INTHE COURT OF APPEALS OF THE STATE OF WASHINGTON PAUL THOMAS CREWS, as personal representative ofthe ESTATE OF BRENDA HOUSTON, and as personal representative ofthe ESTATE OF ELIZABETH CREWS, and in his individual capacity, Respondent,

AVCO CORPORATION, Appellant, PRECISION AIRMOTIVE LLC; FORWARD TECHNOLOGIES INDUSTRIES, INC.; CREST AIRPARK, INC.; and AUBURN FLIGHT SERVICES, INC., Defendants. No. 70756-6-1 DIVISION ONE UNPUBLISHED OPINION

FILED: April 6, 2015 en

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### Appelwick, J. — Avco appeals the trial court's order sanctioning it for discovery violations. The trial court struck all of Avco's affirmative defenses and deemed all 

### allegations in Crews's complaint admitted. As a result, the court found liability and causation established and set separate trials on compensatory damages and punitive 

### damages. Avco argues that the discovery sanctions order violated its right to due 

### process. Itfurtherasserts that the trial courtabused its discretion in imposing sanctions that were more severethan necessary. We remand foramendmentofjudgmentto reflect offset ofamounts Crews received from other defendants. We otherwise affirm.No. 70756-6-1/2

FACTS On July 27, 2008, a rented Cessna 172N plane crashed in the Cascades near McMurray, Washington. The accident killed the pilot, Brenda Houston, and her two passengers: Houston's 10 yearolddaughter, Elizabeth Crews, and their family friend, Dr. Virgil Becker. On September 10, 2008, Houston's husband, Paul Crews, sued for injuries and 

### wrongfuldeath. Crews named multipledefendants involved inthe manufacture and care ofthe plane. The personal representative ofBecker's estate also brought suitagainstthe
same defendants and named Houston's estate as an additional defendant, claiming pilot 

### negligence. The plaintiffs alleged that engine failure, in particular a faulty carburetor, 

### causedthe plane crash. The defendants included Avco Corporation, whichmanufactured 

### and sold the plane's engine in1978,1 and PrecisionAirmotive Corporation, which installed
a new carburetorfloat inthe engine in 1999. 

### Precision developed the float pursuant to its parts manufacturer approval (PMA) from the Federal Aviation Administration (FAA). With a PMA, vendors of airplane parts 

### can sell replacement parts directly to customers and service shops. Precision acquired a PMA to supply carburetors for Avco. The PMArequired Precision to manufacture the 

### carburetors according to Avco's preapproved engineering drawings and specifications. In the 1990s, Precision designed a new float made of a polymer resin called Delrin. Precision obtained permission from Avco to use the Delrin float, and the FAA approved
the float. 

### 1 The engine was manufactured by Avco's unincorporated division, Lycoming 

### Engines. BecauseAvco is the named partyinthe lawsuit, we refer toAvco and Lycoming together as "Avco" to maintain clarity and consistency.No. 70756-6-1/3 

### Crews and Becker alleged that the Delrin floats were defective and that a faulty Delrin float was responsible for the plane crash. They further alleged that Avco and its codefendants were aware the floats were defective butwithheld this information and failed 

### to warn about the defects. The plaintiffs asserted claims for strict liability, negligence, and breach ofwarranty. They sought both general and punitive damages. Avco asserted several affirmative defenses, including a lack of involvement with 

### the carburetor or float, compliance withfederal regulations, federal and state statutes of repose, comparative fault, the unavailability of punitive damages, and a demand foroffset of amounts recovered from other liable parties. Avco also counterclaimed against Houston's estate, alleging that pilot error caused the crash. InOctober2010, Crews and Beckerjointlyserved theirfirst requests forproduction
on Avco. The requests generally pertained to the carburetors and Delrin floats, their design and manufacture, Avco's communication with the FAA and with other companies about the carburetors and floats, and information about any known defects or malfunctions. Avco did not produce any discovery at that time. Itobjected to 68 ofthe 73 requests. It stated that itwould produce the remaining documents with its answers and affirmative defenses. Crews's and Becker's cases were consolidated on January 31, 2011.No. 70756-6-1/4 On April 29, Becker served his first interrogatories and second requests for production on Avco. Avco objected to 16 ofthe 17 interrogatories. Italso objected to 27 ofthe 30 requests for production. As to the remaining three, Avco stated that responsive documents had already been provided. On July 6, Becker moved to compel Avco to answer his first interrogatories and respond to his second requests for production. On July 7, the plaintiffs jointly moved to compel production of documents responsive to their requests. Avco opposed both motions. In his reply, Becker asserted thatAvco withheld documents reflecting its role in testing, reviewing, approving, and certifying the Delrin float. As support, Beckerattached
a December 2005 series of e-mails between Avco and Precision employees reflecting Avco's knowledge of defects in the Delrin floats. Becker had obtained the e-mails from 

### Precision's discovery production. The subject line of the e-mails was "Plastic Float Leaking - Concerns." An Avco employee wrote that, "[p]er the attached file and our previous conversations, it is clearthatthe hollow plastic carb floats can leak, allowing fuel to enter the interior of the floats. [Avco] is concerned that this condition will lead to functional issues on engine installations." The attached file was not included. A Precision employee replied, "We have been monitoring the situation with leaking Delrin floats since their incorporation into production. We have, on several instances discussed the situation with personnel at [Avco]." 

