Opinion ID: 896323
Heading Depth: 1
Heading Rank: 8

Heading: 1997 Farm Expenses

Text: [¶ 27] The trial court found Dale W. Barth has failed to comply with discovery requests and court orders requiring him to divulge information about his income over the past five years. As a sanction for discovery abuse, the trial court did not deduct $45,271 in 1997 farm expenses claimed by Dale in calculating Dale's income. Dale contends, Although Rule 37, N.D.R.O.Civ.P., gives the trial court broad discretion in applying sanctions for failure to comply with discovery, totally disallowing these expenses is clearly an abuse of discretion and contrary to law. Dale argues, By applying a sanction that has such a substantial effect on Dale's child support, Dale is left with an uncertain, open ended and continuing penalty, and he would be paying this penalty every month he pays child support. [¶ 28] We recognize that, under N.D. Admin. Code § 75-02-04.1-05(1995), which provides, in determining a farmer's income for calculating a child support obligation, the average of the most recent five years of farm operations, ..., should be used to determine farm income, an income calculated by excluding expenses as a sanction for discovery abuse will have a continuing impact, resulting in an artificially high child support obligation for a number of years. However, while such a continuing penalty will not often be appropriate, we also recognize that consideration must be balanced against the need to deter discovery abuses, promote efficient litigation, and protect the interests of all litigants. Vorachek v. Citizens State Bank, 421 N.W.2d 45, 51 (N.D.1988). [¶ 29] A party is not at liberty to `pick and choose' what information will be provided and what information will be withheld. Selective, substantial compliance is not enough; complete, accurate, and timely compliance is required by the rules. Vorachek, 421 N.W.2d at 51. Rule 37, N.D.R.Civ.P., authorizes a court to impose sanctions upon a party for failing to make or cooperate in discovery. If a party applies for an order compelling discovery, and the motion is granted or if the requested discovery is provided after the motion was filed, the court shall, ..., require the ... party or attorney advising the conduct, ..., to pay to the moving party the reasonable expenses incurred in making the motion, including attorney's fees, unless the court finds the conduct was justified or an award of expenses would be unjust. N.D.R.Civ.P. 37(a)(4)(A). Rule 37(b)(2), N.D.R.Civ.P., provides in part that, upon a party's failure to obey an order to provide or permit discovery ... the court in which the action is pending may make such orders in regard to the failure that are just, including ordering that matters or facts be taken to be established ... in accordance with the claim of the party obtaining the order, or refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence, striking pleadings, dismissing the action, rendering a default judgment against the disobedient party, and treating failure to obey orders as a contempt of court. [¶ 30] Generally, sanctions exist to further two goals. First, sanctions exist to penalize those whose conduct is deemed to warrant a sanction; second, they exist to deter others who may be tempted to behave in such a way as to warrant the imposition of a sanction. Bachmeier v. Wallwork Truck Centers, 507 N.W.2d 527, 533 (N.D.1993). Sanctions must be tailored to the severity of the misconduct, Vorachek, 421 N.W.2d at 51, and must be reasonably proportionate to the misconduct, Dethloff v. Dethloff, 1998 ND 45, ¶ 16, 574 N.W.2d 867. We apply an abuse-of-discretion standard in reviewing a trial court's ruling on sanctions for discovery violations. Wolf v. Estate of Seright, 1997 ND 240, ¶ 17, 573 N.W.2d 161; Towne v. Dinius, 1997 ND 125, ¶ 14, 565 N.W.2d 762. A trial court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner. Towne, at ¶ 14. [¶ 31] On May 20, 1997, the district court issued an interim order requiring Dale to pay child support, allowing Nancy continued use of personal property in her possession, and requiring Dale to contribute $1,000 toward Nancy's attorney fees. On October 14, 1997, the court ordered Dale to show cause why he should not be judged guilty of contempt of court for failing to pay $1,000 toward Nancy's attorney fees. In an order issued November 18, 1997, the court found Dale had not answered Nancy's interrogatories, not responded to Nancy's demand for production of documents, not complied with the court's order to file a N.D.R.Ct. 8.3 statement, and not complied with the court's order to pay $1,000 in attorney fees to Nancy. The court found Dale in contempt of court and ordered him to do the following within 30 days: (1) comply with Nancy's discovery requests; (2) pay $1,000 in attorney fees ordered on May 20, 1997; (3) pay an additional $150 in attorney fees in regard to Nancy's motion to compel discovery and to the contempt citation; and (4) file a Rule 8.3 statement. [¶ 32] On February 