1. Appeal and Error--interlocutory discovery order--appeal by codefe
ndant--effect on
jurisdiction of trial court
In a car purchaser's action against the dealer and a bank for fraud and unfair trade
practices, the trial court had jurisdiction to enter an order compelling discovery against defendant
bank even though defendant dealer's appeal of an order compelling discovery against it was then
pending where the order against the dealer was interlocutory and not immediately appealable.
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nbsp;
2. Discovery--bank customer's financial records--production by bank-
-not violation of
Financial Privacy Act
The trial court's order compelling the production of documents by defendant bank in a car
purchaser's action for fraud and unfair trade practices against the bank and the car dealer did not
violate the Financial Privacy Act because (1) the Act applies only to access to financial records
by a government authority; (2) although the superior court is, in a general sense, an agency of the
State, the fact that the superior court compelled discovery pursuant to plaintiff's motion did not
transform plaintiff's discovery request into a request by a government authority; and (3) it was
not necessary for plaintiff to comply with the stringent service requirements of N.C.G.S. § 53B-5
in order to obtain discovery of a bank customer's financial records from the bank.
3. Discovery--factual work product--hardship requirement--safeguards
The trial court did not abuse its discretion in an action for misrepresentation and unfair
and deceptive trade practices arising out of plaintiff's purchase of a vehicle by concluding
plaintiff was entitled to discovery of certain factual work product information created by
defendant bank based on the trial court's determination that plaintiff met the hardship
requirement, because: (1) plaintiff adequately demonstrated that he has a substantial need of this
information to prepare his case; (2) plaintiff demonstrated he is unable to obtain this information
from any other source; (3) the trial court ordered this information be presented under a protective
order; (4) the trial court ordered that any information the bank believed to contain opinion work
product may be submitted first to the trial court for an in camera review; and (5) the trial court
ordered that prior to the use of any information gleaned, that information must be disclosed to the
bank's counsel and any party affected, and they must be allowed an opportunity to be heard.
Homesley, Jones, Gaines, Homesley & Dudley, by L. Ragan
Dudley, for the plaintiff-appellee.
James, McElroy & Diehl, P.A., by John S. Arrowood, for
defendant-appellant Centura Bank.
EAGLES, Chief Judge.
Defendant Centura Bank, (hereinafter “Centura”), appeals from
an interlocutory order compelling certain discovery. Because we
conclude that this discovery order does not affect a substantial
right of Centura, we dismiss the appeal.
Plaintiff filed a complaint on 26 April 1999 seeking
compensatory and punitive damages, treble damages and injunctive
relief for fraud, misrepresentation and unfair and deceptive trade
practices, stemming from plaintiff's purchase of a 1998 Pontiac
Sunfire. On 17 May 1999, plaintiff served interrogatories and
requests for production of documents on Defendant Dick Keffer
Pontiac-GMC Truck, Inc. (hereinafter “Dick Keffer”) and Centura.
During the 25 October 1999 civil session, the trial court heard
plaintiff's motion to compel discovery from Dick Keffer for failure
to provide certain documents and answers to the discovery requests.
On 9 December 1999, the trial court issued a protective order and
compelled discovery from Dick Keffer.
Also on 9 December 1999, the trial court heard plaintiff's
motion to compel discovery from Centura. The trial court took the
matter under advisement without objection. Before the trial court
ruled on the motions against Centura, Dick Keffer filed notice of
appeal on 7 January 2000. In its 19 April 2000 order compelling
discovery from Centura, the trial court found as a fact that the
discovery issues between plaintiff and Dick Keffer and plaintiff
and Centura were not affected by each other. It is from the 19
April 2000 order that Centura appeals.
A. Jurisdiction [1]/A HREF>Centura first argues
that the trial court was without
jurisdiction to enter the April 2000 order due to the pending
appeal of Dick Keffer. We disagree.
Dick Keffer's appeal has been dismissed today by this Court
because it is interlocutory and fails to assert a substantial
right. When a litigant appeals from an appealable interlocutory
order, the appeal operates as a stay of all proceedings in the
trial court relating to the issues included therein. G.S. 1-294;
Lawrence v. Lawrence, 226 N.C. 221, 37 S.E.2d 496 (1946); Veazey v.
Durham, 231 N.C. 357, 364, 57 S.E.2d 377, 382 (1950).
However, a litigant cannot deprive the trial court of
jurisdiction to determine a case on its merits by appealing from a
nonappealable interlocutory order of the trial court. Veazey, 231
N.C. at 364, 57 S.E.2d at 382. Our Supreme Court in Veazey further
stated as follows:
Our conclusion on this aspect of the controversy finds
full sanction in previous decisions of this Court
adjudging that when an appeal is taken to the Supreme
Court from an interlocutory order of the Superior Court
which is not subject to appeal, the Superior Court need
not stay proceedings, but may disregard the appeal and
proceed to try the action while the appeal on the
interlocutory matter is in the Supreme Court.
