{ "id": 8239382, "name": "LESSIE J. DUNN and ERWIN W. COOK, JR., individually and on behalf of a class of all others similarly situated, Plaintiffs v. THE STATE OF NORTH CAROLINA, THE NORTH CAROLINA DEPARTMENT OF REVENUE and E. NORRIS TOLSON, AS SECRETARY OF THE NORTH CAROLINA DEPARTMENT OF REVENUE, Defendants", "name_abbreviation": "Dunn v. State of North Carolina", "decision_date": "2006-10-17", "docket_number": "No. COA05-1178", "first_page": "753", "last_page": "763", "citations": [ { "type": "official", "cite": "179 N.C. App. 753" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "611 S.E.2d 474", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12632678 ], "year": 2005, "opinion_index": 0, "case_paths": [ "/se2d/611/0474-01" ] }, { "cite": "392 S.E.2d 90", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "opinion_index": 0 }, { "cite": "326 N.C. 482", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 5307491, 5309577, 5305754, 5307317, 5307610 ], "year": 1990, "opinion_index": 0, "case_paths": [ "/nc/326/0482-02", "/nc/326/0482-01", "/nc/326/0482-05", "/nc/326/0482-04", "/nc/326/0482-03" ] }, { "cite": "386 S.E.2d 610", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "opinion_index": 0 }, { "cite": "96 N.C. App. 516", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523387 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/nc-app/96/0516-01" ] }, { "cite": "427 S.E.2d 623", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "333 N.C. 463", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2548707, 2547831, 2550268, 2547197, 2544383 ], "year": 1993, "opinion_index": 0, "case_paths": [ "/nc/333/0463-03", "/nc/333/0463-04", "/nc/333/0463-05", "/nc/333/0463-02", "/nc/333/0463-01" ] }, { "cite": "423 S.E.2d 312", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1992, "pin_cites": [ { "page": "316", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "108 N.C. App. 127", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522939 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "133" } ], "opinion_index": 0, "case_paths": [ "/nc-app/108/0127-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-134.6", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "pin_cites": [ { "page": "(b)(l)" }, { "page": "(c)(l)" } ], "opinion_index": 0 }, { "cite": "166 S.E. 745", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1932, "opinion_index": 0 }, { "cite": "203 N.C. 651", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8617593 ], "year": 1932, "opinion_index": 0, "case_paths": [ "/nc/203/0651-01" ] }, { "cite": "354 S.E.2d 459", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "319 N.C. 274", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4748509 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc/319/0274-01" ] }, { "cite": "257 S.E.2d 217", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "opinion_index": 0 }, { "cite": "297 N.C. 609", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572582, 8572566, 8572504, 8572540, 8572479 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/nc/297/0609-05", "/nc/297/0609-04", "/nc/297/0609-02", "/nc/297/0609-03", "/nc/297/0609-01" ] }, { "cite": "254 S.E.2d 223", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "pin_cites": [ { "page": "230-31" } ], "opinion_index": 0 }, { "cite": "41 N.C. 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Ed. 2d", "year": 1992, "opinion_index": 0 }, { "cite": "504 U.S. 911", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11736865, 11737123, 11736934, 11736776, 11736681, 11737194, 11737352, 11736624, 11736468, 11736532, 11736825, 11736985, 11737279 ], "year": 1992, "opinion_index": 0, "case_paths": [ "/us/504/0911-07", "/us/504/0911-10", "/us/504/0911-08", "/us/504/0911-05", "/us/504/0911-04", "/us/504/0911-11", "/us/504/0911-13", "/us/504/0911-03", "/us/504/0911-01", "/us/504/0911-02", "/us/504/0911-06", "/us/504/0911-09", "/us/504/0911-12" ] }, { "cite": "412 S.E.2d 295", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "298" } ], "opinion_index": 0 }, { "cite": "330 N.C. 227", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2512760 ], "year": 1991, "pin_cites": [ { "page": "231" } ], "opinion_index": 0, "case_paths": [ "/nc/330/0227-01" ] }, { "cite": "500 S.E.2d 54", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 9, "year": 1998, "pin_cites": [ { "page": "75", "parenthetical": "''Bailey IF'" }, { "page": "75" }, { "page": "75" }, { "parenthetical": "Emphasis added" }, { "page": "70" }, { "page": "166" }, { "page": "75" } ], "opinion_index": 0 }, { "cite": "348 N.C. 130", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1659878 ], "weight": 3, "year": 1998, "pin_cites": [ { "page": "166", "parenthetical": "''Bailey IF'" }, { "page": "166" } ], "opinion_index": 0, "case_paths": [ "/nc/348/0130-01" ] }, { "cite": "585 S.E.2d 240", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "opinion_index": 0 }, { "cite": "160 N.C. App. 209", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8955096 ], "year": 2003, "opinion_index": 0, "case_paths": [ "/nc-app/160/0209-01" ] }, { "cite": "512 S.E.2d 783", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "785", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "132 N.C. App. 556", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11239233 ], "year": 1999, "pin_cites": [ { "page": "558-59", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/132/0556-01" ] }, { "cite": "170 N.C. App. 176", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9004764 ], "year": 2005, "opinion_index": 0, "case_paths": [ "/nc-app/170/0176-01" ] }, { "cite": "561 S.E.2d 511", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "513", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "149 N.C. App. 475", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9129209 ], "year": 2002, "pin_cites": [ { "page": "477", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/149/0475-01" ] }, { "cite": "318 S.E.2d 354", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "opinion_index": 0 }, { "cite": "69 N.C. App. 761", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527035 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc-app/69/0761-01" ] }, { "cite": "540 S.E.2d 324", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2000, "pin_cites": [ { "page": "327", "parenthetical": "citing Perry v. Cullipher, 69 N.C. App. 761, 318 S.E.2d 354 (1984)" }, { "page": "327", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "353 N.C. 188", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135780 ], "weight": 2, "year": 2000, "pin_cites": [ { "page": "192", "parenthetical": "citing Perry v. Cullipher, 69 N.C. App. 761, 318 S.E.2d 354 (1984)" }, { "page": "192" } ], "opinion_index": 0, "case_paths": [ "/nc/353/0188-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7\u00a7 105-130.5", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "page": "(a)(4)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 105-267", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 18, "pin_cites": [ { "page": "166-67" }, { "page": "158" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 957, "char_count": 26158, "ocr_confidence": 0.762, "pagerank": { "raw": 4.906515832017873e-07, "percentile": 0.9338857207505148 }, "sha256": "43733f9a1dcd1d00b3779362abd3c38b6868e2abbccceea6ce4a5560675b92b6", "simhash": "1:0fb6031ad63a265c", "word_count": 4173 }, "last_updated": "2023-07-14T22:27:33.869735+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges McGEE and GEER concur." ], "parties": [ "LESSIE J. DUNN and ERWIN W. COOK, JR., individually and on behalf of a class of all others similarly situated, Plaintiffs v. THE STATE OF NORTH CAROLINA, THE NORTH CAROLINA DEPARTMENT OF REVENUE and E. NORRIS TOLSON, AS SECRETARY OF THE NORTH CAROLINA DEPARTMENT OF REVENUE, Defendants" ], "opinions": [ { "text": "STEPHENS, Judge.\nIn this appeal, Defendants challenge, on grounds of sovereign immunity and standing, the trial court\u2019s order certifying, for purposes of pursuing a class action lawsuit, a class of taxpayers who paid income tax on interest earned or accrued on obligations of states other than North Carolina and their political subdivisions (\u201cnon-State obligations\u201d). We affirm the trial court.