*2 STROUD, Chief Judge. Appellants, Dunhill Holdings, LLC (“Dunhill”) and Greg Lindberg, appeal from
an order imposing sanctions on them for discovery violations and, pursuant to a previous opinion from this Court in this case, from a discovery order requiring them to submit their electronic devices for forensic examination. Because we find the trial court did not abuse its discretion in imposing sanctions and did not err in its choice of sanctions in most respects, we affirm in part. We vacate in part and remand because two paragraphs of the ordered sanctions are inconsistent with the remainder of the order or improperly bar objections, including objections for attorney-client privilege. Finally, since we affirm the relevant parts of the sanctions order, we dismiss the forensic examination issue as moot.
I. Background This is the second appeal to this Court in this case. The first appeal concerned
an order from 27 June 2018 (“June 2018 Order”) that, inter alia , ordered Appellants to make certain electronic devices available for a forensic examination to determine if any relevant emails were deleted. Dunhill Holdings, LLC v. Lindberg , No. COA18- 1112, 270 N.C. App. 820, *7, *10–11 [hereinafter “ Dunhill I ”] (unpublished). The *3 prior appeal dismissed the case “without deciding whether the appeal [was] an interlocutory appeal that does not affect a substantial right” and “refer[red the forensic examination issue] to the panel of this Court that will decide Dunhill and Greg E. Lindberg’s appeals of the discovery order and the sanctions order together.” Dunhill I at *12. Based upon the prior opinion, this panel must address the sanctions order, and we will also address the discovery order at issue in the prior appeal. [2] Id. The prior ruling from this Court is the law of the case and thus binds us. See, e.g., North Carolina Nat. Bank v. Virginia Carolina Builders , 307 N.C. 563, 567, 299 S.E.2d 629, 631 (“[O]nce a panel of the Court of Appeals has decided a question in a given case that decision becomes the law of the case and governs other panels which may thereafter consider the case.”). We therefore recount the facts and procedural history from Dunhill I and only include additional details where necessary to understand the sanctions order that was not before this Court in the prior appeal. Dunhill I summarizes the initiation and pre-discovery occurrences in this lawsuit:
Dunhill Holdings, LLC (“Dunhill”) filed a complaint against Tisha L. Lindberg, as well as four former
employees of Dunhill on 24 July 2017.[ [3] ] According to Dunhill, the company is owned by Greg E. Lindberg, who is “the founder and sole manager and member of Dunhill.” Greg E. Lindberg and Tisha L. Lindberg married on 19 September 2003 and separated on 22 May 2017. In its amended complaint filed 24 August 2017, Dunhill described Tisha L. Lindberg as Dunhill’s “Chief Executive Officer”; however, she denied this characterization in her answer, saying that “while [Mr.] Lindberg purported to call [her] the ‘C.E.O.’ of [Dunhill] on occasion, [Dunhill] never employed [Tisha L.] Lindberg in any capacity and [Dunhill] was merely a vehicle through which [Greg E.] Lindberg funded the personal lifestyle of the parties and their family . . . .”
Dunhill described itself as a “real estate holding company” in its amended complaint and the primary asset owned by Dunhill was the family home of Greg E. Lindberg and Tisha L. Lindberg on Stagecoach Drive in Durham, North Carolina. In its amended complaint, Dunhill claimed Tisha L. Lindberg took funds from Dunhill and it asserted claims against her for breach of fiduciary duty, constructive fraud, civil liability for theft and embezzlement, civil conspiracy, conversion and an action for accounting, in addition to claims for unjust enrichment, disgorgement, and civil conspiracy against the other Defendants.
In her answer, Tisha L. Lindberg moved to dismiss Dunhill’s complaint for failure to state a claim for which relief may be granted under N.C. Gen. Stat. § 1A-1, Rule 12(b)(6), denying various allegations of Dunhill and asserting affirmative defenses of breach of fiduciary duty by Greg E. Lindberg, fraud, constructive fraud, equitable estoppel, waiver, ratification, actual authority, and laches. She also filed a third-party complaint against Greg E. Lindberg and counterclaim against Dunhill, seeking “all
right, title, and interest in the Key West House” and “all right, title, and interest in the tennis complex” Greg E. Lindberg allegedly promised to give her. Tisha L. Lindberg subsequently filed an amended third-party complaint against Greg E. Lindberg and a counterclaim against Dunhill, asserting breach of fiduciary duty, constructive fraud, indemnity, declaratory relief, abuse of process, malicious prosecution, intentional infliction of emotional distress, spoliation of material evidence, and for a constructive trust over the tennis court.
In her amended third-party complaint and counterclaim, Tisha L. Lindberg alleged Dunhill was merely an “alter-ego” of Greg E. Lindberg and was therefore liable for his actions. Dunhill and Greg E. Lindberg did not file an answer to Tisha L. Lindberg’s counterclaim and third-party complaint or her amended counterclaim and third-party complaint, instead filing a motion to dismiss each complaint.
Dunhill I at *2–4. These motions to dismiss were later denied. Before Appellants’ motions to dismiss had been ruled on, Dunhill and Ms.
Lindberg proceeded with discovery:
Dunhill served Tisha L. Lindberg with its first request for production of documents on 24 October 2017 and she replied with objections and responses on 22 December 2017. On 26 February 2018, Tisha L. Lindberg submitted her first set of interrogatories and request for production of documents to Greg E. Lindberg and Dunhill. Dunhill moved to compel discovery on 9 March 2018. Tisha L. Lindberg filed a motion to compel discovery and request for attorney’s fees on 21 May 2018.
Dunhill I at *4. In relevant part, Ms. Lindberg’s discovery requests included interrogatories, requests for document production, and a request for production for *6 forensic inspection of all electronic storage devices owned by Appellants “that [are] the repository for electronic messaging and communication.” Appellants made a series of objections to the discovery requests. In response to the forensic examination request specifically, both parties objected:
In his responses, Greg E. Lindberg responded as follows to this request:
Third Party Defendant objects to Request No. 23 on the ground that it is harassing, overly broad, unduly burdensome, not proportional to the needs of this case, not reasonably calculated to lead to the discovery of admissible evidence, and seeks information that is not relevant to the subject matter of the pending action.
Third-Party Defendant further objects to Request No. 23 on the ground that, on its face it seeks production of records that are confidential or privileged, including records that are protected by the work product and attorney-client privileges, and violates the privacy rights of third persons who are not parties to this lawsuit.
Dunhill made an identical response to this request. Dunhill I at *5. Ms. Lindberg’s motion to compel discovery argued the court should reject the
objections proffered by Mr. Lindberg and Dunhill. In response to objections to the forensic examination, Ms. Lindberg argued she needed the examination to support her spoliation of evidence claim:
Upon information and belief, Mr. Lindberg and Dunhill have intentionally attempted to destroy evidence from computers and electronic devices that is relevant to this matter. The spoliation of evidence by Mr. Lindberg and Dunhill was set out in the pleadings in this matter in Mrs. Lindberg’s[ [4] ] Amended Counterclaims and Third-Party Complaint. For example, upon information and belief, Mr. Lindberg and Dunhill destroyed emails and computer files maintained by Mr. Lindberg’s companies soon after Mr. Lindberg took out the Ex Parte Domestic Violence Protective Order and restricted her access to email servers. Requests for Inspection 23 and 24 to Dunhill and Requests for Inspection 23 and 24 to Greg Lindberg seek to inspect the computers, drives and devices of Mr. Lindberg and Dunhill, but they have refused to allow for this inspection. Mrs. Lindberg respectfully requests that the Court order such a forensic computer inspection.
Ms. Lindberg’s spoliation claim in turn argued, inter alia , that Mr. Lindberg had deleted emails showing he gifted the tennis complex to Ms. Lindberg, thereby supporting her third-party claim for a constructive trust over the tennis complex. The trial court heard the motions to compel from Ms. Lindberg and from Dunhill on 25 June 2018. As of the time of the hearing, neither Dunhill nor Mr. Lindberg had produced “a single document in discovery.” Much of the hearing focused on the forensic examination issue, and Ms. Lindberg continued to argue that the forensic examination would support her spoliation claim as well as her claim the *8 tennis complex was a personal gift. Ms. Lindberg also argued the forensic examination would support her on two
other liability issues. First, she argued the forensic examination would uncover deleted emails that would prove she did not improperly take funds from Dunhill. Second, Ms. Lindberg argued the deleted emails would support her claim for indemnification from Mr. Lindberg as to a deposit for a yacht vacation that Ms. Lindberg claims she made on behalf of Mr. Lindberg. On 27 June 2018, the court entered orders compelling discovery by Ms.
Lindberg and Appellants, awarding attorney’s fees to each side, and ordering the forensic examination. In the order granting relief to Ms. Lindberg, i.e. the June 2018 Order, the trial court rejected all but one of Appellants’ objections to Ms. Lindberg’s discovery requests, and the one sustained objection is not relevant here. The trial court specifically concluded that, other than the one objection it sustained and the forensic examination objection, “all of the objections raised by Dunhill Holdings LLC and Greg Lindberg lack merit, fail to justify the refusal and failure to produce a single discoverable document as of the date of this hearing, and were interposed for an improper purpose of delay and avoiding any meaningful response.” As a result the June 2018 Order required Appellants to “fully and completely reply to each and every Interrogatory and discovery request for production of documents,” with the exception of the one for which an objection was sustained, by 1 August 2018. To make clear *9 which documents were covered, the June 2018 Order fully incorporated by reference the requests for discovery and Appellants’ responses. The June 2018 Order also granted Ms. Lindberg’s request for a forensic
examination with certain limitations:
In the order, the trial court found as follows: As to the request for a forensic examination of certain electronic devices, the Court . . . finds that there are circumstances whereby a forensic examination of the server housing the outlook email accounts used by the parties to this action during the time frame reaching back to the [] period when contested contentions of gifts of real estate valued in excess of one million dollars arose, would be beneficial in the ascertainment of truth. Such a forensic examination would disclose or shed light upon the question of whether or not there exists or existed crucial and relevant documentation that one party contends existed but was “scrubbed” and the other party conten[d]s never existed. . . . The Court further finds that considering the resources of the parties, a forensic examination of the server itself would not unduly burden or obstruct Dunhill Holdings LLC in its operations, nor has any credible evidence been presented that it would unduly interrupt or interfere with operations of any of the other LLC entities connected to Dunhill that may have possession of the server used by the parties to this litigation. There is some evidence that the server may be “owned” by a subsidiary, but all of the evidence shows that any other entity having such an interest exists under the control of Mr. Lindberg. . . . The concern about disclosing any confidential or privileged information is unsupported by any credible evidence or argument, and the inquiry in *10 the forensic analysis can be conducted to [sic] a[s] to obviate any prejudice to Dunhill or to Mr. Lindberg should any such attorney-client privileged data be present.
The trial court concluded that:
The objection to the request for a forensic examination should be overruled for the reasons set forth in the findings [] above. The Court is authorized to order a forensic examination after weighing and balancing the burdens and rights of the parties and the Court finds that the balancing as to those findings clearly show in this case that such an examination is justified, will serve the best interests of both parties, and not pose an undue burden on any party.
The trial court ordered that Dunhill and Greg E. Lindberg “shall make the server or any electronic device housing, hosting, or storing the outlook email account used by the parties available for a forensic examination,” limited to the following purposes: (1) whether any emails or text messages between Greg E. Lindberg and Tisha L. Lindberg ever existed, and producing copies of them; (2) whether emails or text messages “dealing with real estate holdings subject to dispute in this lawsuit exist or ever existed, and producing copies of the same for the parties;” and (3) whether any of those messages “if there were any, have been intentionally deleted, and, if deleted, the circumstances of any deletion and whether or not they can be recovered.” In its order, the trial court further provided for the protection of arguably privileged communications as follows:
Out of an abundance of caution, if there is a contention that a document or communication is a communication exclusively between Greg E. Lindberg and an attorney actually representing him, *11 and the communication does not include any third person for whom the privilege is unavailable, that objection may be renewed provided the specific communication is specifically identified and the basis for the objection and assertion of the privilege is clearly articulated.
Dunhill I at *5–7 (alterations in original). Dunhill and Mr. Lindberg appealed the June 2018 Order. Dunhill I recounts
most of the appellate history:
Dunhill and Greg E. Lindberg filed notice of appeal of the order on 17 July 2018. They also filed a motion for stay with the trial court. Tisha L. Lindberg filed a motion to disregard the notice of appeal and to continue case proceedings with the trial court, along with a response to the motion for stay. The trial court granted Tisha L. Lindberg’s motion to disregard notice of appeal and denied Dunhill and Greg E. Lindberg’s motion for stay on 24 August 2018. Dunhill and Greg E. Lindberg filed a petition for writ of supersedeas with this Court on 4 September 2018, that was denied in part with certain exceptions on 12 September 2018.
Dunhill I at *7–8. Following this Court’s denial of a petition for writ of supersedeas, Mr. Lindberg
and Dunhill filed a Petition for Writ of Supersedeas and Motion for Temporary Stay in the Supreme Court of North Carolina. While that Petition was pending, Ms. Lindberg filed two motions to dismiss the appeal with this Court:
Tisha L. Lindberg filed a motion to dismiss the appeal on 7 November 2018, arguing the appeal was interlocutory and did not affect a substantial right, and *12 therefore should be dismissed. Dunhill filed a response to the motion arguing the order did affect a substantial right to private information stored on the servers.
