Shellhorn v. Brad Ragan, Inc.

248 S.E.2d 103 (1978)

38 N.C. App. 310

Willis Bert SHELLHORN v. BRAD RAGAN, INC., Bradley E. Ragan, Robert H. Buchanan and Homer L. Huskins.

No. 7719SC1049.

Court of Appeals of North Carolina.

October 17, 1978.

Certiorari Denied November 6, 1978.

*106 Hudson, Petree, Stockton, Stockton & Robinson by Norwood Robinson and F. Joseph Treacy, Jr., Winston-Salem, for plaintiff-appellee.

Adams, Kleemeier, Hagan, Hannah & Fouts by Daniel W. Fouts, Greensboro, for defendant-appellant Brad Ragan, Inc.

Manning, Fulton & Skinner by Howard E. Manning, Raleigh, for defendant-appellant Bradley E. Ragan.

Jordan, Wright, Nichols, Caffrey & Hill by Charles E. Nichols, Greensboro, for defendant-appellant Robert H. Buchanan.

Brinkley, Walser, McGirt & Miller by Walter F. Brinkley, Lexington, for defendant-appellant Homer L. Huskins.

Certiorari Denied by Supreme Court November 6, 1978.

HARRY C. MARTIN, Judge.

Plaintiff moves to dismiss the appeal. Although this Court denied petition for certiorari on 8 December 1977, we now treat the appeal as a petition for review by way of certiorari. The petition is granted. The plaintiff's motion to dismiss the appeal is denied.

Defendants' first assignment of error is to the granting of plaintiff's discovery motion to produce documents, challenging the court's findings of fact and conclusions of law: "[T]he documents requested by plaintiff are relevant to the first five Claims for Relief, in that such documents appear to be reasonably calculated to lead to the discovery of admissible evidence as to the first five Claims for Relief." We must align the underlying claims for relief with the requested documents for discovery to determine if the documents are within the scope of discovery. Willis v. Power Co., 291 N.C. 19, 229 S.E.2d 191 (1976). The North Carolina Rules of Civil Procedure define the scope of discovery:

(b) Scope of Discovery. Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows: (1) In General.Parties may obtain discovery regarding any matter not privileged which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence nor is it ground for objection that the examining party has knowledge of the information as to which discovery is sought.

N.C.Gen.Stat. 1A-1, Rule 26(b) (1969). The relevancy test for discovery is not the same as the relevancy test for admissibility into evidence. To be relevant for purposes of discovery, the information need only be "reasonably calculated" to lead to the discovery of admissible evidence. Relevant matter that is privileged is not discoverable unless the interests of justice outweigh the protected privilege. A determination that particular information is relevant for discovery is not conclusive of its admissibility as relevant evidence at trial. 4 Moore's Federal Practice ¶¶ 26.56[1] and 26.56[4] (2d. ed. 1976).

Defendants appeal from the discovery order to produce documents based on four categories of the individual requests. *107 The first category involves requests relating to alleged wrongful acts directed at third persons. Requests Nos. 1-3, 4(c)-4(f), 22-32, 35-39, 45-50, and 52-77. Defendants contend the alleged guilt of wrongful acts by the defendants directed at third parties, specifically matters related to securities fraud, tax evasion, commercial bribery, and improper billing, are not within the elements necessary for plaintiff to prove his claims. The alleged illegal acts directed at third parties are relevant for discovery. The very heart of this lawsuit is related to the alleged illegal acts. Plaintiff maintains that his knowledge and awareness of the alleged illegal acts resulted in the termination of his employment. Defendants have asserted in defense that plaintiff's employment was terminated because he failed to properly and competently discharge his duties of employment and committed acts detrimental to the interests of BRI. The reasons for the termination of plaintiff's employment are directly in issue, therefore the alleged illegal acts to third persons are relevant. The scope of discovery is not limited to matters relevant to claims for relief but also includes matters relevant to defenses. The Court finds that the production of these documents will not be unreasonably burdensome. Defendants' objections to these requests are overruled, except No. 57 considered below.