\nOn 4 November 2003, Defendants received written demands for a refund of taxes paid on non-State obligations for tax years 2001 and 2002 from Plaintiffs Lessie J. Dunn and Erwin W. Cook, Jr. Defendants declined to make the requested refunds, and pursuant to N.C. Gen. Stat. \u00a7 105-267, Dunn and Cook pursued refunds through further legal action. By a complaint filed 9 February 2004, Plaintiffs alleged that Defendants unconstitutionally burdened interstate commerce by imposing and collecting state income tax under N.C. Gen. Stat. \u00a7\u00a7 105-130.5(a)(4), 105-134.5, 105-134.6(b)(l)b, and 105-134.6(c)(l). Specifically, they alleged that the State impermissibly imposed tax on individual and corporate taxpayers on interest received on municipal bonds issued by non-North Carolina state and local governments, while not taxing interest received on municipal bonds issued by North Carolina state and local governments. Moreover, the named Plaintiffs sought to bring the action on behalf of a class of individual and corporate taxpayers pursuant to Rule 23 of the North Carolina Rules of Civil Procedure. In an answer dated 7 September 2004, Defendants denied (1) that the tax structure unlawfully burdened interstate commerce, and (2) that relief through class certification was appropriate.\nFollowing a hearing on 21 February 2005, the Honorable Lindsay R. Davis, Jr. allowed Plaintiffs\u2019 Motion for Class Certification and directed Plaintiffs\u2019 counsel to prepare a proposed order. When the parties were unable to agree on the form of such order, Judge Davis conducted a second hearing on 6 June 2005. By order filed 14 June 2005, Judge Davis certified a class, pursuant to Rule 23, consisting of \u201c[a]ll persons or entities who have paid required North Carolina state income tax on interest or accruals derived from bonds or obligations of states other than North Carolina and their political subdivisions and agencies from October 29, 2000, through the date of final judgment.\u201d He appointed the named Plaintiffs as representatives of all members of the certified class. From this order, Defendants appeal.\nAs a threshold matter, we address the interlocutory nature of this appeal. An order entered by a trial court is either \u201cinterlocutory or the final determination of the rights of the parties.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 54(a) (2003). \u201cA class certification order is not a final judgment disposing of the cause as to all parties; the appeal of such orders is thus interlocutory.\u201d Frost v. Mazda Motor of Am., Inc., 353 N.C. 188, 192, 540 S.E.2d 324, 327 (2000) (citing Perry v. Cullipher, 69 N.C. App. 761, 318 S.E.2d 354 (1984)). However, immediate appeals from an interlocutory order \u201care allowed if they involve a matter of law or legal inference that affects a substantial right of the appellant[.]\u201d Frost, 353 N.C. at 192, 540 S.E.2d at 327 (citations omitted). \u201cThe moving party must show that the affected right is a substantial one, and that deprivation of that right, if not corrected before appeal from final judgment, will potentially injure the moving party.\u201d Flitt v. Flitt, 149 N.C. App. 475, 477, 561 S.E.2d 511, 513 (2002) (citation omitted). The decision of whether an interlocutory appeal affects a substantial right is made on a case-by-case basis. Milton v. Thompson, 170 N.C. App. 176, 611 S.E.2d 474 (2005).\nIn this case, Defendants argue the substantial rights they seek to protect through immediate appellate review are the preservation of sovereign immunity and the protection of the fiscal stability of the State. Moreover, Defendants assert that if this Court does not allow this appeal, these rights will be adversely affected, including the potential injury to Defendants of their inability to avoid a budget exigency. We agree. Further, \u201cthis Court has repeatedly held that appeals raising issues of governmental or sovereign immunity affect a substantial right to warrant immediate appellate review.\u201d Price v. Davis, 132 N.C. App. 556, 558-59, 512 S.E.2d 783, 785 (1999) (citations omitted). We thus allow this interlocutory appeal.\nBy their assignments of error brought forward on this appeal, Defendants first contend that the trial court lacked subject matter jurisdiction over the claims added by class certification because none of the plaintiffs thereby added complied with the notice requirement of N.C. Gen. Stat. \u00a7 105-267. This Court employs de novo review when it evaluates questions of subject matter jurisdiction. Harper v. City of Asheville, 160 N.C. App. 209, 585 S.E.2d 240 (2003).