Blanchard v. Britthaven, Inc.

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

NO. COA12-1286
NORTH CAROLINA COURT OF APPEALS

Filed: 18 February 2014

ANNE BLANCHARD, Executrix of the
Estate of Mary Lou Barthazon,
deceased,
Plaintiff,

v. Orange County
No. 09 CVS 1109
BRITTHAVEN, INC., and HILLCO,
LTD.,
Defendants.

Appeal by defendants from orders entered 12 October 2011

and 8 May 2012 by Judge Shannon R. Joseph in Orange County

Superior Court. Heard in the Court of Appeals 23 May 2013.

Henson & Fuerst, P.A., by Anne Duvoisin; Connor & Connor,
LLC, by Kenneth L. Connor; and Brian G. Brooks, Attorney at
Law, PLLC, by Brian G. Brooks, for plaintiff-appellee.

Hurley Law Office, by Michael C. Hurley and Katherine L.
Jones, for defendants-appellants.

GEER, Judge.

Defendants Britthaven, Inc. and Hillco, Ltd. appeal from

the trial court's order awarding sanctions to plaintiff Anne

Blanchard, Executrix of the Estate of Mary Lou Barthazon, and

the trial court's subsequent order setting the amount of fees
 -2-
and costs to be awarded as sanctions. Defendants primarily

argue that the trial court was divested of jurisdiction over

plaintiff's sanctions motion by various notices of appeal.

Defendants argue that the trial court lacked jurisdiction to

hear the sanctions motion, lacked jurisdiction to order

sanctions, and lacked jurisdiction to enter an order setting the

amount of fees and expenses to be awarded as sanctions.

After reviewing the issues encompassed by the sanctions

motion and the issues involved in the other appeals, we hold

that, under N.C. Gen. Stat. § 1-294 (2013), the trial court

retained jurisdiction to conduct the proceedings and enter the

orders. Because defendants' remaining arguments are either

unpersuasive or not properly raised on appeal, we affirm.

Facts

On 13 July 2009, plaintiff filed a wrongful death action

against defendants alleging negligence by defendants in

connection with their care for Ms. Barthazon at defendant

Britthaven's nursing home in Chapel Hill, North Carolina. A

more detailed description of the facts giving rise to

plaintiff's lawsuit is set forth in this Court's opinion

addressing plaintiff's appeal from the final judgment in

Blanchard v. Britthaven, Inc., ___ N.C. App. ___, ___ S.E.2d
 -3-
___, COA12-1366 (2013), filed contemporaneously with this

opinion.

On 18 June 2010, defendants filed a response to plaintiff's

first set of interrogatories and request for production of

documents. Plaintiff had requested, among other things,

production of "[a]ll balance sheets, statements of assets and

liabilities, federal and state income tax returns, and profit

and loss statements for the Defendants for the period starting

one year prior to the commencement of [Ms. Barthazon's]

residency [at Britthaven] through the present" (the "financial

documents"). Defendants objected to production of the financial

documents and moved for a protective order prohibiting their

discovery. On 13 July 2010, plaintiff filed a motion to compel

production of the financial documents.

On 6 August 2010, in opposition to plaintiff's motion to

compel, defendants filed an affidavit of Britthaven's Chief

Financial Officer, Raymond J. Baker. Mr. Baker's affidavit

stated that the financial documents sought by plaintiff were

"highly confidential and proprietary to [defendants] and, with

the exception of provisions of such confidential information to

their outside legal counsel, accountants, and lenders, these

documents are not disseminated to any persons and are kept in a

secure and confidential location."
 -4-
On 21 September 2010, plaintiff filed a second motion to

compel defendants to produce the financial documents. On 28

December 2010, plaintiff served defendants with notices of

deposition for Steven Farrar, the Chief Financial Officer of

Hillco, and Mr. Baker, with each notice requesting production of

"[a]ll Financial Statements" for defendants "and their

subsidiaries or affiliates for the years including 2004 through

2010."

On 3 January 2011, plaintiff filed a third motion to compel

production of the financial documents. On 12 January 2011,

defendants filed an objection to plaintiff's requests for

production in connection with the depositions of Mr. Farrar and

Mr. Baker and a motion to quash the requests. On 3 June 2011,

the trial court entered an order granting plaintiff's motion to

compel production of the financial documents, subject to a

previously entered protective order.

