Court Opinion

ID: 2981604
Source: CourtListenerOpinion
Date Created: 2015-09-22 19:42:58.165789+00
Date Added: 2024-06-11T13:18:40.372441
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                          Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                  File Name: 13a0002p.06

               UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT
                                _________________

                                                 X
                           Plaintiff-Appellant, -
 UNIVERSAL HEALTH GROUP,
                                                  -
          v.                                      -
                                                  -
                                                      No. 12-1323

                                                  ,
                                                   >
                          Defendant-Appellee. -
 ALLSTATE INSURANCE COMPANY,

                                                  -
                                                 N
                   Appeal from the United States District Court
                  for the Eastern District of Michigan at Detroit.
             No. 2:09-cv-12524—Victoria A. Roberts, District Judge.
                         Decided and Filed: January 3, 2013
 Before: BATCHELDER, Chief Judge; and MERRITT and KETHLEDGE, Circuit
                               Judges.
                                  _________________
                                       COUNSEL
ON BRIEF: Christina A. Ginter, KITCH DRUTCHAS WAGNER VALITUTTI &
SHERBROOK, Detroit, Michigan, for Appellant. Karen W. Magdich, MAGDICH AND
ASSOCIATES, P.C., Livonia, Michigan, for Appellee.
                                  _________________
                                      OPINION
                                  _________________

       KETHLEDGE, Circuit Judge. Universal Health Group appeals the district
court’s dismissal of its complaint as a sanction for its willful and repeated violations of
the district court’s discovery orders. We affirm the dismissal.

       To recite the facts of this case is nearly to decide it. In 2009, Universal
demanded payment from Allstate for medical services that Universal allegedly rendered
to 36 persons claiming coverage under insurance policies issued by Allstate. Allstate
denied payment, contending that Universal had not, in fact, rendered any services to
those persons. Universal thereafter filed this suit against Allstate in Michigan state

                                            1
No. 12-1323        Universal Health v. Allstate Ins.                             Page 2

court, asserting three claims: first, for reimbursement for the services allegedly
rendered; second, for defamation; and third, for tortious interference with Universal’s
business relationships. Allstate timely removed the case to federal court on diversity
grounds.

       In November 2009, Allstate served Universal with interrogatories and document
requests. Universal failed to respond for more than two months, so Allstate filed a
motion to compel. In May 2010, the magistrate judge granted Allstate’s motion and
ordered Universal to “provide full and complete responses” to most of Allstate’s
discovery requests, no later than June 7, 2010. Again Universal did not respond by the
deadline. Instead, 11 days later, Universal filed a motion requesting an additional 21
days (i.e., until June 28) to comply with Allstate’s discovery requests. Allstate agreed
to the extension, and the magistrate judge granted it.

       But Universal did not respond by this deadline either. Instead, on July 12—more
than 240 days after it was first served with Allstate’s discovery—Universal filed a
motion for another extension of time to respond. This time Allstate objected, but the
magistrate judge ultimately granted the extension.

       Universal’s new deadline for responses was October 6, 2010. Universal finally
did respond that day, but its responses were patently incomplete. More than a month
later, Allstate moved to dismiss Universal’s complaint as a sanction for Universal’s
discovery violations. The magistrate judge held a hearing on the motion and later took
supplemental briefing from both parties. In an order dated May 3, 2011, the magistrate
judge concluded that “some sanction is warranted for [Universal’s] conduct[,]” but that
dismissal was inappropriate “[on] this record” because the court had not yet warned
Universal that its discovery violations might result in dismissal. As an alternative
sanction, the order stated that Universal would be limited at trial to the documents,
evidence, and witnesses that it had already produced to Allstate. The magistrate also
extended discovery for 45 days to allow Allstate to depose some of Universal’s
employees.
No. 12-1323        Universal Health v. Allstate Ins.                               Page 3

       Accordingly, on May 20, 2011, Allstate sent an email to Universal to coordinate
deposition dates. Universal never responded. So Allstate chose the dates on its own:
on May 27, Allstate sent Universal deposition notices for 13 of its employees, for dates
beginning on June 30, 2011. Allstate then sent a letter to Universal to confirm those
dates, but again Universal chose not to respond. It was not until the day before the
depositions were to begin—after Allstate’s counsel reached Universal’s counsel on the
phone—that Universal said that it would not produce any witnesses on the dates stated
in the notices. Allstate promptly sent an email to Universal’s counsel (who is not
Universal’s counsel on appeal) to re-schedule the depositions. Again Universal did
nothing.

