POINT INTREPID, LLC and ADVANCED INTERNET TECHNOLOGIES, INC., Plaintiffs v. ROBYN FARLEY, Defendant
Case Details
- Citation
- 215 N.C. App. 82
- Judge(s)
- Judges STEELMAN and STEPHENS concur.
- Procedural Posture — the stage the case had reached
- appeal
- State
- North Carolina
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The trial court's order requiring the employer (AIT) to pay the balance of an independent expert's invoice ($12,400.12) was affirmed on appeal. However, the court reversed the award of attorneys' fees and additional expenses ($6,137.50) to the expert, finding that North Carolina statutes do not authorize such recovery.
Excerpt
POINT INTREPID, LLC and ADVANCED INTERNET TECHNOLOGIES, INC., Plaintiffs v. ROBYN FARLEY, Defendant No. COA10-1617 (Filed 16 August 2011) 1. Appeal and Error — preservation of issues — failure to object Plaintiffs did not preserve for appeal an argument concerning the shifting of discovery fees where they did not obtain a ruling from the trial court on the issue. 2. Costs — expert fees — ex parte contact The trial court did not abuse its discretion by requiring plaintiffs to pay the balance of an independent expert’s fees despite ex parte contact between the expert and opposing counsel where the trial court decided that the contact did not bias the witness. 3. Costs — independent expert fees — reasonableness The trial court did not abuse its discretion by requiring plaintiffs to pay the balance of the fee of an independent expert witness where plaintiffs contended that the fee was unreasonable. Despite evidence to the contrary, there was competent evidence that the invoice was reasonable. The rejection of plaintiffs’ expert testimony on reasonableness did not mean that the testimony was not considered or that the trial court’s decision was not supported by competent evidence. 4. Costs — expert—expenses for recovering fee An award for attorney fees and additional expenses expended by an expert witness in seeking recovery of its fees was reversed. The relevant statutes on reimbursement of expert witnesses do not mention attorney fees, the witness was not entitled to compensation for appearing in court voluntarily, and compensation does not extend to travel expenses. Appeal by Plaintiffs from Orders entered 8 September 2010 and 22 September 2010 by Judge Gregory A. Weeks in Cumberland County Superior Court. Heard in the Court of Appeals 11 May 2011. A. Bikash Roy for Plaintiffs-appellant. Winslow Wetsch, PLLC, by Laura J. Wetsch, for Defendantappellee. Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., by Thomas M. Buckley, for third-party appellee. HUNTER, JR., Robert N., Judge. Point Intrepid, LLC (“Point Intrepid”) and Advanced Internet Technologies, Inc. (“AIT”) (collectively “Plaintiffs”) appeal from Orders directing AIT to pay third-party appellee Forward Discovery’s invoice, attorneys’ fees, and additional expenses. We affirm, in part, and reverse, in part. I. Facts and Procedural History This case arises from an employment dispute between Plaintiffs and Robyn Farley (“Farley”), a former employee of AIT. While the parties settled the litigation relating to the underlying employment dispute, this appeal originates from a disagreement over payment of third-party expert fees incurred during the parties’ litigation. Plaintiffs agreed in court to pay the entire cost of the third-party expert, but subsequently refused full payment. Plaintiffs appeal the trial court’s Orders mandating their payment of the balance of the expert’s invoice, attorneys’ fees, and additional expenses. AIT is a North Carolina corporation in the business of hosting websites and providing internet technology-related services. Point Intrepid is a North Carolina company that acts as the benefits and payroll administrator for AIT, its subsidiaries, and affiliates. On 6 June 2008, Farley was hired by AIT as a Database Administrator/Engineer. Farley’s employment at AIT was terminated on 26 February 2009 following allegations of her unauthorized access of her supervisor’s computer. Plaintiffs brought suit against Farley for, inter alia, breach of contract and breach of fiduciary duty. Farley made numerous counter-claims, including wrongful discharge and defamation. The case was heard at the 19 November 2009 session of the Superior Court of Cumberland County, Judge Gregory A. Weeks presiding. During a motions hearing, Judge Weeks entered a discovery order on 3 December 2009 requiring AIT to produce “all documents supporting and negating AIT’s decision to determinate [sic] Farley’s employment.” Because AIT wanted to use an expert to protect its proprietary information and avoid inadvertent disclosure of customer banking information, AIT filed a motion pursuant to N.C. Gen. Stat. § 1A-1, Rule 60(b). Specifically, AIT requested that an independent third-party expert, either designated by the court or by agreement between the parties, analyze the hard drives “with the costs to be shared equally by the parties.” At a 7 December 2009 hearing for this Motion, Farley conceded to the appointment of an independent third-party expert, but proposed that AIT pay all expenses for