On 28 June 2011, defendants filed a notice of appeal from

the trial court's 3 June 2011 order and from an unrelated 17

June 2011 discovery order. On 29 June 2011, defendants filed an

amended notice of appeal, again appealing the 3 and 17 June 2011

discovery orders. On 6 July 2011, plaintiff filed a motion to

disregard defendants' notice of appeal.
 -5-
The transcript of a 6 July 2011 hearing on plaintiff's

motion to disregard defendants' notice of appeal indicates that

defendants had withheld production of the financial documents,

as well as items at issue in the 17 June 2011 discovery order.

Defendants confirmed at the hearing that they did not oppose

plaintiff's motion to the extent that it "ask[ed] . . . that the

Court retain jurisdiction and . . . ignore the notice of appeal

and proceed with the case as if no appeal had been taken."

The trial court informed plaintiff that she had a choice:

she could push back the trial date pending defendants' appeal --

giving her a chance to receive prior to trial the documents

ordered produced in the appealed orders -- or she could proceed

to trial on the set date without the discovery at issue. On 1

September 2011, the court entered an order granting plaintiff's

motion to disregard defendants' appeal. The order provided that

the motion was granted because "neither party sought a global

stay of the case pending interlocutory appeal," and "Plaintiff

elected to proceed to trial notwithstanding the appeal."

On 22 July 2011, plaintiff filed a motion for sanctions

pursuant to Rules 26 and 37 of the Rules of Civil Procedure,

"the Court's inherent authority," and Chapter 5A of the General

Statutes. Plaintiff alleged that statements in Mr. Baker's

affidavit concerning the financial documents were inaccurate or
 -6-
misleading since plaintiff had recently learned that defendants'

audited financial documents were filed annually pursuant to

Virginia regulations and were generally available as Virginia

public records. Plaintiff asserted that her expert, certified

public accountant Brad Rush, had obtained defendants' audited

consolidated financial statements for the years 2006 to 2010

through a Virginia public records request made on 24 June 2011.

Plaintiff also contended that statements in an affidavit by

defendants' in-house counsel, Erik Lindberg, were inaccurate or

misleading regarding electronic information maintained by

defendants, referred to as "Kronos" information. Finally,

plaintiffs argued that defendants improperly withheld discovery

by producing "data-less budgets" until the court re-ordered

production and complete budgets were produced. At a 16 August

2011 pretrial hearing, the court stated it would take

plaintiff's motion for sanctions under advisement.

On 23 September 2011, the jury returned a verdict in favor

of defendants. The court entered a final judgment on 12 October

2011, which provided that the court retained jurisdiction "for

the determination of taxable costs, and for the appropriate

sanctions against Defendants." Also on 12 October 2011, the

court entered an order granting plaintiff's motion for sanctions

pursuant to Rule 37 and the court's inherent authority.
 -7-
In the sanctions order, the court found that defendants

knew or should have known after reasonable inquiry and diligence

that the statement in Mr. Baker's affidavit concerning

dissemination of the financial documents was not correct.

Further, the misstatement related to a material issue: whether

the documents were confidential and proprietary and should not

be ordered produced. This finding was based in part on the fact

that financial documents were filed with the Virginia agency,

and the affidavit made no mention of filings with any

governmental authorities. The finding was further based on the

fact that there was no credible evidence that any reasonable

inquiry or due diligence was made before Mr. Baker's affidavit

was presented to the trial court or during the multiple

discovery motions and hearings relating to the financial

documents.

The court further found sanctions were proper based on the

statements Mr. Lindberg made in his affidavit regarding the

availability of the "Kronos" information for discovery. The

court found the relevant statements were not false, but "at a

minimum evince a materially incomplete inquiry into whether and

how the Kronos information could be obtained; or an incomplete

and somewhat misleading explanation of the situation."
 -8-
Finally, the court found sanctions were appropriate based

on defendants' production, in response to an order compelling

production, of a disc containing budget information that did not

show values in many fields where there should have been values.

At a hearing on the adequacy of the budget information,

defendants initially did not have an explanation for the

problem, despite being on notice of the issue. Defendants then

produced the complete budget information after intervention and

inquiry by the trial court. The court observed that discovery

mistakes should be remedied once brought to the attention of

counsel and before court intervention and that defendants'

conduct regarding the budgets showed a failure to reasonably and

adequately respond to plaintiff's discovery requests.

