Court Opinion

ID: 4375325
Source: CourtListenerOpinion
Date Created: 2019-03-08 16:04:08.803757+00
Date Added: 2024-06-11T14:22:31.324719
License: Public Domain

FILED
                                                                   Mar 08 2019, 6:51 am

                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court

ATTORNEY FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
Edward W. Hearn                                           David W. Westland
Johnson & Bell, P.C.                                      Carolyn A. Thiess
Crown Point, Indiana                                      Westland & Bennett, PC
                                                          Hammond, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Ameristar Casino East Chicago,                            March 8, 2019
LLC, Ameristar East Chicago                               Court of Appeals Case No.
Holdings, LLC, and Pinnacle                               18A-CT-1174
Entertainment, Inc.,                                      Interlocutory Appeal from the
Appellants-Defendants,                                    Lake Superior Court
                                                          The Honorable Bruce D. Parent,
        v.                                                Judge
                                                          Trial Court Cause No.
Joseph Ferrantelli, Sr.,                                  45D04-1610-CT-189
Appellee-Plaintiff

Crone, Judge.

Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                            Page 1 of 13
                                         Statement of the Case
[1]   This case illustrates the dangers of noncompliance with our liberal and self-

      effectuating discovery process. Ameristar Casino East Chicago, LLC,

      Ameristar East Chicago Holdings, LLC, and Pinnacle Entertainment, Inc.

      (collectively “Ameristar”), bring this interlocutory appeal from the trial court’s

      denial of a motion to set aside a default judgment entered against Ameristar

      and in favor of Joseph Ferrantelli, Sr., on Ferrantelli’s negligence claim against

      Ameristar. A default judgment on Ameristar’s liability was entered by the trial

      court as a sanction based on the court’s finding that Ameristar engaged in a

      continuous, ongoing, and purposeful lack of cooperation with the discovery

      process. On appeal, Ameristar contends that the trial court abused its discretion

      both in issuing the default judgment and in declining to set it aside. Finding no

      abuse of discretion, we affirm and remand for further proceedings.

                                   Facts and Procedural History
[2]   On March 8, 2016, eighty-six-year-old Ferrantelli was injured when he fell

      while getting on an escalator with a wheelchair at the Ameristar Casino in East

      Chicago.1 On October 16, 2016, Ferrantelli filed his complaint against

      1
        In his deposition, Ferrantelli explained that he and a “lady friend” of his went to the casino because they
      had heard about a “crab leg deal” and they wanted “to gamble a little bit.” Appellants’ App. Vol. 2 at 100.
      When they arrived, Ferrantelli’s friend requested a wheelchair, and Ferrantelli was instructed by “one of the
      attendants at a booth” to take the escalator down to the first level to retrieve the wheelchair. Id. at 103.
      Ferrantelli took the escalator down, and a casino employee gave him the wheelchair. That employee then
      “pointed toward the escalator” and said, “Take the escalator.” Id. at 104. As Ferrantelli was putting the
      wheelchair on the escalator to go back up, “it caught the front wheels and flipped [him] backwards, and [he]
      landed flat on [his] back.” Id. at 105.

      Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                                  Page 2 of 13
      Ameristar claiming that Ameristar “failed to properly advise him” and “failed

      to clearly mark the elevators, among other things.” Appellants’ App. Vol. 2 at

      22-23. Ameristar filed its answer denying the allegations in the complaint, and

      asserting affirmative defenses including comparative fault and assumption of

      risk.

[3]   In November 2016, Ferrantelli sent written discovery requests to Ameristar

      requesting, among other things: (1) all statements made by Ferrantelli and

      obtained by Ameristar; (2) every written statement and document obtained

      from any person having personal knowledge of the accident; and (3) the identity

      of each Ameristar employee or agent, or other person with knowledge of the

      accident. In response, Ameristar produced one incident report and identified

      only four individuals with knowledge of the accident. Ameristar indicated that

      it was not in possession of any statement made by Ferrantelli.

[4]   On May 4, 2017, Ferrantelli sent Ameristar a written request for deposition

      dates for the four identified individuals as well as Ameristar’s Trial Rule

      30(B)(6) representative.2 Ameristar did not respond. On May 10, counsel for

      both parties discussed by telephone the request for deposition dates; however,

      dates were not provided by Ameristar. On May 24, Ferrantelli again sent a

      written request for deposition dates and received no response from Ameristar.