the expert. AIT agreed to incur the costs for third-party analysis of its hard drives, and explicitly stated, “[W]e will incur [the costs] voluntarily and a hundred percent, we will incur it.” On 4 January 2010, the trial court entered an Order requiring the parties to agree to a third-party expert within five business days. Pursuant to the Order, the expert would analyze AIT’s hard drives and report the results. Significantly, the Order provided that “[t]he third-party expert may communicate separately with each party, but shall maintain a complete record of all such communications, which shall be made available to the court or either party upon request.” The Order also stated, “AIT shall promptly pay all fees and expenses of the third-party expert selected to perform the work identified in this Order, consistent with the third party expert’s quote which is incorporated in this Order by reference.” On 11 January 2010, the parties informed the trial court that they were unable to agree on an expert. Farley proposed as an expert Ryan Johnson (“Johnson”) of Forward Discovery, Inc. (“Forward Discovery”). Johnson provided an estimate of $10,250 per hard drive ($20,500 total), for the requested work. AIT suggested as an expert Charles Moreton, of Computer Trauma Center, who stated the cost of the work would not exceed $2,200. The trial court, in a 14 January 2010 Order, selected Johnson of Forward Discovery, the expert proposed by Farley. The trial court held that Johnson’s estimate of $20,500 would serve as a cap on the work to be performed. Pursuant to an agreement between the parties, Johnson did not begin his work until late March 2010 to allow the parties time to mediate the underlying claims. Farley’s attorney e-mailed Johnson on 19 March 2010 to inform him that mediation had failed and that he could begin his work. AIT’s attorneys were included on the e-mail. This prompted an exchange of contentious e-mails in which AIT’s attorney expressed his disapproval of this unilateral request by Farley’s attorney that Johnson begin his court-ordered work. On 22 March 2010, Farley’s attorney called Forward Discovery about these e-mails, on which Johnson had been copied, and Johnson advised her that because the matter seemed “contentious,” it might be best to arrange a conference call between all the parties. Forward Discovery logged this phone call with Farley’s attorney pursuant to the trial court’s Order, but admits it failed to log two instances where Farley’s attorney called Forward Discovery’s office for driving directions. In early May 2010, Forward Discovery completed its court-ordered work, and it sent an invoice to AIT in early June 2010. The invoice listed a total amount of $22,650.12 due by 9 July'2010, exceeding the court-ordered limit of $20,500. AIT refused to pay the entire amount, and requested clarification of the services provided. In an e-mail exchange with AIT’s attorney, Johnson provided the requested clarification. On 30 July 2010, AIT paid Johnson $10,250, half of the court-ordered limit. On 9 August 2010, Plaintiffs filed a Motion to Limit Expert Fees. Plaintiffs argued that Forward Discovery’s estimate and invoice were unreasonable, that AIT had already paid a reasonable fee for Forward Discovery’s work, and that Johnson should show cause as to why the trial court should not consider the estimate and invoice unreasonable. The next day, on 10 August 2010, Forward Discovery filed a Motion to Show Cause why AIT should not be held in contempt of court for failing to pay the balance of Forward Discovery’s invoice and requested sanctions against AIT for failure to comply with the trial court’s discovery order. Forward Discovery’s Motion called for AIT to pay the fees Forward Discovery incurred for its court-ordered work, as well as attorneys’ fees, interest, and monetary sanctions for its collection efforts. Both parties appeared for a hearing on these motions on 30 August 2010 before Judge Gregory A. Weeks in Cumberland County Superior Court. Johnson voluntarily attended the 30 August 2010 hearing; he was not required to appear by subpoena. On 8 September 2010, the trial court entered an Order denying Plaintiffs’ Motion and granting Forward Discovery’s Motion. Specifically, the trial court found the invoice for Forward Discovery’s services to be reasonable under N.C. Gen. Stat. § 8C-1, Rule 706 and required AIT to pay the balance of the invoice ($12,400.12). On 13 September 2010, the trial court held an additional hearing to rule on Forward Discovery’s claim for attorneys’ fees and additional expenses. The trial court entered an Order on 22 September 2010 requiring AIT to pay Forward Discovery $3,762.50 for attorneys’ fees and $2,375.00 for additional expenses (a total of $6,137.50). AIT and Farley resolved the underlying employment dispute on 4 October 2010, manifested in a Settlement Agreement and Release (“Settlement Agreement”). Pursuant to the Settlement Agreement, AIT filed a Notice of Voluntary Dismissal on 8 October 2010. This voluntary dismissal was with prejudice to all claims, except with regard to “the Plaintiffs’ right to appeal the Order of the Court entered