Intrepid v. Farley

CourtCourt of Appeal of North Carolina (US)
Citation714 S.E.2d 797
Docket NumberNo. COA10–1617.,COA10–1617.
PartiesPOINT INTREPID, LLC and Advanced Internet Technologies, Inc., Plaintiffs,v.Robyn FARLEY, Defendant.
Decision Date16 August 2011

OPINION TEXT STARTS HERE

Appeal by Plaintiffs from Orders entered 8 September 2010 and 22 September 2010 by Judge Gregory A. Weeks in Cumberland County Superior Court. Heard in the Court of Appeals 11 May 2011.

A. Bikash Roy, Fayetteville, for Plaintiffs-appellant.

Winslow Wetsch, PLLC, Raleigh, by Laura J. Wetsch, for Defendant-appellee.Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., Raleigh, by Thomas M. Buckley, for third-party appellee.

HUNTER, JR., ROBERT N., Judge.

Point Intrepid, LLC (Point Intrepid) and Advanced Internet Technologies, Inc. (AIT) (collectively Plaintiffs) appeal from Orders directing AIT to pay third-party appellee Forward Discovery's invoice, attorneys' fees, and additional expenses. We affirm, in part, and reverse, in part.

I. Facts and Procedural History

This case arises from an employment dispute between Plaintiffs and Robyn Farley (Farley), a former employee of AIT. While the parties settled the litigation relating to the underlying employment dispute, this appeal originates from a disagreement over payment of third-party expert fees incurred during the parties' litigation. Plaintiffs agreed in court to pay the entire cost of the third-party expert, but subsequently refused full payment. Plaintiffs appeal the trial court's Orders mandating their payment of the balance of the expert's invoice, attorneys' fees, and additional expenses.

AIT is a North Carolina corporation in the business of hosting websites and providing internet technology-related services. Point Intrepid is a North Carolina company that acts as the benefits and payroll administrator for AIT, its subsidiaries, and affiliates.

On 6 June 2008, Farley was hired by AIT as a Database Administrator/Engineer. Farley's employment at AIT was terminated on 26 February 2009 following allegations of her unauthorized access of her supervisor's computer. Plaintiffs brought suit against Farley for, inter alia, breach of contract and breach of fiduciary duty. Farley made numerous counter-claims, including wrongful discharge and defamation. The case was heard at the 19 November 2009 session of the Superior Court of Cumberland County, Judge Gregory A. Weeks presiding.

During a motions hearing, Judge Weeks entered a discovery order on 3 December 2009 requiring AIT to produce “all documents supporting and negating AIT's decision to determinate [sic] Farley's employment.” Because AIT wanted to use an expert to protect its proprietary information and avoid inadvertent disclosure of customer banking information, AIT filed a motion pursuant to N.C. Gen.Stat. § 1A–1, Rule 60(b). Specifically, AIT requested that an independent third-party expert, either designated by the court or by agreement between the parties, analyze the hard drives “with the costs to be shared equally by the parties.” At a 7 December 2009 hearing for this Motion, Farley conceded to the appointment of an independent third-party expert, but proposed that AIT pay all expenses for the expert. AIT agreed to incur the costs for third-party analysis of its hard drives, and explicitly stated, [W]e will incur [the costs] voluntarily and a hundred percent, we will incur it.”

On 4 January 2010, the trial court entered an Order requiring the parties to agree to a third-party expert within five business days. Pursuant to the Order, the expert would analyze AIT's hard drives and report the results. Significantly, the Order provided that [t]he third-party expert may communicate separately with each party, but shall maintain a complete record of all such communications, which shall be made available to the court or either party upon request.” The Order also stated, “AIT shall promptly pay all fees and expenses of the third-party expert selected to perform the work identified in this Order, consistent with the third party expert's quote which is incorporated in this Order by reference.”

On 11 January 2010, the parties informed the trial court that they were unable to agree on an expert. Farley proposed as an expert Ryan Johnson (“Johnson”) of Forward Discovery, Inc. (“Forward Discovery”). Johnson provided an estimate of $10,250 per hard drive ($20,500 total), for the requested work. AIT suggested as an expert Charles Moreton, of Computer Trauma Center, who stated the cost of the work would not exceed $2,200. The trial court, in a 14 January 2010 Order, selected Johnson of Forward Discovery, the expert proposed by Farley. The trial court held that Johnson's estimate of $20,500 would serve as a cap on the work to be performed.

Pursuant to an agreement between the parties, Johnson did not begin his work until late March 2010 to allow the parties time to mediate the underlying claims. Farley's attorney e-mailed Johnson on 19 March 2010 to inform him that mediation had failed and that he could begin his work. AIT's attorneys were included on the e-mail. This prompted an exchange of contentious e-mails in which AIT's attorney expressed his disapproval of this unilateral request by Farley's attorney that Johnson begin his court-ordered work. On 22 March 2010, Farley's attorney called Forward Discovery about these e-mails, on which Johnson had been copied, and Johnson advised her that because the matter seemed “contentious,” it might be best to arrange a conference call between all the parties. Forward Discovery logged this phone call with Farley's attorney pursuant to the trial court's Order, but admits it failed to log two instances where Farley's attorney called Forward Discovery's office for driving directions.