      Between July 6 and July 31, 2017, numerous additional oral and email requests

      2
       Indiana Trial Rule 30(B)(6) provides in relevant part that a party may “name as the deponent an
      organization,” and “[t]he organization so named shall designate one or more officers, directors, or managing
      agents, executive officers, or other persons duly authorized and consenting to testify on its behalf.”

      Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                                Page 3 of 13
      were made by Ferrantelli to obtain deposition dates. Ameristar did not respond

      other than to provide the identity of its 30(B)(6) representative.3 On August 7,

      2017, Ferrantelli sent a third written request for deposition dates. Ferrantelli

      advised Ameristar that he would be filing a motion to compel if Ameristar

      failed to set deposition dates within ten days. Ameristar did not respond.

[5]   Almost one month later, on September 5, 2017, Ferrantelli filed a motion to

      compel discovery that included a request for attorney’s fees. Ameristar did not

      file a response to the motion. Discovery closed on September 28, 2017. The

      trial court held a hearing on the motion to compel on December 13, 2017.

      Ferrantelli’s counsel explained and produced documentation to the trial court

      regarding his countless attempts over a protracted period to get depositions

      scheduled to no avail. He argued that Ameristar was purposely evading and

      delaying discovery (specifically the depositions) due to Ferrantelli’s advanced

      age, and that the continued delay could ultimately result in Ferrantelli being

      unable to see the case go to trial. Ameristar’s counsel “[k]ind of apologized”

      but essentially “gave no reason for [Ameristar’s] failure to cooperate.” Tr. Vol.

      2. at 37. Following the hearing, the court reopened and “straightened the

      discovery problems, received promises [from Ameristar] of future compliance

      with the discovery process, set the matter for a compliance hearing, and held

      open the attorney fee request pending cooperation moving forward.”

      3
        Counsel for Ameristar originally designated Edward Spearman as the 30(B)(6) representative. However,
      rather than getting a deposition date scheduled for Spearman, counsel later claimed to still be in the process
      of deciding who would best serve as the 30(B)(6) representative.

      Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                                   Page 4 of 13
      Appellants’ App. Vol. 2. at 66. The trial court ordered Ameristar to provide

      deposition dates by January 1, 2018, noting that it appeared that the case “has

      been sandbagged with an older Plaintiff.” Tr. Vol. 2 at 8. The court warned

      Ameristar’s counsel that the court expected Ameristar to be “extremely

      cooperative here” and also twice declared, “This Judge hates discovery fights.”

      Id. at 9, 10.

[6]   Ameristar did comply, at least in part, with the court’s order, and the

      depositions of four of the five requested witnesses were completed on January

      16, 2018. However, during those depositions, Ferrantelli’s counsel learned the

      identities of several witnesses not previously disclosed by Ameristar, and it was

      further revealed that Ameristar was in possession of multiple documents, as

      well as recorded statements, that were responsive to Ferrantelli’s earlier

      discovery requests but never produced. As a result of the information obtained

      during the depositions, on January 26, 2018, Ferrantelli sent correspondence to

      Ameristar requesting the additional discovery. Ameristar did not respond.

      Accordingly, Ferrantelli filed a second motion to compel and request for

      sanctions on February 16, 2018. Ferrantelli argued that Ameristar continued

      to “purposefully hindering the progression of this case” with its “abuse of the

      discovery process, and continuous failure to comply with [Ferrantelli’s]

      discovery requests, as well as instructions given by [the trial court.]”

      Appellants’ App. Vol. 2 at 61. Accordingly, Ferrantelli requested, among other

      things, entry of an order striking Ameristar’s answer to the complaint and an

      Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019           Page 5 of 13
      order entering a default judgment in favor of Ferrantelli. Ameristar filed no

      response to the motion to compel.