\nNorth Carolina law provides in pertinent part that\n[w]henever a person has a valid defense to the enforcement of the collection of a tax, the person shall pay the tax to the proper officer, and . . . may demand a refund of the tax paid in writing from the Secretary and if the tax is not refunded within 90 days thereafter, may sue the Secretary in the courts of the State for the amount demanded.The protest period ... is three years after payment.\nN.C. Gen. Stat. \u00a7 105-267 (2003). In Bailey v. State, 348 N.C. 130, 166, 500 S.E.2d 54, 75 (1998) (\u2018\u2018Bailey IF'), our Supreme Court determined that\nthe purpose underlying the requirements of section 105-267 is to \u2022put the State on notice that a tax, or a particular application thereof, is being challenged as improper so that the State might properly budget or plan for the potential that certain revenues derived from such tax have to be refunded.While claims of improper or illegal taxation . . . are subject to the procedural requirements of section 105-267, this is only to the extent necessary to provide the State with the notice sufficient to protect fiscal stability.\nTherefore, once the State is put on notice that a tax provision is being challenged, not every taxpayer seeking restitution under N.C. Gen. Stat. \u00a7 105-267 must comply with the statute. Moreover, when the State has impermissibly collected taxes from a group of individuals, public policy makes it\nunjust to limit recovery only to those taxpayers with the advantage of technical knowledge and foresight to have filed a formal protest and demand for refund. Such a result would clearly elevate form over substance. This is especially untenable . . . where the matter is of constitutional import and where, in practical consequence, the purpose of the statute was realized. Further, this more expansive, inclusive determination would seem to comport with the language and spirit of section 105-267, which provides: \u201cIf upon the trial it is determined that all or part of the tax was levied or assessed for an illegal or unauthorized purpose, . . . judgment shall be rendered therefor, with interest, and the judgment shall be collected as in other cases. The amount of taxes for which judgment is rendered in such an action shall be refunded by the State.\u201d\nId. at 166-67, 500 S.E.2d at 75 (quoting N.C.G.S. \u00a7 105-267). Based on the holding in Bailey II, we are persuaded here that the notice requirement of N.C. Gen. Stat. \u00a7 105-267 was met when Defendants received the-named Plaintiffs\u2019 written demands for a tax refund on 4 November 2003. We thus reject Defendants\u2019 argument that, to assert a valid claim, all class members must comply with the statute by individually demanding a refund of taxes paid. Under the plain holding of Bailey II, this argument has no merit.\nDefendants further contend, however, that Bailey II does not control under the factual circumstances presented here. They argue that Bailey II is distinguishable because (1) in Bailey II, the State knew the potential class members and the potential refund amount; (2) Bailey II was decided under a previous version of N.C. Gen. Stat. \u00a7 105-267 that gave taxpayers only thirty days to contest a potentially illegal tax, while the current version provides taxpayers with a three-year window; and (3) Bailey II does not address the limits on class membership imposed by sovereign immunity. While Defendants do raise legitimate distinctions, we believe that the holding in Bailey II and the rationale underlying that holding govern our decision for the following reasons:\nAt issue in the line of Bailey cases was \u201cthe validity under the North Carolina Constitution of a repealed tax exemption for vested participants in state and local government retirement plans[,]\u201d and the necessity for the individual class members in the Bailey litigation to comply with the notice requirements of N.C. Gen. Stat. \u00a7 105-267. Bailey v. State, 330 N.C. 227, 231, 412 S.E.2d 295, 298 (1991), cert. denied, 504 U.S. 911, 118 L. Ed. 2d 547 (1992), overruled in part by Bailey v. State, 348 N.C. 130, 500 S.E.2d 54 (1998). The' Bailey II Court determined that \u201c[t]he purpose of the statute [N.C. Gen. Stat. \u00a7 105-267] was realized[]\u201d because the State was or \u201cshould be fully aware of. . . the amount of benefits paid . . . and had the opportunity to budget[.]