Based on its findings, the court ordered defendants to pay

the expenses, costs, and reasonable attorney's fees incurred by

plaintiff (1) to pursue production of the financial documents

ultimately obtained by the Virginia public records search, (2)

to compel production of the Kronos information that was

ultimately produced, (3) to compel and obtain production of the

budgets, and (4) to prepare for and pursue plaintiff's 22 July

2011 motion for sanctions. The trial court's 12 October 2011

order left for later determination the precise amount of fees

and expenses to be paid.
 -9-
On 14 October 2011, defendants filed a notice of appeal

from the sanctions order. On or about 13 January 2012, after

the trial court denied plaintiff's motion for a new trial,

plaintiff filed notice of appeal from the final judgment.

On 8 May 2012, the trial court entered an order addressing

the sanctions amount to be paid. The court found that the

proposed hourly rate of $475.00 for plaintiff's counsel, Anne

Duvoisin, was supported by Ms. Duvoisin's affidavits and

supporting affidavits and accepted that rate as reasonable. The

court found, however, that the proposed hourly rate of $475.00

for Camille Godwin, one of plaintiff's other attorneys, was not

sufficiently supported by Ms. Godwin's affidavit. The trial

court noted that Ms. Godwin appeared to serve in the same

capacity as defendants' associate counsel who, according to

defendants' submissions related to the award of monetary

sanctions, charged an hourly rate of $150.00. Based on Ms.

Godwin's role as associate counsel, the court applied the

$150.00 hourly rate for Ms. Godwin's time. Totaling attorney's

fees, expenses, and costs, the court ordered defendants to pay

the sum of $29,242.31. Defendants timely appealed the order

setting the award of fees and costs for sanctions.

On 13 July 2012, plaintiff filed a motion to dismiss the

appeal in COA12-664, the June 2011 appeal from the orders
 -10-
compelling production. On 20 November 2012, this Court entered

an order allowing plaintiff's motion to dismiss defendants'

appeal in COA12-664: "The motion filed in this cause on the

13th of July 2012 and designated 'Motion to Dismiss Appeal' is

allowed. Appellants' appeal from the two discovery orders is

now moot. Appellants' appeal from the sanctions order is

interlocutory, and the issues raised therein can be argued in

appellants' subsequent appeal, COA12-1286, which is now

pending." We now address defendants' appeal in COA12-1286.

I

Defendants first contend that, under N.C. Gen. Stat. § 1-

294, their appeal in COA12-664 from the 3 June 2011 order

compelling production of the financial documents divested the

trial court of jurisdiction over plaintiff's motion for

sanctions. N.C. Gen. Stat. § 1-294 provides in relevant part:

"When an appeal is perfected as provided by this Article it

stays all further proceedings in the court below upon the

judgment appealed from, or upon the matter embraced therein; but

the court below may proceed upon any other matter included in

the action and not affected by the judgment appealed from."

Pursuant to N.C. Gen. Stat. § 1-294, "[w]hen a party gives

notice of appeal from an appealable order, the trial court is

divested of jurisdiction and the related proceedings are stayed
 -11-
in the lower court." Dalenko v. Peden Gen. Contractors, Inc.,

197 N.C. App. 115, 121-22, 676 S.E.2d 625, 630 (2009) (per

curiam). However, when a litigant appeals from a non-appealable

interlocutory order, "a trial court is not divested of its

jurisdiction to determine a case on its merits" and "is not

required to stay the proceedings." Id. at 122, 676 S.E.2d at

630. In the latter case, the court "'may disregard the appeal

and proceed to try the action[.]'" Id. (quoting Velez v. Dick

Keffer Pontiac-GMC Truck, Inc., 144 N.C. App. 589, 591, 551

S.E.2d 873, 875 (2001)).

There is no dispute in this case that defendants' appeal

from the order compelling production of the financial records

was interlocutory. However, defendants contend that the

interlocutory order affected a substantial right, and,

therefore, the order was properly appealable. See Romig v.

