pursuant I to federal law, the corporation income tax does not apply to them. However, since G.S. 105-228.22 specifically applies to "every < savings and loan association organized and existing under the 'Home Owners Loan Act of 1933' and which maintains one or more places of business in this State", we conclude that the taxes imposed by -58- Article 8D apply to all such associations created purusant to federal [aw, both mutual and stock. Rufus L. Edmisten, Attorney General Myron C. Banks Special Deputy Attorney General 10 November 1978 Subject: Motor Vehicles; Drivers' Licenses; Financial Responsibility Act of 1953; Unsatisfied Judgments Property Damage Judgment by Owner or Bailee against Negligent Driver of the Owner's or Bailee's Motor Vehicle Requested by: Question: Ionelusion: Mr. Joe Register, Director Traffic Records Division of Motor Vehicles Are the mandatory provisions of G.S. 20-279. 13(a) applicable to an unsatisfied judgment obtained by an owner or bailee against a negligent driver of the owner's or bailee's motor vehicle for the diminished value of such motor vehicle? No. ji owner or bailee of a motor vehicle obtained a default judgment ttii gainst a negligent driver of the owner's or bailee's motor vehicle !^! nd her master or employer for the diminished value of such motor 0^ ehicle resulting from a colhsion with a third party. A motor vehicle ;r- ability insurance policy was in effect. The judgment creditor has 3; emanded the Division of Motor Vehicles to suspend the motor ! jhicle operator's licenses of the judgment debtors under the revisions of G.S. 20-279. 13(a). r.S. 20-279.2 1(a) provides in pertinent part: -59- "(a) A 'motor vehicle liability policy' as said term is used in this Article shall mean an owner's or an operator's poUcy of liabiUty insurance, ..." G.S. 20-279.21 (b) provides in pertinent part: "(b) Such owner's policy of liability insurance: (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or impHed permission of such named insured, or any other persons in lawful possession, against loss from the Uability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles...as follows:... five thousand dollars ($5,000) because of injury to or destruction of property of others in any one accident;" (Emphasis added). G.S. 20-279.2 1(e) provides in pertinent part: "(e) Such motor vehicle habihty poHcy need not insure against loss from...any hability for damage to property owned by, rented to, in charge of or transported by ' the insured." Under G.S. 20-279.2 1(c) an operator's policy of hability insuranc is subject to the same limits of habihty. G.S. 20-279.21 (d) require, all motor vehicle habihty pohcies to be subject to the provisiori of Article 9A. G.S. 20-279.2 1(g) provides for excess and addition coverage, but "the term 'motor vehicle habihty policy' shah appl: only to that part of the coverage which is required by this section From the foregoing statutory provisions, it is clear that a "mote vehicle habihty pohcy" requires property damage coverage for th benefit of third party beneficiaries and not colhsion or upsc insurance coverage for the benefit of the insured. Although th judgment in question appears to fall within the definition -60- judgment as defined in G.S. 20-279.1(3) and subject to the provisions of G.S. 20-279.13, when these statutes are construed in pari materia with the other provisions of Article 9A and Article 13, Chapter 20, of the General Statutes, it appears that such was not the intent of the General Assembly. The legislative intent is revealed not only by the provisions of G.S. 20-279.21 in defining and setting forth the requirements of the motor vehicle habihty pohcy but in other statutory provisions. G.S. 20-279.1(11) provides in pertinent part: "(11) 'Proof of financial responsibihty': Proof of ability to respond in damages for habihty, on account of accidents... arising out of the ownership, maintenance or use of a motor vehicle, ...in the amount of five thousand dollars ($5,000) because of injury to or destruction of property of others in any one accident. Nothing contained herein shall prevent an insurer and an insured from entering into a contract, not affecting third parties, providing for a deductible as to property damage at a rate approved by the Commissioner ofInsurance ^ (Emphasis added). The requirements as to security and suspension under the provisions of G.S. 20-279.5 do not apply to the operator or owner if an owner's or operator's motor vehicle Uability poHcy was in effect or wherein no injury or damage was caused to the person or property of anyone other than such operator or owner. G.S. 20-279. 5(c)(1); G.S. 20-279.6(1). Although not involving a judgment for damages to the insured's property, m Moore v. Young, 263 N.C. 483, 139 S.E. 2d 704 (1965), the Court stated: "The Motor Vehicle Financial Responsibihty Act obliges a motorist either to post security or to carry habihty insurance, not accident insurance to indemnify all persons who might be insured's car." Accord: McKinney v. Morrow, 18 N.C. App. 282, 196 S.E. 2d 585 (1973); See also Strickland v. Hughes, 273 N.C. 481, 160 S.E. 2d. 313 (1968). -61- In Commonwealth of Kentucky, Dept. of Public Safety v. Robinson, 435 S.W. 2d 447 (Ky., 1968), the defendant, Robinson, owned two trucks used for hauling gravel. While being operated by his J employees, the brakes on one truck failed causing it to run into' the other truck, forcing it off the road and over a bluff kilHng the operator thereof. A judgment was obtained against Robinson and the other truck driver. The Department of Pubhc Safety wasj permanently enjoined from canceling or suspending or refusing to renew the motor vehicle operator's license or motor vehicle registration of Robinson. A Kentucky financial responsibihty statute, similar to G.S. 20-279.21(e), KRS 187.490(5) provided: "(5) The motor vehicle hability policy shall not insure any UabiHty under any workmen's compensation law nor any hability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance or repair of the motor vehicle nor any UabiHty for damage to property owned by, rented to, in charge of or transported by the insured." In affirming the lower court decision, the Court of Appeals of Kentucky stated: "The General Assembly set forth the minimum standards of the 'motor vehicle liability policy' required. The parties agreed that appellee had comphed in full with the requirements of The Financial Responsibihty Law. KRS, Chapter 187. Again, in its wisdom had it seen fit, the General Assembly need not have provided the exclusion in KRS 137.490(5), which in this case resulted in appellee's being uninsured. The remedy for such lack of coverage addresses itself to the General Assembly. Inasmuch as appellee had comphed with the standards required, it was unlawful and unreasonable to revoke or suspend his hcense or registrations." Since there was a motor vehicle habihty insurance policy in effect meeting statutory requirements, the operator's hcense of the driver -62- i and her master or employer should not be suspended under the provisions of G.S, 20-279. 13(a). Rufus L. Edmisten, Attorney General William B. Ray Assistant Attorney General 14 November 1978 Subject: Requested by: Questions: PubUc Records; North CaroUna Uniform Traffic Ticket and Complaint; Right of PubUc Inspection Barbara Smith Assistant Secretary Department of Crime Control and PubHc Safety 1. Is the Departmental Copy of the North Carolina Uniform Traffic Ticket and Complaint, which is submitted by a Highway Patrolman to the District First Sergeant who transmits it to the Traffic Record Section of the Division of Motor Vehicles, a pubhc record and subject to inspection during the time it is maintained at the Patrol District Headquarters? 2. Is the Enforcement Division Copy of the North Carohna Uniform Traffic Ticket and Complaint, which is maintained by the officer issuing the complaint and includes his notes and other evidence, a pubhc record and subject to inspection prior to trial of the offense charged in the complaint? 3. Is the Enforcement Division Copy of the North Carolina Uniform Traffic Ticket -63- and Complaint a public record and subject to inspection in the Patrol District Headquarters after the trial of the offense charged in the complaint? Conclusions: 1. No. < 2. No. I i 3. No. The General Assembly has defined the term public records to mean : '"Public record' or 'pubUc records' shall mean all documents, papers, letters, maps, books, photographs, films, sound recordings, ... or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina Government or its subdivisions." G.S. 132-1. A custodian of a pubUc record is the "pubHc official in charge of an office having pubhc reocrds". G.S. 132-2. "Every person having custody of public records shall permit them to be inspected and examined at reasonable times and under his supervision by any person, and he shall furnish certified copies thereof on payment of fees as prescribed by law." G.S. 132-6. The North CaroHna Uniform Traffic Ticket and Complaint is authorized pursuant to G.S. 7A-148(b) and G.S. 15A-302. There is no statutory requirement for disposition of copies of the uniform complaint except that a copy of the complaint must be delivered to the person cited. G.S. 15A-302(d). The initial question is whether the District First Sergeant is required to allow inspection of the Departmental Copy of the North Carolina Uniform Traffic Ticket and Complaint during the time that he has the copy and before he transmits it to the Traffic Records Section of the Division of Motor Vehicles. This copy of the complaint contains the same information as the original and the copy filed -64- in the clerk's office. The First Sergeant is just a conduit for this copy of the complaint. The General Assembly could not have intended that each person who receives public record and passes it on would be required to allow that public record to be inspected during the time, however short, that the individual has possession of the record. Only a person "having custody of public records" is required to permit inspection. G.S. 132-6. A custodian is the "public official in charge of an office having public records." G.S. 132-2. It does not seem that the General Assembly intended that the District First Sergeant be a custodian within the meaning of the statute. He does not file or maintain a log of the records temporarily in his possession other than the report he prepares. In addition, a custodian must "furnish certified copies" of the public records upon payments of fees prescribed by law. There is no authority, that we can ascertain, for a Sergeant in the Highway Patrol to certify copies of complaints. The clerk of court may certify copies of complaints on file with him. G.S. 7A-103(6). The Commissioner of Motor Vehicles is also authorized to certify copies of records on file in his office. G.S. 20-42(b). In the situation described, the District First Sergeant is not a custodian of pubHc records and therefore is not required to permit them to be inspected and examined and is not required to furnish certified copies of them. This information or record can be obtained from the clerk of court or the Commission of Motor Vehicles. The Highway Patrol does not have the personnel necessary to allow such inspection in all 49 districts. The second question presented is whether the Enforcement Division Copy of the North CaroHna Uniform Traffic Ticket and Complaint which is maintained by the arresting officer and contains his notes and other evidence is a pubhc record and subject to inspection and examination. It has been consistently held that there is no common law right to discovery in a criminal case. State v. Goldburg, 261 NC 181, 134 SE 2d 334, cert. den. 377 US 978 (1964). Even though a law enforcement officer makes his notes and gathers evidence pursuant to the authority granted him by law, i.e. G.S. 20-188, if such records and notes are not required to be disclosed to a criminal defendant, we fail to see how the same notes are required to be disclosed to the general pubhc. A criminal defendant can only obtain those items which are allowed by the criminal discovery statutes. -65- See State v. Davis, 282 NC 107, 191 SE 2d 664 (1972); State v. Blue, 20 NC App. 386, 389, 201 SE 2d 548 (1974) (notes of officer not subject to discovery); State v. Jones, 23 NC App. 686, 688, 204 NC 508 (1974), cert. den. 286 NC 418 (reports of officers or work product of police not subject to disclosure in this case). Despite the broad language of the Public Records Act, supra, the courts have held certain records as confidential. G.S. 148-74 and 148-76 require that records be maintained on prisoners. They are not specifically declared to be confidential. However, the Supreme Court held that a prisoner, who is an interested party, may not see such files. Goble v. Bound, 13 NC App. 579, 581, aff.'d 281 NC 307, 188 SE 2d 347 (1972). The notes, opinions, and preceptions of the law enforcement officer may be contained on his copy of the Uniform Traffic Ticket and Complaint. Based upon the above case law, the opinion of this Office issued on June 3, 1975, to the Honorable J. Herbert Haynes, Sheriff of McDowell County, 44 NCAG 340 (1975), is still vahd. This opinion concluded that investigative reports and memoranda concerning investigations of crimes are not pubhc records within this sense of Chapter 132 and are therefore not subject to public inspection. This opinion and the reasoning supporting it would apply to the Enforcement Division Copy of the North CaroUna Uniform Traffic Ticket and Complaint. Florida has a similar statute to North Carolina. Chapter 119.01 of the Florida statute provides that "(i)t is the pohcy of this state that all state, county and municipal records shall at all times be open for a personal inspection by any person." A public record is defined to mean "...all documents, papers, letters, maps, books, photographs, films, sound recordings or other material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of official business by any agency." Chapter 1 19.01 1(1), Florida Statutes. This language is almost identical to the North Carolina statute. The Florida Courts have construed this statute to exempt pohce records. "First, it is clear that police reports are not pubhc records within the meaning of Section 119.01, Florida Statutes (1975) and thus need not be held open at ^ -66- all times for personal inspection by any person. Police records are ordinarily confidential." City of Tampa v. Harold, 352 So. 2d 944, 946 (Fla. App., 1977). The Florida Supreme Court held that poHce records could be produced and used in evidence in a trial only in a rather restrictive sense and outline that criteria governing production and use. "It depends, as we have said, upon 1) being critical, 2) upon a material and vital point, 3) reasonably exculpatory of defendant within sound judicial discretion, and 4) after 'in camera' review and deletion of improper matter." State v. Johnson, 284 So. 2d 198 (Fla. 1973) Florida has recognized the need, as our previous opinion did, for police records to be held confidential. The items in question here are just as much poUce record as any other form. They must therefore be deemed confidential and not subject to inspection absent an order from a court of competent jurisdiction. After the trial of the matter charged by the Uniform Traffic Ticket and Complaint, the notes and evidence gathered by the officer would still prevent this item from being a pubUc record. The officer would be less likely to put down the necessary information to assure proper prosecution of the criminal matter if he knew that such notes and impressions would be subject to inspection and pubHcation. Revealing such records would have a chilling effect upon a law enforcement officer and no appreciable public benefit. The impressions and notes which are introduced at the trial as evidence become part of the record of the trial and may be inspected in the courthouse. All other matters which were not introduced at the trial should not be required to be disclosed. The same rationale for not disclosing the notes of the law enforcement officer before trial would seem also to apply after trial. Rufus L. Edmisten, Attorney General Isaac T. Avery, III Assistant Attorney General -67- 14 November 1978 Subject: Requested by: Question: Conclusion: Public Officers; Conflict of Interest; Public Officer Contracting with Corporation in Which He is a Stockholder or Officer. John F. Kime Town Manager Liberty N. C. Does a conflict of interest, prohibited by G.S. 14-234, exist if a member of the City Council is a minority stockholder or an officer of public or private corporation and the City Council enters into a contract with that corporation? Yes. The general rule is that a public officer who is either a stockholder or officer of a corporation which enters into a contractual relation with the officer or the pubhc body of which he is a member, violates a statute which prohibits such public officer from having a direct or indirect interest in any such contract, and is also against pubhc policy as declared by the common law. Many cases are cited in 140 C.L.R. 344 to support the above general rule. The North CaroUna Supreme Court has held that the prohibition of G.S. 14-234 extends to an officer of a corporation in making contracts between the corporation and the city or county governing body of which he is a member. State v. Williams, 153 NC 595; Lexington Insulation Co. v. Davidson County, 243 NC 252. "No man ought to be heard in any court of justice who seeks to reap the benefits of a transaction which is founded on or arises out of criminal misconduct and which is in direct contravention of the pubhc policy of the State. Fashion Co. v. Grant, 165 NC 453, 81 S.E. 606; Marshall v. Dicks, 175 NC 38, 94 S.E. 514; Lamm V. Crumpler, 233 NC 717, 65 S.E. 2d 336; Waggoner v. Publishing Co., 190 NC 829, 130 S.E. 609. -68- "Public Office is a public trust and this Court will not countenance the subversion thereof for private gain. Not only will it declare void and unenforceable any contract between a public official, or a board of which he is a member, and himself, of a company in which he is financially interested, whereby he stands to gain by the transaction, but it will also deny recovery on a quantum meruit basis. In entering into such contract, a public official acts at his own peril and must suffer the loss incident upon his breach of his public duty. He may look in vain to the courts to aid him in his efforts to recoup his losses, due to the invalidity of the contract, on the grounds the pubUc agency which he serves has been enriched by his misconduct. "In other words, this Court will not recognize or permit any recovery bottomed on the criminal conduct of a public official. To put it simply, the doors of the courts are closed to any individual, or firm in which he is financially interested, who engages in a transaction which comes within the language of the statute. Snipes v. Winston, supra; Davidson v. Guilford, supra; King v. Guilford, 152 NC 438; S. V. Williams, supra, Annos. 84 A.L.R. 969, 110 A.L.R. 164, 154 A.L.R. 375; 12 A.J. 498." Insulation Co. v. Davidson County, supra, at. p. 255. Although we find no North Carolina cases involving a pubHc official who was a mere -stockhoider in the corporation, the courts in many other jurisdictions apply the general rule stated above. Most of the statutes involved contained language similar to G.S. 14-234, "be in any manner interested", "make any contract for his own benefit", "be in any manner concerned or interested in making such contract..., "either privately or openly, singly or jointly with another". In Hardy v. Mayor of Gainsville, 48 SE 921, the statute contained the language "or have any interest in such contract either by himself or by another, directly or indirectly". The Council member held stock in a corporation which entered into a contract with the city. HELD : a stockholder in a private corporation clearly has an