[7]   On March 6, 2018, the trial court entered its order on Ferrantelli’s second

      motion to compel and for sanctions. Specifically, the court noted that

      Ameristar had filed no response to Ferrantelli’s allegations of “withholding of

      discovery, the purposeful creation of the passage of time between reporting and

      disclosure to again ‘slow play’ the discovery process, and a refusal to follow-up

      these late disclosures with reasonable information related to witnesses that have

      since left [Ameristar’s] employment.” Id. at 66. As such, the court found “a

      continuous, on-going, and purposeful lack of cooperation with the discovery

      process” by Ameristar, and ordered in relevant part:

              1.       [Ameristar’s] answer of November 8, 2016 is hereby
                       STRICKEN.

              2.       DEFAULT JUDGMENT is hereby entered against
                       [Ameristar] in favor of FERRANTELLI.

              3.       The facts of this case are ACCEPTED as alleged in the
                       complaint.

              4.       Attorney for FERRANTELLI shall file an Order within
                       twenty-one days setting a coordinated status conference
                       for the purpose of:
                       A.     setting a damages hearing; and
                       B.     setting a hearing on contempt/for attorney fees.

      Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019           Page 6 of 13
      Id. at 67. On March 8, 2018, Ameristar filed a Trial Rule 60(B)(8) motion to set

      aside default judgment and request for hearing. Additionally, on March 9,

      2018, Ameristar filed an amended motion to set aside and request for hearing.

[8]   The trial court held a hearing on Ameristar’s motion to set aside on April 10,

      2018. Based upon the argument of counsel, and a review of all prior

      proceedings and correspondence, the trial court entered its order denying the

      motion to set aside. Specifically, the trial court concluded that “there was an

      interference with discovery” by Ameristar that the court “just can’t tolerate.”

      Tr. Vol. 2. at 39. Indeed, the court repeatedly noted that it had “never seen

      anything even close to this” as far as abuse of the discovery process. Id.4 The

      trial court explained that usually warnings, as were made by the court in

      granting the first motion to compel, cause the noncompliant party to “snap

      right to” without further issue, but unfortunately that “didn’t happen” with

      Ameristar. Id. at 40. Accordingly, the trial court declined to set aside the

      default judgment and set the matter for a damages hearing. The trial court

      certified its order for interlocutory appeal, and this Court accepted jurisdiction

      and stayed the trial court proceedings pending resolution of this appeal.

      4
        Ameristar made numerous arguments and excuses for its dilatory behavior that the trial court did not find
      credible. Specifically, regarding its failure to respond to the second motion to compel, counsel for Ameristar
      implied that it had its response ready to file, but that its response was due the same day the trial court issued
      its order entering a default judgment. Counsel argued, “It would make no sense for us to file a response once
      you entered the order.” Tr. Vol. 2 at 19. The trial court did not believe that a response was planned or
      would have been forthcoming. The court stated, “I gotta be honest, but for my Order, I wouldn’t have
      received anything. I truly believe that … I entered that order in the morning … [i]f [you] had a response
      sitting there ready, I would have got it that afternoon and I didn’t. I don’t think a response was ever going to
      be filed.” Id. at 38-39.

      Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                                     Page 7 of 13
                                       Discussion and Decision
[9]    We begin by emphasizing that the decision whether to set aside a default

       judgment is given substantial deference on appeal. Huntington Nat’l Bank v. Car–

       X Assoc. Corp., 39 N.E.3d 652, 655 (Ind. 2015). Our appellate review is limited

       to determining whether the trial court abused its discretion. Id. An abuse of

       discretion may occur if the trial court’s decision is clearly against the logic and

       effect of the facts and circumstances before the court, or if the court has

       misinterpreted the law. Id. Upon review, we will not reweigh the evidence or

       substitute our judgment for that of the trial court. Id. In order to be granted

       relief pursuant to Indiana Trial Rule 60(B)(8) as Ameristar seeks here, the

       moving party must demonstrate some extraordinary or exceptional

       circumstances justifying equitable relief. State v. Collier, 61 N.E.3d 265, 268

       (Ind. 2016).

