CUMBERLAND CNTY. HOSP. SYS., INC. v. WOODCOCK, 2023 NCBC 45

2023 NCBC 45Ncbizct

Gesamter Gesetzestext

STATE OF NORTH CAROLINA
CUMBERLAND COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
22 CVS 5535
CUMBERLAND COUNTY
HOSPITAL SYSTEM, INC.,
individually,
Plaintiff,
v.
MICHAEL G. WOODCOCK and
WOODCOCK CUSTOM VISION,
LLC,
Defendants.
ORDER AND OPINION ON
PLAINTIFF’S MOTION FOR PARTIAL
SUMMARY JUDGMENT,
DEFENDANT WOODCOCK’S MOTION
TO WITHDRAW AND AMEND
DEEMED ADMISSIONS, AND
DEFENDANT WOODCOCK CUSTOM
VISION, LLC’S MOTION FOR
PROTECTIVE ORDER AND FOR
DECLARATORY JUDGMENT
THIS MATTER comes before the Court on three motions: (1) Plaintiff’s
Motion for Partial Summary Judgment Against Michael G. Woodcock (“Motion for
Partial Summary Judgment,” ECF No. 30); (2) Defendant Michael G. Woodcock’s
Motion to Withdraw and Amend the Deemed Admissions to Plaintiff’s Requests for
Admissions Pursuant to N.C. R. Civ. P. 36(b) (“Motion to Withdraw and Amend,” ECF
No. 37); and (3) Defendant Woodcock Custom Vision, LLC’s Motion for Protective
Order and Motion for Declaratory Judgment (“Motion for Protective Order and
Declaratory Judgment,” ECF No. 40) (collectively, “Motions”).
THE COURT, having considered the Motions, the briefs of the parties, the
arguments of counsel, and all applicable matters of record, CONCLUDES that, for
the 	reasons 	set 	forth 	below, 	the 	Motion 	to 	Withdraw 	and 	Amend 	should 	be
GRANTED, the Motion for Partial Summary Judgment should be DENIED, and the
Motion for Protective Order and Declaratory Judgment should be DENIED.
Cumberland Cnty. Hosp. Sys., Inc. v. Woodcock, 2023 NCBC 45.
K&L Gates LLP, by Nathan A. Huff and Anderson M. Shackleford, for
Plaintiff Cumberland County Hospital System, Inc.
Douglas S. Harris for Defendant Michael G. Woodcock.
Krispen Culbertson for Defendant Woodcock Custom Vision, LLC.
Davis, Judge.
INTRODUCTION
1. 	Much ink has been spilled by the parties in connection with the present
Motions. 	But 	the 	underlying 	issues 	are 	straightforward: 	First, 	is 	Plaintiff
Cumberland County Hospital System, Inc. (“Plaintiff”) entitled to partial summary
judgment against Defendant Michael G. Woodcock (“Woodcock”) based on Woodcock’s
failure to respond to requests for admission allegedly served upon him by Plaintiff?
Second, should Defendant Woodcock Custom Vision, LLC (“WCV”) be required to
respond to discovery requests in this case? The answers are no and yes, respectively.
FACTUAL AND PROCEDURAL BACKGROUND
2. 	The underlying events giving rise to this action—as alleged in Plaintiff’s
Complaint—are summarized in the Court’s 21 March 2023 Order and Opinion on
Defendants’ Joint Motion to Dismiss. (“21 March Opinion,” ECF No. 25.) In essence,
Plaintiff (who, along with Woodcock, is one of the two members of WCV) asserted both
individual (or direct) and derivative claims in its Complaint that primarily alleged
various forms of wrongful acts by Woodcock.
3. 	In its 21 March Opinion, the Court dismissed, without prejudice,
Plaintiff’s derivative claims but declined to dismiss its individual claims except with
respect to Plaintiff’s claim for breach of fiduciary duty against Woodcock for actions
taken by him as a manager of WCV. (ECF No. 25.)
