Opinion ID: 605409
Heading Depth: 2
Heading Rank: 1

Heading: Sanctions for Discovery Abuse

Text: 34 The debtor argues that the bankruptcy court failed to make sufficient findings concerning wilfulness, failed to distinguish between his lawyer's culpability and his own, and failed to consider whether lesser sanctions would have been effective. I disagree. The record is replete with evidence of the debtor's bad faith. The debtor originally received the discovery requests in September, 1990. He sought extensions to respond until December, then filed for a protective order on the grounds that he had essentially provided the material sought by dint of his voluntary surrender of documents, his deposition, and by waiving any professional privileges with respect to his former lawyers and accountants. After an extensive question by question review of the interrogatories and requests for production, the bankruptcy court ordered the debtor to answer the discovery requests within thirty days. He specifically ordered the debtor to provide the documents under the custody and control of the archives. 35 Again, the debtor did not. Instead, he again tried to argue that the discovery requests were overbroad, unduly burdensome, and impossible to fulfill since many of the documents were located in the archives. The debtor even filed an affidavit to that effect in opposition to the motion for default judgment. In point of fact, the debtor never produced the ante-nuptial agreement the receivers requested, never produced expense reports for the year before bankruptcy, and never provided certain insurance policies the receivers sought. Furthermore, his other answers were both unbelievable and disingenuous. He claimed to be unaware of any documents that would reflect his compensation and interest in six business entities he owned and operated in the year before bankruptcy. He initially failed to identify in his schedules any business or personal bank account information. In his answers he identified some thirteen accounts, but again failed to provide the account number for the personal account listed. He left out critical detail about the transfer of automobiles to his wife. He provided less than full disclosure about certain tap fees which had been held in trust for him. He repeatedly referred the receivers to the archives, even in the face of the bankruptcy court's specific order to the contrary. I need not go on. There was ample evidence to support the bankruptcy court's conclusion that the debtor had wilfully refused to comply with its orders. His conduct is a study in arrogance. 36 I also find that the court properly distinguished between attorney and client in imposing sanctions. First, the court specifically rejected, as incredible, the debtor's offer of proof that Mr. Detamore was not authorized to speak for the debtor as he did during the May hearing. In this regard, the court expressed its willingness to hear and consider testimony from Mr. Detamore to the effect that he made unauthorized statements on his client's behalf. The debtor chose never to produce Mr. Detamore for such testimony. Second, the court specifically noted in the May 20 hearing that the debtor had not made a good faith effort to answer the discovery, and that I am not suggesting that you [the lawyer] are in any way responsible. Further, the court specifically referred to both the Supreme Court's decision in National Hockey League v. Metropolitan Hockey Corp., Inc., 427 U.S. 639 (1976), and to this circuit's decision in Bud Brooks Trucking v. Bill Hodges Trucking, 909 F.2d 1437 (10th Cir.1990). While the court used some ambiguous language in apportioning relative responsibility, it is clear to me that he distinguished between lawyer and client, and properly held the debtor, not the debtor's lawyer, responsible for the course and plan of the discovery abuse. 37 In the context of this case, there was no reason to make extensive findings about the effectiveness of sanctions other than dismissal. The debtor's counsel's colloquy with the court on May 20, 1991 convinces me that the debtor had no intention of complying with the court's orders, even if given additional time within which to respond. It was not until default entered that the debtor, himself, even bothered to make an appearance in the bankruptcy court. Under such circumstances, no specific findings are essential.