Id. at 364, 57 S.E.2d at 383; State v. Davis, 203 N.C. 316, 166
S.E. 292 (1932); Goodman v. Goodman, 201 N.C. 794, 161 S.E. 688
(1931).
Our Supreme Court in Harrell v. Harrell, 253 N.C. 758, 117
S.E.2d 728 (1961), held “where an interlocutory order is not
subject to appeal, the Superior Court need not stay proceedingspending dismissal of the appeal in Supreme Court.” Id. at 761, 1
17
S.E.2d at 730. In T&T Development Co. v. Southern Nat. Bank of
S.C., 125 N.C. App. 600, 603, 481 S.E.2d 347, 348 (1997),
plaintiffs appealed the denial of a motion in limine. Id. The
trial court proceeded with trial and plaintiffs refused to put on
any evidence. This Court held: “In this case because plaintiffs
had no right to appeal the granting of the motion in limine, the
trial court was not deprived of jurisdiction and did not err in
calling the case for trial and dismissing it when plaintiffs failed
to offer any evidence. See N.C.G.S. § 1A-1, Rule 41(b) (1990)
(allowing dismissal of action for failure to prosecute).” T&T
Development, 125 N.C. App. at 603, 481 S.E.2d. at 348.
Although both of these cases were heard by this Court 14 May
2001, Dick Keffer's notice of appeal was filed 7 January 2000 and
the record was settled by 14 February 2000. Centura's notice of
appeal was filed 12 May 2000 and the record was settled by 7 July
2000. These appeals were heard together because of factual
similarities. Since Dick Keffer had no right of immediate appeal
regarding the discovery order, there was no stay of proceedings.
Veazey, 231 N.C. at 364, 57 S.E.2d at 383. Thus, on this record we
hold that the trial court retained jurisdiction over all matters
relating to Iredell County No. 99 CVS 911.
B. Financial Privacy Act
[2]Centura next argues that interrogatories #10 and #11 and
request for production of documents #5 are in violation of theFinancial Privacy Act, Chapter 53 of the General Statutes. Thus,
although this appeal is interlocutory, Centura argues that it has
asserted a substantial right, which if not immediately addressed
will work irreparable injury. J & B Slurry Seal Co. v. Mid-South
Aviation, Inc., 88 N.C. App. 1, 5, 362 S.E.2d 812, 815 (1987).
While certainly if the Financial Privacy Act was implicated here,
it would raise a substantial right; we disagree that the act covers
this discovery request.
It is the stated policy of the Financial Privacy Act “that
financial records should be treated as confidential and that no
financial institution may provide to any government authority and
no government authority may have access to any financial records
except in accordance with the provisions of this Chapter.” G.S.
53B-3 (Reg. Sess., 1986). The statute further defines a
“government authority” as “an agency or department of the State or
of any of its political subdivisions, including any officer,
employee, or agent thereof.” G.S. 53B-2(4). The statute denotes
the situations under which a government authority may access a
customer's financial record held by a financial institution. There
is a “catchall provision” which has specific mandatory service
requirements that are delineated in G.S. 53B-5. Centura argues
that in order for the Superior Court to order production of these
interrogatories, the Superior Court must ensure that the service
requirements of G.S. 53B-5 have been met. We disagree.
The plaintiff made this discovery request pursuant to N.C.R.
Civ. P. 33 and 34. That Centura objected and the Superior Court
compelled discovery pursuant to a motion made by plaintiff does notsomehow transform the plaintiff's discovery request into a request
by a government authority. Discovery rules “should be liberally
construed in order to accomplish the important goal of
'facilitat[ing] 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.'” Williams v. N.C. Dept. of Correction,
120 N.C. App. 356, 359, 462 S.E.2d 545, 547 (1995); Telegraph Co.
v. Griffin, 39 N.C. App. 721, 726, 251 S.E.2d 885, 888 (1979). To
hold that the Financial Privacy Act applies to discovery requests
made by private parties in the midst of litigation would severely
limit the application of available discovery methods. Financial
institutions could use the act inappropriately as a sword to
frustrate any litigant's attempt to hold the institution liable for
its actions, rather than as a shield to protect customers from
unwarranted government intrusion. The General Assembly, when
enacting the Financial Privacy Act, did not intend to relieve
financial institutions from accountability for their actions by
permitting the institutions to refuse to participate in discovery
in litigation.
