Court Opinion

ID: 4684897
Source: CourtListenerOpinion
Date Created: 2021-05-07 14:09:47.1608+00
Date Added: 2024-06-11T08:04:24.877575
License: Public Domain

RENDERED: APRIL 30, 2021; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                         Court of Appeals

                            NO. 2019-CA-1838-MR

DAVID MEGRONIGLE, D/B/A
ACCIDENT/INJURY
CHIROPRACTIC; AND E-TOWN
INJURY CENTER, INC., D/B/A
METRO PAIN RELIEF CENTER                                         APPELLANTS

              APPEAL FROM JEFFERSON CIRCUIT COURT
v.          HONORABLE ANGELA MCCORMICK BISIG, JUDGE
              ACTION NOS. 16-CI-000163 AND 16-CI-000169

ALLSTATE PROPERTY &
CASUALTY INSURANCE
COMPANY                                                              APPELLEE

                                   OPINION
                                  AFFIRMING

                                 ** ** ** ** **

BEFORE: JONES, LAMBERT, AND K. THOMPSON, JUDGES.

LAMBERT, JUDGE: David Megronigle, d/b/a Accident/Injury Chiropractic,

(hereinafter “Dr. Megronigle”) and E-Town Injury Center, Inc., d/b/a Metro Pain

Relief Center (hereinafter “E-Town”) have appealed from the October 21, 2019,
order of the Jefferson Circuit Court awarding $816.00 in attorney fees to Allstate

Property & Casualty Insurance Company pursuant to Kentucky Rules of Civil

Procedure (CR) 37.02(3) based upon delays in the discovery process. We affirm.

             The underlying lawsuit commenced with the filing of two complaints

on January 12, 2016, by Jean-Luc Henry and Dwayne Smith (the plaintiffs) related

to injuries they received in a motor vehicle accident on January 14, 2015, when

they were passengers in a vehicle driven by Wolf Conseillant. The first, Action

No. 16-CI-00163, is a contract claim against Allstate. The plaintiffs were insured

under a policy of insurance with Allstate at the time of the accident, and they

alleged that Allstate refused to honor the provisions of the policy by failing to pay

medical expenses or lost wages as it was obligated to under the Basic Reparations

Benefits (BRB) provision. The second, Action No. 16-CI-00169, is a bodily injury

claim against Conseillant in which the plaintiffs sought damages for past and

future medical expenses, past and future physical and mental pain and suffering,

lost wages, and diminished capacity to work and earn income based upon

Conseillant’s negligence in causing the accident. An amended complaint added

Anny Cun as a defendant based upon the negligent operation of her vehicle, which

caused the collision with the vehicle Conseillant was driving. The two cases were

later consolidated. As this appeal relates to issues arising from the contract claim

against Allstate, we shall focus our attention for the most part on that case.

                                          -2-
               Allstate filed an answer disputing the plaintiffs’ claims, and discovery

commenced. Allstate sought the production of medical records from the plaintiffs’

healthcare providers, including hospitals and chiropractic offices. The circuit court

also bifurcated the plaintiffs’ tort claims from their contract claims against Allstate,

staying the contract claims until the tort claims were resolved.

               In July 2017, Allstate filed a motion to dismiss the plaintiffs’ claims

for failure to state a claim. It argued that the plaintiffs had not paid any of the

chiropractic bills and therefore had not accrued or incurred any economic loss.

The plaintiffs objected to the motion. The court treated the motion as one for

summary judgment. It denied the motion as premature by order entered September

26, 2017, because discovery had not been completed. The court denied Allstate’s

motion to alter, amend, or vacate this order.

               In June 2017, just prior to the filing of the motion to dismiss, Allstate

filed separate notices and subpoenas to take the depositions of the designated

corporate representatives of Dr. Megronigle and E-Town. Neither was a party to

the lawsuits. Rather, Dr. Megronigle provided chiropractic treatment for, and E-

Town performed MRIs of, the plaintiffs.1 The depositions were scheduled for July

31, 2017. In the notices, Allstate sought production of a list of documents relating

1
 In their brief, the appellants state that Dr. Megronigle “is the owner and manager of the various
business entities involved[.]”

                                               -3-
to their involvement with the plaintiffs’ lawsuit, for any claim that the practices

had been contracted by plaintiffs’ counsel to evaluate, any referral relationship

with plaintiffs’ counsel, advertising information for the last five years, and

financial performance for the last five years, among other information. Allstate

was apparently seeking information that Dr. Megronigle had inflated the cost of

MRIs performed at E-Town when it billed Allstate for services rendered.

