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Myers v. Myers

Court of Appeals of North Carolina

January 7, 2020

James B. Myers, Jr., Plaintiff,
Charlotte K. Myers, Defendant.

          Heard in the Court of Appeals 22 May 2019.

          Appeal by defendant from order entered 4 April 2018 by Judge Jena P. Culler in District Court, Mecklenburg County. No. 15 CVD 20688

          James, McElroy & Diehl, P.A., by Christopher T. Hood, Jonathan D. Feit and Haley E. White, for plaintiff-appellee.

          Hamilton Stephens Steele Martin, PLLC, by Amy E. Simpson, for defendant-appellant.

          STROUD, Judge.

         Defendant-Wife appeals from the trial court's Equitable Distribution Judgment and Alimony Order. Wife argues the trial court erred by excluding her expert witness's testimony regarding potential tax consequences of an alimony award, by failing to make sufficient findings to support the amount of prospective alimony awarded, and by failing to award retroactive alimony. Because the trial court erred in its legal determination that North Carolina General Statute § 1A-1, Rule 26(b)(4)(a)(1) required exclusion of Wife's expert witness, the trial court failed to exercise its discretion to decide whether to admit her testimony and we remand for further consideration. Because the trial court did not make sufficient findings to support the amount of alimony awarded or explain why it denied Wife's claim for retroactive alimony, we reverse and remand the order as to the amount of the prospective alimony and as to the denial of retroactive alimony.

         I. Background

         Husband and Wife were married in 1994 and separated on 26 July 2014. Two children were born to the marriage, in 2005 and 2007. After the first child was born, Wife stopped working outside the home to care for the children or worked only part-time, and Husband was the primary wage earner. On 6 November 2015, Husband filed a complaint with claims for child custody, child support, equitable distribution, and absolute divorce. On 21 January 2016, Wife filed her answer and counterclaims for child custody, child support, post-separation support, alimony, equitable distribution, and attorney fees. On 2 March 2016, the trial court entered a judgment of absolute divorce, reserving all other pending claims. On 22 March 2016, Husband filed his affirmative defenses and reply, alleging marital misconduct by Wife as a defense to alimony. On 23 January 2017, with leave of court, Wife filed her amended answer and counterclaims, adding allegations of marital misconduct by Husband. The parties engaged in discovery regarding all pending claims.

         About a week before trial on the equitable distribution and alimony claims, the parties entered a Consent Order regarding permanent child custody and child support. Under the Consent Order, Husband was required to pay child support of $1, 700.00 per month, starting on 1 September 2017, and 75% of the children's uninsured medical expenses and certain extracurricular activities. The Consent Order did not address how child support was calculated and did not mention retroactive or past prospective child support.

         The trial court held a hearing on equitable distribution and alimony on 13 and 14 September 2017 and entered its order on these claims on 4 April 2018. The trial court granted an unequal distribution of the marital property, granting Wife 52% of the net marital estate. In making the unequal distribution, the trial court specifically considered several factors under North Carolina General Statute § 50-20(c), including that Husband's income "greatly exceeded that of" Wife during the marriage and his "career growth potential is also far greater than" hers; Husband's higher expectations of pension or retirement benefits; Wife's contributions as a homemaker and primary parent; and Wife's support for Husband in advancing his career. Neither party challenges the equitable distribution provisions of the order on appeal.

         On the alimony claim, the trial court made extensive findings of fact addressing Husband's allegations of marital misconduct by Wife early in their marriage but determined that he was aware of the incident and condoned it. Although Wife presented evidence regarding allegations of illicit sexual misconduct by Husband in support of her alimony claim, the trial court made no findings on this issue. The trial court also made detailed findings of fact regarding the parties' incomes and expenses and required Husband to make monthly alimony payments of $1, 200.00. We will address the trial court's findings regarding alimony in more detail below. Wife timely appealed from the trial court's order.