on September 8, 2010 and the Court’s further Order entered on September 22, 2010,” which were dismissed without prejudice. Plaintiffs timely entered notice of appeal from the trial court’s 8 September 2010 Order requiring payment of the balance of Forward Discovery’s invoice and the 22 September 2010 Order requiring payment of attorneys’ fees and expenses (collectively the “September 2010 Orders”). II. Jurisdiction and Standard of Review This Court has jurisdiction to hear the instant appeal pursuant to N.C. Gen. Stat. § 7A-27(b) (2009). We review the trial court’s Orders under an “abuse of discretion” standard. Smith v. Barbour, 195 N.C. App. 244, 253, 671 S.E.2d 578, 585 (2009) (citing Sharp v. Sharp, 116 N.C. App. 513, 533, 449 S.E.2d 39, 50, disc. rev. denied, 338 N.C. 669, 453 S.E.2d 181 (1994)). “Abuse of discretion occurs where the court’s ruling is manifestly unsupported by reason or is so arbitrary it could not have been the result of a reasoned decision.” State v. Syriani, 333 N.C. 350, 379, 428 S.E.2d 118, 133 (1993). A trial court does not reach a reasoned decision, and thus abuses its discretion, when its findings of fact are not supported by competent evidence. Leggett v. AAA Cooper Transp., Inc., 198 N.C. App. 96, 104, 678 S.E.2d 757, 763 (2009) (“[T]he trial court’s finding is supported by competent evidence, and does not constitute an abuse of discretion.”). Findings of fact are conclusive on appeal if they are supported by competent evidence. Powers v. Tatum, 196 N.C. App. 639, 648, 676 S.E.2d 89, 95 (citation omitted), disc. rev. denied, 363 N.C. 583, 681 S.E.2d 784 (2009). Additionally, “findings of fact to which [the appellant] has not assigned error and argued in his brief are conclusively established on appeal.” Static Control Components, Inc. v. Vogler, 152 N.C. App. 599, 603, 568 S.E.2d 305, 308 (2002). The trial court’s legal conclusions receive de novo review. State v. Newman, 186 N.C. App. 382, 386, 651 S.E.2d 584, 587 (2007). III. Analysis On appeal, Plaintiffs argue the trial court erred in ordering them to pay the balance of Forward Discovery’s invoice, attorneys’ fees, and additional expenses. Specifically, Plaintiffs contend the trial court should not have allowed recovery of the balance of the Forward Discovery invoice for its hard drive analysis, since improper communications occurred between Johnson and Defendant’s counsel and there was no competent evidence that Forward Discovery’s fees were reasonable. Plaintiffs further argue that North Carolina statutes and case law do not permit recovery of attorneys’ fees and additional expenses on the facts of this case. We affirm, in part, and reverse, in part. A. Right to Appeal Preliminarily, we address Defendant’s procedural rebuttal to Plaintiffs’ claims. Defendant argues that AIT lost its right to appeal when it filed a voluntary dismissal with prejudice pursuant to the parties’ Settlement Agreement. We disagree. Generally, a voluntary dismissal, even without prejudice, “terminates a case and precludes the possibility of an appeal.” Dodd v. Steele, 114 N.C. App. 632, 636, 442 S.E.2d 363, 366 (citing Lloyd v. Carnation Co., 61 N.C. App. 381, 384, 301 S.E.2d 414, 416 (1983)), disc. rev. denied, 337 N.C. 691, 448 S.E.2d 521 (1994). However, a voluntary dismissal of claims does not necessarily act as a bar against other related but independent claims; as our state’s Supreme Court has stated, “[dismissal does not deprive the court of jurisdiction to consider collateral issues such as sanctions that require consideration after the action has been terminated.” Bryson v. Sullivan, 330 N.C. 644, 653, 412 S.E.2d 327, 331 (1992); see Dodd, 114 N.C. App. at 634, 442 S.E.2d at 365 (“Furthermore, neither the dismissal of a case nor the filing of an appeal deprives the trial court of jurisdiction to hear Rule 11 motions.”); VSD Commc’ns, Inc. v. Lone Wolf Publ’g Group, Inc., 124 N.C. App. 642, 644, 478 S.E.2d 214, 216 (1996) (noting that after a voluntary dismissal, motions for attorneys’ fees “have a life of their own”). Still, under our Rules of Appellate Procedure, for a party to raise an issue on appeal, it must have presented to the trial court a timely request, objection, or motion, stating the specific grounds for the ruling the party desired the court to make if the specific grounds were not apparent from the context. It is also necessary for the complaining party to obtain a ruling upon the party’s request, objection, or motion. N.C.R. App. P. 10(a)(1) (2011); see Lake Colony Constr., Inc. v. Boyd, _N.C. App._,_,_S.E.2d_,_., 2011 WL 2200607, at *10 (No. 10-959) (June 7, 2011) (explaining that, pursuant to N.C.R. App. P. 10(a)(1), appellant failed to preserve an issue for appellate review where the appellant did not raise the issue in the trial court). In the present case, the voluntary dismissal of claims against Farley does not negate Plaintiffs’ right to appeal the September 2010 Orders. Although the overall dismissal was with prejudice, the Notice of Voluntary Dismissal provides the following exception: This dismissal ... is without prejudice to the Plaintiffs’ right to appeal the Order of the Court entered