Lannan v. Bd. of Governors of the Univ. of N.C.

IN THE SUPREME COURT OF NORTH CAROLINA

No. 316PA22

Filed 21 March 2025

JOSEPH LANNAN and LANDRY KUEHN, on behalf of themselves and others

similarly situated

v.

BOARD OF GOVERNORS OF THE UNIVERSITY OF NORTH CAROLINA,

known and distinguished by the name of THE UNIVERSITY OF NORTH

CAROLINA, a body politic and corporate

On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision

of the Court of Appeals, 285 N.C. App. 574 (2022), affirming an order entered on 30

June 2021 by Judge Edwin G. Wilson Jr. in Superior Court, Wake County. Heard in

the Supreme Court on 22 October 2024.

White & Stradley, PLLC, by J. David Stradley; and Brian D. Westrom for

plaintiff-appellees.

Jeff Jackson, Attorney General, by Laura McHenry, Special Deputy Attorney

General, and Lindsay Vance Smith, Deputy Solicitor General; and Brooks,

Pierce, McLendon, Humphrey & Leonard, LLP, by Jim W. Phillips Jr., Jennifer

K. Van Zant, and Katarina Wong; and Dowling PLLC, by Craig D. Schauer

and Troy D. Shelton, for defendant-appellant.

Cranfill Sumner LLP, by Steven A. Bader, for North Carolina Association of

Defense Attorneys, amicus curiae.

ALLEN, Justice.

Early in the Fall 2020 semester, during the COVID-19 pandemic, North

Carolina State University (NCSU) and the University of North Carolina at Chapel

Hill (UNC-CH) moved their in-person classes online and effectively closed their

LANNAN V. BD. OF GOVERNORS OF THE UNIV. OF N.C.

Opinion of the Court

campuses to students. Plaintiffs filed suit as students at the universities against the

Board of Governors of the University of North Carolina, seeking refunds of the

mandatory fees they paid as a condition of registration. Plaintiffs also sued to recover

fees paid for on-campus parking permits.

The Board moved to dismiss the lawsuit, asserting the defense of sovereign

immunity, a legal doctrine that bars most legal claims against the State and its

agencies. The trial court denied the motion as to plaintiffs’ breach of contract claims.

The Court of Appeals affirmed, in part because sovereign immunity is not a defense

to a claim that the State breached a valid contract. According to the Court of Appeals,

plaintiffs successfully alleged that (1) the Board—through NCSU and UNC-CH—

entered into implied contracts with plaintiffs to provide fee-funded services and on-

campus parking and (2) NCSU and UNC-CH breached those implied contracts by

denying students access to services and facilities.

We agree with the Court of Appeals that sovereign immunity does not foreclose

plaintiffs’ breach of contract claims against the Board at this stage of litigation;

however, we read the lawsuit to allege the existence of express—not implied—

contracts between plaintiffs and the Board. We therefore modify and affirm the

judgment of the Court of Appeals.

I. Background

On 10 September 2020, plaintiff Joseph Lannan filed suit in the Superior

Court, Wake County, against defendant Board of Governors of the University of

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North Carolina.1 The Board is “responsible for the general determination, control,

supervision, management and governance of all affairs” of the sixteen constituent

universities that make up the University of North Carolina, including NCSU and

UNC-CH. N.C.G.S. §§ 116-4, -11(2) (2023). On 18 November 2020, the Chief Justice

of the Supreme Court of North Carolina designated this case as exceptional pursuant

to Rule 2.1 of the General Rules of Practice for the Superior and District Courts,

assigning it to Senior Resident Superior Court Judge Edwin G. Wilson Jr.

On 3 February 2021, plaintiff Lannan and plaintiff Landry Kuehn filed an

amended complaint. The amended complaint alleges the following facts regarding

certain fee-related actions taken by NCSU and UNC-CH during the Fall 2020

semester. Both universities fund various student services and benefits through the

imposition of mandatory fees. Students could not register for the Fall 2020 semester

without paying those fees.