Tisha L. Lindberg subsequently filed a “New Motion to Dismiss Based on Withdrawal of Underlying Appellate Issue” (“second motion to dismiss”) on 7 December 2018. In the second motion to dismiss, Tisha L. Lindberg argued the appeal should be dismissed as moot because she entered a “Notice of Withdrawal of Forensic Search Request” with the trial court. Dunhill and Greg E. Lindberg filed a response to Tisha L. Lindberg’s motion to dismiss the appeal with this Court arguing the appeal was not moot because the withdrawal did not unilaterally dissolve the challenged portion of the order, because Tisha L. Lindberg remained free to seek further forensic examinations and, alternatively, because several exceptions to the mootness doctrine applied.
Dunhill I at *8. Prior to this Court ruling on those motions, the Supreme Court issued an order
denying Mr. Lindberg’s and Dunhill’s Petition for Writ of Supersedeas and Motion for Temporary Stay on 5 February 2019. Dunhill’s and Mr. Lindberg’s first appeal from the forensic order was addressed
in this Court’s 7 April 2020 opinion in Dunhill I . As discussed above, Dunhill I did not resolve the forensic examination issue. See Dunhill I at *12 (referring to this panel the issues in that appeal). The Dunhill I court noted issues surrounding whether the appeal before it was interlocutory or moot:
Before we can reach the merits of Dunhill and Greg E. Lindberg’s arguments in this appeal, however, we note that Tisha L. Lindberg has filed two motions to dismiss the *13 appeal because (1) the appeal is an interlocutory appeal which does not affect a substantial right and (2) the appeal is moot because she has filed a “Notice of Withdrawal of Forensic Search Request” with the trial court, removing the underlying motion to compel discovery. In Tisha L. Lindberg’s “Objection and Reply in Opposition to Appellants’ ‘Supplemental Response to New Motion to Dismiss Appeal,’” she also argues that the trial court’s imposition of a final sanctions order on 1 August 2019 moots the present appeal because the discovery order will have no further force or effect.
Dunhill I at *11. Given those concerns and “[i]n the interests of judicial economy and efficiency,” this Court in Dunhill I “refer[red the forensic examination issue] to the panel of this Court that will decide Dunhill and Greg E. Lindberg’s appeals of the discovery order and the sanctions order together.” Dunhill I at *12. The sanctions order to which Dunhill I refers was entered after further
proceedings in the trial court. Following the Supreme Court’s denial of Mr. Lindberg and Dunhill’s Petition for Writ of Supersedeas and Motion for Temporary Stay on 5 February 2019, the trial-level proceedings were no longer stayed. As a result, discovery continued with Mr. Lindberg and Dunhill serving Objections and Second Amended Responses to Ms. Lindberg’s discovery requests on 11 February 2019. Finding those responses “woefully lacking,” Ms. Lindberg filed a Motion to Compel Compliance with the June 2018 Order on 22 February 2019. Specifically, Ms. Lindberg argued Appellants violated the June 2018 Order by:
1. Improperly asserting objections that have already been
expressly overruled by the Court; 2. Engaging in an improper “document dump” in a way that makes it impossible to determine which documents have been produced in response to any particular Requests for Production (In fact, Mr. Lindberg and Dunhill have indicated that every page of every document is being produced in response to every Request for Production.); 3. Continuing to withhold documents and not respond to certain discovery requests by Mrs. Lindberg, to which they have been expressly Ordered by the Court to respond without objection; and
4. Continuing to refuse to answer interrogatories and continuing to refuse to verify interrogatory responses. Ms. Lindberg also raised the specter of Rule of Civil Procedure 37 issues, saying “[t]hese proceedings have now progressed to the point that an appropriate Rule 37 inquiry is necessary by the court to address” Appellants’ failures to comply with earlier discovery orders. Appellants filed a response to Ms. Lindberg’s Motion to Compel on or around 7 March 2019. The trial court held a hearing on Ms. Lindberg’s Motion to Compel on 11 March
2019. At that hearing, Appellants’ counsel admitted they had not fully complied with the June 2018 Order. Specifically, Appellants’ counsel said, “We have gone a long way in complying with that [the June 2018 Order]. I am not arguing that we are there, Judge .” (Emphasis added). At another point, Appellants’ counsel agreed with the trial court that they had not been following the June 2018 Order. On 26 March 2019, the trial court entered an order granting Ms. Lindberg’s
Motion to Compel Compliance with Court Order (“March 2019 Order”). The March *15 2019 Order started by summarizing the June 2018 Order, including a verbatim quote of Appellants’ obligations under the June 2018 order. The March 2019 Order then summarized the history of Dunhill’s and Mr. Lindberg’s appeal from the June 2018 Order and specifically noted the appeal only concerned the issue of the forensic examination ordered therein. After determining the February 2019 Supreme Court order denying Mr.
Lindberg’s and Dunhill’s petition for Writ of Supersedeas and Motion for Temporary Stay meant “there is no stay over the enforcement” of the June 2018 Order as it relates to document requests and interrogatories, the March 2019 Order proceeded to analyze Appellants’ discovery actions. First, the March 2019 Order explained the June 2018 Order required Appellants to respond to the discovery requests without objection and that Appellants had violated the June 2018 Order by improperly reasserting all objections. Then, the March 2019 Order faulted Appellants for failing to organize the 7,000 pages of documents they had produced at that point. The March 2019 Order proceeded to recount all of Appellants’ failures to respond to Ms. Lindberg’s requests for production and interrogatories in violation of the June 2018 Order. As part of that process, the trial court listed the specific document productions and interrogatories to which Appellants had failed to respond. Relying in part on counsel’s admissions at the hearing on the motion to compel included above, the March 2019 Order found Appellants were in violation of the June 2018 Order for the *16 reasons already discussed. The trial court then concluded, in the March 2019 Order, that Appellants had
¶ 18 violated the June 2018 Order and laid out its Rule of Civil Procedure 37(b)(2), N.C. Gen. Stat. § 1A-1, Rule 37(b)(2), authority for actions it could take to compel compliance. The trial court ordered that by 26 March 2019 Appellants had to “answer fully and completely, and without objection” all of Ms. Lindberg’s interrogatories and “produce all documents that are being withheld from the document requests identified above.” The March 2019 Order further required Appellants to “specifically identify which Request for Production” all of their documents corresponded to, whether the documents were produced before or after the Order. Finally, the March 2019 Order awarded attorney’s fees to Ms. Lindberg. Pursuant to the March 2019 Order, Appellants produced additional documents
on 26 March 2019. They also organized the documents based upon the discovery requests to which they were responsive. As discovery proceeded, Ms. Lindberg noticed a deposition for Dunhill, via Rule
of Civil Procedure 30(b)(6), for early May 2019. Dunhill and Mr. Lindberg sought a protective order against the Rule 30(b)(6) deposition in mid-April 2019. Pending a hearing on the protective order, Ms. Lindberg re-noticed the Rule 30(b)(6) deposition to early June 2019. After a hearing on the motion, the trial court entered an order denying the protective order because it concluded “in its discretion, that each *17 deposition topic at issue is proper . . . .” The court’s order then required Dunhill to appear for the noticed deposition “and be prepared to testify, through an appropriate company designee, as to all ‘matters known or reasonably available to’ Dunhill regarding each topic in the notice of deposition.” (Quoting N.C. Gen. Stat. § 1A-1, Rule 30(b)(6)). On the same day that Appellants sought a protective order for Dunhill’s
deposition, Mr. Lindberg filed a motion for a temporary stay of proceedings until federal criminal charges against him were resolved. On the same day as the trial court denied Dunhill’s motion for a protective order, it also issued an order denying Mr. Lindberg’s motion for a temporary stay. The trial court found that “none of the claims, counterclaims, or causes of action” in the current case were connected to the then-pending criminal proceedings against Mr. Lindberg. Concurrently, the trial court found neither Mr. Lindberg nor Dunhill would be prejudiced by its order and said Mr. Lindberg could assert, in this suit, his Fifth Amendment privilege against self-incrimination if he believed it was in his best interest. To further protect Mr. Lindberg, the trial court ordered Ms. Lindberg’s counsel “shall not be allowed to question Mr. Lindberg at his upcoming deposition in this action regarding the facts contained in the Bill of Indictment . . . .” The trial court’s order denying Appellants’ motion for a protective order also made it clear that because it was denying Mr. Lindberg’s motion for a stay, the trial court would not entertain the issues in the stay *18 as a basis for granting the protective order. Based upon those orders, the next discovery proceeding was Dunhill’s Rule
30(b)(6) deposition. Days before that deposition, Dunhill and Mr. Lindberg produced another 129,000 pages of documents. At the deposition, Dunhill’s designated corporate representatives were “completely unprepared” to address many of the designated topics according to the trial court’s later unchallenged Findings of Fact. The document production and deposition led Ms. Lindberg to file a motion, which was subsequently corrected, for sanctions under Rule 37(b). After summarizing the history of the dispute, Ms. Lindberg argued Dunhill’s and Mr. Lindberg’s actions in producing 129,000 pages of documents mere days before the deposition as well as Dunhill’s failure to present prepared designees for its deposition justified sanctions. As a result of that misconduct, Ms. Lindberg requested as sanctions, specifically: that certain facts be established in the action; that Dunhill be barred from supporting its claims; that Dunhill’s designees be required to sit again for depositions and fully answer on the noticed topics; and “any further relief [the court] deems just and proper pursuant to Rule 37(b) for violating this Court’s prior discovery orders.” Dunhill later filed a verified response to Ms. Lindberg’s corrected motion for sanctions. While that motion for sanctions was pending, Ms. Lindberg deposed Mr.
Lindberg. Mr. Lindberg, according to unchallenged Findings of Fact made later by the trial court, committed numerous forms of misconduct at his deposition including: *19 repeatedly refusing to answer questions by saying he could not comment; repeatedly refusing to review or answer questions about documents, even ones he or Dunhill produced; making personal attacks on Ms. Lindberg’s counsel; extreme time wasting; and improperly asserting attorney-client privilege when there was clearly no communication between lawyer and client. As a result of the deposition, Ms. Lindberg filed, under seal, a supplemental motion for sanctions under Rules 37(a), 37(b), and 41(b). After laying out the facts and law supporting sanctions, Ms. Lindberg requested as sanctions that: all pleadings by Mr. Lindberg and by Dunhill be stricken; all claims asserted by Dunhill be dismissed with prejudice; Ms. Lindberg be allowed to conduct all discovery relevant to her counterclaims; the attorney-client objections asserted at Mr. Lindberg’s deposition be overruled; Mr. Lindberg be required to sit for another deposition and answer, without objection, all questions posed that are relevant to Ms. Lindberg’s counterclaims and damages claims; neither Mr. Lindberg nor Dunhill be allowed to use any documents in their 129,000 page production on the eve of Dunhill’s deposition; and the trial court grant any further relief it deems just and proper under Rule 37(b) for violating the court’s prior discovery orders. The trial court held a hearing on the motions for sanctions on 15 July 2019. At
the hearing, Appellants delineated where the 129,000 pages they produced on the eve of Dunhill’s deposition came from as they tried to argue the documents were *20 supplemental rather than a violation of past discovery orders. Specifically 100,000 pages were bank and credit card statements and the remaining were emails from individuals who worked at Dunhill during the relevant time period. The hearing led to an order granting Ms. Lindberg’s motions for sanctions on 1 August 2019 (“August 2019 Order”). The August 2019 Order started by summarizing the procedural history and
background of the case as we have already laid out. Characterizing the 129,000 page document production on the eve of Dunhill’s deposition as a “document dump,” the August 2019 Order laid out how the production violated the March 2019 Order because that order had “unequivocally required Dunhill and Mr. Lindberg to produce all discovery materials in its possession by no later than the March 26, 2019 deadline.” (Emphasis in original.) The August 2019 Order also recounted “Dunhill’s failure to present prepared witnesses for [its] 30(b)(6) deposition in violation of th[e] court’s order.” (Capitalization altered). Specifically, the August 2019 Order detailed how Dunhill’s designees were completely unprepared—and in some cases had not even inquired to try to prepare—to address certain noticed topics including: electronic devices used by Mr. Lindberg at the relevant times; the location of servers that housed relevant emails; and the factual bases for Dunhill’s allegations against Ms. Lindberg. Dunhill’s designees further quibbled with the meanings of ordinary words in English and indicated Ms. Lindberg’s attorneys should find answers by *21 “search[ing] through vague categories of documents” while intentionally not identifying any specific documents. The trial court also made extensive Findings of Fact about the “multiple forms of intentional obstruction and delay repeatedly employed by Greg Lindberg at his deposition,” as summarized above. (Capitalization altered.) After those Findings, the August 2019 Order explained how Dunhill and Mr.
