Court Opinion

ID: 9348549
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:05:45.883308+00
Date Added: 2024-06-11T16:42:21.578418
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                      2022-NCCOA-740

                                        No. COA22-271

                                   Filed 15 November 2022

     Johnston County, No. 20 CVS 1536

     LUAI ABDO, Plaintiff,

                  v.

     KEMAL ALI JONES, Defendant.

           Appeal by Plaintiff from order entered 28 October 2021 by Judge D. Jack

     Hooks, Jr., in Johnston County Superior Court. Heard in the Court of Appeals 4

     October 2022.

           David J. Martin for Plaintiff-Appellant.

           Sue, Anderson & Bordman, LLP, by Stephanie W. Anderson, for Unnamed
           Defendant-Appellee Erie Insurance Exchange.

           Russ, Worth & Cheatwood, PLLC, by Philip H. Cheatwood, for Unnamed
           Defendant-Appellee United Services Automobile Association.

           COLLINS, Judge.

¶1         Plaintiff Luai Abdo appeals an order granting Unnamed Defendant Erie

     Insurance Exchange’s motion for sanctions and dismissing Plaintiff’s complaint with

     prejudice as to Defendant Kemal Ali Jones and Unnamed Defendants Erie and

     United Services Automobile Association (“USAA”). Plaintiff makes no argument that

     the trial court erred by dismissing the complaint against Jones. After careful review,
                                        ABDO V. JONES

                                        2022-NCCOA-740

                                       Opinion of the Court

     we conclude the trial court did not err by dismissing Plaintiff’s complaint against

     Erie. However, we conclude the trial court erred by dismissing Plaintiff’s complaint

     against USAA. Accordingly, we affirm in part and reverse in part, and remand for

     further proceedings.

                   I.   Procedural History and Factual Background

¶2         Plaintiff was involved in an automobile accident with Jones in July 2017. In

     June 2020, Plaintiff filed an amended complaint against Jones, which included claims

     against Erie and USAA for underinsured motorist coverage. Erie answered and

     served its “First Request for Production of Documents” and “First Set of

     Interrogatories” on Plaintiff in early June. USAA answered in early July.

¶3         Plaintiff responded to Erie’s discovery requests by the end of July but failed to

     provide all the requested documents. Erie notified Plaintiff by email on 31 August

     that his responses were deficient and requested supplemental discovery, including

     Plaintiff’s pre-accident medical records. When Erie had not received a response to its

     supplemental discovery request by December 2020, Erie filed a motion to compel.

     Plaintiff served supplemental discovery responses in March 2021 but objected to

     Erie’s request for pre-accident medical records. The trial court entered a Consent

     Order on 24 March 2021, signed by Plaintiff’s attorney and Erie’s attorney, ordering

     Plaintiff to produce the requested documents by 24 May 2021.

¶4         Shortly after the Consent Order was entered, Plaintiff’s attorney separated
                                         ABDO V. JONES

                                         2022-NCCOA-740

                                        Opinion of the Court

     from his law firm.    The law firm withdrew its representation of Plaintiff, and

     Plaintiff’s attorney individually entered a notice of appearance on Plaintiff’s behalf

     on 12 May 2021.

¶5         On 25 August 2021, by which time Plaintiff still had not produced the

     court-ordered discovery, Erie filed an Amended Motion for Sanctions or, in the

     Alternative, to Dismiss for Failure to Prosecute, “pursuant to Rules 26, 33, 34, 37,

     and 41 of the North Carolina Rules of Civil Procedure,” requesting “entry of an order

     dismissing [Plaintiff’s] case as sanctions for failing to comply with the Court’s Order

     to Compel Discovery or, in the alternative, to dismiss [Plaintiff’s] case for failure to

     prosecute.” The trial court heard Erie’s motion on 27 September 2021. Plaintiff and

     Erie argued at the hearing; neither Defendant nor USAA made an appearance at the

     hearing.