Object Description
Description
Title | North Carolina Attorney General reports |
Contributor | North Carolina. Department of Justice. |
Date | 1978; 1979 |
Subjects |
Attorneys general's opinions--North Carolina Automobiles--Transportation--Law and legislation Criminal law Education Genealogy Local government Mental health laws Public health Public officers--North Carolina Public welfare Taxation--Law and legislation |
Place | North Carolina, United States |
Time Period | (1945-1989) Post War/Cold War period |
Description | Opinions of the Attorney General. |
Publisher | Raleigh, N.C. :Dept. of Justice,1970- |
Agency-Current | North Carolina Department of Justice |
Standard Number | 0364-362X |
Rights | State Document see http://digital.ncdcr.gov/u?/p249901coll22,63754 |
Physical Characteristics | v. ;23 cm. |
Collection | Health Sciences Library. University of North Carolina at Chapel Hill |
Type | text |
Language | English |
Format | Reports |
Digital Characteristics-A | 7957 KB; 198 p. |
Digital Collection |
Ensuring Democracy through Digital Access, a North Carolina LSTA-funded grant project North Carolina Digital State Documents Collection |
Digital Format | application/pdf |
Title Replaces | North Carolina. Department of Justice..Biennial report of the Attorney General of the State of North Carolina |
Audience | All |
Pres File Name-M | pubs_edp_biennialreportattorneygeneral19781979.pdf |
Pres Local File Path-M | \Preservation_content\StatePubs\pubs_edp\images_master\ |
Full Text | THE LIBRARY OF THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL THE COLLECTION OF NORTH CAROLINIANA C3U0 N87a v.hQ 1978/79 UNIVERSITY OF N.C. AT CHAPEL HILL 00033947392 FOR USE ONLY IN THE NORTH CAROLINA COLLECTION NORTH CAROLINA VOLUME 48 Number 1 FUS L. EDMISTEN TORNEY GENERAL ^8 N.C.A.G. No. 1 Pages 1 through 83 NORTH CAROLINA ATTORNEY GENERAL REPORTS Opinions of the Attorney General July 1, 1978 through December 31, 1978 MAILING ADDRESS: Post Office Box 629 Raleigh, North CaroHna 27602 I AlS7a ^ RUFUS L. EDMISTEN j^'Tihi Attorney General ^ames F. Bullock Andrew A. Vanore, Jr. Jenior Deputy Senior Deputy Attorney General Attorney General Robert Bruce White, Jr. Senior Deputy Attorney General fean A. Benoy William W. Melvin deputy Attorney General Deputy Attorney General Millard R. Rich, Jr. Deputy Attorney General harles H. Smith Howard A. Kramer \dministrative Deputy Deputy Attorney General Attorney General for Legal Affairs John A. Elmore, II Special Assistant to the Attorney General ^yron C. Banks Charles J. Murray >ster V. Chalmers, Jr. Dennis P. Myers Buie Costen WilHam F. O'Connell bavid S. Crump William A. Raney, Jr. Ann Reed Dunn James B. Richmond Herbert Lamson, Jr. Jacob L. Safron John R. B. Matthis Eugene A. Smith Edwin M. Speas, Jr. Special Deputy Attorneys General Archie W. Anders Rudolph A. Ashton, III Isaac I. Avery, III Rebecca R. Bevacqua David R. Blackwell George W. Boylan WiUiam F. Briley EHsha Harry Bunting, Jr. Ehzabeth C. Bunting Joan H. Byers James M. Carpenter H. Al Cole, Jr. John C. Daniel, Jr. Thomas H. Davis, Jr. Amos C. Dawson, III Roy A. Giles, Jr. Frank Graham Richard L. Griffin Donald W. Grimes Guy A. Hamlin Norma S. Harrell Claude W. Harris Ralf F. Haskell Charles M. Hensey Alan S. Hirsh Patricia B. HoduHk I. B. Hudson, Jr. Ben G. Irons, II Douglas A. Johnston Sandra M. King Leigh E. Koman Richard N. League George W. Lennon James E. Magner, Jr. Nonnie F. Midgette Thomas F. Moffitt Mary I. Murrill Robert W. Newson, III Daniel C. Oakley George J. Oliver WilHam B. Ray Robert R. Reilly Marilyn Y. Rich Alfred N. Salley Jo Ann Sanford James P. Smith Donald W. Stephens | James L. Stuart Jane R. Thompson James M. Wallace, Jr. Acie L. Ward Robert G. Webb W. Woodward Webb Thomas B. Wood , Assistant Attorneys General Benjamin G. Alford Sylvia X. Allen Jean Boyles Christopher P. Brewer Henry H. Burgwyn Robert E. Cansler Lucien Capone, III Francis W. Crawley Christopher S. Crosby Susan L. Hartzoge Robert L. Hillman Lemuel W. Hinton Grayson G. Kelley R. James Lore C. Jan Napowsa Mary E. Noonan John C. Prather Marvin Schiller Steven M. Shaber Tiara B. Smiley JuHa A. Talbutt T. Michael Todd Kaye R. Webb Sarah C. Young Associate Attorneys 5 July 1978 Subject : Requested by: Question: Conclusion: Motor Vehicles; Chauffeur's License Toni Foxwell Transportation Planning Section Department of Transportation Does North Carolina law require volunteer operators, operating their own vehicle of less than nine passenger capacity, transporting elderly citizens to nutrition sites, to hold a chauffeur's hcense if such owner/operator is reimbursed once for mileage at the rate of 15 cents per mile? No, reimbursement at the rate of 15 cents per mile would not be transporting persons or property for compensation. The generally accepted reimbursement rate is 15 cents per mile for a private passenger vehicle and, as such, is considered reimbursement for actual costs. Under the requirements for chauffeur's license, reimbursement for actual costs would not fall within the definition "... transportation of persons or property for compensation." In our opinion, such reimbursement would not be for compensation. Rufus Edmisten, Attorney General William W. Melvin Deputy Attorney General 5 July 1978 Subject: Mental Health; Area Mental Health Authorities; Licenses and Licensing; Requirement for Hcensing of Local Mental Health Facilities Requested by: R. J. Bickel Deputy Director for Administration Division of Mental Health and Mental Retardation Services Question: Under current statutes dealing with Area Mental Health Authorities are the following required to be licensed: (A) Satellite units of an Area Mental Health Authority? (B) Agencies with which the Area Mental Health Authority contracts for services statutorily required of the Area Mental Health Authority? Conclusion: The entities described in both (A) and (B) above are required to obtain hcenses. This Office has previously issued an opinion dealing with the Hcensing of various types of local mental health facilities. See 45 N.C.A.G. 51 (1975). Since the date of that prior opinion, however, the statutory basis for Area Mental Health Programs and Area Mental Health Authorities has been completely rewritten. The answers to the questions posed here are now found in Article 2F, Chapter 122 and G.S. 143B-147a(2)e. G.S. 122-35.51, effective July 1, 1977, provides as follows: "An area mental health facility operated under the provisions of Chapter 1 22 of the General Statutes shall obtain a license permitting such operation. Subject to standards governing the operation and hcensing of these facilities set by the Commission for Mental Health and Mental Retardation Services, the Department of Human Resources shall be responsible for issuing licenses." An "Area Mental Health Facility" is defined by G.S. 122-35.36(3) in the following language: "(3) Area Mental Health Facility. - A mental health facility, pubhc or private, estabhshed to serve the needs of a designated catchment area in mental health, mental retardation, or substance abuse." Significantly, G.S. 143B-147a(2)e authorizes and requires the Commission for Mental Health and Mental Retardation Services to estabUsh standards and adopt rules and regulations for the Ucensing of all area or community mental health facihties "of whatsoever nature" pursuant to Article 2F of Chapter 122. As a result of the above-described provisions, it is clearly the intent of the General Assembly that all units and service-providing agencies to the Area Mental Health Authorities be hcensed by the Department of Human Resources utilizing standards, rules and regulations promulgated by the Commission for Mental Health and Mental Retardation Services. Rufus L. Edmisten, Attorney General WiUiam F. O'Connell Special Deputy Attorney General 5 July 1978 Subject: Requested by: Question: Education; Superintendent; Duration of contract of employment of new superintendent where vacancy occurs in the office of superintendent. John W. Hardy, Attorney for the Guilford County Board of Education Where the superintendent resigns before the end of his contract period, or a vacancy occurs in the superintendency for whatever reason, may the Board of Education extend to the new superintendent a two or four year contract? -3- Conclusion: Yes. Where a vacancy occurs in the office of the superintendent, the vacancy may be filled on a temporary basis, or it may be filled for a specific two or four year period. The former superintendent of the Guilford County schools submitted his resignation effective June 30, 1978, with one year remaining on his contract. The question arises whether the new superintendent may be hired for a two or four year term, or is the Board restricted to offering the new superintendent a contract of only one year, which is the period remaining on the former superintendent's contract. G.S. 115-55 provides in pertinent part: "In case of vacancy by death, resignation or otherwise in the office of a county or city superintendent, such vacancy shall be filled by the county or city board of education in which such vacancy appears." G.S. 115-39 provides in pertinent part: "Such superintendent shall take office on the following July 1 and shall serve for a term of two or four years or until his successor is elected and quaUfied. The superintendent shall be elected for a term of either two or four years, which term shall be in the discretion of the county board of education." Construing G.S. 115-39 and 115-55, particularly those portions of each statute above quoted, it would appear that the superintendent of a county school administrative unit shall serve a term of two or four years, or until his successor is elected and qualified, and that in choosing a successor the board of education has the discretion in electing the successor for either two or four years. To interpret these statutes in such a way that would restrict a board of education from contracting with a successor to a resigning superintendent for any period of time greater than the length of time remaining on his unexpired contract, would create a difficult situation in employing such a successor. For example, in the event a superintendent died while in office leaving six months on his -4- contract, one can readily see that a qualified person would be very reluctant to enter into a contract for six months without any assurance that he could obtain a new contract for either two or four years. It is our opinion that the language contained in either G.S. 115-39 or 115-55 does not require such an interpretation and in fact does give a board of education sufficient discretion to fill a vacancy with a new contract term of either two or four years. The conclusion stated herein does not in any way affect or overturn an earlier opinion issued by this Office and reported in 40 N.C.A.G.R. 261, wherein it was concluded that a local board of education does not have the authority, with the superintendent's consent, to terminate the superintendent's current contract of employment prior to the specified termination date set out in the contract and to thereafter enter into a new contract of employment as superintendent with the same individual. The opinion rendered today deals only with a situation where a vacancy occurs in the office of superintendent and a new contract is entered into with an individual other than the previous superintendent. Rufus L. Edmisten, Attorney General Andrew A. Vanore, Jr., Senior Deputy Attorney General 7 July 1978 Subject: Counties; Cities; Collection of Taxes; Interlocal Cooperation; G.S. 160A-460 et seq; G.S. r60A-146. Requested by: Robert C. Cogswell, Jr. City Attorney City of Fayetteville Question: May a city and the county in which it is situated enter into an interlocal undertaking under which the city agrees to designate the county tax collector as city tax collector? -5- Conclusion: Yes. Article 20 of Chapter 1 60A of the North Carolina General Statutes, entitled Interlocal Cooperation, authorizes any unit of local government (defined in G.S. 160A-460 to include cities and counties) to enter into an agreement with any other such unit or units for the purpose of carrying on an undertaking. G.S. 160A-460 defines an undertaking as "the joint exercise by two or more units of local government, or the contractual exercise by one unit for one or more other units, or any administrative or governmental power, function, public enterprise, right, privilege, or immunity of local government." Since taxation is a governmental power and function, a contractual arrangement for the collection of taxes-including an agreement whereby one unit of local government designates another unit's tax collector as its own-would seem to be the very kind of interlocal undertaking contemplated by Article 20. G.S. 160A-146, Council to organize city government, in no way defeats the conclusion that such an agreement is a proper one. G.S. 160A-146 relates only to the powers of the city council with respect to the allocation of duties within municipal government. It has no application to the matter of interlocal cooperation, which is governed exclusively by G.S. 160A-460 et seq. Moreover, even if G.S. 160A-146 were apphcable, it would not be violated by the agreement in question. The office of city tax collector is not abolished by the agreement, nor are the duties of the city tax collector assigned elsewhere. The position continues to exist; it is simply occupied by an individual who happens also to serve as county tax collector. Rufus L. Edmisten, Attorney General Marilyn R. Rich Associate Attorney 24 July 1978 Subject: Requested by: Question: Conclusion: Insurance; Tax on group insurance premiums; group insurance procured by North Carolina Farm Bureau agents through a North CaroHna Farm Bureau insurance agency from an IlUnois agency and holder of a group policy issued by a California insurance company. John R. Ingram Commissioner of Insurance Are premiums collected from various insureds in state by a North Carolina insurance agency and remitted out of state for group insurance issued by an insurance company that is not Ucensed in North CaroUna subject to a 5% premium tax imposed by G.S, 58-53.3? Yes. Sequoia Insurance Company (hereafter Sequoia), a California corporation that is not Hcensed to sell insurance in North Carolina, has issued an "Errors and Omissions" master group policy (No. EL 20-10-11) to American Agricultural Insurance Agency, Inc. (hereafter AAIAI. AAIAI is an Ilhnois corporation and is not licensed in North Carolina. In turn, AAIAI issues certificates of "" insurance to, among others, 100 and more North Carolina Farm Bureau agencies. Premiums for such insurance are paid annually by each county agency to the North Carolina Farm Bureau Insurance Agency, Inc. (hereafter N. C. Agency). When all premiums for each covered agency or agency have been collected, the N. C. Agency forwards its single check for the premiums to AAIAI. AAIAI responds by issuing renewal certificates to the covered agents or agencies. No payment is made by anyone to the State of North Carolina as a tax on the premiums. G.S. 58-53.3 requires that: -7- "When any person procures insurance on any risk located in this state with an insurance company not licensed to do business in this state, it shall be the duty of such person to deduct from the premium charged on the policy or policies for such insurance five per centum (5%) of the premium and remit same to the Commissioner of Insurance of the state...." There are several statutory requirements for tax liability: (1) The tax is imposed on a person. G.S. 58-2(7) defines a person as "an individual, aggregation of individuals, corporation, company, association and partnership." The N. C. Agency comes within the statutory definition of person. (2) There must be a procurement. The N. C. Agency collects the premium money, accounts for it, administers to the program statewide, and forwards the gross premium to AAIAI for the commodity. A 5% brokerage commission is withheld from gross premiums by the N. C. Agency for its services. Upon receipt of the premium from the N. C. Agency, AAIAI issues the several certificates of insurance to the county agencies. These actions of the N. C. Agency clearly constitute a procurement. (3) Insurance must be procured. There is no controversy but that the certificates