4. 	Unlike the issues raised by the parties in Defendants’ Joint Motion to
Dismiss, however, the present Motions are more procedural than substantive.
5. 	On 4 April 2023, Plaintiff filed a Motion for Partial Summary Judgment.
(ECF No. 30.) 	In that motion, Plaintiff requests judgment in its favor against
Woodcock on the issue of liability regarding Plaintiff’s individual claims for breach of
operating agreement, breach of fiduciary duty, and constructive fraud. 	Plaintiff
asserts that it is entitled to this relief based on requests for admission it previously
served on Woodcock on 7 November 2022 to which Woodcock has failed to respond.
Plaintiff contends that pursuant to Rule 36 of the North Carolina Rules of Civil
Procedure, the factual matters contained within those requests for admission should
therefore be deemed admitted and that, as a result, these admissions entitle Plaintiff
to partial summary judgment on its claims against Woodcock. (Br. Supp. Mot. Partial
Summ. J.)
6. 	In response to Plaintiff’s Motion, Woodcock filed a Motion to Withdraw
and Amend on 18 April 2023 in which he requested that any deemed admissions in
connection with Plaintiff’s requests for admission to him be withdrawn and that he
be permitted to serve responses. (Mot. Withdraw and Amend.)
7. 	On 20 April 2023, WCV filed a Motion for Protective Order and
Declaratory Judgment. (ECF No. 40.) In this Motion, WCV sought an order from the
Court (1) providing that WCV is not required to respond to the discovery requests
that Plaintiff served upon it; and (2) declaring that WCV is no longer a party in this
action following the Court’s dismissal of Plaintiff’s derivative claims in its 21 March
Opinion.
8. 	The Court held a hearing on the Motions on 27 June 2023. The Motions
are now ripe for decision.
LEGAL STANDARD
9. 	It is well established that “[s]ummary judgment is proper ‘if the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of law.’ ” Morrell v. Hardin
Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). 	“[A] genuine
issue is one which can be maintained by substantial evidence.” 	Kessing v. Nat’l
Mortg. Corp., 278 N.C. 523, 534 (1971). 	“Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion and
means more than a scintilla or a permissible inference.” 	Daughtridge v. Tanager
Land, LLC, 373 N.C. 182, 187 (2019) (citation and internal quotation marks omitted).
10. 	On a motion for summary judgment, “[t]he evidence must be considered
‘in a light most favorable to the non-moving party.’ ” McCutchen v. McCutchen, 360
N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470
(2004)). 	“[T]he party moving for summary judgment ultimately has the burden of
establishing the lack of any triable issue of fact.” 	Pembee Mfg. Corp. v. Cape Fear
Constr. Co., 313 N.C. 488, 491 (1985) (citation omitted).
11. 	“For affirmative summary judgment on a party’s own claim, the burden
is heightened.” 	Futures Grp. v. Brosnan, 2023 NCBC LEXIS 7, at **4 (N.C. Super.
Ct. Jan. 19, 2023). The movant “must show that there are no genuine issues of fact,
that there are no gaps in his proof, that no inferences inconsistent with his recovery
arise from the evidence, and that there is no standard that must be applied to the
facts by the jury.” 	Parks Chevrolet, Inc. v. Watkins, 74 N.C. App. 719, 721 (1985);
accord Kidd v. Early, 289 N.C. 343, 370 (1976). Consequently, “rarely is it proper to
enter summary judgment in favor of the party having the burden of proof.” Blackwell
v. Massey, 69 N.C. App. 240, 243 (1984).
12. 	Pursuant to Rule 36(a), a party served with a request for admission
must respond within 30 days or “the matter is deemed admitted.” 	Duke Energy
Carolinas, LLC v. AG Ins. SA/NV, 2020 NCBC LEXIS 14, at *5 (N.C. Super. Ct. Feb.
10, 2020) (quoting Excel Staffing Servs., Inc. v. HP Reidsville, Inc., 172 N.C. App 281,
284 (2005)). “Any matter admitted under [the] rule is conclusively established unless
the court on motion permits withdrawal or amendment of the admission.” 	N.C. R.