Lindberg had jointly violated the court’s prior orders and worked together to “intentionally evade” discovery obligations. After summarizing all those factual bases for potential sanctions, the August 2019 Order included a section entitled “Consideration of Lesser Sanctions” where the trial court recounted how it had considered lesser sanctions, including requiring Appellants to sit for new depositions, but did not think they would deter Appellants from continuing to evade discovery obligations and violate discovery orders. The August 2019 Order then included pertinent Conclusions of Law. First, the
trial court laid out its Conclusions regarding sanctions for Dunhill’s and Mr. Lindberg’s 129,000 page “document dump” and Dunhill’s deposition. (Capitalization altered.) The trial court then justified its sanctions for Mr. Lindberg’s deposition misconduct under Rules of Civil Procedure 37(b) and 41(b). The trial court concluded the discussion of sanctions for Mr. Lindberg’s deposition misconduct by again justifying harsh sanctions here and, further, overruled all of Mr. Lindberg’s *22 assertions of attorney-client privilege from his deposition. Finally, the August 2019 Order granted both of Ms. Lindberg’s motions for
sanctions. As sanctions, the trial court first struck all pleadings from Mr. Lindberg and Dunhill. The trial court then ruled in favor of Ms. Lindberg on all liability issues by dismissing Dunhill’s claims with prejudice and granting default judgment against Dunhill and Mr. Lindberg on all of Ms. Lindberg’s claims; it reserved the issue of damages for trial. To support those sanctions, the trial court barred Dunhill and Mr. Lindberg from opposing any liability issues at trial and designated certain facts be established in Ms. Lindberg’s favor. The trial court further allowed Ms. Lindberg to proceed with all discovery relevant to the issue of damages. As part of that process, the trial court allowed Ms. Lindberg to depose Dunhill on “all previously-noticed topics.” (Emphasis in original.) The trial court also permitted Ms. Lindberg to depose Mr. Lindberg again and required him “to answer, without objection, all questions posed by Mrs. Lindberg’s counsel that are relevant to any of her counterclaims or damages claims,” although the trial court confirmed all Mr. Lindberg’s previous attorney-client privilege objections had been overruled. Lastly, the August 2019 Order sanctioned Appellants by barring them from using any documents in the 129,000 page production and awarding Ms. Lindberg attorney’s fees. Dunhill and Mr. Lindberg both filed written notices of appeal, which they then amended.
II. Grounds for Appellate Review
Appellants provide a “Statement of the Grounds for Appellate Review,” as
provided for in North Carolina Rule of Appellate Procedure 28(b)(4) and argue the
sanctions issues are interlocutory but that discovery orders imposing sanctions
impact a substantial right and are thus immediately appealable. (Capitalization
altered.) We agree that the sanctions orders are immediately appealable, although
for slightly different reasons. While Appellants rely on statutes allowing appeals
from interlocutory orders that “[a]ffect[] a substantial right,” N.C. Gen. Stat. § 7A-
27(a) (2021);
see also
N.C. Gen. Stat. § 1-277 (2021), “an order imposing sanctions
under Rule 37(b) is appealable as a final judgment.”
[5]
Batesville Casket Co., Inc. v.
Wings Aviation, Inc.
, 214 N.C. App. 447, 457, 716 S.E.2d 13, 20 (2011) (quoting
Smitheman v. Nat’l Presto Indus.
, 109 N.C. App. 636, 640, 428 S.E.2d 465, 468
(1993));
see also Walker v. Liberty Mut. Ins. Co.
,
discovery orders on which the sanctions are based,
see
N.C. R. App. P. 28(a) (“Issues
not presented and discussed in a party’s brief are deemed abandoned.”), “the appeal
tests the validity of both the discovery order and the sanctions imposed.”
In re
Pedestrian Walkway Failure
, 173 N.C. App. at 262, 618 S.E.2d at 802. With one
exception, Appellants’ arguments only challenge the sanctions imposed, not the
validity of the underlying discovery orders. As for the exception, Appellants both
incorporate the argument from their prior appeal that, in the words of Appellants,
focused on the June 2018 Order’s ruling requiring a “forensic examination of all
*25
electronic devices that might have relevant information,” regardless of party
ownership. Therefore, we also review the June 2018 Order’s section on the forensic
examination of electronic devices as argued in Appellants’ previous appeal.
Notably, even if we could not reach that argument under
In re Pedestrian
¶ 32
Walkway Failure
, we would still address Appellants’ arguments in their prior appeal
due to the law of the case. Specifically, the
Dunhill I
Court “refer[red the forensic
examination issue] to the panel of this Court that will decide Dunhill and Greg E.
Lindberg’s appeals of the discovery order and the sanctions order together.”
Dunhill
I
at *12. As that panel, we are bound by the law of the case to consider Dunhill’s and
Greg Lindberg’s prior appeal as well.
See North Carolina Nat. Bank
,
III. Standard of Review Because all the issues between the parties are discovery issues and sanctions stemming therefrom, the same standard of review applies throughout our analysis. As this Court has previously explained:
As a general rule, we review the trial court’s rulings
regarding discovery for abuse of discretion. [Citation] “An
abuse of discretion is a decision manifestly unsupported by
reason or one so arbitrary that it could not have been the
result of a reasoned decision.”
Briley v. Farabow
, 348 N.C.
537, 547,
Feeassco
, 264 N.C. App. at 337, 826 S.E.2d at 210 (“According to well-established
North Carolina law, a broad discretion must be given to the trial judge with regard
to sanctions.”) (quoting
Batlle v. Sabates
,
unchallenged findings of fact are binding on appeal.
Feeassco
,
IV. Sanctions for Document Productions Both Appellants argue the court erred in sanctioning them for their document productions. After setting out law requiring a “predicate violation” of a prior court order to compel discovery, Appellants contend “the fundamental problem with these orders [the sanctions order on appeal] is that there was no predicate violation of a court order.” Specifically, Appellants argue “the March 2019 Order failed to identify any violation of the June 2018 Order,” and that the August 2019 Order failed to show *28 a violation of the March 2019 Order. Within each of those arguments, Appellants take issue with certain Findings of Fact in the March and August 2019 Orders and detail why no predicate orders existed. After reviewing the relevant law, we address the alleged issues with the March 2019 and August 2019 Orders in turn. North Carolina Rule of Civil Procedure 37(b)(2) authorizes “sanctions by [a]
court in which action is pending” when a party or certain representatives of a party, inter alia , “fail[] to obey an order to provide or permit discovery.” N.C. Gen. Stat. § 1A-1, Rule 37(b)(2) (2021) (capitalization altered). The statute authorizes sanctions “as are just” and explicitly allows, as relevant here:
a. An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order; b. An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting the party from introducing designated matters in evidence;
c. An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party;
N.C. Gen. Stat. § 1A-1, Rule 37(b)(2)(a)–(c). “Generally sanctions under Rule 37 are imposed only for the failure to comply
with a court order.”
Myers
,
order compelling discovery and a violation of that order. We review the specifics of each of those arguments.
A. March 2019 Order Finding Violations of June 2018 Order
Appellants’ argue “[t]here was no violation of the June 2018 Order” and thus
the March 2019 Order erred in awarding sanctions under Rule 37(b). Their parallel
arguments begin by asserting the March 2019 Order never addressed the key
question of “which documents and where designated.” (Citing
Willis v. Duke Power
Co.
,
documents and where designated is misplaced because that question had already
been answered. Appellants rely on
Willis v. Duke Power Co.
Appellants’ quote from
Willis v. Duke Power Co.
is taken out of context, as the language immediately after
the quote on which Appellants rely shows that case is distinguishable. The predicate
order in that case required “the defendant to answer the plaintiff's interrogatories
and to produce ‘the documents therein designated . . . .’ The question is which
documents and where designated.
At the time of this order no documents had been
identified or designated by either party.
”
Willis
,
completely reply to
each and every
Interrogatory and discovery request for production
of documents” with exceptions not relevant here. (Emphasis added.) The June 2018
Order also specifically “fully incorporated herein by reference” the “requests for
discovery” that Ms. Lindberg had filed on 26 February 2018. Thus, unlike in
Willis
,
*31
not require them to respond to Ms. Lindberg’s requests without objection and thus it was an error for the March 2019 Order to find the June 2018 Order did just that. While the June 2018 Order did not specifically state Appellants had to respond to Ms. Lindberg’s requests “without objection,” the June 2018 Order in its entirety supports *32 this reading. First, the June 2018 Order addressed the specific objections Appellants had raised and then overruled nearly all of them concluding they lacked merit—other than attorney-client privilege, which we address below—and determining they “were interposed for an improper purpose of delay and avoiding any meaningful response.” In the June 2018 Order, the trial court had already ruled upon the particular objections Appellants attempted to raise again. This argument, like Appellants repeated attempts to raise the same objections again after the trial court had already rejected them, is without merit. Further, the June 2018 Order provided a specific procedure for Appellants to
renew objections based on a claim of attorney-client privilege. A common canon of statutory construction says “when a statute lists the situations to which it applies, it implies the exclusion of situations not contained in the list.” E.g. Cooper v. Berger , 371 N.C. 799, 810, 822 S.E.2d 286, 296 (2018) (quotations and citations omitted). Applying similar logic here, by listing that Appellants could renew objections based on a claim of attorney-client privilege, the June 2018 Order implied Appellants could not renew their other objections. Under the June 2018 Order, Appellants were supposed to respond to the outstanding discovery requests without raising the same objections the trial court had already rejected, so the trial court did not abuse its discretion in the March 2019 Order by finding Appellants violated the June 2018 Order for reasserting overruled objections. *33 Appellants also argue they could have reasserted their previously overruled
objections because “failure to reassert the objections could be construed as waiver.”
Both cases upon which Appellants rely involve rules and situations where waiver
might follow when a party failed to properly object even once.
See Adams v. Lovette
,
when it “stated that it was ‘improper and in violation of’ the June 2018 Order to
produce documents without indicating to which particular discovery requests the
documents responded.” While the June 2018 Order does not specifically say
*34
Appellants must indicate to which particular discovery requests the documents
respond, reading the Order in its entirety once again supports that requirement. The
June 2018 Order mandated Appellants “fully and completely reply to
each and every
Interrogatory and discovery request for production of documents” with one exception
not relevant here. (Emphasis added.) The March 2019 Order explicitly quoted that
language when summarizing the June 2018 Order. Given that language, we cannot
say the March 2019 Order’s determination that the June 2018 Order required
Appellants to indicate which particular discovery request documents responded to
was “manifestly unsupported by reason” or “so arbitrary that it could not have been
the result of a reasoned decision.”
Myers
,
documents as they are kept in the usual course of business rather than labeling them in response to a particular document request. Appellants omit the prefatory clause of the rule. The full sentence reads:
Unless otherwise stipulated by the parties or ordered by the court , the following procedures apply to producing documents or electronically stored information: (1) A party must produce documents as they are kept *35 in the usual course of business or must organize and label them to correspond to the categories in the request;
N.C. Gen. Stat. § 1A-1, Rule 34(b)(2021) (emphasis added). Appellants may have originally had the choice to produce documents in the ordinary course of business, but the June 2018 Order removed that choice by requiring them to label the documents by request. Turning to the final category, Appellants list many other Findings of Fact they
claim “there is no evidence to support” without making any further argument. North
Carolina Rule of Appellate Procedure 28(a) requires parties to present and discuss
issues or they are deemed abandoned. N.C. R. App. P. 28(a);
see also
N.C. R. App. P.
28(b)(6) (requiring a party to support issues by reason or argument). Failure to follow
Rule 28 makes it “difficult if not impossible to properly determine the appeal.”
Steingress v. Steingress
,
they challenge, and it is not our duty to “peruse through the record” to construct their argument for them. Id. For example, both Appellants challenge Finding of Fact 48 awarding attorney’s fees and making eight specific sub-Findings of Fact, some of *36 which span multiple sentences. Despite that listed challenge, neither Appellant further mentions in their argument the two pages of the record Finding 48 covers, apparently leaving for this Court to determine the specific portions of the Finding Appellants challenge. As another example, Appellants challenge Findings of Fact 27 and 33, each of
which lists approximately twenty five requests for document production Appellants
still had not responded to in violation of the June 2018 Order. Appellants provide no
evidence or record citations to support their compliance with those requests. It is not
our duty to search the 7,000 pages of documents Appellants produced between the
June 2018 and March 2019 Orders
—
which also do not appear to be in the record—to
determine Appellants’ compliance with those requests.
Person Earth Movers
, 182
N.C. App. at 333,
that [Appellants] had appealed from the June 2018 Order” and “effectively sought to punish [Appellants] for obtaining stay relief from the appellate courts” because Appellants “promptly served the responses and produced the documents required by the June 2018 Order” once the stay was denied. We cannot reconcile this argument with the record before us. The March 2019 Order acknowledged the initial appeal *37 , from the June 2018 Order and the history of that appeal in multiple unchallenged Findings of Fact. The March 2019 Order then specifically found in unchallenged Finding of Fact 15: “As a result of the Supreme Court’s February 5, 2019 Order, this matter is not stayed in any way and proceedings at the trial court level must move forward.” Thus, contrary to Appellants’ argument, the March 2019 Order acknowledged their appeals and the stays involved. The record also does not support Appellants’ argument that they complied with
the June 2018 Order once the stay was denied. At the 11 March 2019 hearing that led to the March 2019 Order, Appellants’ counsel admitted they had not fully complied with the June 2018 Order. At one point, Appellants’ counsel said, “We have gone a long way in complying with that [June 2018 Order]. I am not arguing that we are there, Judge .” (Emphasis added.) At another point, the following exchange occurred:
THE COURT: . . . what is before me is you now have an order, after all of this, that Judge Smith entered on June 27th of 2018 that’s not being followed.
MR. PACE [Appellants’ counsel]: You’re exact – you’re correct . We agree 100 percent it is time to comply with the order.
(Emphasis added.) Thus a month and six days after the final stay was denied,
Appellants still admitted they were not in compliance. Notably, this was roughly the
same amount of time the June 2018 Order originally gave them to comply.
