American Telephone & Telegraph Co. v. Griffin

251 S.E.2d 885 (1979) 39 N.C. App. 721

AMERICAN TELEPHONE AND TELEGRAPH COMPANY and Western Electric Co., Inc.
v.
J. M. GRIFFIN, T/A Griffin Transfer and Storage Company and Griffin Transfer and Storage Company, Inc.

No. 7825SC338.

Court of Appeals of North Carolina.

February 20, 1979.

Townsend, Todd & Vanderbloemen by J. R. Todd, Jr., Lenoir, for plaintiff appellants.

Wayne W. Martin, Morganton, for defendant appellees.

HEDRICK, Judge.

The assignments of error brought forward and argued in plaintiffs' brief are all based on a single exception to the Order entered 15 September 1977 finding plaintiffs in contempt and imposing sanctions. Such a broadside exception does not present for review the sufficiency of the evidence to support the findings of fact but presents only the question whether the facts found or admitted support the conclusions of law and the judgment. MacKay v. McIntosh, 270 N.C. 69, 153 S.E.2d 800 (1967); Johnson v. Johnson, 17 N.C.App. 398, 194 S.E.2d 562 (1973); 1 Strong's N.C.Index, Appeal and Error § 28 (3d Ed.1976).

The question thus presented in this appeal is whether the facts found by Judge Ferrell support the judgment holding plaintiffs in contempt and imposing sanctions pursuant to Rule 37(b)(2)(e), which provides:

Sanctions by Court in Which Action is Pending.—If a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or Rule 35, a judge of the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:

. . . . .

(e) . . .

In lieu of any of the foregoing orders or in addition thereto, the court shall require the party failing to obey the order to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.

The facts found by Judge Ferrell clearly demonstrate that plaintiffs violated at least the spirit of Judge Kirby's first Order when they responded that they had "no knowledge of any standard fire insurance policy with a standard extended coverage." The findings reveal that a genuine issue of fact existed with regard to whether the property involved in plaintiff's claim was covered by fire insurance. Whether the existence of such insurance would be a defense to plaintiffs' claim could only be determined at trial. By denying the existence of "standard fire insurance with standard extended coverage" the plaintiffs unilaterally determined a question that could only be determined by the trial court. As Judge Ferrell aptly stated in his 15 September 1977 Order:

Whether or not the policy or policies [of insurance revealed in response to Judge Kirby's second Order] in law apply to this litigation is a question for the court and not for the plaintiffs to determine; and the policy or policies are an element of the dispute between the parties that cannot be determined on the merits without their disclosure, and unless their existence is known.

One of the primary purposes of the discovery rules 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. United States v. Proctor & Gamble Co., 356 U.S. 677, 682, 78 S. Ct. 983, 987, 2 L. Ed. 2d 1077, 1082 (1958); Hickman v. Taylor, 329 U.S. 495, 500-501, 67 S. Ct. 385, 388, 91 L. Ed. 451, 457 (1947); 4 Moore's Federal Practice ¶ 26.02[1] (2d Ed. 1978); 8 Wright & Miller, Federal Practice and Procedure: Civil § 2001 (1970). "Emphasis in the new rules is not on gamesmanship, but on expeditious handling of factual information before trial so that the critical issues may be presented at trial unencumbered by unnecessary or specious issues and so that evidence at trial may flow smoothly and objections and other interruptions be minimized." Willis v. Duke Power Co., 291 N.C. 19, 34, 229 S.E.2d 191, 200 (1976).

When viewed in light of the purposes of discovery, plaintiffs' refusal to disclose the existence of the insurance policies cannot be justified. Plaintiffs nowhere attempt to argue that the policies in question are not relevant or material to the resolution of a key issue in the case. To permit a party to refuse to disclose relevant factual information in this type of situation would serve to reinject the "sporting element" into trials and would utterly defeat the purposes for which the new discovery rules were enacted.

Finally, we note the discovery rules "should be construed liberally" so as to substantially accomplish their purposes. Willis v. Duke Power Co., 291 N.C. at 34, 229 S.E.2d at 200. The administration of these rules lies necessarily within the province of the trial courts; Rule 37 allowing the trial court to impose sanctions is flexible, and a "broad discretion must be given to the trial judge with regard to sanctions." 8 Wright & Miller, Federal Practice and Procedure: Civil § 2284, at 765 (1970). See also 4A Moore's Federal Practice § 37.03[2.7] (2d Ed.1978).

We conclude that Judge Ferrell's findings of fact support the conclusions of law, and the Orders imposing sanctions are affirmed.

Affirmed.

VAUGHN and CLARK, JJ., concur.