Azalea Garden Bd. & Care, Inc. v. Vanhoy

Azalea Garden Bd. & Care, Inc. v. Vanhoy, 2009 NCBC 9.

NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
DAVIDSON COUNTY 06 CVS 0948

AZALEA GARDEN BOARD & CARE,
INC.,
Plaintiff,

v.

MEREDITH DODSON VANHOY, ORDER & OPINION
Personal Representative of the Estate of
Ricky C. Dodson, Deceased; LARRY S.
GIBSON, NINA G. GIBSON, DANIEL
W. TUTTLE; TIMOTHY D. SMITH; and
HARVEY ALLEN, JR.,

Defendants.

{1} This matter is before the Court on Defendant Daniel W. Tuttle’s (“Tuttle”)
Motion for Sanctions (the “Motion”), dated July 25, 2008. Defendant Tuttle seeks
sanctions pursuant to Rule 26(g) and Rule 37 of the North Carolina Rules of Civil
Procedure for Plaintiff’s actions in response to discovery concerning expert opinions.
The Court heard oral arguments on the Motion on October 7, 2008. Having
considered Defendant Tuttle’s Motion and Brief in Support, Plaintiff’s Brief in
Opposition, and the arguments of counsel, the Court hereby GRANTS Defendant
Tuttle’s Motion.

Biesecker, Tripp, Sink & Fritts, LLP by Joe E. Biesecker and Christopher A.
Raines for Plaintiff.

Spilman Thomas & Battle, PLLC by Jeffrey D. Patton and Nathan B.
Atkinson for Defendant Daniel W. Tuttle.