*38
Reviewing for abuse of discretion, we reject all of Appellants’ arguments that
the March 2019 Order improperly found violations of the June 2018 Order. The
parties must comply with the order actually entered, regardless of what a party
wishes
the order had required.
See Becker v. Pierce
,
B. August 2019 Order Finding Violations of the March 2019 Order Similar to their first argument, Appellants contend “[t]here was no violation of the March 2019 Order” and thus the August 2019 Order erred in awarding sanctions under Rule 37(b). As with the previous argument, Appellants challenge listed Findings of Fact and then have arguments, some of which are unconnected to the challenged Findings. We first address the challenges to the Findings before turning to the unconnected arguments. *39 Appellants both challenge the same Findings of Fact in the August 2019 Order.
¶ 57 As with their previous argument, Appellants list certain Findings of Fact that they claim “there is no evidence to support” without making any further argument (Findings 10, 22, 101, 110). Because Appellants have failed to present an argument as to these challenged Findings of Fact, we again deem those challenges abandoned. N.C. R. App. P. 28(a), (b)(6). The next Finding of Fact Appellants challenge (Finding 21) summarizes the
ways in which Appellants, after the final stay was lifted in February 2019, “continued purposefully to withhold discovery and violate the Court’s June 27, 2018 Discovery Order . . . .” Of the listed violations in that Finding, Appellants only specifically argue “there was no prohibition against reasserting objections,” so we only address that argument. See N.C. R. App. P. 28(a), (b)(6) (deeming challenges to be abandoned if not specifically argued). We have already determined above that the June 2018 Order prohibited Appellants from reasserting their objections, and we reject this challenge for the same reason. The final challenged Finding of Fact (Finding 32) determined Appellants
violated the March 2019 Order through their 129,000 page document production in May 2019 because that was after the March 2019 Order’s deadline “to produce all discovery materials” in Appellants’ possession. (Emphasis in original.) Appellants argue the March 2019 Order did not require producing all discovery materials but *40 rather all documents that were being withheld, which Appellants argue they did. Appellants then argue this later production permissibly supplemented their earlier production with “documents [that] were received from third parties and computer servers . . . .” This supplementation argument therefore also contends none of the documents in the 129,000 page production from May 2019 were documents that had previously been withheld. The record here cannot support Appellants’ argument. The March 2019 Order
listed numerous requests for document production with which Appellants entirely failed to comply. The March 2019 Order then required Appellants to “produce all documents that are being withheld from the document requests identified above.” Thus, the term withholding referred to all documents Appellants had related to those discovery requests. Despite the fact that Appellants had to provide all documents related to those
requests by the 26 March 2019 deadline set in the March 2019 Order, they failed to comply. Instead, Appellants had still not complied by May 2019 because the May 2019 production included many documents responsive to those requests. While we do not have the entire batch of discovery documents before us, Appellants’ own admission that these documents were responsive to prior requests puts them in violation of the March 2019 Order, unless all of the documents produced were supplemental. *41 The record here belies Appellants’ contention that all 129,000 pages produced
¶ 62 in May 2019 were supplemental. At the July 2019 hearing on Ms. Lindberg’s motion for sanctions, Appellants’ counsel identified the sources of the 129,000 pages. About a quarter of the documents (29,000 pages) were emails from the accounts of individuals who worked at Dunhill during the relevant time period. Rule of Civil Procedure 34(a) allows a party to obtain production of documents “which are in the possession, custody or control of the party upon whom the request is served.” N.C. Gen. Stat. §1A-1, Rule 34(a). Dunhill clearly had possession, custody, or control over the email accounts of its own employees. Thus, the 29,000 pages of emails cannot all be supplemental. The remaining 100,000 pages were bank and credit card statements, of which
we presume at least some were for accounts held by either Dunhill or Mr. Lindberg
given the underlying requests focused on those accounts. Appellants do not show
these documents were all supplemental. As the terms are used in Rule of Civil
Procedure 34(a), “possession, custody, or control of the party” includes documents a
party has “the legal right to obtain . . . on demand.”
See Pugh
,
their own bank and credit card statements. Therefore, they had possession, custody, *42 or control of at least some of those 100,000 pages of records before the March 2019 Order’s deadline. To characterize all 129,000 pages in the May 2019 production as supplemental per Appellants’ arguments the August 2019 Order faulted them for supplementing their production is incredulous. The trial court did not abuse its discretion in finding, in the August 2019 Order, that the 129,000 page production in May 2019 violated the March 2019 Order. Finally, Appellants argue they “[a]t the very least . . . made good faith efforts
to comply with the trial court’s orders,” and therefore they should not have been
sanctioned. Appellants are correct that Rule 37 requires “a good faith effort at
compliance with the court order.”
Laing v. Liberty Loan Co. of Smithfield and
Albemarle
,
their own conduct and circumstances within their control. Considering the entire history of this discovery dispute, the multiple orders addressing Appellants’ objections and late and deficient responses, as well as Dunhill’s and Mr. Lindberg’s deposition testimony, Appellants have not shown good faith in Appellants’ responses to the discovery requests. As explained above, Appellants had in their possession, control, or custody or had the legal right to demand all the documents they admitted were part of the May 2019 production. Therefore, Appellants did not act with good faith and were subject to Rule 37 sanctions. We find the trial court did not abuse its discretion in ruling, in its August 2019
Order, Appellants violated the March 2019 Order. Combined with our previous conclusion about violations of the June 2018 Order, we hold the trial court did not abuse its discretion in sanctioning Appellants for their document production actions and inactions.
V. Sanctions for Depositions In addition to arguing they should not have been sanctioned for their actions ¶ 68 and inactions around document production, both Appellants assert the trial court erred in sanctioning them for their depositions. Similar to the document production issue, Appellants both argue “without a predicate order in place, the sanctions” based on their depositions “were inappropriate.” Dunhill then presents an additional argument that the trial court “misconstrued Rule 30(b)(6),” the basis for its deposition. We first address the predicate order issue for each Appellant before turning to Dunhill’s argument about Rule 30(b)(6).
A. Predicate Order Issue Both Appellants argue the trial court erred by sanctioning them for their
depositions “without a predicate order in place.” This argument closely resembles the contentions Appellants had regarding document productions. Given the similarities in the argument, much of the law governing Appellants’
contention is the same here, so we briefly recite it. Rule of Civil Procedure 37(b)(2)
permits sanctions when “a party fails to obey an order to provide or permit discovery
. . . .” N.C. Gen. Stat. § 1-1A, Rule 37(b)(2). Thus, “[i]n general, ‘sanctions under Rule
37 are imposed only for the failure to comply with a court order,’” i.e. failure to comply
with a predicate order borrowing Appellants’ term.
Lovendahl v. Wicker
, 208 N.C.
App. 193, 200,
1. Dunhill’s Predicate Order Argument Dunhill argues “without a predicate order in place, the sanctions based on the 30(b)(6) deposition of Dunhill were inappropriate.” It also asserts the August 2019 Order “did not even purport to identify a predicate order regarding Dunhill’s deposition.” While Dunhill acknowledges the order denying its motion for a protective order, it argues that order was not specific enough for Dunhill to be required “to do anything other than provide prepared witnesses.” Finally, Dunhill argues the August *46 2019 Order erred by sanctioning Dunhill for previous misconduct by both it and by Mr. Lindberg. Taking Dunhill’s arguments in turn, it is simply wrong to argue the August
2019 Order failed to identify a predicate order. We have identified four examples of times the August 2019 Order referred to the trial court’s previous order denying Dunhill’s and Mr. Lindberg’s Motion for a Protective Order and said Dunhill violated that previous order by failing to present prepared witnesses at its Rule 30(b)(6) deposition:
30. On June 5, 2019, the Court entered a written order denying Dunhill’s Motion for Protective Order, and expressly ordered that Dunhill make available for its Rule 30(b)(6) deposition an appropriate company designee for all noticed topics who was prepared to testify “as to ‘all matters known and reasonably available to’ Dunhill regarding each topic in the notice of deposition.” See this Court’s 6/5/2019 Order on Dunhill Holdings, LLC and Greg Lindberg’s Motion for Protective Order ( citing N.C. Gen. Stat. § 1A-1, Rule 30(b)(6)).
. . .
42. Dunhill’s failure to prepare for its deposition, as it was required to do under Rule 30(b)(6) and this Court’s 5 June 2019 Order . . . .
. . .
47. Brenda Lynch was designated as Dunhill’s corporate representative to testify pursuant to Rule 30(b)(6) as to Dunhill’s specific knowledge of Topics 1 and 2. Moreover, and as previously discussed above, pursuant to this Court’s June 5, 2019 Order on Dunhill Holdings, LLC and Greg Lindberg’s Motion for Protective Order , Dunhill was ordered by the Court to produce at the deposition an appropriate company designee who is *47 . prepared to testify “as to ‘all matters known and reasonably available to’ Dunhill regarding each topic in the notice of deposition.” (citing N.C. Gen. Stat. § 1A-1, Rule 30(b)(6)).
. . .
51. The Court finds that Ms. Lynch’s deposition testimony, given on behalf of Dunhill, represents a failure of Dunhill to adequately testify in response to Topics 1-43, in direct violation of this Court’s 5 June 2019 Order on Dunhill and Mr. Lindberg’s Motion for Protective Order described above.
(Emphasis in original.) Dunhill does not challenge any of those Findings of Fact, so
they are binding on appeal.
See Feeassco
,
relied, might stem from its related argument that the order denying its motion for a
protective order was not specific enough. Dunhill cites no binding precedent to
support that argument.
[7]
However, in
Lovendahl
, this Court ruled an order denying
*48
a motion for a protective order was sufficient to justify Rule 37(b) sanctions when the
order merely required the defendant to “‘submit to deposition within forty-five days
of the date of this Order.’”
Accordingly, and pursuant to Rule 30(b)(6) of the North Carolina Rules of Civil Procedure, Dunhill Holdings, LLC shall appear as noticed on June 5 and 6, 2019 for its deposition and be prepared to testify, through an appropriate company designee, as to all “matters known or reasonably available to” Dunhill regarding each topic in the notice of deposition. N.C. Gen. Stat. § lA-1, Rule 30(b)(6).
The trial court’s order, specifically directing Dunhill’s designee to be prepared to testify to all matters known or reasonably available on each noticed topic, is more specific than the language this Court found acceptable in Lovendahl . Therefore, we find the language here was specific enough that a violation of the order denying the motion for the protective order could support sanctions under Rule 37(b). Turning to its final argument, Dunhill asserts “[t]he trial court erred by
assuming it could enter sanctions based on the history of the parties’ discovery disputes,” especially since Mr. Lindberg is a separate individual according to Dunhill. particularly inapposite because, as explained above, this Court has issued binding precedent on the issue. See N.C. R. App. P. 30(e)(3) (“If a party believes, nevertheless, that an unpublished opinion has precedential value to a material issue in the case and that there is no published opinion that would serve as well , the party may cite the unpublished opinion . . . .”) (emphasis added).
Dunhill’s arguments are unpersuasive. Dunhill quotes a portion of Conclusion of Law 141 that references a long pattern of violations of discovery orders, but that Conclusion appears under the heading “Sanctions Arising from Misconduct During Mr. Lindberg’s Deposition.” Dunhill seemingly ignores Conclusions of Law 114–28, which recount the basis for sanctions against Dunhill based on its Rule 30(b)(6) “Deposition Misconduct.” Those Conclusions and the facts we recounted above detail how Dunhill was sanctioned not for its past misconduct but rather for its new failure to comply with the order compelling discovery that came out of the order denying Dunhill’s motion for a protective order. Thus, Dunhill was sanctioned not for its previous misconduct—which was extensive as recounted in our analysis of the document production sanctions above—but rather for its new misconduct in depositions. Dunhill also contends the trial court improperly conflated it with Mr. Lindberg,
arguing “accusations of misconduct against a separate individual (like Mr. Lindberg) should not be part of the analysis.” As recounted more fully above, Dunhill was sanctioned for its own failures. For example, unchallenged Finding of Fact 51 faulted Dunhill for failing “to adequately testify in response to Topics 1-43, in direct violation of this Court’s 5 June 2019 Order on Dunhill and Mr. Lindberg’s Motion for Protective Order described above.” The underlying premise that Dunhill and Mr. Lindberg are separate is questionable. In unchallenged Findings of Fact, the trial court noted *50 evidence that Dunhill and Mr. Lindberg are not separate in general and specifically “collu[ded]” in their deposition misconduct:
100. . . . . In fact, on numerous occasions, the corporate representatives at Dunhill’s Rule 30(b)(6) deposition testified that they were not knowledgeable persons to testify regarding the noticed topics, and instead Mr. Lindberg, the sole owner and manager of Dunhill, was in fact the more knowledgeable individual about the noticed topics. [footnote] Counsel for Mrs. Lindberg thereafter reasonably proceeded to ask Mr. Lindberg about many of these same topics at his deposition, only to be met with his repeated refusals to answer relevant questions.
101. The Court finds that Greg Lindberg’s refusal to answer relevant deposition questions, when combined with his sole ownership and control over Dunhill as a corporate entity, amounts to collusion between Dunhill and Greg Lindberg at their respective depositions to intentionally evade their discovery obligations in this matter and to purposefully withhold relevant information from Mrs. Lindberg and her counsel. The Court finds the same is true with respect to Dunhill and Mr. Lindberg’s repeated violations of this Court’s prior orders compelling them to produce documents and materials in discovery. (Footnote omitted.) Given Dunhill’s own misconduct warranted sanctions and its connection to and collusion with Mr. Lindberg, we also reject this argument. Thus, reviewing for abuse of discretion, we reject all of Dunhill’s arguments about the lack of a predicate order and its related objections.