         II. Exclusion of Expert Testimony

         A. Standard of Review

         Wife's first issue arises from the trial court's exclusion of testimony of her expert witness based upon her failure to disclose the identity of the witness sufficiently in advance of trial. As a general rule, we review the trial court's rulings regarding discovery for abuse of discretion. See Miller v. Forsyth Mem'l Hosp., Inc., 174 N.C.App. 619, 620, 625 S.E.2d 115, 116 (2005) ("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. In addition, the appellant must show not only that the trial court erred, but that prejudice resulted from that error. This Court will not presume prejudice." (citations and quotation marks omitted)). "An abuse of discretion is a decision manifestly unsupported by reason or one so arbitrary that it could not have been the result of a reasoned decision." Briley v. Farabow, 348 N.C. 537, 547, 501 S.E.2d 649, 656 (1998). However, if the trial court makes a discretionary ruling based upon a misapprehension of the applicable law, this is also an abuse of discretion. See State v. Rhodes, 366 N.C. 532, 536, 743 S.E.2d 37, 39 (2013) ("[A]n abuse-of-discretion standard does not mean a mistake of law is beyond appellate correction. A [trial] court by definition abuses its discretion when it makes an error of law." (alterations in original) (quoting Koon v. United States, 518 U.S. 81, 100, 116 S.Ct. 2035, 2047) (1996))). And if the trial court's ruling depends upon interpretation of a statute, we review the ruling de novo. Moore v. Proper, 366 N.C. 25, 30, 726 S.E.2d 812, 817 (2012) ("[W]hen a trial court's determination relies on statutory interpretation, our review is de novo because those matters of statutory interpretation necessarily present questions of law."). Where the language of a statute is clear, we need not construe the statute and must simply apply the plain meaning of the statute. See Burgess v. Your House of Raleigh, 326 N.C. 205, 209, 388 S.E.2d 134, 136 (1990). If the statute is ambiguous or unclear, we must consider the purpose of the statute and intent of the legislature as expressed in the statute.

When the plain language of a statute proves unrevealing, a court may look to other indicia of legislative will, including: the purposes appearing from the statute taken as a whole, the phraseology, the words ordinary or technical, the law as it prevailed before the statute, the mischief to be remedied, the remedy, the end to be accomplished, statutes in pari materia, the preamble, the title, and other like means. The intent of the General Assembly may also be gleaned from legislative history. Likewise, later statutory amendments provide useful evidence of the legislative intent guiding the prior version of the statute. Statutory provisions must be read in context: Parts of the same statute dealing with the same subject matter must be considered and interpreted as a whole. Statutes dealing with the same subject matter must be construed in pari materia, as together constituting one law, and harmonized to give effect to each.

Insulation Sys., Inc. v. Fisher, 197 N.C.App. 386, 390, 678 S.E.2d 357, 360 (2009) (quoting In re Proposed Assessments v. Jefferson-Pilot Life Ins. Co., 161 N.C.App. 558, 560, 589 S.E.2d 179, 181 (2003)). Where, as in this case, the Legislature has recently amended a statute, we also "presume that the legislature acted with full knowledge of prior and existing law and its construction by the courts." State ex rel. Cobey v. Simpson, 333 N.C. 81, 90, 423 S.E.2d 759, 763 (1992) (citing Lumber Co. v. Trading Co., 163 N.C. 314, 317, 79 S.E. 627, 628-29 (1913)).

         B. Motion to Exclude Expert Testimony

         Wife contends the trial court erred by striking testimony and evidence from her expert witness, Victoria Coble. Wife attempted to present evidence regarding the tax consequences of alimony, tax rates, "cash flow issues and hypothetical rates of return on cash investments." Wife hired Ms. Coble a week prior to the trial and did not disclose her as an expert witness until the afternoon of 12 September 2017, the day before the trial. Husband moved to exclude Ms. Coble's testimony at the start of the trial, but the trial court initially denied Husband's motion, ordered that all of Ms. Coble's materials be produced to Husband in the courtroom and directed that she could be called to testify on the second day of trial. On the second day, Husband renewed his objection to Ms. Coble's testimony and made additional arguments to the trial court based upon the 2015 amendments to Rule 26 of the North Carolina Rules of Civil Procedure, including a blog post on the issue published by Professor Ann Anderson of the University of North Carolina School of Government (hereinafter School of Government).