Tennille, Judge.
I.
FACTS
{2} This is a suit to recover damages for the alleged breach of a contract to
purchase a nursing care facility owned by Azalea Garden Board & Care, Inc.
(“Plaintiff”). At issue is Plaintiff’s response to discovery directed to the expert
opinions of David Wagner (“Wagner”) and Gene Tarr (“Tarr”).
{3} Wagner was the owner and President of Plaintiff. He has a law degree,
but he has not recently engaged in the private practice of law. Wagner was actively
involved in the negotiations that led to the execution of the contract at issue in this
litigation. In response to interrogatories in this case, he was listed as someone who
may provide expert opinions on behalf of Plaintiff.
{4} Tarr is an attorney in Winston-Salem, North Carolina. During
negotiations for the sale of Plaintiff, Plaintiff was under the supervision of the
United States Bankruptcy Court for the Middle District of North Carolina. Prior to
the closing, Tarr sent an e-mail to a partner in his firm who was representing the
lender that was financing the purchase of Plaintiff. The e-mail purportedly
expressed Tarr’s advice to his partner that certain orders in the bankruptcy
proceedings would not prevent Plaintiff from closing the transaction. Tarr was also
listed as someone who may provide expert opinions on behalf of Plaintiff.
{5} A first action was filed against Defendants in Davidson County in 2002,
shortly before expiration of the three (3)-year statute of limitation for breach of
contract. At trial, during Plaintiff’s evidence, Plaintiff took a voluntary dismissal
without prejudice as to all claims. One (1) day before the one (1)-year period to re-
file expired, Plaintiff filed this new suit. At the 2002 trial, both Wagner and Tarr
were listed as fact witnesses, not experts.
{6} In the present action, this Court entered a Case Management Order
requiring all parties to designate their experts and provide the information required
by Rule 26 with respect to disclosure of expert opinions. (See Case Management
Order 1, Sept. 10, 2007.) On August 14, 2007, in response to an interrogatory from
another defendant, Plaintiff designated Wagner and Tarr as “possible” testifying
expert witnesses. (Def.’s Br. Supp. Mot. Sanctions 1; Pl.’s Br. Opp’n Mot. Sanctions
4.) Based on these designations, on March 11, 2008, Tuttle served interrogatories
and document requests on Plaintiff directed to the expert testimony to be provided
by Wagner and Tarr as required by Rule 26(b)(4). (Def.’s Br. Supp. Mot. Sanctions
1−2; Pl.’s Br. Opp’n Mot. Sanctions 5.) Tuttle also noticed Wagner’s deposition as an
expert for April 29, 2008. (Def.’s Br. Supp. Mot. Sanctions 2; Pl.’s Br. Opp’n Mot.
Sanctions 5.)
{7} Plaintiff hand-delivered responses to Tuttle’s interrogatories and
document requests on April 22, 2008. (Def.’s Br. Supp. Mot. Sanctions 2; Pl.’s Br.
Opp’n Mot. Sanctions 6.) Plaintiff responded to Tuttle’s discovery requests by,
among other things, asserting the attorney-client privilege with respect to Wagner.
(Def.’s Br. Supp. Mot. Sanctions 2; Pl.’s Br. Opp’n Mot. Sanctions 6−7.) On April 23,
2008 and April 24, 2008, Plaintiff and Tuttle communicated via e-mail and written
letters about the merits of designating “possible” expert witnesses and Plaintiff’s
assertion of the attorney-client privilege with respect to the basis of Wagner’s expert
opinions. (Def.’s Br. Supp. Mot. Sanctions 3; Def.’s Br. Supp. Mot. Sanctions, Ex.
A−C; Pl.’s Br. Opp’n Mot. Sanctions 6.) In an e-mail dated April 23, 2008, Plaintiff’s
counsel explicitly declined to communicate with Tuttle’s counsel over the telephone.
(See Def.’s Br. Supp. Mot. Sanctions 3; Def.’s Br. Supp. Mot. Sanctions, Ex. B.)
{8} In a letter dated April 23, 2008, Tuttle explicitly asked Plaintiff whether
Tarr had been retained as an expert witness and informed Plaintiff that there is no
attorney-client privilege associated with communications related to a witness’s
service as an expert. (Def.’s Br. Supp. Mot. Sanctions 3; Def.’s Br. Supp. Mot.
Sanctions, Ex. A.) In a response letter, dated April 24, 2008, Plaintiff again stated
that Wagner and Tarr were identified as “possible” expert witnesses who may
testify. (Def.’s Br. Supp. Mot. Sanctions 3; Def.’s Br. Supp. Mot. Sanctions, Ex. A.)
The response letter further stated that there had been no communication between
Wagner and Plaintiff in Wagner’s role as an expert witness, and, indeed, there had
been no communication between Plaintiff and Tarr at all. (Def.’s Br. Supp. Mot.
Sanctions 3; Def.’s Br. Supp. Mot. Sanctions, Ex. C.)
{9} On April 25, 2008, Tuttle filed a Motion to Compel seeking an order
finding that no attorney-client privilege existed and that Defendant Tuttle was
entitled to the discovery sought. (Def.’s Mot. Compel 1; Def.’s Br. Supp. Mot.
Sanctions 3.) On May 6, 2008, the Court filed the Second Order on Motion to
Compel (the “Second Order”). 1 The Second Order stated that because Plaintiff
designated Wagner as a testifying expert witness, Plaintiff was required to produce
the requested discovery regarding the facts relied upon by Wagner in forming his
expert opinions. (Second Order Mot. Compel 1, May 6, 2008.) The Court noted that
the responses furnished by counsel up to that point were “deficient in several
respects.” (Second Order Mot. Compel 1, May 6, 2008.) The Court explicitly stated
that Plaintiff’s “assertion of the attorney client privilege to shield discovery of any
communications with counsel involving [Wagner’s] expert opinions [was]
misplaced.” (Second Order Mot. Compel 1, May 6, 2008.) The Second Order
required Plaintiff to produce the requested information relied upon by Wagner in
forming his expert opinions within twenty (20) days of entry thereof. (Second Order
Mot. Compel 2, May 6, 2008.) The Court also gave Plaintiff twenty (20) days to
retain Tarr and provide responses from him regarding his expert opinions and
stated that he would not be permitted to testify as an expert if Plaintiff failed to
comply with that deadline. (Second Order Mot. Compel 2, May 6, 2008.)
{10} On May 19, 2008, Plaintiff filed a Motion for Instruction seeking
clarification of the Second Order. (Pl.’s Mot. Instruction 1.) In the Motion for
Instruction, Plaintiff asserted that Tarr was previously designated as a “possible”
expert witness. (Pl.’s Mot. Instruction 2.) The Motion for Instruction sought the
Court’s guidance on whether Tarr could testify as a fact witness rather than an
expert witness. (Pl.’s Mot. Instruction 2.) On May 28, 2008, the Court, in an Order
on Motion for Clarification, stated that the Court’s prior orders were clear and that
the North Carolina Rules of Civil Procedure make no provision for designation of
“possible” expert witnesses. (Order Mot. Clarification 1, May 28, 2008.)
1
The First Order on Tuttle’s Motion to Compel simply extended the deadline for expert discovery an additional
thirty (30) days and noted that the Court would issue a second order on the substance of the Motion to Compel at a
later date.
{11} After the Court’s Order on Motion for Clarification, Tuttle sent a letter to
Plaintiff on June 5, 2008, again seeking discovery of Wagner in his capacity as an
expert witness. (Def.’s Br. Supp. Mot. Sanctions 4; Def.’s Br. Supp. Mot. Sanctions,
Ex. H; Pl.’s Br. Opp’n Mot. Sanctions 9−10.) Plaintiff replied in a letter dated June
11, 2008, by withdrawing the designations of Wagner and Tarr as expert witnesses.
(Def.’s Br. Supp. Mot. Sanctions 4; Def.’s Br. Supp. Mot. Sanctions, Ex. D; Pl.’s Br.
Opp’n Mot. Sanctions 9−10.) The letter stated that upon further review, counsel
had determined that Wagner was not qualified as an expert. (Def.’s Br. Supp. Mot.
Sanctions 4; Def.’s Br. Supp. Mot. Sanctions, Ex. D.)

