Superior Court Judge Tessa Sellers has granted Swain County a temporary enjoinment and restraining order against the Fontana Regional Library board, in effect until June 29, when the court will hear the plaintiff’s preliminary injunction.
Ahead of an anticipated surplus fund distribution to the three FRL member counties (Swain, Macon and Jackson) first proposed at a May 12 FRL board meeting by Trustee Lori Richards, the ruling prohibits the defendant from “taking any action whatsoever, directly or indirectly, in furtherance of, pursuant to, or arising from the FRL board’s May 12, 2026 action authorizing or directing the distribution, transfer, disbursement, allocation, or conveyance of funds or assets to Jackson County, Macon County, and or/Swain County, pending further Order of the Court.”
It also restrains and enjoins the defendant, pending a future court order, from “distributing, transferring, assigning … directly or indirectly, any funds or monies whatsoever” to any of the three partner counties.
The plaintiff’s first claim for relief is grounded in the assertion that $1,350,311.38 in surplus FRL funding will be distributed “on or immediately after” the defendant’s next board meeting on June 22 — and that “the loss of assets dedicated to FRL constitutes irreparable harm to Plaintiff and Plaintiff has no other adequate remedy at law.”
Certain distribution-related actions anticipated by FRL run counter to the guidelines stipulated in the Interlocal Agreement that binds the library system and its member counties, according to the lawsuit.
The Interlocal Agreement is an enforceable Nov. 12, 2024, contract outlining FRL responsibilities and organizational structure as well as protocol in the case of dissolution or withdrawal. According to the filing, Swain County has “performed its obligations under the Interlocal Agreement,” which does not authorize surplus fund distribution except in the event of FRL dissolution.
Both Jackson and Macon counties are pending withdrawal from the FRL system. Jackson County’s withdrawal will be effective July 1, 2026, while Macon County cannot officially exit until July 1, 2027. Swain County has not opted out.
“FRL remains operational, continues to function, and has the ability to continue performing the duties and obligations of the Interlocal agreement,” asserts the complaint, adding that even were FRL to dissolve, the state, not the FRL board, would determine surplus distribution.
The second claim for relief seeks the imposition of a constructive trust, alleging because the distribution violates the Interlocal Agreement, accepting or retaining the funding in question would “unjustly enrich” the recipient.
The third claim maintains Swain County is entitled to “a declaration that the Defendant lacks authority to distribute the funds authorized by its formal Board action on May 12, 2026,” as well as “a declaration of the parties’ obligations and rights under the Interlocal Agreement.”
At its mid-May meeting, FRL claimed it would not pursue a distribution without written confirmation from the acting executive director, finance officer or independent auditor that the surplus funds are not grant-restricted, donor-restricted or have certain other obligations. The filing asserts the surplus funding includes state and federal dollars as well as private contributions, despite what was said on May 12.
The Smoky Mountain News covered that meeting, noting concerned board members were not allowed an opportunity to speak with a Certified Professional Accountant — and that some had only 24 hours to review the distribution proposal.
County distribution values have also been “arbitrarily calculated,” according to the lawsuit.
Swain County, whose sole library — Marianna Black Library — has housed the FRL headquarters for nearly a decade, would receive $86,213. That’s far less than what would be given to the other partner counties: $738,696 to Jackson and $525,402 to Macon. The complaint says that considerations for disbursement should “include revenue to Swain County based upon fair value of space for FRL headquarters for eight (8) prior fiscal years provided by Swain County.”
The final claim seeks a court order requiring FRL to comply with said agreement, specifically as it governs asset and fund distribution.