RELATION INS., INC. v. PILOT RISK MGMT. CONSULTING, LLC, 2023 NCBC 21

Relation Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLC, 2023 NCBC 21.
STATE OF NORTH CAROLINA
GUILFORD COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
22 CVS 4285
RELATION INSURANCE, INC. and
RELATION INSURANCE
SERVICES OF NORTH CAROLINA,
INC.,
Plaintiffs,
v.
PILOT RISK MANAGEMENT
CONSULTING, LLC; PILOT
FINANCIAL BROKERAGE, INC.
d/b/a PILOT BENEFITS; KYLE
SMYTHE; ROBERT CAPPS;
LYNETTE KINNEY; EDWARD
MILES GURLEY; SEAN KELLY;
TYLER CROOKER; MICHELLE
LINTHICUM; LINDA MICHELLE
SNEED; TONI KING; and
JOHNATHAN LANCASTER,
Defendants.
ORDER AND OPINION ON
DEFENDANTS’ MOTION TO STRIKE
THIS MATTER comes before the Court on Defendants’ “Motion to Strike
Errata Entries to Transcript of Plaintiffs’ 30(b)(6) Deponent, Jonathan Cooper”
(“Motion to Strike,” or “Motion,” ECF No. 151). The Court, having considered the
Motion, the parties’ briefs, the arguments of counsel, the applicable law, and all
appropriate matters of record, CONCLUDES, in its discretion, that the Motion
should be DENIED but that Defendants shall be permitted to re-depose Cooper as
set forth below.
Fox Rothschild, by Kip Nelson and Ashley Chandler, for Plaintiffs
Relation Insurance, Inc. and Relation Insurance Services of North
Carolina, Inc.
Rossabi Law PLLC, by Amiel Rossabi, for Defendants Pilot Risk
Management Consulting, LLC, Pilot Financial Brokerage, Inc. d/b/a

Pilot Benefits, Kyle Smythe, Robert Capps, Lynette Kinney, Edward
Miles Gurley, Sean Kelly, Tyler Crooker, Michelle Linthicum, Linda
Michelle Sneed, Toni King, and Johnathan Lancaster.
Davis, Judge.
INTRODUCTION
1. The present Motion asks the Court to determine whether under North
Carolina law a deponent is permitted to make substantive changes to his deposition
transcript on an errata sheet. The North Carolina Rules of Civil Procedure, as well
as prior decisions from this Court interpreting and applying the Rules, mandate an
answer in the affirmative to that question. However, the Court is authorized to
impose certain safeguards to protect the deposing party in cases where—as here—
that party may be otherwise prejudiced by the changed responses on the deponent’s
errata sheet.
FACTUAL AND PROCEDURAL BACKGROUND
2. Plaintiffs Relation Insurance, Inc.—formerly known as Ascension
Insurance, Inc.—and Relation Insurance Services of North Carolina, Inc.
(collectively, “Plaintiffs”) initiated this action on 11 April 2022, asserting multiple
claims against (1) certain former employees of Plaintiffs—Edward Miles Gurley, Sean
Kelly, Tyler Crooker, Michelle Linthicum, Linda Michelle Sneed, Toni King, and
Johnathan Lancaster (collectively, the “Former Employees”); (2) the company for
which the Former Employees are now all employed—Pilot Risk Management
Consulting, LLC and Pilot Financial Brokerage, Inc. d/b/a Pilot Benefits (collectively,
“Pilot”); and (3) the managing members of Pilot—Kyle Smythe, Robert Capps, and
Lynette Kinney. (Compl., ECF No. 3.)