2. Mr. Lindberg’s Predicate Order Argument Mr. Lindberg’s predicate violations argument resembles Dunhill’s argument, but Mr. Lindberg also contends he was inappropriately sanctioned for invoking his *51 Fifth Amendment privilege against self-incrimination. Mr. Lindberg first mirrors Dunhill’s arguments that no predicate order existed to justify sanctions and that the trial court erred by sanctioning Mr. Lindberg for past misconduct by both him and Dunhill. Then, Mr. Lindberg argues his “reluctance or refusal to answer some questions is not surprising” given that depositions in other litigation between him and Ms. Lindberg resulted in him “obtaining a protective order . . . that required Ms. Lindberg’s counsel to remain six feet away from Mr. Lindberg.” Finally, Mr. Lindberg argues that despite the trial court acknowledging his deposition “could be affected by invocation of the Fifth Amendment privilege against self-incrimination” based on a then-pending criminal case, the trial court “[i]ronically . . . then sanctioned Mr. Lindberg for refusing to answer questions at his deposition.” (Emphasis in original.) Mr. Lindberg contends “the right to discovery must yield to the privilege against compulsory self-incrimination” such that the trial court “erred in sanctioning Mr. Lindberg based on his deposition testimony.” We address each of those arguments in turn. First, Mr. Lindberg’s argument that there was no predicate order in place is
inaccurate. The trial court’s order denying Dunhill’s motion for a protective order
also denied Mr. Lindberg’s motion for a protective order. The trial court clearly
denied Mr. Lindberg’s motion for a protective order because it separately denied Mr.
Lindberg’s motion for a stay of proceedings. Thus, the order denying the motion for
*52
a protective order in practice relies on the denial of the motion for a stay of
proceedings. Since the denial of a motion for a protective order can have the same
effect as an order compelling discovery, i.e. creating the requisite predicate order,
Lovendahl
,
9. There is no unfair prejudice to Mr. Lindberg or
Dunhill by denying Mr. Lindberg’s Motion for Temporary
Stay. To the extent Mr. Lindberg believes it in his best
interest, he has a right in this civil action to assert his Fifth
Amendment rights to not answer questions propounded to
him in discovery. Moreover, during the hearing of this
motion, Mrs. Lindberg’s counsel voluntarily agreed that
*53
they would not ask Mr. Lindberg questions at his upcoming
deposition about the facts contained in the Bill of
lndictment attached as Exhibit 1 to Mr. Lindberg’s motion.
10. Mr. Lindberg argues that he would be prejudiced
by potentially having to invoke his Fifth Amendment right
to refuse to answer questions at his upcoming deposition.
However, the Court finds that no unfair prejudice would
occur given the fact that Mr. Lindberg has failed to
demonstrate a nexus of substantially similar facts or issues
between his criminal proceeding and this civil action. . . .
The trial court also, as Mr. Lindberg highlights, converted into a binding court
order the voluntary agreement of Ms. Lindberg’s counsel not “to question Mr.
Lindberg at his upcoming deposition in this action regarding the facts contained in
the Bill of Indictment . . . .” Thus, the trial court knew Mr. Lindberg’s deposition
would go ahead when it ordered the denial of his motion for a temporary stay and
motion for a protective order. It is reasonable to read that sequence of events as the
trial court ordering Mr. Lindberg to attend his deposition, so we cannot find the trial
court abused its discretion in viewing the denial of the motions for a temporary stay
and for a protective order as the equivalent of an order compelling discovery and in
sanctioning Mr. Lindberg for violating that order.
See Myers
,
denial of Mr. Lindberg’s motions for a protective order and temporary stay as a predicate order, we address Mr. Lindberg’s argument he was improperly sanctioned for previous conduct by both him and Dunhill. As with Dunhill’s similar argument, Mr. Lindberg’s argument fails because he was sanctioned for his own new conduct. Looking just at Conclusion of Law 141 that Mr. Lindberg takes issue with in his brief, the trial court made it clear in the parts Mr. Lindberg omits that his own misconduct during the deposition justified its sanctions:
141. The Court further concludes that Mr. Lindberg personally is subject to sanctions as a result of the many forms of misconduct he repeatedly employed during his personal deposition as described hereinabove . Mr. Lindberg and Dunhill have engaged in a long pattern of violating the discovery orders of this Court as well as the Rules of Civil Procedure. Mr. Lindberg’s personal deposition obstruction and misconduct is but the most recent in the long line of both his Dunhill’s [sic] repeated prior violations of this Court’s discovery orders and the discovery rules. (Emphasis added.) Unchallenged Findings of Fact 59–98 recount in great detail, across five different subsections of misconduct, the “multiple forms of intentional obstruction and delay repeatedly employed by Greg Lindberg at his deposition.” (Capitalization altered.) As just one example, the trial court included a table calculating the “ 5 HOURS 47 MINS ” of deposition time “wasted due to Greg Lindberg’s repeated tardiness” over two days. (Emphasis in original in first quotation; capitalization altered in second quotation.) Thus, the court sanctioned Mr. *55 Lindberg for his deposition misconduct alone and had ample support for its decision to do so. Mr. Lindberg’s next argument is about his “reluctance or refusal to answer
some questions” because of the prior protective order requiring Ms. Lindberg’s counsel to remain six feet away from him. Without reaching the issue of whether a protective order about physical distancing from another case could justify refusing to answer any questions in a deposition from this case where the trial court in this case had already denied a substantive motion for a protective order, we note that Mr. Lindberg’s deposition here did not even involve the attorney whose actions were the basis for the prior protective order. While the prior protective order covered “Counsel for Plaintiff,” which included one of Ms. Lindberg’s attorneys who deposed Mr. Lindberg in this case, it is clear from the prior protective order that the conflict that led to the protective order involved another attorney who was not present at Mr. Lindberg’s depositions in this case. Given the relevant attorney from the past conflict was not even present at this deposition, we reject any argument by Mr. Lindberg that this past history in any way impacts how we should view his “reluctance or refusal to answer some questions . . . .” Finally, we reject Mr. Lindberg’s argument that the trial court erred by
sanctioning him for refusing to answer questions at his deposition after
acknowledging Mr. Lindberg’s deposition could be impacted by assertions of his Fifth
*56
Amendment privilege against self-incrimination. The key issue with Mr. Lindberg’s
argument is that he never invoked his Fifth Amendment privilege during his
deposition. “The Fifth Amendment privilege against compelled self-incrimination is
not self-executing.”
Roberts v. U.S.
,
deposition—in response to one of Mr. Lindberg’s “I can’t comment” answers—, Ms. Lindberg’s counsel expressly asked Mr. Lindberg if he was intending to invoke his privilege and Mr. Lindberg’s counsel specifically told him he did not have to answer if he was intending to invoke his Fifth Amendment privilege:
Q. Refuse to answer. Did you not authorize Tisha Lindberg to sign your name on multiple documents? A. I can’t comment on that.
Q. Refuse to answer that question?
A. I can’t comment on it.
Q. Well, if you can’t comment, that to me means you are refusing to comment or answer.
A. No. Saying I can’t comment is a comment. Q. Why can’t you comment? Mr. Lindberg, is the reason – one of the reasons you can’t comment on many of these questions is because you intend to plead the Fifth Amendment?
Mr. Pace: Objection. You don’t have to answer that.
Mr. Zaytoun: This is a civil case.
Mr. Pace: Yes. And you’ve already represented to a judge that you wouldn’t ask him any questions about that.
By Mr. Zaytoun:
Q. Mr. Lindberg, is it – is it your intention to plead the Fifth Amendment to any of these questions that I’ve asked you where you said you can’t comment? Mr. Pace: You don’t have to answer that. I’ll instruct you not to answer.
Mr. Zaytoun: All right. Certify that. On what – would you state for the record the basis upon which you’re instructing him not to answer that question.
Mr. Pace: Because you represented to the judge that you would not use this case for discovery of any of the criminal proceedings.
Mr. Zaytoun: No. This has nothing to do with the North Carolina indictment, my question.
Mr. Pace: Oh, you’re – Mr. Zaytoun: It has no- -- has – this has to do with Dunhill.[ [9] ]
Mr. Pace: We disagree.
In this case, Ms. Lindberg’s counsel, rather than Mr. Lindberg or his counsel, made
the reference to the Fifth Amendment privilege. The language Mr. Lindberg and his
counsel used cannot be reasonably interpreted as an invocation. Unsurprisingly, as
a result, Ms. Lindberg’s counsel had to follow-up to clarify if Mr. Lindberg was
invoking the privilege only for Mr. Lindberg’s counsel to direct Mr. Lindberg not to
answer whether he was invoking or not. Thus, Mr. Lindberg, through actions of his
counsel, made a choice to not clarify he was expressly invoking his Fifth Amendment
privilege as he was required to do to gain the privilege’s protection.
Emspak
, 349
U.S. at 194,
incrimination, the trial court could not have sanctioned him for such invocation, as he now argues. We therefore reject that argument and find the trial court did not abuse its discretion in sanctioning Mr. Lindberg for his deposition conduct. B. Dunhill’s 30(b)(6) argument In the final argument against the sanctions for deposition conduct, Dunhill
contends “the trial court misconstrued Rule 30(b)(6).” (Capitalization altered.) Rule with, or are substantially similar to, the facts or issues involved in this civil action.” Thus, by asking about Ms. Lindberg and Dunhill, Ms. Lindberg’s attorney did not run afoul of the court order to not question Mr. Lindberg “regarding facts contained in” the indictment. *60 of Civil Procedure 30(b)(6) provides:
A party may in his notice and in a subpoena name as the deponent a public or private corporation or a partnership or association or governmental agency and describe with reasonable particularity the matters on which examination is requested. In that event, the organization so named shall designate one or more officers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which he will testify. A subpoena shall advise a nonparty organization of its duty to make such a designation. It shall not be necessary to serve a subpoena on an organization which is a party, but the notice, served on a party without an accompanying subpoena shall clearly advise such of its duty to make the required designation. The persons so designated shall testify as to matters known or reasonably available to the organization. This subsection (b)(6) does not preclude taking a deposition by any other procedure authorized in these rules.
N.C. Gen. Stat. § 1A-1, Rule 30(b)(6) (emphasis added). Dunhill’s argument focuses
on the meaning of the phrase “known or reasonably available” in the second to last
sentence. Since this argument involves a review of the trial court’s interpretation of
a statute, we review it de novo.
Myers
,
scope of Rule 30(b)(6),” Dunhill proceeds to make five arguments based primarily on
analogies to federal law. We reject all of Dunhill’s arguments without addressing the
scope of Rule 30(b)(6) under North Carolina law. Rather, Dunhill’s arguments all fail
*61
based on the unchallenged, and therefore binding, Findings of Fact even when
applying the law with which it argues.
See Feeassco
,
When it comes to preparation for the deposition, the touchstone of this Rule is reasonableness. See, e.g., Brazos River Auth. v. GE Ionics, Inc. , 469 F.3d 416, 432-33 (5th Cir. 2006).[footnote omitted] Recognizing that “an individual cannot be expected to know every possible aspect of the organization’s inner workings,” courts have invariably acknowledged that the “standard for sanctions in this context is high.” Runnels v. Norcold, Inc. , No. 1:16- cv-713,2017 WL 3026915 , at *1 (E.D. Va. Mar. 30, 2017) (unpublished) [Add. 84] (citing cases). A designee is not expected to present “a fully reliable and sufficiently complete account of all the bases for the contentions made and positions taken by the corporate party.” Stoneeagle Servs., Inc. v. Pay-Plus Sols., Inc. , No. 8:13-CV-2240- T33MAP, 2015 WL 12843846, at *2 (M.D. Fla. Apr. 29, 2015) (unpublished) [Add. 88 ].
(All alterations in original exception noting omission of footnote.) Dunhill then recounts how its witnesses were “well prepared” and “testified for two entire days regarding the requested topics creating more than 700 pages of testimony.” The cases Dunhill presents indicate that reasonableness means that the *62 designated individuals do not have to know everything completely but rather must know a reasonable amount and be reasonably prepared to answer questions. While Dunhill’s designees may have testified to some topics, they seemingly lacked any preparation or knowledge as to certain other topics. For example, the unchallenged Findings of Fact indicate one of Dunhill’s designees, Mr. Neal, was unable to answer any questions about electronic devices used by Mr. Lindberg and had not even attempted to learn that information prior to his deposition:
38. During the questioning of Mr. Neal, he was completely unprepared to address many of his designated topics. Most notably, Mr. Neal was unable to address Topic 49 regarding Mr. Lindberg’s electronic devices and computers, which stated:
All Computers and electronic devices used by Greg Lindberg from January 1, 2014 to the present, including:
a. Number, types and locations b. Operating systems with versions, dates of use and upgrade history c. Application software with versions, dates of use and upgrade history.
39. Mr. Neal testified at deposition, on behalf of Dunhill, that he did not know this information, he did not learn this information prior to the deposition, nor had he ever attempted to ask Mr. Lindberg personally to identify Mr. Lindberg’s computers and devices. Instead, Mr. Neal merely sent an email to two people who work for Mr. Lindberg about Mr. Lindberg’s electronic devices, but never received a response to his email and did not follow up. This represents a clear and total failure of Dunhill to testify in response to Topic 49 during its deposition, in direct violation of this Court’s 5 June 2019 Order on Dunhill and Mr. Lindberg’s Motion for Protective Order *63 described above.