issued by AAIAI under the Sequoia master policy constitute insurance. (4) The insurance must cover a risk located in this state. Here the risk is to protect against liabihty from errors and omissions of several hundred agents in the performance of their jobs at 100 and more locations in the state. It is quite Ukely that the potential risk is exclusively within the geographic hmits of North Carolina. Consequently the risk is located within North Carolina. (5) The insurance company must not be licensed in North Carolina. Again there is no controversy. Sequoia is an insurance company and is not licensed to do business in North Carolina. • , Each of the statutory requirements is met. Under the statute, the N. C. Agency has a duty to deduct 5% of the gross premiums and remit same to the Commissioner of Insurance. Failure of the N. C. Agency to deduct and remit that percentage would constitute a violation of G.S. 58-53.3. Counsel for Sequoia cites several cases to the effect that levy of the tax would constitute a deprivation of federal constitutional -8- rights. State Bd. of Insurance v. Todd Shipyards Corp., 82 S.Ct. 1380 (1962); Connecticut General Life Ins. Co. v. Johnson, 58 S.Ct. 436 (1938); St. Louis Cotton Compress Co. v. State of Arkansas, 43 S.Ct. 125 (1922); Alleger v. State of Louisiana, 17 S.Ct. 427 (1897). Those cases are distinguishable because no tax is sought to be levied against Sequoia. Moreover, the insurance is against errors and omissions. Claims would be made by North CaroHna residents on North CaroUna transactions. Claims would have to be adjusted and settled in North Carolina. Additionally, the 100 or more N. C. County Farm Bureaus, (the insureds) deal with the N. C. Agency to obtain the insurance and make payment of annual premiums within the state to that same corporation. Thus, a substantial portion of the recurring negotiation for the insurance occurs in North Carolina. The totality of those transactions between the local agencies and the N. C. Agency are intrastate in nature. These activities are not slight and casual as in Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.S. 143, 78 LEd. 1178 (1934) but are substantial as in Clay v. Sun Ins. Office, 377 U.S. 179, 12 LEd. 2d 229 (1964). These facts are sufficient to provide North Carolina with a substantial nexus for the tax purposes. See Texas v. New Jersey, 379 U.S. 674, 13 LEd. 2d 596, 85 S.Ct. 626 (1965). Rufus L. Edmisten, Attorney General Richard L. Griffin Assistant Attorney General 31 July 1978 Subject: Mental Health; Area Mental Health Authorities; Patients' Rights Entitlement Where Services Are On A Contractual Basis Requested by: R. J. Bickel Deputy Director for Administration Division of Mental Health and Mental Retardation Services Question: Do the provisions of G.S. 122-55.1 through G.S. 122-55.14 apply to services provided for an Area Mental Health Authority (by a general hospital, etc.) on a contractual basis? Conclusion: Yes. The statutes referred to in the question posed are part of the "Patients' Rights Bill" enacted by the General Assembly to afford statutory protection for "basic human rights" of mental patients in our treatment facilities. See G.S. 122-55.1 and G.S. 122-55.13. G.S. 122-36(g) contains the following general definition of the term " treatment facility " : "(g) The words 'treatment facility' shall mean any hospital or institution operated by the State of North Carolina and designated for the admission of any person in need of care and treatment due to mental illness or mental retardation, any center or facility operated by the State of North Carolina for the care, treatment or rehabihtation of inebriates, and any community mental health clinic or center administered by the State of North Carolina." A similar definition of the term "treatment facility" as utilized in the voluntary admission provisions is set forth in G.S. 122-56.2. G.S. 122-35.49 permits an Area Mental Health Authority to contract for services statutorily required of it, subject to the following conditions: "The area mental health authority may contract with other pubhc or private agencies, institutions, or resources for the provision of services, but it shall be the responsibility of the area mental health authority to insure that such contracted services meet the rules and regulations as set by the Commission for Mental Health and Mental Retardation Services. Terms of the contract shall require the area mental health authority to monitor the contract to assure that minimum standards are met." -10- From the above, it is clear that patients served by an Area Mental Health Authority must be guaranteed the same rights whether they are served "in-house" or through a contract with a general hospital or other such facility. This is clearly the intent of the statutes. Further, the failure to guarantee these same rights regardless of where services are rendered would probably raise a serious question under the Equal Protection Clauses of the North Carolina Constitution and the Constitution of the United States. Rufus L. Edmisten, Attorney General William F. O'Connell Special Deputy Attorney General 2 August 1978 Subject : Public Offices, Constitutional Law; Double Office Holding; Counties, Municipalities; PoUce Officer Elected as County Commissioner, Article VI, Section 9, North Carolina Constitution; G.S. 160A-284; G.S. 128-1.1. Requested by: Question: Paul S. Messick, Jr. Town Attorney May a town policeman hold concurrently an elective office? Conclusion: No. Article VI, Section 9 of the North Carolina Constitution provides that no person shall hold concurrently any two or more appointive offices or any combination of elective and appointive offices except as the General Assembly shall provide by general law. Thus without specific authority from the General Assembly, no person could hold an elective and appointive office concurrently. II- On June 30, 1971, the General Assembly enacted Chapter 697, Session Laws of 1971 which contained G.S. 128-1.1, and which authorizes "any person who holds an elective office in State or local government to hold concurrently one other appointive office ... in State or local government ...". Also, on June 30, 1971, the General Assembly enacted Chapter 698, Session Laws of 1971, which contained G.S. 160A-284, and which authorizes a policeman, a chief of police and auxiliary policemen to hold concurrently any other appointive office pursuant to Article VI, Section 9 of the Constitution. In 1975, G.S. 160A-284 was amended to permit an auxihary policeman to hold concurrently any elective office. Statutes dealing with the same subject matter must be construed in pari materia, and harmonized, if possible, to give effect to each. Where one statute deals with the subject matter in detail with reference to a particular situation and another statute deals with the same subject matter in general terms, the particular statute controls unless it appears that the General Assembly intended to make the general act controlling. 12 Strong's N.C. Index 3d, Statutes, Sec. 5. Applying the rules of statutory construction, and the rule of ascertaining the legislative intent, it is our opinion that G.S. 1 60A-284 is the controlling statute and that a policeman other than an auxiliary policeman, is not authorized to hold concurrently an elective office. Thus should the person in question be elected to the office of County Commissioner, he would, upon acceptance of said office, be disqualified to serve as a municipal police officer. Rufus L. Edmisten, Attorney General James F. Bullock Senior Deputy Attorney General •12- 2 August 1978 Subject: Requested by: Question: Conclusion: Municipalities; Powell Bill Fund; Village of Pinehurst Joseph R. Monroe, Jr. Attorney for Village of Pinehurst Is Pinehurst, Inc., a private real estate and development corporation which renders fire and police protection and maintains streets for the Village of Pinehurst, eligible to receive Powell Bill Funds (gasoline tax funds) under Section 5 of the provisions of Chapter 993 of the 1949 Session Laws? No. The Village of Pinehurst is constituted a municipal corporation only for such purposes as are listed in Chapter 993 of the 1949 Session Laws and it cannot comply with the conditions of eligibility to receive Powell Bill Funds as it is not a municipal corporation for those purposes. The gasoline tax funds appropriated to municipalities for use in the construction and maintenance of municipal streets are referred to as Powell Bill Funds. G.S. 136-41.1. The question is presented as to the right of Pinehurst, Inc. to receive Powell Bill Funds under the provisions of Section 5 of Chapter 993 of the 1949 Session Laws. Section 1 of the Act provides that "For all purposes of this Act, but only for such purposes'' the- area described constitutes "the municipal corporation to be known and hereafter referred to as Pinehurst " . Section 5 of the Act provides that "the municipality of Pinehurst as herein defined shall be entitled to all such refunds and moneys as are allowed or conferred upon towns and cities of the State" and "shall be entitled likewise to all such gasoline taxes on account of roads . . , that other cities and towns may be entitled to and to the same extent as if the said Pinehurst was a regularly incorporated town or city." A private corporation, Pinehurst, Inc., 13- developed the Village of Pinehurst and performs services such as the maintenance of roads and sidewalks, fire protection and police protection for some of its residents. The Act provides that inasmuch as "Pinehurst, Incorporated, . . . maintains and operates at its own expense all public streets and sidewalks in Pinehurst and furnishes at its own expense all the pubHc facilities and utilities enjoyed by the public within said territory of Pinehurst, all such refunds, moneys or property as would be payable or belong to Pinehurst as a regular municipahty under the provisions of this Act shall be paid and delivered to Pinehurst, Inc. to reimburse it for such expenditures in behalf of Pinehurst in its capacity as a municipal corporation." G.S. 136-41.1 provides for the distribution of "Powell Bill Funds" "among the several eligible municipalities of the State." G.S. 136-41.2 contains the provisions for eligibility for receiving the funds. It provides that (a) no municipality shall be eligible to receive funds under G.S. 136-41.1 unless it has conducted the most recent election required by its Charter or general law, whichever is appHcable, for the purpose of electing the municipal officials. Subsection (b) provides that no municipality shall be eligible to receive funds under G.S. 136-41.1 unless it is levied an ad valorem tax for the current fiscal year of at least five-cents on the $100 valuation upon all taxable property within the corporate limits, and unless it has actually collected at least 50% of the total ad valorem taxes levied for the preceding fiscal year. Subsection (c) provides that no municipality shall be ehgible to receive funds under 136-41.1 unless it has formally adopted a budget ordinance and appropriated funds for at least two municipal services. Chapter 993 of the 1949 Session Laws constitutes the Village of Pinehurst as a municipal corporation only for the purposes Hsted in that Act. The purposes listed do not include any of the acts Hsted which are conditions for eligibility for receipt of Powell Bill Funds. It is not a municipal corporation for the purpose of (a) electing municipal officials; (b) the levying of an ad valorem tax; nor (c) the adoption of a budget ordinance. Therefore, this Office is of the opinion that Pinehurst, Inc. is not entitled to receive distribution of Powell Bill Funds. •14- Rufus L. Edmisten, Attorney General Eugene A. Smith Special Deputy Attorney General 8 August 1978 Subject: Requested by: Question: Conclusion: Mental Health; Area Mental Health Authority; Involuntary Commitment; Temporary Custody of Respondent by Out-Patient Facility Pending Commitment Hearing R. J. Bickel Assistant Administrator for Administration Division of Mental Health and Mental Retardation Services Can a mental health facility without an in-patient capabihty legally accept a patient for temporary custody, observation and treatment prior to his involuntary commitment hearing in District Court as required by G.S. 122-58.7? Yes, if that facihty can meet the needs for control, safety, care and treatment of the individual patient involved. G.S. 122-58.7 provides for a hearing to determine if a respondent should be involuntarily commited within ten days of the date that he is taken into custody. Initially, when an individual has been taken into custody, the respondent is taken before an evaluating physician who determines if he meets the standards for involuntary commitment. If the evaluating physician determines that the respondent does meet the standards for involuntary commitment, then the law enforcement officer is required to take the respondent to ". . .a community mental health facility or pubhc or private facility designated or licensed by the Department of Human Resources for temporary custody, observation, and treatment of 15- mentally ill or inebriate persons pending a District Court hearing." (G.S. 122-58.4(c)) Upon arrival at that facility, the respondent must then be examined by a second qualified physician for a determination of whether he meets the standards for involuntary commitment. If this physician finds that the respondent does meet the standards, "... he shall hold the respondent at the facility pending the District Court hearing." (G.S. 122-58.6(a)) The situation described in the question posed is quite different from that wherein either of the two physicians decides that the respondent does not meet the standards for involuntary commitment~i.e., in those situations the first physician may release the individual and the proceedings will terminate (G.S. 122-5 8.4(c)), and the second physician may release the respondent without any further treatment but with the proviso that he appear for his hearing (G.S. 122-58.6(a)). From the description of the facility under discussion, it is obvious ; that it is not capable of accepting a patient in a twenty-four hour a day in-patient status. Thus, the answer to the question really turns on the interpretation of the words "custody, observation and treatment" (G.S. 122-58.4) and "hold" (G.S. 122-58.6). In so. interpreting this language, the following expressed intention of the General Assembly must be considered: ". . . It is further the policy of the State that each treatment facihty shall insure to each patient the right to live as normally as possible while receiving care and treatment." (G.S. 122-55.1) Further, the General Assembly has specifically empowered the trial 1 judge at the time of the commitment hearing to commit the; respondent to either in-patient or out-patient treatment. (G.S. 122-58. 8(b)). Additionally, in interpreting the statutory provisions, it is very important to recognize that it is presently generally accepted that an individaul who is involuntarily detained or committed as a mental patient has a constitutional entitlement to treatment in the least restrictive setting available, consistent with legitimate control, safety, care and treatment objectives. -16- The term "custody" would seem to have different meanings as (applicable to different settings-e.g., a quite different situation is , {contemplated when referring to the imprisonment of a convicted . 'prisoner from that involved in the custody of children. As affecting the detention involved of a mental patient prior to his hearing, the fulfillment of the requirement for custody would seem to be met if conditions are imposed which significantly confine or restrain the freedom or liberty of the individual if those measures are appropriate in that particular situation. CompaiQ Jones v. Cunningham, 371 U.S. 236 (1963); Calley v. Callaway, C.A.Ga., 519 Fed. 2d 184 (1975). G.S. 122-58.6 (c) authorizes the quahfied physician attending the respondent to administer reasonable and appropriate medication and treatment that is consistent with accepted medical standards. It would seem that, in a situation where out-patient treatment, probably including medications, would suffice to meet the needs for control, safety, care and treatment under accepted medical standards, then the receipt of a respondent at a facihty capable of rendering these services would be permissible. As with the situations wherein the District Court judge at the : commitment hearing directs out-patient treatment rather than ' in-patient treatment, it is perhaps conjectural exactly what ij percentage of respondents who meet the standard of "being J imminently dangerous" can be satisfactorily handled as out-patients at such early stages of treatment. However, the determination of !!l appropriateness of this mode of custody must be made on an ad ^ hoc basis. It might also be noted that the delineation of facilities k capable of being utilized as pre-hearing treatment facilities and the degree of services they are capable of. rendering is properly a matter included in the local plans required by G.S. 122-58.16. Rufus L. Edmisten, Attorney General Wilham F. O'Connell Special Deputy Attorney General 10 August 1978 Subject: State Departments, Institutions and Agencies; Department of Transportation; -17- k Municipalities; Streets and Highways; Weight Limits; Special Permits Requested by: Mr. F. Douglas Canty Assistant City Attorney for Charlotte Question: 1. Does the City of Charlotte have the authority to issue special permits authorizing the operation, over city-maintained streets, of passenger buses of a weight exceeding the maximum specified in G.S. 20-118(8)? 2. Does the North Carolina Department of Transportation have the authority to issue special permits authorizing the operation, over both state-maintained and city-maintained streets, of passenger buses of a weight exceeding the maximum specified in G.S. 20-118(8)? Conclusion: 1. No. Although the municipality has authority under the provisions of G.S. 160A-296 and 300 to restrict and regulate traffic on municipal streets, including authority for the issuance of special permits for the purpose of the ( , licensing of overweight passenger buses under the provisions of G.S. 2()-118(8). 