### On July 21, Judge Julie Spector granted Becker's motion and the joint motion to compel. Judge Spectorordered Avco to respond to Becker's requests within 14 days and 

### the plaintiffs' joint requests within five days. She further ordered Avco to specificallyNo. 70756-6-1/5 

### identifybyBates stamp number each documentthatwas responsivetoeach interrogatory Orrequest. She also provided thatthe plaintiffs could seekcostsfor bringingthe motions. On August 4, Avco amended its responses to the plaintiffs' first requests for production and Becker's first interrogatories and second requests for production. Avco's responses generally indicated that "[r]esponsive documents have either been produced 9nd/or are being made available for inspection" or that "Avco has located no documents responsive to this request." (Emphasis omitted.) 

### On August 31, Becker moved to hold Avco in contempt forfailing to comply with 

### tJie order to compel. He requested that the court impose sanctions, including striking Avco's federal statute of repose defense, holding that Avco may not oppose the 

### Availability of punitivedamages in this case, holding that Avco had a duty to warn owners and operators about the defective float, and monetary sanctions. On September 2, the plaintiffs alsojointly moved to hold Avco in contempt and to impose sanctions. On September 27, Judge Spector granted both contempt motions, finding that 

### Avco's "willful violation of the Court's July 20, 2011 Order has prejudiced and continues to prejudice the plaintiffs in their prosecution of the case." She ordered Avco to fully comply within seven days. She further ordered Avco to submit an affidavit detailing all efforts made to fully comply with the order, "including, as for each ordered request, a statement as to whether full and complete production has been made, and a detailed description of how documents were identified and located." Judge Spector again provided that the plaintiffs could seek costs and fees for bringing the motions. She reserved ruling on three sanctions: striking Avco's federal statute of repose defense;No. 70756-6-1/6 ordering thatAvco may not oppose punitive damages; and ordering thatAvco had a duty to warn about the defective floats. Avco submitted a declaration from counsel detailing Avco's efforts to comply with Judge Spector's orders. Counsel stated that, pursuant to company policy, "certain Categories of documents (such as engineering documents and regulatory Correspondence) are kept into perpetuity whereas other categories ofdocuments are not Required to be retained on a permanent basis but are retained only for fixed periods of 

### time, depending upon the category of document." Counsel's affidavit further explained that many ofthe documents supplied by Precision regarding carburetors were "beyond the various retention periods in [Avco's] Records Management Policy." The records management policywas not attached to the declaration. On October 10, Avco moved to amend or vacate the contempt orders. Itargued 

### that itmade good faith efforts to comply with the plaintiffs' broad discovery requests and thatit had timelysubmitted the declaration ofcompliance as required bythe court's order. Avco also proposed that the subject matter ofthe orders be transferred to retired Judge Paris Kallas, who had been appointed special discovery masterthe prior month. On November 8, Judge Spector denied Avco's motion. She declined to impose further sanctions at that time. Effective January 9, 2012, the case was transferred to Judge Monica Benton. 

### On January 20, Becker served Avco with his second interrogatories and third requests for production. Avco responded on February 24. Again, Avco objected to many ofthe requests or stated that ithad no responsive documents.No. 70756-6-1/7 On May 25, Becker brought a motion before Discovery Master Kallas to compel 

### Avco to fully answer the second interrogatories and third requests for production. On 

### June 12, Discovery Master Kallas granted Becker's motion in part and ordered Avco to produce certain discovery. She rejected Becker's argumentthatAvco's responses were evasive, instead finding thatAvco explicitlyrepresented that its responses were complete 

### and compliant. She further stated that Avco was held to its representations and its duty to reasonably supplement its responses. 

### On September 4 and 5, Becker and Crews amended their complaints to add federal causes of action. 

### On September 28, the plaintiffsjointly moved for a defaultjudgment againstAvco 

### for itsfailureto complywithJudge Spector'sdiscovery and contempt orders. Theplaintiffs 

### explained that they sought discovery about Avco's role in approving the Delrin float, 

### knowledge about the defective floats, and failure to notify the FAA or aircraft operators and owners about the defect. The plaintiffs identified several examples ofdocuments 

### that Avco failed to produce, including the 2005 e-mails with Precision about the Delrin float leaking problems. The plaintiffs asserted that Avco's noncompliance put them at a "serious disadvantage trying to prepare fortrial without the benefit ofcritical facts going to the heart of their case against [Avco] and other defendants." The plaintiffs requested that the courtdeem allallegations of the plaintiffs' complaints admitted and order Avcoin default thereof, or, in the alternative, strike Avco's affirmative defenses, hold that the 

### punitive damages elements againstAvco had been met, and hold thatAvco breached its duty to warn.

7No. 70756-6-1/8
Avco responded on October 4. It did not assert that ithad provided the allegedly withheld documents. However, it maintained that it had responded to all the plaintiffs' discovery requests and had produced documents or made documents available for 

### ipspection. It also explained that, under its records management policy, many of the documents that Precision produced were no longer inAvco's possession. Inthe plaintiffs' October5 reply, they noted thatAvco failed to submitanyemployee affidavit stating that no responsive documents existed or that certain evidence was 

### destroyed under the records management policy. Instead, they observed, Avco "wholly relies on [its attorney's] declaration, which Judge Spector rejected." 