       So Allstate filed a second motion to dismiss Universal’s complaint, this time
based on its complete refusal to comply with the court’s May 3, 2011 order. The
magistrate judge held a hearing on the motion, during which Universal’s counsel
essentially said that he was too busy with another case to comply with the orders in this
one, and that—notwithstanding his complete silence towards Allstate’s counsel—he
thought the parties had extended the deposition deadlines “by sort of unspoken
consent[.]”

       The magistrate judge thereafter entered a Report and Recommendation in which
he recited this litany and quite sensibly observed that “there is simply no excuse to fail
to communicate with opposing counsel regarding the deposition schedule, particularly
given the time constraints of the May 3, 2011 Order.” The judge also noted that—more
than a year after Allstate had served its interrogatories, and almost innumerable
extensions later—Universal still had done nothing to supplement its inadequate
interrogatory responses “as required by the May 3, 2011 Order.” The magistrate judge
therefore found that “plaintiff’s counsel’s conduct in disregarding the Court’s plain and
clear May 3, 2011 Order could only be willful”; that “[p]laintiff’s counsel’s excuses are
simply unavailing in light of his pattern of delay and failure to comply with discovery
orders since at least May, 2010”; and that “[t]he prejudice to defendant is clear.” The
magistrate judge therefore recommended that Allstate’s motion be granted and that
No. 12-1323         Universal Health v. Allstate Ins.                                 Page 4

Universal’s complaint be dismissed with prejudice. The district court adopted the
recommendation.

        We review the district court’s dismissal for an abuse of discretion. Sommer v.
Davis, 317 F.3d 686, 692 (6th Cir. 2003). Under Rule 37(b)(2)(A) of the Federal Rules
of Civil Procedure, “a district court may sanction parties who fail to comply with its
orders in a variety of ways, including dismissal of the lawsuit.” Bass v. Jostens, Inc., 71
F.3d 237, 241 (6th Cir. 1995). As the magistrate judge correctly observed, we consider
four factors when reviewing a district court’s dismissal under Rule 37(b): “(1) whether
the party’s failure is due to willfulness, bad faith, or fault; (2) whether the adversary was
prejudiced by the dismissed party’s conduct; (3) whether the dismissed party was warned
that failure to cooperate could lead to dismissal; and (4) whether less drastic sanctions
were imposed or considered before dismissal was ordered.” United States v. Reyes, 307
F.3d 451, 458 (6th Cir. 2002) (internal quotation marks and citation omitted). “Although
no one factor is dispositive, dismissal is proper if the record demonstrates delay or
contumacious conduct.” Id.

        Every one of these factors is present here. As for the first two: Universal’s
violations were willful, and they prejudiced Allstate by preventing it from obtaining
evidence essential to the preparation of its defense. The third factor is also met,
notwithstanding Universal’s argument before us that “there was no explicit warning of
dismissal.” There is no magic-words prerequisite to dismissal under Rule 37(b); and
otherwise we entirely agree with the magistrate judge’s conclusion that—after the
court’s May 3, 2011 order denying Allstate’s first motion to dismiss and imposing an
intermediate sanction short of dismissal—“plaintiff was on clear notice that continued
abuses could cause that result.” Finally, the magistrate judge’s measured response to the
first motion to dismiss meets the fourth factor.

        “Every violation of the Rules has consequences; the question is who will bear
them. Too often the consequences are borne only by the innocent party, who must live
with the violation . . . or else pay to brief and argue a motion to compel the offending
party to do what the Rules required it to do all along.” R.C. Olmstead, Inc. v. CU
No. 12-1323        Universal Health v. Allstate Ins.                             Page 5

Interface, LLC, 606 F.3d 262, 277–78 (6th Cir. 2010) (concurring opinion). Here, even
Allstate’s repeated motions, and the court’s own orders, were not enough to compel
Universal to do what the Rules required. Universal’s conduct violated the rules of civil
procedure and common courtesy alike. On this record, “it was not only permissible, but
salutary[,]” that the court imposed a sanction of dismissal. Id. at 277.

       The district court’s judgment is affirmed.