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NO. COA12-396
NORTH CAROLINA COURT OF APPEALS
Filed:  20 November  2012
PEDRO L. MARTINEZ,
Plaintiff,
v.                                                                     Guilford County
No.  11 CVS  6490
THE UNIVERSITY OF NORTH CAROLINA,
Defendant.
1.                                                                     Immunity                                                             —  sovereign              —  breach  of  contract    —  university
salary
Trial  court  erred  in  dismissing  plaintiff’s  complaint
pursuant  to  N.C.G.S.  §  1A-1,  Rule  12(b)(2)  where  plaintiff
filed  a  breach  of  contract  action  concerning  his  salary
after  he  moved  from  being  provst  of  Winston-Salem  State
University  to  a  full  time  faculty  position.                      Defendant
waived  its  sovereign  immunity  on  a  claim  for  breach  of
contract   by   entering   into   a   contract   with   plaintiff
regarding employment and salary.
2.                                                                     Jurisdiction  —  failure  to  exhaust  administrative  remedies  —
breach of contract  — university salary
The   trial   court   erred   in   dismissing   plaintiff’s
complaint  pursuant  to  N.C.G.S.  §  1A-1,  Rule  12(b)(1)  where
plaintiff  filed  a  breach  of  contract  action  concerning  his
salary  after  moving  from  provst  of  Winston-Salem  State
University  to  a  full  time  faculty  position.    An  action  is
properly  dismissed  under  Rule  12(b)(1)  for  lack  of  subject
matter   jurisdiction   where   the   plaintiff   has   failed   to
exhaust  administrative  remedies;  here,  it  is  clear  from  the
record  that  plaintiff  exhausted  the  administrative  remedies
available  to  him  by  initiating  a  grievance  with  the  faculty
grievance  committee,  an  appeal  with  the  provost,  and  a
further appeal with the chancellor.
3.                                                                     Contracts                                                            —   university   salary   —   claim   for   breach   —
sufficiently stated




The   trial   court   erred   in   dismissing   plaintiff’s
complaint  pursuant  to  N.C.G.S.  §  1A-1,  Rule  12(b)(6)  where
plaintiff  filed  a  breach  of  contract  claim  concerning  his
salary  after  he  moved  from  being  provst  of  Winston-Salem
State  University  to  being  a  full-time  faculty  member.  When
viewed  as  admitted,  plaintiff's  allegations  stated  a  valid
claim for breach of contract.




NO. COA12-396
NORTH CAROLINA COURT OF APPEALS
Filed:  20 November  2012
PEDRO L. MARTINEZ,
Plaintiff,
v.                                                                            Guilford County
No.  11 CVS  6490
THE UNIVERSITY OF NORTH CAROLINA,
Defendant.
Appeal  by  plaintiff  from  order  entered                                   18  January                                              2012  by
Judge  Anderson  D.  Cromer  in  Guilford  County  Superior  Court.
Heard in the Court of Appeals  10 October  2012.
David  B.  Puryear  of  PURYEAR  &  LINGE  PLLC,  attorney  for
plaintiff.
Attorney  General  Roy  Cooper,  by  Assistant  Attorney  General
Brian R. Berman, for The University of North Carolina.
ELMORE, Judge.
Pedro   L.   Martinez                                                         (plaintiff)   appeals   from   an   order
granting  a  motion  to  dismiss  in  favor  of  The  University  of  North
Carolina  (defendant).    We reverse and remand.
In   August                                                                   2008,   plaintiff   was   employed   as   provost   of
Winston  Salem  State  University  (WSSU),  a  constituent  institution
of  defendant.    Sometime  that  month,  plaintiff  was  approached  by
the  chancellor  of  WSSU  and  asked  to  resign  from  his  position  as




