Malicious prosecution suit appealed to N.C. Supreme Court

By Vicki Hyatt | Dec 16, 2013

In what could be the next-to-the-last legal development in the now-defunct Haywood County Council on Aging, Denise Mathis has appealed her malicious prosecution case to the N.C. Supreme Court.

The issue stemmed from a 2010 lawsuit where Mathis accused a number of well-known nonprofit organizations in the county — as well as those who represented them — of providing false and misleading information when the Council on Aging finances were being investigated.

In November 2012, Superior Court Judge Alan Thornburg dismissed the cases, which meant a long-sought after jury trial never materialized.

Mathis and her attorney, Russell McLean, took the case to the N.C. Court of Appeals, and in the past year, Mountain Projects, Haywood Christian Ministry, David Teague, the Haywood County representative on a flood relief committee and the USDA Farm Services Agency all reached settlements.

That left the United Way of Haywood County, along with Executive Director Celesa Willett and Mike Clinton, and former Council on Aging employee Victoria Young as the remaining defendants when the appellate court ruled 3 to 0 to uphold Thornburg’s ruling.

McLean has appealed the case to the state’s Supreme Court. Typically, the court accepts only 10 percent of the cases, McLean said, but this one has a chance of being selected.

“Because of a recent decision, they have completely changed the standards that most lawyers look at regarding malicious prosecution,” McLean said. “This is an opportunity to further define what they meant by that opinion because it was so radical.”

He expects to know whether his appeal is successful in the next few months.

Jon Yarborough, who represents Young, said he doesn’t see the appeal going anywhere.

“It was a unanimous decision,” he said of the appellate court ruling. “I don’t see this going on. It’s been an unfortunate situation for a long time but the decision is pretty clear.”

The issue stems back to 2004 when Haywood County struck by back-to-back floods that destroyed crops in the field, shut businesses down while they dealt with the aftermath, destroyed a number of public buildings and left hundreds of people homeless.

Nonprofit agencies in the county worked together to address flood-related needs, and when state flood relief funding became available, they formed a working group called the Unmet Needs Committee.

The group received state grant money as well as donations funneled through the United Way of Haywood County. The money was held in a special account within the Council on Aging.

But when questions arose about more than $100,000 in flood relief donations from United Way that committee members felt couldn't be adequately answered, the group approached authorities to investigate.

In 2006, Mathis was accused and later indicted for 14 counts of embezzlement following a six-month investigation by the Waynesville Police Department.

While court documents show Mathis had transferred funds from the flood relief account to the Council on Aging to keep the organization afloat, there was no evidence she kept the money for herself. The embezzlement charges were dropped 22 months later, which sparked the malicious prosecution lawsuits.

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