Court Opinion

ID: 47955
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:32:46+00
Date Added: 2024-06-11T17:18:10.634053
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
               IN THE UNITED STATES COURT OF APPEALS        FILED
                       FOR THE FIFTH CIRCUIT
                                                        February 6, 2007

                                                     Charles R. Fulbruge III
                           No. 05-10479                      Clerk

AHMAD YAZDCHI, doing business as Al Auto;

ALI YAZDCHI, doing business as Al Auto

                     Plaintiffs - Appellants

     v.

AMERICAN HONDA FINANCE CORP; DALLAS AUTO AUCTION INC

                     Defendants - Appellees

          Appeal from the United States District Court
           for the Northern District of Texas, Dallas
                      USDC No. 3:04-CV-203

Before KING, GARZA, and PRADO, Circuit Judges.

PER CURIAM:*

     Plaintiffs-appellants Ali and Ahmad Yazdchi (“plaintiffs”)

contend that the district court abused its discretion by

dismissing with prejudice their suit against defendants-appellees

American Honda Finance Corp. (“AHFC”) and Dallas Auto Auction,

Inc. (“DAA”) (collectively, “defendants”).     Because we find no

     *
        Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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abuse of discretion, we AFFIRM.1

              I.   Factual and Procedural Background

     The underlying suit follows a 1999 suit brought by the State

of Texas against Ali Yazdchi for fraud, insurance fraud,

deceptive trade practices, theft, and falsification of automobile

title documents.   The State contended that since the early 1980s,

Ali Yazdchi purchased salvage, flooded, wrecked, and recovered

stolen vehicles from auto auctions, superficially repaired the

damaged ones to appear as if they were in good condition, rolled

back the odometers on some of the cars, and sold them to

unsuspecting customers for more than their worth.   The suit was

ultimately resolved in 2000 by an agreed final judgment that

restrained Ali Yazdchi from engaging in these types of acts,

awarded damages, attorneys’ fees, and expenses to the State, and

appointed a receiver to distribute, as restitution to Ali

Yazdchi’s injured customers, much of Ali Yazdchi’s frozen funds

and the proceeds from the sale of most of his remaining vehicles.

     In December 2003, plaintiffs Ali and Ahmad Yazdchi, who are

brothers, filed the present suit alleging that AHFC, through its

alleged apparent agent DAA, sold them twenty-one damaged Hondas

and Acuras between 1997 and 1999 while representing that the cars

were in excellent condition.   Plaintiffs claim that they

     1
        Plaintiffs’ motion to strike defendants’ briefs is
denied. The briefs complied with all procedural requirements and
addressed the relevant issues in this appeal.

                                   2
innocently resold the vehicles to consumers and ultimately had to

pay the State of Texas $3 million as a result of their reliance

on defendants’ alleged misrepresentations.

     On April 11, 2004, the district court issued an amended

scheduling order that established January 31, 2005, as the

deadline for all discovery and April 4, 2005, as the beginning of

trial.   The deadline for discovery was later extended to February

28, 2005.   On April 29, 2004, DAA served plaintiffs with

interrogatories, requests for production of documents, and

requests for admissions, and AHFC served its interrogatories and

requests for production on May 17, 2004.

     Ahmad Yazdchi failed to respond at all, and Ali Yazdchi’s

interrogatory responses generally instructed the defendants,

without referencing any specific documents, to check their own

business records for the requested information, to check with

courthouses for the information, or to wait for the information

to become available.   Similarly, Ali Yazdchi answered the great

majority of document requests by stating that the documents were

not available and would be “provided at a later time.”   After

attempts by AHFC and DAA to get plaintiffs to comply with the

discovery requests, the district court issued an order on August

26, 2004, compelling plaintiffs to supplement their inadequate

responses to DAA’s interrogatories and to comply with DAA’s

requests for production.   The court also granted sanctions

against plaintiffs in the amount of reasonable expenses and

                                 3
attorneys’ fees incurred by DAA as a result of the noncompliance.

Plaintiffs filed a motion to set aside the sanctions, which the

court denied.

     Despite the order, Ali Yazdchi only slightly expanded on

some of his earlier interrogatory responses and continued to

point the defendants to other general sources of information,

including his first set of answers that had already been deemed

inadequate by the district court.     Ali Yazdchi again failed to

comply with defendants’ requests for production, promising to

turn over the documents at a future time, and Ahmad Yazdchi again

made no response at all.    Accordingly, on November 2, 2004, the

district court issued orders compelling each plaintiff to comply

with AHFC’s and DAA’s discovery requests within two weeks of the

order and specifically required independent responses from Ahmad

Yazdchi.    The court again awarded reasonable attorneys’ fees--

this time to AHFC--and twice warned plaintiffs that failure to

comply sufficiently with the order would result in the dismissal

of their case.2   The court also noted plaintiffs’

“unprofessional, and sometimes abusive, conduct towards opposing

counsel.”