Jefferson-Pilot Life Ins. Co., 132 N.C. App. 682, 685, 513

S.E.2d 598, 600 (1999) ("A party may . . . appeal an

interlocutory order 'if it affects a substantial right and will

work injury to the appellant[] if not corrected before final

judgment.'" (quoting Perry v. Cullipher, 69 N.C. App. 761, 762,

318 S.E.2d 354, 356 (1984))), aff'd per curiam, 351 N.C.

349, 524 S.E.2d 804 (2000).
 -12-
Defendants assert that the order affected a substantial

right since the financial documents were confidential,

proprietary documents and, if defendants had complied with the

order compelling production, "the damage from th[at] disclosure

could not be undone." Defendants further assert that the order

affected a substantial right because some of the financial

documents -- tax returns -- were subject to a qualified

privilege arising from a reasonable expectation of privacy.

Assuming, without deciding, that the order compelling

production of the financial documents affected a substantial

right and was properly appealable, defendants must still show

that plaintiff's motion for sanctions and the trial court's 12

October 2011 sanctions order were matters "embraced" in the

appeal from the order compelling production of the financial

documents. See N.C. Gen. Stat. § 1-294.

Defendants argue that the order compelling production of

the financial documents involved "the competency of" Mr. Baker's

affidavit filed by defendants in opposition to plaintiff's

motion to compel. Defendants then contend that because the

sanctions order imposed sanctions based in part on an

"inaccurate and misleading" statement in Mr. Baker's affidavit,

the sanctions order involved a matter embraced by the order

compelling production. We disagree.
 -13-
The issues embraced by defendants' interlocutory appeal

from the order compelling production of the financial documents

included, according to defendants' counsel at a pretrial hearing

following the appeal of the production order, whether the

financial documents were privileged or otherwise discoverable,

whether plaintiff's ability to obtain the documents from a

Virginia public records search impacted their discoverability,

and whether Judge Joseph improperly overruled an earlier

discovery order by Judge Marvin K. Blount regarding production

of the financial documents. By contrast, in the sanctions

order, the trial court did not, in any way, address the nature

of the financial records or whether they should be produced, but

rather the order addressed the propriety of representations made

to the trial court in filings with the court -- a matter not at

issue in COA12-664. Under the specific facts of this case, the

matters at issue in the sanctions motion were not embraced in

the appeal, and, as a result, N.C. Gen. Stat. § 1-294 did not

stay proceedings on the sanctions motion.

We also note that defendants' arguments in their brief and

at oral argument touch upon the merits of the order compelling

production of the financial documents. Defendants' appeal from

that order has, however, previously been dismissed as moot.

Further, with respect to the financial documents, defendants
 -14-
were sanctioned for filing an inaccurate and misleading

affidavit without reasonably determining whether the affidavit's

statements were true. Defendants were not sanctioned for

failing to comply with the order compelling production of the

financial documents. Consequently, the merits of the order

compelling production of the financial documents are not

presently before this Court.

Defendants next argue that their appeal from the 12 October

2011 sanctions order and plaintiff's appeal from the final

judgment each divested the trial court of jurisdiction over the

remaining issue of the amount of fees and costs to be awarded as

sanctions. With respect to defendants' appeal from the 12

October 2011 sanctions order, this Court has already issued an

order, in COA12-664, determining that defendants' appeal from

the sanctions order was interlocutory and dismissing the appeal

from that order.

This Court's prior determination that the sanctions order

was not appealable is binding here. In re Civil Penalty, 324

N.C. 373, 384, 379 S.E.2d 30, 37 (1989) ("Where a panel of the

Court of Appeals has decided the same issue, albeit in a

different case, a subsequent panel of the same court is bound by

that precedent, unless it has been overturned by a higher

court."). Since defendant's appeal was from a non-appealable
 -15-
interlocutory order, that appeal did not divest the trial court

of jurisdiction to receive evidence pertaining to the amount of

sanctions and to enter the order awarding fees and costs. See

Dalenko, 197 N.C. App. at 122, 676 S.E.2d at 630.

With respect to plaintiff's appeal from the final judgment,

it well established that the exception in N.C. Gen. Stat. § 1-

294 for continued jurisdiction over matters not affected by the

appealed judgment allows the court to continue to exercise

jurisdiction over motions for sanctions as long as the matter

does not depend upon the validity of the appealed order or

judgment. See Overcash v. Blue Cross & Blue Shield of N.C., 94

N.C. App. 602, 617, 618, 381 S.E.2d 330, 340 (1989) (holding

"termination of the action and defendant's filing of notice of

appeal did not automatically deprive the court of jurisdiction"

over defendant's post-trial motion for sanctions, but "[s]ince

the substantive basis of defendant's motion had been adjudicated

in the earlier order, defendant's appeal therefrom divested the

trial court of its jurisdiction to entertain the post-trial

motion"). Cf. McClure v. Cnty. of Jackson, 185 N.C. App. 462,

471, 648 S.E.2d 546, 551 (2007) ("When, as in the instant case,

the award of attorney's fees was based upon the plaintiff being

the 'prevailing party' in the proceedings, the exception set

forth in N.C. Gen. Stat. § 1–294 is not applicable."). Since
 -16-
plaintiff's motion for sanctions did not depend upon the

validity of the final judgment, the exception to N.C. Gen. Stat.