         Although the parties had engaged in discovery, Husband had done no discovery requesting disclosure of expert witnesses. There was no discovery conference or pretrial conference addressing evidence or witnesses in the alimony portion of the case; the only pretrial order addressed the equitable distribution claim, and that order did not mention potential witnesses, including any expert witnesses. Wife argued that under North Carolina General Statute § 1A-1, Rule 26(a) and (e), Husband had not requested her to identify any expert witnesses and she thus had no duty to supplement any prior responses. In addition, we note that the Mecklenburg County Local Rules do not require disclosure of expert witnesses and do not require a pretrial order in an alimony claim. Both parties had timely produced financial affidavits and income information as required by the Local Rules.

         Based upon the blog post, the trial court noted in open court that "Professor Anderson seem[s] to have a different opinion about how to interpret [Amended Rule 26]" than the trial court had the previous day. The trial court allowed Wife to proffer Ms. Coble's testimony in full but took the matter under advisement and contacted Professor Anderson by email. The trial court later disclosed Professor Anderson's response to the parties and allowed them to respond to this information. Ultimately, the trial court changed its ruling and determined Wife was required to disclose the identity of the expert witness under North Carolina General Statute § 1A-1, Rule 26(b)(4)(a)(1) in advance of trial, even with no interrogatories or other discovery by Husband. Although Rule 26(b)(4)(a)(1) did not set a particular time for identification of experts, the trial court determined Wife had failed to give sufficient or fair notice as "24 hours in advance would pretty much [be] under anyone's interpretation, not reasonably in advance" of the trial and excluded the testimony.

         C. Trial Court's Communication with Disinterested Expert

         The ruling in question on appeal depends upon the interpretation of North Carolina General Statute § 1A-1, Rule 26, and particularly Rule 26(b)(4)(1)(a). Upon Husband's request, the trial court considered a blog post by Professor Anderson published on 4 September 2015; it states in part as follows:

The General Assembly has amended the rule of procedure in civil cases for discovery of information about another party's expert witness. North Rule of Civil Procedure 26(b)(4) has largely been unchanged since 1975. With the amendments made by House Bill 376, S.L. 2015-153, the rule updates the methods of disclosing and deposing experts and implements some explicit work-product-type protections. The Rule now looks more like the corresponding provisions in Federal Rule of Civil Procedure 26 (after that Rule's own significant round of changes in 2010). The changes to North Carolina Rule 26(b)(4) apply to actions commenced on or after October 1, 2015. The rule now provides the following:
Expert witness disclosure. A party is now required to disclose the identity of an expert witness that it may use at trial (that is, a witness that may be used to "present evidence under Rule 702, Rule 703, or Rule 705 of the North Carolina Rules of Evidence"). It appears that the other party is no longer required to first submit formal interrogatories requesting the disclosure, but, as discussed below, that party has the option of doing so.
Written report provision. If the expert is one "retained or specifically employed to provide expert testimony in the case or one whose duties as the party's employee regularly involve giving expert testimony," the disclosing party has the option of submitting a written report prepared by the expert that includes: a complete statement of the witness's opinions and the bases and reasons for them; facts the witness considered in forming the opinions; exhibits that will be used to summarize or support them; the witness's qualifications and a list of certain publications; certain prior expert testimony by the witness; and a statement of the expert's compensation. (This report is required under the Federal rule.) In the absence of this report, the other party may discover through interrogatories the subject matter of an expert's expected testimony; the substance of the facts and opinions to which the expert is expected to testify; and a summary of the grounds for each opinion.
Time frames for disclosure. The rule sets default time frames for submitting written reports of experts or interrogatory responses: 90 days before trial or, for rebuttals, 30 days after the opposing party's disclosure. These requirements may-and surely in many cases will be-altered by stipulation or court order.

         Ann M. Anderson, "North Carolina's Expert Witness Discovery Rule - Changes and Clarifications," School of Gov't (4 Sept. 2015), carolinas-expert-witness-discovery-rule-changes-and-clarifications/.