                On July 12, 2017, Dr. Megronigle filed a motion for a protective order

pursuant to CR 26.03 through attorney Paul Croce,2 seeking to prevent his

examination and disclosure of any information other than about the medical

treatment directly provided to the plaintiffs and associated invoices for service. He

explained that his office provided treatment for the plaintiffs related to their motor

vehicle accident and submitted invoices to Allstate. Allstate requested to take his

deposition as the corporate representative and seek information unrelated to the

plaintiffs’ claims. This information, Dr. Megronigle argued, was confidential and

proprietary business information and had nothing to do with the lawsuit or

treatment of the plaintiffs. Rather, Dr. Megronigle posited that Allstate was

seeking this information for its adjusting purposes in future, unrelated claims. He

argued that the discovery Allstate was seeking was “not reasonably calculated to

lead to admissible evidence” and was “done to harass and create hardship” to him.

2
    Later, attorney J. Fox DeMoisey represented both E-Town and Dr. Megronigle.

                                              -4-
Therefore, Dr. Megronigle sought a protective order to limit the scope of his

deposition. This motion was later withdrawn, and Allstate remanded the

deposition notices on July 24, 2017.

             On August 31, 2017, the court entered agreed orders dismissing the

plaintiffs’ bodily injury claims against Conseillant and Anny Cun as settled. The

contract claim against Allstate continued.

             In September 2017, Allstate again filed notices to take the corporate

representative depositions with a new date of October 5, 2017. The notices

indicated that Allstate was still seeking information related to marketing and

advertising, referral relationships, and financial performance. On October 4, 2017,

Dr. Megronigle moved to hold his deposition in abeyance or reschedule it pending

a ruling by this Court on his Petition for a Writ of Prohibition. The next day,

Allstate filed a motion to compel and for sanctions, requesting that the court

compel the corporate representative depositions.

             The court held a hearing on the pending motions on December 19,

2017. Much of the discussion addressed the scope of the discovery Allstate was

attempting to obtain. Allstate argued that the issue to be decided was the

reasonableness of the treatment and cost; therefore, whether any solicitation or

marketing was involved would be subject to discovery. Allstate believed there was

a contractual relationship between Dr. Megronigle (the treating chiropractor) and

                                         -5-
E-Town whereby Dr. Megronigle leased an MRI bed at E-Town on a per patient

rate, and the office then billed the insurance company under its provider code at a

much higher rate of $1,750.00 per MRI. Counsel for Allstate discussed the various

procedural delays that occurred after it first issued the notices and subpoenas in

June as well as his attempts to reschedule the depositions. Counsel representing

Dr. Megronigle and E-Town would not provide any dates for the depositions,

which prompted Allstate to file the motion to compel. Counsel for Allstate stated

that he had done everything he could to work with Dr. Megronigle and E-Town,

but nothing happened, and that under CR 45, Dr. Megronigle and E-Town had ten

days to assert any objections. Six months later, no objection had been filed. In

response, counsel for Dr. Megronigle and E-Town explained that Allstate had been

targeting multiple chiropractors who were using MRIs to service their clients.

Allstate, he argued, was improperly attempting to obtain information regarding the

economic relationship between a vendor and a health provider; this was beyond the

scope of discovery for this case. This should be done in another action, not in a

motor vehicle accident case. Counsel indicated that a similar case was being

considered by the Court of Appeals.

             Once the arguments were complete, the court orally ruled on

Allstate’s motion to compel as follows:

             Judge: The motion to compel, Mr. Stempien [counsel for
             Allstate], that you’re making is granted. I think you

                                          -6-
            should be able to conduct discovery and get information
            about from [sic] the chiropractor and from any other tests
            and what their costs were. I would limit that to not going
            into general information about how they conduct their
            business and where they may farm out services, but
            certainly anything related to this particular plaintiff, Mr.
            Henry . . . and his medical treatment and what tests he
            had done and how much those tests cost and why he
            needed those tests, I will allow you to take that
            discovery. . . . The motion to compel would be granted,
            with the limitation of just not going into general
            information about how they conduct their business but
            specific information to this individual and what treatment
            they received, what the billing costs were because
            Plaintiff is obviously going to have to establish that if
            they are going to be able to overcome, either prove their
            case at trial or overcome a renewed motion for summary
            [judgment].