### On February4, 2013, the first day of trial,Judge Benton held oral argumenton the plaintiffs' motion for default. At oral argument, Avco's counsel produced a copy of the 

### records management policy for Judge Benton. Counsel acknowledged that Judge 

### Spectorwas not provided a copy of the policy and was only informedaboutthe policyvia counsel's declaration. Judge Benton found that it was unclear whether the policy extended to the documents requested by the plaintiffs. She stated that she was "not satisfied
. . . that some of the documents requested by the plaintiffcouldn't have been 

### produced." She orallygranted the plaintiffs' motion to sanction Avco. 

### On February 5,Judge Bentonentered a written order granting the plaintiffs' motion. The order stated that there was substantial evidence that Avco did not comply with the 

### plaintiffs' discovery requests, listing "[a]s one example" the 2005 e-mail chain with Precision. The courtfound thatthewithheld discoverytied directly to the plaintiffs'burden 

### of proof regarding Avco's violation of federal regulations and punitive damages. The orderfurther stated thatAvco's justification fornonproduction was insufficient: "The Court

8No. 70756-6-1/9


### Examined the [records management policy], which was provided without affidavit or declaration and here finds the categories within it, combined with counsel's assignment 

### Ofdocuments to the categories within it, to be overly vague." (Emphasis omitted.). The courtfound thatAvco's "continued disregard and violation ofthe discovery and contempt 

### Orders is without reasonable excuse and is willful. [Avco] has and continues to 

### Substantiallyprejudice plaintiffs' preparationfortrial and presentation attrial, on issues of liability, causation, and punitive damages." (Emphasis omitted.) It concluded that the 

### only sanction that suffices is as follows: "All of each plaintiff's allegations in their respective operative Complaints against[Avco] are deemed admitted, andall of[Avco's] defenses, ifany, are stricken." Thecourtestablishedliabilityand causationinfavorofthe 

### plaintiffs and left to thejury the amount ofcompensatory and punitive damages to be ^warded. 

### The jury considered compensatory damages and punitive damages in two 

### separate phases oftrial. Itreturned averdictfor Crews2 of$17,283,000: $11,283,000 in compensatory damages and $6,000,000 in punitivedamages. Avcoappeals.3 DISCUSSION 

### Avco challenges the trial court's discovery sanctions order on multiple grounds. 

### Avco first argues that theorderviolated dueprocess, becauseAvco had no noticethatit Was in continuing violation ofprevious discovery orders. Avco further contends that the 2Afterthecompensatorydamages phase ofthetrial, Avco settledwith Becker. At 

### the punitive damages phase, the parties presented evidence regarding only Crews's claims. After trialconcluded, Crews's and Becker's cases were deconsolidated. 3Avco moved to include summaries and timelines as appendices to its opening 

### brief. There was no objection to the motion. The motion is granted.No. 70756-6-1/10
trial court abused its discretion in imposing the most severe sanctions possible when lesser sanctions would have sufficed. Avco also challenges specific sanctions, asserting that the trial court erred in striking Avco's federal defenses, imposing punitive damages, and denying an offset of amounts Crews received from other defendants.
I. Due Process Avco characterizes the discovery sanctions order as a violation of its right to due process. Due process is satisfied if, before entering a defaultjudgment or dismissing a Claim or defense, the trial court concludes that there was a willful or deliberate refusal to obey a discovery orderand thatthe refusal substantially prejudiced the opponent's ability 

### to prepare for trial. Maqana v. Hyundai Motor Am., 167 Wn.2d 570, 591, 220 P.3d 191 (2009).Here, Judge Spector concluded that Avco willfully violated her discovery orders 

### and that its willful violation prejudiced the plaintiffs in their prosecution of the case. Accordingly, Judge Spector held Avco incontempt. She denied Avco's motion to amend
or vacate the contempt orders. At no point did any judge enter an orderfindingthat the contempt was purged. Avco nonetheless asserts that it was unaware there would be further 

### consequences for its failure to comply withJudge Spector's contempt orders. This is so, Avco argues, because Judge Spector and Discovery Master Kallas entered subsequent orders indicating thatAvco's responses were adequate. Avco does not assertthatthese 

### orders had preclusive effect on subsequentdiscovery decisions or estopped Crews from

10No. 70756-6-1/11 

### arguing thatAvco was in continuing violation. Avco merelyasserts that, in lightofthetwo Orders, the discovery sanctions were an ambush.4 We disagree. 