NCSU and UNC-CH provided information about the mandatory fees on their

respective websites and in written communications to students. For example, NCSU

described some of its fees as follows:

a. Education and Technology Fee – This academic fee

of $439.28 is used by colleges and schools to equip and

operate computing and scientific laboratories which

supplement classroom instruction.

....

1 Both the original complaint and the amended complaint are framed as class action

lawsuits. The class action component is not at issue here.

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d. Union Activities Board (UAB) Fee – This fee of

$19.63 supports the UAB which is the main programming

body for the campus which is responsible for acquiring,

scheduling, publicizing, and presenting films, speakers,

and special events.

....

h. Student Center Operations Fee – This fee of $132.39

supports the maintenance and operations of the Student

Center facilities.

i. Student Center Programming Fee – This fee of

$242.70 supports programming for the Student Centers

and the Office of Institutional Equity and Diversity.

....

l. Recreational Sports Fee – This fee of $168.85 is used

to defray the cost of operating and maintaining the

intramural recreational sports program and other physical

education programs.

....

o. Student Health Services Fee – This fee of $407.00 is

used by the University Health Center to offer medical and

counseling services to students.

p. Transit Operations Fee – This fee of $205.00 partially

funds the campus transit system.

The universities’ written communications to students included “an itemized

bill which labeled . . . the services, benefits, and opportunities which NCSU and UNC-

CH promised to provide in exchange for each student’s . . . payment of Fall 2020 Term

Student Fees.” The bill “also specified the amount that each . . . NCSU and UNC-CH

student was required to pay for those services, benefits, and opportunities.”

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Additionally, the universities offered optional parking permits that “some, but

not all, Fall 2020 Term students at NCSU and UNC-CH . . . purchased.” The parking

permits authorized purchasers “to park their motor vehicle[s] on NCSU’s and UNC-

CH’s convenient on-campus parking lots for the Fall 2020 Terms.”

Plaintiff Lannan paid NCSU’s mandatory fees when registering as a graduate

student for the Fall 2020 semester. He also paid for a Fall 2020 parking permit.

Plaintiff Kuehn paid UNC-CH’s mandatory fees when registering as an

undergraduate for the Fall 2020 semester and purchased a parking permit, though

her permit was valid for the entire 2020–2021 academic year.

In August 2020, NCSU and UNC-CH “voluntarily” and “unnecessarily” took a

series of drastic actions effective for the duration of the Fall 2020 semester, to include:

cancelling all in-person, on-campus instruction; evicting all students from on-campus

housing; severely limiting campus transportation; prohibiting students from

accessing on-campus student athletic and recreation facilities; and closing libraries,

student unions, dining halls, and other on-campus facilities.2 Those actions rendered

many of the facilities and services funded by the mandatory fees “of no value

whatsoever” to plaintiffs and other NCSU and UNC-CH students enrolled during the

Fall 2020 semester. Nonetheless, the fees “were not adjusted, pro-rated, or rebated in

any way.”

2 The original complaint filed in this case alleges that NCSU and UNC-CH took these

actions “in response to the COVID-19 pandemic.” The amended complaint omits any

explanation for the actions.

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The amended complaint alleges two claims against the Board for breach of

contract arising from the foregoing alleged facts. The first claim concerns the

mandatory fees and asserts that plaintiffs “entered into express contracts . . . in

which: (1) NCSU and UNC-CH offered [p]laintiffs . . . services, benefits, and

opportunities . . . ; and (2) [p]laintiffs . . . accepted [the] offer and agreed to pay, and

did, in fact, pay, the Student Fees for such Earmarked Services.” NCSU and UNC-

CH allegedly breached the contracts by stopping or curtailing the services and

benefits for which plaintiffs paid. This purported breach left plaintiff Lannan with

$1,288.80 in damages and plaintiff Kuehn with damages totaling $976.25.

The second breach of contract claim focuses on parking permits. Plaintiffs

assert that “NCSU and UNC-CH offered to sell optional parking permits” for on-

campus lot access during Fall 2020. When students purchased those permits, the

amended complaint continues, they formed contracts. By closing campuses and

suspending activities, the universities allegedly “rendered the . . . permits worthless.”