Civ. P. 36(b).
13. 	“Rule 26 allows parties to ‘obtain discovery regarding any matter, not
privileged, which is relevant to the subject matter involved in the pending action.’ ”
Edison v. Acuity Healthcare Holdings, Inc., 2016 NCBC LEXIS 84, at **4 (N.C. Super.
Ct. Nov. 2, 2016) (quoting N.C. Civ. P. 26(b)(1)). However, “ ‘[u]pon motion by a party
or by the person from whom discovery is sought, and for good cause shown,’ a trial
court may issue an order limiting discovery ‘to protect a party or person from
unreasonable annoyance, embarrassment, oppression, or undue burden or expense.’ ”
Duke Energy Carolinas, LLC v. AG Ins. SA/NV, 2018 NCBC LEXIS 39, at *8 (N.C.
Super. Ct. April 30, 2018) (quoting N.C. R. Civ. P. 26(c)). 	In doing so, the court
“balance[s] one party’s need for information against the likelihood of an undue burden
being imposed upon the other.” 	Brown v. Secor, 2017 NCBC LEXIS 65, **29 (N.C.
Super. Ct. July 28, 2017) (cleaned up). 	“The decision to enter a protective order . . .
is ‘within the discretion of the trial court[.]’ ” 	Duke Energy Carolinas, LLC, 2018
NCBC LEXIS 39, at *9 (quoting Powers v. Parisher, 104 N.C. App. 400, 409 (1991)).
ANALYSIS
I. 	Motion to Withdraw and Amend
14. 	Plaintiff’s Motion for Partial Summary Judgment hinges on the matters
contained in its 	requests 	for admission 	being deemed admitted by Woodcock.
Therefore, the Court will first address Woodcock’s Motion to Withdraw and Amend.
15. 	This Court has previously stated as follows:
“Litigants 	in 	this 	state 	are 	required 	to 	respond 	to 	pleadings,
interrogatories and requests for admission with timely, good faith
answers.” 	WXQR Marine Broad. Corp. v. JAI, Inc., 83 N.C. App. 520,
521, 350 S.E.2d 912, 913 (1986). 	Rule 36(b) states that “[a]ny matter
admitted under this rule is conclusively established unless the court on
motion permits withdrawal or amendment of the admission.” 	N.C. R.
Civ. P. 36(b). 	The Rule further provides that a court may permit
withdrawal or amendment when (1) “the presentation of the merits of
the action will be subserved thereby” and (2) “the party who obtained
the admission fails to satisfy the court that withdrawal or amendment
will prejudice him in maintaining his action or defense on the merits.”
Id.; see also Pritchard v. Dow Agro Scis., 255 F.R.D. 164, 172 (W.D. Pa.
2009) (stating Federal Rule of Civil Procedure 36(b)’s nearly identical
two-part 	test). 	A 	trial 	court’s 	decision 	to 	permit 	withdrawal 	or
amendment is discretionary and “will not be overturned absent a
showing that the decision was so arbitrary that it could not have been
the result of a reasoned decision.” Excel Staffing Serv., 172 N.C. App. at
285, 616 S.E.2d at 353 (citing Eury v. N.C. Employment Sec. Comm., 115
N.C. App. 590, 603, 446 S.E.2d 383, 391 (1994)).
Duke Energy Carolinas, LLC v. AG Ins. SA/NV, 2020 NCBC LEXIS 14, at *5–6 (N.C.
Super. Ct. Feb. 10, 2020).
16. 	Woodcock asserts that he was not actually served with Plaintiff’s
requests for admission and that his attorney was never made aware that there were
outstanding requests for admission when he made an appearance in this case.