2. Yes. The Department of Transportation has the authority to issue special permits for overweight passenger buses in order that the applicant may obtain a license to operate the passenger bus on both the state-maintained and ^ city-maintained streets pursuant to the provisions of G.S. 20-118(8). The City of Charlotte has on order thirty-four new passenger buses for use by its public transit system, which, when fully loaded, will -18- n exceed the statutory weight limits estabhshed by G.S. 20-118(8), G.S. 20-115 provides that the maximum size and weight of vehicles specified in the article shall be lawful throughout the State and local authorities shall have no power or authority to alter said limitations except as express authority shall be granted in this Article. The foregoing restriction raises the question of the authority of a municipaUty to grant special permits for the operation of overweight vehicles on municipal streets as G.S. 20-119 provides that municipalities may grant permits in writing authorizing the applicant to move a vehicle over the streets of the city or town, the size or width exceeding the maximum expressed in the article. We find no express authority in the Article for municipalities to alter the weight limitations nor to issue special permits for the operation of overweight vehicles on the streets. The municipahty has specific statutory authority to adopt such ordinances for the regulation and use of its streets as it deems best for the pubhc welfare of its citizens and to provide for the regulation and diversion of vehicular traffic upon its streets. Genes, Inc. v. Charlotte, 259 N.C. 118, 120 (1963). G.S. 160A-296 provides that a city shall have general authority and control over all public streets p which includes but is not Umited to (1) the duty to keep pubHc streets in proper repair; (5) the power to regulate the use of public |s streets. G.S. 160A-300 provides that a city may by ordinance prohibit, regulate, divert, control and limit pedestrian or vehicular traffic upon the public streets, sidewalks, alleys and bridges of the city. Unless otherwise restricted by State law, the municipality has the authority to regulate the weight of vehicles using its streets and to issue permits for the operation of overweight vehicles on < municipal streets under the authority of those statutes. 75 ALR 2d 396 Anno. Highways - Weight Limitations. The foregoing cited statutes authorizing municipalities to regulate streets and traffic have been in effect since 1919. Chapter 136, 1919 Session Laws. These statutes however were rewritten and reenacted in 1971. Chapter 968, 1971 Session Laws. G.S. 20-115 and G.S. 20-1 19 were originally passed 1927. At that time the language in the first sentence of G.S. 20-119 authorized local governments and the State Highway Commission to issue special permits for oversize or overweight vehicles. The 1927 Statute provided in part as follows: -19- "The State Highway Commision and local authorities in their respective jurisdiction may in their discretion, upon appUcation in writing and good cause being shown therefore, issue a special permit in writing authorizing the applicant to operate or move a vehicle of its size or weight exceeding the maximum specified in this Act upon any highway under the jurisdiction for the maintenance of which the body granting the permit is responsible." Chapter 148, Section 38, 1927 Session Laws. However, after the county road system was taken over by the State i Highway Commission, the 1937 Legislature rewrote the motor, vehicle statutes. G.S. 20-1 19 was amended by deleting the foregoing underlined portion which authorized local governments to issue overweight permits. The purpose was apparently an attempt to reflect the change in the jurisdiction over county roads. The proviso as now appears was added, which provides that municipalities may issue special permits to move a vehicle over the streets of thei municipalities may issue special permits to move a vehicle over thej streets of the municipality, the size or width exceeding the maximumj expressed in the Act. Chapter 407, Section 83, 1937 Session Laws.; This left G.S. 20-115 somewhat ambiguous. The use of the termj "size or width" in the proviso, rather than "size or weight" mays also have been an oversight. An unsuccessful attempt was made in, 1957 to clarify G.S. 20-119 by the passage of Chapter 1129 of the 1959 Session Laws. That session law is entitled "An act to clarify the issuance by the State Highway Commission of special permits for vehicles of excessive size or weight." It was still ambiguous after! the amendment. A further review of the legislative history for the! purpose of this opinion would serve no purpose except to show, that G.S. 20-1 19 was ambiguous when rewritten in 1937 and is still j ambiguous after an attempted clarification in 1959. 1 MunicipaUties have the duty and authority to maintain the Municipal j Street System and the Department of Transportation has the duty and authority to maintain the State Highway System. G.S. 136-66.1. Both are given authority to regulate traffic and the use of public^ streets. The Department of Transportation is given express authority; to (1) classify county roads as light traffic roads and to post those j roads, G.S. 20-1 18(5); (2) to establish truck routes and to prohibit -20- trucks from using certain routes, G.S. 20-116(h), G.S. 20-141(i); (3) to issue special permits for overweight vehicles, G.S. 20-119; (4) and to restrict load limits on bridges on the State Highway System, G.S. 136-72, Express authority is not given to municipaUties to Hmit the load Hmits on bridges, to post and restrict roads, to establish truck routes over municipal streets, nor to issue special permits for overweight vehicles. A review of the legislative history of the municipal laws and G.S. 20-1 19 and G.S. 20-1 16 does not indicate an intent to exclude municipal regulations in these areas. This Office has in the past advised that State law does not prohibit municipalities (1) from posting weight hmits on bridges on the 'Municipal Street System; (2) from restricting trucks on certain streets to prevent damage or destruction by vehicles carrying the 'legal load limit; (3) and from establishing truck routes, so long as ithe regulations are reasonable. This Office is of the opinion that municipalities have authority to issue special permits for the movement of overweight vehicles over municipal streets, and that the issuance of such permits is not an alteration of the weight hmits in contravention of G.S. 20-115. However, the municipality has no ^ authority to issue such special permits for operation of overweight [passenger buses for the reasons hereinafter discussed. (\ The Ucensing of "passenger buses" for operation on the highways J* of the State is handled differently from the Ucensing of other J vehicles. A certification as to the weight of a passenger bus is ^ required before it can be Hcensed to operate on the highways. Prior to the 1978 Amendment by the General Assembly, G.S. 20-118(8) prohibited the issuance of a special permit for the operation of a passenger bus exceeding the statutory weight hmits. The 1977 < General Assembly on June 16, 1978, amended G.S. 20-118(8) by repealing the prohibition against the issuance of overweight permits for passenger buses, and by providing that "Unless the apphcant holds a special permit from the Department of Transportation, no license shall be issued to any passenger bus", for operation on the highways, which exceeds the weight limits specified therein. Chapter 1178, 1977 Session Laws. The license issued by the Commissioner of Motor Vehicles authorizes the operation of the "passenger bus" upon the highways of the State, including those maintained by the municipahty. A permit from the Department of Transportation is a prerequisite for the Ucensing of "passenger buses", which will exceed the weight Umits in G.S. 20-118(8). Therefore, this Office -21- is of the opinion that the State has preempted the issuance of specia; permits for overweight passenger buses for the purpose of Hcensinj under the provisions of G.S. 20-118(8). Rufus L. Edmisten, Attorney General Eugene A. Smith Special Deputy Attorney General 14 August 1978 Subject: Requested by: Question: Employment Agency; G.S. 95-37; Definition includes a For Profit Business.; Mr. John H. Boddie, Director Private Employment Agency Division N.C. Department of Labor Does the definition of employment agencyi in G.S. 95-37 include a for profit business that makes a charge on persons seeking! employment for the service of providing! them with information about employment! opportunities, when: (1) the business advertises specific positions of employment in the classified section of one or more newspapers of general circulation but tells job seekers the name of the employer offering an advertised position only after they pay a "subscription" charge; (2) the business publishes no printed on written list of available jobs; (3) the business disseminates no materiaJ| or information other than informationi about employment opportunities; and | -22- n (4) persons who pay for the service are told about employment opportunities by means of telephone conversations with employees of the business and by no other means? Conclusion: Yes. Chapter 95, Article 5 of the General Statutes of North Carolina authorizes and empowers the North Carolina Department of Labor to Hcense and regulate individuals and businesses engaged in the operation of an employment agency. G.S. 95-37 is hereinafter set forth verbatim: "§95-37. Employment agency defined.-Employment agency within the meaning of this Article shall include any business operated by any person, firm or corporation for profit and engaged in procuring employment for any person, firm or corporation in the State of North Carolina and making a charge on the employee or employer for the service." (> To be classified as an employment agency, a business must be: j^ 1. Operated for profit; 2. Engaged in procuring employment "for any person, firm or corporation in the State of North i^ Carolina;" and < 3. Charging the prospective employee or employer for the service. irhe business described above clearly falls within the parameters of [;. this statutory definition and is an employment agency within the s meanmg of G.S. 95-37. Rufus L. Edmisten, Attorney General George W. Lennon Associate Attorney General -23- 23 August 1978 Subject: Requested by: Question: Conclusion: Social Services; Welfare Fraud; Client Interviews; Warnings as to Constitutional Rights Mr. Robert H. Ward, Director Division of Social Services Must a social worker, before questioning a client in a suspected welfare fraud case, inform the cHent of his constitutional rights? No, so long as nothing about the questioning might reasonably cause the client to believe he was in custody or^ otherwise significantly deprived of his freedom. The Fourteenth Amendment to the U.S. Constitution prohibits the use of a confession which is coerced, either by physical or mental means. State v. Chamberlain, 263 N.C. 406 (1965). "The test of admissibiUty of a confession is whether the statements made by the \ defendant were in fact voluntarily and understandingly made. " State V. Jones, 278 N.C. 88 at 92 (1971). The state courts are bound by the United States Supreme Court's interpretation of thei Fourteenth Amendment in Miranda v. Arizona, 384 U.S. 436 (1966), ' which requires that to insure voluntariness a suspect be warned, priori to interrogation, of his Fifth and Sixth Amendment rights. The^^ situation that triggers this requirement is a "custodial interrogation". \ Id. at 444. Prior to Miranda, the Court had seemed to hold that I the decisive stage was reached when the investigation "had begun j to focus on a particular suspect." Escobedo v. Illinois, 378 U.S. | 478 at 490 (1964). But Miranda expHcitly Hmited the requirement! to "custodial interrogations", and the warnings have since been I required only in such situations. State v. Dollar, 292 N.C. 344^' (1977); State v. Meadows, 272 N.C. 327 (1968). Our question now becomes: Is an interview by a social worker concerning suspected fraud a "custodial interrogation"? \n Miranda -24- a custodial interrogation is defined as "questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way". Miranda v. Arizona, 384 U.S. at 444. A client brought to the Department of Social Services for a normal interview of this type has not been arrested, restrained, or deprived of his freedom. He is free to leave, is not being questioned in a coercive atmosphere, and is not at a police station. There are no factors compelling involuntary testimony. In accordance with this argument, the New Jersey Supreme Court has held that social workers need not give Miranda warnings during investigations of suspected fraud. State v. Graves, 60 N.J. 441 (1972). The Colorado Supreme Court arrived at the same conclusion, though it was not essential to the holding in that case. People v. Parada, 533 P.2d 1121 (Colo., 1975). Similarly, in a decision by the United States Supreme Court, an Internal Revenue Service special agent investigating potential criminal tax violations was not required to inform the suspect of his rights. Beckwith v. United States, 425 U.S. 341 (1976). The Supreme Court distinguished H between the "focus of the investigation" test and the "custodial ^ interrogation" test, and emphatically apphed the latter. Id. at 345. ^ iln so doing, the Supreme Court affirmed decisions in nine of the 1^ Circuits including the Fourfli Circuit. See, United States v. Browney, jj 421 F.2d 48 (4th Cir., 1970). !J I It should be remembered that the Miranda, warnings are merely a procedural device to ensure the voluntariness of a defendant's 'statement. Though they are not required in these interviews, any ^ statement, to be admitted, must have been given voluntarily. It "must not be extracted by any sort of threats or violence, nor obtained by any direct or implied promises, however sHght, nor by the exertion of any improper influence." Brady v. United States, 397 U.S. 742 at 753 (1970). Social workers should avoid such influences. See, People v. Paranda, supra. Rufus L. Edmisten, Attorney General Steven Mansfield Shaber Associate Attorney -25- 29 August 1978 Subject: Requested by: Question: Health; Certificate of Need; Coverage of projects commenced before January 1, 1979; G.S. 131-170 et seq. Mr. Charles W. Houseworth, Jr., Health Planner, State Health Planning and Development Agency Department of Human Resources If work has commenced, but not completed by January 1, 1979, on a "new institutional health service" proposal and the proposal has not received approval under Section 1122 of the Social Security Act, 42 U.S.C.A. 1320a-l, is the person; required to obtain a Certificate of Need pursuant to Chapter 1182, 1977 Session Laws (Second Session, 1978), (to be codified at G.S. 131-170 et seq.) before proceeding further with work on the proposal? No, if prior to ratification of the Act he has proceeded with development of the new institutional health service as explained below. The North Carohna Health Planning and Resource Development Act ( of 1978, ratified by the General Assembly on June 16, 1978, addsj a new Article 18 to Chapter 131 of the General Statutes which! requires that before a person undertakes, develops, or offers a new.; institutional health service he must obtain a Certificate of Need from j the Department of Human Resources. Chapter 1182, 1977 Session Laws (Second Session, 1978). Section 4 of the Act provides that it will be effective January 1, 1979. In addition. Section 4 provides two exemptions from coverage: 1) those proposals which received approval for capital reimbursement under Section 1 1 22 of the Social Security Act, 42 U.S.C.A., 1320a-l, prior to January 1, 1979, as long as construction commences before January 1, 1980; and 2) -26- Conelusion: n those proposals for which application is made between July 1 , 1 978 and January 1 , 1 979 under the Section 1 1 22 program, if the application is approved and if construction commences before January 1, 1980. The question at hand is whether a Certificate of Need is required for a proposal which does not qualify under the two exemptions and which is not completed by January 1, 1979. A Certificate of Need "affords the person so designated as the legal proponent of the proposed project the opportunity to proceed with the development of such project." Section 131-171(3) of Section 2, Chapter 1182, 1977 Session Laws (Second Session 1978). The Act reveals that a Certificate of Need will be granted only to those proposals which the Department of Human Resources finds to be needed and in conformity with other standards and criteria as set forth in the Act and developed by the Department. Immediately prior to ratification a new institutional health service would be submitted to the Department of Human Resources for a finding of need only if the proponent desired reimbursement for capital expenditures under Titles V, XVIH, and XIX of the Social Security Act, 42 U.S.C.A. 1320A-1. The passage of the Act by the General Assembly imposes an entirely new Umitation on the opportunity to proceed with the development of the new institutional health 0" service. {j- If the Act is interpreted to require a Certificate of Need when prior J to the ratification of the Act the proponent had already proceeded U with development of the new institutional health service and "^ incurred substantial expense the Act would invade personal and J property rights protected under the Constitution of this State. See, < Whaley v. Lenoir County, 5 N.C.App. 319 (1969). On the other hand, if the Act is interpreted so that it does not apply where a proponent, prior to ratification, had already proceeded with development of the new institutional health service such rights will be protected. The basic rules of statutory construction require the latter, if reasonable, as a statute will not be construed so as to raise questions as to its constitutionality if a