\u201d Bailey II, 348 N.C. at 166, 500 S.E.2d at 75. It does not follow, however, that the State must be aware of the exact number of potential plaintiffs or the exact amount of its potential liability to receive sufficient notice to enable the State to protect fiscal stability. While we agree with Defendants that \u201c[n]otice for fiscal planning purposes is the touchstone of the section 105-267 requirements[,]\u201d Id., we are persuaded by our Supreme Court\u2019s elaboration of the definition of notice for section 105-267 purposes: \u201cAs of the first protest received in accordance with section 105-267, not to mention the first lawsuit filed thereafter, the State has been aware of a constitutional challenge to the validity of the Act.\u201d Id. (Emphasis added). Therefore, notice, not exact knowledge of the total potential liability, is the goal of N.C. Gen. Stat. \u00a7 105-267. Once notice is received, the burden is on the State to determine its potential exposure and to plan accordingly.\nWe note further that, by affidavit, Margaret M. Barnes, Assistant Secretary for Information Technology at the North Carolina Department of Revenue, acknowledged that, although it would take time and effort, Defendants could review tax returns and obtain an understanding of North Carolina\u2019s potential liability through the use of electronic means and manual labor. Therefore, the information that Defendants claim they need to plan for the State\u2019s fiscal stability as a consequence of this lawsuit is clearly within Defendants\u2019 control. As in Bailey II, then, the purpose of N.C. Gen. Stat. \u00a7 105-267 has been achieved. Accordingly, we hold that the named Plaintiffs\u2019 compliance with N.C. Gen. Stat. \u00a7 105-267 is sufficient to put Defendants on notice of the claims of all members of the class.\nDefendants also contend, however, that Bailey II does not control this case because, since the opinion in Bailey II, the General Assembly has modified N.C. Gen. Stat. \u00a7 105-267 to provide three years in which a taxpayer can challenge the legality of a tax. This is an increase over the original thirty days that the statute provided for such a challenge when it was evaluated by the Bailey II Court. We are not persuaded by this argument. Had the General Assembly wanted to modify the notice requirements of N.C. Gen. Stat. \u00a7 105-267 and thus weaken the Bailey II decision, we believe it would have specifically and directly done so, rather than leaving it to litigants and Courts to speculate that, by increasing a taxpayer\u2019s protest period, the Legislature also changed the statutory notice requirement as defined by our Supreme Court. Other than argument, Defendants offer no evidence that this is what the Legislature intended, and we decline to make this leap. Bailey II thus continues to guide our determination. Defendants\u2019 argument is without merit.\nFinally, Defendants contend that because the opinion in Bailey II does not address the limits on class membership imposed by sovereign immunity, it does not control the resolution of this case. We disagree.\nThe Bailey II Court recognized that the General Assembly partially waived the State\u2019s sovereign immunity by enacting N.C. Gen. Stat. \u00a7 105-267. See id. at 158, 500 S.E.2d at 70. In addition, our Supreme Court concluded that \u201c[i]t would be unjust to limit recovery only to those taxpayers with the advantage of technical knowledge and foresight to have filed a formal protest and demand for refund.\u201d Id. at 166, 500 S.E.2d at 75. In so concluding, the Court allowed individual taxpayers who complied with N.C. Gen. Stat. \u00a7 105-267 by timely requesting a refund to represent other individuals who paid the tax, but did not comply with the statute. It follows that, in this case, since sovereign immunity has been partially waived, the named Plaintiffs may represent taxpayers who were subject to the contested tax, but failed to comply with N.C. Gen. Stat. \u00a7 105-267 by individually requesting a refund. Under our Supreme Court\u2019s resolution of this question, Defendants\u2019 position has no merit. Accordingly, this assignment of error is overruled.