17. 	In their briefs, Plaintiff and Woodcock spar over this issue at great
length, and—for the sake of brevity—the Court will not recite the details of their
respective contentions. Instead, it suffices to say that based on its careful review of
the record, the Court is satisfied that some degree of confusion exists regarding the
service of the requests for admission upon Woodcock so as to warrant relief under
Rule 36. 	Moreover, Plaintiff has failed to convince the Court that it will suffer any
degree of prejudice if Woodcock’s deemed admissions are withdrawn and he is allowed
to serve responses to the requests for admission.
18. 	Therefore, in the exercise of its discretion, the Court elects to GRANT
Woodcock’s Motion to Withdraw or Amend, and Woodcock shall have up to and
including 7 July 2023 in which to serve responses to Plaintiff’s requests for
admission directed to him.
II. 	Motion for Partial Summary Judgment
19. 	As noted above, Plaintiff’s Motion for Partial Summary Judgment is
predicated on Woodcock being deemed to have admitted all factual matters contained
within the requests for admission directed to him. Without the admissions asserted
by Plaintiff, it clearly has not satisfied its burden on a motion for summary judgment.
20. 	Because the Court has granted Woodcock’s Motion to Withdraw and
Amend, Plaintiff’s Motion for Partial Summary Judgment is DENIED.1
III. 	Motion for Protective Order and Declaratory Judgment
21. 	Finally, the Court must address WCV’s Motion for Protective Order and
Declaratory Judgment. 	In this Motion, WCV requests that the Court declare that
WCV is no longer a party in this lawsuit. 	It also seeks an accompanying protective
order providing that WCV is not required to answer the discovery requests that
Plaintiff has previously served upon it.
22. 	WCV’s contention that it is no longer a party to this case is misplaced.
The Court’s 21 March Opinion dismissed Plaintiff’s derivative claims but did not
disturb Plaintiff’s individual claims for breach of operating agreement and for
declaratory judgment—the two claims that were asserted against both Woodcock and
WCV. Accordingly, those two claims are still pending, and WCV remains a party to
this lawsuit. As a party, WCV is both entitled to serve its own discovery requests and
required to respond to such requests from other parties.
23. 	WCV’s alternative argument that Plaintiff’s discovery requests are
invalid in that they were served before the Court’s entry of a Case Management Order
also lacks merit. 	Indeed, Rule 10.4 of the Business Court Rules expressly provides
1 The denial of this Motion is without prejudice to Plaintiff’s ability to file future motions for
summary judgment in this case in accordance with the North Carolina Rules of Civil
Procedure and the Business Court Rules.
that the “[R]ules do not discourage the parties from beginning discovery before entry
of the Case Management Order[.]” BCR 10.4(a). In the absence of an agreement by
counsel for the affected parties, or a directive in the Court’s Case Management Order
withdrawing discovery requests served before the entry of the Case Management
Order – neither of which exists here – proper and timely responses to discovery
requests must be made by the party to whom they are directed.
24. 	Accordingly, 	WCV’s 	Motion 	for 	Protective 	Order 	and 	Declaratory
Judgment is DENIED, and WCV shall have up to and including 27 July 2023 in
which to serve responses to all of Plaintiff’s outstanding discovery requests directed
to it.
CONCLUSION
THEREFORE, IT IS ORDERED AS FOLLOWS:
1. 	Woodcock’s Motion to Withdraw and Amend is GRANTED, and Woodcock
shall have up to and including 7 July 2023 in which to serve responses
to Plaintiff’s requests for admission directed to him;
2. 	Plaintiff’s Motion for Partial Summary Judgment is DENIED; and
3. 	WCV’s Motion for Protective Order and Declaratory Judgment is DENIED,
and WCV shall have up to and including 27 July 2023 in which to serve
responses to all of Plaintiff’s outstanding discovery requests directed to it.2
2 The parties’ filings since the Court’s 21 March Opinion have continued to use the original
caption to Plaintiff’s Complaint, which is no longer accurate in light of the Court’s dismissal
of Plaintiff’s derivative claims. In all future filings, the parties shall use the caption set forth
on page one of this Order and Opinion.
SO ORDERED, this the 27th day of June, 2023
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge
for Complex Business Cases

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