Court Opinion

ID: 9746244
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:09:52.067209+00
Date Added: 2024-06-11T12:37:45.575698
License: Public Domain

Burgess, J.,
¶ 19. concurring in part, dissenting in part. After claimant’s wilful and unjustified refusal to produce discovery as ordered, it was no abuse of discretion for the Board to dismiss his appeal without prejudice, allowing claimant to proceed on the condition that he comply with discovery. Accordingly, I respectfully dissent from the remand and the majority’s reasons for it. As the majority concludes, ante, ¶ 9, the Board was authorized to compel discovery of relevant evidence through its hearing officer, and had the incidental power necessary to enforce its authority. Claimant did not contest the discovery order, but ignored it without any offered or apparent excuse. The Board responded appropriately by imposing the relatively mild sanction of dismissal with leave to refile if claimant produced the information sought.
¶ 20. That claimant disagreed with the ordered discovery of certain financial information is undisputed. Claimant complained to the Department in October 2004 that, while willing to disclose some of the information requested, he would not produce documentation about the value of his daughter’s home put up as her mortgage collateral for the borrowed trust fund, because he deemed it irrelevant. On October 25, 2004, claimant moved in superior court to quash the State’s subpoena for the information, but his motion was denied upon the court’s finding that the information sought appeared discoverable and relevant. Claimant’s similar objection was rejected by the Board’s hearing officer when the February 2, 2005, discovery order was issued requiring claimant to disclose the information to the Department by February 11, three weeks in advance of the hearing set for March 4.
*542¶ 21. Having failed to persuade the superior court and the hearing officer that the information was irrelevant, claimant then unilaterally elected not to comply with the discovery order. This is not disputed. Claimant made no motion for Board review of the order as provided by the Board’s Fair Hearing Rule 11. See ante, ¶ 11. The due date passed without disclosure and ten days later, on February 22, the Department filed a “Statement” with the Board that claimant failed to disclose the material as directed. Claimant did not dispute this either, or offer any response at all to the Board before the scheduled hearing date. Instead, in a letter dated February 28, four days before the scheduled hearing, claimant moved to disqualify the hearing officer, not on any grounds of bias or conflict of interest, but merely because claimant named the hearing officer as a defendant in an Amended Complaint and Motion for Temporary Restraining Order against enforcement of the discovery order, filed by claimant in federal court three weeks earlier. This motion was baseless on its face.3 Claimant’s request for the temporary restraining order, his third challenge to the requested 'discovery, was denied by the federal court. Nevertheless, claimant continued in his refusal to comply with the discovery order.
¶ 22. On March 2,2005, the Board can-celled the merits hearing, and on March 10, the hearing officer submitted a recommendation that claimant’s appeal be dismissed for failure to comply with discovery. This did prompt a response from claimant, but not to the issue of his discovery noncompliance. Claimant protested that he had disclosed some information earlier in October, and that some of the other information originally withheld was later supplied pursuant to the earlier subpoena; all beside the point of the discovery order to produce information that had not yet been disclosed. As to the remaining undisclosed information about prior encumbrances on the daughter’s realty used as security for the mortgage loan of the trust money, claimant offered, apparently for the first time, that all such encumbrances were a matter of public record and available at the local town offices; again beside the point that claimant was ordered to produce the material to opposing counsel three weeks before the hearing. The Board answered this recalcitrance with the simple expedient of dismissing claimant’s appeal, but without prejudice, until such time as he chose to comply with his discovery obligation.
¶ 23. The majority mistakenly balks at the Board’s dismissal because of the Board’s omission to make “findings of... bad faith or deliberate and willful disregard for the court’s orders, and ... that the party seeking the sanction has been *543prejudiced thereby,” see ante, ¶ 11 (quotations omitted), as necessary to invoke the “ultimate sanction” in response to analogous discovery violations in civil litigation; all as prescribed in John v. Medical Center Hospital of Vermont, Inc., 136 Vt. 517, 519, 394 A.2d 1134, 1135 (1978); Manosh v. First Mountain Vermont, L.P., 2004 VT 122, ¶ 10, 177 Vt. 616, 869 A.2d 79 (mem.); and C.C. Miller Corp. v. Ag Asset, Inc., 151 Vt. 604, 606, 563 A.2d 626, 627 (1989). In each of those cases, we reversed the imposition of an “ultimate” sanction (dismissal with prejudice in John, and default judgments in Manosh and C.C. Miller Corp.) and remanded for such findings necessary to justify such a punitive final judgment against the noncompliant party. In each of those cases we also cautioned that, absent the prescribed findings, “less drastic” sanctions should be used. John, 136 Vt. at 520, 394 A.2d at 1135; Manosh, 2004 VT 122, ¶ 10; and C.C. Miller Corp., 151 Vt. at 607, 563 A.2d at 627.
¶ 24. The rule of these cases, then, is readily distinguishable from and inapposite to the Board’s ruling in the instant case. The Board’s dismissal here, without prejudice, imposed no “ultimate sanction.” In stark contrast to the final judgments entered against the noncompliant parties in John, Manosh, and C.C. Miller Corp., the Board’s dismissal order left claimant free to renew his appeal if he complied with the discovery order. The Board’s dismissal without prejudice was the “less drastic sanction” prescribed in John, Manosh, and C.C. Miller Corp., designed for no other evident purpose than to insure compliance with the discovery order as a precondition to claimant choosing to pursue his appeal.
¶ 25. Although the majority is dissatisfied with the Board’s lack of findings to establish claimant’s bad faith or willful disregard of the discovery order, ante, ¶¶ 11-14, it is undisputed that his noncompliance with the order was willful. Claimant never suggested that production was beyond his means. In his written response to the hearing officer’s dismissal recommendation, claimant acknowledged the order and identified the documents required, but not produced. In his brief before this Court, claimant concedes awareness of the order and argues, without authority, that his unsuccessful effort to enjoin the order was somehow a substitute for filing an objection with the Board. Claimant’s disdain for the order did not justify its violation. It is beyond cavil that claimant’s noncompliance was deliberate and unexcused. To the extent any finding of bad faith is necessary to warrant the Board’s less than “ultimate sanction,” which required only that claimant abide by an unchallenged discovery order before proceeding with his appeal, claimant’s bad faith is self-evident from his admitted refusal to follow the order, absent injunction, justification, or even a timely objection; all frosted by his patently unfounded recusal motion.
¶ 26. The majority also faults the Board for not fully explaining why the undisclosed information was relevant, ante, ¶ 13, but such a finding was unnecessary to the Board’s order of dismissal without prejudice.4 Claimant offered no *544challenge to the discovery order until the hearing officer’s dismissal recommendation. Having declined to make any timely objection to the Board before discovery was due, claimant’s relevancy argument did not have to be resolved by the Board for discovery purposes.
¶ 27. In any event, the relevance of prior encumbrances upon the daughter’s collateral was manifest. As noted by the Board, termination of claimant’s benefits was premised on the Department’s contention that he transferred $87,000 in resources for less than fair market value. As recited by the majority, this transfer involved claimant moving his assets into a trust fund which the daughter then borrowed, in return for a mortgage secured by her home. It is commonly understood that encumbrances on realty affect equity and are thus obviously relevant, without the need for particular findings, to the issue of fair mortgage value of the home exchanged by the daughter for the trust’s funds.
¶ 28. The majority accurately observes that the Board had ample opportunity to address claimant’s arguments after the discovery date and after the hearing date, ante, ¶ 13, but there will always be unlimited opportunities to entertain such belated challenges if parties can delay trial by ignoring discovery deadlines, filing unfounded recusal motions and merely seeking, but not obtaining, injunctive relief from other forums. The Board, however, like any trial court, had a docket to administer according to its rules that claimant chose to ignore, resulting in this typically vexing discovery dispute that wastes time and unnecessarily distracts from the actual adjudication of eases. While the majority is generous to tolerate claimant’s noneompliance, nothing in the record appears to make his flouting of the discovery order any more precious than the Board’s interest in proceeding to merits. The Board’s dismissal order, permitting claimant to pursue his appeal should he comply with discovery, was quite proportionate to the problem and worked no ultimate prejudice to claimant’s interests in his appeal.
¶ 29. I would, however, reverse the part of the Board’s dismissal order foreclosing continued benefits after claimant refiles his appeal since that part of the order appears primarily punitive and unnecessary to effectuate progress on the case.
¶ 30. I am authorized to state that Judge Cook joins in this dissent.