\nDefendants next argue that the trial court lacked subject matter jurisdiction over taxpayers who are not individuals. Specifically, Defendants argue that the named Plaintiffs lacked standing to represent anyone other than individual taxpayers. Defendants contend that because the named Plaintiffs pay only individual income tax under N.C. Gen. Stat. \u00a7 105-134.2, they may not represent non-individual taxpayers, such as corporations or estates and trusts that pay tax under N.C. Gen. Stat. \u00a7 105-130.3 and N.C. Gen. Stat. \u00a7 105-160.2 respectively.\nIt is clear that the named Plaintiffs have standing to represent themselves and other individual taxpayers, and Defendants do not challenge their ability in this regard. However, to determine if they may represent non-individiial taxpayers, we must evaluate the rule governing class certification.\nUnder Rule 23 of the North Carolina Rules of Civil Procedure, \u201c [i]f persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 23 (2003). The goal of Rule 23 is to help eliminate \u201c \u2018repetitious ligation and possible inconsistent adjudications involving common questions, related events, or requests for similar relief.\u2019 \u201d English v. Holden Beach Realty Corp., 41 N.C. App. 1, 9, 254 S.E.2d 223, 230-31 (quoting 7 Wright and Miller, Federal Practice and Procedure: Civil \u00a7 1754, p. 543), disc. review denied, 297 N.C. 609, 257 S.E.2d 217 (1979), overruled on other grounds by Crow v. Citicorp Acceptance Co., 319 N.C. 274, 354 S.E.2d 459 (1987). \u201cThose purporting to represent the class must show that they have a personal, and not just a technical or official, interest in the action.\u201d English, 41 N.C. App. at 7, 254 S.E.2d at 230 (citing Hughes v. Teaster, 203 N.C. 651, 166 S.E. 745 (1932)).\nIn this case, although the named Plaintiffs paid only individual income tax under N.C. Gen. Stat. \u00a7 105-134.2, they are also attempting to contest the imposition of the same income tax on corporations under section 105-130.3 and estates and trusts under 105-160.2. While each entity is subject to a unique statutory provision that governs taxation, a closer examination reveals that all three provisions are strikingly similar. For example, the estates and trusts income tax provision uses tax rates from the individual income tax provision, and the corporate tax statute differs only in the rate of taxation imposed. Most significantly, however, although individuals, estates and trusts, and corporations pay tax under different statutory provisions, in this litigation, each group is contesting the adjustment to taxable income under N.C. Gen. Stat. \u00a7 105-134.6(b)(l)b and N.C. Gen. Stat. \u00a7 105-134.6(c)(l), that is, each group is alleging that the same law, which taxes non-State but not State obligations, is unconstitutional. Therefore, the named Plaintiffs have more than a technical or official interest in the subject matter of this lawsuit affecting corporations or estates and trusts; their interest is personal. Accordingly, once the named Plaintiffs established standing to proceed on the individual claims, they were entitled, under Rule 23, to represent not only other individuals, but also non-individual taxpayers, specifically, estates and trusts, and corporations.\nBy their final argument, Defendants attack the trial court\u2019s order certifying the class, arguing that the order contains erroneous assumptions and lacks sufficient findings of fact to support class certification. We find no merit in this argument.\nThe decision to grant or deny class certification rests within the discretion of the trial court and will not be overturned absent an abuse of that discretion. Nobles v. First Carolina Communications, Inc., 108 N.C. App. 127, 423 S.E.2d 312 (1992), disc. review denied, 333 N.C. 463, 427 S.E.2d 623 (1993). On appeal, \u201can appellate court is bound by the court\u2019s findings of fact if they are supported by competent evidence.\u201d Id. at 132, 423 S.E.2d at 315 (citing Howell v. Landry, 96 N.C. App. 516, 386 S.E.2d 610 (1989), disc. review denied, 326 N.C. 482, 392 S.E.2d 90 (1990)). Although not mandated by the language of Rule 23, this Court has determined that \u201cfindings of fact are required by the trial court when rendering a judgment granting or denying class certification in order for the appellate courts to afford meaningful review under the abuse of discretion standard.\u201d Nobles, 108 N.C. App. at 133, 423 S.E.2d at 316 (citation omitted).