Court Opinion

ID: 8044481
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:49:03.950769+00
Date Added: 2024-06-11T16:37:26.083619
License: Public Domain

Manoukian, J.,
with whom Thompson, J., joins,
dissenting in part:
I respectfully dissent from that part of the majority opinion wherein my brethren surprisingly and summarily uphold the trial court’s striking of Sovereign’s amended answer, entry of default and eventual award of money damages and other relief all under the authority of NRCP 37(b)(2)(C). If this dissent were to become the majority opinion, it would have the effect of reversing the drastic order on sanctions, the default entry and judgment and would necessarily vacate all other orders entered by the court below.
On October 27, 1972, appellant filed its amended complaint against Sovereign and several fictitiously named defendants. The complaint contained several averments of damages. On November 9, 1972, Sovereign filed its answer to the amended complaint together with a counterclaim against appellant.
On January 15, 1973, appellant served a set of interrogatories upon Sovereign. Sovereign answered some of these questions and, in proper procedural fashion, objected to the others. Consequently, on April 2, 1973, appellant moved the trial court pursuant to NRCP 37(a)(2) for its order compelling Sovereign to answer. At the hearing on June 4, 1973, the trial court ordered Sovereign to answer several of the objected to interrogatories, but also found several answers to be sufficient. Sovereign agreed to answer several others, but not all, and to provide supplemental answers to two previously answered interrogatories.
*195On June 25, 1973, the action was stayed due to a pending federal action instituted by Sovereign. That proceeding was ultimately dismissed by the federal district court, which dismissal was upheld September 19, 1975, by the Ninth Circuit Court of Appeals.
By February 9, 1976, Sovereign had not provided any further discovery. On that day, appellant moved the trial court to strike Sovereign’s amended answer and to enter a default judgment as a result of Sovereign’s claimed willful failure to comply with the trial court’s discovery order. At the conclusion of the hearing on appellant’s motion for sanctions, held months later, the trial court awarded appellant its requested relief. Subsequently, appellant was awarded judgment in the sum of $25,260.73, together with an attorney’s fee in the sum of $10,000. The trial court additionally rescinded the management contract, which had the effect of cancelling the twenty-five percent share of appellant’s stock previously issued to Sovereign. Sovereign’s subsequent NRCP 59 motion to amend the judgment was granted in part.
At the conclusion of the hearing on sanctions, the trial court found that two and one-half years had passed since the order to answer, the failure to answer was willful and without just cause and appellant’s case was wrongfully prejudiced. The court also found that respondent intentionally and in bad faith sought to delay trial by filing a frivolous ancillary lawsuit. The trial court apparently acted pursuant to the authority given it by virtue of Rule 37(b)(2)(C) of the Nevada Rules of Civil Procedure. That provision permits a court to strike pleadings or parts thereof, to stay further proceedings, and to dismiss the action or render judgment by default against a party who fails to obey a discovery order. The discretion reposed in our district courts through Rule 37, however, is not unfettered.
In Finkelman v. Clover Jewelers Blvd., Inc., 91 Nev. 146, 532 P.2d 608 (1975), we stated that the “general rule in the imposing of sanctions is that they be applied only in extreme circumstances where willful noncompliance of a court’s order is shown by the record.” Id. at 147, 532 P.2d at 609 (citations omitted). Additionally, “[a] 1 though Rule 37 is very broad, and the courts have considerable discretion in imposing sanctions as authorized by the rule, there are constitutional limits, stemming from the Due Process Clause of the Fifth and Fourteenth Amendments, upon the imposition of sanctions.” C. Wright & A. Miller, Federal Practice and Procedure, § 2283, at 759 (1970). I am of the opinion that such limitations were applicable to the instant case and precluded the trial court *196from invoking the harsh sanction of directing the entry of a default judgment on all issues raised by appellant’s complaint. By its complaint, appellant asserted several distinct causes of action against Sovereign. On a comparison of the permissible inferences which flow from Sovereign’s failure to answer the relevant interrogatories with the material allegations in appellant’s complaint, it is clear that the district court’s order striking Sovereign’s answer in its entirety was inconsistent with the demands of due process.
In this case, the information sought by the interrogatories did not embrace the totality of issues raised by the pleadings on file. Indeed, here the interrogatories relate to only a minor portion of the case. Only where the testimony or records sought through discovery relate to all issues raised by the pleadings may a court take such an action. See Hammond Packing Co. v. Arkansas, 212 U.S. 322 (1908); Bova v. Roanoke Oil Co., 23 S.E.2d 347 (Va. 1942). Where, as here, no presumption can reasonably arise “that the material facts alleged or pleaded [by the plaintiff] were admitted” to be true, Hammond Packing Co. v. Arkansas, 212 U.S. 351, the trial court’s striking of a defendant’s answer is not compatible with due process of law as is required by the Federal Constitution. See Stern v. Hassen, 109 Cal.Rptr. 321, 327 (Ct.App. 1973); Mitchell v. Watson, 361 P.2d 744, 747 (Wash. 1961). Cf. Kerley v. Aetna Cas. & Sur. Co., 94 Nev. 710, 711, 585 P.2d 1339, 1340 (1978) (no abuse of discretion with dismissal of complaint where defendant willfully failed to respond to order compelling production). Subject to reasonable legislation and judicial limitations, a litigant is entitled to his day in court. See Affanato v. Merrill Brothers, 547 F.2d 138, 140 (1st Cir. 1977).
I believe that the penalty imposed here was disproportionate to any misconduct on the part of respondent as the propounded interrogatories did not relate to all of the issues involved in the litigation. Furthermore, Sovereign had substantially complied with the court’s order and, through new counsel, had filed and served the remaining answers prior to the hearing on sanctions, although some answers were found to be inadequate. Moreover, the authorities differentiate between a trial court’s power to impose sanctions against a plaintiff and its power to impose sanctions on a contumacious defendant. Mitchell v. Watson, 361 P.2d at 747. Cf. National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639 (1976) (court established actual deadlines for compliance and disobedient party was the plaintiff). Here, Sovereign, the defendant, suffered the drastic sanctions.
*197Finally, not only does the record fail to show that appellant was prejudiced in any way, I note that on February 27, 1975, the trial judge expressed his displeasure and frustration at the failure of both parties to exercise diligence in getting to trial. Additionally, although Sovereign did not seek any protective orders, NRCP 26(c), it is significant that appellant sought no trial date. Here, I believe that the sanction of dismissal was too harsh. See E.E.O.C. v. Carter Carburetor, Division of ACE Industries, Inc., 577 F.2d 43 (8th Cir. 1978), cert. denied, 439 U.S. 1081 (1979); A & M Records, Inc. v. Heilman, 142 Cal.Rptr. 390 (Ct. App. 1977); Henshaw v. Traveler’s Insurance Co., 386 N.E.2d 1029 (Mass. 1979). On review of the record, there is sufficient evidence to support a finding that Sovereign’s failure timely to file answers regarding its second and fourth affirmative defenses was in bad faith. I perceive an abuse of discretion, however, and would reverse and remand for a full trial as to all issues except issues tendered by the second and fourth affirmative defenses, since the failure of Sovereign to answer interrogatories related only to the second and fourth affirmative defenses.