            Counsel for Allstate: And quick your honor just because
            I think this is going to be an issue. So one of our
            questions is going to be “okay how much did you pay E-
            Town Injury for the MRI in this particular case pursuant
            to that lease agreement?”

            Judge: For this case that is fine.

            ....

            Judge: My order is that they [Allstate] can go forward
            and take the discovery. Again, if you [Dr. Megronigle]
            want to object to the scope of it, we can always come
            back and revisit that. I do think any bills related to this
            particular plaintiff’s care that the questions should be
            answered.

The court also denied Dr. Megronigle and E-Town’s motion to reschedule the

depositions or hold them in abeyance.

                                         -7-
             In February 2018, Allstate filed another set of subpoenas and notices

to take the corporate representative depositions on February 16, 2018, which were

then rescheduled for February 22, 2018. However, on the day the depositions were

scheduled to be taken, Dr. Megronigle and E-Town filed a renewed and amended

motion for a protective order seeking to limit the deposition testimony.

             Also on February 22, 2018, Allstate filed a motion asking the court to

compel the corporate representatives’ compliance with its prior order. It also

sought a finding of contempt and an award of attorney fees. Allstate indicated that

it had attempted to work with counsel regarding discovery but had received no

response or had received assurances of cooperation that never happened.

Specifically as to discovery, Allstate requested that the depositions be ordered to

take place and that the documents requested in the subpoena be produced. The

court heard arguments on February 26, 2018, where Allstate again argued that it

was seeking this information to determine whether the medical bills were

reasonable and that Dr. Megronigle and E-Town were choosing not to comply.

Allstate requested costs and attorney’s fees, noting that it had been almost eight

months since it had sought this discovery and that Dr. Megronigle and E-Town had

only recently moved for a protective order. Dr. Megronigle and E-Town noted that

they had filed a motion for a protective order based on a similar case that had been

pending in this Court in which Allstate was attacking chiropractors. They noted

                                         -8-
that the circuit court had ruled that it was permissible to go ahead with discovery as

it related to this case. But Allstate, they argued, continued to request discovery

related to a referral and financial relationship between Dr. Megronigle and E-Town

as well as the cost of the services that had been provided. This, they asserted, was

beyond whether the medical bills here were reasonable.

             The court entered an order on March 22, 2018, related to the

discovery issues. It stated in relevant part as follows:

                                  BACKGROUND

                   This matter involves an automobile collision that
             occurred in Jefferson County, Kentucky on or about
             January 14, 2015. By Order dated September 26, 2017,
             this Court previously denied a Motion to Dismiss filed by
             Defendant Allstate. The background facts as listed in the
             Court’s prior Order are adopted fully herein. The current
             matters before the Court involve an on-going discovery
             dispute.

                    The parties appeared before the Court on
             December 19, 2017 to discuss essentially the same issues
             presented here. At that hearing, the Court orally granted
             the Defendant Allstate’s motion to compel discovery and
             denied [Movants’] motion to hold further discovery in
             abeyance. Since the prior ruling, counsel for Allstate
             alleges that the Movants have not provided dates for the
             deposition of a corporate representative of the various
             entities doing business as the collective Movants in this
             case. As a result, counsel is requesting the deposition be
             noticed for the courtroom with the Court to be available
             to rule on objections as they occur. Counsel for Allstate
             also requests attorney fees and costs incurred in
             attempting to obtain discovery from the Movants.

                                          -9-
       For the Movants’ part, counsel acknowledges that
their objections to the discovery requests tendered by
Allstate were not timely. Counsel further argues for a
protective order preventing Allstate from engaging in a
“fishing expedition” into his client’s business practices.
While counsel for Movants acknowledges their discovery
responses were delayed, he also states that the scope of
discovery requested by Allstate is outside the oral
[parameters] set by the Court at the December, 2017
hearing. Counsel argues the Defendant failed to narrow
the scope of the discovery requests, and therefore
Movants are still refusing to respond. Counsel also
argues that discovery in this case should be limited to the
accident at issue and not business referral practices,
marketing schemes or other information not related to
this case. Finally, counsel for Movants argues that an
investigation into the alleged fraudulent activity is not
appropriate as part of the current litigation. Balancing
these issues, the Court rules as follows.