Although NCSU refunded $80 to plaintiff Lannan and UNC-CH refunded

approximately $150 to plaintiff Kuehn, plaintiff Lannan has unpaid damages of $130,

while plaintiff Kuehn’s unpaid damages come to $150.

As an alternative to plaintiffs’ contract claims, the amended complaint also

alleges that the universities violated plaintiffs’ property rights and constitutional

rights “guaranteed by the ‘law of the land’ clause found in Article I, Section 19 of the

North Carolina Constitution.” Citing this Court’s decision in Corum v. University of

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North Carolina, 330 N.C. 761 (1992), the amended complaint refers to the alleged

constitutional violation as a “Corum claim” and asserts that it entitles plaintiffs to

just compensation for the unrefunded fees they paid for the Fall 2020 semester.

On 2 March 2021, the Board filed a motion to dismiss the amended complaint

pursuant to Rules 12(b)(1) (lack of subject matter jurisdiction), 12(b)(2) (lack of

personal jurisdiction), and 12(b)(6) (failure to state a claim for relief) of the North

Carolina Rules of Civil Procedure. In its motion, the Board asserted that plaintiffs’

claims are barred by the doctrine of sovereign immunity, which generally prohibits

lawsuits against the State except when the State has waived its immunity. The Board

further contended that the amended complaint fails to allege either a claim for breach

of contract or a Corum claim.

The trial court entered an order on 18 June 2021, granting the Board’s motion

in part and denying it in part. The order allowed the contract claims to proceed but

dismissed plaintiffs’ Corum claim. At plaintiffs’ request, the court entered an

amended order on 30 June 2021 restating its earlier ruling and certifying the

dismissed Corum claim for immediate appeal. Both sides then sought appellate

review, with plaintiffs appealing the dismissal of their Corum claim and the Board

challenging the trial court’s denial of its motion to dismiss the contract claims.

In an opinion filed on 4 October 2022, the Court of Appeals unanimously

affirmed the trial court’s amended order. Lannan v. Bd. of Governors of the Univ. of

N.C., 285 N.C. App. 574, 606 (2022). As summarized by the Court of Appeals, the

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appeal presented three issues: (1) whether sovereign immunity bars plaintiffs’ claims;

(2) whether the trial court should have dismissed the contract claims under Rule

12(b)(6) “for failure to plead a claim for breach of contract on which relief may be

granted”; and (3) whether, if plaintiffs’ contract claims fail, their Corum claim states

a valid claim for relief. Id. at 581. After establishing that it had jurisdiction over the

appeal, id. at 581–86, the Court of Appeals took up the first issue.

Although the parties agreed that the State waives sovereign immunity by

entering into valid contracts, the Board insisted that such contracts must be express

and that plaintiffs failed to allege the existence of any express contract. In response,

plaintiffs argued that they successfully alleged a contract implied in fact and that

such contracts can also overcome sovereign immunity.

The Court of Appeals acknowledged this Court’s holding in Smith v. State, 289

N.C. 303 (1976), that the State implicitly consents to be sued for breach of contract

whenever it enters into a valid contract. Lannan, 285 N.C. App. at 585. It noted,

though, that later cases such as Whitfield v. Gilchrist, 348 N.C. 39 (1998), “include

broad language that when read literally, and taken out of context, could [appear to]

exclude contracts implied in fact from the waiver of sovereign immunity.” Lannan,

285 N.C. App. at 590. Declining to rely on this broad language, the Court of Appeals

turned for guidance to several of its prior decisions that “extend[ed] Smith to implied

in fact contracts [in] the employment context.” Id. at 593. According to the Court of

Appeals, “[t]he reasoning of those [employment] cases extends beyond the

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employment context” because it “turn[s] on the similarities of express and implied in

fact contracts.” Id. In light of this precedent, the court concluded that “a contract

implied in fact can waive sovereign immunity under the contractual waiver holding

in Smith.” Id. at 595.

Having determined that implied-in-fact contracts can waive sovereign

immunity, the Court of Appeals considered whether the amended complaint alleges

such a contract. “[T]o plead a valid implied-in-fact contract,” the court explained,

“[p]laintiffs needed to plead offer, acceptance, and consideration.” Id. at 597. The

court reviewed the amended complaint’s factual allegations and held that “[p]laintiffs

properly pled each of those three elements.” Id. Consequently, “the trial court did not

err in denying [the Board’s] motion to dismiss on the grounds of sovereign immunity.”

