Court Opinion

ID: 4472460
Source: CourtListenerOpinion
Date Created: 2020-01-14 00:15:28.458147+00
Date Added: 2024-06-11T13:39:41.675244
License: Public Domain

Filed
                                                                                     Washington State
                                                                                     Court of Appeals
                                                                                      Division Two

                                                                                     January 13, 2020

    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                         DIVISION II
 JACOB CUZDEY, individually, and CUZDEY                          No. 52080-0-II
 MANUFACTURING            TECHNOLOGIES,
 LLC, a Washington limited liability company,
 and CUZDEY ENTERPRISES, INC., a
 Washington corporation,

                                Appellant,

        v.

 DARRYL DRUZIANICH and JANE DOE                            UNPUBLISHED OPINION
 DRUZIANICH, a married couple,

                                Respondent.

       MELNICK, J. — Jacob Cuzdey appeals the trial court’s dismissal of his case because of

discovery violations. The trial court ruled that Cuzdey continually failed to produce documents

that were particularly important to the case.

       Cuzdey argues that the trial court erred because his failure to produce the documents was

not willful or deliberate and because the opposing party was not prejudiced. Cuzdey also seeks

attorney fees.

       We affirm.
52080-0-II

                                             FACTS

       In January 2017, Cuzdey1 sued Darryl and Jane Doe Druzianich (collectively Druzianich).

Cuzdey alleged that he had been wrongfully excluded from property he rented from Druzianich.

He further alleged that Druzianich sold his machinery and tools, which were located on the

property and valued at approximately $160,000. Cuzdey also alleged that he lost approximately

$9 million in business opportunities. Druzianich denied the allegations, and the parties began

discovery.

       In March, Druzianich sent Cuzdey the first set of interrogatories and requests for

production (RFPs). Approximately two months later, Cuzdey responded. As relevant, one RFP

sought Cuzdey’s tax returns from 2011 to 2017. Cuzdey responded that “[i]nformation regarding

tax returns, including income tax returns, W-2 and/or 1099 forms, is privileged under federal and

state law.” Clerk’s Papers (CP) at 128. Cuzdey made a similar objection in response to

Druzianich’s interrogatory asking Cuzdey to “[i]dentify all financial accounts, including . . .

deposit accounts, savings accounts, [and] certificates of deposit.” CP at 107. Cuzdey responded

to many of Druzianich’s other requests by stating either that he was attempting to obtain documents

or had made progress and would “produce all requested documents when [the remaining]

documents [were] located.” CP at 127.

       In July, Druzianich sent Cuzdey a letter asking him to supplement his responses to the first

set of interrogatories and RFPs, and stating his position that many of Cuzdey’s objections were

not valid.

1
  Businesses owned by Cuzdey, Cuzdey Manufacturing Technologies, LLC and Cuzdey
Enterprises, Inc., also sued; however, the court dismissed those claims prior to it dismissing
Cuzdey’s personal claims for discovery violations.

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52080-0-II

          On September 6, Druzianich wrote Cuzdey another letter stating that he had “not

supplemented his discovery responses in any meaningful fashion.” CP at 144. The letter further

stated that if Druzianich did not receive the supplemented responses within three weeks, he would

file a motion to compel.

          On September 28, Cuzdey responded via e-mail, stating that he had been unable to locate

many responsive records and would produce them when they became available. The e-mail did

not attach or otherwise produce any documents. Later that same day, Druzianich filed a motion to

compel.

          In October, Cuzdey produced his personal 1040 tax returns from 2013, 2014, and 2015.

No signature appeared on the 2015 tax return.

          Cuzdey’s first counsel then withdrew and new counsel appeared.          In late October,

Druzianich served Cuzdey with a subpoena duces tecum to appear for a deposition. Cuzdey failed

to appear for it.

          On November 1, Cuzdey’s counsel came to an agreement with Druzianich where Cuzdey

would compensate Druzianich with $1,000 in exchange for cancelling the hearing on the motion

compel.

          In January 2018, Cuzdey sent Druzianich supplemental answers and responses to the first

set of interrogatories and RFPs. Cuzdey did not provide additional tax returns but stated that he

had requested the documents from the Internal Revenue Service but had not yet received them.

Soon thereafter, Druzianich filed a second motion to compel.2

2
    The record is unclear regarding the disposition of this second motion to compel.

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52080-0-II

       In February, Druzianich deposed Cuzdey.        In his deposition, Cuzdey admitted that

numerous documents he had produced had not been responsive to Druzianich’s RFPs. Regarding

his financial accounts, Cuzdey stated that the relevant documents were in his possession.

Druzianich requested that Cuzdey immediately produce the documents. When asked why he had

not produced those documents, Cuzdey stated that his withholding was based on his first lawyer’s

recommendation.

       In early March, Druzianich sent a letter to Cuzdey demanding complete responses to the

outstanding discovery requests no later than March 22. Druzianich stated that if Cuzdey did not

comply, he would file a third motion to compel and would request dismissal as the appropriate

remedy for the discovery violations.

       On March 23, Cuzdey’s and Druzianich’s attorneys conferred. Druzianich stated that if he

did not receive a “substantial majority” of the outstanding documents in five days, then he would

file the motion. CP at 538.

       In April, Druzianich filed a motion to dismiss because of discovery violations or, in the

alternative, his third motion to compel.

       On April 27, the court held a hearing on Druzianich’s motion. It denied Druzianich’s

motion to dismiss but entered an order to compel. The court ordered that “[d]iscovery must be

completely provided in the next two weeks, based on requests previously made.” Report of

Proceedings (Apr. 27, 2018) at 10. The court also warned that if Cuzdey did not comply with its

order, dismissal might be warranted.