40. Mr. Neal was also unable to identify the location of the servers that house the parties’ emails, which Dunhill was required to be prepared to identify under deposition Topics 44, 60, 67 and 71. Mr. Neal could only identify the third- party email hosting service provider that Dunhill utilizes, but he could not identify the location of any of the servers. When pressed on his inability to provide the location of the email servers, Mr. Neal testified that he was confused about the meaning of the word “location” and thought that it meant something other than its plain English meaning. This, too, represents a failure of Dunhill to adequately testify in response to Topics 44, 60, 67 and 71, in direct violation of this Court’s 5 June 2019 Order on Dunhill and Mr. Lindberg’s Motion for Protective Order described above. As the portion about Mr. Neal believing the word “location” had something
other than its ordinary meaning indicates, Dunhill also cannot claim the two days and 700 pages of testimony from its witnesses all shows its compliance either. Further to that point, the trial court specifically found Dunhill’s other designee, Ms. Lynch, “intentionally and repeatedly gave evasive and longwinded responses to interfere with the deposition time available . . . .” Given these Findings alone, Dunhill cannot credibly claim that its designees were even reasonably prepared to testify as to the designated topics. Dunhill’s second argument is not based on any new law; instead, Dunhill
argues that the trial court “summarily found that Dunhill ‘did not provide a witness prepared to testify as to the Rule 30(b)(6) designated deposition topics’—apparently *64 all 73 of them.” In making this contention, Dunhill omits the critical opening part of the quote indicating that the trial court was referring to the specific topics it had already discussed:
As articulated above , Dunhill (necessarily acting by and through its sole owner, member, and manager, Mr. Lindberg) did not provide a witness prepared to testify as to the Rule 30(b)(6) designated deposition topics and provide the responsive information known or reasonably available to the organization. Dunhill (and by necessary extension Mr. Lindberg) has, therefore, violated the Court’s 5 June 2019 discovery Order and is subject to sanctions for failing to comply with the same pursuant to Rule 37(b).
(Emphasis added.) With the full quote, it is clear the trial court was not saying Dunhill had failed to provide a prepared witness for all 73 topics. The trial court was saying it had not provided a prepared witness for the topics it already discussed, including those it incorporated by reference to the corrected motion for sanctions, above in its Findings of Fact. Thus to the extent Dunhill argues the trial court erred by finding it did not present a prepared witness for all 73 topics, we reject that argument. Dunhill’s final three arguments all are responding to the basis for the trial
court’s above conclusion, as they “appear[]” to Dunhill. With each of these arguments, Dunhill presents more law justifying its position, and as with the first argument, we reject Dunhill’s contentions as their proffered law applies to the facts here. *65 LLC Dunhill first claims the basis for the sanctions for failure to present a prepared witness was “that the witness referred to documents produced in litigation.” For its supporting law, Dunhill stated:
Referring to documents was proper because “Rule 30(b)(6)
is not designed to be a memory contest.”
Risinger v. SOC,
,
Here, the witnesses repeatedly stated that answers could be found in the documents that had been produced. ( See, e.g. , Lynch Depo.(II) 283 (“Q. What specific facts support that . . . allegation? A. There would be bank statements, bank ledgers that would show when the withdrawals were – were made, when items were paid and for what.”)). Here, in addition to the fact that Ms. Lynch is using a document instead of answering, she is not even citing to a specific document but rather says there “would be,” i.e. without certainty, support in some documents that presumably were produced. This non-answer does not in any way resemble the acceptable means laid out by Dunhill’s proffered law above. Underlining the inadequacy of using a vague reference to potential documents in place of answers, the trial court specifically found that Ms. Lynch “could not identify any specific document or email from the hundreds of thousands of pages of the discovery” to support Dunhill’s allegations. For these reasons, we reject this argument. Turning to its fourth argument, Dunhill contends the trial court improperly
concluded its witnesses were not prepared because “the witnesses could not recall certain information, such as the exact date of events.” To support this argument, Dunhill provides the following law and argument:
Likewise, the witnesses properly testified to the best of
their recollection. A witness “cannot be expected to have
predicted the exact questions she would face in deposition.”
BreathableBaby
,
Again, Dunhill overlooks the extent to which its designees were completely unprepared as to certain topics. The case law it cites is about whether a witness should be expected to predict the exact questions in a deposition and to have all the information at its fingertips. Here, Dunhill’s deponents did not have any information on certain topics, as laid about above. Put another way, this was not an imperfect deposition; as to certain topics on which the designees provided no answers, this deposition in effect did not happen at all. Dunhill’s final argument is that the trial court erred by faulting Dunhill’s
designees when they “could not comprehensively explain Dunhill’s legal theories.” To support this contention, Dunhill included the following law and argument:
Finally, the designees could not have been expected to testify about legal theories beyond their basis for the allegations. ( See Lynch Depo.(II) 236-38, 246-47, 328-30, 458-59). As the Business Court has recognized, it is “impracticable” for a company “to prepare one or more witnesses to testify about ‘all facts’ and ‘all evidence’ that support more than half a dozen claims and defenses.” Addison Whitney, LLC v. Cashion ,2020 NCBC 48 ¶ 112, 2020 WL 3096793, at *19 (June 10, 2020) (unpublished) [Add. 16]. Yet, that is precisely what Ms. Lindberg’s counsel expected.
The 30(b)(6) designees appropriately limited their testimony to facts rather than legal theories. Sanctions are improper when the deponent was “able to testify regarding the evidence and facts underlying the allegations.” FTC v. Vylah Tec LLC , No. 2:17-cv-228-FtM-PAM-MRM, 2018 WL 7361111, at *3 (M.D. Fla. Dec. 18, 2018) (unpublished) [Add. 46 ]. Indeed, this Court has indicated that a 30(b)(6) witness is not expected to testify about the law at all. Bullard v. Wake Cty. ,221 N.C. App. 522 , 535, 729 S.E.2d 686, 694 (2012); see also Snapp v. United Transp. Union ,889 F.3d 1088 , 1104 (9th Cir. 2018) (similar), cert. denied ,139 S. Ct. 817 (2019). Thus, Ms. Lindberg’s counsel had no basis to complain when he asked “You’re really not a very knowledgeable corporate designee, are you . . . about Dunhill if you can’t even tell me the basics of what Dunhill is, what an LLC is versus a corporation”? (Lynch Depo.(II) 424). Dunhill’s arguments can be broken down into two. First, as the cite to the
North Carolina business court indicates, Dunhill is arguing that a designee cannot be expected to know all facts or evidence to support a number of claims. The problem with that argument, as with similar arguments above, is that Dunhill’s designees did not provide any evidence. The trial court’s unchallenged Finding of Facts indicate that Ms. Lynch “was completely unprepared to provide any specific information or knowledge to explain the basis for any of Dunhill’s claims or allegation categories listed in topics 1 or 2” (emphasis added), which were the two topics that related to the basis for Dunhill’s claims against Ms. Lindberg. The second piece of Dunhill’s argument is that the sanctions improperly
faulted its designees for not providing legal theories. Again, this argument does not comport with the August 2019 Order, which specifically faulted the designees for not being able to provide evidence rather than legal theories. For example, the trial court found Ms. Lynch could not identify evidence to support any of the claims in the Dunhill lawsuit:
Importantly, Ms. Lynch was never able to identify a single document, communication, or other piece of evidence that Dunhill knew of or contended was supportive of any of the claims or allegations in the Dunhill lawsuit.
As the trial court noted:
This is especially troubling given that Dunhill has represented to this Court, through its counsel, that it possesses specific emails, text messages, photographs, and other materials it contends supports Dunhill’s claims and allegations against Mrs. Lindberg. See e.g. Dunhill’s 11 July 2019 Verified Response to [Corrected] Tisha L. Lindberg’s Motion for Sanctions Regarding Deposition of Dunhill Holdings, LLC , at page 2, in which Dunhill’s counsel describes specific “emails,” “text messages,” “pictures,” “bank records,” as well as Mrs. Lindberg’s “written assurance” and “admissions,” all of which Dunhill claims are in its possession and knowledge as supportive of its claims against Mrs. Lindberg in this action.
These findings make it clear Dunhill was sanctioned because its designees could not provide evidence rather than because they failed to supply legal theories. As we have rejected each of Dunhill’s Rule 30(b)(6) arguments, we find the trial
court did not err here either. Thus, we find no error by the trial court with regard to *70 any of its sanctions for Appellants’ deposition misconduct and failures.
VI. Choice of Sanctions Appellants’ final arguments that take issue with the August 2019 Order present a series of alleged errors under the heading, “Even if the court had the authority, the choice of sanctions was improper.” (Capitalization altered.) First, both Appellants argue “[t]here is a disconnect between the purported violations and the sanctions imposed.” (Capitalization altered.) Both Appellants also contend the August 2019 Order “is internally inconsistent.” Finally, Mr. Lindberg presents two arguments on his own that the August 2019 Order “impermissibly allows for disclosure of privileged information” and that “[t]here was not proper notice” as to the basis of sanctions against him. We address each of those arguments in turn. A. Disconnect Argument Appellants’ first argument about the disconnect between the violations and the
sanctions is really a series of arguments that amounts to the contention that the choice of sanctions was improper. First, Appellants argue the trial court improperly believed that it had “unfettered discretion.” Then, Appellants argue discovery sanctions under Rule 37 “must be equitable.” As part of this argument, Appellants contend, by relying on federal court cases, default judgment and taking a party’s allegations as established are powerful and should only be used in the most extreme circumstances. Appellants further support their equity argument by indicating *71 North Carolina has a policy favoring deciding cases on the merits rather than entry of default judgment. Finally, Dunhill argues the August 2019 Order “is especially problematic because it deemed certain facts ‘established’ even though they are contrary to the record evidence,” particularly on the allegation that Mr. Lindberg is the alter ego of Dunhill. Appellants’ first argument omits a key portion of the sentence that shows the
trial court understood its discretion was subject to limits. Specifically, the full sentence in the trial court order says, “[T]he tailoring of sanctions in a particular case is limited only by the judge’s imagination and the possibility of appellate review .” (Emphasis added to show the part omitted by the parties.) Thus, the trial judge knew he did not have unfettered discretion and was subject to appellate review. In fact, looking at the surrounding Conclusions of Law, the trial court explained in detail how it was subject to the abuse of discretion standard on appeal and how “North Carolina appellate courts have routinely affirmed the trial court’s decision to impose severe sanctions for discovery abuses and violations of court orders including dismissing actions and claims, and striking pleadings.” The trial court further acted within the discretion described by Turner v. Duke
University , the case which Appellants highlight as being applied in error, in imposing sanctions. 101 N.C. App. 276, 399 S.E.2d 402 (1991). As Appellants note, Turner differentiates between the discretion offered by statutes that do not authorize specific *72 types of sanctions (Rules of Civil Procedure 11 and 26) and statutes that do, such as Rule of Civil Procedure 37(b)(2). Id. , 101 N.C. App. at 279–80, 399 S.E.2d at 405. The trial court here followed the strictures of Rule 37. As relevant here, Rule 37(b)(2) authorizes the following types of sanctions:
a. An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order; b. An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting the party from introducing designated matters in evidence;
c. An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party;
N.C. Gen. Stat. § 1A-1, Rule 37(b)(2)(a)–(c). Rule 37 also authorizes the trial court to order the party failing to obey a court order “to pay reasonable expenses, including attorney’s fees” in certain situations. Id. , Rule 37(b)(2). Here, all the trial court’s sanctions under Rule 37(b)(2) adhered to those categories. The remainder of the sanctions all related to ordering discovery to continue or rejecting certain objections made in discovery, so they fit within Rule 37(a)(2)’s allowance of an order compelling discovery. N.C. Gen. Stat. §1A-1, Rule 37(a)(2). Thus, Appellants incorrectly assert the trial court believed it had unfettered discretion; the trial court understood its discretion was subject to limits, and it stayed within those limits. The trial court did *73 not abuse its discretion. Turning to Appellants’ next argument, both misinterpret what our courts
mean when they say sanctions must be just. While the “as just” language comes
directly from Rule 37(b)(2),
see
N.C. Gen. Stat. § 1A-1, Rule 37(b)(2) (authorizing the
court to “make such orders in regard to the failure [to comply with a discovery order]
as are just”), our courts have indicated the language refers to the grant of discretion
to the trial court.
See Stone v. Martin
,
authorized by Rule 37(b)(2) and did not abuse its discretion in that manner. Beyond
that, generally “[t]he choice of sanction under Rule 37 lies within the court’s
discretion and will not be overturned on appeal absent a showing of abuse of that
discretion.”
Routh v. Weaver
, 67 N.C. App. 426, 429, 313 S.E.2d 793, 795 (1984).
Before a court imposes severe sanctions, such as dismissing an action with prejudice,
it “must consider less severe sanctions.”
See Hursey v. Homes by Design, Inc.
, 121
*74
N.C. App. 175, 179,
The trial court found in the 21 September 2007 order that: The Court has considered lesser discovery sanctions, and dismissal of Plaintiff’s lawsuit with prejudice is the only just and appropriate sanction in view of the totality of the circumstances of the case, which demonstrate the severity of Plaintiff’s disobedience in failing to make discovery in a lawsuit she instituted and her unjustified noncompliance with *75 the mandatory North Carolina Rules of Civil Procedure.
