Title: Harris v. Soley
Citation: 2000 ME 150, 756 A.2d 499
Docket Number: 
State: Maine
Issuer: Maine Supreme Court
Date: July 28, 2000

Decided July 28, 2000. *502 Gregory P. Hansel, Esq., (orally), John P. McVeigh, Esq., Preti, Flaherty, Beliveau, Pachios & Haley, LLC, Portland, for plaintiffs. Peter J. Rubin, Esq., (orally), Glenn Israel, Esq., Bernstein, Shur, Sawyer & Nelson, P.A., Portland, for defendants. Panel WATHEN, C.J., and CLIFFORD, RUDMAN, SAUFLEY, ALEXANDER, and CALKINS, JJ. SAUFLEY, J. [¶ 1] Joseph Soley, Monopoly, Inc., Jobar, Inc., Seamen's Club, Inc., Christopher Stafiej, and Preston Wilkin[1] appeal from a judgment entered against them by the Superior Court (Cumberland County, Mills, J.) on a complaint filed by former tenants. The defendants appeal both from the default judgment on liability, entered by the court as a sanction for discovery violations, and from the judgment entered on the jury's verdict on damages. We affirm the judgments. I. BACKGROUNDA. Factual Background [¶ 2] Near Labor Day of 1997, Andrea Harris, Kimberly Nightingale, Karen Simard, and Michelle Dussault[2] moved into a large apartment that was located in the Old Port area of Portland and owned by Joseph Soley. Soley had promised the tenants that the apartment, which had previously been condemned by the City of Portland, would be repaired by the time they moved in. When they arrived, the condemnation notice was still on the door. Upon entering the apartment, they found it in an uninhabitable condition. They spoke to Soley's property manager who indicated that if the tenants were willing to clean the apartment themselves, she would credit them with $750 of their $1000 monthly rent for the month of September. They rented a steam cleaner, bought various cleaning supplies, and cleaned the apartment themselves. Soley's property manager also suggested that they buy a new refrigerator and deduct it from the rent because the one in the apartment did not work. [¶ 3] Despite their efforts to clean the apartment, the tenants continued to have problems with infestations of mice and cockroaches, as well as a persistent odor of cat urine. A dead cat was eventually found beneath the floorboards. The apartment had no heat during the month of October. One tenant slept with blankets over her head, not only because of the cold, but also to keep bugs away from her. These problems persisted into November, and the tenants submitted to Soley a list of complaints including a broken skylight, a broken toilet, a broken garbage disposal, a leaking roof, and cockroach infestation. As winter arrived, snow would fall into the *503 living room through the broken skylight. When Soley did not make the needed repairs, the tenants stopped paying rent. During this period, Soley telephoned them on several occasions regarding the rent and spoke to the tenants in a rude and abrasive manner. In February, the property manager told the tenants that Soley had begun eviction proceedings against them. [¶ 4] The tenants eventually found another place to live and had begun moving out by April 1, 1998.[3] While the tenants were in the process of moving out, but were away from the apartment, Soley's agents broke into the apartment and took many of the tenants' remaining belongings. Upon confrontation with the returning tenants and police officers who had been called to the scene, Soley's agents indicated that Soley had directed their actions. Eventually, the officers and one of the tenants went to an apartment nearby and recovered some, but not all, of the missing property. [¶ 5] The tenants then sought out Soley to request that he return their remaining possessions. They located him at his restaurant, the Seamen's Club. According to one of the tenants, he replied that he would return their property only after they paid him $3000.[4] He then ordered them to leave and threatened to call the police and have them forcibly removed. Soley told the tenants that he knew where they were moving and where their families lived, a statement that the tenants took as a threat. B. Procedural Background [¶ 6] On June 18, 1998, the tenants brought suit against the defendants in a complaint that included claims for conversion, intentional infliction of emotional distress, punitive damages, breach of contract, wrongful eviction, and wrongful retention of a security deposit. The court set a discovery deadline of February 1, 1999. As discovery proceeded, Soley repeatedly failed to comply with appropriate discovery requests, failed to make the apartment available for inspection, and, later, failed to make witnesses available for deposition. Eventually, the tenants filed a motion to compel discovery. The parties reached agreement on certain aspects of discovery and the court entered an order compelling the delivery of documentary discovery by December 20. When the defendants did not comply with that order, the court sanctioned the defendants by entering judgment against them on all counts, leaving only the matter of damages for trial. When Soley again failed to comply with damage-related discovery requests, the court precluded him from offering certain evidence in the trial on damages. [¶ 7] At the two-day jury trial on the issue of the tenants' damages, the trial judge read the complaint to the jury and explained that they were to accept those facts as true and would only be required to address the question of damages.