Id. at 600.

The Court of Appeals next examined the Board’s argument that the trial court

should have dismissed plaintiffs’ contract claims under Rule 12(b)(6) for failure to

state a claim for relief. Because, in its view, plaintiffs alleged a valid contract, the

Court of Appeals “only need[ed] to address whether [p]laintiffs adequately pled

breach to address the trial court’s Rule 12(b)(6) ruling.” Id. at 601. “Focusing only on

[plaintiffs’] non-conclusory factual allegations,” the court held that “[p]laintiffs

adequately allege[d] a breach even though they [did] not specifically say they

explicitly asked for and then were denied services; according to the allegations, they

paid for services and then [NCSU and UNC-CH] barred them from accessing such

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services.” Id. at 603. It followed that “the trial court did not err in denying [the

Board’s] motion to dismiss [p]laintiffs’ contract claims for failure to state a claim

under Rule 12(b)(6).” Id.

Finally, the Court of Appeals disagreed with plaintiffs’ contention that the trial

court erred by dismissing the amended complaint’s Corum claim. Observing that a

party may not pursue a claim directly under the North Carolina Constitution when

the law provides an adequate alternative remedy, the Court of Appeals pointed out

that “the remedy for [plaintiffs’] contract claims, namely money damages, is identical

to [their] requested remedy for the alleged constitutional violation.” Id. at 605.

Having disposed of all issues raised by the parties, the Court of Appeals affirmed the

trial court’s amended order granting in part and denying in part the Board’s motion

to dismiss.

The Board filed a petition for discretionary review pursuant to N.C.G.S. § 7A-

31 asking this Court to review the Court of Appeals’ rulings on plaintiffs’ contract

claims. We allowed the petition.3

II. Standard of Review

“Questions of law regarding the applicability of sovereign or governmental

3 Plaintiffs did not file a petition for discretionary review of the Court of Appeals’

ruling upholding the dismissal of their Corum claim. After oral argument, plaintiffs filed a

conditional petition for writ of certiorari requesting review of the Corum ruling if this Court

determines that the amended complaint fails to allege valid breach of contract claims.

Inasmuch as we hold that the amended complaint states valid claims for breach of contract,

we dismiss as moot the petition for writ of certiorari. Accordingly, plaintiffs’ Corum claim is

not before this Court.

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immunity are reviewed de novo.” Irving v. Charlotte-Mecklenburg Bd. of Educ., 368

N.C. 609, 611 (2016). In other words, we “consider[ ] the matter anew and freely

substitute[ ] our own judgment for that of the lower courts.” Town of Midland v.

Harrell, 385 N.C. 365, 370 (2023) (cleaned up).

We also review de novo a lower court’s ruling on a motion to dismiss under

Rule 12(b)(6). Arnesen v. Rivers Edge Golf Club & Plantation, Inc., 368 N.C. 440, 448

(2015). Such a motion tests whether the complaint states a valid legal claim if its

factual allegations are accepted as true. Sutton v. Duke, 277 N.C. 94, 98 (1970). “When

the complaint on its face reveals that no law supports the claim, reveals an absence

of facts sufficient to make a valid claim, or discloses facts that necessarily defeat the

claim, dismissal is proper.” Arnesen, 368 N.C. at 448. On the other hand, our “system

of notice pleading affords a sufficiently liberal construction of complaints so that few

fail to survive a motion to dismiss.” Ladd v. Est. of Kellenberger, 314 N.C. 477, 481

(1985). See generally N.C.G.S. § 1A-1, Rule 8(a) (requiring any pleading that sets

forth a claim for relief to contain “[a] short and plain statement of the claim

sufficiently particular to give the court and the parties notice of the transactions,

occurrences, or series of transactions or occurrences, intended to be proved showing

that the pleader is entitled to relief”).

