Court Opinion

ID: 9627702
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:51:11.560505+00
Date Added: 2024-06-11T15:38:54.037538
License: Public Domain

FABE, Justice,
concurring in part, and dissenting in part.
I agree with the court’s opinion in all respects except one: its refusal to address Seaward’s argument that the cost award for Sramek’s accounting services should be upheld as an appropriate discovery sanction. The court concludes that “Seaward appears to raise this argument for the first time on appeal.”1 But Seaward did argue in the superior court that the trial judge’s discovery order requiring payment of accounting fees to Seaward due to discovery violations by Strong justified an award of costs against Strong for Sramek’s accounting services. I therefore disagree that Seaward waived this issue on appeal and believe that the court should address the sanctions argument on its merits.
The appointed discovery master in this case concluded that Strong deliberately withheld portions of the partnership books and business records necessary to resolve the issues in the case. Specifically, the master found that Strong’s “argument that they have no check registers is not credible.... Taking [Strong’s] argument as true would mean that the, partners were writing checks and making deposits without recording them in the checkbook!” The master recommended that “because the books and records ... were in full custody and control of [Strong], but yet they are incomplete or missing, [Seaward] should be reimbursed for reasonable costs and fees for having to obtain and recreate the information fully from the outside sources.”
The superior court fully approved and adopted the discovery master’s findings and recommendations, including the recommendation that Seaward be reimbursed for the cost of recreating financial information of the partnerships due to Strong’s discovery violations. Seaward hired Sramek to accomplish this accounting task; at the conclusion of the case, Seaward argued that the superior court’s order adopting the master’s recommendations justified the award covering Sra-mek’s expert accounting costs:
Furthermore, the discovery master recommended that the court require the plaintiffs to reimburse Mr. Seaward “for any reasonable costs and fees they ha[d] to incur to develop the full accounting information of the two partnerships.” The court subsequently adopted the Master’s recommendations. The court . should, therefore, award Mr. Seaward the cost of retaining Mr. Sramek under the catchall provision of Civil Rule 79(b) and the Discovery Master’s recommendation as adopted by the court. Mr. Sramek’s fees totaled $5,146.11.
*462In support of his request for costs, Seaward submitted to the trial court his attorney’s affidavit that Sramek’s services “were necessary to reconstruct accountings for some of the real estate transactions,” as well as an affidavit by Sramek describing the necessity of his efforts in light of the missing documents and gaps in discovery.
The court essentially holds that because Seaward did not refer specifically to Civil Rule 37 in his superior court request for an award of costs, he has waived the argument that Strong’s discovery violations and the court’s resulting discovery order justify affir-mance of the cost award. But while the superior court’s order and the master’s underlying recommendations do not rely on Rule 37, they are based both on the failure to produce complete records that were in Strong’s exclusive control and on the master’s factual finding that Strong’s justification for failing to produce the records was “not credible.” In turn, Seaward relied on these factors when requesting review of the cost award. Strong neither challenged the master’s findings and recommendations nor appealed the superior court’s discovery order adopting them.
The court claims that an evaluation of Seaward’s Rule 37 argument would require a factual determination of whether Seaward willfully failed to comply with discovery or violated a discovery order.2 But this conclusion overlooks the discovery master’s determination that Strong knew about Seaward’s need for certain information yet still failed to respond to discovery requests. The master found
that the crucial financial records of the partnerships sought in the motion to compel are not available when they should be. Because of their absence, a[n] accurate determination of each partner’s interest ... cannot be accomplished without extra costs.... The undersigned further found that most, if not all, of the supplemental responses to defendant’s discovery requests were provided after the motion to compel was filed.... Due to numerous correspondence between counsel and phone calls, it is inconceivable that plaintiffs had no knowledge of defendant’s needs for supplemental responses prior to the motion to compel, especially when ... they were required by the applicable discovery rule to supplement the responses.
(Emphasis added.) Because this language in the master’s order intimates that Strong violated the “applicable discovery rule” by knowingly failing to produce needed responses in a timely fashion, we need not make additional factual determinations to grant Seaward relief under Rule 37.
Moreover, the court’s conclusion is based solely on the language of Rule 37(b), which addresses a party’s failure to comply with discovery orders. Although Strong might not have expressly violated an outstanding discovery order, Rule 37(c) allows the court to impose appropriate sanctions on a party “that without substantial justification fails to disclose [required] information.” And Rule 37(g) allows the court, when faced with a party who engages in “unreasonable, groundless, abusive, or obstructionist conduct during the course of discovery ... [to] require such party ... to pay to any other party the reasonable expenses ... caused by the conduct.”
I would therefore affirm the award of costs as being within the superior court’s power under Rule 37.

. Op. at 460.

. See Op. at 461.