II.
DISCUSSION
A.
RULE 26
{12} North Carolina courts have inherent authority to impose sanctions. Couch
v. Private Diagnostic Clinic, 146 N.C. App. 658, 663, 554 S.E.2d 356, 361 (2001). A
trial court’s inherent “authority encompasses not only the ‘power but also the duty
to discipline attorneys, who are officers of the court, for unprofessional conduct.’” Id.
at 665−66, 247 S.E.2d at 362 (citing In re Hunoval, 294 N.C. 740, 744, 247 S.E.2d
230, 233 (1977)); see also Dunn v. Canoy, 180 N.C. App 30, 45, 636 S.E.2d 243, 253
(2006). For a more limited view of the trial court’s authority to sanction, see
Egelhof v. Szulik, COA08-452 (N.C. Ct. App. Nov. 18, 2008). That limited view,
however, is inapplicable where, as here, the motion for sanctions is clearly directed
to a violation of Rule 26(g). See Brooks v. Giesey, 334 N.C. 303, 317−19, 432 S.E.2d
339, 347−48 (1993) (holding that discovery responses were the subject of sanctions
under Rule 26(g), not Rule 11). Unprofessional conduct includes “misconduct,
malpractice, or deficiency in character . . . and any dereliction of duty except mere
negligence or mismanagement.” Couch, 146 N.C. App. at 666, 554 S.E.2d at 362.
When a court exercises its power to sanction, it is reviewed for abuse of discretion.
Id. at 663, 554 S.E.2d at 361.
{13} Expert witnesses are subject to specific rules of discovery under the North
Carolina Rules of Civil Procedure. See N.C. R. Civ. P. 26(b). Generally, the facts
known to, and the opinions held by, an expert are discoverable, as are the materials
the expert relied upon in coming to his or her opinion. See N.C. R. Civ. P. 26(b)(4),
(b)(1). Expert discovery is expensive, and, if not conducted in the proper sequence,
can result in shifting opinions and unfair surprise at trial. Our rules are designed
to flush out what opinions are going to be expressed at trial so that challenges to
those opinions can be heard pretrial without wasting the jurors’ time. Responses to
discovery that comply with the rules save the parties and the courts substantial
time and money.
{14} Rule 26 also makes special provision for the signing of discovery requests.
See N.C. R. Civ. P. 26(g). Under Rule 26(g):
The signature of the attorney or party constitutes a certification that
he has read the request, response, or objection and that to the best of
his knowledge, information, and belief formed after a reasonable
inquiry it is: (1) consistent with the rules and warranted by existing
law or a good faith argument for the extension, modification, or
reversal of existing law; (2) not interposed for any improper purpose,
such as to harass or cause unnecessary delay or needless increase in
the cost of litigation; and (3) not unreasonable or unduly burdensome
or expensive, given the needs of the case, the discovery already had in
the case, the amount in controversy, and the importance of the issues
at stake in the litigation . . . .

