Opinion
No. 03 CV 2528 (CBA).
May 26, 2004
REPORT AND RECOMMENDATION
On May 21, 2003, plaintiffs Theresa E. Welch and Angelica Welch filed this action seeking damages they allegedly sustained during a motor vehicle accident that occurred on January 29, 2003 in the vicinity of the intersection of Flatbush Avenue and Church Avenue, Kings County, New York. (Compl. ¶¶ 15-17). At the time of the accident, plaintiffs were passengers in a 2000 Infinity driven by Wyeler Alexis and owned by Claude Fils Aime and Franck D. Fils Aime. (Id. ¶¶ 10-12).
The other defendant named in the action, Marguerite Hessini, was dismissed from the case on March 11, 2004.
Plaintiffs have moved to strike the answers of defendant Alexis and the Fils Aime defendants, pursuant to Rule 37(b)(2)(C), contending that they have failed to comply with court-ordered discovery, including orders to appear for depositions issued on October 3, 2003 and February 2, 2004. Defendants' counsel argues that the extreme sanction of striking defendants' answers is not warranted where, as here, defendants personally have never received notice of the Court's orders or their discovery obligations, and plaintiffs have "unclean hands" in that they also failed to comply with their own discovery obligations. Moreover, according to defendants' counsel, there are serious questions as to whether plaintiffs were in fact seriously hurt in the accident, sufficient to survive the no-fault threshold.
By Order dated April 6, 2004, the motion to strike was referred to the undersigned to prepare a Report and Recommendation.
DISCUSSION
A. Standards
Rule 37(b)(2) of the Federal Rules of Civil Procedure authorizes a court to impose various sanctions when a party "fails to obey an order to provide or permit discovery." Fed.R.Civ.P. 37(b)(2); see also Transatlantic Bulk Shipping Ltd. v. Saudi Chartering S.A., 112 F.R.D. 185, 189 (S.D.N.Y. 1986) (holding that Rule 37(b) "provides for sanctions where a party fails to honor its disclosure obligations, especially after court orders"). It is clear that sanctions may be imposed upon a party or counsel who deliberately fails to "make a disclosure required by Rule 26(a)," Fed.R.Civ.P. 37(a)(2)(A), or who provides an "evasive or incomplete disclosure, answer or response. Fed.R.Civ.P. 37(a)(3). See Nike, Inc. v. Top Brand Co. Ltd., 216 F.R.D. 259, 267 (S.D.N.Y. 2003). Sanctions are particularly appropriate when the party against whom sanctions are sought has failed to comply with a court order to provide discovery. See, e.g., United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 44 F.3d 1091, 1096 (2d Cir. 1995); Drywall Tapers, Local 1974 v. Local 530, Operative Plasterers and Cement Masons Int'l Ass'n, 889 F.2d 389, 394 (2d Cir. 1989), cert. denied, 494 U.S. 1030 (1990). However, "[e]ven in the absence of a discovery order, a court may impose sanctions on a party for misconduct in discovery under its inherent power to manage its own affairs." Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 106 (2d Cir. 2002) (citing DLC Management Corp. v. Town of Hyde Park, 163 F.3d 124, 135-36 (2d Cir. 1998). Where the alleged breach of a discovery obligation involves the non-production of evidence, the Second Circuit has held that the district courts have broad discretion in fashioning an appropriate sanction. Id. at 107.
"Sanctions may also be imposed under Rule 37(a)(4) when a party applies for an order "compelling disclosure or discovery" and it is not complied with. In the event that a party does not comply with such an order, the party at fault is responsible for "reasonable expenses incurred in making the motion, including attorney's fees." Fed.R.Civ.P. 37(a)(4) (emphasis added). However, sanctions under Rule 37(b) are available whenever any type of Court order relating to discovery is disobeyed. See Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1362-63 (2d Cir. 1991). While Rule 37(b) sanctions may be imposed for violation of a Rule 37(a) order, "a Rule 37(a) order is merely one of the orders that can trigger sanctions under Rule 37(b)(2)." Id. at 1363.