        Defendant’s Motion to Compel is GRANTED.
Movants are required to make a corporate representative
available for deposition within 25 days of the date of this
Order. In addition, Movants are to provide responses to
the previously tendered discovery within 20 days of the
date of this Order. Specifically, Movants should respond
to all discovery related to the treatment of Plaintiff, Jean-
Luc Henry as well as business practices used to handle
Plaintiff’s case. Further, information should be provided
about the cost and type of care he received at Movants’
locations.

      Movants’ Motion for a Protective Order is
GRANTED in part to the extent Allstate requests general
information about Movants’ overall marketing practices
or business plan. The Court is further DENYING the
Motion to conduct the requested deposition at the
courthouse in the presence of the Court. However,
because of the acknowledged delay on the Movants’
behalf in responding to the discovery issues beginning

                            -10-
             back in June of 2017 and again after the Court’s oral
             ruling in December of 2017, the Court orders Movants to
             pay for two (2) hours of Allstate’s counsel time in
             preparing the February 22, 2018 Motion to Compel.

             In April 2018, Dr. Megronigle and E-Town filed a motion requesting

that the court hold a hearing to clarify the directives of the March 22, 2018, order.

The motion included a copy of this Court’s ruling on Dr. Megronigle’s motion for

intermediate relief. This Court denied intermediate relief, noting that it would not

speculate on the alleged injuries Dr. Megronigle and E-Town might incur when

there was no indication that they had sought clarification from the circuit court.

The petition for a writ was later denied by a three-judge panel on July 12, 2018.

             The circuit court heard arguments on May 14, 2018, related to what

would be properly discoverable in Allstate’s deposition notices based upon the

court’s prior order. The court explained that anything that pertained to these

plaintiffs was discoverable. The court ultimately ordered the documents to be

produced in 15 days and the depositions to take place in 25 days.

             On June 6, 2018, Allstate filed a motion to compel Dr. Megronigle

and E-Town to provide the amount of the payment made by Dr. Megronigle to E-

Town for the MRI performed on the plaintiff or plaintiffs. It stated that this

information was covered in the December 19, 2017, hearing. Allstate also sought a

finding of contempt and an award of attorney’s fees. At the hearing on June 11,

2018, Dr. Megronigle and E-Town objected on the basis that this was proprietary

                                         -11-
information and irrelevant as to whether this was a necessary expense. They

argued that this was another attempt by Allstate to circumvent the court’s ruling.

The court ruled both orally and in writing on the tendered order that Allstate could

obtain the cost of the MRI to Dr. Megronigle’s office.

             At this point in the proceedings, Dr. Megronigle and E-Town decided

to drop their claim to recover their medical fees. Because that left no other issues

to be decided, the plaintiffs filed a notice of voluntary dismissal against Allstate on

June 18, 2018.

             On June 21, 2018, Allstate filed a motion seeking reasonable

attorney’s fees pursuant to CR 37.02(3). Allstate stated that it had been informed

that, following the entry of the last order to compel, Dr. Megronigle decided to

“zero out” the bills related to the treatment of the plaintiffs in this case rather than

provide the requested information. It argued that Dr. Megronigle should not be

permitted to walk away from the case after a year of delay without any

consequence and that he should bear the reasonable costs associated with this

conduct. Allstate set forth a detailed timeline of events associated with the

discovery process as it related to Dr. Megronigle.

             In response, Dr. Megronigle argued that Allstate did not want to honor

its contractual obligations by paying the outstanding medical bills. He indicated

that he decided “to suffer a loss” on this case and pursue the matter as a direct

                                          -12-
party for what he described as the improper conduct of the insurance company in

seeking the cost information. After Dr. Megronigle informed the plaintiffs that he

would no longer be seeking payment for the services he had rendered, the plaintiffs

filed a notice of voluntary dismissal. Two days later, Allstate filed its motion

seeking attorney’s fees. Dr. Megronigle argued that CR 37.02(2) and (3) were

only applicable to actual parties in the litigation, and he was not a party to the

litigation. In addition, he asserted that his position was justified. Because he had

expended money on his own attorney’s fees and lost the value of the services he

had rendered to the plaintiffs, Dr. Megronigle argued that the award of attorney’s

fees would be unjust and unwarranted. In reply, Allstate argued that it was within

the court’s discretion to levy appropriate sanctions in this case.

             By order entered July 26, 2018, the court granted Allstate’s motion

and ordered Dr. Megronigle and E-Town to pay reasonable attorney’s fees

associated with Allstate’s final motion to compel discovery. Allstate was to submit

an amount with supporting documentation within ten days.