### First, Avco maintains thatJudge Spectorindicated that Avcowas in compliance by declining the plaintiffs' proposal to impose more severe sanctions. But, this 

### misrepresents the record. The fact that Judge Spector reserved ruling on the three harsher proposed sanctions putAvco on notice ofthe riskthatthe more severe sanctions 

### Could be imposed inthe future for failure to comply. Judge Spector declined to impose 

### those sanctions when ruling on Avco's motion to amend or vacate the contempt orders. 

### But, she did notexpressly revoke her reservation of them in her previous order. Merely declining to impose further sanctions did not indicate that Avco had purged contempt, evidenced by the fact that Judge Spector specifically denied Avco's motion to vacate the Contempt orders. Avco further alleges that Discovery Master Kallas confirmed thatAvco's responses
were adequate. Again, this mischaracterizes the record. The issue before Master Kallas
was not whether Avco had purged its contempt. The issue was whether Avco was evasive in responding to Becker's second interrogatories and third requests for production. Becker had complained that, where Avco produced no responsive documents, itfailed to affirmatively state that it had no documents to produce. Master Kallas stated that Avco's counsel represented that its responses were complete and Compliant. She did not determine that the responses were in fact complete, and she

4At oral argument, Avco also asserted that the trial court should have held an evidentiary hearing before imposing sanctions. But, Avco did not request an evidentiary hearing in its response to the motion for default or at any othertime on this record.

11No. 70756-6-1/12 

### further noted Avco's duty to supplement. Nothing inthese orders provides that Avco's early contempt had been purged or thatthe reserved sanctions had been lifted. Inthe 2011 contempt orders, Judge Spector made the requisite findings to satisfy due process. Her orders clearly put Avco on notice that she was reserving additional sanctions and identified what those sanctions were. The plaintiffs' motion for default put Avco on notice that its compliance with the contempt orders was still in question. Avco then had more than four months before the sanctions hearing, during which it could have Complied with the orders or prepared a defense. Neither the discovery sanctions procedure nor the order violated Avco's right to due process.

II. Discovery Sanctions 

### Avco argues that the trial court erred in imposing a "death penalty order" that was
more severe than necessary to cure any prejudice. If a party fails to obey a discovery 

### order, the trial court may "make such orders in regard to the failure as are just." CR 

### 37(b)(2). The trial court has broad discretion as to the choice ofsanctions forviolation of a discovery order. Burnet v. Spokane Ambulance, 131 Wn.2d 484, 494, 933 P.2d 1036 (1997). We will not disturb its ruling on appeal absent a clear showing of abuse of discretion, jd. Discovery sanctions serveto deter, punish, compensate, educate, and ensurethat 

### the wrongdoerdoes notprofitfrom the wrong. Wash. State Physicians Ins. Exch. &Ass'n y. Fisons Corp., 122 Wn.2d 299, 356, 858 P.2d 1054 (1993). The trial court should impose the least severe sanction that is adequate to serve the sanction's particular 

### purpose but is not so minimal as to undermine the purpose of discovery. ]d. at 355-56.

12No. 70756-6-1/13 

### CR 37(b) presents a nonexclusive list ofpossible sanctions, including designating facts as established, striking claims or defenses, limiting or prohibiting evidence, default, and contempt. Ifa trial court imposes one ofthe harsher remedies under CR 37(b), the record must clearly show that (1) one party willfully or deliberately violated the discovery 

### ijules and orders, (2) the opposing party was substantially prejudiced in its ability to 

### prepare for trial, and (3) the trial court explicitly considered whether a lesser sanction Would have sufficed. Magana, 167 Wn.2d at 584. We can disturb a trial court's sanction Only if it is clearly unsupported by the record, jd. at 583. Here, the trial court made the three required findings on the record. Thus, our focus is whetherthe record supports those findings. A. Willful Violation 

### A party's disregard of a court order without reasonable excuse is deemed willful. 

### (Rivers v. Wash. State Conference ofMason Contractors, 145Wn.2d 674, 686-87, 41 F\3d 1175 (2002). Here, the trial court found that Avco's "discovery violations were willful
as found byJudge Spectorand have continued to be willful since her rulinghas not been Complied with. . . . Further the court finds that [Avco] has not presented a reasonable


### excuse or justification for its non-compliance." (Emphasis omitted.) This finding is

i supported by the record. The plaintiffs repeatedly requested information aboutAvco's involvement withthe Delrin floats and knowledge that they were problematic. Avco did not provide the 

### requested discovery, despite being ordered to produce and subsequently being held in contemptforfailing to do so. Avco claimed that, under its records management policy, it

13No. 70756-6-1/14 

### Was not required to keep allthe documents that the plaintiffs sought. As a result, Avco asserted, its failure to produce the records was not willful. 