3. In order to resolve the discrete issue presented in this Motion, the Court
need not recite the facts giving rise to this lawsuit or list the specific claims and
counterclaims that have been asserted between the parties. A detailed factual
background is contained in the Court’s Amended Order on Plaintiffs’ Motion for
Preliminary Injunction. (ECF No. 116.)
4. Discovery in this case has been contentious, and the parties have
brought a number of discovery-related issues to the Court’s attention pursuant to
Rule 10.9 of the Business Court Rules (“BCR”). The present Motion stems from one
of these disputes that was unable to be resolved during the BCR 10.9 process.
5. On 7 September 2022, Defendants issued a Notice of Deposition
pursuant to North Carolina Rule of Civil Procedure 30(b)(6) to Plaintiff Relation
Insurance Services, Inc. of North Carolina (“Relation”). (Defs.’ Br. Supp. Mot. Ex. A
[“Notice”], ECF No. 152.1.) The Notice directed Relation to “designate one or more
officers, directors, managing agents, or other persons who consent to testify on
[Relation’]s behalf as to matters known or reasonably available to the corporation
regarding [certain] matters, as set forth” in an exhibit to the Notice. The deposition
was scheduled to take place on 3 October 2022. (Notice, at 1–2, 11–16.)
6. Relation designated Jonathan W. Cooper as its corporate representative
under Rule 30(b)(6), and Cooper testified in this capacity at the deposition. (Pls.’ Br.
Opp. Mot. Ex. A [“Cooper Dep. Tr.”], ECF No. 159.2.)
7. Subsequently, on 21 November 2022, Defendants’ counsel received an
errata sheet for Cooper’s deposition transcript (the “Errata Sheet”). (Defs.’ Br. Supp.

Mot. Ex. C, ECF No. 152.3.) The Errata Sheet contained 76 changes to Cooper’s
testimony. (Errata Sheet, at 3–8.)
8. Defendants’ counsel sent an email to the Court on 19 December 2022
pursuant to BCR 10.9 identifying a number of unresolved discovery disputes. Among
these issues was Defendants’ complaint that “Plaintiffs submitted an improper 6-
page errata sheet in which they changed actual deposition testimony of their 30(b)(6)
representative[,]” and that “[t]he errata changes substantially contradict and/or
modify sworn deposition testimony, as opposed to correcting only typographical errors
or errors in transcription[.]” (Email from Amiel Rossabi, counsel for Defendants, to
the Court, via its law clerk and court coordinator, and counsel for Plaintiffs (Dec. 19,
2022 11:40 AM EST) (on file with Court).)
9. The Court held a Webex conference with counsel for all parties on 11
January 2023. At the 11 January conference, the Court authorized Defendants to file
a motion to strike the Errata Sheet. (Order on BCR 10.9 Submission, ECF No. 156,
at 2.)
10. On 23 January 2023, Defendants filed the present Motion requesting
that all changes on the Errata Sheet as to testimony set out on pages 25, 38, 72, 81,
91, 115, 176–77, 179–81, 193–96, 201–02, 205–14, 230, 235, and 250–51 of Cooper’s
deposition transcript be stricken.
11. Following briefing by the parties, the Court held a hearing on the Motion
to Strike via Webex on 9 March 2023. The Motion is now ripe for decision.

ANALYSIS
12. As noted above, Defendants contend that the changes contained on
Cooper’s Errata Sheet should be stricken on the ground that they improperly
change—and in certain instances actually contradict—the sworn testimony that he
gave under oath at his deposition.
13. Plaintiffs, conversely, assert that North Carolina law places no limits on
a witness’s ability to make changes to his deposition testimony on an errata sheet.
14. The subject of errata sheets is governed by North Carolina Rule of Civil
Procedure 30(e), which states as follows:
Submission to deponent; changes; signing. – The sound-and-visual
recording, or the transcript of it, if any, the transcript of the sound
recording, or the transcript of a deposition taken by stenographic means,
shall be submitted to the deponent for examination and shall be
reviewed by the deponent, unless such examination and review are
waived by the deponent and by the parties. If there are changes in form
or substance, the deponent shall sign a statement reciting such changes
and the reasons given by the deponent for making them. The person
administering the oath shall indicate in the certificate prescribed by
subdivision (f)(1) whether any review was requested and, if so, shall
append any changes made by the deponent. The certificate shall then
be signed by the deponent, unless the parties by stipulation waive the
signing or the deponent is ill or cannot be found or refuses to sign. If the
certificate is not signed by the deponent within 30 days of its submission
to him, the person before whom the deposition was taken shall sign the
certificate and state on the certificate the fact of the waiver or of the
illness or absence of the deponent or the fact of the refusal or failure to
sign together with the reason, if any, given therefor; and the deposition
may then be used as fully as though the certificate were signed unless
on a motion to suppress under Rule 32(d)(4) the court holds that the
reasons given for the refusal to sign require rejection of the deposition
in whole or in part.
N.C. R. Civ. P. 30(e) (emphasis added).