             Allstate’s counsel filed a timely affidavit as requested by the court. In

the affidavit, counsel stated that the reasonable value of legal services related to the

motions for clarification and to compel discovery following the court’s March 22,

2018, order totaled $2,529.00. He went on to state that he had expended two hours

for the preparation for and his appearance at the February 2018 motion to compel,

                                         -13-
which had a value of $480.00. Counsel attached a ledger establishing these

amounts.

             Dr. Megronigle filed a response and objection to Allstate’s demand

for costs and fees. He continued to argue that Allstate and other insurance

companies had been targeting him and other chiropractors by seeking their

proprietary information. He noted that it appeared from the affidavit that the

billing rate in the matter was $240.00 per hour. However, he claimed that past

experience of Dr. Megronigle’s counsel established that this was not the typical

hourly billing rate for Allstate.

             The court held a hearing on the matter on October 3, 2019. Allstate

indicated that the reasonableness of the requested fees was at issue for this hearing.

Dr. Megronigle raised a procedural issue as to whether the court had jurisdiction

because the case had ended more than a year earlier. The only issue that remained

related to a non-party. Allstate argued that the attorney’s fee issue had already

been ruled on and that the hourly rate of the fees was reasonable for the

community. There was some argument related to whether Allstate should have

requested fees in the actual amount it was paid rather than the hourly fees

requested in the affidavit. Allstate argued that it took a long time to get before the

court due to procedural issues but that the court retained jurisdiction over its

orders.

                                         -14-
             By order entered October 21, 2019, the court ruled on Allstate’s

motion for attorney’s fees, in pertinent part, as follows:

                    Briefly stated, this dispute involves a long
             discovery process between Allstate and E-town Injury
             Center, Inc. d/b/a Metro Pain Relief Center, Cardiopathic
             Radiology Group via their corporate representative, Dr.
             Megronigle, regarding information sought via subpoena
             in this case. Beginning in June and July of 2017, Allstate
             sent requests for discovery and deposition notices for
             representatives of Plaintiff’s treaters. In general, Allstate
             complains of lack of responsiveness and [seeks] its
             expenses for four separate court orders compelling
             Plaintiff’s treaters to produce information. Allstate
             argues that the Plaintiff’s treaters refusals were without
             merit.

                     For its part, Megronigle argues he had a “solid
             basis” for his objections to this discovery. In addition,
             Megronigle argues that he is not an actual party to the
             litigation but rather rendered treatment for the Plaintiff.
             Megronigle further argues that Allstate should seek the
             amount it was charged by counsel for the services and
             not a “reasonable” amount. Finally, Megronigle argues
             that he has waived his treatment fees and the issues are
             now moot. Based upon his withdraw[al] of payment for
             services, the Plaintiff filed a notice of voluntary dismissal
             of the underlying case.

                    Balancing these arguments, the Court considers
             Allstate’s argument that regardless of the dismissal of the
             case, the more than a year Allstate and its attorneys spent
             in an attempt to gain compliance with the Court’s
             discovery orders was unreasonable. The Court also
             weighs that Allstate ultimately prevailed in the
             underlying legal action in that Plaintiffs’ claims were
             dismissed. While the Court agrees that some of the legal
             wrangling over this discovery process were within
             normal limits, the Court also finds that multiple orders

                                         -15-
             compelling the same discovery warrant some sanction.
             For this reason, the Court will award attorney fees for the
             preparation of the June 6, 2018 motion to compel. This
             represents 2.2 hours of work for a total cost of $528.00.
             In addition, the Court will award attorney fees for the
             hearing on the motion to compel from June 11, 2018 in
             the amount of 1.2 hours at a total cost of $288.00.

Accordingly, the court awarded $816.00 in attorney’s fees as a sanction pursuant to

CR 37.02(3), to be paid within 60 days. This appeal now follows.

             On appeal, Dr. Megronigle and E-Town (now referred to as the

appellants) raise two issues. First, they contend the circuit court did not have

jurisdiction to compel the payment of attorney’s fees. Second, they argue the

circuit court abused its discretion in awarding these sanctions.

             For their first argument, the appellants assert that the circuit court lost

subject matter jurisdiction to compel them, as non-parties, to pay attorney’s fees to

Allstate once both the contract and bodily injury complaints had been terminated.