### Avco did not produce or prove the policy at the original contempt hearing before 

### Judge Spector. Instead, it submitted an attorney declaration stating that the policy governs the retention of "various categories of documents, including intra-company and inter-company correspondence." Counsel further stated that [t]he discovery served by plaintiffs seeks information and documents dating back many decades, much of which is not [sic] longer maintained in company records by virtue of the Records Management Policy and by attrition given the passage oftime and the retirement or deaths of persons employed by [Avco] overthe years. The declaration did not specifythe discovery requests ortypes ofdocuments to which the policy applied. 

### Avco did not provide the actual policy to the court for another 16 months, when it 

### presented a copy of the policy for Judge Benton to review at the sanctions hearing. Counsel again stated that the policy "has retention periods for various categories of documents." As an example, counsel pointed out that the 2005 e-mails would not have 

### been maintained past a certain number ofyears.5 Judge Benton examined thepolicyand found that itwas "vague in many ways .... I'm not satisfied, looking at the exhibits provided today, that some ofthe documents requested bythe plaintiffcouldn't have been 

### produced."

5The records management policywas protected by a pretrial stipulation. Counsel did not state on the record the number of years that correspondence would be retained and instead pointed the trial courtto the relevant portion ofthe written policy.

14No. 70756-6-1/15 

### The records management policy is not part of the record on appeal,6 so we are unable to independently review its language. On the record before us, however, itwas not an abuse of discretion to reject the policyas an excusefor nonproduction. The scope i 

### and operation of the policy is unclear and unsupported. Avco's attorney declarations and 

### pleadings do notexplain howthe policy applies to the "various categories" of documents requested. Avco did not submit any other evidence, such as employee affidavits, about 

### how the policy applied to the requested documents and theirdestruction. As the trial court noted, itwould require a "leap offaith" to conclude that the policy covered the evidence in question here. 

### Avco also committed violations of the contempt order unrelated to its records 

### Management policy. It failed tocomply with JudgeSpector's orderthatit produce and | i 

### identify by Bates stamp every document that was responsive to every interrogatory or 

### request for production. Instead, Avco produced and referred to 694 pages ofBates 

### stamped documents and "otherbusiness records."7 The plaintiffs determinedthatnearly all oftheBates stamped documents were unrelated to theinformation sought. Avco also maintained thatitmade relevantdocuments availableforinspection inPennsylvania. But, 

### when Becker's counsel went to Pennsylvania, no responsive documents wereidentified, letalone Bates numbered. Counselwas shown a room wherein he estimatedthat roughly


### 6Therecord on appeal containsnearly 18,000pages of clerk's papers, ourreview ofwhich did not reveal a copy of the records management policy. Neither party cites to 

### thepolicy. Avco cites toits trial counsel's declarations, wherein counsel stated thatthe 

### policy existed. But, thepolicy wasnot attached tothose declarations. And, in Avco's final motion to the trial court, Avco stated that the policy was "provided" to the plaintiffs and "shown" to the court—not entered into the record. 

### 7The "other business records" appear to be over 6,000 pages of Bates stamped documents thatwere not specifically identified.
15No. 70756-6-1/16
60 boxes were assembled to be searched. He was not permitted to search them at that time. But, he observed that two ofthe files were labeled "Moffett," the name of an Avco 0mployee and witness in the case. When counsel was later permitted to review the documents, he saw that some files—including the Moffett boxes—had been removed. 

### He determined that the remaining files were unrelated to the discovery inthis case. Judge Benton found that this was nonresponsive to Judge Spector's order and observed that there was a "pattern here." Failure to comply was even evidentwith records admittedly inAvco's possession. The plaintiffs requested a copy ofAvco's insurance policy covering their claims against Avco. Avco had not produced the insurance policy as of the day of trial. When Judge Benton asked counsel why ithad not been produced, counsel identified no impediment 

### preventing her from doing so. Instead, she responded that she madethe policy "available for inspection" and that itwas "sitting in my office." Avco did not complywith the original contemptorder. On this record, itwas not an abuse for the court to conclude that Avco did not provide a reasonable excuse for its nonproduction. Therefore, the trial court did not abuse its discretion in finding that the violation ofthe discovery order was willful. B. Prejudice The trial court found that Avco's "discovery violations caused the Plaintiffs substantial prejudice in conducting discovery ofthis case, in preparation for trial and for trial of this case." As a result of Avco's nonproduction, the court found that: (1) the plaintiffswere unable to properly depose Avco's liability lay and expertwitnesses; (2) the plaintiffs did not have the requisite documents to present at trial; and (3) the prejudice

16No. 70756-6-1/17

was even more pronounced due to Avco's continued contemptovermore than 16 months. 