[5] After hearing the evidence, the jury awarded each of the tenants $15,000 for intentional infliction of emotional distress, $110 for breach of contract, and damages varying from $250 to $1060 on their claims for conversion. They also awarded a total of $1 million in punitive damages against Joseph Soley, Monopoly, Inc., Seamen's Club, Baker's Table, Inc., and Jobar, Inc., and $4000 against Christopher Stafiej. The court entered its judgment in accordance with the jury's determinations of damages, along with additional damages determined by the court and those agreed *504 to by the parties on the claims for wrongful eviction, wrongful retention of a security deposit, and breach of implied warranty of fitness for human habitation.[6] This appeal followed. II. DISCUSSIONA. Entry of Judgment as a Discovery Sanction [¶ 8] Soley first challenges the court's imposition of a judgment against all defendants on all claims of liability as a sanction, pursuant to M.R. Civ.P. 37(b)(2)(C),[7] for discovery related conduct. Soley argues that the court abused its discretion by imposing the ultimate sanction without providing the defendants another chance to comply with the discovery order, and without issuing a warning that the court was contemplating the entry of judgment as a sanction.[8] [¶ 9] We review the imposition of sanctions for discovery violations for an abuse of discretion, but will more closely scrutinize sanctions such as dismissal or default. See Saucier v. State Tax Assessor, 1998 ME 61, ¶ 6, 708 A.2d 281 , 283 . Nevertheless, "[a]lthough we recognize the constitutional implications of dismissal and give greater scrutiny to the decision to dismiss than we would give to a lesser sanction, we will not lightly overrule the trial court's decision." Orlandella v. O'Brien, 637 A.2d 105 , 106 (Me.1994) (citing Fallon v. Casco-Northern Corp., 462 A.2d 53 , 56 (Me.1983); Reeves v. Travelers Ins. Cos., 421 A.2d 47 , 50 (Me.1980)); see also Pelletier v. Pathiraja, 519 A.2d 187 , 190 (Me.1986).[9] [¶ 10] A court that is called upon to determine an appropriate sanction for a discovery violation must understand the facts at issue, the factors and the law material to its decision, and must weigh the factors accordingly. The factors to be weighed when the court considers imposing sanctions for discovery violations include, but are not limited to, "the purpose of the specific rule at issue, the party's conduct throughout the proceedings, the party's bona fides in its failure to comply, *505 prejudice to other parties, and the need for the orderly administration of justice."[10]Baker's Table, Inc. v. City of Portland, 2000 ME 7, ¶ 17, 743 A.2d 237 , 243. The court must also consider the purposes to be served by imposing sanctions, including penalizing the noncompliant party, remedying the effects of the noncompliance, and deterring similar conduct by the offending party, as well as by others. See Pelletier, 519 A.2d at 190; Reeves, 421 A.2d at 50. [¶ 11] When the court has determined the facts without error and has understood the factors and law material to the decision at hand, we defer to the trial court and will find an abuse of discretion only where the court makes a "serious mistake" in weighing the applicable factors. See West Point-Pepperell, Inc. v. State Tax Assessor, 1997 ME 58, ¶ 7, 691 A.2d 1211 , 1213. [¶ 12] In the matter before us, the court had before it evidence that Soley failed at every turn to comply with Rule 26, failed to cooperate in good faith in providing access to the apartment, failed to make witnesses reasonably available for deposition, and ultimately failed to comply with the court's order compelling compliance with the rules. By the date first scheduled for hearing on the tenants' motion for discovery sanctions over seven months after the service of the complaint and first request for documents, two days short of the close of discovery, and more than a month after the date by which compliance had been ordered by the court Soley had produced not a single document, the apartment had not been made available for inspection, and only one deposition had been taken.