[10]   It is well settled that the purpose of the discovery rules is to allow for minimal

       trial court involvement and to promote liberal discovery. Whitaker v. Becker, 960

       N.E.2d 111, 115 (Ind. 2012). “Although concealment and gamesmanship were

       [once] accepted as part and parcel of the adversarial process, we have

       unanimously declared that such tactics no longer have any place in our system

       of justice.” Id. (citations and quotation marks omitted). “Today, the purpose of

       pretrial discovery is to make a trial less a game of blindman’s bluff and more a

       fair contest with the basic issues and facts disclosed to the fullest practicable

       extent.” Id. (citations and quotation marks omitted). When discovery breaks

       down or the trial court determines that the discovery process has been abused,

       Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019            Page 8 of 13
       the court may, in its discretion, impose various sanctions including, but not

       limited to, an award of costs and attorney fees, exclusion of evidence obtained

       through misuse of the discovery process, or entry of dismissal or judgment by

       default. Ross v. Bachkurinskiy, 770 N.E.2d 389, 392 (Ind. Ct. App. 2002). The

       purpose of allowing a trial court to impose sanctions is “not merely to penalize

       those whose conduct may be deemed to warrant such a sanction, but to deter

       those who might be tempted to such conduct in the absence of such a

       deterrent.” Whitaker, 960 N.E.2d at 115 (quoting Nat'l Hockey League v. Metro.

       Hockey Club, Inc., 427 U.S. 639, 643 (1976)). Therefore, we vest trial courts with

       wide discretion in dealing with discovery matters and will reverse a trial court’s

       decision regarding discovery only for an abuse of discretion. Prime Mortg. USA,

       Inc. v. Nichols, 885 N.E.2d 628, 648-49 (Ind. Ct. App. 2008).

[11]   The sole limitation on the trial court in determining an appropriate discovery

       sanction is that the sanction must be just. Id. (citing Bankmark of Fl., Inc. v. Star

       Fin. Card Servs., Inc., 679 N.E.2d 973, 978 (Ind. Ct. App. 1997)). In determining

       whether a sanction is just, we have recognized that,

               [a]lthough a default judgment plays an important role in the
               maintenance of an orderly, efficient judicial system as a weapon
               for enforcing compliance with the rules of procedure and for
               facilitating the speedy determination of litigation, in Indiana
               there is a marked judicial deference for deciding disputes on their
               merits and for giving parties their day in court, especially in cases
               involving material issues of fact, substantial amounts of money,
               or weighty policy determinations.

       Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019             Page 9 of 13
       Charnas v. Estate of Loizos, 822 N.E.2d 181, 185 (Ind. Ct. App. 2005). While an

       order granting a default judgment is the ultimate sanction a trial court may use,

       the court is not necessarily required to first issue a lesser sanction. Prime Mortg.,

       855 N.E.2d at 649. Indeed, imposing intermediate sanctions is not obligatory

       when a party’s behavior is particularly egregious. Id.

[12]   Before arguing the merits of the default sanction imposed by the trial court,

       Ameristar points to several claimed procedural deficiencies regarding the trial

       court’s consideration of Ferrantelli’s second motion to compel. Namely,

       Ameristar contends that neither the motion to compel nor the trial court’s grant

       thereof complied with certain applicable local court rules.5 Our supreme court

       has noted that “Indiana trial courts may establish local rules for their own

       governance so long as the local rules do not conflict with the rules established

       by this Court or by statute.” Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d

       633, 646 (Ind. 2012) (citations omitted). “As a general matter, local rules are

       procedural and ‘are intended to standardize the practice within that court, to

       facilitate the effective flow of information, and to enable the court to rule on the

       merits of the case.’” Id. (quoting Meredith v. State, 679 N.E.2d 1309, 1310 (Ind.

       1997). “Once made, the court and all litigants subject to the local rules are

       bound by them.” Id. However, a trial court should not blindly adhere to all of

       its rules because in “rare cases, such blind adherence to rigid procedural

       5
        Specifically, Ameristar asserts noncompliance with Lake County Local Rule 45-TR26-8(C) regarding
       attorney conferences to resolve discovery disputes and Rule 45-TR7-4 addressing motions practice.

       Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                          Page 10 of 13
       requirements may defeat justice instead of serving the rules’ intended function

       as a means of obtaining the end of orderly and speedy justice.” Id. That said, a

       trial court should not set aside its own rules lightly and, “before doing so, ‘the

       court must assure itself that it is in the interests of justice to do so, that the

       substantive rights of the parties are not prejudiced, and that the rule is not a

       mandatory rule.’” Id. (quoting Meredith, 679 N.E.2d at 1311).