### These findings are supported bythe record. In Magana, the trial court likewise sanctioned a defendant for withholding requested discovery and hindering the plaintiff's ability to presentcrucial evidence attrial. See 167 Wn.2d at 581-82. Magana was seriously injured in a car accident and sued the carmaker, Hyundai, jd. at 576-77. Magana's theory was that there was a design defect in the car seat, and he sought discovery about other accidents involving that particular seat design. Id. at 577. Hyundai responded that there were no lawsuits or claims in connection withthat design. Id. at 577-78. At trial, thejury found in favor ofMagana and awarded over $8 million in damages, jd. at 578. Hyundai appealed on an evidentiary issue and was awarded a retrial solely on the issue of liability, id. at 578-79. Prior to the second trial, Magana requested updated discovery about accidents 

### involving the particular seat design. Id. at 579. When Hyundai resisted, the trial court Orderedproduction of alldiscovery involving consumercomplaints and lawsuits involving 

### allegations ofseatback failure. Id. at 580. Hyundai then produced numerous documents related to seat back failure, including nine reports involving the same model of car in 

### Magana's accident. Id. at 580. As a sanction, the trial court imposed a default judgment against Hyundai. Jd. at 581-82. The Washington Supreme Court affirmed. Id. at 593-94. Regarding the prejudice prong, the court noted that the sole remaining issue was Hyundai's liability, and Hyundaisuppressed evidence relevantto Magana's claims on that issue. !g\at589. Avco maintains that Crews was not prejudiced, because he obtained the sensitive e-mails from Precision. But, as Crews points out, he was not provided the attachment

17No. 70756-6-1/18


### referenced inthe e-mails. Moreover, based on discovery obtained from Precision as well
as deposition testimony from Avco's own employees, Crews asserted thatAvco withheld multiple other pieces of relevant discovery: reports about Delrin float leaks, information about a previous Avco accident investigation involving the same model float, communication between Avco and the FAA regarding the floats, and information about weekly phone meetings between Precision and Avco about the leaking Delrin floats. In Magana, Hyundai produced incident reports 45-75 days prior to retrial, jd. at 

### 579-80. Here the documents were not produced at all. Avco disputes the existence of the requested discovery. However, the e-mail chain with Precision clearly showed that
some ofthe discovery sought had existed and would have demonstrated that Avco was aware of problems with the Delrin floats and had at least some degree of involvement with them. And, Crews offered evidence—based in part on Avco employee testimony— that more information was out there. Here, as in Magana, the withheld information goes straight to the plaintiff's theory ofliability. The prejudice is at least as great as in Magana. The trial court did not abuse its discretion in finding thatAvco's discovery violation 

### prejudiced Crews's preparation for trial and presentation of his case. C. Lesser Sanctions 

### The trial court explicitlyconsidered several lessersanctions. Atthattime, trialwas beginning, and itwas too late to coerce compliance. The trial courtfound that, although monetary damages could compensate Crews, 

### they would not adequately punish, deter, or educate. This was reasonable. Judge

18No. 70756-6-1/19 

### Spector had imposed monetary sanctions against Avco on three prior occasions8 and Avco still did not comply with the discovery orders. The court also found that limiting Avco's presentation of evidence would not alleviate the prejudice to Crews in his ability to meet his burden of proof. Avco's nonproduction hindered Crews's ability to properly depose witnesses and present evidence at trial, preventing him from establishing a case against Avco. Restricting 

### Avco's evidence would not remedy this harm. Instead, the court deemed all plaintiffs' claims admitted, struck all of Avco's defenses, and awarded punitive damages in an amountto be determined bythejury. The Stricken defenses included lack of involvement with the carburetor or float, compliance withfederal regulations, the federal statute ofrepose, comparativefault, the unavailability 

### of punitivedamages, and offsetofamounts recovered from otherdefendants. In addition, Avco was prohibited from asserting pilot error. The court found thatthis served to advance the important due process goals of insuring fair trials for all 

### parties[,] of punishing a party for violations of long standing court orders, of deterring other parties from acting as [Avco] has in this case, ofeducating 

### the party litigants, bench, bar, and the public about the importance of complying withdiscovery obligations and courtorders, and incompensating the parties who are prejudiced by this conduct. The trial court made the required consideration oflesser sanctions on the record. 

### We find thatitdid notabuse itsdiscretion in rejecting the claimthat lessersanctions would be adequate for a fair trial. Nor didthe trial court abuse its discretion bydetermining that

8Judge Spector awarded the plaintiffs costs and fees for bringing their motions to compel and motionsforcontemptandforresponding toAvco's motion to amend orvacate the contempt orders. Master Kallas ordered Avco to pay $18,683.58 in costs and fees associated withthose motions and further provided thatAvco borethe Discovery Master's expenses for considering the motion for costs and fees.
19No. 70756-6-1/20
the focus ofthe contempt had moved beyond compliance withthe contemptorderand on to punishment and deterrence. D. Challenges to Specific Sanction Provisions 1. Striking Federal Defenses Avco asserts thatthe trialcourt erred inprecluding Avco from asserting its federal defenses.9 Avco maintains that itdid not manufacture or install the carburetor float and cannot be held liable for the float under federal law. Essentially, Avco asks us to determine that, as a matter of law, it was not liable under federal regulations. That 

### question is notproperly before thiscourt. Thetrial courtstruckAvco's federal defenses as a sanction for its discoveryviolations. Therefore, we do not ask whether thetrial court 