[11] [¶ 13] As a result of the delay occasioned by Soley's conduct, discovery had barely begun on the day that the court had set for the close of discovery. The tenants and their attorneys were required to spend unnecessary time and money setting up and canceling depositions, writing letters, scheduling conferences with the court, and attending hearings. The tenants were effectively prevented from preparing their case and on the eve of trial had received almost no meaningful discovery. It is difficult to imagine a more unprincipled approach to the discovery process. [¶ 14] Soley argues, nonetheless, that the defendants should not have been exposed to the ultimate sanction for two reasons: first, Soley argues that the court was unaware of whether his attorney had kept him informed on discovery issues, and second, Soley insists that the defendants only engaged in a clear violation of one court order.[12] Both arguments lack merit. [¶ 15] Regarding Soley's first argument, "it is well settled that the knowledge of trial counsel is imputed to plaintiff." Orlandella, 637 A.2d at 106 n. 1. The conduct of discovery constitutes no exception to that rule. Soley's complete failure to comply with his discovery obligations, regardless of his relationship with his attorney, *506 requires that the defendants be held fully accountable. [¶ 16] Soley's second argument, that default judgment was an inappropriate sanction given the fact that the defendants only failed to comply with one court order, demonstrates a critical misapprehension of the rules of discovery. Our discovery rules are designed to "eliminate the sporting theory of justice." Reeves, 421 A.2d at 50, and are based on concepts of voluntary cooperation.[13] A party to a lawsuit has a duty to comply with the rules regarding discovery throughout the litigation. [¶ 17] Recourse to the authority of the court for orders compelling compliance with the rules must be the exception rather than the rule. Ordinarily, the court's intervention in discovery matters should be necessary only where there is a legitimate dispute regarding the responsibility of one party to provide certain discovery. When one party forces another to obtain a court order merely to enforce an obligation that is not legitimately in dispute, that party wastes the court's resources, causes unnecessary expense to the opposing party, and delays the ultimate resolution of the suit. Hence, a party's failure to cooperate in discovery prior to the entry of a court order compelling compliance constitutes "conduct throughout the proceeding" that may be considered by a court in determining an appropriate sanction for purposes of M.R. Civ. P. 37(b). Baker's Table, Inc., 2000 ME 7, ¶ 17, 743 A.2d at 243. [¶ 18] There can be no question on the record of this case that Soley failed to comply with the rules of discovery, caused additional expense and delay by his conduct, and failed to comply with the court order requiring his compliance. The court acted well within the bounds of its discretion when it entered judgment in favor of the tenants on all claims as a discovery sanction. B. In Limine Ruling Excluding Evidence of Joseph Soley's Debts [¶ 19] After default on liability was imposed as a sanction for Soley's failure to provide discovery, the court issued another discovery order in March 1999 compelling defendants to provide requested financial information. Notwithstanding what was, at that point, the obvious risk of failing to provide discovery, Soley failed once again to provide any meaningful information.[14] Finding that there had been absolutely no effort on Solely's part to verify or even investigate the figures provided to the tenants, the court concluded that there was no reliable information provided by Soley regarding his financial liabilities and therefore that it would be improper to allow him to testify regarding liabilities at trial. [¶ 20] As with the court's first sanction for discovery violations, we review the order for an abuse of discretion, looking to the same factors and principles as set out above, and we conclude that the court acted well within the range of its discretion in fashioning the sanction for Soley's continued failure to comply with the court's orders regarding production of his financial documents. C. Admission of Evidence of Previous Violations of the City's Code [¶ 21] Soley next argues that the court erred by admitting evidence of Soley's *507 prior building code violations in the City of Portland on the issue of punitive damages. Soley contends that the evidence was irrelevant to the determination of punitive damages stemming from either the claim for conversion or the claim for the intentional infliction of emotional distress. [¶ 22] Any analysis of relevance regarding the determination of punitive damages in this case necessarily begins with a review of the facts conclusively established upon the adjudication by default of liability on the conversion and emotional distress claims.