N.C. R. Civ. P. 26(g).
{15} To ensure compliance, Rule 26 also provides for sanctions. “If a
certification is made in violation of the rule, the court, upon motion or upon its own
initiative, shall impose upon the person who made the certification, the party on
whose behalf the request, response, or objection is made, or both, an appropriate
sanction . . . .” Id. (emphasis added). The sanction can be the cost incurred due to
the violation, including reasonable attorney’s fees. Id.
{16} A plain-language reading of Rule 26(g) suggests that sanctions under Rule
26(g) are mandatory rather than discretionary. Rule 26(g)(3) of the Federal Rules of
Civil Procedure, while not identical, is similar to North Carolina’s Rule 26(g). The
federal rule states:
If a certification violates this rule without substantial justification, the court,
on motion or on its own, must impose an appropriate sanction on the signer,
the party on whose behalf the signer was acting, or both. The sanction may
include an order to pay the reasonable expenses, including attorney’s fees,
caused by the violation.

Fed. R. Civ. P. 26(g)(3) (emphasis added).
{17} While no North Carolina court has spoken to the issue of whether
sanctions with respect to Rule 26(g) are discretionary or mandatory, several federal
cases are persuasive. See, e.g., Dugan v. Smerwick Sewerage Co., 142 F.3d 398, 407
(7th Cir. 1998). “Decisions under the federal rules are . . . pertinent for guidance
and enlightenment in developing the philosophy of the North Carolina rules.”
Turner v. Duke Univ., 325 N.C. 152, 164, 381 S.E.2d 706, 713 (1989). The court in
Dugan held, “[u]nlike its Rule 11 counterpart, which now assigns to the discretion of
the district court whether to impose sanctions for a violation of the rule . . . , Rule
26(g)(3) still requires that sanctions be imposed in the event of a violation.” Dugan,
142 F.3d. at 407 (internal citations omitted). Rule 26(g)(3) is “designed to curb
discovery abuse by explicitly encouraging the imposition of sanctions.” Fed. R. Civ.
P. 26, Advisory Committee’s Note (1983 Amendment). Additionally, the Eleventh
Circuit Court of Appeals has held that “Rule 26(g) makes the imposition of ‘an
appropriate sanction’ mandatory if a discovery request, response, or objection is
interposed for an improper purpose.” Malautea v. Suzuki Motor Co., 987 F.2d 1536,
1545 (11th Cir. 1993). Sanctions under Rule 26(g) serve not only to punish the
violator of the rule, but also to deter violations by others. Mancia v. Mayflower
Textile Serv. Co., 253 F.R.D. 354, 358 (D. Md. 2008).
{18} In the Mancia case, Magistrate Judge Grimm, one of the leading
commentators on discovery issues in the federal courts, makes a compelling case for
the return to cooperation rather than adversarial discovery in today’s complex civil
litigation. His entire opinion should be read by all trial lawyers. The following are
a few pertinent excerpts from his opinion:
[Rule 26(g)] is intended to impose an “affirmative duty” on counsel to
behave responsibly during discovery, and to ensure that it is conducted
in a way that is consistent “with the spirit and purposes” of the
discovery rules, which are contained in Rules 26 through 37. It cannot
seriously be disputed that compliance with the “spirit and purposes” of
these discovery rules requires cooperation by counsel to identify and
fulfill legitimate discovery needs, yet avoid seeking discovery the cost
and burden of which is disproportionally large to what is at stake in
the litigation. Counsel cannot “behave responsively” during discovery
unless they do both, which requires cooperation rather than
contrariety, communication rather than confrontation.