15. As an initial matter, Defendants do not dispute the fact that Cooper’s
submission of the Errata Sheet complied with the procedure and time limit set out in
Rule 30(e). Instead, Defendants’ concern is with the number of substantive changes
set out on the Errata Sheet.
16. Defendants are correct that a number of the proposed changes on the
Errata Sheet contradict or substantially modify Cooper’s prior deposition testimony.
By way of illustration, consider the following examples1 of the changes contained on
the Errata Sheet:
QUESTION RESPONSE ERRATA SHEET
Q. Are there any other
bases upon which Relation
North Carolina has sued
any of the former -- any of
the defendants, other than
the contracts attached to
the complaint?
A. No. Should be “Yes, as alleged
in the Complaint”;
misunderstood the
question
Q. Is there any other basis
pursuant to which Relation
North Carolina is
contending any lost -- any
losses or damages as a
result of the actions of
defendants?
A. Confidential
Information.
Q. Anything else?
A. Nope. Should be, “Yes, as alleged
in the Complaint”; those
are the bases pursuant to
which Relation NC is
alleging damages
1 (Cooper Dep. Tr., at 37:23–38:2, 72:3–9, 179:20–180:3, 181:5–10, 195:16–196:6, 206:8–11,
206:15–16, 207:11–14, 211:11–13, 211:16–25, 212:15–213:6, 229:23–230:3, 235:1–4, 235:20–
22, 249:24–250:4; Cooper Errata Sheet, at 255–60.)

Q. And the only reason why
-- the only reason you know
of why Pilot Risk
Management Consulting
and Pilot Financial
Brokerage has been sued in
this lawsuit is because
their employees have
allegedly taken
confidential information
and trade secrets from
Relation North Carolina
and Relation, Inc.; is that
right?
A. Yes. Should be “No, they have
been sued for the claims
alleged in the Complaint
including breach of the
settlement agreement and
other claims”; I was
mistaken and said the
wrong thing
Q. Was there anything that
wasn’t produced that you
contend was taken by any
of the defendants that is
confidential or trade
secrets that was not
produced?
A. Not to my
knowledge.
Should be “Yes, including
the evidence that Relation
has provided”; I was
mistaken and did not have
the defendants’ documents
in front of me
Q. When it says, at page
nine, paragraph 34, that
Relation has regularly and
systematically endeavored
to maintain the secrecy and
confidentiality of all of its
confidential and trade
secret information, how
have the Relation entities
done that?
A. We have kept everything
password-protected on our
system so no one can access
that. We have shared
information sparingly, so
we can’t get this
A. No, not that I’m
aware of.
Should be “Yes, as
explained in the Complaint
and the Affidavit of Mike
Toran”; I was mistaken

information out in the
general public.
Q. What do you mean by
shared it sparingly?
A. We don’t send our client
list to all of our employees.
Q. Is there any other way
that you’ve done that?
Q. So you don’t know that
she’s done anything wrong,
she was just sued to
determine whether she’s
done anything wrong?
A. Right. Should be “No, she was
sued based on the evidence
that has been provided”; I
was mistaken
Q: Is that correct? A. Correct. Should be “No”; I was
mistaken
Q. And has all of that been
evidenced by what was
produced by Ms. King in
connection with this
lawsuit already?
A. Yes. Should be “No”; I was
mistaken
Q. Have any of the other
defendants [i.e., other than
Kelly, Lancaster, Gurley,
King, Linthicum]
committed [tortious
interference with
prospective economic
advantage]?
A. Not that I’m
aware of.
Should be “Yes”; I
misunderstood the
question
Q. [Have] any of the other
defendants [(other than
Kelly, Lancaster, Gurley,
King, Linthicum)]
A. Not that I’m
aware of.
Should be “Yes, as alleged
in the Complaint”; my
answer was wrong