### arrived at theproperlegal conclusion, butwhetherthecourt acted within its discretion in imposing the sanction. 

### Crews asserted thatAvcowas liable for a defective and unsafe product and failed 

### to warn the FAA or aircraft owners and operators, in violation of several federal 

### regulations. Avcowithheldinformationthatitknewaboutthefaultyfloatbeforethesubject accident and was involved incommunication and investigation as to the defect. This was relevant to its involvement with the float and its failure to warn and therefore relevant to 

### its failure tocomply with federal regulations. Avco's discoveryviolations thusprejudiced 

### theplaintiffs' abilitytolitigateAvco's liabilityunderthefederal regulations. StrikingAvco's
9Crews asserts that Avcofailed to preserve itsdefenses byfailing to respond to 

### his third amended complaint. But, in Avco's answer to Crews's earlier complaint, it 

### alleged defenses thatwere relevantto theclaims in Crews's amended complaint. This wassufficienttopreserve the defenses. See Durveav. Wilson, 135Wn. App. 233, 239, 144P.3d318(2006) (finding defenses preserved where answer tooriginalcomplaintwas sufficientto indicate grounds onwhich defendant intended to defend).
20No. 70756-6-1/21


### federal defenses served to deter such conduct, prevent Avco from benefitting from withholding the information necessary to prove Crews's case, compensate Crews forthe consequences ofwithholding that information, and punish Avco. This sanction was tailored to Avco's violation and was not an abuse ofdiscretion.10 2. Striking Comparative Fault Defense Avco contends that the trial court abused its discretion in striking Avco's comparative fault defense. The court found that merely establishing certain facts, such
as Avco's liability, would "still prejudice the plaintiffs in their ability to prove the elements of their case." The court stated that it would not instruct the jury to determine whether any other parties are at fault, because it would "prejudice plaintiffs' ability to prove that [Avco] is solely liable fortheirinjuries and damages." The courtfurther stated thatitwould 

### not instruct the jury on the pilot's fault, because "itwould be prejudicial to plaintiffCrews 

### to ask the jurytocomparethe negligence orliabilityof the acts of[Avco] tothose ofplaintiff Crews given the discovery violation." Instead, the court instructed the jury that Avco's violation offederal regulations was a proximate cause ofthe crash and that Avco was liable to each plaintiff. Avco asserts that this was an abuse of discretion, because the comparative fault defense was unrelated to the withheld discovery. Avco maintains that striking this 10 Furthermore, it is unclear that Avco's federal statute of repose defense is relevant. Underthe General Aviation Revitalization Act of 1994 (GARA), Pub. L. No. 103- 298, 108 Stat. 1552 (codified at 49 U.S.C. § 40101 note), manufacturers of general aviation aircraft and parts are not liable for damages arising out of an accident occurring 18 years or more after the date ofdelivery ofthe aircraft to its first purchaser or lessee. 

### GARA § 2(a)(1). Avco notes that it built and sold the plane's engine in 1978, meaning the engine is covered by the 18 year period ofrepose. But, the original engine is not in question here—it isthe replacement carburetorthat allegedly failed. The carburetorwas built in 1999. The statute has not triggered as to the carburetor.

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defense goes a step further than Magana, where the sole issue was the defendant's 

### liability. Here, Avco notes, the parties also disputed whether the negligence of other defendants or the pilotwas a proximate cause ofthe crash. Avco is correct that this case is more procedurally complicated than Magana. Crews sued 11 defendants in total. By the time of trial, Crews had dismissed and/or settled with many ofthe defendants. Avco counterclaimed against Crews, alleging pilot
error. Becker named Houston's estate as a defendant, also alleging potential pilot error. Contrary to Avco's position, however, we find thatthis complicated posture lends support for the propriety of striking the comparative fault defense. Avco's discovery violations prejudiced Crews's ability to establish Avco's true role in the plane crash. This affected the allocation of liability to Avco and among the defendants. This violation could have allowed the jury to undervalue Avco's portion of 

### fault. And, establishing pilot negligence could have defeated joint and several liability, thereby shifting liability away from Avco. See RCW4.22.070(1 )(b); Kottler v. State, 136 Wn.2d 437, 446-47, 963 P.2d 834 (1998). Striking the comparative fault defense prevented Avco from benefitting from its discovery violations inthis way. Avco challenges the trial court's conclusion that it would have been insufficient to merely establish Avco's liability, so this sanction was necessary. Crews counters that it would cause severe prejudice ifthe jury were to "apportion fault between Houston and Avco based on a trial solely about Houston's alleged negligence and a one-page instruction that Avco was liable." It is reasonable, not an abuse of discretion, to accept that Crews would suffer prejudice ifthejury heard evidence of piloterrorthroughouttrial, but evidence ofAvco's fault only from a paragraph long jury instruction. Again, this could

22No. 70756-6-1/23 

### lead thejuryto misallocate fault between Crews andAvco, allowing Avco tobenefitfrom its discovery violations. 

### Avco further maintains that this was not the least severe sanction necessary to
cure any prejudice Crews suffered. But, Fisons instructs us that the trial court should impose the least severe sanction that is adequate to "serve the purpose ofthe particular 