¶6         By written order entered 28 October 2021 (“Dismissal Order”), the trial court

     found, in pertinent part:

                  11. That as of the date of the hearing on September 27,
                  2021, [Plaintiff] had not served the unnamed defendant
                  with any of the documents that he agreed to provide to the
                  unnamed defendant in the March 24, 2021 Consent Order;
                  12. That at the hearing of this matter, [Plaintiff’s attorney]
                  appeared and provided no evidence to the Court that he
                  had attempted to obtain any of the documents that were
                  agreed to in the March 24, 2021 Consent Order;
                  13. That [Plaintiff’s attorney] has willfully failed to comply
                  with the March 24, 2021 Consent Order;
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                                        Opinion of the Court

                  14. That the Court has considered less severe sanctions
                  than dismissal in ruling on these motions but believes
                  dismissal appropriate as this matter [w]as handled by
                  [Plaintiff’s attorney] in its entirety and he has willfully
                  failed to comply. While understanding the file was perhaps
                  under the supervision of another partner or attorney
                  during its tenure with the [former law firm], all official
                  actions have been signed and handled by [Plaintiff’s
                  attorney]. Thus he has been aware at all times, even if he
                  was subordinate while at the [former law firm]. He was
                  certainly aware on May 12, when he filed his appearance
                  with the Court.

     Based on its findings, the trial court ordered that, “in the Court’s discretion and after

     having considered less severe sanctions than dismissal, the unnamed defendant

     Erie’s Motion for Sanctions is hereby GRANTED and that [Plaintiff’s] Complaint is

     hereby dismissed with prejudice as to all defendants and unnamed defendants.”

     Plaintiff timely appealed.

                                      II.     Discussion

¶7         Plaintiff argues the following: dismissal was not proper under Rule 37 because

     Plaintiff was not engaged in systematic violations of court orders and lesser sanctions

     were available; the trial court failed to make the requisite findings of fact to support

     dismissal under Rule 41; and the trial court erred by dismissing Plaintiff’s complaint
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                                           Opinion of the Court

     against Defendant and USAA.1

     A. Rule 37

¶8          Rule 37 of the North Carolina Rules of Civil Procedure authorizes a trial court

     to impose sanctions, including dismissal, upon a party that “fails to obey an order to

     provide or permit discovery[.]” N.C. Gen. Stat § 1A-1, Rule 37(b)(2) (2021). “[T]rial

     courts are vested with broad discretion in ordering sanctions under Rule 37(b).” GEA,

     Inc. v. Luxury Auctions Mktg, Inc., 259 N.C. App. 443, 452, 817 S.E.2d 422, 429-30

     (2018) (citation omitted). “Not only is the decision to impose Rule 37(b) sanctions

     within the sound discretion of the trial court, but so too is the choice of Rule 37(b)

     sanctions to impose.” Id. at 452, 817 S.E.2d at 430 (citation omitted).

¶9          “[B]efore dismissing a party’s claim with prejudice pursuant to Rule 37, the

     trial court must consider less severe sanctions.” Hursey v. Homes by Design, Inc., 121

     N.C. App. 175, 179, 464 S.E.2d 504, 507 (1995) (citing Goss v. Battle, 111 N.C. App.

     173, 177, 432 S.E.2d 156, 159 (1993)). However, “[a] trial court is not required to list

     and specifically reject each possible lesser sanction prior to determining that

     dismissal is appropriate.” Honeycutt Contractors, Inc. v. Otto, 209 N.C. App. 180, 185,

            1Erie begins its brief by pointing out that, “[n]otwithstanding the fact that [Plaintiff]
     only presented one issue for appeal in the record for appeal, [Plaintiff] presents three issues
     in his Brief.” However, we note that “[p]roposed issues on appeal are to facilitate the
     preparation of the record on appeal and shall not limit the scope of the issues presented on
     appeal in an appellant’s brief.” N.C. R. App. P. 10(b).
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                                          Opinion of the Court

       703 S.E.2d 857, 860-61 (2011) (citation omitted). “A trial court may be reversed for

       abuse of discretion only upon a showing that its ruling was so arbitrary that it could

       not have been the result of a reasoned decision.” Hursey, 121 N.C. App. at 177, 464

       S.E.2d at 505 (citing White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)).

