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Kendall Lakes Towers v. Pacific Insurance Company

December 2, 2011

KENDALL LAKES TOWERS CONDOMINIUM ASSOCIATION, INC., PLAINTIFF,
v.
PACIFIC INSURANCE COMPANY, LIMITED, DEFENDANT.



ORDER ON MOTION TO DISMISS

This matter is before the Court on Defendant, Pacific Insurance Company, Limited's, motion to dismiss due to discovery violations (DE 60), filed October 21, 2011. The Plaintiff, Kendall Lakes Tower Condominium Association, Inc., filed a response to the motion (DE 67), and Pacific filed a reply (DE 78). The Court carefully reviewed and considered the motion, the associated briefing and the pertinent portions of the record, and held a hearing on the motion on November 29, 2011.

Although the motion is captioned as a motion to dismiss, it is technically a motion for sanctions under Federal Rule of Civil Procedure 37. The Undersigned has jurisdiction under the standing order of reference for sanctions motions entered in this case (DE 19). Because a dispositive sanction, such as outright dismissal, is not warranted in this instance, the Undersigned may enter a final order on the motion rather than a report and recommendations. See Gomez v. Martin Martin Marietta Corp., 50 F.3d 1511, 1519-20 (10th Cir. 1995) (magistrate judge may enter final order on sanctions motion so long as the order does not impose dispositive sanctions).

BACKGROUND

This is an insurance coverage dispute arising out of alleged damages to Kendall Lakes Towers' property caused by Hurricane Wilma in October 2005. Discovery closed on October 14, 2011. One week later, Pacific Insurance Company filed this motion asking the Court to strike Kendall Lakes Towers' pleadings and dismiss this action as a result of Plaintiff's alleged discovery violations. The Court previously held one discovery conference in this case on unrelated matters initiated by the plaintiff. But before filing this motion the defendant never sought any court intervention in the discovery process.

Pacific did not first file a motion to compel or otherwise bring the plaintiff's purported discovery failures at issue in its motion to dismiss to the Court's attention at a discovery calendar hearing. Instead, Pacific first brought Plaintiff's alleged discovery violations to the Court's attention by requesting the most extreme sanction available. Setting aside this unusual strategy, filing a motion to dismiss as a discovery sanction without first seeking preliminary relief (which is the situation here) may run afoul of Local Rule 26.1(h)(1) of the Local Rules of the Southern District of Florida, which provides:

All motions related to discovery, including but not limited to motions to compel discovery and motions for protective order, shall be filed within thirty (30) days of the occurrence of grounds for the motion. Failure to file a discovery motion within thirty (30) days, absent a showing of reasonable cause for a later filing, may constitute a waiver of the relief sought. (emphasis added).

Because this motion is related to discovery, the 30-day deadline listed in the rule would seem to apply. On the other hand, many of the plaintiff's alleged discovery violations occurred within 30 days of the motion, and the rule's 30-day deadline does not preclude relief for these violations. As a matter of general practice, however, it is generally inadvisable to request the most extreme relief available even if it is technically permitted by the governing procedural rules.

Rule 26.1(h)(1) reflects a policy of promoting the prompt resolution of discovery disputes by requiring the parties to timely bring to the court's attention matters that the parties cannot resolve amongst themselves. The Local Rule does not expressly preclude a sanctions award when there is a failure to file a motion to compel within the specified time period. Nevertheless, common sense dictates that failures in the discovery process will not ordinarily result in dismissal, a remedy which the Eleventh Circuit has a described a sanction of last resort, United States v. Certain Real Property Located at Route 1, Brant, Alabama, 126 F.3d 1314, 1317 (11th Cir. 1997), if the injured party does not first seek relief though a standard discovery remedy, such as a motion to compel or scheduling the dispute for a discovery calendar hearing. Of course, there may be some discovery abuses that are so egregious as to justify dismissal without first filing a motion to compel, but this motion to dismiss is certainly not such a situation.

As a practical matter, when parties use the established avenues for obtaining discovery relief, it will often mitigate the need to later file a sanctions motion because the parties are required under the Federal Rules of the Civil Procedure and the Local Rules of this District to confer in good faith before seeking court intervention in the discovery process. If the parties cannot agree despite their good faith efforts to do so, then the court may intervene and enter an appropriate order requiring the offending party to comply with its discovery obligations. If the offending party still refuses to comply, then the court is in a better position to determine whether the party has acted in bad faith and whether more severe sanctions are necessary.