§ 1–294 is applicable here.

Defendants nonetheless cite McClure and Swink v. Weintraub,

195 N.C. App. 133, 672 S.E.2d 53 (2009), in support of their

argument. In both of those cases, however, this Court concluded

that the trial court lacked jurisdiction to impose an award of

attorneys' fees following appeal from a judgment because the fee

award was entered as a result of a party prevailing on the

merits, a circumstance not present here. See McClure, 185 N.C.

App. at 471, 648 S.E.2d at 551 (holding "exception set forth in

N.C. Gen. Stat. § 1–294 is not applicable" since "award of

attorney's fees was based upon the plaintiff being the

'prevailing party' in the proceedings"); Swink, 195 N.C. App. at

160, 672 S.E.2d at 70 (holding trial court lacked jurisdiction

under N.C. Gen. Stat. § 1-294 to enter order taxing costs after

appeal from judgment since "award of costs [was] directly

dependent upon whether the judgment [was] sustained on appeal").

In sum, none of the prior notices of appeal stayed the

proceedings on the sanctions matter. The trial court,

therefore, properly exercised its jurisdiction over the

sanctions matter throughout this case.

II
 -17-
Defendants next argue that the trial court abused its

discretion in ordering defendants sanctioned. "[T]rial courts

have inherent authority to impose sanctions for wilful failure

to comply with the rules of court." Few v. Hammack Enters.,

Inc., 132 N.C. App. 291, 298, 511 S.E.2d 665, 670 (1999). The

exercise of a court's inherent authority is reviewed for abuse

of discretion. Dunn v. Canoy, 180 N.C. App. 30, 45, 636 S.E.2d

243, 253 (2006). Similarly, "[t]he imposition of sanctions

under Rule 37 'is in the sound discretion of the trial judge and

cannot be overturned absent a showing of abuse of that

discretion.'" In re Pedestrian Walkway Failure, 173 N.C. App.

237, 246, 618 S.E.2d 819, 826 (2005) (quoting Bumgarner v.

Reneau, 332 N.C. 624, 631, 422 S.E.2d 686, 690 (1992)).

Defendants first argue that "the trial court's finding that

Baker [CFO of Britthaven], Farrar [CFO of Hillco], and Lindberg

[defendants' in house counsel] wrongfully failed to appear at

the Sanctions hearing is contradicted by the record" since

"[t]he trial court refused Plaintiff's request to summon these

witnesses to the hearing and granted Defendants' motion to the

[sic] quash subpoenas issued to them for that purpose."

(Internal record citations omitted.) Contrary to defendants'

contention, however, the trial court never found that Mr. Baker,
 -18-
Mr. Farrar, and Mr. Lindberg "wrongfully failed to appear at the

Sanctions hearing." (Emphasis omitted.)

In the trial court's explanation of why sanctions were

appropriate for the factually incorrect statement in Mr. Baker's

affidavit about dissemination of the financial documents, the

court found that defendants never produced evidence that

reasonable inquiries had been made to ensure the affidavit was

accurate. In noting the absence of evidence, the court pointed

out that defendants had moved to quash the subpoenas issued to

Mr. Baker and Mr. Lindberg compelling their testimony at the

sanctions hearing.

The trial court further found that rather than bringing Mr.

Baker and Mr. Lindberg to court, defense counsel represented

that neither of those individuals knew how the financial

documents had been filed in Virginia and, only after several

calls, was defense counsel able to represent to the trial court

that the documents had purportedly been filed by an outside

accounting firm. The trial court's order for sanctions was,

therefore, based on the "submission of misleading and inaccurate

affidavit statements," resulting from defendants' inadequate

inquiry prior to making the statements. Defendants' failure to

produce witnesses at the sanctions hearing and their rationale

for the motion to quash the subpoenas were pertinent to whether
 -19-
defendants had any justification for the statements in the

affidavits.