committed unfair and
deceptive trade practices?
Q. [You have only testified
that Linthicum, King,
Gurley, Kelly, Lancaster, or
Crooker committed a
breach of contract
confidentiality,] And that’s
it?
A. Correct. Should be “No”; I was
mistaken
Q. Any of the other
defendants violated that
contract provision?
A. Not to my
knowledge.
Should be “Yes”; I was
mistaken
Q. So as far as you know,
they were not provided all
of the information they
needed, right?
Mr. Nelson: Objection to
form.
Q. Isn’t that correct?
A. Correct. Should be “No”; I
misunderstood the
question
Q. Would those things that
you mentioned be reflected
in lost revenue, in the list
that you referenced?
A. Yes. Should be “No”; I
misunderstood the
question
Q. In these documents, did
Relation North Carolina
object to defendants’
discovery requests?
A. No. Should be “Yes”; I was
mistaken
Q. Page two is exactly
where the reference to
matters that relate to the
A. Yes. Should be “No”; I
misunderstood the
question

allegations contained in the
pleadings; so you were
wrong when you said that,
weren’t you?
17. Defendants acknowledge that no North Carolina court has held that a
witness is barred from making substantive changes to his deposition transcript on an
errata sheet. However, Defendants ask this Court to adopt the reasoning of several
decisions issued by federal courts interpreting Federal Rule of Civil Procedure 30(e)—
including federal courts in North Carolina—that have refused to allow changes on an
errata sheet that contradict the witness’s testimony.2 See, e.g., Thorp Revocable Tr.
v. Ameritas Inv. Corp., 57 F. Supp. 3d 508, 518 (E.D.N.C. 2014) (“A change in ‘form’
would include correcting a typographical error or a spelling error. A change in
‘substance’ would include the substantive correction of a court reporter’s
transcription (i.e., the witness answers ‘No,’ but the court reporter records ‘Yes’).”);
see also Greenway v. Int’l Paper Co., 144 F.R.D. 322, 325 (W.D. La. 1992) (“A
deposition is not a take home examination.”).
18. The federal decisions relied upon by Defendants are not illogical. One
can legitimately question the logic of a rule allowing a witness, for example, who has
given sworn deposition testimony that the sky is blue from stating on an errata sheet
a few weeks later that the sky is instead yellow and that he was “mistaken” in his
earlier response. Indeed, a layperson learning of this rule’s existence might well
2 Rule 30(e) of the Federal Rules of Civil Procedure similarly permits a deponent to list
changes “in form or substance” on an errata sheet. See Fed. R. Civ. P. 30(e)(1)(B).

wonder as to the point of allowing deposition testimony in the first place if it can be
so easily contradicted a short time later by the deponent himself.
19. Nevertheless, this interpretation of Rule 30(e) has never been adopted
by a North Carolina court.3 In fact, to the contrary, this Court on at least two prior
occasions has held that North Carolina Rule 30(e)—by its plain language—places no
limits on a deponent’s ability to make substantive changes to his prior deposition
testimony on an errata sheet. See BB&T Boli Plan Tr. v. Mass. Mut. Life Ins. Co.,
2017 NCBC LEXIS 235, at *2 (N.C. Super. Ct. Dec. 21, 2017) (“[T]he plain language
of Rule 30(e) permits a deponent to change his deposition transcript ‘in form or
substance,’ so long as the deponent ‘sign[s] a statement reciting such changes and the
reasons given by the deponent for making them.’ N.C. R. Civ. P. 30(e). Although Mr.
Marley’s substantive changes here appear to be unusual and extraordinary, the Court
concludes that those changes are permitted under a plain reading of Rule 30(e),
notwithstanding the position taken by a minority of federal courts that have
concluded that substantive changes to a deposition transcript should not be
allowed.”); see also Window World of Baton Rouge, LLC v. Window World, Inc., 2018
NCBC LEXIS 79, at *10 (N.C. Super. Ct. Aug. 2, 2018) (“The plain language of Rule
30(e) permits a deponent to change the deponent’s deposition transcript ‘in form or
substance,’ so long as the deponent ‘sign[s] a statement reciting such changes and the
reasons . . . for making them.’ ”).
3 It also represents a minority view among federal courts. See Raytheon Co. v. Indigo Sys.
Corp., 2009 U.S. Dist. LEXIS 12558, at *6–7 (E.D. Tex. Feb. 18, 2009).