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provost,  and  to  accept  a  full-time  faculty  position.    Plaintiff
agreed,  and  he  entered  into  a  written  contract  with  WSSU            (the
contract).                                                                   The   contract,   titled                           “Settlement   Agreement,”
governed  the  terms  of  plaintiff’s  transition  from  provost  to
full-time  faculty  member.    The  contract  provided  that  plaintiff
“shall  continue  to  receive  full  administrative  annual  salary  of
$180,000.00                                                                  .  from  September                                 1,                          2008  and  ending  June   30,
2009,”  after  which,  plaintiff  would  then  “retreat  to  the  Faculty
of   the   School   of   Education   at   a   salary   commensurate   with
comparable  salaries  of  senior  faculty  in  the  School  of  Education
as determined at that time.”
In  May  2009,  WSSU  notified  plaintiff  that  he  would  be  paid
an  annual  salary  of                                                       $85,000.00  per  year  as  a  full-time  faculty
member.    However,  plaintiff  was  not  satisfied  with  that  salary.
According   to   plaintiff,   that   amount   was                            “not   a   salary
commensurate  with  salaries  paid  to  other  senior  tenured  faculty
members   employed   by   defendant   who   have   retreated   from   an
administrative   position[.]”                                                Plaintiff   then   initiated   a
grievance,  and  a  faculty  grievance  committee  investigated  his
argument.    The  committee  determined  that  plaintiff’s  salary  was
appropriate,  and  plaintiff  appealed  this  decision  to  the  new
provost  of  WSSU.     The  new  provost  affirmed  the  decision  on        1




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March                                                                          2010.                                                           Plaintiff   then   continued   his   appeal   to   the
                                                                               chancellor  of  WSSU,  who  also  affirmed  the  decision  on   23  March
2010.
On  17  May  2011,  plaintiff  filed  suit  against  defendant  for
1)  breach  of  contract  and  2)  violation  of  the  Wage  and  Hour  Act.
However,  on  14  September  2011,  plaintiff  amended  his  complaint,
alleging  only  a  claim  for  breach  of  contract.    On                     21  September
2011,  defendant  filed  a  motion  to  dismiss                                1)  pursuant  to  Rules
12(b)(1)  and  (2)  of  the  North  Carolina  Rules  of  Civil  Procedure
under  the  theory  of  sovereign  immunity  and                               2)  pursuant  to  Rule
12(b)(6)  of  the  North  Carolina  Rules  of  Civil  Procedure  for
failure  to  state  a  claim  upon  which  relief  can  be  granted.    On
18  January                                                                    2012,  the  trial  court  entered  an  order  granting
defendant’s motion.    Plaintiff now appeals.
II. Arguments
A. Sovereign immunity
Plaintiff   first   argues   that   the   trial   court   erred   in
dismissing  his  amended  complaint  pursuant  to  Rules  12(b)(1)  and
(2) because defendant waived its sovereign immunity.    We agree.
i.  12(b)(2)
“[A]n  appeal  of  a  motion  to  dismiss  based  on  sovereign
immunity  presents  a  question  of  personal  jurisdiction  rather




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than  subject  matter  jurisdiction[.]”    Data  Gen.  Corp.  v.  Cnty.
of  Durham,  143  N.C.  App.  97,  100,  545  S.E.2d  243,  245-46  (2001)
(citations  omitted).     We  must  review  the  record  to  determine
whether   there   is   evidence   to   support   the   trial   court’s
determination   that   exercising   its   jurisdiction   would   be
appropriate.    See  Stacy  v.  Merrill,  191  N.C.  App.  131,  134,  664
S.E.2d                                                                        565,                                           567   (2008)   (Holding  that   “[t]he  standard  of  review
of  the  trial  court’s  decision  to  grant  a  motion  to  dismiss  under
Rule  12(b)(2)  is  whether  the  record  contains  evidence  that  would
support   the   court’s   determination   that   the   exercise   of
jurisdiction over defendants would be inappropriate.”).
It  is  a  well  established  rule  that                                      “[t]he  State  cannot  be
sued  in  its  own  courts  or  elsewhere  unless  it  has  expressly
consented  to  such  suits.”    Stahl-Rider,  Inc.  v.  State,                48  N.C.
App.  380,  383,  269  S.E.2d  217,  219  (citation  omitted).    However,
our Supreme Court has held that
whenever   the   State   of   North   Carolina,
through    its    authorized    officers    and
agencies,  enters  into  a  valid  contract,  the
State  implicitly  consents  to  be  sued  for
damages  on  the  contract  in  the  event  it
breaches  the  contract.    Thus,  in  this  case,
and  in  causes  of  action  on  contract  arising
                                                                              after  the  filing  date  of  this  opinion,   2
March                                                                         1976,   the   doctrine   of   sovereign
immunity  will  not  be  a  defense  to  the  State.
The  State  will  occupy  the  same  position  as
any other litigant.