\nDefendants first allege that the trial court\u2019s order contains an assumption not supported, and even contradicted, by the evidence presented. In particular, Defendants object to the portion of the court\u2019s order that asserts \u201c[t]he State must have assessed the likely revenue from the various sources, including taxes, and has had sufficient opportunity to assess the likely effect on the treasury if refunds to all who have paid an unlawful tax is [sic] required.\u201d We believe this statement merely indicates that the State was put on sufficient notice that the income tax structure was being questioned. Once it was determined that the State received sufficient notice, what the trial court believes the State \u201cmust have\u201d done is irrelevant. Therefore, including this statement in the order certifying the class did not amount to an abuse of discretion by the trial court.\nNext, Defendants generally object to the failure of the trial court to enumerate findings of fact in the order certifying the class. While we agree with Defendants that the trial court did not make numbered findings of fact, upon a thorough review of the trial judge\u2019s detailed order certifying the class, we are satisfied that the section entitled \u201cDiscussion\u201d in the order includes sufficient findings of fact for this Court \u201cto afford meaningful review under the abuse of discretion standard.\u201d Id. For example, the trial court found that (1) all putative class members share common issues, including whether the State\u2019s tax provision in question violates the Commerce Clause, (2) \u201c[t]he issues which are common to the plaintiffs and members of the putative class are likely to predominate over distinctly separate issues[,]\u201d (3) there is \u201cno disabling conflict between the interests of the plaintiffs and the interests of other taxpayers in the putative class, and the claims of the plaintiffs are typical of the claims of other putative class members[,]\u201d and (4) \u201c[i]t is apparent. . . that potential recoveries by putative class members if they were to pursue their claims separately, would not likely be sufficient in amount to be economically justifiable.\u201d The court further found that although corporations, individuals, and estates and trusts are taxed under separate statutory provisions, \u201cthe only substantial difference among them is the tax rate, which is actually the same for individuals and trusts and estates[,]\u201d and that \u201cthe taxation mechanisms are substantially the same.\u201d Most importantly, the trial court found that the State was \u201cput on notice in 2003 when the plaintiffs filed for refund, . . . and was on notice [because of ongoing similar litigation involving intangibles taxation] that revenue provisions that treat income differently depending on its connection to the State are constitutionally suspect.\u201d Based on the sufficiency of the trial court\u2019s findings of fact, we find Defendants\u2019 argument without merit.\nThe order of Judge Lindsay certifying a class for purposes of pursuing this action is\nAFFIRMED.\nJudges McGEE and GEER concur.", "type": "majority", "author": "STEPHENS, Judge." } ], "attorneys": [ "Smith James Rowlett & Cohen L.L.R, by Norman Smith; Jack E. Thornton, Jr.; and Susman, Watkins & Wylie, LLP, by John R. Wylie, pro hac vice, for Plaintiffs-Appellees.", "Attorney General Roy Cooper, by Assistant Attorney General Gregory P. Roney, for Defendants-Appellants." ], "corrections": "", "head_matter": "LESSIE J. DUNN and ERWIN W. COOK, JR., individually and on behalf of a class of all others similarly situated, Plaintiffs v. THE STATE OF NORTH CAROLINA, THE NORTH CAROLINA DEPARTMENT OF REVENUE and E. NORRIS TOLSON, AS SECRETARY OF THE NORTH CAROLINA DEPARTMENT OF REVENUE, Defendants\nNo. COA05-1178\n(Filed 17 October 2006)\n1. Appeal and Error\u2014 appealability \u2014 interlocutory order\u2014 class certification \u2014 substantial right \u2014 sovereign immunity\nAlthough defendants\u2019 appeal from an order certifying a class of taxpayers and appointing the named plaintiffs as class representatives is an appeal from an interlocutory order, the order is subject to immediate review because: (1) appeals raising issues of governmental or sovereign immunity affect a substantial right warranting immediate appellate review; and (2) defendants\u2019 rights will be adversely affected including the potential injury to defendants of their inability to avoid a budget exigency.