[15] In the count alleging intentional infliction of emotional distress, the tenants reallege the general facts recited in their complaint, including, inter alia, Soley's repeated broken promises to fix the numerous problems with the tenants' apartment, his refusal to fix the apartment following an inspection by the Portland Code Enforcement Officer in September, and the continuing condemnation of the premises as unfit for human occupation. [¶ 23] Thus, the tortious conduct proved by the tenants was not limited to the break-in, as Soley argues, but encompassed the ongoing conduct of the defendants, including repeated refusals to fix problems amounting to code violations. It is well established that prior misconduct by a defendant that is similar to the misconduct giving rise to liability is relevant to the determination of punitive damages. See BMW of N. Am., Inc. v. Gore, 517 U.S. 559 , 576-77, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) (citing TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443 , 462 n. 28, 113 S. Ct. 2711 n. 28, 125 L. Ed. 2d 366 n. 28 (1993); Gryger v. Burke, 334 U.S. 728 , 732, 68 S. Ct. 1256, 92 L. Ed. 1683 (1948)). This approach reflects one of the primary purposes of punitive damages in allowing that "a recidivist may be punished more severely than a first offender [because] repeated misconduct is more reprehensible than an individual instance of malfeasance." BMW, 517 U.S. at 577, 116 S. Ct. 1589.[16] [¶ 24] The court did not err in admitting, on a carefully limited basis, evidence of prior conduct relating to repeated failures to fix serious habitability problems. III. DAMAGESA. Emotional Distress Damages [¶ 25] The jury awarded each of the tenants $15,000 as damages for emotional distress. The defendants argue that the evidence does not support an award to each of the tenants in identical amounts. In addition, Soley relies on the fact that the awards are identical to support a claim that the awards are the result of passion and prejudice. [¶ 26] The determination of damages is the "`sole province of the factfinder,' [and] we will not disturb the jury's decision unless there is `no basis in the evidence for the award,'" Tang of the Sea, Inc. v. Bayley's Quality Seafoods, Inc., 1998 ME 264, ¶ 8, 721 A.2d 648 , 650 (quoting VanVoorhees v. Dodge, 679 A.2d 1077 , 1081 (Me.1996) (emphasis in original), or unless "the jury acted under some bias, prejudice, or improper influence," Lawrence v. Saunders, 539 A.2d 1102 , 1103 (Me.1988)) (citations omitted), quoted in Town of Stonington v. Galilean Gospel Temple, 1999 Me 2, ¶ 17, 722 A.2d 1269 , 1273. [¶ 27] Contrary to Soley's argument, the jury was not required to find *508 that each of the tenants suffered identical emotional distress in order to award the same amount of damages to each; rather, the jury need only have found that the emotional distress suffered by each, regardless of the nature of that distress, warranted comparable monetary compensation. The evidence introduced at trial, including evidence of Soley's conduct and the tenants' testimony regarding their emotional responses, could support a determination that the tenants suffered comparable emotional distress. [¶ 28] We also reject the defendants' argument that the awards must necessarily be the product of passion and prejudice because they are identical. The mere fact that different tenants receive identical awards does not establish the existence of bias or prejudice. See, e.g., Lambert v. Ackerley, 180 F.3d 997, 1011 (9th Cir.1999); Kuhl v. Atchison, Topeka & Santa Fe Ry. Co., 250 Kan. 332, 827 P.2d 1 , 9 (1992) ("There is no per se rule which discredits identical awards, and there is no provision in the current law for comparison of one plaintiff's recovery with another's to serve as the basis for overturning a jury's verdict."). The court did not err in declining to set aside the jury's award of emotional distress damages. B. Punitive Damage Award [¶ 29] Finally, Soley challenges the award of $1 million in punitive damages as excessive. Again, we begin with the facts of the complaint as conclusively established by the default judgment. Among other things, those facts included the following: Plaintiffs were shaken up, infuriated, violated, intimidated and in fear for their physical safety.... The conduct of Defendants, and each of them, was so extreme and outrageous as to exceed all possible bounds of decency. Their