....

Rule 26(g) charges those responsible for the success or failure of
pretrial discovery—the trial judge and the lawyers for the adverse
parties—with approaching the process properly: discovery must be
initiated and responded to responsibly, in accordance with the letter
and spirit of the discovery rules, to achieve a proper purpose (i.e., not
to harass, unnecessarily delay, or impose needless expense), and be
proportional to what is at issue in the litigation, and if it is not, the
judge is expected to impose appropriate sanctions to punish and deter.

The apparent ineffectiveness of Rule 26(g) in changing the way
discovery is in fact practiced often is excused by arguing that the
cooperation that judges expect during discovery is unrealistic because
it is at odds with the demands of the adversary system, within which
the discovery process operates. But this is just not so.

....

. . . However central the adversary system is to our way of
formal dispute resolution, there is nothing inherent in it that precludes
cooperation between the parties and their attorneys during the
litigation process to achieve orderly and cost effective discovery of the
competing facts on which the system depends.

....

. . . A lawyer who seeks excessive discovery given what is at
stake in the litigation, or who makes boilerplate objections to discovery
requests without particularizing their basis, or who is evasive or
incomplete in responding to discovery, or pursues discovery in order to
make the cost for his or her adversary so great that the case settles to
avoid the transaction costs, or who delays the completion of discovery
to prolong the litigation in order to achieve a tactical advantage, or
who engages in any of the myriad forms of discovery abuse that are so
commonplace is, as Professor Fuller observes, hindering the
adjudication process, and making the task of the “deciding tribunal not
easier, but more difficult,” and violating his or her duty of loyalty to
the “procedures and institutions” the adversary system is intended to
serve. Thus, rules of procedure, ethics and even statutes make clear
that there are limits to how the adversary system may operate during
discovery.

Mancia, 253 F.R.D. at 357−63 (internal citations omitted).
{19} Judges and lawyers should resurrect the original intention of the discovery
rules, which was to make discovery a more cooperative and less adversarial system
designed to reduce, not increase, the cost of litigation. North Carolina’s Rule 26(g)
was designed to do that and mandates sanctions when violations of the rule occur.
Our system of civil justice cannot function effectively and economically unless
lawyers and judges return to the original intention of the discovery rules and make
cooperation, communication, and transparency the cornerstones of the discovery
process. 2
{20} Under certain circumstances, counsel is required to supplement previous
discovery responses when new information is acquired. See N.C. R. Civ. P. 26(e).
Of particular importance to this litigation, Rule 26(e)(1) requires a party to
seasonably supplement his response to any question that addresses “the identity of
each person expected to be called as an expert witness at trial.” N.C. R. Civ. P.
26(e)(1). Moreover, a party has an affirmative duty to seasonably amend prior
responses that were true when made but are no longer true and “the circumstances
are such that a failure to amend the response is in substance a knowing
concealment.” N.C. R. Civ. P. 26(e)(2).
{21} Plaintiff’s brief cites Bryson v. Sullivan, 330 N.C. 644, 401 S.E.2d 327, for