III. Analysis

The Board raises three main issues in its briefing to this Court. First, it argues

that the fees for which plaintiffs seek refunds cannot be the subject of a contract

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because state law required NCSU and UNC-CH to impose and collect them. Second,

the Board contends that sovereign immunity bars plaintiffs’ contract claims. Third,

the Board insists that plaintiffs’ contract claims cannot survive its Rule 12(b)(6)

motion to dismiss “because [p]laintiffs pled facts that defeat them.” Each of these

arguments misses the mark.

A. Statutory Mandate

The Board highlights several statutory provisions that govern the imposition

of student fees. In particular, N.C.G.S. § 116-143(a) directs the Board to “fix the

tuition and fees . . . at the [constituent] institutions of higher education . . . in such

amount or amounts as it may deem best, taking into consideration the nature of each

institution and program of study and the cost of equipment and maintenance.”

N.C.G.S. § 116-143(a) (2023). According to the Board, “[t]he University’s imposition

and collection of fees, pursuant to the General Assembly’s mandate, constitutes the

exercise of the University’s governmental power and, therefore, cannot be the subject

of a contract.”

Furthermore, in the Board’s view, the imposition and collection of mandatory

student fees is analogous to the levying of taxes. The Board insists that “the

government’s levying of an assessment is the exercise of its sovereign power to raise

revenue and fund government operations and advance public welfare, not the

creation of a contract enforceable by a citizen.” In support of its position, the Board

cites Tilghman v. West of New Bern Volunteer Fire Department, 32 N.C. App. 767

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(1977), wherein the Court of Appeals held that “[t]he collection of taxes by Craven

County . . . under authority granted by the legislature constituted the exercise of a

public and governmental power and as such [was] not and [could not] be the subject

of a contract.” Id. at 769.

It appears that the Board did not make its statutory mandate argument to the

trial court. Likewise, the Board did not include the argument in its briefs to the Court

of Appeals. Inasmuch as “the law does not permit parties to swap horses between

courts in order to get a better mount in the Supreme Court,” we decline to consider

this argument. Weil v. Herring, 207 N.C. 6, 10 (1934); see also N.C. R. App. P. 28(a)

(“Issues not presented and discussed in a party’s brief are deemed abandoned.”).

B. Sovereign Immunity

The Board maintains that sovereign immunity bars plaintiffs’ breach of

contract claims because “there can be no serious argument the General Assembly’s

requirement that [the Board] charge fees is a waiver of liability.” The Board further

argues that plaintiffs failed to allege a waiver of sovereign immunity because the

amended complaint does not allege either an express contract or a contract implied

in fact. Lastly, the Board asserts that, even if the amended complaint alleges an

implied-in-fact contract, “North Carolina’s appellate courts have previously only

allowed an implied-in-fact contract to waive sovereign immunity in one limited

context: where the State acts as an employer.”

Subject to important limitations, the doctrine of sovereign immunity bars

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lawsuits against the State except when the State has waived its immunity to suit.4

Smith v. Hefner, 235 N.C. 1, 6 (1952). The State’s sovereign immunity extends to the

University of North Carolina. See Orange County v. Heath, 282 N.C. 292, 296 (1972)

(“The State and its governmental units cannot be deprived of the sovereign attributes

of immunity except by a clear waiver by the lawmaking body.”).

Though rooted in the outdated notion that “the king could do no wrong,”

Corum, 330 N.C. at 785, today sovereign immunity reflects the judiciary’s respect for

the separation of powers between the legislative and the judicial branches. See id. (“It

has been said that the present day doctrine [of sovereign immunity] seems to rest on

a respect for the positions of two coequal branches of government—the legislature

and the judiciary.”).

The appropriations clause in the North Carolina Constitution provides that

“[n]o money shall be drawn from the State treasury but in consequence of

appropriations made by law.” N.C. Const. art. V, § 7(1). “In drafting the

appropriations clause, the framers sought to ensure that the people, through their

elected representatives in the General Assembly, had full and exclusive control over

4 In general, sovereign immunity will not bar claims against the State or its agencies

for violations of an individual’s rights under the North Carolina Constitution. See Corum,

330 N.C. at 785–86 (“The doctrine of sovereign immunity cannot stand as a barrier to North

Carolina citizens who seek to remedy violations of their rights guaranteed by the [North

Carolina Constitution’s] Declaration of Rights.”). “In addition, under the federal cases

interpreting [42 U.S.C. § 1983], sovereign immunity alleged under state law is not a

permissible defense to section 1983 actions.” Id. at 772 (citing Martinez v. California, 444

U.S. 277, 283 (1980)).

