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Civil settlement doesn’t block criminal restitution

 

A woman’s civil settlement with her former employer over embezzled funds doesn’t supersede a court’s order that she pay restitution in the ensuing criminal case, although the payment can be applied toward the money she owes, the North Carolina Court of Appeals has ruled in a case of first impression.

Tamora Williams worked as an officer manager for GCF Corp., a construction company in Burlington, for two years. In 2018 she entered an Alford plea after she was charged with embezzling thousands of dollars from the business. Williams had filed a defamation lawsuit against the business’s owner, Charles Fogleman, who filed a counterclaim for embezzlement and employee theft. They settled those suits in mediation, with Williams paying Fogleman $13,500.

As part of her plea deal, Alamance County Superior Court Judge James K. Roberson ordered Williams to pay a total of $41,204 in restitution to Fogleman. Roberson credited Williams for the settlement amount, leaving $27,704 owed in restitution. Williams appealed the decision, saying that the settlement agreement contained a binding release clause, so she couldn’t be made to pay restitution on top of it.

North Carolina’s appellate courts had never considered whether a civil settlement agreement containing such a release clause would bar a party to the agreement from later receiving restitution in a criminal action relating to the civil claim. But in unanimous June 4 opinion, the court ruled that it would not.

Judge John Tyson, writing for the court, said that settlement agreements and restitution awards are separate and distinct remedies pursued for different ends, and the settlement agreement did not involve or bind the State of North Carolina. As such, private settlement or reimbursement agreements neither usurp the state’s ability to uphold criminal statutes nor impede on the State’s “distinct societal goals” of the criminal justice system, which include seeking to make victims whole for their losses.

“Although the plain terms of the settlement agreement suggest Fogleman could not seek more recovery from Defendant than the $13,500.00 he undisputedly agreed to accept, the plain language of the settlement agreement expressly limited its application to the parties ‘[releasing] and fully [discharging] each other,’” Tyson wrote. “The agreement also specifically states that ‘the civil matter has been fully resolved,’ limiting the release clause strictly to the parties to the civil matter, and not including the State.”

Tyson noted that other states that have considered the issue have reached similar conclusions, and that Fogleman testified that when he signed the agreement, he considered it separate from the criminal matter and would not have signed it otherwise.

Assistant Attorney General Madeline Lea represented the state, and Assistant Appellate Defender Katherine Jane Allen represented Williams. Neither attorney could be reached for comment.

The 14-page decision is State v. Williams (Lawyers Weekly 011-150-19). The full text of the opinion can be found at nclawyersweekly.com

Follow Bill Cresenzo on Twitter @bcresenzonclw


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