         This Court observes that the School of Government provides continuing education for many public officials in North Carolina, including District Court judges, Superior Court judges, the Court of Appeals, and the Supreme Court, as well as many other local and state elected and appointed officials. As noted on the School of Government's website,

As the largest university-based local government training, advisory, and research organization in the United States, the School of Government offers up to 200 courses, webinars, and specialized conferences for more than 12, 000 public officials each year.
Faculty members respond to thousands of phone calls and e-mail messages each year on routine and urgent matters and also engage in long-term advising projects for local governing boards, legislative committees, and statewide commissions.
In addition, faculty members annually publish approximately 50 books, manuals, reports, articles, bulletins, and other print and online content related to state and local government. Each day that the General Assembly is in session, the School produces Daily Bulletin Online, which reports on the day's activities for members of the legislature and others who need to follow the course of legislation.

         School of Government, (last visited 5 Dec. 2019).

         Although a trial judge must always carefully consider any communications with a disinterested expert regarding a question arising in a trial, the trial court fully advised the parties of the communication in open court and gave them an opportunity to review the information and respond to it. This procedure is not required by any statute or rule and is not possible or practicable in every situation. The North Carolina Code of Judicial Conduct allows judges to consult "a disinterested expert on the law applicable to a proceeding before the judge," but it does not set out any parameters for the consultation:

A judge should accord to every person who is legally interested in a proceeding, or the person's lawyer, full right to be heard according to law, and, except as authorized by law, neither knowingly initiate nor knowingly consider ex parte or other communications concerning a pending proceeding. A judge, however, may obtain the advice of a disinterested expert on the law applicable to a proceeding before the judge.

         North Carolina Code of Judicial Conduct Canon 3(A)(4).[1] Here, the trial court's disclosure of the communication to the parties eliminated any possibility of confusion or unfairness to the parties and provided a clear basis for appellate review, since the communication is addressed in the transcript.

         D. Analysis of Rule 26(b)(4)(a)(1):

         Under North Carolina General Statute § 1A-1, Rule 26(b), each party is required to disclose the identity of expert witnesses it may use at trial:

(b) Discovery scope and limits.--Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows: . . . .
(4) Trial Preparation; Discovery of Experts. - Discovery of facts known and opinions held by experts, that are otherwise discoverable under the provisions of subdivision (1) of this subsection and acquired or developed in anticipation of litigation or for trial, may be obtained only as provided by this subdivision:
a. 1. In general. - In order to provide openness and avoid unfair tactical advantage in the presentation of a case at trial, a party must disclose to the other parties in accordance with this subdivision the identity of any witness it may use at trial to present evidence under Rule 702, Rule 703, or Rule 705 of the North Carolina Rules of Evidence.

          N.C. Gen. Stat. § 1A-1, Rule 26(b) (2017).

         This subsection of Rule 26 was substantially revised in an amendment adopted in 2015.[2] Before the amendment, it read:

1. A party may through interrogatories require any other party to identify each person whom the other party expects to call as an expert witness at trial, to state the subject matter on which the expert is expected to testify, and to state the substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion.
2. Upon motion, the court may order further discovery by other means, subject to such restrictions as to scope and such provisions, pursuant to sub-subdivision (b)(4)b. of this rule, concerning fees and expenses as the court may deem appropriate.

          N.C. Gen. Stat. § 1A-1, Rule 26(b)(4)(a) (2013) (emphasis added).

         Thus, before the 2015 Amendment, Rule 26(b)(4)(a)(1) provided that a party "may through interrogatories" require an opposing party to disclose expert witnesses[3]expected to testify at trial. Id. The 2015 Amendment to this subsection removed the language regarding interrogatories and states instead that a party "must disclose" expert witnesses.[4] See N.C. Gen. Stat. § 1A-1, Rule 26(b)(4)(a)(1) (2017).