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the allocation of the [S]tate’s expenditures.” Cooper v. Berger, 376 N.C. 22, 37 (2020).

By narrowing the State’s exposure to lawsuits, sovereign immunity reduces the

chances that judgments entered against the State will significantly impair the

General Assembly’s authority to set spending priorities. See Smith, 289 N.C. at 322

(“With no limits on liability jury verdicts could conceivably impose an unanticipated

strain upon the State’s budget.”).

Consistent with our respect for the separation of powers, we will not lightly

infer waivers of sovereign immunity. Guthrie v. N.C. State Ports Auth., 307 N.C. 522,

537–38 (1983). In Smith, however, we reasoned “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 . . . in the event it breaches the

contract.” Smith, 289 N.C. at 320. In such circumstances, “the doctrine of sovereign

immunity will not be a defense to the State.” Id.

We predicted that our decision in Smith would not “result in any unseemly

conflict between the legislative and judicial branches of the government.” Id. at 321.

For one thing, we did not “anticipate that [Smith would] have a significant impact

upon the State treasury.” Id. Inasmuch as the immunity waiver recognized in Smith

was confined to contracts “authorized by law,” the State could, “with a fair degree of

accuracy, estimate the extent of liability for a breach of contract.” Id. at 322; see also

Wray v. City of Greensboro, 370 N.C. 41, 47 (2017) (noting that a valid contract waives

the State’s sovereign immunity only “to the extent of th[e] contract”). We further

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clarified that, even if the Smith plaintiff proved his claim against the State, he could

not “obtain execution to enforce the judgment.” Smith, 289 N.C. at 321. “Satisfaction

[of the judgment] w[ould] depend upon the manner in which the General Assembly

discharge[d] its constitutional duties.” Id.

“Because in contract actions the doctrine of sovereign immunity will not be a

defense, a waiver of governmental immunity is implied, and effectively alleged, when

the plaintiff pleads a contract claim.” Wray, 370 N.C. at 48 (cleaned up). Ordinarily,

this means that the complaint must allege offer, acceptance, and consideration. See,

e.g., Dodds v. St. Louis Union Tr. Co., 205 N.C. 153, 156 (1933) (“In the formation of

a contract[,] an offer and an acceptance are essential elements; they constitute the

agreement of the parties.”). To serve as the foundation for a valid contract, the offer

must be intended to create legal obligations if accepted. Yeager v. Dobbins, 252 N.C.

824, 828 (1960). “It must not be . . . intended merely to open negotiations which will

ultimately result in a contract . . . .” Id. Acceptance occurs only if the parties “assent

to the same thing in the same sense, . . . and their minds must meet as to all the

terms.” Dodds, 205 N.C. at 156. Consideration is present if there is a benefit to the

promisor or a detriment to the promisee. Carolina Helicopter Corp. v. Realty Co., 263

N.C. 139, 147 (1964).

As noted above, the Court of Appeals held that plaintiffs successfully alleged

the existence of an implied-in-fact contract. In a case not involving sovereign

immunity, we declared that “an implied contract is as valid and enforceable as an

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express contract.” Creech v. Melnik, 347 N.C. 520, 526 (1998).

“[A] contract implied in fact arises where the intent of the parties is not

expressed, but an agreement in fact, creating an obligation, is implied or presumed

from their acts.” Id. To determine whether an implied-in-fact contract exists, courts

look to whether the parties’ conduct would be understood to create legal obligations

in “the ordinary course of dealing.” Snyder v. Freeman, 300 N.C. 204, 217 (1980)

(cleaned up). The existence of an implied-in-fact contract is usually obvious from the

circumstances. In Warren v. Dixon & Christopher Co., for example, an implied

employment contract came about when the employer’s foreman immediately put a

pipefitter to work. 252 N.C. 534, 538 (1960).