In Update Art, Inc. v. Modiin Publ'g, Ltd., 843 F.2d 67, 71 (2d Cir. 1988), the Second Circuit described the three purposes behind sanctions under Rule 37:
First, they ensure that a party will not benefit from its own failure to comply. Second, they are specific deterrents and seek to obtain compliance with the particular order issued. Third, they are intended to serve a general deterrent effect on the case at hand and on other litigation, provided that the party against whom they are imposed was in some sense at fault.Id. (citing Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639 (1976) (per curiam); Cine Forty-Second St. Theatre Co. v. Allied Artists Pictures Corp., 602 F.2d 1062, 1066 (2d Cir. 1979))
Among the sanctions available under subsection (b)(2) of Rule 37 are the issuance of an order that certain designated facts be taken as established in accordance with the claim of the party obtaining the order, see Fed.R.Civ.P. 37(b)(2)(A);Santrayll v. Burrell, No. 91 CV 3166, 1998 WL 60926, at *3 (S.D.N.Y. Jan. 21, 1998) (noting the availability of this sanction but declining to impose it), or an order "prohibiting [the disobedient] party from introducing designated matters in evidence." Fed.R.Civ.P. 37(b)(2)(B);accord Kang v. Lee, No. 96 CV 1145, 1997 WL 669787, at *3 (S.D.N.Y. Oct. 27, 1997). The harshest sanctions that can be imposed are the striking of a pleading or parts thereof, see In re Barnholdt, 74 B.R. 760, 764 (Bankr. N.D.N.Y. 1987), dismissal of the action, see Republic of the Philippines v. Marcos, 888 F.2d 954, 956-57 (2d Cir. 1989); Jones v. Niagara Frontier Transp. Auth. (NFTA), 836 F.2d 731, 734 (2d Cir. 1987),cert. denied, 488 U.S. 825 (1988), or the rendering of a judgment by default against the disobedient party. See Fed.R.Civ.P. 37(b)(2)(C); Sullivan v. City of New York, No. 94 CV 1643, 1997 WL 642321, at *2 (E.D.N.Y. Sept. 3, 1997).
The decision whether to impose sanctions and what those sanctions should be is left to the sound discretion of the court.See In re Barnholdt, 74 B.R. at 763. In determining which sanction, if any, is appropriate, courts must bear in mind the "strong policy favoring trial on the merits," id. at 764 (citing Gill v. Stolow, 240 F.2d 669, 670 (2d Cir. 1957)), and should impose the severe sanction of dismissal only where the party has demonstrated "'wilfulness, bad faith, or any fault.'"Baba v. Japan Travel Bureau Int'l, Inc., 111 F.3d at 5 (quotingJones v. Niagara Frontier Transp. Auth. (NFTA), 836 F.2d at 734); see also Nat'l Hockey League v. Metro, Hockey Club, Inc., 427 U.S. at 643 (holding that the sanction of dismissal should be utilized where there has been evidence of "flagrant bad faith"); In re E.C. Ernst, Inc., 26 B.R. 576, 578 (Bankr. S.D.N.Y. 1983) (noting that dismissal is appropriate only where there is a "total failure of discovery").
In lieu of or in addition to these sanctions, the Rule provides for the imposition of "reasonable expenses, including attorney's fees," caused by the defaulting party's failure to comply, unless the court finds the failure "substantially justified" or that "other circumstances make an award of expenses unjust." Fed.R.Civ.P. 37(d). Indeed, courts have awarded attorney's fees and costs where sanctions were appropriate, but where the court found that the sanctioned party's conduct did not rise to the level of the drastic sanction of dismissal. See, e.g., Roadway Express, Inc. v. Piper, 447 U.S. 752, 763-764 (1980) (holding that "[b]oth parties and counsel may be held personally liable for expenses, 'including attorney's fees,' caused by the failure to comply with discovery orders"): Stanziale v. First Nat'l City Bank, 74 F.R.D. 557, 560 (S.D.N.Y. 1977) (imposing Rule 37 sanctions on the attorneys); Charron v. Meaux, 66 F.R.D. 64, 68-69 (S.D.N.Y. 1975) (imposing Rule 37 sanctions on the party); Chesa Int'l., Ltd. v. Fashion Assocs. Inc., 425 F.Supp. 234, 237-38 (S.D.N.Y.) (holding both the attorney and the party jointly liable for fees), aff'd, 573 F.2d 1288 (2d Cir. 1977); In re Barnholdt, 74 B.R. at 765 (imposing counsel fees where the court took "a dim view of Debtor's slipshod responses" but found that the action had "not risen to so serious a level as to warrant the drastic sanction requested").