     2
        Discussing the order relating to AHFC’s discovery
requests, the court wrote, “The Court warns both Plaintiffs that
failure to sufficiently comply with this order may result in the
dismissal of their case.” Later, discussing the order relating
to DAA’s discovery requests, the court wrote, “The Court warns
Plaintiffs that failure to comply with this order will result in
the dismissal of their case.”

                                  4
     Again, however, Ali Yazdchi’s supplemental interrogatory

responses contained the same deficiencies, and although he

produced a set of documents to defendants, it mostly consisted of

court filings, correspondence between the parties, copies of his

prior discovery responses, and other miscellaneous documents.    A

document purportedly containing Ahmad Yazdchi’s interrogatory

responses was finally submitted, but the handwritten document

appears to be a photocopy of Ali Yazdchi’s answers with Ahmad

Yazdchi’s name written over that of Ali Yazdchi on the first

page--but not the last page, which still said that the document

provided Ali Yazdchi’s interrogatory answers.   The document also

falsely represented that it was sworn before a notary public in

Harris County, Texas, when the seal shows, and plaintiffs

concede, that it was witnessed by an Iranian translator.    Ahmad

Yazdchi failed to produce any additional documents, claiming that

they were all in Ali Yazdchi’s possession.

     On January 31, 2005, the district court dismissed the action

with prejudice.   The court later denied plaintiffs’ motions for

new trial and for reconsideration, and plaintiffs timely

appealed.

                           II.   Analysis

     Under Rule 37(b)(2) of the Federal Rules of Civil Procedure,

a district court may impose “just” sanctions on a party who fails

to comply with a discovery order, including the dismissal of a

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plaintiff’s action with prejudice.3   A court’s decision to impose

this severe sanction may only be reversed for an abuse of

discretion, but several considerations guide our inquiry.

          First, dismissal is authorized only when the
          failure to comply with the court’s order
          results from willfulness or bad faith, and not
          from the inability to comply. Next, dismissal
          is proper only in situations where the
          deterrent   value   of  Rule    37   cannot   be
          substantially achieved by the use of less
          drastic sanctions. Another consideration is
          whether the other party’s preparation for
          trial was substantially prejudiced. Finally,
          dismissal may be inappropriate when neglect is
          plainly attributable to an attorney rather
          than a blameless client, or when a party’s
          simple negligence is grounded in confusion or
          sincere   misunderstanding   of    the   court’s
          orders.

Prince v. Poulos, 876 F.2d 30, 32 (5th Cir. 1989).    Additionally,

the factual findings on which the district court based its

decision are reviewed for clear error.    See Bluitt v. Arco Chem.

Co., 777 F.2d 188, 191 (5th Cir. 1985).

     The record in this case confirms that the district court did

     3
        Rule 41(b) also allows dismissal for failure to comply
with a court order. However, district courts that dismiss an
action with prejudice under this rule must make express findings
concerning whether less drastic sanctions would serve the
purposes of the rule, which the court here did not do. See Coane
v. Ferrara Pan Candy Co., 898 F.2d 1030, 1033 n.2 (5th Cir.
1990); Batson v. Neal Spelce Assocs., 765 F.2d 511, 516 n.2 (5th
Cir. 1985). We need not address dismissal under Rule 41(b),
however, because Rule 37 provides a proper basis for dismissal
even without an express discussion of lesser sanctions by the
lower court. Batson, 765 F.2d at 516. This court can “affirm
the district court’s judgment on any grounds supported by the
record.” Sojourner T v. Edwards, 974 F.2d 27, 30 (5th Cir.
1992).

                                 6
not abuse its discretion.   While plaintiffs’ excuse of

inexperience with the legal system could arguably explain their

initial failure to provide adequate responses to the discovery

requests, the willfulness of their actions is evidenced by their

continued failure to comply even after the specific inadequacies

of their responses were detailed in several requests and motions

from defendants and two orders from the district court.   For

example, like most of his interrogatory responses, Ali Yazdchi

initially sidestepped DAA’s request that he specifically detail

the defects that were allegedly undisclosed for each vehicle sold

to him, responding that the information could be obtained from

defendants’ business records.   After defendants pointed out the

inadequacy of this response and the court ordered Ali Yazdchi to

supplement his answers, he updated his answer to generally assert

that all of the cars were damaged and that the details could be

found in the prior lawsuit brought by the State of Texas or

defendants’ business records.   Even after the district court’s

second order noted Ali Yazdchi’s continued failure to address the

specific defects of each individual vehicle, he again generally

asserted that all of the vehicles were in accidents and damaged.