conduct would be regarded as atrocious and utterly intolerable in a civilized community.... Defendants acted intentionally, knowingly, willfully, wantonly and with malice.... [¶ 30] From these and other facts addressed previously, there can be no question that the jury was justified in deciding that an award of punitive damages was warranted. See McAlister v. Slosberg, 658 A.2d 658 , 660 (Me.1995) (holding that punitive damages may be based on a default judgment). Thus, the questions presented are: (1) whether the award is so excessive as to violate our concepts of due process, see BMW, 517 U.S. at 568, 116 S. Ct. 1589, and (2) whether the award is excessive in light of the relevant mitigating and aggravating factors considered by the jury, see Tuttle v. Raymond, 494 A.2d 1353 , 1359 (Me.1985).[17] [¶ 31] In determining whether the award is excessive, we first examine the amount in light of due process considerations. See BMW, 517 U.S. at 568, 116 S. Ct. 1589. The Supreme Court in BMW suggested a multi-part analysis to provide guidance in appellate review of punitive damage awards and developed "guideposts" to determine whether a defendant has been put on sufficient notice that his or her conduct will be subject to a penalty and has notice of the possible scope of that penalty. See id. at 568-85, 116 S. Ct. 1589. Relevant to the matter before us are: (1) the degree of reprehensibleness of the conduct; (2) the disparity between the punitive award and the actual harm; and (3) the amount of sanctions generally imposed for comparable conduct. See id. at 575, 116 S. Ct. 1589.[18] *509 [¶ 32] The degree of reprehensibleness of the conduct in this case has been established as severe.[19] The tenants had to endure the presence of insect and rodent infestations, dead animals, snow falling into the apartment, and a total lack of response from their landlord after repeated complaints. Soley's continued refusal to repair conditions that rendered the apartment unfit for human occupation, the violent removal of tenants' property before eviction proceedings had proceeded, the retention of property belonging to the tenants, the destruction of their property, and his threatening behavior combined to create a pattern of conduct that must be considered intolerable. [¶ 33] We look next to the disparity, if any, between the conduct and the punitive damage award.[20] It is helpful to begin with a determination of the ratio between the punitive damage award and the compensatory damages. The ratio is this instance, although high, is not "breathtaking." BMW, 517 U.S. at 583, 116 S. Ct. 1589. The jury awarded the tenants a total of $62,060 on their claims for conversion and intentional infliction of emotional distress and a total of $1 million in punitive damages, yielding a ratio of roughly 16 to 1.[21] Thus, the ratio of compensatory to punitive damages does not disclose a constitutional infirmity. Nor is the award wholly out of proportion to the injuries inflicted. The unmitigated abuse of tenants by a landlord over a period of months is sufficient to support an award of this magnitude. [¶ 34] We next review the difference between the award in this case and civil penalties authorized or awarded in other cases.[22] Again, it bears repeating that the jury was required to accept as true all allegations contained in the tenants' complaint. Although we have not found other cases in which a punitive damage award of this size occurred in similar circumstances, neither have we found a case involving such a pattern of egregious *510 behavior that has not been deterred by municipal sanction and that resulted in extreme distress to the tenants. On this record, we cannot conclude that punitive damages in the amount of $1 million to four plaintiffs was excessive. [¶ 35] Finally, we consider whether the award is excessive in light of the relevant factors considered by the jury. See Tuttle, 494 A.2d at 1359. Because several of those factors are coextensive with the guideposts set out by the Supreme court in BMW and are considered above, and because, on this record, we find no mitigating factors, we need address only the ability of the defendant to pay the award. See Hanover Ins. Co. v. Hayward, 464 A.2d 156 , 158 (Me.1983).[23] Because evidence was presented regarding the assets and income of the wrongdoer, we consider whether the penalty imposed was excessive in light of those assets. Given Soley's extensive assets and income, as well as his own evasive testimony on the question of his net worth,[24] the amount selected by the jury does not offend our concepts of a fair judgment, nor does it reflect an untenable disparity between the goal of deterrence and the punitive damage award. The entry is: Judgment affirmed.