B. Application
In this case, plaintiffs seek to impose one of the most drastic sanctions available — namely, striking the defendants' answers for their failure to appear for their depositions. Plaintiffs correctly point out that defendants have also previously failed to provide timely responses to plaintiffs' written discovery requests, despite being warned by this Court of the possible imposition of sanctions and despite being given extensions of time to comply. Although current counsel for defendants served discovery responses in January 2004, the depositions of defendants still have not been held.
Defendants' counsel, in response, argues that the drastic sanction of striking the defendants' answers is not warranted where the defendants' failure to respond is not clearly wilful. Defendants' counsel contends that all efforts to locate the defendants have been unsuccessful. Letters sent to them have not been responded to and indeed, plaintiffs effectuated service only through the Secretary of State even though plaintiffs were passengers in defendants' vehicle and presumably had some relationship with them. (Defs.' 56.1 Stmnt ¶ 1; Defs.' Mem. ¶ 2). Defendants contend that there has been no showing that defendants' failure to appear is in bad faith, or due to the fault or gross negligence of counsel. Thus, since it is unclear whether defendants are even aware of the lawsuit, counsel argues that there is no basis for finding their failure to appear for deposition was knowing and wilful.
Citations to "Defs.' 56.1 Stmnt" refer to Defendants' Statement of Facts Pursuant to Local Civil Rule 56.1, dated April 16, 2004.
Citations to "Defs.' Mem." refer to Defendants', Wyeler Alexis, Claude Fils Aime and Franck D. Fils-Aime, Opposition to the Motion by Plaintiffs to Strike Their Answer, dated April 16, 2004.
In addition, defendants' counsel complains that plaintiffs have also not fully complied and provided discovery in response to defendants' discovery requests in a timely manner. Defendants contend that they did not receive full medical records for plaintiffs in advance of the depositions and to date, counsel still has not received duly executed HIPAA compliant authorizations or a full set of medical records. (Defs.' 56.1 Stmnt ¶¶ 4, 5). Defendants also contend that plaintiffs have failed to respond fully to defendants' interrogatories and cite certain examples in their papers. They contend that given the absence of medical evidence, there is a serious question as to whether one of the plaintiffs even suffered a "serious" injury sufficient to survive the threshold showing required under New York. Thus, to strike the defendants' answer would allow plaintiffs to achieve a windfall.
Having participated in the discovery process and being familiar with the problems faced by counsel in attempting to locate the individual defendants, it is not clear that counsel has done all that is possible to locate defendants. However, since there has been no showing of bad faith here, this Court finds that the most drastic sanction of striking defendants' answer is not warranted at this time. Instead, the Court concludes that an order precluding defendants from testifying at trial and awarding plaintiffs the fees and costs incurred in filing this motion sufficiently vindicates plaintiffs' rights and serves to further the goals of Rule 37.
Plaintiffs' counsel in his Reply Declaration notes that all that has been done is to send letters to Wyeler Alexis at the same address. There has been no effort made to hire an investigator or take other steps to locate the defendants.
Accordingly, it is respectfully recommended that: (1) plaintiffs' motion to strike defendants' answer be denied; (2) an order issue precluding defendants from presenting testimony at trial or in connection with any motions; and (3) plaintiffs' counsel be awarded reasonable attorney's fees and costs incurred in pursuing this motion, subject to the submission of an affidavit and supporting documentation.
Any objections to this Report and Recommendation must be filed with the Clerk of the Court, with a copy to the undersigned, within ten (10) days of receipt of this Report. Failure to file objections within the specified time waives the right to appeal the District Court's order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(e), 72; Small v. Secretary of Health Human Servs., 892 F.2d 15, 16 (2d Cir. 1989).
The Clerk is directed to mail copies of this Report and Recommendation to the parties.
SO ORDERED.