         As Professor Anderson's blog post correctly noted, subsection (b)(4)(a)(1) which requires disclosure is now more similar to Federal Rule of Civil Procedure 26. In addition, other amendments to Rule 26 adopted at the same time also made North Carolina's Rule 26 more similar to its federal counterpart. But since North Carolina has not adopted many of the other related provisions of the Federal Rules, the similarity is somewhat superficial. Regarding the 2015 amendments to Rule 26, Shuford's North Carolina Civil Practice and Procedure notes that North Carolina Rule 26 and Federal Rule 26 both deal "with substantive aspects of discovery," but they are

fundamentally different in their respective approaches. Since 1993, when Federal Rule 26 was substantively rewritten, the discovery procedures were substantially changed to establish what amounts, through mandatory discovery requirements, to standing interrogatories and requests for disclosure and production. The matter must be produced no later than 14 days before a scheduled conference to formulate a joint written discovery plan. While the North Carolina Rule now lays out the framework for a discovery plan and conference to be creased, it is not mandatory unless one of the parties requests to have a discovery meeting.

         Alan D. Woodlief, Jr., Shuford North Carolina Civil Practice and Procedure § 26:28 (2018).

         Because the 2015 Amendments to Rule 26 incorporated the concept of required disclosure of expert witnesses but set no procedure or timing for the disclosure, Rule 26(b(4)(a)(1) is ambiguous. The trial court appreciated this ambiguity, noting, "I think the rule is clear as mud." We must therefore review the trial court's interpretation of the 2015 Amendment to Rule 26 de novo. See Moore v. Proper, 366 N.C. at 30, 726 S.E.2d at 817.

         In conducting de novo review of the 2015 Amendment to Rule 26(b)(4)(a)(1), we must first "determine whether [the] amendment is clarifying or altering." Ray v. N.C. Dep't of Transp., 366 N.C. 1, 9, 727 S.E.2d 675, 681 (2012). An "altering amendment" is intended to change the substance of the original statute, but a "clarifying amendment" is not intended to "change the substance of the law but instead [to give] further insight into the way in which the legislature intended the law to apply from its original enactment." Id. Even if the statutory language is plain, we consider the title of the act to assist in "ascertaining the intent of the legislature." Id. at 8, 727 S.E.2d at 681. The Bill which made these amendments is entitled, "An Act Amending the Rules of Civil Procedure to Modernize Discovery of Expert Witnesses and Clarifying Expert Witness Costs in Civil Actions." S.L. 2015-153 (H.B. 376) (original in all caps). "To determine whether the amendment clarifies the prior law or alters it requires a careful comparison of the original and amended statutes." Ray, 366 N.C. at 10, 727 S.E.2d at 682 (quoting Ferrell v. Dep't of Transp., 334 N.C. 650, 659, 435 S.E.2d 309, 315 (1993)). Considering the purpose of the amendment-"to modernize discovery of expert witnesses"-and the comparison of the original and amended statutes, the 2015 Amendment was an "altering amendment" which was intended to change the substance of Rule 26(b)(4)(a)(1).[5]

         In seeking to construe Rule 26(b)(4)(a)(1), we have also considered it in the context of Rule 26 in its entirety and Rule 37, which provides for enforcement and sanctions for violations of Rule 26. We have also compared North Carolina's Rule 26 to Federal Rule 26, as the amendments do make North Carolina's rule somewhat more similar to the federal rule. Most relevant to the issue presented here, the 2015 Amendment to North Carolina's Rule 26 did not incorporate several related provisions of Federal Rule 26 addressing how and when experts must be disclosed. Federal Rule 26(a)(1)(C) directs that certain required disclosures be made and sets out when "initial disclosures" must be provided. See Fed. R. Civ. P. 26(a)(1)(A) ("Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties[.]"). North Carolina's Rule 26-in contrast to the required initial disclosures in the Federal rules-still requires the parties to ask for discovery.[6]See N.C. Gen. Stat. § 1A-1, Rule 26(a). In addition, Federal Rule 26(a)(2)(B) also requires the parties to provide a written report from the expert witnesses identified, while in North Carolina providing a report is optional. Compare Fed. R. Civ. P. 26(a)(2)(B) with N.C. Gen. Stat. § 1A-1, Rule 26(b)(4)(a)(2). Federal Rule 26(f) requires, unless exempted, a conference regarding discovery and a discovery plan. Fed.R.Civ.P. 26(f). The analogous provisions in North Carolina's Rules are optional. N.C. Gen. Stat. ยง 1A-1, Rule 26(f). ...

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