\n2. Class Actions\u2014 certification \u2014 taxpayers who paid income tax \u2014 subject matter jurisdiction \u2014 notice requirement\nThe trial court did not lack subject matter jurisdiction over the claims added by class certification of taxpayers who paid income taxes on interest earned or accrued on obligations of states other than North Carolina and their political subdivisions even though defendants contend none of the plaintiffs thereby added complied with the notice requirement of N.C.G.S. \u00a7 105-267, because: (1) once the State is put on notice that a tax provision is being challenged, not every taxpayer seeking restitution under N.C.G.S. \u00a7 105-267 must comply with the statute; (2) when the State has impermissibly collected taxes from a group of individu-\u00e1is, public policy makes it unjust to limit recovery only to those taxpayers with the advantage of technical knowledge and foresight to have filed a formal protest and demand for refund; (3) the notice requirement was met when defendants received the named plaintiffs\u2019 written demands for a tax refund on 4 November 2003; (4) notice instead of exact knowledge of the total potential liability is the goal of N.C.G.S. \u00a7 105-267, and thereafter the burden is on the State to determine its potential exposure and to plan accordingly when the information is within its control; (5) had the General Assembly wanted to modify the notice requirements of N.C.G.S. \u00a7 105-267 and thus weaken the Bailey II decision, it would have specifically and directly done so rather than leaving it to litigants and courts to speculate that by increasing a taxpayer\u2019s protest period, the legislature also changed the statutory notice requirement as defined by our Supreme Court; and (6) the named plaintiffs may represent taxpayers who were subject to the contested tax but failed to comply with N.C.G.S. \u00a7 105-267 by individually requesting a refund since sovereign immunity has been partially waived by the enactment of N.C.G.S. \u00a7 105-267.\n3. Class Actions\u2014 certification \u2014 representation of taxpayers who are not individuals \u2014 subject matter jurisdiction \u2014 personal interest\nThe trial court did not lack subject matter jurisdiction over taxpayers who are not individuals such as corporations or estates and trusts that pay income taxes under N.C.G.S. \u00a7\u00a7 105-130.3 and 105-160.2 when the named plaintiffs paid only individual income taxes under N.C.G.S. \u00a7 105-134.2, because: (1) N.C.G.S. \u00a7 1A-1, Rule 23 provides that if persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued in order to help eliminate repetitious litigation and possible inconsistent adjudications involving common questions, related events, or request for similar relief; (2) although individuals, estates and trusts, and corporations pay tax under different statutory provisions, in this litigation, each group is contesting the adjustment to taxable income under N.C.G.S. \u00a7\u00a7 105-134.6(b)(l)b and 134.6(c)(1); and (3) the named plaintiffs have more than a technical or official interest in the subject matter of this lawsuit \u2014 affecting corporations or estates and trusts, and their interest is personal.\n4. Class Actions\u2014 certification \u2014 sufficiency of findings of fact\nWhile the trial court did not make numbered findings of fact in its order certifying a class action by taxpayers against the State and the N.C. Department of Revenue, a section of the order entitled \u201cDiscussion\u201d included sufficient findings of fact to permit meaningful appellate review under the abuse of discretion standard.\nAppeal by Defendants from order entered 14 June 2005 by Judge Lindsay R. Davis, Jr. in Forsyth County Superior Court certifying a class of taxpayers and appointing the named Plaintiffs as class representatives. Heard in the Court of Appeals 19 April 2006.\nSmith James Rowlett & Cohen L.L.R, by Norman Smith; Jack E. Thornton, Jr.; and Susman, Watkins & Wylie, LLP, by John R. Wylie, pro hac vice, for Plaintiffs-Appellees.\nAttorney General Roy Cooper, by Assistant Attorney General Gregory P. Roney, for Defendants-Appellants." }, "file_name": "0753-01", "first_page_order": 785, "last_page_order": 795 }