different construction which will avoid such question of constitutionality is reasonable. State Milk Commission v. National Food Stores, Inc. 270 N.C. 323 (1967); State V. Barber, 180 N.C. 711 (1920). The definition of Certificate of Need reasonably supports a construction of the Statute which makes it inapphcable to someone who prior to ratification has -27- already proceeded with development of the new institutional health service. As previously noted, the Certificate of Need allows the proponent to proceed with development. If the proponent had done so prior to ratification the Certificate of Need, by definition, would be unnecessary. Such a construction is also consistent with the provision that the certificate shall be valid only for the time specified by the Department of Human Resources, not to exceed 18 months, and that within such time the proponent must fulfill the specific performance requirements set forth in the Act for incurring a financial obligation. Section 131-174 (a) and (b) of Section 2, Chapter 1182, 1977 Session Laws (Second Session, 1978). In order to be exempt from the Act, the proponent must have proceeded with development prior to ratification. Subsequent to June 16, 1978 and prior to January 1, 1979, the proponent may be protected only if he receives approval under Section 1122 of the Social Security Act, 42 U.S.C.A. 1320a-l, in accordance with Section 4 of the Act. A person proceeds with development when he "undertake(s) those activities which will result in the offering of institutional health service not provided in the previous 12 month reporting period or the incurring of a financial obHgation in relation to the offering of such a service." Section 131-171 (8) of Section 2, Chapter 1 182, 1977 Session Laws (Second Session, 1978). Whether or not a person has undertaken such activities is a question of fact to be settled on a case-by-case method. It should be noted that this opinion does not address the application of the Act to those who, subsequent to January 1, 1979, proceed with development of a new institutional health service without a Certificate of Need. Rufus L. Edmisten, Attorney General Robert L. Hillman Associate Attorney General -28- 5 September 1978 Subject: Requested by: Questions: Conclusions: Education; County Board of Education; Condition Subsequent; Undue Restraint Upon Right of Alienation Lucas, Rand, Rose, Meyer, Jones and Orcutt Attorneys for the Wilson County Board of Education (1) Whether the language contained in a deed to the Wilson County Board of Education (as it appears below), restricting the use of land for school purposes and giving to the grantor, his heirs or assigns the right to repurchase at a set price if said condition is breached, constitutes a condition subsequent? (2) Whether said language, by attempting to vest a right to repurchase the subject property in the grantor, his heirs or assigns at a set price if the land is no longer used for school purposes, constitutes an undue restraint upon the right of alienation? (3) Whether the heirs or assigns of the grantor may assert a valid contract to repurchase or may the School Board, if it chooses to dispose of the property, follow the pubhc auction procedures of N.C.G.S. 115-126? (1) No. (2) Yes. (3) The School Board may follow the public auction procedures of n 29- N.C.G.S. 115-126 if it should choose to dispose of the property. The following facts have been provided: On 20 April, 1922, "H" and his wife, "W", did convey by warranty deed approximately five acres of land to Wilson County Board of Education. The consideration recited in the deed was $750. The following language appears in the deed after the metes and bounds description: "It is agreed by the County Board of Education that if this site is ever abandoned for school purposes that the site shall be offered for sale first to (the grantor) or his heirs or assigns at the purchase price herein named; then in case said (grantor) or his heirs or assigns do not care to purchase this school site at the price above named, then the County Board of Education may sell the same to any other person or persons at such price as they may consider reasonable and just." As to Conclusion (1), the North CaroHna courts have held that despite the other language used in an instrument, a condition subsequent is not created unless the grantor expressly reserves the right to re-enter, or provides for a forfeiture or for a reversion, or that the instrument shall be null and void. First Presbyterian Church V. Sinclair Refining Company, 200 NC 469 (1931); Lassiter v. Jones, 215 NC 298 (1939). The clause in question here fails to reserve any of these rights in the grantor, his heirs or assigns. It instead attempts to reserve an option to repurchase the land upon the : discontinued use of the land for school purposes and at the price of $750. Thus, it would seem that technically such a clause falls i short of creating a fee simple or condition subsequent. As is pointed out in Webster, Real Estate Law in North Carolina, §345, p. 434 (1971) "(v)ery clear language of condition, indicating that title is; subject to revert upon the occurence of a specified event, must be ; used. While express language of reverter is not required, anything less may cause the court to construe the language to create simply a covenant, charge or trust, or to be mere surplusage". As to Conclusion (2), the general rule seems to be that there is a policy in favor of the free alienation of land. As a result, any -30- provision in a conveyance which unduly restricts the right of transfer of the title in any way has been held to be void. Webster, Real Estate Law in North Carolina, §346(0(2) (1971). The North Carolina court was faced with a similar fact situation in the case oi Hardy v. Galloway, 111 NC 519 (1892). There the deed that was conveyed provided that upon a decision by the grantee to sell, the grantor would have the first change to repurchase. There was no reservation as to the exact time for the performance of the provision or for the price that was to be paid. The court held that the restriction to reconvey to the grantor upon a decision to sell the property not only was void for uncertainty in fixing no price for the repurchase and no time for the performance of the provision, but also as an unlawful restraint upon alienation. The Court stated that: "(t)he restriction is certainly inconsistent with the ownership of the fee as well, it would seem, as against pubhc pohcy... In other words, we have an estate in fee without the power to dispose of or encumber it, unless first offering it for no definite price to the grantors, their heirs and assigns. The condition is ^s repugnant to the grant, and therefore void." Ill NC di at 524. The principle of Hardy v. Galloway was reaffirmed by the Court of Appeals in Jenkins v. Coombs, 21 NC App. 683 (1974). Ci The first situation here is similar to the Hardy case in that there is no definite time set for the performance of the option to repurchase. Although there is a set price, there is precedent that [j a fixed price set below the present fair-market value is also an undue restraint on the fee simple estate and should be held void. Simes, tji The Law of Future Interest, §114 (2d Ed. 1966). Since there is no condition subsequent created by the language in question (as is discussed under Conclusion (1)), the opinion of this Office is that the attempt to create an option to repurchase the property in the grantor, his heirs or assigns at a set price upon the condition that the land is no longer used for estate granted. Not only is there no set time that such an option will remain open but -31- also there is a set price that would fall substantially below the present fair-market value of the land. As to Conclusion (3), it would be suggested that the grantor's heirs or assigns be notified as to any actions taken by the School Board, but it would be the opinion of this Office that there is no obHgation encumbent upon the Wilson County School Board to offer the land in question to the grantor's heirs or assigns should the School Board decide to no longer use said land for school purposes (for the above stated reasons). The School Board may proceed to dispose of the property if it so chooses by the normal pubhc auction procedures of North Carolina General Statute 115-126. Rufus L. Edmisten, Attorney General T. Buie Costen Special Deputy Attorney General 15 September 1978 Subject: Requested by: Question: Conclusion: Health, Chiropractors; Access to X-Rays In Possession of Hospitals The Honorable Ramey F. Kemp Member of The House of Representatives North Carolina General Assembly Under current statutes may a chiropractor review the diagnostic X-ray records of his patient when such records are in the possession of a hospital wliich receives aid or support from the public? Yes. As amended by the 1977 General Assembly, G.S. 90-153 provided as follows: "A licensed chiropractor in this State may have access to and practice chiropractic in any hospital or -32- I sanitarium in this State that received aid or support from the pubhc, and shall have access to diagnostic X-ray records and laboratory records relating to the chiropractor's patient.'^ (Emphasis SuppHed) This statute clearly authorizes a chiropractor to review the records described in the question, which such entitlement including access to the X-rays themselves. It would seem that the intent of the General Assembly in enacting this legislation was threefold: (a) to obviate unnecessary costs in the delivery of health care; (b) to prevent unnecessary explosure of patients to radiation; and (c) to enable chiropractors to engage fully in the practice of chiropractic. Rufus L. Edmisten, Attorney General Wilham F. O'Connell Special Deputy Attorney General Robert R. Reilly Assistant Attorney General 18 September 1978 Subject: Requested by: Questions: Administration of Estates; Probate of Wills Honorable Carl G. Smith Clerk of Superior Court Iredell County (1) May .a will be admitted to probate where it includes a certificate executed in the form prescribed by N.C.G.S. §31-11.6 (relating to self-proved wills), but where no separate attestation was made? (2) If the answer to question (1) is no, may the witnesses who signed the certificate later go before the court and attest the will and thereby have the will admitted to probate? -33- Conclusions: (1) No. (2) No. N.C.G.S. §31-11.6 (Supp. 1977) provides that: An attested written will executed as provided by G.S. 31-3.3 may at the time of its execution or at any subsequent date be made self-proved by the acknowledgement thereof by the testator and the affidavits of the attesting witnesses, each made before an officer authorized to administer oaths under the laws of this state, and evidenced by the officer's certificate, under official seal, attached or annexed to the will in form and content substantially as follows.... The certificate is set out in the statute. It states, in part, that the testator declared that he had signed the will and executed it in the presence of the witnesses or acknowledged his signature to them. The witnesses make a similar declaration. Space is provided for the signatures of the testator, witnesses and acknowledging officer. The statute then provides that "The sworn statement of any such witnesses taken as herein provided shall be accepted by the court as if it had been taken before such court." The purpose of this provision is to allow for the ante-mortem proof of a written attested will. It simply provides an alternative method of probate to the others set out in N.C. G.S. 31-11.6 does not in any respect displace of amend the requirements of N.C. G.S. 31-3.3 governing attestation of wills. See, e.g., In Re Estate of Kavcic, 341 So.2d 278 (Fla. App.1977). The whole thrust of the statute contemplates a will that has already been attested by the testator and witnesses. This is self-evident from the language of the certificate which requires a declaration by the testator and witnesses that they had signed the will. It is interesting to note that Section 2-504 of the Uniform Probate Code (U.L.A.) §2-504 (1977) read substantially Uke N.C. G.S. 31-11.6. However, Section 2-504 was amended (Supp. 1978) to read, in part. -34- (a) Any will may be simultaneously executed, attested, and made self proved by acknowledgment thereof by the testator and affidavits of the witnesses, each made before an officer authorized to administer oaths.... The comment to this amendment states that: (T)he original text (of this section) authorized only the addition to an already signed and witnessed will, of an acknowledgment of the testator and affidavits of the witnesses thereby requiring testator and witnesses to sign twice even though the entire execution ceremony occurred in the presence of a notary or other official. If the will was not properly attested, the witnesses who signed the certificate may not later go before the court and attest the will and thereby have the will admitted to probate. Attestation must be made in accordance with N.C. G.S. 31-3.3 which requires that the witnesses sign after the testator and in his presence. In re Thomas, 111 N.C. 409,16 S.E.226 (1892). This could obviously not be done if the testator had also failed to sign the will in accordance with N.C. G.S. 31-3.3. Rufus L. Edmisten, Attorney General Lucien Capone, III Associate Attorney General 22 September 1978 Subject: Social Services; North Carolina Grant under the Child Abuse Prevention and Treatment Act Requested by: Carl H. Harper, Regional Attorney, Region IV, United States Department of Health, Education and Welfare -35- Question: Is the definition of "sexual abuse" as set forth in the recent amendments to the Child Abuse Prevention and Treatment Act (42 U.S.C. §5101 et seq., as amended by P.L. 95-266) encompassed within the definition of "abused child" as set forth in The North Carolina Child Abuse Reporting Law (G.S. 110-117) and the definition of "neglected child" as set forth in The North Carolina Juvenile Jurisdiction and Procedure Law (G.S. 7A-278(4))? Conclusion: Yes. This opinion is in response to a question posed by the Office of Regional Attorney, Region IV, United States Department of Health Education and Welfare in connection with the North Carolina grant under the Child Abuse Prevention and Treatment Act (42 U.S.C. § 5101, ef seq.). In April of 1977 the Act was amended to include "sexual exploitation" within the definition of "child abuse and neglect" (42 U.S.C. § 5102 as amended by Section 102(1) of Public Law 95-266). In addition, the term "sexual abuse" was defined as including: "... The obscene or pornographic photographing, filming, or depiction of children for commercial purposes, or the rape, molestation, incest, prostitution, or other such forms of sexual exploitation of children under circumstances which indicate that the child's health or welfare is harmed or threatened thereby, as determined in accordance with regulations prescribed by the Secretary (of HEW) ..." 42 U.S.C. § 5104 as amended by Section 104(2) of Public Law 95-266 The precise question raised by the Regional Attorney's Office is whether the definition of "abused child" as set forth in G.S. 110-117 (1) c. and the definition of "neglected child" under G.S. 7A-278(4) may be interpreted to include "sexual abuse or exploitation" as currently defined by the Child Abuse Prevention and Treatment Act. . -36- Although G.S. 110-117(1) c. defines an "abused child" as "a child less than 1 8 years of age whose parent or other person responsible for his care commits or allows to be committed any sex act upon a child in violation of law," the preamble to this section states: "As used in this Article, unless the contex otherwise requires:^' (Emphasis supplied) It is our opinion that if sexual abuse or exploitation of children for commercial purposes does not fall squarely within the purview of G.S. 1 10-1 17(1 )c., the preamble to said section would nonetheless bring it within the State law definition of "abused child." Moreover, as we asserted in our prior opinion relative to the North CaroUna appHcation for a grant under the Child Abuse Prevention and Treatment Act (March 28, 1978), it has always been our position that abuse is impUcitly encompassed within the definition of "neglected child" under G.S. 7A-278(4). This would still hold true now that we have concluded that sexual abuse or exploitation of children for commercial purposes is included within the definition of "abused child" under G.S. 110-117. Rufus L. Edmisten, Attorney General WilUam Woodward Webb Assistant Attorney General 5 October 1978 Subject: Motor Vehicles; On-street Parking; Prima Facie Rule of Evidence Requested by: Question: Mr. Miles B. Fowler, City Attorney Clinton, N. C. May a city ordinance providing a penalty of more than One Dollar ($1.00) for overtime parking be enforced under the prima facie rule of evidence as provided in G.S. 20-162.1? -37- Conclusion: No, G.S. 20-162.1 provides for a One Dollar ($1.00) penalty only. If a penalty of more than One Dollar (1.00) is sought, the prima facie rule of evidence provided in G.S. 20-162.1 would not be applicable. Rufus L. Edmisten, Attorney General William W. Melvin Deputy Attorney General 6 October 1978 Subject: Requested by: Question: Conclusion: Antitrust; Real Estate Brokers and Agents. Blanton Little, Secretary-1 reasurer N. C. Real Estate Licensing Board May a local Board of Realtors, a private trade association, require a Ucensed real estate agent to become a member of the Board in order to be eligible to apply for membership in or association with a multiple Hsting service corporation estabhshed by the Board? No, if the multiple listing service is found to be an essential competitive tool in the real estate market it serves. Real estate brokering is a "trade" within the meaning of the federal and state antitrust laws. United States v. National Association of Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 LEd. 1007 (1950); Love v. Pressley, 34 N.C. App. App. 503, 239 S.E.2d 574 (1977). The business practices of real estate agents individually and jointly as members of a Board of Realtors are subject to antitrust enforcement. -38- Unreasonable restraints of trade are prohibited by G.S. 75-1 and 75-2, and § 1 of the Sherman Act. Where members of a trade band together for the purpose of advancing business interests the antitrust laws condemn group activities which restrain trade. The law prohibits businessmen from becoming associates in a common plan which has the purpose and effect of reducing their competitors' opportunity to buy or sell the things in which the groups compete. Associated Press V. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 LEd. 2013 (1945). In Associated Press, the court held that where a facility created by a combination of competitors became essential to effective competition in a particular market such that exclusion from membership in that facility placed an enterprise at a competitive disadvantage, exclusion was unlawful under the Sherman Act. This is true even if competing facilities exist or even if competition has not been completely prevented by the presence of the facihty. See also American Federation of Tobacco Growers v. Neal, 183 F.2d 869 (4th Cir. 1950); Gamco, Inc. v. Providence Fruit and Produce Bldg., 194 F.2d 484 (1st Cir.), cert, denied, 344 U.S. 817 (1952). Denial of access to the Hstings of a multiple listing service reduces the "opportunity to buy or sell the things in which the groups compete" of non-members. Where a multiple listing service estabUshed by a Board of Realtors has become so dominant an economic force in a particular market that exclusion from membership places a broker at a competitive disadvantage, exclusion is unlawful under federal and state antitrust laws. It is not enough that Board membership is open to any Hcensed real estate agent. United States v. Terminal R.R. Association of St. Louis, 224 U.S. 383, 32 S.Ct. 507, 56 LEd. 810 (1912). While your question has not been Htigated in North Carolina, other jurisdictions have held that conditioning membership in a multiple listing service on membership in the Board of Realtors is an unreasonable restraint of trade. The court in Marin County Board of Realtors v. Palsson, 130 Cal. Rptr. 1, 549 P.2d 833, 843 (1976), said: An association's freedom to exclude non-members from its activities is not absolute. It must yield to -39- antitrust laws when (1) its activities begin to correspond directly with and touch upon the business activities of its members; and (2) the association has the power to shape and influence the economic environment of its particular market. The court held that for non-members to compete effectively access must be granted to all licensed real estate agents who choose to use the service. Accord, Pomanowski v. Monmouth County Bd. of Realtors, 152 N.J. Super. 100, 377 A.2d 791 (1977); Oates v. Eastern Bergen County Multiple List. Serv., Inc., 133 N.J. Super. 371, 273 A.2d 795 (1971); but see, Barrows v. Grand Rapids Real Estate Bd., 51 Mich. App. 75, 214 N.W.2d 532 (1974) (exclusion of non-members of real estate board from multiple listing service upheld where non-members were substantially able to complete and majority of sales in the area were not made through the service). Thus, where the multiple listing service is a vital competitive tool, requiring membership in the Board of Realtors is a violation of G.S. 75-1 and § 1 of the Sherman Act. G.S. 75-2 prohibits any act in restraint of trade which violates the common law. Predicating MLS participation on Board membership where access to the multiple is an economic competitive necessity violates common law principles. See Collins v. Main Line Board of Realtors, 452 Pa. 342, 304 A.2d 493 (1973) (exclusion of non-members from multiple listing service held per se common law restraint of trade); Grillo v. Bd. of Realtors of Plainfield Area, 91 N.J. Super. 202, 219 A.2d 635 (1966) (denial of access to non-members found to be unreasonable restraint of trade under common law principles). Rufus L. Edmisten, Attorney General Tiare Smiley Farris Associate Attorney General 20 October 1978 Subject: Health; Immunization; Exclusion of Students from School under G.S. 130-90 -40- Requested by: Dr. J. N. MacCormack, Head Communicable Disease Control Branch Division of Health Services Questions: 1. Does G.S. 130-90, after amendment of G.S. 130-87 by Chapter 191, 1971 Session Laws and by Chapter 160, 1977 Session Laws, require all children presently attending school in North Carolina to be immunized against red measles (rubeola) and rubella? 2. Are school authorities now prevented from excluding student from school in accordance with G.S. 130-90 for not obtaining the immunizations required by G.S. 130-87 (at the time such students were first enrolled in school in North Carolina) when such students have been allowed to continue in school after expiration of the thirty (30) day grace period during which evidence that the child had received the required immunizations should have been presented to school authorities? Conclusion: 1. All children presently attending school in North Carolina are not required to be immunized against red measles (rubeola) and rubella as a requirement for continuance in school. All children enrolled in school for the first time in North Carohna after April 13, 1971 are required to be immunized against red measles (rubeola) as well as the other previously required immunizations and all children enrolled in school for the first time in North Carolina after July 1, 1977 must also be immunized against rubella as a requirement for continuance in school. ^1- 2. Under G.S. 130-90, school authorities are able to exclude students from school who have not received the immunizations required by G.S. 130-87 (at the time such students were first enrolled in school in North Carolina) even though such students were allowed to continue in school after expiration of the thirty (30) day grace period, set forth in G.S. 130-90. As to the first question presented, the conclusion reached is based on the same reasoning and in accordance with the Opinion of the Attorney General to Dr. J. N. MacCormack concerning rubella immunization dated November 29, 1977 and reported at 47 NCAG 130. As to the second question presented, are school authorities prevented by the doctrine of estoppel from enforcing G.S. 130-90? Generally, laches and estoppel may not be relied upon to deprive the public of protection of a statute because of mistaken action or lack of action on the part of public officials. McComb v. Homeowners' Handicraft Coop., 176 F. 2d 633, cert, denied, 70 S. Ct. 250, 358 U.S. 900, 94 LEd. 553 (N.C. App. \9A9y, accord, S.S. Kresge Co. v. Davis, 277 N.C. 654, 178 S.E. 2d 382 (1971). However, the doctrine of estoppel may be applied cautiously because ,; of the pubhc interest involved. See, Goldhlath v. Chicago, 39 111. App. 2d 211, 174 N.E. 2d 222 {\96\), accord, Lanier v. Williams, 361 F. Supp. 944 (D.C.N.C. 1973). The purpose of G.S. 130-90 is to protect the pubhc health by conditioning a child's continuance in school on his obtaining the immunizations required by G.S. 130-87. It is stated in 39 Am Jur 2d, Health, Section 1, that: "The preservation of the public health is one of the duties devolving on the State as a sovereign power. In fact, among all the objects sought to be secured by governmental laws, none is more important, and an imperative obUgation rests on the State, through its proper instrumentalities or agencies, to take all necessary steps to promote this object." -42- If suitable information is given to parents of unimmunized children concerning the required immunizations and if an adequate time for compliance is provided; it would seem that the exclusion of such children from school would not result in manifest injustice as long as any constitutional requirements of due process are met concerning such explusion, especially in light of the pubhc interest involved. For the above reasons, it is our opinion that G.S. 130-90 would require a child to only receive the immunizations required by G.S. 130-87 when he was first enrolled in school either as a result of his attaining the age required by G.S. 115-162 or G.S. 1 1 5-205. 1 2 or as the result of his parents or guardian becoming residents of this State and that the duty of school authorities to exclude children who do not receive such immunizations arises thirty (30) days after their admittance to school and is enforceable at any time thereafter. 20 October 1978 Subject: Requested by: Questions: Rufus L. Edmisten, Attorney General Jan Napowsa Associate Attorney Infants and Incompetents; Day-Care Licensing; Construction of Criminal Statutes Senator Harold W. Hardison North Carohna General Assembly (1) Should children who receive care in a child-care arrangement for less than four hours per day be counted in determining whether the arrangement must be Ucensed as a day-care facility? (2) Do children in the care of great-aunts or other relatives come within the exclusion to the definition of "day-care" -43- set out in G.S. 110-86(2) so that such children would not be counted in determining whether a child-care arrangement was caring for more than five children? Conclusions: (1) Children who receive care in a child-care arrangement for less than four hours per day should not be counted in determining whether the arrangement must be licensed as a day-care facility. (2) The exclusion from the definition of "Day care" set out in G.S. 110-86(2) is limited to children who are cared for by their parents, grandparents, guardians or I full-time custodians; therefore, children in ' the care of great-aunts or other relatives who are not their parents, grandparents, guardians or full-time custodians must be ; , counted in determining how many children I ' ; are receiving day care. I I G.S. 1 10-98 provides that it shall be unlawful to operate a day-care j facility without being Ucensed under the provisions of Article 7 of I Chapter 110 of the General Statutes. G.S. 110-103 provides that a violation of the provisions of G.S. 110-98 through 110-102 is a general misdemeanor, which is punishable by imprisonment for a term not exceeding two years or by a fine or by both, in the discretion of the court. (G.S. 14-3). In requiring that day-care facilities be Hcensed, the legislature stated its purpose in G.S. 110-85: The General Assembly hereby declares its intent with respect to day care of children: (1) The State should protect the growing number of children who are placed in day-care ' facilities or in child-care arrangements when these children are under the supervision and in the care of persons other than their parents, I -44- grandparents, guardians or full-time custodians during the day. (2) This protection should assure that such children are cared for by persons of good moral character, that their physical safety and moral environment are protected, and that the day-care resources conform to minimum standards relating to the health and safety of the children receiving day care. (3) This protection requires the following elements for a comprehensive approach: mandatory licensing of day-care facilities under minimum standards; promotion of higher levels of day care than required for a license through the development of higher standards which operators may comply with on a voluntary basis; registration of day-care plans which are too small to be regulated through hcensing; and a program of education to help operators improve their programs and to develop public understanding of day-care needs and problems." in Article 7 of Chapter 110 makes a distinction between two types j* of child-care arrangements providing day care: day-care plans and xiay-care facilities. Only facilities are required to be licensed. A day-care faciUty is defined as "any day-care center or child-care arrangement which provides day care on a regular basis for more than four hours per day for more than five children, wherever operated and whether or not operated for profit...." A day-care plan is defined as "any day-care program or child-care arrangement where any person provides day care for more than one child and less than six children, wherever operated and whether or not operated for profit." jit is common for both day-care plans and day-care facihties to provide care for after-school children and other children who are generally present for less than four hours per day. Because of the I clearly stated legislative intent to protect children who receive care away from their homes, it is tempting to include these after-school -45- children in the number of children used to determine whether or not a child-care arrangement is a day-care facility which must be licensed in order to operate or a day-care plan which must be registered in order to operate. In 1975, at 44 N.C.A.G. 234, this Office dealt with the question of the maximum number of children for whom care could be provided in a day-care plan, and concluded that the maximum number, including after-school children, was five. However, since a violation of the day-care licensing requirements is a criminal offense, and since criminal provisions must be strictly construed, with all conflicts or ambiguities resolved in favor of the defendant, the definition of a day-care facility must be interpreted so as to exclude any after-school children or other children who receive care for less than four hours per day when determining whether more than five children are receiving care. Thus, if a child-care arrangement provides care on a regular basis for five children under 13 years of age for more than four hours per day (excluding children, grandchildren, wards, or children in full-time custody) and for any number of children for less than four hours per day, that arrangement would be considered a day-care plan which would not be required to obtain a license to operate. Any previous interpretations which conflict with this Opinion are hereby overruled to the extent of the conflict. G.S. 110-86(2) defines "Day-care" to include "any child-care arrangement under which a child less than 1 3 years of age receives care away from his own home by persons other than his parents, grandparents, guardians or full-time custodians." The exclusion as to parents, grandparents, guardians and full-time custodians is very specific and unambiguous. In light of the clearly stated purpose of the day-care hcensing laws, there is no basis for expanding the exclusion to include any other relatives who are not guardians or full-time custodians. Rufus L. Edmisten, Attorney General ^^ Ann Reed Special Deputy Attorney General -46- 20 October 1978 Subject: Requested by: Mental Health; Involuntary Commitment; Transfer of a Respondent to a Private Hospital Honorable James E. Lanning District Court Judge 26th Judicial District Question: Conclusion: In a situation wherein a District Court Judge has involuntarily committed a respondent to a State Hospital under the provisions of Article 5A, Chapter 122, is it necessary to obtain an additional order from the Court in order to permit later transfer of the respondent to a private hospital? No, the respondent may be transferred by order of the Department of Human Resources pursuant to G.S. 122-80. G.S. 122-58.8 provides that, upon determination that involuntary commitment is warranted, the District Court may "...order treatment, inpatient or outpatient, for a period not in excess of 90 days, at a mental health facihty, pubHc or private, designated or licensed by the Department of Human Resources." Thus, in the initial order, commitment to a private hospital (if the respondent, his family, or representatives are amendable to bearing the cost of hospitaUzation) may be made if the Judge, in his discretion, feels such is appropriate. After the original commitment, the provisions of G.S. 122-80, as follows, would appear to apply: "Patients transferred from State hospital to private hospital-When it is deemed desirable that any patient of any State hospital be transferred to any Hcensed private hospital within the State, the Department of Human Resources may so order. A certified copy of -47- j the hospitalization order on file at the State hospital f shall be sent to the private hospital which, together I with the order of the Department of Human ^ Resources, shall be sufficient warrant for holding the i mentally ill or mentally retarded person, or inebriate by the officers of the private hospital. A certified copy of the order of transfer shall be filed with the clerk i of superior court of the county from which such mentally ill or mentally retarded person, or inebriate was hospitahzed. After such transfer the State hospital from which such patient was transferred shall be relieved of all future responsibility for the care and treatment of such patient." Literal reading of this statute compels the conclusion that it was not the intent of the General Assembly to require that an additional court order be obtained in order to effect the transfer described in the question. To the contrary, the statute permits a determination of the appropriateness of the transfer to be made by the Department of Human Resources. Like other functions of that Department, the authority to take this action may be delegated to a subordinate agency of such Department. Of course, this action can only be taken if the patient, his family, or representatives are wilUng to pay the costs of the hospitahzation and if the private hospital involved is capable and willing to accept the respondent. Rufus L. Edmisten, Attorney General , , William F. O'Connell Special Deputy Attorney General 26 October 1978 Subject: Mental Health; Involuntary Commitments; Petitioner in Involuntary Commitment ^^ Proceedings Involving a Prisoner. Requested by: Ms. Judith L. Komegay, Special Counsel - Dorothea Dix Hospital -48- Question: In a case involving a prisoner in a state correctional institution who becomes mentally ill and dangerous to himself or others, who is the person responsible for acting as petitioner for involuntary commitment of the prisoner to a treatment facility under Article 5 A, Chapter 122? I^onclusion: A staff psychiatrist of the correctional institution must be the petitioner. i^or ordinary situations, the initiation of involuntary commitment proceedings