### sanction." 122 Wn.2d at 355-56 (emphasis added). Discoverysanctions serve not only to compensate, butto educate, punish, and deter. Id. at 356. And, the trial court's choice ofsanction is a matter ofdiscretion—there is no bright line rule dictating which rationale applies to which violation. Judge Benton stated that she was "trulytroubled" by Avco's conduct, and her rationales for imposing sanctions included "punishing [Avco] for violations of long standing courtorders." On the eve of trial, itwas too late forcompliance. Financial sanctions would not adequately compensate Crews. Punishment and deterrence were particularly valid purposes to be served by sanctions. Itwas not an abuse ofdiscretion to strike Avco's comparative fault defense. 3. Imposing Punitive Damages Avco asserts that the trial court erred in imposing punitive damages. Avco first argues that itcould not be held liable under eitherWashington or Pennsylvania law. This question, like Avco's liability under federal law, is not properly before this court. See supra, at 20-21. This is because the trial court determined Avco's liability by deeming the pleadings admitted as a sanction for Avco's discovery violations. Avco further contends that the trial courtfailed to perform a choice of law analysis and determine that Pennsylvania law applies. When the transactions at issue did not all
occur inWashington, the court must determine which state's law applies to the claims.

23No. 70756-6-1/24


### FutureSelect Portfolio Mgmt., Inc. v.TremontGrp. Holdings, Inc.. 175Wn. App. 840, 856, 309 P.3d 555 (2013), affd, 180 Wn.2d 954, 331 P.3d 29 (2014). Here, the trial court applied Pennsylvania law withrespectto punitivedamages and did not conduct a formal choice of law analysis on the record. But, that is not fatal here. 

### Crews asserted that Avco committed outrageous and reckless conduct when it 

### knowingly concealed and withheld its knowledge that the floats were faulty, creating an unreasonable risk of death or severe injury. Crews further asserted that Pennsylvania had the most significantcontacts withthe underlying accident: "[Avco's] principal place of business i[s] Pennsylvania. . . . [Avco] designs, manufactures, sells, and places into the stream of commerce reciprocating aircraft engines, including carburetors, and provides continuing information and services to aircraft owners and operators in support of [Avco] engines, from its Williamsport, Pennsylvania facilities." Because these allegations were deemed admitted as a sanction, itwas uncontested that Pennsylvania law applied as to punitive damages. This sanction was tailored to Avco's violation. In Pennsylvania, punitive damages
are available "when a person's actions are of such an outrageous nature as to demonstrate intentional, willful, wanton or reckless conduct." SHV Coal, Inc. v. C'nt'l Grain Co., 526 Pa. 489, 493, 587 A.2d 702 (1991). Therefore, Crews argued, evidence ofAvco's knowledge aboutthe faulty floats was highly relevantto punitive damages. The trial court found that Avco's noncompliance substantially prejudiced the plaintiffs' presentation ofevidence on punitive damages attrial. Indeeming the pleadings admitted, the sanction made punitive damages available to be proved. This deprived Avco ofthe

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### benefitofwithholding information about its conduct and compensated Crews for the lack ofthat information. 

### Thetrial court did not err in failing to conduct a choice of law analysis. Itwas not an abuse ofdiscretion to allow punitive damages under these pleadings as deemed admitted. 4. Denying Offset 

### Finally, Avco argues that the trial court erred in denying it an offset ofsettlement
amounts Crews received from other defendants. Avco asserted offset as an affirmative defense. The discovery sanctions order struck all defenses. However, after the court 

### imposed sanctions and after trial, the parties stipulated to a reduction injudgment based

on Crews's settlements with two other defendants. The trial court then entered final 

### judgmentwithout providing forthe reduction. The court deniedAvco's subsequentmotion to amend thejudgmentto reflect the parties' stipulation.11 Insanctioning Avco, the court prohibited it from arguing that other parties were at fault, reasoning that it would prejudice the plaintiffs' ability to prove that Avco was solely liable. The discovery sanctions orderdid not provide a separate reason for strikingAvco's offset defense. Having ensured thatjudgmentwould be entered againstAvco forthe full amount of damages proven, the trial court eliminated benefit to Avco from any willful withholding ofdiscovery. Crews was entitled to a single recovery. See RCW4.22.060(2). Avco was statutorily entitled to have its liabilityreduced by the amountCrews had already received. See RCW4.22.060(2). Denying Avco's statutory right to offsetfor settlements


### 11 As of oral argument, the parties had not filed a partial satisfaction ofjudgment to fulfill their stipulation.

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### with other defendants was not necessary to punish the discovery violation or to protect the plaintiffs' recovery. The parties recognized this in their posttrial stipulation. We are persuaded that itwas an abuse of discretion to disregard the statute and the parties' stipulation. Because itwas an abuse of discretion to deny offset of settlement amounts, we 

### remand foramendment ofthe finaljudgmentto reflect any offsets authorized pursuantto chapter4.22 RCW. We otherwise affirm.

WE CONCUR:

s-*_- A. 

### >Mn+ 

# &X.J".

26