The Court of Appeals erred in holding that the amended complaint alleges a

contract implied in fact. Because this appeal stems from a Rule 12(b)(6) motion to

dismiss, we must base our decision on the amended complaint’s factual allegations.

Morris v. Rodeberg, 385 N.C. 405, 406 (2023). As explained below, the amended

complaint alleges the existence of express contracts between plaintiffs and the Board.

Once parties enter an express agreement, there can be no implied contract between

them covering the same subject matter. Morganton Mfg. & Trading Co. v. Andrews,

165 N.C. 285, 290 (1914). Thus, plaintiffs’ allegations of express contracts necessarily

defeat their effort on appeal to recast their lawsuit as one arising from the Board’s

breach of implied contracts.

After providing detailed descriptions of the mandatory fees charged by NCSU

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and UNC-CH, the amended complaint alleges the following facts with respect to those

fees:

47. . . . [B]efore the beginning of their respective Fall

2020 Terms, NCSU and UNC-CH provided each student

enrolled for their Fall 2020 Terms, including [p]laintiffs, an

itemized bill which labeled, in writing, the services,

benefits, and opportunities which NCSU and UNC-CH

promised to provide in exchange for each student’s,

including each [p]laintiff’s, payment of Fall 2020 Term

Student Fees; those bills also specified the amount that

each [p]laintiff and each other NCSU and UNC-CH student

was required to pay for those services, benefits, and

opportunities.

48. Following their receipt of the itemized bill for

Fall Term 2020 Student Fees from NCSU and UNC-CH,

each [p]laintiff made full payment to each of their

respective Subject Constituent Institutions—NCSU and

UNC-CH—for all Student Fees charged by NCSU and

UNC-CH for the Fall 2020 Terms.

49. Before August 10, 2020, NCSU and UNC-CH, on

behalf of [the Board], offered to [p]laintiffs and other

prospective . . . students that if the prospective students

registered for the Fall 2020 Terms and promised to pay the

Student Fees for the Fall 2020 Terms, that they . . . would,

in turn, receive the services, benefits, and opportunities of

the Earmarked Components from NCSU and UNC-CH for

the duration of the Fall 2020 Term; NCSU and UNC-CH,

on behalf of [the Board], made this offer through their

websites and through their billing communications with

[p]laintiffs and other prospective . . . students . . . .

....

98. As set forth above, [p]laintiffs . . . entered into

express contracts with [the Board] in which: (1) NCSU and

UNC-CH offered [p]laintiffs . . . the Earmarked

Components composed of services, benefits, and

opportunities and billed [p]laintiffs . . . for those

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Earmarked Components; and (2) [p]laintiffs . . . accepted

[the Board’s] offer and agreed to pay, and did, in fact, pay,

the Student Fees for such Earmarked Services.

(Emphasis added.)

Similarly, the amended complaint alleges these facts regarding plaintiffs’

parking permits:

108. Before the beginning of the Fall 2020 Terms,

NCSU and UNC-CH offered to sell optional parking

permits to [p]laintiffs and other Fall 2020 Term students

which would permit the purchaser to park a motor vehicle

in an on-campus parking lot during the Fall 2020 Terms.

109. Plaintiffs . . . accepted the offers of NCSU and

UNC-CH and purchased such permits: Lannan paid NCSU

$210 for his parking permit and Kuehn paid UNC-CH over

$300 for her parking permit . . . .

110. As set forth above, [p]laintiffs . . . entered into

express contracts with [the Board] through its Subject

Constituent Institutions—NCSU and UNC-CH—in which:

(1) NCSU and UNC-CH offered [p]laintiffs . . . on-campus

motor vehicle parking permits; and (2) [p]laintiffs . . .

accepted such offers and agreed to pay, and did, in fact,

pay, to [the Board] through the respective Subject

Constituent Institutions—NCSU and UNC-CH—fees for

on-campus motor vehicle parking permits for the Fall 2020

Terms at NCSU and UNC-CH.

(Emphasis added.)