The second category involves requests relating to the employment of persons who are not parties to this action. Requests Nos. 4(a)-4(b), 5, 6-10, 11, 12, 13-16, 21, 62, 65, and 72. Defendants contend that documents relating to the employment of others by BRI are irrelevant because the issue in this case is the employment of plaintiff. Plaintiff contends that this information is relevant either because the individuals were participants or they "have evidence as to the nature and extent of the alleged scheme." We agree with appellee that these items are relevant for discovery and defendants' objections to these requests are overruled.

The third category involves requests relating to documents remote in time from the events giving rise to Shellhorn's claims. Defendants contend that plaintiff's request for production of documents that came into existence between 1 January 1966 and 1 January 1974 is only of marginal relevance to the matters surrounding plaintiff's alleged employment contract that began in April 1974. The record indicates that plaintiff was employed by BRI from 1966 to 1972. In 1972, plaintiff was discharged from his employment with BRI. The discharges in 1972 and in 1974 were allegedly on the same grounds.

In an ordinary case, discovery as to matters occurring outside the period of limitations or at some other time not relevant to the case may be denied, but where a continuing conspiracy, fraud, or other wrong is alleged, discovery may be had regarding acts prior to the period upon which the action is based.

4 Moore's Federal Practice ¶ 26.56[1], at 26-126 (2d. ed. 1976). Although plaintiff makes no claim with respect to the prior employment, we hold that the requested documents are not remote in time from the events of the plaintiff's present claim.

The fourth category involves requests which defendants contend are overly broad and indefinite. Requests Nos. 32, 33, 34, 40-43, 47, 49, 50, 51, 56-60, 72, and 75. Plaintiff's Request No. 51 for "[a]ll records, whether by tape, wire, videotape, sound movie, or other electronic or mechanical means and transcripts thereof of any conversation whether conducted by telephone or otherse [sic] which record the words of any person who now is or has been in the past an employee of BRI" and Request No. 57 for "[a]ll documents related to any civil or criminal actions, whether threatened, pending, or closed in which the defendants have been or may be named a party or parties thereto" are overly broad and indefinite. Defendants' objections to Requests Nos. 51 and 57 are sustained. Defendants' objections to the remaining requests in the fourth category are overruled.

Defendants' second assignment of error is the trial court's denial of their motion for judgment on the pleadings pursuant *108 to Rule 12(c). N.C.Gen.Stat. 1A-1, Rule 12(c) (1969). Defendants must show that no material factual issues exist and that they are clearly entitled to judgment. This is a strict standard. "The trial court is required to view the facts and permissible inferences in the light most favorable to the nonmoving party. All well pleaded factual allegations in the nonmoving party's pleadings are taken as true and all contravening assertions in the movant's pleadings are taken as false." Ragsdale v. Kennedy, 286 N.C. 130, 137, 209 S.E.2d 494, 499 (1974). Defendants' motion is based on an alleged release executed by plaintiff to each and all claims against the defendants. The plaintiff's complaint presents questions as to the validity of the alleged release and the circumstances giving rise to its execution. Taking plaintiff's assertion in the light most favorable to him, there are contravening issues of fact. Defendants' motion for judgment on the pleadings was properly denied.

Defendants' third assignment of error is the trial court's denial of their motion to strike pursuant to Rule 12(f). N.C.Gen. Stat. 1A-1, Rule 12(f). This motion was denied in part, from which defendants appeal. Matter should not be stricken unless it has no possible bearing upon the litigation. If there is any question as to whether an issue may arise, the motion should be denied. 2A Moore's Federal Practice ¶ 12.21, at 2429 (2d. ed. 1976). We affirm the trial court's order on the motion to strike.

Modified and affirmed.

BROCK, C. J., and CLARK, J., concur.