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52080-0-II

       On May 14, Cuzdey provided supplemental answers to Druzianich’s interrogatories and

RFPs. Regarding his financial information, Cuzdey ambiguously identified his financial accounts.

Regarding Druzianich’s RFP that Cuzdey produce all tax returns, Cuzdey stated that he had

requested documents from his accountant, but his accountant informed him that he “no longer

ha[d] the lap top that the documents were saved on.” CP at 592.

       On May 18, Cuzdey’s counsel withdrew and third counsel appeared.

       On May 21, Druzianich filed another motion for dismissal based on Cuzdey’s discovery

violations. Druzianich argued that Cuzdey failed to comply with the court’s April 27 order and

that Cuzdey’s May 14 response contained none of the financial information corroborating his lost

business opportunity claim.

       The court held a hearing on Druzianich’s motion. At the conclusion of the parties’

arguments, the court considered whether lesser sanctions sufficed and decided they did not. The

court then granted Druzianich’s motion and dismissed the case. The court’s order stated that

dismissal was appropriate because the discovery Cuzdey failed to produce was “particularly

material,” namely “financial documents substantiating the significant economic damages alleged

by [Cuzdey].” CP at 628. Cuzdey appeals.

                                            ANALYSIS

       Cuzdey argues that the trial court erred in dismissing his lawsuit because his failure to

produce the documents was not willful or deliberate and because Druzianich was not prejudiced.

We disagree.

       CR 37 allows the trial court to impose sanctions against a party who fails to comply with

a discovery order. CR 37(b)(2) provides that the trial court “may make such orders in regard to

the failure as are just.” The rule provides a nonexhaustive list of possible sanctions, which includes

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52080-0-II

“dismissing the action or proceedings or any part thereof.” CR 37(b)(2)(C). The trial court

generally should impose the least severe sanction that will adequately serve the purposes of

sanctions, which are to compensate the harmed party, deter, punish, and educate the wrongdoer,

and ensure that the wrongdoer does not profit from the wrong. Barton v. Dep’t of Transp., 178

Wn.2d 193, 215, 308 P.3d 597 (2013).

        If a trial court imposes one of the harsher remedies under CR 37(b), the record must clearly

show that one party willfully or deliberately violated the discovery rules and orders, the opposing

party suffered substantial prejudice in its ability to prepare for trial, and the trial court explicitly

considered whether a lesser sanction would have sufficed. Magaña v. Hyundai Motor Am., 167

Wn.2d 570, 584, 220 P.3d 191 (2009).

        We review a trial court’s sanction order for discovery violations for an abuse of discretion.

Barton, 178 Wn.2d at 214. The trial court has wide latitude in fashioning the appropriate sanction

for discovery abuse. Barton, 178 Wn.2d at 215. “A trial court exercises broad discretion in

imposing discovery sanctions under . . . [CR] 37(b), and its determination will not be disturbed

absent a clear abuse of discretion.” Mayer v. Sto Indus., Inc., 156 Wn.2d 677, 684, 132 P.3d 115

(2006). A finding of abuse of discretion requires a clear showing that the trial court was manifestly

unreasonable in exercising its discretion or exercised its discretion on untenable grounds or for

untenable reasons. Barton, 178 Wn.2d at 215.

        We conclude that the trial court did not abuse its discretion in dismissing Cuzdey’s case

for discovery violations. Cuzdey failed to produce important discovery related to his claim. He

provided various, ever-changing objections and explanations justifying his failure, which resulted

in Druzianich filing three motions to compel.

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52080-0-II

       First, the record shows that Cuzdey willfully or deliberately violated discovery rules and

the court’s orders. See Associated Mortg. Inv’rs v. G.P. Kent Constr. Co., 15 Wn. App. 223, 229,

548 P.2d 558 (1976) (“[T]he unexplained failure to furnish complete and meaningful answers to .

. . material interrogatories in the face of the court’s order impels a conclusion that the refusal was

willful.”). For example, Cuzdey made numerous different objections to producing the material,

yet at no point moved for a protective order. See Johnson v. Mermis, 91 Wn. App. 127, 133, 955

P.2d 826 (1998) (“If a party disagrees with the scope of production, or wishes not to respond, it

must move for a protective order and cannot withhold discoverable materials.”).

       Second, the record shows that Druzianich was substantially prejudiced in his ability to

prepare for trial. Cuzdey’s complaint alleged that he lost approximately $9 million in business

opportunity. Thus, documents related to his and his businesses’ income were particularly relevant

to substantiate his claim and to provide Druzianich a basis to evaluate his potential defenses and

potential exposure. However, throughout the entire course of discovery, aside from tax returns

from 2013, 2014, and 2015, one of which was unsigned, Cuzdey did not produce any documents

by which Druzianich could substantiate or assess the loss.

       Finally, before dismissing Cuzdey’s case, the trial court not only considered, but also

utilized, a lesser sanction. The court rejected Druzianich’s first motion for dismissal and ordered

that Cuzdey complete discovery within two weeks. The court warned that if Cuzdey did not

comply with the order, it would potentially dismiss his case. Only after Cuzdey’s continued failure

to produce the records did the court dismiss his case. In so ruling, the court discussed on the record

why a lesser sanction was not warranted.

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52080-0-II

         Based on all of the above and the record as a whole, we conclude that the trial court did

not abuse its discretion.3

         A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,

it is so ordered.

                                                             Melnick, J.

We concur:

         Maxa, C.J.

         Glasgow, J.

3
    Because he does not prevail, we also reject Cuzdey’s argument seeking attorney fees.

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