"[W]here a literal interpretation of the language of a statute
will lead to absurd results, or contravene the manifest purpose of
the Legislature, as otherwise expressed, the reason and purpose of
the law shall control and the strict letter thereof shall be
disregarded." Petty v. Owen, 140 N.C. App. 494, 499, 537 S.E.2d
216, 219 (2000); Mazda Motors v. Southwestern Motors, 296 N.C. 357,361, 250 S.E.2d 250, 253 (1979). Interpretations that would crea
te
a conflict between two or more statutes are to be avoided, and
statutes should be reconciled with each other whenever possible.
Clark v. ITT Grinnell Industrial Piping, Inc., 141 N.C. App. 417,
426, 539 S.E.2d 369, 375 (2000); Meyer v. Walls, 122 N.C. App. 507,
512, 471 S.E.2d 422, 427 (1996). Accordingly, we hold that
although the Superior Court is, in a general sense, an agency of
the State, the General Assembly did not intend for financial
institutions to be able to utilize the Financial Privacy Act to
shield themselves from private rights of action and court orders.
Otherwise, financial institutions could regularly refuse to comply
with litigation-related discovery requests from private entities,
force litigants to resort to motions to compel and then be shielded
from production by their interpretation of the stringent
requirements of G.S. 53B-5.
C. Work Product
[3]Centura also excepted to the trial court's order that any
factual work product created by Centura be disclosed to the
plaintiff pursuant to interrogatory #16. In Evans v. USAA, 142
N.C. App. , 541 S.E.2d 782, disc. rev. denied, 353 N.C. 371,
S.E.2d (2001), this Court addressed work product stating:
The protection given to matters prepared in anticipation
of trial, or "work product," is not a privilege, but a
"qualified immunity." Willis v. Power Co., 291 N.C. 19,
35, 229 S.E.2d 191, 201 (1976). "The protection is
allowed not only [for] materials prepared after the other
party has secured an attorney, but those prepared under
circumstances in which a reasonable person might
anticipate a possibility of litigation." Id. If a
document is created in anticipation of litigation, the
party seeking discovery may access the document only bydemonstrating a "substantial need" for the document and
"undue hardship" in obtaining its substantial equivalent
by other means. N.C. Gen. Stat. § 1A-1, Rule 26(b) (3).
Materials that are prepared in the ordinary course of
business, however, are not protected by the work product
immunity. Willis, 291 N.C. at 35, 229 S.E.2d at 201.
Furthermore, work product containing the "mental
impressions, conclusions, opinions, or legal theories of
an attorney or other representative of a party concerning
the litigation in which the material is sought" is not
discoverable. N.C. Gen. Stat. § 1A-1, Rule 26(b) (3);
National Union Fire Ins. v. Murray Sheet Metal, 967 F.2d
980, 983-84 (4th Cir. 1992).
Id. at , 541 S.E.2d at 788-89. At the hearing, plaintiff's
counsel presented his affidavit stating that he was in substantial
need of the information requested and that he had no other means of
obtaining the information. Centura argues that a “bare bones”
affidavit which espouses the correct standard but is without detail
is not sufficient to sustain the trial court's holding.
The trial court found as a fact that “plaintiff has adequately
demonstrated that he has a substantial need of this information to
prepare his case. The Court further concludes that Plaintiff is
unable to obtain this information from any other source, thus he
has met the hardship requirement of obtaining work product
information.” The trial court's order was not based solely on
this affidavit. The trial court stated that its order was based on
“pleadings, memoranda, affidavits and arguments of counsel.” As
the oral arguments of counsel are not in the record on appeal, we
are unable to review the showing of substantial need and undue
hardship made by the plaintiff. It is “well established that
orders regarding discovery matters are within the discretion of the
trial court and will not be upset on appeal absent a showing of
abuse of that discretion.” Evans, 142 N.C. App. at , 541 S.E.2dat 788; Hudson v. Hudson, 34 N.C. App. 144, 145
, 237 S.E.2d 479,
480 (1977).
We note that the trial court ordered that this information be
presented under a protective order. Further, the court ordered
that any information that Centura believed to contain opinion work
product may be submitted first to the trial court for an in camera
review. Finally the court ordered that prior to the use of any
information gleaned, in any hearing of this case, that information
must be disclosed to Centura's counsel and any party affected; and
they must be allowed an opportunity to be heard. Since the trial
court put stringent safeguards in place to protect against abuse
and discovery orders are within the trial court's discretion, on
this record, we hold that the trial court did not err in compelling
discovery of Centura's factual work product. The defendant's
appeal is dismissed in part. The trial court's order is affirmed
in part.
Accordingly the defendant's appeal is
Dismissed in part, affirmed in part, and remanded.
Judges McGEE and TYSON concur.
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