Conflict of interest? Attorney advising school board decisions while working case defense

A discussion over the naming of the Rick Holliday Stadium at Laney High School has raised questions about a potential conflict of interest with the board’s attorney. (Port City Daily photo/Alexandria Sands)

NEW HANOVER COUNTY – Recent legal guidance at a school board meeting has raised questions about whether New Hanover County Schools attorney Deborah Stagner advising board decisions while serving on the district’s defense in an ongoing lawsuit is a conflict of interest.

Laney High School alum Chris Sutton brought the issue to board members Wednesday and Thursday in a string of emails. He told Port City Daily he and others intend to sue if the board does not rectify the situation.

According to NHCS, its insurance company retained Stagner and her law firm Tharrington Smith to defend the board in John Does v. New Hanover County Board of Education et al.


Filed in July 2019, the suit alleges the school system and some of its top administrators failed to act on the knowledge that former Laney and Isaac Bear Early College high schools teacher Michael Earl Kelly was sexually abusing minors. Kelly was sentenced to 17 to 31 years in prison for his crimes.

Seven days after the resignation of general counsel Wayne Bullard, the then-chair of the school board Lisa Estep signed an agreement on March 17, 2020, for Stagner to provide legal services to the board. According to NHCS, the board approved the agreement.

There was no public vote noted in the meeting minutes in March.

Clyde Edgerton, of “Concerned Parents and Citizens 2020,” wrote in an email to board members that Stagner’s law firm representing the insurance company means it “will likely be on the opposite side of the interests of child sexual abuse victims.”

“We believe the board was elected to represent the parents of victims and the victims of child sexual abuse,” Edgerton continued. “Your being represented by someone connected to the other side is wrong, in our view.”

Sutton also claims that Stagner could offer legal advice in the interest of the lawsuit rather than the district, such as in the case of Tuesday night when the education law attorney recommended the board delay action on renaming the Laney High football stadium. The facility is currently named after former Deputy Superintendent Rick Holliday, one of the defendants in the suit.

Sutton is the organizer of the movement to remove Holliday’s name from the stadium in light of allegations that he turned a blind eye to Kelly’s sex crimes against students. Sutton said he’s realized there’s more than three dozen victims of Kelly, and multiple were watching the board on Tuesday’s livestream to see it take action on their long-awaited request.

A petition to remove Holliday’s name from the football field has garnered 4,400-plus supporters, including board member Judy Justice.

During the meeting, Justice tried to motion to rename the stadium, but her attempt was blocked when chairperson Stefanie Adams explained she mistakenly listed the item as information on “naming of school facilities” rather than a specific proposal to rename Laney High’s facility. Stagner indicated taking action without proper advance notice posed potential open meeting law issues. She advised the board to wait until the next meeting in April to re-address it.

Justice and board member Stephanie Walker both requested the subject be placed on the board agenda over a month ago.

“I hope that this is not a further delay of what we all know is coming, which is a vote to rename Laney stadium back to its original name,” Walker said during the meeting. “I just don’t want to keep stalling it just for the purposes of giving people more time or whatever. I feel like we did what we were supposed to do. We first it, we seconded it, like the policy states. And I know it was a mistake – you say – but I just don’t want to delay it further.”

Justice told Port City Daily on a phone call the next day that she spoke with Adams just hours before the meeting about the agenda item. While concerns about legal issues came up, she said the chair never mentioned a mix-up on the agenda until they were both at the dais.

Almost exactly a year ago, former board attorney Wayne Bullard also prevented the renaming of the stadium from moving forward. At the time he instructed the board that its policy required at least one year to pass following Holliday’s retirement. Yet, the policy does not explicitly address removing a name.

Now, Sutton is accusing Stagner of her own attempt to halt action that could be considered an admission of guilt by the district.

“It is in her Civil Case’s best interest to continue the work Bullard did of using any legal avenue possible to impede, delay and distract the board from reaching a final resolution,” Sutton wrote to board members in an email.

Sutton also stated in his emails that the board attorney should not give guidance on the release of personnel files of former Roland Grise band teacher Peter Frank, who was charged in early 2020 for child sex crimes.

“What’s best for the current board is transparency and following the vote that was legally taken…..what’s best for her civil case is to keep it bottled up,” Sutton wrote. “Still no release.”

In a terse press conference in Jan. 2020 following Frank’s arrest, the board announced it was considering releasing parts of his file. To date, this information has not been released.

Port City Daily requested an update on the file from chair Adams, who said she did not believe the board voted to release the information. NHCS communications office did not provide a response by this article’s deadline, which will be updated when and if one becomes available.

“As Board chair, I believe Deborah Stagner and her law firm have exercised, and will continue to exercise, independent professional judgment on behalf of the Board, both in litigation and in all other aspects of their legal representation,” Adams wrote in an email.

The district pays Tharrington Smith $235 for partners, $200 for associates and $100 for paralegals per hour, according to the legal services agreement. Stagner is present at all board meetings and often committee meetings.

Sutton suggests the four newly elected board members, who took their seats in early December, were left “in the dark” about the potential for conflict of interests. In his email, he references client-lawyer relationship rules, which state a lawyer may still represent a client if a concurrent conflict of interests exists. However, everyone affected must consent in writing.

“I am under the assumption that this has not occurred and new board members have not been properly notified about the potential conflict of interest and are just now finding out,” Sutton wrote in one email to all board members.

Sutton is requesting the board remove Stagner from one of her roles, either in the advisory capacity or on the civil case. He said they could bring in outside legal counsel to investigate the legitimacy of his claims.

If they do nothing, he said he will pursue the lawsuit.

Sutton added if his complaint is not handled by the administration, it should be discussed amongst board members at a meeting, per Policy No. 2122 “Role of Board Members in Handling Complaints.” He then asked that Stagner not advise the discussion’s placement on the agenda.

He said that, too, could be a conflict of interest.


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