[13]   We chose not to belabor the specifics of the procedural deficiencies alleged by

       Ameristar, as we are confident upon review that, even assuming any technical

       noncompliance with certain procedural rules, Ameristar’s substantive rights

       have ultimately not been prejudiced. The crux of Ameristar’s claims of

       procedural noncompliance is that it was denied the opportunity to present to

       the trial court its arguments in opposition to Ferrantelli’s second motion to

       compel. However, Ameristar was afforded a full opportunity to present those

       arguments to the trial court, and in fact did so, during the hearing on its motion

       to set aside. Accordingly, we conclude that any technical noncompliance with

       certain procedural rules was harmless in the instant case.

[14]   Turning to the merits of the default judgment entered here, Ameristar asserts

       that the entry of a default was an unwarranted sanction, and therefore the trial

       court abused its discretion both in issuing that sanction and in declining to set it

       aside upon Ameristar’s motion. The record indicates that Ameristar failed to

       respond and/or was entirely uncooperative with regard to numerous discovery

       requests, over a protracted period of time, which caused the trial court to

       intervene and issue its first order to compel discovery. In entering that order,

       Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019              Page 11 of 13
the trial court held the issue of monetary sanctions under advisement and

warned Ameristar that it expected full compliance and cooperation moving

forward. Although Ameristar complied, for the most part, with that order, it

was later revealed that Ameristar had withheld certain witness information, and

further that many of Ameristar’s prior discovery responses had been, in the trial

court’s opinion, intentionally incomplete and misleading. Our supreme court

has specifically acknowledged that, under appropriate facts, a trial court may

enter dismissal or default judgment if it determines that a party has responded

to discovery but has done so in an incomplete or misleading way. Whitaker,

960 N.E.2d at 116. To make matters worse, when Ferrantelli again tried to

obtain complete discovery, Ameristar continued to be noncooperative and

unresponsive. Even a second motion to compel filed by Ferrantelli, which

included a request for more severe sanctions, failed to get Ameristar’s attention,

in that it did not even garner a response.6 Under the circumstances presented,

the trial court determined that a default judgment was warranted based upon

the “continuous, on-going, and purposeful lack of cooperation with the

discovery process” by Ameristar. Appellants’ App. at 67. Indeed, the court

found Ameristar’s behavior particularly egregious, repeatedly noting that it had

“never seen anything even close to this.” Tr. Vol. 2. at 39.

6
  As noted earlier, the trial court did not find credible Ameristar’s assertion that it would have filed a
response but for the trial court’s “premature” ruling on the motion to compel. Appellant’s Br. at 23. We will
not reassess credibility on appeal.

Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                                Page 12 of 13
[15]   To be clear, the entry of a default judgment is the ultimate sanction. Still, we

       must be mindful that “[t]rial judges stand much closer than an appellate court

       to the currents of litigation pending before them, and they have a

       correspondingly better sense of which sanctions will adequately protect the

       litigants in any given case[.]” Wright v. Miller, 989 N.E.2d 324, 327 (Ind. 2013).

       It is not the place of this Court to substitute our judgment for that of the trial

       court, as we must presume the trial court acted in accord with what was fair

       and equitable in the specific case. Id. at 330. The trial court here made a

       detailed oral record explaining its frustration with Ameristar’s behavior, as well

       as its prior warnings to counsel to stop what the court viewed as the intentional

       sandbagging of the case considering the plaintiff’s advanced age. We conclude

       that the trial court did not abuse its discretion in determining that the sanction

       of default judgment was warranted. Moreover, the trial court was well within

       its discretion to reject Ameristar’s equitable demands for the court to set aside

       the default judgment pursuant to Trial Rule 60(B)(8).7 Therefore, we affirm the

       trial court’s orders and remand for further proceedings on the issue of damages.

[16]   Affirmed and remanded.

       Vaidik, C.J., and Mathias, J., concur.

       7
         We note that Ameristar’s continued denial of and lack of contrition for its discovery abuses was not well
       taken by the trial court.

       Court of Appeals of Indiana | Opinion 18A-CT-1174| March 8, 2019                                 Page 13 of 13