The record is replete with similar instances of generalized or

nonresponsive answers to discovery requests that, in light of the

specific requests for compliance by defendants and the court,

show the willfulness of plaintiffs’ actions.

     Ali Yazdchi’s responses to the discovery requests were no

                                 7
better; even after two orders compelling his adequate compliance

with defendants’ discovery requests, he only turned over a small

assortment of court filings, other miscellaneous documents, and a

few documents of general relevance to this case.     The record also

indicates that Ali Yazdchi made certain relevant documents

available at a meeting with defendants but withdrew the documents

before they could be copied or listed for a discoverability

determination by the district court.    Although Ali Yazdchi later

claimed that the withdrawn documents were not relevant, his

failure to provide them after the court specifically ordered him

to do so is without excuse.

     As another example of plaintiffs’ contumacious conduct,

Ahmad Yazdchi failed to respond altogether until after the

district court’s second order.   Despite the district court’s

explicit command that he independently respond to the discovery

requests, it is apparent that Ahmad Yazdchi merely submitted Ali

Yazdchi’s answers with his own name written on the first page.

Plaintiffs also misrepresented that the document was notarized by

a notary public in Harris County, Texas when it was actually

sworn before an Iranian translator, making the answers

effectively unsworn.   See TEX. GOV’T CODE ANN. § 602.002.

     Plaintiffs’ contention that two court order violations are

insufficient to justify dismissal is belied by precedent that has

affirmed dismissal under similar circumstances where only one

discovery order has been violated.     See Truck Treads, Inc. v.

                                 8
Armstrong Rubber Co., 818 F.2d 427, 429 (5th Cir. 1987); see also

Coane v. Ferrara Pan Candy Co., 898 F.2d 1030, 1032 (5th Cir.

1990) (dismissing an action principally because the plaintiff

failed to obey two court orders).    Also, despite plaintiffs’

claim that the litigation was “in its early stages,” the case was

dismissed after nine months of discovery failures with only

approximately two months remaining until trial.    That plaintiffs

point to two cases finding eight months’ delay insufficient to

warrant dismissal in other contexts has little relevance here,

where the trial and discovery schedule rendered the delay

excessive.   And although plaintiffs correctly note that the delay

here was not characterized by total inactivity, the willfulness

of their noncompliance with the district court’s orders is

nonetheless sufficient to justify dismissal.     See McNeal v.

Papasan, 842 F.2d 787, 790-91 (5th Cir. 1988).

     The record also supports the conclusion that lesser

sanctions would have been ineffective, as the district court

twice required plaintiffs to pay defendants’ reasonable

attorneys’ fees and expenses incurred due to plaintiffs’

noncompliance with the discovery requests.    The district court

warned plaintiffs twice in its second order that their suit would

be dismissed if they did not adequately supplement their

discovery responses, and their failure to adequately comply when

apprised of this consequence warrants dismissal.

     Finally, defendants were plainly prejudiced by plaintiffs’

                                 9
failure to provide adequate discovery responses, as trial was

roughly two months away at the time that the action was dismissed

and defendants had obtained virtually no information of any

relevance after nine months of discovery attempts.     See Prince v.

Poulos, 876 F.2d 30, 32-33 (5th Cir. 1989).   The information

sought by defendants, which included the specific defects that

they allegedly failed to disclose to plaintiffs for each car, was

crucial to developing their defense, and the withholding of this

information hindered defendants’ ability to prepare for trial.

     While courts are more lenient with pro se litigants, we have

cautioned that “[t]he right of self-representation does not

exempt a party from compliance with relevant rules of procedural

and substantive law,” Hulsey v. Texas, 929 F.2d 168, 171 (5th

Cir. 1991), and that “[t]hose who venture into federal court

without the assistance of counsel cannot . . . be permitted to

enjoy much or protracted advantage by reason of that

circumstance.”   Brinkmann v. Johnston, 793 F.2d 111, 113 (5th

Cir. 1986).   We are satisfied that the district court in this

case extended the appropriate amount of leniency to plaintiffs.

     AFFIRMED.   MOTION DENIED.   Costs shall be borne by

plaintiffs.

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