This occurred when the plaintiffs filed their voluntary dismissal in the contract

case on June 19, 2018. Allstate filed its motion for attorney’s fees two days later.

The appellants assert that the discovery issues pending at the time of the voluntary

dismissal were, at best, ancillary to the main litigation. “Whether the court has

acted outside its jurisdiction is a question of law, and the standard of review on

appeal is therefore de novo.” Whaley v. Whitaker Bank, Inc., 254 S.W.3d 825, 827

(Ky. App. 2008).

                                         -16-
             Allstate maintains that the circuit court retained jurisdiction to award

the fees in this case. It cites to CR 41.01, which addresses the effect of a voluntary

dismissal.

             (1) By plaintiff; by stipulation.

             Subject to the provisions of Rule 23.05, of Rule 66, and
             of any statute, an action, or any claim therein, may be
             dismissed by the plaintiff without order of court, by filing
             a notice of dismissal at any time before service by the
             adverse party of an answer or of a motion for summary
             judgment, whichever first occurs, or by filing a
             stipulation of dismissal signed by all parties who have
             appeared in the action. Unless otherwise stated in the
             notice of dismissal or stipulation, the dismissal is without
             prejudice, except that a notice of dismissal operates as an
             adjudication upon the merits when filed by a plaintiff
             who has once dismissed in any court of this state, of the
             United States or of any state an action based on or
             including the same claim.

             (2) By order of court.

             Except as provided in paragraph (1) of this rule, an
             action, or any claim therein, shall not be dismissed at the
             plaintiff’s instance save upon order of the court and upon
             such terms and conditions as the court deems proper. If a
             counterclaim has been pleaded by a defendant prior to the
             service upon him of the plaintiff’s motion to dismiss, the
             action shall not be dismissed against the defendant’s
             objection unless the counterclaim can remain pending for
             independent adjudication by the court. Unless otherwise
             specified in the order, a dismissal under this section is
             without prejudice.

Here, Allstate argues that the plaintiffs’ notice of voluntary dismissal did not

comply with CR 41.01(2) because the circuit court did not consider the effect the

                                         -17-
dismissal would have, nor did it enter an order dismissing the case. See Sublett v.

Hall, 589 S.W.2d 888, 893 (Ky. 1979) (“In essence, the basic criterion is whether

the opposing party will suffer some substantial injustice or be substantially

prejudiced” if a court were to dismiss an action without prejudice.). We note that

CR 41.01(1) is not applicable here because the notice of voluntary dismissal was

not made before an answer, motion for summary judgment, or stipulation of

dismissal signed by all parties was filed.

             In their reply brief, the appellants rely upon Whaley, supra, to support

their argument that the court lost jurisdiction to consider other matters once the

notice of voluntary dismissal was filed: “After a plaintiff files a motion for

voluntary dismissal pursuant to CR 41.01 and there is no timely objection, the

matter is at an end and the court loses jurisdiction to consider other matters and

motions.” 254 S.W.3d at 829. However, this case is distinguishable from the

matter at hand because the Whaleys filed a notice of dismissal pursuant to CR

41.01(1). In such cases, the Court held that “[s]ince a CR 41.01(1) notice of

dismissal is automatic, leaving no discretion to the trial court as to whether it

should be granted, we conclude that the Whaleys’ case was dismissed without

prejudice, effective immediately upon their filing of the notice on May 8, 2007.”

Id. Here, the notice was filed pursuant to CR 41.01(2), which does require the

court – in most situations – to use its discretion to determine whether to permit the

                                         -18-
dismissal: “[A]n action, or any claim therein, shall not be dismissed at the

plaintiff’s instance save upon order of the court and upon such terms and

conditions as the court deems proper.”

             We agree with Allstate that the circuit court retained jurisdiction in

this case because the court had taken no action on the notice of voluntary

dismissal.

             For their second argument, the appellants argue that the circuit court

abused its discretion both in awarding attorney’s fees and in the amount of

attorney’s fees awarded. “A trial court ‘has broad discretion in addressing a

violation of its order[s]’ regarding discovery, and this Court reviews the trial

court’s determination of the appropriate sanction for abuse of that discretion.”

Turner v. Andrew, 413 S.W.3d 272, 279 (Ky. 2013) (quoting Wilson v.