2
The Court also notes here that Plaintiff’s counsel refused oral communication with Tuttle’s counsel, making
resolution of the discovery disputes between them far more difficult. What resulted was needless motion practice
which wasted the parties’ resources and the Court’s time. (See Def.’s Br. Supp. Mot. Sanctions 3; Def.’s Br.
Supp. Mot. Sanctions, Ex. B.)
the proposition that sanctions are not appropriate if the discovery response was
reasonable. (See Pl.’s Br. Opp’n Mot. Sanctions 10 (citing Bryson, 330 N.C. at 656,
401 S.E.2d at 333 (1992).) The Supreme Court’s opinion in Bryson begins, however,
by stating “[t]his case considers the propriety of sanctions under N.C. R. Civ. P.
11(a).” Bryson, 330 N.C. at 329, 412 S.E.2d at 650. The decision in Bryson,
therefore, is not relevant to the Motion before the Court.
{22} Similarly, Plaintiff cites Miltier v. Downes, 935 F.2d 660 (4th Cir. 1991),
which holds that “‘counsel do[es] not have to be right on their legal positions to
avoid sanctions, but only reasonable.’” (Pl.’s Br. Opp’n Mot. Sanctions 10−11
(quoting Miltier, 935 F.2d at 663).) The opinion in Miltier discusses sanctions
pursuant to Rule 11 of the Federal Rules of Civil Procedure. See Miltier, 935 F.2d
at 661−65. Rule 11 of the Federal Rules of Civil Procedure, however, does not apply
to discovery. See Fed. R. Civ. P. Rule 11(d) (“This rule does not apply to disclosures
and discovery requests, responses, objections, and motions under Rules 26 through
37.”) Accordingly, Miltier also fails to address the issue raised by the instant
Motion.
{23} The Motion before the Court is a motion for sanctions under Rules 26(g)
and 37, and it must be treated as such. Consequently, the Bryson and Miltier
decisions, and other authority involving Rule 11, are not relevant to this Motion.
{24} The Court now turns to Plaintiff’s conduct in light of the language and
purpose of Rule 26(g). In response to an interrogatory, Plaintiff identified Wagner
and Tarr as potential expert witnesses. It is clear from Mr. Biesecker’s letter of
April 24, 2008, that he had not communicated with Tarr in any manner about
acting as an expert. (See Def.’s Br. Supp. Mot. Sanctions, Ex C.) Nor does it appear
that Wagner prepared any expert opinions prior to being designated as an expert
witness.
{25} According to Plaintiff’s Brief in Opposition to Tuttle’s Motion for Sanctions,
Wagner and Tarr were designated as “possible” experts assuming that “it was or
should have been clear to all involved in the litigation that neither Mr. Tarr nor Mr.
Wagner were retained by Azalea Garden as experts or had prepared expert reports
for Azalea Garden.” (Pl.’s Br. Opp’n Mot. Sanctions 7.) Just how defense counsel
was to make that leap of faith is unclear. Moreover, exactly how defense counsel
would know that Wagner and Tarr would not later form opinions, prepare reports,
and testify is also unclear. Tuttle’s counsel responded in the only way possible to
protect their client’s interest: they sent discovery to find out what opinions would
be expressed and the basis for each opinion. Had they not done so, they ran the risk
of being blindsided at trial by opinions they had not prepared to counter.
{26} It appears that Plaintiff’s counsel thought they could somehow cloak the
fact testimony of both Wagner and Tarr with the aura of expert testimony just
because they were both lawyers, converting fact testimony from the previous
litigation to legal expert opinions in this litigation without complying with the Rule
26 provisions governing expert testimony. In Tarr’s case, that would be done
without paying him as an expert. The designations of Wagner and Tarr as experts
apparently occurred without any contemplation of the rules regarding disclosure of
expert opinions or the potential partial waiver of the attorney-client privilege by
calling the client as an expert.
{27} In addition, in a letter dated June 11, 2008, Plaintiff’s counsel
subsequently determined that Wagner did not qualify as an expert to give the
opinion desired. (See Def.’s Br. Supp. Mot. Sanctions, Ex D.) There exists no
explanation of what inquiry was made that produced new facts to warrant his
withdrawal as an expert. Plaintiff’s counsel had an obligation to make a reasonable
inquiry into Wagner’s qualifications as an expert before designating him as an
expert. See N.C. R. Civ. P. 26(g). Plaintiff’s counsel had represented Wagner for
years, and they were familiar with his background and qualifications. 3
{28} In summary, Plaintiff and Plaintiff’s counsel violated Rule 26(g) by (1)
designating Wagner as an expert without an intention of having Wagner prepare
any expert report containing his opinions and the basis therefore, (2) failing to
make inquiry into Wagner’s qualifications to give any expert opinions, and (3)