on September 8, 2010 and the Court’s further Order entered on September 22, 2010. The foregoing is with Defendant Robyn Farley’s consent,, [sic] pursuant to the terms of the mediated settlement agreement between all parties. Additionally, the Settlement Agreement specifically stated that AIT “preserved] its right to appeal from the Orders entered by the Honorable Gregory Weeks on September 8, 2010 and September 22, 2010.” Thus, Plaintiffs may maintain their appeal of the September 2010 Orders. Nonetheless, we agree with Defendant that Plaintiffs have not preserved the right to appellate review of their fee-shifting argument, whereby Plaintiffs contend that because Defendant engaged in improper communications with Johnson, the burden for paying Forward Discovery’s fees should be shifted to Defendant. In its carve-out preserving Plaintiffs’ right to appeal the September 2010 Orders, the Settlement Agreement does not address the fee-shifting argument. Additionally, neither AIT’s Motion nor the trial court’s Orders make any mention of a fee-shifting claim. Thus, pursuant to North Carolina Rule of Appellate Procedure 10(a)(1), we conclude that Plaintiffs did not preserve the fee-shifting argument because they did not obtain a ruling from the trial court on the issue. B. Allegations of Improper Ex Parte Communications Plaintiffs argue the trial court erred and abused its discretion by requiring AIT to pay the balance of Forward Discovery’s invoice because improper communications occurred between Johnson and Farley’s counsel. We disagree. Improper ex parte communication can occur when contact between a litigating party and the expert inhibits the expert’s ability to “provide the court with . . . unbiased information.” Bd. of Managers of Bay Club Condominium v. Bay Club of Long Beach Inc., 15 Misc. 3d 282, 286, 827 N.Y.S.2d 855, 858 (N.Y. Sup. Ct. 2007). Generally, “court-appointed witnesses should remain neutral and impartial in conducting their evaluations.” In re David W., 759 A.2d 89, 95 (Conn. 2000); see State v. Adams, 335 N.C. 401, 408-10, 439 S.E.2d 760, 763-64 (1994) (explaining in an analogous situation of ex parte communications between a judge and potential jurors that there is no reversible error when the communication is harmless). We examine the facts of the present case to determine whether Johnson’s neutrality was impacted by any ex parte communications with Farley’s counsel. We find unpersuasive Plaintiffs’ analogy to relevant case law from other jurisdictions, because the conduct here does not rise to the level of impropriety in the cases referenced by Plaintiffs. See, e.g., Bd. of Managers of Bay Club Condominium, 15 Misc. 3d at 284-85, 827 N.Y.S.2d at 857-58 (describing how the plaintiff’s attorneys scheduled a meeting with the third-party expert without the defendant’s knowledge and received documents from the expert beyond the scope of the expert’s court-ordered work); G.K. Las Vegas Ltd. P’ship v. Simon Prop. Grp., 671 F. Supp. 2d 1203, 1227 (D. Nev. 2009) (explaining how the defendants invited the experts to their office and interviewed some of the experts “to ensure that the particular [experts] who were expected to be involved would be sufficiently knowledgeable and experienced”); In re David W., 759 A.2d at 92 (noting, in a termination of parental rights case, the assistant attorney general’s request to the court-appointed expert for an independent developmental assessment of the child constituted improper ex parte communication). In the present case, the facts are significantly distinguishable from these cases. First, in the case at hand, the trial court’s Order expressly permitted communications between the litigating parties and the court-appointed expert, and required Johnson to log such communications. Furthermore, we are not persuaded that the communications between Farley’s counsel and Johnson were improper. For instance, Plaintiffs argue that a 22 March 2010 phone call between Farley and Johnson discussing the “contentious” nature of the case biased Johnson as a neutral third-party expert. We disagree. Per the trial court’s order, Johnson logged this phone call and described the call as follows: [Defendant’s counsel] called [Johnson] — related to the emails [sic] between the parties. [Johnson] advised that current matter was contentious and that a conference call with counsel would be beneficial to get everyone on the same page. Wetsch advised that there was no agreement to further delay analysis. [Johnson] noted that [Johnson] had received an e-mail from [Plaintiffs’ counsel] at 9:46 but that [Johnson] hadn’t fully read it — [Johnson] would read and respond as necessary. [Johnson] phoned and left a message for [AIT’s outside counsel]. No reply phone call. We cannot reasonably conclude that Farley’s counsel biased Johnson by discussing the fact that the case was contentious. The trial court itself has noted the contentiousness of this case, and Johnson has been included in communications between the litigating parties that have displayed significant tension. We do not believe the call between Farley’s
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