Commonwealth, 381 S.W.3d 180, 191 (Ky. 2012)). “The test for abuse of

discretion is whether the trial judge’s decision was arbitrary, unreasonable, unfair,

or unsupported by sound legal principles.” Goodyear Tire & Rubber Co. v.

Thompson, 11 S.W.3d 575, 581 (Ky. 2000) (citing Commonwealth v. English, 993

S.W.2d 941, 945 (Ky. 1999)).

             In the present case, the circuit court based its award of attorney’s fees

on CR 37.02(3), which provides for the award of expenses for the failure to obey

an order:

                                         -19-
             In lieu of any of the foregoing orders or in addition
             thereto, the court shall require the party failing to obey
             the order or the attorney advising him or both to pay the
             reasonable expenses, including attorney’s fees, caused by
             the failure, unless the court finds that the failure was
             substantially justified or that other circumstances make
             an award of expenses unjust.

             The appellants cite to E.I.C., Inc. v. Bank of Virginia, 582 S.W.2d 72

(Ky. App. 1979), in which this Court addressed the burden shifting language of the

rule that would require the non-compliant party to justify the failure to comply or

establish that an award of fees would be unjust:

                   It appears to us that although the rule, by use of the
             word “shall,” appears to mandate an award of reasonable
             expenses including attorney’s fees for failure to comply
             with an order compelling discovery, the addition of the
             language in the rule that “unless . . . the failure was
             substantially justified or . . . unjust,” precludes the award
             of expenses and attorney’s fees where there is a showing
             the award would be unjust or the failure to comply is
             substantially justified.

                     In other words, we believe the language used in the
             rule is intended to shift the burden to the party who has
             failed to comply with an order compelling discovery, and
             requires that party to establish to the satisfaction of the
             trial court that the failure was substantially justified or
             that an award of expenses would be unjust. Accordingly,
             we hold that the award of expenses and attorney’s fees
             pursuant to CR 37.02(3) is within the sound discretion of
             the trial court.

Id. at 75. The appellants argue that the award of fees was unjust and that they were

substantially justified in not complying with the court’s order. They cite their

                                         -20-
decision to give up the medical fees to which they were entitled in order to protect

the information concerning their business practices as well as a “windfall”

Allstate’s counsel would receive over whatever Allstate had already paid him.

They also point out that they were successful in part in seeking protective orders.

             We disagree with the appellants’ assertions that they were

substantially justified in their refusal to comply with the court’s discovery orders

or that it would be unjust to award attorney’s fees in this case. As Allstate sets

forth in its brief, the appellants flatly refused to comply with multiple court orders

related to discovery in this case, and this process went on for over a year as

detailed above and by the court in its orders. We find no abuse of discretion in the

circuit court’s decision to award fees in this case.

             Finally, we shall consider whether the amount awarded was

reasonable. The circuit court awarded $816.00 in attorney’s fees, representing 2.2

hours of work preparing the June 6, 2018, motion to compel and 1.2 hours for the

appearance at the June 11, 2018, hearing, at a rate of $240.00 per hour. The

appellants disagree with this calculation and instead argue that the fee should have

been what counsel was actually paid rather than using the $240.00 per hour rate as

a reasonable community rate. However, Allstate points out that Kentucky law only

requires that a rate be reasonable. “[T]he attorney’s fee awarded should consist of

the product of counsel’s reasonable hours, multiplied by a reasonable hourly

                                         -21-
rate[.]” Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814, 826 (Ky. 1992).

We agree with Allstate that the circuit court properly relied upon a reasonable,

community rate of $240.00 per hour to calculate the amount of attorney’s fees

Allstate was entitled to recoup. Therefore, the circuit court did not abuse its

discretion either in its decision to award fees or in the amount it awarded.

             For the foregoing reasons, the order of the Jefferson Circuit Court is

affirmed.

             JONES, JUDGE, CONCURS.

             K. THOMPSON, JUDGE, DISSENTS AND FILES SEPARATE

OPINION.

             THOMPSON, K., JUDGE, DISSENTING: I disagree with the

majority opinion that attorney’s fees could appropriately be awarded against a non-

party in this case pursuant to Kentucky Rules of Civil Procedure (CR) 37.02(3). I

further write to express my disagreement with the Jefferson Circuit Court allowing

this kind of disruptive discovery.