For both contract claims, the amended complaint alleges offer, acceptance, and

consideration. It asserts that the universities offered prospective students benefits in

the form of specified services and access to designated facilities in exchange for the

payment of certain fees. It further alleges that plaintiffs accepted the offer and paid

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Opinion of the Court

those fees. Likewise, the amended complaint alleges that the universities expressly

offered the benefit of on-campus parking to students such as plaintiffs in exchange

for the purchase of parking permits and that plaintiffs accepted the offer and

purchased the permits. Under the lenient standards of notice pleading, the amended

complaint sufficiently alleges that the Board—through two of its constituent

institutions—entered into express contracts with plaintiffs. Accordingly, it also

alleges waivers of the Board’s sovereign immunity as to plaintiffs’ claims for breach

of contract. See Smith, 289 N.C. at 320 (“[I]n causes of action on contract . . . , the

doctrine of sovereign immunity will not be a defense to the State.”).

Having concluded that the amended complaint alleges a waiver of sovereign

immunity based on express contracts, we need not consider whether or when a

contract implied in fact can waive sovereign immunity. We therefore decline to

resolve that issue.

C. Adequacy of Contract Allegations

According to the Board, “[e]ven if [this] Court were to endorse the Court of

Appeals’ derogation of [the Board’s] sovereign immunity and allow [p]laintiffs to

proceed with their claims against [the Board] . . . , then [p]laintiffs’ breach of contract

claims would still fail under Rule 12(b)(6).” Specifically, in the Board’s opinion,

plaintiffs’ “own allegations reveal that there was never any meeting of the minds to

form a contract and are fatal to their claims.” The Board contends that “[t]he very

websites on which [p]laintiffs rely as a basis for their contract informed students that

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Opinion of the Court

the fees would not be refunded if [NCSU or UNC-CH] switched to remote

instruction.”5 The Board also argues that the fee descriptions contained in the

amended complaint “affirmatively show[ ] that many of the fees were paid not in

exchange for personal services, but rather to fund debt services and the expansion

and renovation of campus buildings.”

Not surprisingly, having just held that the amended complaint successfully

alleges express contracts, we reject these arguments. As we have repeatedly

emphasized, the procedural posture of this case requires us to accept the amended

complaint’s factual allegations as true. Morris, 385 N.C. at 406. Plaintiffs could lose

at a later stage, however, if the evidence produced in discovery confirms the Board’s

contention that they were not entitled to refunds.

Moreover, the Board correctly observes that many of the fee descriptions in the

amended complaint lack any explicit promise to provide services to students who paid

those fees. The description of the “Transit Operations Fee,” for instance, merely says

that “[t]his fee of $205.00 partially funds the campus transit system.” Plaintiffs have

overcome the Board’s Rule 12(b)(6) motion because the amended complaint alleges

other facts sufficient to establish the existence of express contracts between the

5 The Board cites copies of website pages that it submitted to the trial court as exhibits

to a memorandum of law. Although the amended complaint mentions websites, we cannot

tell from its factual allegations whether the pages cited by the Board are the ones referred to

in the amended complaint.

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Opinion of the Court

parties. To win at trial, plaintiffs will have to prove their allegations with evidence.6

IV. Conclusion

The amended complaint adequately alleges the existence of express contracts

between plaintiffs and the Board. For this reason, sovereign immunity does not bar

plaintiffs’ alleged claims against the Board for breach of contract. Although the Court

of Appeals rightly affirmed the trial court’s denial of the Board’s motion to dismiss

those claims, it did so under the erroneous impression that the amended complaint

alleges implied but not express contracts. We thus modify and affirm the judgment of

the Court of Appeals.

MODIFIED AND AFFIRMED.

Justice BARRINGER did not participate in the consideration or decision of this

case.

6 We have not addressed whether the amended complaint sufficiently alleges that the

Board breached its contracts with plaintiffs. The Court of Appeals considered the issue and

held that, “[t]aking the alleged facts as true, . . . [p]laintiffs have properly alleged breach.”

Lannan, 285 N.C. App. at 602. Aside from a conclusory footnote, the Board ignored the breach

issue in the briefs it filed with this Court. See N.C. R. App. P. 28(a) (“Issues not presented

and discussed in a party’s brief are deemed abandoned.”).

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