Based upon this finding, the trial court concluded in the 21 September 2007 order that:
The Court has considered lesser sanctions than dismissal of Plaintiff’s lawsuit with prejudice. Lesser sanctions would be unjust and inappropriate in view of the totality of the circumstances of the case, which demonstrate the severity of the disobedience of Plaintiff in refusing to make discovery in a lawsuit she instituted, her unjustified noncompliance with the mandatory North Carolina Rules of Civil Procedure, and untimely response on the day of the hearing.
Id.
, 198 N.C. App. at 421–22, 681 S.E.2d at 798–99. This Court reached that
conclusion because that language was similar to language this Court had previously
found acceptable in both
In Re Pedestrian Walkway Failure
and
Cunningham
.
Id.
,
198 N.C. App. at 422, 681 S.E.2d at 798–99;
see also Baker v. Charlotte Motor
Speedway, Inc.
,
“Consideration of Lesser Sanctions,” the trial court made nine Findings of Fact *76 recounting how it considered the arguments of Dunhill and Mr. Lindberg for lesser sanctions and ultimately rejected them. Before laying out the fact-specific reasons why lesser sanctions would not be effective here, including the past failures of lesser sanctions to ensure compliance, the trial court said:
The Court, in its discretion, has considered all available sanctions in light of Dunhill and Mr. Lindberg’s actions described herein, including specifically whether sanctions lesser than those requested in Mrs. Lindberg’s Motions would be appropriate. The Court, in its discretion, finds that the evidence before it shows that that [sic] lesser sanctions would not be appropriate based on the conduct and repeated discovery abuses of Dunhill and Mr. Lindberg, nor would lesser sanctions achieve the desired effect of correcting and/ or deterring the misconduct of Dunhill and Mr. Lindberg described herein.
This paragraph alone is similar to the paragraph this Court previously found was
sufficient in
Batlle
.
included a similarly detailed analysis in its Conclusions of Law under the heading, “Harsh Sanctions are Warranted Here.” After recounting the previous misconduct by Dunhill and Mr. Lindberg as well as its discretionary authority to impose harsh sanctions, the trial court indicated again that it had considered all sanctions and gave its reasoning for why lesser sanctions were not enough:
162. The Court, in its discretion, has considered all available sanctions in light of Dunhill and Mr. Lindberg’s actions described herein, including specifically whether *77 sanctions lesser than those requested in Mrs. Lindberg’s Motions would be appropriate. The Court, in its discretion, finds that the evidence before it shows that that [sic] lesser sanctions would not be appropriate nor would they achieve the desired effect of correcting and/ or deterring the misconduct of Dunhill and Mr. Lindberg described herein. 163. The Court concludes that monetary sanctions are not likely to have any beneficial effect on either Mr. Lindberg or Dunhill in deterring either from furthering their efforts to evade their discovery obligations or from future conduct in clear violation of this Court’s discovery orders. 164. The Court likewise concludes that lesser discovery sanctions such as requiring Dunhill or Mr. Lindberg to sit for additional deposition sessions, or provide additional discovery by a date certain, are not likely to have any beneficial effect on either Mr. Lindberg or Dunhill in deterring either from furthering their efforts to evade their discovery obligations or from future conduct in clear violation of this Court’s discovery orders.
165. In summary, Dunhill and Mr. Lindberg have made it clear that they believe the litigation process is a game, one where they make all the rules, regardless of what this Court orders or the rules of discovery say to the contrary, and, therefore, striking pleadings is the only appropriate remedy to redress their misconduct.
Based on
Batlle
, Conclusion 162 alone was enough for us to conclude that the trial
court did not abuse its discretion.
lesser sanctions misses the point of their argument. They explain their argument is *78 that even if the trial court “had the authority to enter sanctions, the sanctions imposed were excessive.” This argument seemingly relates back to Appellants’ arguments that (1) default judgment and taking a party’s allegations as established are powerful and should only be used in the most extreme circumstances and (2) North Carolina has a policy favoring deciding cases on the merits rather than entering default judgment. Both of these arguments, while generally true and persuasive, are not controlling here. The first argument about default judgment only being used in the most
extreme circumstances is not persuasive in part because of the authority Appellants
use to support it. In making the argument, Appellants rely exclusively on federal
caselaw, rather than North Carolina precedents. Federal cases may be persuasive in
other areas of interpreting our Rules of Civil Procedure given some overlap in design.
See Harvey Fertilizer & Gas Co. v. Pitt County
,
rejected the federal approach.
See Hursey
,
Although the federal rule is laudable and best serves the judicial preference in favor of deciding cases on the merits, our courts have not adopted the federal rule. Indeed, this court’s precedent all but expressly rejects the notion of progressive sanctions. This court has upheld dismissals in several cases when no previous less stringent sanction was ordered.
a policy favoring deciding cases on the merits rather than entering default judgment,
they misunderstand that precedent, which works hand-in-hand with the requirement
that courts consider lesser sanctions. By considering lesser sanctions, the trial court
is doing the very thing for which Appellants press, ensuring that this case is one
*80
where it should impose a harsh penalty in spite of the general policies disfavoring
default judgment and favoring trial on the merits.
See Stone
,
because our courts exist to resolve disputes about, among other things, evidence. Rule 37(b)(2)(a) allows certain facts to be designated as a sanction for disrupting discovery, which is part of the process of resolving such disputes. See King v. Koucouliotes , 108 N.C. App. 751, 755, 425 S.E.2d 462, 464 (1993) (“The recognized primary purpose of discovery ‘is to facilitate the disclosure prior to trial of any unprivileged information that is relevant and material to the lawsuit so as to permit the narrowing and sharpening of the basic issues and facts that will require trial .’” (quoting Bumgarner v. Reneau , 332 N.C. 624, 628, 422 S.E.2d 686, 688–89(1992)) (emphasis added)). Thus, parties can comply with discovery and resolve their disputes through the regular mechanisms of our courts; but, if they fail to comply with discovery and are thus subject to Rule 37(b)(2) sanctions, the court can resolve those disputes for the parties by establishing certain facts against the party who failed to follow the normal process. See N.C. Gen. Stat. § 1A-1, Rule 37(b)(2)(a) *82 (providing that a court can designate certain facts as established as a discovery sanction). As laid out above, the existence of and choice of discovery sanction fell to the trial court because of Dunhill’s repeated, significant discovery violations. If Dunhill wanted to argue that the facts in the record supported its contentions, it should have complied with the discovery rules and court orders and thereby participated in the normal methods of dispute resolution our courts offer. As with the other arguments, we reject Dunhill’s argument that the trial court abused its discretion by deeming certain facts established when there was some evidence to the contrary in the record.
B. Internal Consistency of the Order Appellants’ other joint argument is that the August 2019 Order “is internally
inconsistent.” Specifically, Appellants contend the Order is inconsistent because it
struck their pleadings, entered default judgment against them, and took facts alleged
by Ms. Lindberg as true but then still required them to sit for another deposition.
Appellants also each point to the trial court’s Finding of Fact that additional
deposition sessions are unlikely to deter them from evading discovery obligations.
“Inconsistent judgments are erroneous.”
Graham v. Mid-State Oil Co.
, 79 N.C.
App. 716, 720,
depositions after the court found additional deposition sessions would not deter them
from evading discovery obligations was inconsistent because that Finding of Fact can
be harmonized with the rest of the judgment.
Spencer
, 70 N.C. App. at 168, 319
S.E.2d at 644. Finding 113 about the lack of benefit from additional deposition
sessions is part of the trial court’s section considering lesser sanctions. Thus, when
the trial court was saying additional depositions would not be helpful, it was
justifying its imposition of default judgment as to issues of liability. As a compliment
to only imposing default judgment as to liability, the trial court “reserved for trial”
*84
the damages issue as to both Appellants. The order of additional depositions
therefore applied to damages issues rather than liability. Further, given the purpose
of sanctions is to “prevent or eliminate dilatory tactics on the part of unscrupulous
attorneys or litigants,”
Essex Group, Inc. v. Express Wire Services, Inc.
, 157 N.C. App.
360, 363,
of damages. Paragraph 16 of the August 2019 Order requires Mr. Lindberg to sit for another deposition and answer questions “that are relevant to any of her [Ms. Lindberg’s] counterclaims or damages claims.” Beyond the damages claims, the counterclaims also related to damages, specifically compensatory damages from Dunhill and imposing a constructive trust over the tennis complex. While the counterclaims also involve Ms. Lindberg’s allegation that Mr. Lindberg is an alter ego of Dunhill, which would have been covered by the default judgment, we can harmonize that portion of the order by reading the word “any” in relation to Ms. Lindberg’s counterclaims to mean any counterclaims on the issue of damages. That harmonization is similar to Spencer where this Court reconciled apparently inconsistent findings by avoiding “unduly literal stress” on a word. 70 N.C. App. at *85 168, 319 S.E.2d at 644. Therefore, we find no internal inconsistency as to the additional deposition of Mr. Lindberg. We find, however, internal inconsistency with the order for an additional
deposition for Dunhill. The August 2019 Order requires Dunhill to sit again for its
Rule 30(b)(6) “deposition and designate ten days in advance persons for all
previously-noticed topics who are prepared to testify as to all matters known and
reasonably available to[] Dunhill regarding each topic in the notice of deposition.”
(Emphasis in original.) The previously-noticed topics included issues relevant to
liability alone. For example, Topic 1, as summarized in the same August 2019 Order,
asked for “[t]he basis for any claims or allegations made by Dunhill against” Ms.
Lindberg in the lawsuit. Given that the August 2019 Order explicitly dismissed, with
prejudice, “[a]ll claims for relief asserted by Dunhill in this action,” not all previously-
noticed topics need to be covered at another deposition. We cannot reconcile this
inconsistency because the emphasis on “all” in the order makes it clear the trial
court’s intention to include topics unrelated to damages such as Topic 1.
See Lackey
,
C. Order and Privileged Information Turing to Mr. Lindberg’s individual arguments, he contends the August 2019 ¶ 123 Order erred by ordering him to sit for another deposition and answer all questions from Ms. Lindberg’s counsel without objection. Specifically, Mr. Lindberg argues this language would require him to answer questions even on topics that should be protected by privileges such as attorney-client privilege or the Fifth Amendment’s privilege against self-incrimination. The language of the Order requiring Mr. Lindberg to sit for another deposition
is as expansive as he claims. Specifically it erroneously requires him “to answer, without objection, all questions posed by Mrs. Lindberg’s counsel that are relevant to any of her counterclaims or damages claims.” As Mr. Lindberg correctly argues, this order could require him to answer questions that are otherwise subject to at least attorney-client privilege. [10] A court cannot pre-determine that a person cannot claim attorney-client
privilege as doing so would amount to a forced waiver by the trial court rather than
the client.
See Crosmun v. Trustees of Fayetteville Technical Community College
, 266
*87
N.C. App. 424, 439–40,
Lindberg’s attorney-client privilege objections from his first deposition in its August 2019 Order. Ms. Lindberg is correct in that the order separately bars Mr. Lindberg from reasserting attorney-client privilege with respect to those documents, and Mr. Lindberg does not challenge that paragraph. The trial court’s error was that it barred Mr. Lindberg from asserting new attorney-client privilege objections. Therefore, we vacate the paragraph ordering Mr. Lindberg to sit for a new deposition on damages and answer all questions without objection. On remand, the trial court will clarify that, in his deposition on damages, Mr. Lindberg can assert objections, including privileges, that have not been previously overruled.
D. Proper Notice Mr. Lindberg’s final solo argument under the choice of sanctions issue heading ¶ 127 is that he “was not on proper notice.” Specifically, he contends that he only had notice for sanctions as to his deposition conduct, not as to the document production issues. He also argues that he was not on notice that the sanctions imposed may include being precluded from introducing evidence or arguments or that default judgment might be entered against him. Taking Mr. Lindberg’s second argument first, he presents no authority for his
contention that the trial court can only impose the exact sanctions requested by the
other party. Both of the cases he cites involve situations where a party was
sanctioned for
conduct
for which it was not on notice.
See Griffin v. Griffin
, 348 N.C.
278, 280, 500 S.E.2d 437, 438–39 (1998) (finding party did not have proper notice
because he was put on notice he was subject to sanctions for one filing but was
actually sanctioned for a different filing);
OSI Restaurant Partners, LLC v. Oscoda
Plastics, Inc.
,
and that these sanctions were under Rule 37(b)(2); there was no need for any specific
notice that he may be sanctioned by preclusion from introducing evidence and entry
of default judgment. First,
OSI Restaurant Partners
explains the notice required is
*89
“(1) of the fact that sanctions may be imposed, and (2) the alleged grounds for the
imposition of sanctions.”
proper notice that he could be sanctioned for the document production. As explained
above, a person subject to sanctions must have notice “(1) of the fact that sanctions
may be imposed, and (2) the alleged grounds for the imposition of sanctions” as a
matter of due process.
OSI Restaurant Partners
,
The supplemental motion also satisfied the second requirement because it indicated Mr. Lindberg could be subject to sanctions for the document production. See id. (requiring notice of “the alleged grounds for the imposition of sanctions”). The supplemental motion for sanctions specifically moved for entry of sanctions against Mr. Lindberg and Dunhill “for their repeated and willful violations of the Court’s prior discovery orders and the Rules of Civil Procedure.” In the corrected motion for sanctions, which Ms. Lindberg specifically “incorporated by reference herein [in the supplemental motion] as if fully restated,” Ms. Lindberg included four paragraphs detailing how the 129,000 page document production by Dunhill and Mr. Lindberg days before Dunhill’s deposition was part of the reasons she was moving for sanctions.