3
The Court notes that Wagner testified that he was a “semi-retired lawyer” who did “very little legal practice.”
(Wagner Dep. 15:20−16:40, Apr. 5, 2004.)
designating Tarr as an expert without even having communicated with Tarr.
Whether intended or not, those actions did cause delay and undue expense for
Tuttle and Tuttle’s counsel. The conduct was unreasonable under the
circumstances. It was more than mere negligence.
{29} Those are not the only actions, however, which caused the Court concern
and violated Rule 26(g). Before withdrawing Wagner as an expert, Plaintiff’s
counsel objected to production of information Wagner may have relied upon in
forming his opinions on the basis of the attorney-client privilege. (See Def.’s Br.
Supp. Mot. Sanctions 2; Pl.’s Br. Opp’n Mot. Sanctions 6−7.) That reliance was
totally unfounded in the law. If Wagner formed an opinion based upon information
or instruction from his lawyer, that information is discoverable. Tuttle’s counsel
brought that to the attention of Plaintiff’s counsel before filing any motion to
compel. Plaintiff did not, however, waiver in objecting to the proper discovery until
ordered to do so by the Court. Plaintiff’s counsel ended up withdrawing Wagner as
an expert, rather than run the risk of disclosing attorney-client communications.
{30} It is clear that designating a client as an expert can result in at least a
limited waiver of the attorney-client privilege. Rule 26(b)(4)(a)(1) states:
A party may through interrogatories require any other party to
identify each person whom the other party expects to call as an expert
witness at trial, to state the subject matter on which the expert is
expected to testify, and to state the substance of the facts and opinions
to which the expert is expected to testify and a summary of the
grounds for each opinion.

N.C. R. Civ. P. 26(b)(4)(a)(1) (emphasis added). Undoubtedly, the “grounds for each
opinion” include information Wagner obtained from Plaintiff’s counsel. Ultimately,
Plaintiff’s counsel cites no North Carolina law to support a reasonable belief that
Plaintiff’s objection to producing communications between counsel and Wagner as
an expert witness was reasonable or consistent with the rules or existing law.
{31} Plaintiff relies on Shooker v. Superior Court, 111 Cal. App. 4th 928 (2003),
for the proposition that it is permissible to designate a client as an expert and later
withdraw the designation. See 111 Cal. App. 4th at 928. Shooker, however, was
not a sanctions case. Rather, it was a case in which the court held that the
attorney-client privilege had not been waived based upon a timely withdrawal of the
expert designation. See Shooker, 111 Cal. App. 4th at 930. That is not the issue
before this Court. Tuttle is not seeking to enforce a waiver of the attorney-client
privilege. Plaintiff did not withdraw Wagner as an expert until it had lost its
argument on the Motion to Compel. Indeed, Shooker actually supports the rule that
a limited waiver of the attorney-client privilege occurs when the client is called as
an expert. See Shooker, 111 Cal. App. at 928−929. The objection made by Plaintiff
in this case had no basis in the rules or existing North Carolina case law, nor was it
an argument for the modification of existing law. It was just wrong. Had Wagner
and Tarr been withdrawn as experts prior to Plaintiff’s unfounded objections to
discovery and the hearing on the Motion to Compel, Tuttle would have had little
complaint. Instead, Tuttle was forced to file a motion to compel and respond to a
motion for clarification.
{32} The Court also notes with concern Plaintiff’s counsel’s refusal to even talk
to Tuttle’s counsel on the telephone. (See Def.’s Br. Supp. Mot. Sanctions 4; Def.’s
Br. Supp. Mot. Sanctions, Ex. B.) Lawyers have a responsibility and a duty to their
clients, the Court, and opposing counsel to communicate openly and civilly with
each other. A failure to do so is a breach of their professional duties and results in
unnecessary delay and expense to the parties and the Court.
{33} Plaintiff waited until the last day before the three (3)-year statute of
limitations was to expire before filing its original suit. Plaintiff then took a
voluntary dismissal without prejudice during the first trial and waited until the last
day of the one (1)-year grace period to reinstitute the suit. The estate of one (1) co-
defendant has been dismissed, and an appeal taken from that Order prevents trial
of this action. Defendant Allen has been dismissed on summary judgment. The
breach of the contract was alleged to have occurred in September of 1999, almost
ten (10) years ago. This has been an expensive process for all concerned. The
creation of unnecessary expense by failing to make any reasonable inquiry before
filing (1) interrogatory responses or objections and (2) objections that were
unsupported by the rules or existing case law unreasonably added to that expense.
{34} Based on the foregoing, the Court finds that Plaintiff violated Rule 26(g)
and is subject to mandatory sanctions.
B.
RULE 37
{35} The Court also finds that an award of expenses would be available to
Tuttle under Rule 37. Rule 37 provides that if a party is forced to go to the court
and file a motion to compel discovery, and the motion to compel is granted:

