NEW HANOVER COUNTY — The New Hanover County Board of Education approved a settlement agreement in a civil case involving three victims of Michael Kelly, a former NHCS teacher convicted in of sexual exploitation and indecent liberties with students.
Unanimously, the board approved the settlement, which includes a payout of $640,000, after a closed session at its Tuesday agenda review meeting. Board member Pat Bradford motioned for the body to accept the agreement its insurance company reached with Rhine and Lee/Schultz law firms, representing John Does 15-17.
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The victims in this case were not part of a previous civil suit involving other victims, which was settled in June 2023 with a payout of $5.75 million.
Kelly was employed as a chemistry teacher at Laney High School and Isaac Bear Early College. From 2003 to his arrest in 2018, he committed a number of predatory acts with multiple students. Accusations included sexually explicit conversations with students, exposing them to pornography, possessing and sharing child pornography, performing sex acts on children and directing them to perform sex acts on him.
In 2019, Kelly pleaded guilty to 59 charges, including sexual exploitation of a minor, indecent liberties with a student and indecent liberties with a child. He is currently serving a 17.6-to-31.25-year prison sentence.
Having attended Isaac Bear when Kelly was there, John Does 15-17 claimed in the case their abuse occurred after a principal “conducted interviews with several parents and many other former students about Kelly’s inappropriate conduct in 2010.” The lawsuit claimed if Kelly had subsequently been fired, the abuse to John Does 15-17 would not have occurred.
The terms of the settlement were not discussed in open session Tuesday, but NHCS released a statement on Wednesday.
“The New Hanover County Board of Education has approved a final settlement agreement with the survivors of the Michael Kelly lawsuit.
“The misconduct that occurred was unacceptable and represents a profound breach of trust. We condemn these actions and acknowledge the deep harm experienced by the survivors and their families. While no agreement can undo the pain caused, we hope this provides the survivors with the space and resources to focus on healing and their future endeavors. We recognize their courage in coming forward and honor their voices.
“Since these events, the Board has taken decisive steps to ensure student safety:
- Revised Board policies on student safety, employee conduct, and mandatory reporting.
- Re-evaluated district leadership to ensure accountability and a commitment to protecting students.
- Strengthened reporting protocols, oversight, and background checks.
- Expanded mandatory training for all staff on preventing and reporting misconduct.
- Established clear, confidential channels for students and staff to safely raise concerns.
- Fostered a culture where trust, vigilance, and accountability are standard expectations.
“The Board remains committed to continuous improvement, stronger safeguards, and a culture where every student is seen, heard, and safe.”
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