Defendants also contend that "the finding that Raymond

Baker's statements in his affidavit were 'inaccurate and

misleading' is not supported by the bare fact that Plaintiff's

expert succeeded in obtaining financial statements from a state

agency." (Internal record citation omitted.) In relevant part,

the court found that Mr. Baker's affidavit contained a factual

inaccuracy regarding dissemination of the financial documents

since it omitted the fact that the financial statements were

filed with government agencies or produced in other litigation.

The court's actual finding was supported by exhibits

attached to plaintiff's motion for sanctions and admissions by

defense counsel at the hearing. Given the evidence, we cannot

conclude that the trial court abused its discretion in finding

both that Mr. Baker's affidavit contained an inaccurate and

misleading statement and that defendants had not shown they made

a reasonable inquiry into whether Mr. Baker's statement was

correct prior to filing his affidavit.

Defendants next argue that the trial court abused its

discretion in sanctioning defendants based on the content of Mr.

Lindberg's affidavit regarding discovery of the Kronos

information. Defendants specifically dispute the trial court's
 -20-
finding that even though the "statements were not false on their

face," those statements "at a minimum evince a materially

incomplete inquiry into whether and how the Kronos information

could be obtained; or an incomplete and somewhat misleading

explanation of the situation." Defendants do not challenge any

of the order's other findings that supported this ultimate

finding. The court's detailed supporting findings explain that

Mr. Lindberg made the misleading statements in his affidavit

about the accessibility of the Kronos information based upon

only limited communications with a Britthaven employee. He did

not fully explore with that employee the possible ways in which

the information could have been obtained. The unchallenged

supporting findings fully support the trial court's ultimate

finding.

Defendants nonetheless assert that "the statements in

Lindberg's Affidavit, executed 28 February 2010, were made based

on his knowledge, information, and belief of the Kronos computer

system at that time." Defendants further argue that "an affiant

is required to have only personal knowledge, information, or a

reasonable belief of the facts stated in the affidavit" and "is

not required to have complete or infallible knowledge."

However, defendants' arguments fail to recognize the actual

basis for the trial court's concern regarding defendants'
 -21-
conduct in discovery. As with Mr. Baker's statements regarding

the financial documents, Mr. Lindberg also made statements that

demonstrated that he had made "a materially incomplete inquiry"

into the matter or was providing "an incomplete and somewhat

misleading explanation of the situation." Thus, the court did

not sanction defendants for failing to have "infallible

knowledge," but rather for failing to adequately look into the

matter prior to filing an affidavit making representations to

the trial court.

Finally, defendants argue that the trial court abused its

discretion in sanctioning defendants for their failure to

produce the full budget information prior to repeated court

intervention. Defendants challenge the trial court's finding

that "[a]t the hearing, Defendants did not initially have any

explanation for the [budget] problem, despite being on notice of

the issue, and obtained the information and produced the correct

information only after yet another intervention and inquiry by

the Court." Defendants argue that this finding does not present

"an accurate reflection of what actually occurred during that

hearing."

At a 26 May 2011 hearing, plaintiff's counsel explained to

the court that the budgets she received from defendants were

missing information. Plaintiff's counsel stated she had
 -22-
notified defendants of the problem. Upon the trial court asking

why defendants had not cured the problem prior to the hearing

and why plaintiff had to raise the issue with the court, defense

counsel responded that he had "no excuse for that." Defense

counsel then stated he could have an explanation for the problem

shortly.

At a continuation of the hearing the next day, 27 May 2011,

defense counsel explained that the issue leading to incomplete

information in the budgets as produced resulted from the need

for a certain macro on a computer system for the documents, and

defendants' prior counsel had printed the documents from a

computer without the necessary macro, leaving out the

information that would otherwise have been present. Defense

counsel further indicated that he had corrected the problem and

would produce the complete budget information by the end of the

day. Thus, the court's finding accurately reflects the events

at the hearings.

Also with respect to the budgets, defendants argue that the

trial court abused its discretion in stating at the 27 May 2011

hearing that it believed "the error with the budgets was due to

a failure of Plaintiff's counsel and Defendants' counsel to

communicate" and that the issue had been "'resolved,'" but
 -23-
later, in the sanctions order, "revers[ing]" itself and ordering

sanctions based on this issue. We disagree.