The defendant did not follow this approach here.*fn1 In the Court's view, the defense strategy behind this motion to dismiss put the cart before the horse and short-circuited the discovery and sanctions process. To use a musical reference, defendant's discovery approach ignored the teachings articulated by singer-songwriter Meat Loaf, in his 1984 song, "Jumpin' The Gun:"

Heaven blesses those who wait, patience is a virtue, son Keep your toe on the line, keep your foot on the brake No sense jumpin' the gun*fn2

It is abundantly clear that lesser relief, such as seeking an order compelling discovery responses, reopening the discovery period or supplementing the summary judgment briefing, would have been more than sufficient to protect the defendant from the alleged harm. Pacific could also have requested less-severe sanctions, such as asking the court "inform the jury of the party's [discovery] failures" under Rule 37(c)(1)(B). It is also apparent that some of these issues could have been avoided completely if defense counsel engaged in the type of communication and cooperation with opposing counsel that is necessary to maintain a smooth discovery process. See Appendix A to Local Rules, Discovery Practice Handbook I(A)(1) ("Courtesy suggests that a telephone call is appropriate before taking action that might be avoided by agreement of counsel."). Indeed, at the hearing on this motion, plaintiff's counsel readily made numerous discovery concessions and gave many explanations regarding the disputed discovery issues that defense counsel admitted he was hearing for the first time.

To provide one concrete illustration of how Pacific could have obtained relief earlier on, Plaintiff's response to Interrogatory 2, served on June 22, 2011, was woefully inadequate. The interrogatory is a standard one, seeking, among other things, the identification of all persons with knowledge of "any of the issues raised by the pleadings." Plaintiff objected to the interrogatory as "ambiguous and overbroad" and then said it "is not in possession of any statements from any witness at this time." This type of interrogatory is so commonly used that the Standard Form Interrogatories found in Appendix B to the Local Rules for the United States District Court for the Southern

In the securities markets, the term also means "trading on information which has not yet been revealed to the public." http://www.investorwords.com/2680/jumping_the_gun.html (last visited December 1, 2011).

District of Florida list this type of interrogatory. Specifically, Standard Form Interrogatory 1 asks for the name, address, telephone number, place of employment and job title of any fact witness and Interrogatory 2 asks for the specific nature and substance of each person's knowledge.

Plaintiff did not provide a sufficient response to this basic interrogatory. First, the interrogatory is not, as Plaintiff contended in its objection, ambiguous and overbroad. To the contrary, it largely parrots the very interrogatories that this district court approved of in its Standard Form Interrogatories. Second, Plaintiff did not list any witnesses in its answer. Instead, it merely said that it did not currently possess any witness statements. Although this answers a part of the interrogatory, it completely avoids the other portion seeking the identification of fact witnesses, regardless of whether they provided a statement.

This omission was substantial and should have been obvious to the attorney who read the incomplete response. Thereafter, Pacific should have contacted Plaintiff's counsel immediately and demanded a proper answer. Because there were surely some fact witnesses that Plaintiff knew about when it submitted its interrogatory answer, Plaintiff would have been hard-pressed to maintain its objection. Thus, Pacific likely would have obtained witness information had it bothered to follow up originally. And if Plaintiff failed to provide the witness information, then Pacific could have brought the discovery dispute to the Court's attention and the Undersigned would have compelled responses.

But, as noted, Defendant Pacific did nothing about this incomplete interrogatory answer for months and then finally filed this motion to dismiss, leaping over other available remedies and for the ultimate sanction of dismissal.

Given the relief that the defendant is seeking, the Court's task in deciding this motion is not, ultimately, to parse each individual discovery dispute and determine what should or should not have been done in each instance -- because the defendant is seeking dismissal with prejudice, a sanction of last resort, and the Court's task is to determine whether the plaintiff's misconduct is commensurate with such a heavy penalty. At bottom, the motion must be denied because the plaintiff's discovery conduct in this case falls well short of the bad-faith conduct needed to sustain a sanction as severe as dismissal. Defendant could have obtained less-drastic relief in many instances had it timely raised its objections with Plaintiff's discovery responses and disclosure ...


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