City of Morganton leaders served in defamation lawsuit by Bella Vino owner

Four of the five senior City of Morganton leaders sued by owners of the restaurant, Bella Vino, alleging defamation, unfair business practices, and misuse of legal processes have officially been served lawsuit documents.

Morganton City Manager Sally Sandy, City Attorney Louis Vinay, Mayor Pro Tem Wendy Cato, and Morganton Councilman Chris Hawkins were served lawsuit papers between Aug. 29 and 30.

As of Thursday afternoon, Cultural and Creative Director Sharon Jablonski had not been served.

City officials along with attorneys Andy Santaniello and Daniel Peterson (representing Morganton) did not return a request for comment. Matthew Rogers (representing Bella Vino) could not comment on the lawsuit due to other client matters as of noon Thursday.

Filed on July 25 by Rogers, the lawsuit alleges defamation, unfair business practices, malicious prosecution, and abuse of legal processes that have damaged the business of owner Emmanuel Manolakas.

Rogers calls for a jury trial, unspecified punitive damages, trebled damages where allowed by state statute, attorney fees, and prejudgment and post-judgment interest of 8%.

The lawsuit lists five specific allegations involving the five Morganton leaders:

1. Defamation: Saying or writing something false about someone that harms their reputation.

2. Tortious Interference: Happens when someone deliberately creates complications with your business relationships or deals.

3. Unfair and Deceptive Trade Practices: Involves doing something sneaky or dishonest in business.

4. Abuse of Process: Occurs when someone misuses legal actions or procedures to hurt someone or get an unfair advantage.

5. Malicious Prosecution: Happens when someone starts a legal case against you with bad intentions or without a good reason.

These terms describe different ways someone might wrongly harm a business or person, either through lies, interference, dishonesty, misuse of legal processes, or starting legal trouble without justification.

The lawsuit calls for a jury trial in Burke County District Court. Given the potential costs and public scrutiny of a trial, both sides might seek to resolve the matter through a settlement, which could provide a quicker and more controlled outcome, legal observers said.

The lawsuit comes on the heels of the May 17 Burke County District Court jury trial in which the City of Morganton was found guilty of breach of contract with Bella Vino and ordered to pay a judgment of $705,000 plus 8% interest compounded daily.

Morganton is appealing that decision to the N.C. Court of Appeals in Raleigh. No trial date is set.

As of Sept. 7, the accumulated interest totals about $99,600, bringing the total judgment to $804,600. Morganton’s insurance is expected to cover those costs.

Legal observers said that the recent lawsuit with its request for a District Court trial could be part of an overall strategy by Bella Vino to conclude the breach of contract judgment. Attorneys could attempt to schedule the case in front of a judge whose judicial philosophy is known.

And the longer the case drags on, the more expensive it is for Morganton taxpayers — judgment costs (with interest), attorney fees, staff time, and diversion from day-to-day duties.

Morganton residents' discontent with the lingering case is beginning to surface in general conversation. Some observers are calling for the City to close the case, put Bella Vino behind them, and focus on downtown vibrancy, especially in that central West Union Street block where Bella Vino is located. See Editorial on Page 1B.