At the hearing, the court actually stated: "It sounds like

it's resolved; seems like it took an awfully long time to get

here; still have concerns about that; realize it may not be

entirely present counsel's fault. . . . [I]t just seems to me

to be a failure to communicate among counsel. And that's a

problem. So that's a problem." The court's statement about

"present counsel" refers to assertions by defense counsel that

defendants' former attorney had mistakenly produced the budgets

containing the missing data. In response to defense counsel's

assertions that the issue may have received little attention

since discovery of the budgets was not strongly contested by the

parties, the court responded, "Then how did it get to me? . . .

It's been pending for so long."

Thus, the court did not "reverse" itself by ordering

sanctions pursuant to a matter that it had previously determined

to be completely resolved. Rather, the court noted at the

hearing that it believed the issue was attributable to a failure

of counsel, including defense counsel, to communicate and that

it was very concerned that defendants had failed to correct the

issue, despite being on notice of it, before further court

intervention was necessary.
 -24-
Each of the findings of fact challenged by defendants are

supported by evidence or other unchallenged findings. Given

those findings, defendants have not shown that the trial court

abused its discretion in deciding that defendants should be

sanctioned.

III

Defendants next argue that the trial court's entry of the

sanctions order violated their constitutional rights in a number

of ways. Defendants first argue that the trial court violated

their due process rights by sanctioning them for matters

embraced by their pending appeal of the order compelling

production of the financial documents despite the trial court's

acknowledgement at the 6 July 2011 hearing that the order

compelling production was automatically stayed pending appeal

pursuant to N.C. Gen. Stat. § 1-294.

Initially, we note that defendants cite no authority in

support of this argument, thereby violating Rule 28(b)(6) of the

Rules of Appellate Procedure. In any event, we have already

held that the court's sanctions order did not pertain to matters

"embraced" within the appeal from the order compelling

production of the financial documents. N.C. Gen. Stat. § 1-294.

Even if defendants' due process rights could be implicated by a
 -25-
violation of the stay set out in N.C. Gen. Stat. § 1-294, no

violation occurred in this case.

Defendants next contend that the sanctions order violated

their due process rights given "the inordinate and unexplained

delay in the issuance of the order awarding sanctions."

Defendants assert that the timing of the order demonstrates that

the trial court used the sanctions order "as a consolation prize

for a plaintiff disappointed by the jury's verdict." Defendants

again cite no authority in support of their contention, and we

decline to address a claimed constitutional violation when

defendants have not considered the argument important enough to

warrant even minimal research.

Defendants further argue that the trial court's entry of

the sanctions order violated their constitutional rights on

three additional grounds related to (1) defendants' claim

(already found unsupported) that the trial court sanctioned

defendants for failing to produce witnesses at the sanctions

hearing; (2) the trial court's "refus[ing] to hear Mr. Baker's

offer of proof" at the trial following the sanctions hearing;

and (3) the trial court's violation of "Defendants'

constitutional right to due process and equal protection of the

law by making findings based on matters outside the record of

which Defendants had been given no notice or an opportunity to
 -26-
be heard, including hearsay related to motions filed in the

Hopper case and Defendant's [sic] alleged failure to comply with

orders by other judges."

Defendants did not make any of these three additional

constitutional arguments to the trial court. Moreover,

defendants cite no authority in support of the second and third

additional constitutional arguments, in violation of Rule

28(b)(6) of the Rules of Appellate Procedure.

"A constitutional issue not raised at trial will generally

not be considered for the first time on appeal." Anderson v.

Assimos, 356 N.C. 415, 416, 572 S.E.2d 101, 102 (2002) (per

curiam). See N.C.R. App. P. 10(a)(1) (providing that, in order

to preserve argument for appeal, party must present to trial

court "a timely request, objection, or motion, stating the

specific grounds for the ruling the party desired the court to

make"). Since defendants did not raise these constitutional

issues below, they cannot now argue them on appeal.1

Finally, although not set out in their brief, defendants

raised an additional due process issue at oral argument before

this Court, asserting that the trial court's failure to enter

the sanctions order until after entry of final judgment

1
We note, in passing, however, that defendants' articulation
of what the trial court did is not necessarily consistent with
what appears in the actual record.
 -27-
necessarily precluded the trial court from considering lesser

sanctions that would otherwise have been available. Since this

argument was not raised in defendants' brief, defendants cannot

properly raise it for the first time at oral argument. See Atl.