5, 1998, the district court ordered Dale to show cause why he should not be judged guilty of contempt of court for his failure to comply with the Court's order to pay $1,150 to Plaintiff for her attorney fees and to comply with Plaintiff's discovery request. On March 23, 1998, the court again issued an order finding Dale in contempt of court: A hearing was held on an Order to Show Cause why Dale W. Barth should not be held in contempt for his failure to answer Plaintiff's discovery request as required by the Court in its Order dated November 18, 1997, and Defendant's failure to pay attorney fees of $1,150.00 as previously ordered by the Court.... A oral stipulation was presented from Plaintiff and Defendant whereby Defendant Dale W. Barth agreed to provide to Plaintiff all supporting documentation, including worksheets and receipts, for his 1997 tax return and other farm records which he may have no later than Tuesday, March 25, 1998. Defendant Dale W. Barth also agreed to provide to Plaintiff a copy of his 1997 income tax return and all accompanying schedules no later than Friday, March 27, 1998. The Court makes the following findings of fact: 1. The Court accepts the stipulation of the parties regarding discovery which was read into the record. 2. Dale Barth has refused to pay attorney fees previously ordered by the Court in the amount of $1,150.... .... 4. The Court finds that Defendant Dale W. Barth is in contempt of Court for his willful failure to pay attorney fees as previously ordered by the Court. NOW, THEREFORE, IT IS ORDERED as follows: 1. Defendant Dale W. Barth shall comply with the stipulation of the parties regarding discovery. Failure to do so shall result in the imposition of appropriate sanctions by the Court. 2. Dale W. Barth is hereby remanded to the custody of the Sheriff of Oliver County for a period of 30 days or until such time as he complies with the Court's order to pay $1,150.00 for Plaintiff's attorney fees. [¶ 33] Dale has not disputed Nancy's assertion he did not produce his 1997 tax return until March 30, 1998, just three days before trial, and never did provide the supporting documentation required by the court. In a post-trial brief, Nancy argued: Defendant's expenses for the year 1997 should not be considered by the Court. Prior to trial, Plaintiff submitted a motion for sanctions due to Defendant's failure to abide by the stipulation the parties agreed to at the order to show cause contempt hearing on March 20, 1998. Plaintiff did not receive any of the supporting documentation for Defendant's 1997 tax return prior to the date of trial. On the morning of trial Defendant provided only a list of expenses, no receipts or other documentation were furnished. Due to Defendant's failure to abide by this discovery stipulation, the Court should not consider his 1997 expenses and conclude that his net income for 1997 is $31,919. The trial court did as Nancy suggested. [¶ 34] Dale's evasiveness about financial matters extended to the trial. When Dale's father, Otto Barth, was being examined about the number of cattle on the farm, the trial court admonished Dale: Before we proceed further, I want the record to reflect that Mr. Dale Barth was making hand signals to his father, which I interpreted to mean, don't answer the question. I am instructing you now, Mr. Dale Barth, that you are to stop making any gestures or communications to the witness while the witness is testifying. In a post-trial order on attorney fees, the court said: The court takes judicial notice of the difficulty presented to Nancy's counsel by Dale's failure to cooperate with discovery. At trial, Dale gave non-verbal signals to his father Otto in an attempt to conceal potential marital assets. On examination by Nancy's attorney at trial, Dale testified, You told me to produce tax returns, and I did that. He testified he did not provide amended tax returns because Nancy's attorney didn't ask for amended tax returns. [¶ 35] Dale did not provide the complete, accurate, and timely compliance [ ] required by the rules. Vorachek v. Citizens State Bank, 421 N.W.2d 45, 51 (N.D.1988). Dale responded to discovery requests and orders with delay, evasiveness, and noncompliance. Dethloff v. Dethloff, 1998 ND 45, ¶ 14, 574 N.W.2d 867. Dale's discovery misconduct was extreme, persistent, and willful. Id. From this deep record of intentional delay, evasion, and nonresponsiveness, id., we conclude the trial court's exclusion of Dale's 1997 farm expenses in calculating his income for determining his child support and attorney fee obligations, was an appropriate sanction for [Dale's] pronounced procedural misconduct, id. at ¶ 18. Although we may have ruled differently had we been in the position of the trial court, we cannot say the court acted arbitrarily, unreasonably, or unconscionably. Towne v. Dinius, 1997 ND 125, ¶ 14, 565 N.W.2d 762. We conclude the trial court did not abuse its discretion in disallowing deduction of 1997 farm expenses claimed by Dale in calculating Dale's income.