 In support of his request, claimant cited Fair Hearing Rule 3, which requires the hearing officer to be “not involved in any way with the action in question,” but the “action in question” before the Board was the Department’s termination of benefits. Claimant alleged no involvement in that action by the hearing officer. Nowhere in the motion, or in its referenced federal court complaint, is there any claim of bias or prejudice necessary to overcome a judge’s presumed impartiality. Ball v. Melsur Corp., 161 Vt. 35, 39-40, 633 A.2d 705, 710 (1993). It is settled that litigants cannot recuse judges just by naming them in lawsuits. In re Hunter, 167 Vt. 219, 223, 704 A.2d 1154, 1156 (1997). Otherwise, parties would be free to employ collateral litigation to manipulate the courts and judge shop, In re Illuzzi, 164 Vt. 623, 624, 670 A.2d 1264, 1265 (1995) (mem.), just as claimant attempted here.

 The majority’s concern seems to pass by the Board’s explanation that claimant’s irrelevancy argument was rejected for stated reasons specifically emphasizing “the limited information” initially provided by claimant about the transfer of resources to his daughter and the resulting rights and obligation of the Department to obtain proof of financial eligibility under sections M102, M126, and M131 of the Medicaid regulations. Medicaid Manual §§ M102, M126, & M131, 5 Code of Vermont Rules 13 170 008-8.1, -30, & -34. These rules require *544claimant to “give necessary facts about their (or their family’s) situation for the eligibility tests,” Medicaid Manual § M102, 5 Code of Vermont Rules 13 170 008-8.1, and to supply “[vjerification ... [of] [a]ll resources,” Medicaid Manual § M126, 5 Code of Vermont Rules 13 170 008-30. The rules also direct the Department to investigate and review claimant’s continuing eligibility after reporting a “change in his situation that is related to the Medicaid eligibility tests,” Medicaid Manual § M131, 5 Code of Vermont Rules 13 170 008-34, such as a reported transfer of assets to a trust fund borrowed by a daughter in return for a low interest, low payment mortgage secured by real estate equity of undisclosed value.