Further, the supplemental motion requested, among other sanctions, that “ neither Mr. Lindberg nor Dunhill” be allowed to use any of the documents in the 129,000 page *91 document production. (Emphasis added.) Logically, a sanction barring Mr. Lindberg from using documents in a certain production would be based on misconduct related to that production. Given all this information in the supplemental motion for sanctions against Mr. Lindberg, we determine Mr. Lindberg received proper notice as to the conduct subject to sanctions. As a result, we reject Mr. Lindberg’s final argument under the heading choice of sanctions as well.
VII. Forensic Examination Finally, Appellants both incorporate the arguments made in their prior appeal that challenged the “ordered forensic examination” on the basis that it “was an inappropriate invasion of privacy.” As Appellants note and as we explained more fully above, the ruling in the prior appeal directed us to consider the issues in that appeal when we decided the sanctions issues in this appeal. Dunhill I at *12. Therefore, we address the issue. Before potentially reaching the merits of the discovery issues raised in the
prior appeal, we note the prior appeal carried mootness concerns. As the prior panel’s opinion summarized, Ms. Lindberg filed a motion to dismiss the appeal, arguing “the appeal is moot because she has filed a ‘Notice of Withdrawal of Forensic Search Request’ with the trial court, removing the underlying motion to compel discovery.” Dunhill I at *11. Ms. Lindberg also filed a document in the prior appeal arguing “that the trial court’s imposition of a final sanctions order on 1 August 2019,” i.e. the *92 sanctions order on appeal here, mooted the dispute over the forensic examination discovery order. Dunhill I at *11. Based on these arguments and the concerns of the prior panel, [11] we examine mootness and ultimately conclude the forensic examination issue is moot. “A case is ‘moot’ when a determination is sought on a matter which, when
rendered, cannot have any practical effect on the existing controversy.”
Roberts v.
Madison County Realtors Ass’n, Inc.
, 344 N.C. 394, 398–99, 474 S.E.2d 783, 787
(1996). Put another way, “[w]henever, during the course of litigation it develops that
the relief sought has been granted or that the questions originally in controversy
between the parties are no longer at issue, the case should be dismissed, for courts
will not entertain or proceed with a cause merely to determine abstract propositions
of law.”
In re Peoples
,
forensic examination issue because it granted all the relief sought via the forensic
examination.
In re Peoples
,
documents relevant to liability issues. First, the motion to compel discovery that led to the forensic inspection order indicated the forensic examination would help prove the spoliation claim as laid out in Ms. Lindberg’s Amended Counterclaims and Third- Party Complaint:
Upon information and belief, Mr. Lindberg and Dunhill have intentionally attempted to destroy evidence from computers and electronic devices that is relevant to this matter. The spoliation of evidence by Mr. Lindberg and Dunhill was set out in the pleadings in this matter in Mrs. Lindberg’s Amended Counterclaims and Third-Party Complaint. For example, upon information and belief, Mr. Lindberg and Dunhill destroyed emails and computer files maintained by Mr. Lindberg’s companies soon after Mr. Lindberg took out the Ex Parte Domestic Violence Protective Order and restricted her access to email servers. *94 Requests for Inspection 23 and 24 to Dunhill and Requests for Inspection 23 and 24 to Greg Lindberg seek to inspect the computers, drives and devices of Mr. Lindberg and Dunhill, but they have refused to allow for this inspection. Mrs. Lindberg respectfully requests that the Court order such a forensic computer inspection. Looking in turn at Ms. Lindberg’s Amended Counterclaims and Third-Party
Complaint, the spoliation claim related to the deletion of emails that corroborated Ms. Lindberg’s claim that two pieces of real estate were gifted to her as her sole property:
164. Mrs. Lindberg is informed and believes that Mr. Lindberg has spoliated critical material evidence, including many emails exchanged between them, corroborating that he gifted both the Key West House and tennis complex to her as her sole property. Specifically, Mrs. Lindberg’s email account in 2017 was maintained on a server controlled exclusively by Mr. Lindberg. Mr. and Mrs. Lindberg exchanged numerous emails regarding the acquisition of the Key West House as her birthday gift and the gift of the tennis complex to her.
. . .
166. Mr. Lindberg deleted Mrs. Lindberg’s emails at some time following his involuntary commitment of Mrs. Lindberg in May or June, 2017. This purposeful deletion of Plaintiffs emails constitutes spoliation of material evidence which Mr. Lindberg has deleted to avoid confirmation that the Key West House and the Tennis complex were gifted to Mrs. Lindberg.
As part of her prayer for relief, Ms. Lindberg sought constructive trust over one of those pieces of property, the tennis complex. While Ms. Lindberg’s pleading mentions a Key West house, that property was not at issue in this lawsuit. Rather, as clarified *95 at the June 2018 hearing on the motion to compel, the Key West house was, at least at that time, part of a separate lawsuit in Florida. [12] Because the June 2018 Order limited the forensic examination to, inter alia , “[a] determination as to whether emails or text messages dealing with real estate holdings subject to dispute in this lawsuit exist or ever existed, and producing copies of the same for the parties,” (emphasis added), the trial court implicitly denied the request as to the Key West house, so we need not further examine that portion of the request. Based on the motion to compel and its references to the pleadings, the forensic examination sought to advance Ms. Lindberg’s spoliation argument and provide evidence to support her claim the tennis complex was gifted to her and should be placed in a constructive trust. The purposes for the forensic examination advanced by Ms. Lindberg at the
hearing on the motion to compel are broadly similar. At the hearing, Ms. Lindberg’s counsel repeatedly emphasized the forensic examination sought to uncover emails that would support her spoliation claim and show the Florida house and the tennis complex were gifts to her personally. Ms. Lindberg also raised two new purposes for the forensic examination at the hearing. First, she said the emails she believed the *96 forensic examination would uncover would also prove the allegation “on the money being her money.” This appears to relate to Ms. Lindberg’s denial of Dunhill’s claims that she took funds from Dunhill, which was the animating claim in this suit. See Dunhill I at *3 (Dunill claiming Ms. Lindberg took funds from it and Ms. Lindberg “denying various allegations of Dunhill”). The second new purpose for the forensic examination was that it would uncover
emails “specifically related to the yacht claim.” This purpose relates to Ms. Lindberg’s claim for indemnity as to a deposit on a yacht vacation that Ms. Lindberg claims she made on behalf of Mr. Lindberg. With the exception of the Florida house, the June 2018 Order’s grant of the
forensic examination confined its scope to those purposes:
5. Dunhill Holdings LLC and Greg Lindberg shall make the server or any electronic device housing, hosting, or storing the outlook email account used by the parties available for a forensic examination, but that inspection and examination is limited to:
a. A determination as to whether emails or text messages between Mr. Lindberg and Mrs. Lindberg exist or ever existed, and producing copies of the same for the parties;
b. A determination as to whether emails or text messages dealing with real estate holdings subject to dispute in this lawsuit exist or ever existed, and producing copies of the same for the parties; c. Whether any of those email or text messages, if there were any, have been intentionally deleted and, if deleted, the circumstances of any deletion and whether or not they can be recovered. *97 The first paragraph granting the forensic examination appears to encompass
¶ 141
all the listed purposes. The second paragraph relates to the tennis complex as the
real estate holding subject to dispute in this lawsuit. The final paragraph relates to
spoliation, i.e. “a party’s intentional destruction of evidence in its control before it is
made available to the adverse party . . . .”
Holloway v. Tyson Foods, Inc.
, 193 N.C.
App. 542, 547, 668 S.E.2d 72, 75 (2008) (quoting
Red Hill Hosiery Mill, Inc. v.
MagneTek, Inc.
,
liability between the parties. The money, tennis complex, and yacht purposes all relate directly to proving claims or defenses made by the parties. Specifically, the emails that would be uncovered by the forensic examination “would prove every single allegation about these promises [Mr. Lindberg] made to [Ms. Lindberg]” on the tennis complex and the money Dunhill claims Ms. Lindberg improperly took. The lost emails could help prove the yacht claim according to Ms. Lindberg’s counsel. Notably, all three of those claims featured a dispute on liability, i.e. whether promises were made, etc., rather than the amount of money the claim would be worth. The money issue was a defense against Dunhill’s claim Ms. Lindberg took its funds, so Dunhill would know the amount. As to the tennis complex, Ms. Lindberg seeks a constructive trust rather than
monetary damages. And as to the yacht claim, Ms. Lindberg seeks indemnity “for all *98 amounts she is required to pay” if found liable for the yacht rental. Thus, none of these claims feature a dispute as to damages. Ms. Lindberg either wins on liability and keeps the money she received from Dunhill and receives a constructive trust and indemnification, or she loses and does not. Finally, the spoliation claim could only possibly relate to liability, not damages,
because “the spoliation of evidence principle is an evidentiary matter” that “can give
rise to an inference that the evidence destroyed would injure its (the party who
destroyed the evidence) case.”
Holloway
,
order moot because it resolves all liability issues in favor of Ms. Lindberg. Specifically, it dismisses with prejudice “[a]ll claims for relief asserted by Dunhill in this action” and it enters judgment by default against both Dunhill and Mr. Lindberg, *99 and in favor of Ms. Lindberg, “on the issue of liability for each of” Ms. Lindberg’s claims in the action. It also established as true all facts related to Dunhill’s claim against Ms.
¶ 146
Lindberg for improperly taking funds. Finally, the August 2019 Order specifically
bars Dunhill and Mr. Lindberg from opposing at trial the issue of liability in Ms.
Lindberg’s favor on her claims against them. Since the August 2019 Order has
already determined all issues on liability, the relief Ms. Lindberg sought via the
forensic examination has been granted, and the provisions regarding forensic
examination are moot.
In re Peoples
,
VIII. Conclusion The trial court did not abuse its discretion in (1) sanctioning Appellants for their document production behavior, (2) sanctioning Appellants for their deposition misconduct, and (3) choosing sanctions, except as to two sanctions as described below Those portions of the sanctions order are affirmed. *100 We vacate the August 2019 Order’s sanctions in paragraphs 13 and 16 and
remand to the trial court to ensure any new depositions ordered in those paragraphs are limited to the issue of damages only and do not bar a party from asserting objections, particularly asserting attorney-client or other rights and privileges, not previously ruled upon. Finally, because we affirm the sanctions deciding all issues of liability in favor of Ms. Lindberg, we hold the provisions regarding forensic examinations are moot.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED. Judges TYSON and ZACHARY concur.
Notes
[2] We also note that both Dunhill and Mr. Lindberg specifically incorporated the arguments made in their prior appeal through footnotes in their briefs in this appeal, thereby avoiding any potential preservation issue.
[3] In November 2017, the trial court granted each of the four employees’ motions to dismiss for failure to state a claim pursuant to Rule of Civil Procedure 12(b)(6). N.C. Gen. Stat. § 1A- 1, Rule 12(b)(6) (2017).
[4] This document and many of the documents from this litigation refer to Appellee Tisha Lindberg as Mrs. Lindberg whereas throughout this opinion we refer to her as Ms. Lindberg. We refer to Tisha Lindberg as Ms. Lindberg because the briefing in this case referred to her with that title.
[5] Appellants’ position—i.e. that sanctions affect a substantial right and are therefore
immediately appealable despite being interlocutory—also finds support in certain cases from
this Court.
See, e.g.
,
Feeassco, LLC v. Steel Network, Inc.
,
[6] Our determination that the August 2019 Order was a final judgment aligns with Dunhill I’s description of this appeal as one in which “each party appeals not only the final judgment of the trial court imposing sanctions, but also again specifically appeals the discovery order at issue in the present [first] appeal.” Dunhill I at *11 (emphasis added).
[7] In fact, Dunhill primarily cites unpublished federal district court opinions. Citation to this Court’s own unpublished opinions is “disfavored,” N.C. R. App. P. 30(e)(3), so citation to other courts’ unpublished opinions at least warrants the same treatment. The citations here are
[8] We searched the transcript for the following words “fifth”; “5 th ”; “amendment”; “privilege”; and “incrimination” and found no responses that discussed the Fifth Amendment privilege against self-incrimination other than the instance discussed in the main text. The search for the word “privilege” revealed numerous references to attorney-client privilege as well as a couple of references to professional-patient privilege, but Mr. Lindberg does not make any arguments about those privileges.
[9] In unchallenged Findings of Fact, the trial court found the indictment in question did not mention Dunhill or Ms. Lindberg and did “not refer to facts or issues that create a nexus
[10] Mr. Lindberg also argues his Fifth Amendment privilege against self-incrimination might apply, but Ms. Lindberg points out that the criminal charges Mr. Lindberg previously faced resulted in his conviction in 2020. Because the possibility of a Fifth Amendment privilege is not dispositive based on our analysis of attorney-client privilege, we do not analyze the Fifth Amendment privilege issue.
[11] Even if this history of mootness concerns did not exist, we could have addressed the issue
ex mero motu
.
See State ex rel. Rhodes v. Gaskill
,
[12] An earlier version of Ms. Lindberg’s third-party complaint and counterclaim also sought control of the Florida house, but that was not included in the amended version of that document that we discuss above. See Dunhill I at *3 (summarizing the claims in the original and amended third-party complaint and counterclaim pleadings).