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Smith  v.  State,  289  N.C.  303,  320,  222  S.E.2d  412,  423-24  (1976)
(citation omitted).
Here,  defendant,  an  agency  of  the  State,  entered  into  a
contract  with  plaintiff  regarding  employment  and  salary.     As
such,  defendant  waived  its  sovereign  immunity  to  suit  based  on  a
claim  for  breach  of  that  contract.     Accordingly,  we  conclude
that  the  trial  court  erred  in  dismissing  plaintiff’s  complaint
pursuant to Rule  12(b)(2).
i.  12(b)(1)
Likewise,  we  also  conclude  that  the  trial  court  erred  in
dismissing  plaintiff’s  complaint  pursuant  to  Rule  12(b)(1).             “An
action  is  properly  dismissed  under  Rule                                  12(b)(1)  for  lack  of
subject  matter  jurisdiction  where  the  plaintiff  has  failed  to
exhaust  administrative  remedies.    An  appellate  court’s  review  of
such  a  dismissal  is  de  novo.”     Johnson  v.  Univ.  of  N.C.,          202
N.C.  App.                                                                    355,                      357,   688  S.E.2d   546,   548   (2010)   (quotations  and
citations omitted).
Here,  it  is  clear  from  the  record  that  plaintiff  exhausted
the  administrative  remedies  available  to  him.     Before  filing
suit,  plaintiff  initiated  a  grievance  with  the  faculty  grievance
committee,  an  appeal  with  the  provost,  and  a  further  appeal  with
the chancellor.




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B. Failure to state a claim
Plaintiff   next   argues   that   the   trial   court   erred   in
dismissing  his  amended  complaint  pursuant  to                             12(b)(6)  because
the  amended  complaint  adequately  pled  all  elements  of  a  cause  of
action for breach of contract.    We agree.
“The  motion  to  dismiss  under  N.C.R.  Civ.  P.  12(b)(6)  tests
the  legal  sufficiency  of  the  complaint.    In  ruling  on  the  motion
the  allegations  of  the  complaint  must  be  viewed  as  admitted,  and
on  that  basis  the  court  must  determine  as  a  matter  of  law
whether  the  allegations  state  a  claim  for  which  relief  may  be
                                                                                                  granted.”    Stanback  v.  Stanback,                                                                                          297  N.C.                                          181,   185,                             254  S.E.2d
                                                                                                  611,  615  (1979)  (citations  omitted).                                                                                                                                                “The  elements  of  breach  of
                                                                              contract  are                                                                                                                                     (1)  the  existence  of  a  valid  contract  and                                           (2)
                                                                                                                                                           breach  of  the  terms  of  the  contract.”    Long  v.  Long,                                                                                                  160  N.C.
App.                                                                          664,                668,                                       588  S.E.2d   1,                                                               4   (2003)                                                    (quotations  and  citation
omitted).
Here,  plaintiff’s  amended  complaint  alleged                               1)                  “plaintiff
contracted  with  defendant  to  receive,  upon  his  return  to  a  full
time   tenured   faculty   position,   a   salary   commensurate   with
salaries  paid  to  other  senior  tenured  faculty  members  who  have
retreated  from  an  administrative  position”  and                           2)                  “[d]efendant
breached  its  contract  with  plaintiff  by  failing  and  refusing  to




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pay  plaintiff,  upon  his  return  to  his  full  time  tenured  faculty
position,  a  salary  commensurate  with  comparable  salaries  of
senior  faculty[.]”    When  viewed  as  admitted,  these  allegations
state  a  valid  claim  for  breach  of  contract.    Thus,  we  conclude
that  the  trial  court  erred  in  dismissing  plaintiff’s  complaint
pursuant to Rule  12(b)(6).
III. Conclusion
In   sum,   we   conclude   that   the   trial   court   erred   in
                                                                            dismissing  plaintiff’s  claim  pursuant  to  Rules   12(b)(1),                                                   (2),
and                                                                         (6).                                                  We  reverse  the  trial  court’s  order  and  remand  for
further proceedings.
Reversed and Remanded.
Judges STROUD and BEASLEY concur.

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