to treatment facilities is dealt with by G.S. 122-58.3. Subsection (a) of that statute provides that any person having Adequate knowledge may execute the requisite affidavit and petition lecessary for the institution of involuntary commitment proceedings. Apparently some discussion has been encountered as ;o the applicability of this statute to a prisoner in a correctional nstitution. a.S. 122-85 addresses the subject of commitment of prisoners iirectly and serves to resolve the issue with the following language: "(a) A convict who becomes mentally ill and imminently dangerous to himself or others after commitment to any penal institution in the State shall be processed in accordance with Article 5A of this Chapter, as modified by this Section, except when the provisions of Article 5A are manifestly inappropriate. A staff psychiatrist of the prison shall execute the affidavit required by G.S. 122-58.3, and send it to the Clerk of Superior Court of the county in which the penal facility is located." (Emphasis suppHed) The specific language of the second sentence of G.S. 122-85 'a)-particularly when coupled with the emphasized words in the first sentence-clearly identifies the intent of the General Assembly relative to the involuntary commitment to treatment faciHties of prisoners in correctional institutions. As a result of this language, only a staff psychiatrist of such institution is authorized to execute the requisite affidavit and accompanying petition. •49- The rationale behind this statute is readily apparent aftei consideration of the nature and location of such type of respondent This distinction as to the manner of initiation of these proceedings presents no problems under the equal protection clause of the Constitution; further, the statute fully grants a prisoner the due process protection in all succeeding proceedings vital to deprivation of any of his rights. Rufus L. Edmisten, Attorney General William F. O'Connell Special Deputy Attorney General 'Sill 27 October 1978 Subject : Requested by: Questions: ^ Register of Deeds; Mortgages and Deeds of| Trust - Cancellation Howard P. Neumann Assistant County Attorney Washington County (1) The beneficiary of a deed of trust marks both the note and deed of trust as satisfied and paid in full. Upon presenting these to the Register of Deeds, is the beneficiary entitled to have the deed of trust cancelled of record? (2) A note and deed of trust are given to secure an obligation. The payee on the note and the beneficiary of the deed of trust are the same party. The payee endorses the note to a third party but no physical assignment of the deed of trust is made. The third party marks the note satisfied and paid in full, and the beneficiary marks the deed of trust satisfied and paid in full. May the Register of Deeds cancel the deed of Trust of record? -50- iii Conclusions: (1) No. (2) No. la The discharge of record of mortgages, deeds of trust and other 101 jinstruments is governed by G.S. 45-37. That statute sets out several methods of discharge. However, there must be strict compliance with the statute, regardless of the particular method chosen. Mills v. Kemp, 196 N.C. 309, 145 S.E. 557 (1928). Cancellation under the facts presented is governed by G.S. 45-37(2). The deed of trust, mortgage or other instrument along with the bond, note or other instrument thereby secured must be exhibited to the Register of Deeds, with the endorsement of payment and satisfaction by (a) The obhgee (b) The mortgagee (c) The trustee (d) An assignee of the obhgee, mortgagee, or trustee or (e) Any chartered banking institution, national or state, or credit union, quahfied to do business in and having an office in the State of North Carohna, where so endorsed in the name of the institution by an officer thereof. 1 Cancellation is not authorized by anyone other than those parties r listed in the statute. Faircloth v. Johnson, 189 N.C. 429, 127 S.E. 346 (1925). Thus the underlying question must be whether a beneficiary of a deed of trust is one of the parties listed in the statute - either expressly or by construction. til; "In construing a statute it will be presumed that the legislature fi comprehended the import of the words employed by it to express i;: its intent. Accordingly, technical terms must ordinarily be given their 1 technical connotation." 12 Strong's N.C. Index 3rd, Statutes 5.11 [ (1978). Ci: t! At the outset, there is no indication in the question that the li beneficiary of the deed of trust is a bank or an assignee of the ;;; obhgee, mortgagee or trustee. -51- The term "obligee" refers to a person in favor of whom some obHgation is contracted, but when used in its technical sense includes] only payees of notes, bonds, etc., and not to mortgage parties BLACK'S LAW DICT. 1226 (Rev. 4th ed. 1968). Technically the beneficiary in a deed of trust is also not a mortgagee but a cestui que trust. Osborne, Mortgages, §17(2nd ed. 1970).; There are three parties to a deed of trust - the grantor or trustor^t the trustee and the cestui que trust (beneficiary). There are only two parties to a mortgage, the mortgagor and the mortgagee. The Courts clearly recognize a difference between the true mortgage and a deed of trust as evidenced by the following statement. Upon the execution of a mortgage or deed of trust on real estate, legal title to the land vests in the mortgagee or trustee, as the case may be. Simms v. Hawkins, 1 N.C. App. 168, 160 S.E.2d 514 (1968). (Emphasis added). Unlike the trustee or mortgagee, the beneficiary does not hold legal title. Webster, Real Estate Law In North Carolina, §228-230 (1970)' Thus, the beneficiary in a deed of trust is not synonymous with a mortgagee. \ Finally, although it is theoretically possible for the beneficiary and trustee to be the same person, there is no indication of that here and, indeed, it would be highly unUkely in the typical deed of trusii case. In the opinion of this Office there is no authority for cancellatior of record of the deed of trust upon endorsement of satisfactior by the beneficiary thereof See, also, Mills v. Kemp, supra. Regarding the second question, although the payee (obhgee) is £ proper party to cancellation under G.S. 45-37(2), his endorsement appears only on the note. It has already been estabhshed that thei beneficiary's endorsement in the deed of trust is insufficient. Tht question then becomes whether both the note and the deed of trust must be marked satisfied by the proper party? -52- It would appear that the Legislature intended an answer in the affirmative when one considers the following exception in the statute providing. The exhibition of the mortgage, deed of trust or other instrument alone to the Register of deeds with endorsement of payment, satisfaction, performance or discharge, shall be sufficient if the mortgage, deed of trust or other instrument itself sets forth the obligation secured. ..and does not call for or recite any note, bond or other instrument secured by it. G.S. 45-37(2). flAlso see Webster, Real Estate Law In North Carolina, §225 at p. y316 (1971). Rufus L. Edmisten, Attorney General Lucien Capone, III Associate Attorney General 1 November 1978 Subject: Requested by: Question: Conclusion: Mental Health; Involuntary Commitment; Criminal Law; Preliminary Evaluation of Defendant Incapable of Proceeding With Trial. Dr. William Thomas Chief of Adult Services Division of Mental Health and Mental Retardation Services When a defendant is found incapable of proceeding with a criminal trial and the trial court takes the action directed by G.S. 15A-1003 (a), is the examination by a quahfied physician as described in G.S. 122-58.4 required? Yes. -53- In a situation involving a defendant in a criminal action who is found to lack the mental capacity to proceed with trial, G.S. 1 5 A-1 003(a) provides as follows: "If a defendant is found to be incapable of proceeding, the Court must enter an order directing the initiation of proceedings for involuntary civil commitment, and the Court's order is authority for a magistrate or clerk to order a law-enforcement officer to take the defendant into custody for examination by a qualified physician under G.S. 122-5 8.3(b), or for processing as an emergency case under G.S. 122-58.18." In turn, G.S. 122-58. 3(b) requires the magistrate or clerk to "...issue an order to a law-enforcement officer to take the respondent into custody for examination by a qualified physician." Apparently some disagreement has developed as to whether the law-enforcement officer, when confronted with this type of respondent, is required to take him to one of the facilities described in G.S. 122-58.4. Reportedly, in some instances, arguments have been advanced that the respondent is to be taken directly to a regional hospital. The language of the governing statutes makes it clear that it was I the intent of the General Assembly to afford this type of respondent! the same due process as that available to others. One step of thatj due process is the preliminary evaluation by a local qualified physician as required by G.S. 122-58.4. Only upon a determination, by that physician that the defendant/respondent meets the standards I for involuntary commitment is he to be disposed of in accordance! with G.S. 122-58.4(c) and G.S. 122-58.6(a). Of course, as permitted by G.S. 15 A-1 003(a), situations falling! within the purview of G.S. 122-58.18 should be handled in accordance with that statute. Further, all personnel responsible forj the processing of defendants/respondents should be aware thatf G.S. 15 A-1 004 quite logically makes specific provisions regarding the monitoring, reporting, etc. of individuals of this type. -54- 1 November 1978 Subject: Requested by: Question: Conclusion: Rufus L. Edmisten, Attorney General William F. O'Connell Special Deputy Attorney General Taxation; Ad Valorem Taxes; Mobile Homes; Tax Permits; Seller of Used Mobile Homes as "Retailer"; G.S. 105-316.1 Leon M. Killian, III Haywood County Attorney (1) Is an individual engaged in the business of buying and selling only used mobile homes a "retailer? (2) Is he required to obtain a tax permit before moving a mobile home into his inventory, or before moving a mobile home to the premises of a purchaser? (1) Yes (2) No An individual is engaged in the business of buying and seUing used f((and only used) mobile homes. Presumably he buys them from mobile home wholesalers or from individuals who first bought them at retail; and presumably he sells them at retail and not to others for resale. He is neither a hen holder nor a manufacturer. G.S. 105-3 16. 1(a) requires that a "tax permit" be obtained before a mobile home may be moved by anyone other than a manufacturer or retailer. G.S. 105-3 16. 1(b) specifically provides that "manufacturer, retailers and licensed carriers of mobile homes "shall not be required to obtain such permits. The purpose of the permit is to prevent the avoidance or evasion of tax on highly mobile -55- property, since to obtain the permit requires payment of the tax, and failure to obtain it is a misdemeanor. G.S. 105-3 16. 2, .3, .6. Heretofore, the businessman has been required by the tax collector to pay taxes and obtain permits before moving the units which are his stock in trade. It is not clear whether he has been required to get the permits when he acquires a unit for resale and moves it to liis lot, or when he sells to a consumer and moves it from his lot, or both. However, we believe that under G.S. 105-31 6.4, neither is correct if he is a "retailer". "Retailer" is not defined in the Machinery Act, and has not been judicially construed in the context of G.S. 105-316.1. However, it is defined in the Sales and Use Tax Act as "every person engaged in the business of making sales of tangible personal property at retail". G.S. 105-164.3(14) "Retail" means "the sale of any tangible personal property in any quantity or quantities for any use or purpose on the part of the purchaser other than for resale." G.S. 105-164.3(13). While there is no necessary transfer of meaning between the two Acts, we think that the Sales Tax definition catches the accepted sense of the word in that it is a sale to one for use or consumption and not for resale as part of a retail business. Thus, it is our opinion that the businessman in question is a "retailer" of used mobile homes and is not required to obtain a permit or pay delinquent taxes on a used mobile home when he moves iti from the seller's premises to his lot, or from his lot to the purchaser's! premises, under the provisions of G.S. 105-3 16. 1(a) and (b). It appears to us that any other result would require amendment of the pertinent statutes. If the tax collector if aware of the sale by the owner to the retailer, he might want to consider garnishment upon the retailer before the purchase price is paid to the owner. G.S. 105-368. Unfortunately, it is Ukely that he seldom if ever knows of the sale until after the fact. Rufus L. Edmisten, Attorney General Myron C. Banks Special Deputy Attorney General -56- 8 November 1978 Subject: Requested by: Question: Conclusion: Taxation, Income Tax; Excise and Capital Stock Tax on Savings and Loan Associations; Federal Stock Savings and Loan Associations; G.S. 54-1 (b); G.S. 54A-1 et seq.; G.S. 105-130 et seq.; G.S. 105-228.22 W. L. Cole, Administrator Savings and Loan Division North Carolina Department of Commerce Are federally-chartered stock savings and loan associations subject to tax Uke mutual savings and loan associations, or hke business corporations generally? Federally-chartered savings and loan associations are subject to tax like mutual savings and loan associations In a letter from W. L. Cole, Administrator, Savings and Loan Division, North CaroUna Department of Commerce, the following facts are given: 1. "Pursuant to Federal law. Federal mutual associations may apply to the Federal Home Loan Bank Board for permission to convert into Federal stock associations; however, there is a current moratorium on such conversions." 2. "At present. Federal mutual associations are taxed Hke State mutual associations under Article 8D of Chapter 105 of the General Statutes. Under Article 8D such associations pay a capital stock tax and an excise tax. However, questions have arisen regarding the taxation of Federal mutual associations which convert to Federal stock associations." Mr. Cole has asked "would such Federal stock associations be taxed under Article 8D or would such associations be taxed in the same -57- manner as general business corporations organized under the provisions of Chapter 55 of the General Statutes?" Subchapter I of Chapter 54 of the General Statutes relates to savings and loan associations generally, which are created pursuant to the laws of this State. Chapter 54A relates specifically to stock-owned as opposed to mutual, savings and loan associations created pursuant to State law, and G.S. 54-1 (b) specifically requires such associations ; created under Chapter 54A to "be taxed as a business corporation organized under the provisions of Chapter 55", which is the "Business Corporation Act". The income of such corporations is; taxed under the Corporation Income Tax Act, G.S. 105-130 et seq. Other savings and loan associations are taxed pursuant to Article 8D, Subchapter I of Chapter 105 of the General Statutes, and in that connection, G.S. 105-228.22 provides: "The provisions of this Article shall apply to every building and loan association or savings and loan association organized under the laws of this State or organized under the laws of another state and which maintains one or more places of business in this State and to every savings and loan association organized and existing under the 'Home Owners Act of 1933' and which maintains one or more places of business in this State, all such associations hereinafter to be referred to as Building and Loan Association." Article 8D then proceeds to levy a capital stock tax and an excise; tax upon such associations. Federal savings and loan associations are created pursuant to the] provisions of the "Home Owners Loan Act of 1933", 12 USC § 1461 1 et seq. Since the Corporation Income Tax Act affects only those: associations organized pursuant to Chapter 54A, and since federal | associations are not organized pursuant to that Act but pursuant I to federal law, the corporation income tax does not apply to them. However, since G.S. 105-228.22 specifically applies to "every < savings and loan association organized and existing under the 'Home Owners Loan Act of 1933' and which maintains one or more places of business in this State", we conclude that the taxes imposed by -58- Article 8D apply to all such associations created purusant to federal [aw, both mutual and stock. Rufus L. Edmisten, Attorney General Myron C. Banks Special Deputy Attorney General 10 November 1978 Subject: Motor Vehicles; Drivers' Licenses; Financial Responsibility Act of 1953; Unsatisfied Judgments Property Damage Judgment by Owner or Bailee against Negligent Driver of the Owner's or Bailee's Motor Vehicle Requested by: Question: Ionelusion: Mr. Joe Register, Director Traffic Records Division of Motor Vehicles Are the mandatory provisions of G.S. 20-279. 13(a) applicable to an unsatisfied judgment obtained by an owner or bailee against a negligent driver of the owner's or bailee's motor vehicle for the diminished value of such motor vehicle? No. ji owner or bailee of a motor vehicle obtained a default judgment ttii gainst a negligent driver of the owner's or bailee's motor vehicle !^! nd her master or employer for the diminished value of such motor 0^ ehicle resulting from a colhsion with a third party. A motor vehicle ;r- ability insurance policy was in effect. The judgment creditor has 3; emanded the Division of Motor Vehicles to suspend the motor ! jhicle operator's licenses of the judgment debtors under the revisions of G.S. 20-279. 