Coast Line R.R. Co. v. Beaufort Cnty., 224 N.C. 115, 119, 29

S.E.2d 201, 203 (1944) ("No such contention appears to have been

made in court below, and none is made in [sic] brief filed in

this Court. Hence, oral presentation of it comes too late, and

the point may not now be raised in this Court.").

Moreover, the argument was not made in the trial court.

Defendants claim they did not have the chance to make this

argument to the trial court since the court held no additional

hearing on the sanctions matter after trial began and did not

give defendants notice prior to entering the sanctions order.

However, defendants filed an objection to the sanctions order,

after entry of the sanctions order and prior to entry of the

order setting the award of fees and costs for sanctions, arguing

to the trial court that entry of the sanctions order violated

their due process rights in a number of other ways. Defendants'

own filing, therefore, belies their argument that they had no

opportunity to present this issue to the trial court. Because

the issue was neither preserved at the trial level nor
 -28-
appropriately argued on appeal, it is not properly before this

Court.

IV

Defendants' final argument is that "the trial court abused

its discretion when it set the hourly rate of compensation for

the legal services of Plaintiff's counsel, Anne Duvoisin, at

$475 per hour." Defendants assert that Ms. Duvoisin functioned

primarily in a second-chair capacity during trial and that since

defendants' lead counsel's hourly rate is $175.00 and

defendants' associate counsel's hourly rate is $150.00, there

was no reasonable basis for the court's finding.

We initially note that defendants presented no actual

evidence in the trial court of defendants' lead counsel's or

associate counsel's hourly rates. Our review of the record has

revealed only that, in an unverified responsive filing by

defendants entitled "defendants' objection and response to

plaintiff's affidavits in support of monetary sanctions,"

defendants made representations regarding defense counsel's

hourly rates. However, the assertions in this filing were not

evidence, and defendants did not attach any affidavits or other

evidence concerning these hourly rates.

The trial court's findings on the reasonableness of

attorney's fees must be supported by some evidence. Simpson v.
 -29-
Simpson, 209 N.C. App. 320, 325, 703 S.E.2d 890, 893 (2011). To

that end, the court may take judicial notice of the

reasonableness of fees unless it "determines that it lacks the

necessary knowledge or that the customary hourly rate is in fact

subject to debate in the community." Id. at 328, 703 S.E.2d at

895.

Here, the trial court observed the trial and was in a

position to determine Ms. Duvoisin's role at trial. Defendants

cite no authority supporting their contentions regarding the

hourly rates awarded and, therefore, have cited nothing that

suggests that Ms. Duvoisin's hourly rate should be set at the

level of a lesser experienced associate. Further, defendants

neither offered evidence of the hourly rates that they argue on

appeal would have been appropriate nor did they request that the

trial court take judicial notice of those hourly rates. There

is, however, no dispute that affidavits submitted by Ms.

Duvoisin -- the only evidence before the court on this issue --

supported the hourly rate set by the court.

Defendants also argue that the court abused its discretion

in setting Ms. Duvoisin's hourly rate in light of the court's

findings regarding the hourly rate of another one of plaintiff's

attorneys, Ms. Godwin. The court rejected the hourly rate of

$475.00 proposed in Ms. Godwin's affidavit, finding that "the
 -30-
Court does not have sufficient information to determine whether

the rate of $475.00 is the customary fee for like work and the

experience and ability of Ms. Godwin."2 The court further found

that Ms. Godwin "appeared to function in the same role as did

associate counsel for the defense who, according to Defendants'

Objections and Response to Plaintiff's Affidavits, charges an

hourly rate of $150.00." The court, "[b]ased on that role,"

applied a $150.00 hourly rate for Ms. Godwin's time.

Defendants do not challenge Ms. Godwin's fee, and her

affidavit provides no evidence that the hourly rate set for Ms.

Duvoisin was unreasonable. We, therefore, hold that the trial

court did not abuse its discretion in setting Ms. Duvoisin's

hourly rate, and we affirm the trial court's order.

Affirmed.

Judges ELMORE and DILLON concur.

Report per Rule 30(e).

2
We note that Ms. Godwin's affidavit was significantly
shorter than Ms. Duvoisin's affidavit and, unlike Ms. Duvoisin's
affidavit, was not supported by additional affidavits by other
attorneys.