In early May 2010, Forward Discovery completed its court-ordered work, and it sent an invoice to AIT in early June 2010. The invoice listed a total amount of $22,650.12 due by 9 July 2010, exceeding the court-ordered limit of $20,500. AIT refused to pay the entire amount, and requested clarification of the services provided. In an e-mail exchange with AIT's attorney, Johnson provided the requested clarification. On 30 July 2010, AIT paid Johnson $10,250, half of the court-ordered limit.

On 9 August 2010, Plaintiffs filed a Motion to Limit Expert Fees. Plaintiffs argued that Forward Discovery's estimate and invoice were unreasonable, that AIT had already paid a reasonable fee for Forward Discovery's work, and that Johnson should show cause as to why the trial court should not consider the estimate and invoice unreasonable. The next day, on 10 August 2010, Forward Discovery filed a Motion to Show Cause why AIT should not be held in contempt of court for failing to pay the balance of Forward Discovery's invoice and requested sanctions against AIT for failure to comply with the trial court's discovery order. Forward Discovery's Motion called for AIT to pay the fees Forward Discovery incurred for its court-ordered work, as well as attorneys' fees, interest, and monetary sanctions for its collection efforts. Both parties appeared for a hearing on these motions on 30 August 2010 before Judge Gregory A. Weeks in Cumberland County Superior Court. Johnson voluntarily attended the 30 August 2010 hearing; he was not required to appear by subpoena.

On 8 September 2010, the trial court entered an Order denying Plaintiffs' Motion and granting Forward Discovery's Motion. Specifically, the trial court found the invoice for Forward Discovery's services to be reasonable under N.C. Gen.Stat. § 8C–1, Rule 706 and required AIT to pay the balance of the invoice ($12,400.12). On 13 September 2010, the trial court held an additional hearing to rule on Forward Discovery's claim for attorneys' fees and additional expenses. The trial court entered an Order on 22 September 2010 requiring AIT to pay Forward Discovery $3,762.50 for attorneys' fees and $2,375.00 for additional expenses (a total of $6,137.50).

AIT and Farley resolved the underlying employment dispute on 4 October 2010, manifested in a Settlement Agreement and Release (“Settlement Agreement”). Pursuant to the Settlement Agreement, AIT filed a Notice of Voluntary Dismissal on 8 October 2010. This voluntary dismissal was with prejudice to all claims, except with regard to “the Plaintiffs' right to appeal the Order of the Court entered on September 8, 2010 and the Court's further Order entered on September 22, 2010,” which were dismissed without prejudice.

Plaintiffs timely entered notice of appeal from the trial court's 8 September 2010 Order requiring payment of the balance of Forward Discovery's invoice and the 22 September 2010 Order requiring payment of attorneys' fees and expenses (collectively the September 2010 Orders”).

II. Jurisdiction and Standard of Review

This Court has jurisdiction to hear the instant appeal pursuant to N.C. Gen.Stat. § 7A–27(b) (2009). We review the trial court's Orders under an “abuse of discretion” standard. Smith v. Barbour, 195 N.C.App. 244, 253, 671 S.E.2d 578, 585 (2009) (citing Sharp v. Sharp, 116 N.C.App. 513, 533, 449 S.E.2d 39, 50, disc. rev. denied, 338 N.C. 669, 453 S.E.2d 181 (1994)). “Abuse of discretion occurs where the court's ruling is manifestly unsupported by reason or is so arbitrary it could not have been the result of a reasoned decision.” State v. Syriani, 333 N.C. 350, 379, 428 S.E.2d 118, 133 (1993). A trial court does not reach a reasoned decision, and thus abuses its discretion, when its findings of fact are not supported by competent evidence. Leggett v. AAA Cooper Transp., Inc., 198 N.C.App. 96, 104, 678 S.E.2d 757, 763 (2009) ([T]he trial court's finding is supported by competent evidence, and does not constitute an abuse of discretion.”).

Findings of fact are conclusive on appeal if they are supported by competent evidence. Powers v. Tatum, 196 N.C.App. 639, 648, 676 S.E.2d 89, 95 (citation omitted), disc. rev. denied, 363 N.C. 583, 681 S.E.2d 784 (2009). Additionally, “findings of fact to which [the...

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7 cases
  • Belk v. Belk
    • United States
    • North Carolina Court of Appeals
    • June 5, 2012
    ...permit reimbursement of attorneys' fees, we may not award attorneys' fees even on equitable grounds.” Point Intrepid, LLC v. Farley, ––– N.C.App. ––––, ––––, 714 S.E.2d 797, 805 (2011) (emphasis added); see also McNeely, 281 N.C. at 691, 190 S.E.2d at 185 (“Since costs may be taxed solely o......
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    • North Carolina Court of Appeals
    • August 16, 2011
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    • July 1, 2014
    ...concede that there are times when ex parte contact with a court-appointed expert is not improper. See Point Intrepid, LLC v. Farley, 215 N.C.App. 82, 89–92, 714 S.E.2d 797, 802–03 (2011). In the instant case, the record demonstrates that the trial court ordered that forensic accountants per......
  • Light v. Prasad
    • United States
    • North Carolina Court of Appeals
    • February 4, 2020
    ...omitted). "Findings of fact are conclusive on appeal if they are supported by competent evidence." Point Intrepid, LLC v. Farley , 215 N.C. App. 82, 86, 714 S.E.2d 797, 800 (2011) (citation omitted).In its Protective Order, the trial court found as follows:After duly considering the pleadin......
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