13(a). r.S. 20-279.2 1(a) provides in pertinent part: -59- "(a) A 'motor vehicle liability policy' as said term is used in this Article shall mean an owner's or an operator's poUcy of liabiUty insurance, ..." G.S. 20-279.21 (b) provides in pertinent part: "(b) Such owner's policy of liability insurance: (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or impHed permission of such named insured, or any other persons in lawful possession, against loss from the Uability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles...as follows:... five thousand dollars ($5,000) because of injury to or destruction of property of others in any one accident;" (Emphasis added). G.S. 20-279.2 1(e) provides in pertinent part: "(e) Such motor vehicle habihty poHcy need not insure against loss from...any hability for damage to property owned by, rented to, in charge of or transported by ' the insured." Under G.S. 20-279.2 1(c) an operator's policy of hability insuranc is subject to the same limits of habihty. G.S. 20-279.21 (d) require, all motor vehicle habihty pohcies to be subject to the provisiori of Article 9A. G.S. 20-279.2 1(g) provides for excess and addition coverage, but "the term 'motor vehicle habihty policy' shah appl: only to that part of the coverage which is required by this section From the foregoing statutory provisions, it is clear that a "mote vehicle habihty pohcy" requires property damage coverage for th benefit of third party beneficiaries and not colhsion or upsc insurance coverage for the benefit of the insured. Although th judgment in question appears to fall within the definition -60- judgment as defined in G.S. 20-279.1(3) and subject to the provisions of G.S. 20-279.13, when these statutes are construed in pari materia with the other provisions of Article 9A and Article 13, Chapter 20, of the General Statutes, it appears that such was not the intent of the General Assembly. The legislative intent is revealed not only by the provisions of G.S. 20-279.21 in defining and setting forth the requirements of the motor vehicle habihty pohcy but in other statutory provisions. G.S. 20-279.1(11) provides in pertinent part: "(11) 'Proof of financial responsibihty': Proof of ability to respond in damages for habihty, on account of accidents... arising out of the ownership, maintenance or use of a motor vehicle, ...in the amount of five thousand dollars ($5,000) because of injury to or destruction of property of others in any one accident. Nothing contained herein shall prevent an insurer and an insured from entering into a contract, not affecting third parties, providing for a deductible as to property damage at a rate approved by the Commissioner ofInsurance ^ (Emphasis added). The requirements as to security and suspension under the provisions of G.S. 20-279.5 do not apply to the operator or owner if an owner's or operator's motor vehicle Uability poHcy was in effect or wherein no injury or damage was caused to the person or property of anyone other than such operator or owner. G.S. 20-279. 5(c)(1); G.S. 20-279.6(1). Although not involving a judgment for damages to the insured's property, m Moore v. Young, 263 N.C. 483, 139 S.E. 2d 704 (1965), the Court stated: "The Motor Vehicle Financial Responsibihty Act obliges a motorist either to post security or to carry habihty insurance, not accident insurance to indemnify all persons who might be insured's car." Accord: McKinney v. Morrow, 18 N.C. App. 282, 196 S.E. 2d 585 (1973); See also Strickland v. Hughes, 273 N.C. 481, 160 S.E. 2d. 313 (1968). -61- In Commonwealth of Kentucky, Dept. of Public Safety v. Robinson, 435 S.W. 2d 447 (Ky., 1968), the defendant, Robinson, owned two trucks used for hauling gravel. While being operated by his J employees, the brakes on one truck failed causing it to run into' the other truck, forcing it off the road and over a bluff kilHng the operator thereof. A judgment was obtained against Robinson and the other truck driver. The Department of Pubhc Safety wasj permanently enjoined from canceling or suspending or refusing to renew the motor vehicle operator's license or motor vehicle registration of Robinson. A Kentucky financial responsibihty statute, similar to G.S. 20-279.21(e), KRS 187.490(5) provided: "(5) The motor vehicle hability policy shall not insure any UabiHty under any workmen's compensation law nor any hability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance or repair of the motor vehicle nor any UabiHty for damage to property owned by, rented to, in charge of or transported by the insured." In affirming the lower court decision, the Court of Appeals of Kentucky stated: "The General Assembly set forth the minimum standards of the 'motor vehicle liability policy' required. The parties agreed that appellee had comphed in full with the requirements of The Financial Responsibihty Law. KRS, Chapter 187. Again, in its wisdom had it seen fit, the General Assembly need not have provided the exclusion in KRS 137.490(5), which in this case resulted in appellee's being uninsured. The remedy for such lack of coverage addresses itself to the General Assembly. Inasmuch as appellee had comphed with the standards required, it was unlawful and unreasonable to revoke or suspend his hcense or registrations." Since there was a motor vehicle habihty insurance policy in effect meeting statutory requirements, the operator's hcense of the driver -62- i and her master or employer should not be suspended under the provisions of G.S, 20-279. 13(a). Rufus L. Edmisten, Attorney General William B. Ray Assistant Attorney General 14 November 1978 Subject: Requested by: Questions: PubUc Records; North CaroUna Uniform Traffic Ticket and Complaint; Right of PubUc Inspection Barbara Smith Assistant Secretary Department of Crime Control and PubHc Safety 1. Is the Departmental Copy of the North Carolina Uniform Traffic Ticket and Complaint, which is submitted by a Highway Patrolman to the District First Sergeant who transmits it to the Traffic Record Section of the Division of Motor Vehicles, a pubhc record and subject to inspection during the time it is maintained at the Patrol District Headquarters? 2. Is the Enforcement Division Copy of the North Carohna Uniform Traffic Ticket and Complaint, which is maintained by the officer issuing the complaint and includes his notes and other evidence, a pubhc record and subject to inspection prior to trial of the offense charged in the complaint? 3. Is the Enforcement Division Copy of the North Carolina Uniform Traffic Ticket -63- and Complaint a public record and subject to inspection in the Patrol District Headquarters after the trial of the offense charged in the complaint? Conclusions: 1. No. < 2. No. I i 3. No. The General Assembly has defined the term public records to mean : '"Public record' or 'pubUc records' shall mean all documents, papers, letters, maps, books, photographs, films, sound recordings, ... or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina Government or its subdivisions." G.S. 132-1. A custodian of a pubUc record is the "pubHc official in charge of an office having pubhc reocrds". G.S. 132-2. "Every person having custody of public records shall permit them to be inspected and examined at reasonable times and under his supervision by any person, and he shall furnish certified copies thereof on payment of fees as prescribed by law." G.S. 132-6. The North CaroHna Uniform Traffic Ticket and Complaint is authorized pursuant to G.S. 7A-148(b) and G.S. 15A-302. There is no statutory requirement for disposition of copies of the uniform complaint except that a copy of the complaint must be delivered to the person cited. G.S. 15A-302(d). The initial question is whether the District First Sergeant is required to allow inspection of the Departmental Copy of the North Carolina Uniform Traffic Ticket and Complaint during the time that he has the copy and before he transmits it to the Traffic Records Section of the Division of Motor Vehicles. This copy of the complaint contains the same information as the original and the copy filed -64- in the clerk's office. The First Sergeant is just a conduit for this copy of the complaint. The General Assembly could not have intended that each person who receives public record and passes it on would be required to allow that public record to be inspected during the time, however short, that the individual has possession of the record. Only a person "having custody of public records" is required to permit inspection. G.S. 132-6. A custodian is the "public official in charge of an office having public records." G.S. 132-2. It does not seem that the General Assembly intended that the District First Sergeant be a custodian within the meaning of the statute. He does not file or maintain a log of the records temporarily in his possession other than the report he prepares. In addition, a custodian must "furnish certified copies" of the public records upon payments of fees prescribed by law. There is no authority, that we can ascertain, for a Sergeant in the Highway Patrol to certify copies of complaints. The clerk of court may certify copies of complaints on file with him. G.S. 7A-103(6). The Commissioner of Motor Vehicles is also authorized to certify copies of records on file in his office. G.S. 20-42(b). In the situation described, the District First Sergeant is not a custodian of pubHc records and therefore is not required to permit them to be inspected and examined and is not required to furnish certified copies of them. This information or record can be obtained from the clerk of court or the Commission of Motor Vehicles. The Highway Patrol does not have the personnel necessary to allow such inspection in all 49 districts. The second question presented is whether the Enforcement Division Copy of the North CaroHna Uniform Traffic Ticket and Complaint which is maintained by the arresting officer and contains his notes and other evidence is a pubhc record and subject to inspection and examination. It has been consistently held that there is no common law right to discovery in a criminal case. State v. Goldburg, 261 NC 181, 134 SE 2d 334, cert. den. 377 US 978 (1964). Even though a law enforcement officer makes his notes and gathers evidence pursuant to the authority granted him by law, i.e. G.S. 20-188, if such records and notes are not required to be disclosed to a criminal defendant, we fail to see how the same notes are required to be disclosed to the general pubhc. A criminal defendant can only obtain those items which are allowed by the criminal discovery statutes. -65- See State v. Davis, 282 NC 107, 191 SE 2d 664 (1972); State v. Blue, 20 NC App. 386, 389, 201 SE 2d 548 (1974) (notes of officer not subject to discovery); State v. Jones, 23 NC App. 686, 688, 204 NC 508 (1974), cert. den. 286 NC 418 (reports of officers or work product of police not subject to disclosure in this case). Despite the broad language of the Public Records Act, supra, the courts have held certain records as confidential. G.S. 148-74 and 148-76 require that records be maintained on prisoners. They are not specifically declared to be confidential. However, the Supreme Court held that a prisoner, who is an interested party, may not see such files. Goble v. Bound, 13 NC App. 579, 581, aff.'d 281 NC 307, 188 SE 2d 347 (1972). The notes, opinions, and preceptions of the law enforcement officer may be contained on his copy of the Uniform Traffic Ticket and Complaint. Based upon the above case law, the opinion of this Office issued on June 3, 1975, to the Honorable J. Herbert Haynes, Sheriff of McDowell County, 44 NCAG 340 (1975), is still vahd. This opinion concluded that investigative reports and memoranda concerning investigations of crimes are not pubhc records within this sense of Chapter 132 and are therefore not subject to public inspection. This opinion and the reasoning supporting it would apply to the Enforcement Division Copy of the North CaroUna Uniform Traffic Ticket and Complaint. Florida has a similar statute to North Carolina. Chapter 119.01 of the Florida statute provides that "(i)t is the pohcy of this state that all state, county and municipal records shall at all times be open for a personal inspection by any person." A public record is defined to mean "...all documents, papers, letters, maps, books, photographs, films, sound recordings or other material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of official business by any agency." Chapter 1 19.01 1(1), Florida Statutes. This language is almost identical to the North Carolina statute. The Florida Courts have construed this statute to exempt pohce records. "First, it is clear that police reports are not pubhc records within the meaning of Section 119.01, Florida Statutes (1975) and thus need not be held open at ^ -66- all times for personal inspection by any person. Police records are ordinarily confidential." City of Tampa v. Harold, 352 So. 2d 944, 946 (Fla. App., 1977). The Florida Supreme Court held that poHce records could be produced and used in evidence in a trial only in a rather restrictive sense and outline that criteria governing production and use. "It depends, as we have said, upon 1) being critical, 2) upon a material and vital point, 3) reasonably exculpatory of defendant within sound judicial discretion, and 4) after 'in camera' review and deletion of improper matter." State v. Johnson, 284 So. 2d 198 (Fla. 1973) Florida has recognized the need, as our previous opinion did, for police records to be held confidential. The items in question here are just as much poUce record as any other form. They must therefore be deemed confidential and not subject to inspection absent an order from a court of competent jurisdiction. After the trial of the matter charged by the Uniform Traffic Ticket and Complaint, the notes and evidence gathered by the officer would still prevent this item from being a pubUc record. The officer would be less likely to put down the necessary information to assure proper prosecution of the criminal matter if he knew that such notes and impressions would be subject to inspection and pubHcation. Revealing such records would have a chilling effect upon a law enforcement officer and no appreciable public benefit. The impressions and notes which are introduced at the trial as evidence become part of the record of the trial and may be inspected in the courthouse. All other matters which were not introduced at the trial should not be required to be disclosed. The same rationale for not disclosing the notes of the law enforcement officer before trial would seem also to apply after trial. Rufus L. Edmisten, Attorney General Isaac T. Avery, III Assistant Attorney General -67- 14 November 1978 Subject: Requested by: Question: Conclusion: Public Officers; Conflict of Interest; Public Officer Contracting with Corporation in Which He is a Stockholder or Officer. John F. Kime Town Manager Liberty N. C. Does a conflict of interest, prohibited by G.S. 14-234, exist if a member of the City Council is a minority stockholder or an officer of public or private corporation and the City Council enters into a contract with that corporation? Yes. The general rule is that a public officer who is either a stockholder or officer of a corporation which enters into a contractual relation with the officer or the pubhc body of which he is a member, violates a statute which prohibits such public officer from having a direct or indirect interest in any such contract, and is also against pubhc policy as declared by the common law. Many cases are cited in 140 C.L.R. 344 to support the above general rule. The North CaroUna Supreme Court has held that the prohibition of G.S. 14-234 extends to an officer of a corporation in making contracts between the corporation and the city or county governing body of which he is a member. State v. Williams, 153 NC 595; Lexington Insulation Co. v. Davidson County, 243 NC 252. "No man ought to be heard in any court of justice who seeks to reap the benefits of a transaction which is founded on or arises out of criminal misconduct and which is in direct contravention of the pubhc policy of the State. Fashion Co. v. Grant, 165 NC 453, 81 S.E. 606; Marshall v. Dicks, 175 NC 38, 94 S.E. 514; Lamm V. Crumpler, 233 NC 717, 65 S.E. 2d 336; Waggoner v. Publishing Co., 190 NC 829, 130 S.E. 609. -68- "Public Office is a public trust and this Court will not countenance the subversion thereof for private gain. Not only will it declare void and unenforceable any contract between a public official, or a board of which he is a member, and himself, of a company in which he is financially interested, whereby he stands to gain by the transaction, but it will also deny recovery on a quantum meruit basis. In entering into such contract, a public official acts at his own peril and must suffer the loss incident upon his breach of his public duty. He may look in vain to the courts to aid him in his efforts to recoup his losses, due to the invalidity of the contract, on the grounds the pubUc agency which he serves has been enriched by his misconduct. "In other words, this Court will not recognize or permit any recovery bottomed on the criminal conduct of a public official. To put it simply, the doors of the courts are closed to any individual, or firm in which he is financially interested, who engages in a transaction which comes within the language of the statute. Snipes v. Winston, supra; Davidson v. Guilford, supra; King v. Guilford, 152 NC 438; S. V. Williams, supra, Annos. 84 A.L.R. 969, 110 A.L.R. 164, 154 A.L.R. 375; 12 A.J. 498." Insulation Co. v. Davidson County, supra, at. p. 255. Although we find no North Carolina cases involving a pubHc official who was a mere -stockhoider in the corporation, the courts in many other jurisdictions apply the general rule stated above. Most of the statutes involved contained language similar to G.S. 14-234, "be in any manner interested", "make any contract for his own benefit", "be in any manner concerned or interested in making such contract..., "either privately or openly, singly or jointly with another". In Hardy v. Mayor of Gainsville, 48 SE 921, the statute contained the language "or have any interest in such contract either by himself or by another, directly or indirectly". The Council member held stock in a corporation which entered into a contract with the city. HELD : a stockholder in a private corporation clearly has an |
OCLC Number-Original | 2640733 |