United States District Court, E.D. North Carolina, Southern Division
B. Jones, Jr. United States Magistrate Judge
Bennett Brothers Yachts, Inc. ("Defendant") moves
the court to compel Plaintiffs Nicholas and Susan Weare
("Plaintiffs") to supplement their responses to
Defendant's First Set of Interrogatories and First
Request for Production of Documents pursuant to Fed.R.Civ.P.
26(e). [DE-35]. Plaintiffs oppose the motion. [DE-37]. The
issues have been fully briefed, and the motion is ripe for
decision. For the reasons stated below, Defendant's
motion is allowed.
action arises out of a brokered agreement concerning the sale
of a boat. Compl. [DE-1] ¶ 4. Defendant is engaged in
yacht brokerage, and it represented Tracy and Gregory Leonard
("the Leonards") in the planned purchase of a yacht
from Plaintiffs. Answer [DE-13] at 1. In January 2017,
Defendant contacted Plaintiffs' broker, Oyster Brokerage
U.S.A. ("Oyster") and informed it that the Leonards
were interested in purchasing Plaintiffs' yacht. Compl.
[DE-1] ¶ 5. In March 2017, Plaintiffs and the Leonards
agreed that the Leonards would purchase the yacht for $485,
000. Id. ¶ 12. On April 6, 2017, the Leonards
deposited the sale price into Defendant's escrow account
for a closing scheduled for April 7, 2017. Id.
¶¶ 19, 23. However, before the money was wired to
Plaintiffs, cyber thieves gained access to Defendant's
computer system and wired the money elsewhere. Id.
¶ 32. The thieves have not been identified, and the
money remains lost. Id. ¶ 33. Plaintiffs allege
that Defendant breached a fiduciary duty, acted negligently,
breached a contract, and that Defendant was unjustly
enriched. Id. ¶¶ 38-63. In its answer,
Defendant has denied that it owed a fiduciary duty to
Plaintiffs, and it has asserted that Oyster, not Defendant,
acted negligently. Answer [DE-13] at 1.
March 19, 2018, Defendant served Plaintiffs with its first
set of discovery requests. Def.'s Mem. [DE-36] at 3.
Plaintiffs responded on April 16, 2018. Id.
Plaintiffs supplemented their responses pursuant to Rule
26(e) on June 21, 2018 and September 21, 2018. Pis.'
Resp. [DE-37] at 3. On October 31, 2018, Plaintiffs disclosed
the report of their yacht brokerage expert, Jeffrey Cox
("Mr. Cox"), pursuant to Rule 26(a)(2).
Id. at 4. In the report, Mr. Cox opined as to
Defendant's negligence and did not render any opinion as
to the negligence of Oyster. Def.'s Mem. [DE-36] at 2.
Defendant objected to the expert report on November 18, 2018
on the grounds that it did not include an opinion regarding
the negligence of Oyster. Id. At that time,
Plaintiffs' counsel assured Defendant's counsel that
Mr. Cox would be offering an opinion only as to
Defendant's negligence. Id. Defendant did not
depose Mr. Cox. Id. at 4.
are currently engaged in an arbitration proceeding with
Oyster pending before the American Arbitration Association
concerning the same circumstances giving rise to the instant
action. Def.'s Mem. [DE-36] at 2. Although Defendant is
not a party to the arbitration proceeding, the parties in the
arbitration proceeding and the instant case have agreed to
conduct discovery jointly, including joint depositions, and
participating in a joint mediation of both matters.
Id. It does not appear to the court that discovery
is exclusive to the proceeding in which it has been produced.
In fact, Plaintiffs have previously supplemented their
discovery responses in the instant case with information that
Oyster provided to Plaintiffs in the arbitration proceeding.
Pis.' Resp. [DE-37] at 3. On March 1, 2019, Oyster's
counsel informed Defendant's counsel that Mr. Cox had
rendered an opinion on Oyster's negligence in the
arbitration proceeding. [DE-36-3] at 3. Subsequently,
Defendant's counsel requested Mr. Cox's report from
Plaintiffs' counsel. Id. Plaintiffs' counsel
responded that Plaintiffs have sufficiently produced and
supplemented all discoverable material. Id.
According to Defendant's motion, Plaintiffs have refused
to provide Mr. Cox's report from the arbitration
proceeding. Def.'s Mot. [DE-35] at 1.
Interrogatories Six and Eight to Plaintiffs are the subject
of the parties' dispute:
6. Identify all written communication sent on your behalf to
any third-party, not including your legal counsel, regarding
the facts or circumstances giving rise to your claims in this
8. Identify any individual you believe violated any duties to
you during the course of the subject transaction. Include in
your response why you believe such individual violated duties
Def.'s Mem. Ex. 2 [DE-36-2] at 10; [DE-37-2] at 8.
Additionally, Defendant's Requests for Production of
Documents ("RFP") to Plaintiffs One and Six are
1. All documents identified in the foregoing Interrogatories.
6. All writing communication [sic] between you and Oyster
Yachts, USA, or its affiliates, from January 1, 2017 to the
[DE-37-2] at 1-2.
contends that Plaintiffs are obligated to supplement their
responses to those discovery requests pursuant to Rule 26(e)
and produce Cox's expert report produced in the
arbitration proceeding. Def.'s Mem. [DE-36] at 5.
Plaintiffs contend that Defendant is attempting to gain an
unfair tactical advantage from Plaintiffs' arbitration
case, Plaintiffs have adequately responded to all discovery
requests, and Plaintiffs have satisfied the expert disclosure
requirements of Rule ...