the court shall, after opportunity for hearing, require the party . . .
whose conduct necessitated the motion . . . to pay the moving party the
reasonable expenses incurred in obtaining the order, including
attorney’s fees, unless the court finds that the opposition to the motion
was substantially justified or that other circumstances make an award
of expenses unjust.

N.C. R. Civ. P. 37(a)(4) (emphasis added). In this case, Tuttle filed the Motion to
Compel on April 25, 2008. By Order dated May 6, 2008, the Court granted Tuttle’s
Motion to Compel. Based on the record before the Court, there is no evidence that
opposition to the Motion to Compel was substantially justified or that the
circumstances make an award of expenses unjust. Consequently, an award of
expenses under Rule 37 is proper.

III.
CONCLUSION
{36} In the first trial of this case, Wagner and Tarr were treated as fact
witnesses. When discovery ensued after the second case was filed, Plaintiff elected
to list Wagner and Tarr as experts even though neither had prepared or expressed
any expert opinions. In Tarr’s case, there had been no communication with him at
all. Plaintiff’s counsel had no idea what expert opinions Tarr might express. In
Wagner’s case, Plaintiff refused expert discovery relying on the attorney-client
privilege. That reliance was unsupported by existing rules and case law.
{37} The fact that both Wagner and Tarr were designated as “possible” expert
witnesses did not change either Defendant’s necessity of conducting discovery
concerning their opinions or Plaintiff’s obligation to comply with Rule 26. When it
became clear to Plaintiff’s counsel that they had to comply with Rule 26, they
withdrew both Wagner and Tarr as experts. In the interim, Tuttle was put to the
expense of ferreting out, through discovery and motions, what opinions would be
offered, the basis for those opinions, and the qualifications of the experts who
planned to express those opinions at trial. Ultimately, Plaintiff’s counsel conceded
that Wagner, who they had represented for years, did not qualify as an expert
under Rule 26(b)(4).
{38} The discovery responses filed by Plaintiff were not based upon any
reasonable inquiry, and the objections that prolonged the battle were not based
upon any rule or existing case law. Plaintiff’s designation of Wagner and Tarr as
possible expert witnesses finds no support in law or logic. The actions of Plaintiff
and its counsel caused Tuttle unnecessary expense. Sanctions under Rule 26(g) are
mandatory and also justified under Rule 37.
{39} Based on the foregoing, it is hereby ORDERED, ADJUDGED, and
DECREED:
1. Defendant Tuttle’s Motion for Sanctions is GRANTED.
2. Tuttle’s counsel shall file with the Court a detailed request for
attorney fees specifying the time spent and the services rendered for
which reimbursement is sought. Tuttle’s counsel shall also include
the actual hourly rate charged to and paid by the client for those
services.

IT IS SO ORDERED, this 26th day of March, 2009.