20. Therefore, the Court CONCLUDES—based on existing North Carolina
law—that no basis exists to strike Cooper’s Errata Sheet.
21. Nevertheless, this Court in Window World recognized the authority of a
trial court to provide some measure of relief to the deposing party in such
circumstances:
Although the Court is sympathetic to Plaintiffs’ complaints, North
Carolina Rule 30(e) is unequivocal.
. . .
The Court imposes two safeguards, however, in light of the extensive
substantive changes Whitworth has made to her deposition transcript.
First, Whitworth’s original answers to the questions posed at her
deposition will remain part of the record and may be used for
impeachment, as contemplated under the applicable North Carolina
Rules of Evidence, or for any other relevant or proper purpose.
. . .
In addition, the Court will permit Plaintiffs to re-depose Whitworth, for
a period of no more than one hour of on-the-record time and at
Defendants’ expense, regarding the changes Whitworth has made to her
deposition transcript and the reasons for those changes and to ask
reasonable follow-up questions that flow from Whitworth’s answers to
these permitted inquiries.
. . .
The Court further notes that Plaintiffs may seek to challenge
Whitworth’s substantive corrections to the extent Defendants offer those
corrections as a basis to advance or defeat summary judgment at a later
stage of these proceedings. . . . The Court defers any determination on
whether the Court will consider Whitworth’s Errata Sheet changes on
any motion for summary judgment that may be filed in this action unless
and until that issue is raised in the summary judgment phase of this
case.
Window World, 2018 NCBC LEXIS 79, at *12, *16–18.
22. The Court believes that similar safeguards are appropriate here.
23. First, Defendants shall be permitted to re-depose Cooper for a period of
no more than two (2) hours of on-the-record time—at Plaintiffs’ expense—with regard
to any substantive changes to his prior deposition testimony that are contained on

his Errata Sheet on the pages of his deposition transcript referenced herein. At such
time, counsel for Defendants may ask Cooper questions regarding the substantive
changes contained on those pages of the Errata Sheet and the reasons for those
changes along with any reasonable questions that naturally arise from Cooper’s
responses.4
24. Second, Cooper’s original responses to the questions posed by
Defendants’ counsel at his 3 October deposition shall remain part of the record and
may be used for impeachment purposes as provided under the North Carolina Rules
of Evidence, or for any other legally permissible purpose.
25. Third, Defendants shall be permitted, if they choose, to seek to challenge
Cooper’s substantive corrections as contained in his Errata Sheet to the extent that
Plaintiffs offer those corrections for the purposes of advancing or defeating summary
judgment later in this case.5
CONCLUSION
THEREFORE, the Court, in the exercise of its discretion, hereby DENIES
Defendants’ Motion to Strike and ORDERS as follows:
4 The Court DIRECTS the parties to work collegially in scheduling the limited re-deposition
of Cooper as authorized herein for a date and time that is mutually convenient both to Cooper
and to counsel for all parties and that is within the existing deadline for completion of
discovery in this case.
5 As in Window World, the Court “defers any determination on whether the Court will
consider [Cooper]’s Errata Sheet changes on any motion for summary judgment that may be
filed in this action unless and until that issue is raised in the summary judgment phase of
the case.” Window World, 2018 NCBC LEXIS 79, at *18.

1. Cooper’s Errata Sheet shall not be stricken and shall be appended to his
deposition transcript;
2. Cooper’s original answers to the questions posed at his deposition will
remain part of the record of this case and may be used for impeachment, as
contemplated by the applicable North Carolina Rules of Evidence, or for
any other legally permissible purpose;
3. Defendants will be permitted to re-depose Cooper, at Defendants’ election
and at Plaintiffs’ expense, for a total period of no more than two (2) hours
of on-the-record time, at a date, time, and place mutually convenient to the
parties and to Cooper—subject to the deadline for the completion of
discovery in this case; and
4. The questions that Defendants’ counsel may ask at the re-deposition of
Cooper are strictly limited to the substantive changes Cooper made on the
signed Errata Sheet for pages 25, 38, 72, 81, 91, 115, 176–77, 179–81, 193–
96, 201–02, 205–14, 230, 235, and 250–51 of his deposition transcript, the
reasons therefor, and any reasonable follow-up questions that flow from the
answers given.
SO ORDERED, this the 16th day of March, 2023.
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge
for Complex Business Cases