             It is undisputed that David Megronigle, d/b/a Accident/Injury

Chiropractic and E-town Injury Center, Inc., d/b/a Metro Pain Relief Center are not

parties to the motor vehicle accident (MVA) lawsuit between plaintiffs Jean-Luc

Henry and Dwayne Smith versus Wolf Conseillant and Allstate Property &

Casualty Insurance Company. Therefore, there is nothing in CR 37.02 which

                                         -22-
authorized the circuit court to order Megronigle and E-town (the non-parties) to

pay Allstate’s attorney fees.

             I quote CR 37.02 to illustrate my point:

             (1) Sanctions by court in judicial district where
                 deposition is taken.

             If a deponent fails to be sworn or to answer a question
             after being directed to do so by the court in the judicial
             district in which the deposition is being taken, the failure
             may be considered a contempt of that court.

             (2) Sanctions by court in which action is pending.

             If a party or an officer, director, or managing agent of a
             party or a person designated under Rule 30.02(6) or
             31.01(2) to testify on behalf of a party fails to obey an
             order to provide or permit discovery, including an order
             made under Rule 37.01 or Rule 35, the court in which the
             action is pending may make such orders in regard to the
             failure as are just, and among others the following:

             [lists possible orders]

             (3) Expenses on failure to obey order.

             In lieu of any of the foregoing orders or in addition
             thereto, the court shall require the party failing to obey
             the order or the attorney advising him or both to pay the
             reasonable expenses, including attorney’s fees, caused by
             the failure, unless the court finds that the failure was
             substantially justified or that other circumstances make
             an award of expenses unjust.

(Emphasis added.) Simply put, the non-parties cannot be ordered to pay attorney

fees based upon the clear language of the rule. As a matter of law, the circuit

                                         -23-
court’s order awarding fees should have been reversed. While the non-parties

could be subject to contempt of court if they refused to be deposed under CR

37.02(1), the circuit court was imposing a sanction based upon violations of

discovery orders under (2) with the fees imposed under (3). This “remedy” is

simply unavailable against the non-parties.

             Even had they been parties, I disagree with the circuit court’s analysis

that “Allstate ultimately prevailed in the underlying legal action in that Plaintiffs’

claims were dismissed.” There was no “win” here; the non-parties simply decided

they would rather not seek the reimbursement they were legally entitled to receive

at the cost of disclosing that which they believed should not be discoverable. The

amount of money they were foregoing could have rightly been subtracted from any

fees due. These “other circumstances” should have certainly been considered in

determining whether “an award of expenses [was] unjust.” CR 37.02(3).

             I am troubled that the circuit court allowed discovery from the non-

parties beyond the plaintiffs’ medical records. I do not think that Allstate was

warranted in seeking such discovery. It is also evident that Allstate is routinely

seeking this kind of disclosure to discourage medical providers from providing

services and obtaining payment as seen in Allstate Property & Casualty Insurance

Company v. Kleinfeld, 568 S.W.3d 327, 335 (Ky. 2019). Such an action harms

both providers and MVA victims.

                                         -24-
             An MVA lawsuit is not an appropriate forum for Allstate to question

how much Dr. Megronigle paid to E-Town for the MRIs performed on the

plaintiffs. Allowing insurance companies to question the appropriateness of every

medical fee incurred for injuries resulting from a MVA will disrupt the ability of

injured plaintiffs to receive treatment and to receive timely reimbursement for the

cost of their treatment. See KRS 304.39-010 (providing the stated purposes of the

Motor Vehicles Reparation Act as including (2) “[t]o provide prompt payment to

victims . . . ;” (3) “[t]o encourage prompt medical treatment . . . by providing for

prompt payment . . . ;” and (5) “[t]o reduce the need to resort to bargaining and

litigation through a system which can pay victims of motor vehicle accidents

without the delay, expense, aggravation, inconvenience, inequities and

uncertainties of the liability system[.]”).

             There is a mark-up in everything purchased, including medical

services. As an insurance provider, Allstate was required to pay what the MVA

victim had to pay for care. Therefore, the information on this markup was

irrelevant to this MVA lawsuit. If Allstate believes there was some fraud involved

with the fees for MRIs possibly relating to overcharging when automobile

insurance was involved, it should be required to file a separate action against the

non-parties rather than delay the resolution of a MVA lawsuit.

             Accordingly, I dissent.

                                          -25-
BRIEFS FOR APPELLANTS:     BRIEF FOR APPELLEE:

J. Fox DeMoisey            Brian D. Stempien
Louisville, Kentucky       Jessica M. Stemple
                           Louisville, Kentucky

                         -26-