       B. Dismissal as to Erie

¶ 10         Here, Erie notified Plaintiff on 31 August 2020 that his interrogatory responses

       were deficient and requested supplemental discovery, including Plaintiff’s

       pre-accident medical records; Plaintiff failed to address the deficiency in his

       interrogatory responses. Erie filed a motion to compel in December, and on 24 March

       2021, the trial court entered a Consent Order compelling Plaintiff to produce the

       requested documents by 24 May 2021. When Erie filed its motion for sanctions, over

       three months after the Consent Order’s deadline, Plaintiff had yet to produce the

       ordered documents. When Erie’s motion for sanctions was heard on 27 September

       2021, over four months after the Consent Order’s deadline, Plaintiff had yet to

       produce the ordered documents. At the hearing on Erie’s motion, Plaintiff “provided

       no evidence to the Court that he had attempted to obtain any of the documents . . . [.]”

¶ 11         In its Dismissal Order, after making findings of fact detailing Plaintiff’s

       repeated failures to produce discovery and comply with the Consent Order, the trial

       court made a finding that it “has considered less severe sanctions than dismissal in

       ruling on these motions but believes dismissal appropriate as this matter [w]as
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                                          Opinion of the Court

       handled by [Plaintiff’s attorney] in its entirety and he has willfully failed to comply.”

       Only “after having considered less severe sanctions than dismissal” did the trial court

       order Plaintiff’s complaint dismissed.

¶ 12         Based on the facts of this case, and the trial court’s consideration of lesser

       sanctions, the trial court’s decision to dismiss Plaintiff’s complaint against Eerie as a

       sanction for his willful failure to comply with the Consent Order was not “so arbitrary

       that it could not have been the result of a reasoned decision.” Hursey, 121 N.C. App.

       at 177, 464 S.E.2d at 505 (citation omitted). Accordingly, Plaintiff’s complaint against

       Erie was properly dismissed under Rule 37.

¶ 13         Because Plaintiff’s complaint against Erie was properly dismissed under Rule

       37, we do not address Plaintiff’s argument that the trial court erred by dismissing his

       complaint under Rule 41.

       C. Dismissal as to USAA

¶ 14         Plaintiff next argues that the trial court erred by dismissing his complaint

       against USAA because USAA did not file a motion to compel, join Erie’s motion for

       sanctions, attend the hearing, or request relief from the trial court. We agree.

¶ 15         The imposition of sanctions under Rule 37 for failure to obey a court order is

       an abuse of discretion where there is no record evidence that the party failed to obey

       a court order. See Baker v. Rosner, 197 N.C. App. 604, 677 S.E.2d 887 (2009). In

       Baker, plaintiffs filed a complaint against multiple defendants – Prudence and Ed
                                           ABDO V. JONES

                                          2022-NCCOA-740

                                         Opinion of the Court

       Rosner, Jo Faulk, and Nova Realty, Inc. – alleging fraud and unfair and deceptive

       trade practices. Id. at 605, 677 S.E.2d at 889. Plaintiffs requested certain documents

       be produced, and the trial court entered a consent order directing the Rosners and

       Faulk to produce the documents. Id. When the Rosners and Faulk failed to produce

       the documents, plaintiffs filed a motion for sanctions, pursuant to Rule 37. Id. The

       trial court entered an order allowing the motion for sanctions, ordering each

       defendant’s answer be stricken, and entering default judgment against each

       defendant as to plaintiffs’ claims for fraud. Id. at 606, 677 S.E.2d at 889. This Court

       concluded that the trial court abused its discretion by sanctioning Nova because

       plaintiffs did not seek discovery from Nova and Nova was not a party to the consent

       order; thus, Nova was not a disobedient party. Id. at 607, 677 S.E.2d at 890.

¶ 16         Although the parties in Baker were situated differently, Baker’s reasoning

       applies here. In this case, Erie sought discovery from Plaintiff, while USAA did not.

       When Plaintiff’s discovery responses were deficient, Erie requested supplemental

       discovery; USAA did not. When Plaintiff did not respond to Erie’s supplemental

       discovery request, Erie filed a motion to compel; USAA did not. Erie and Plaintiff

       signed the Consent Order compelling the production of documents; USAA was not a

       party to the Consent Order. When Plaintiff failed to comply with the Consent Order’s

       deadline, Erie filed a motion for sanctions, while USAA did not. Erie attended the

       hearing to argue that sanctions were appropriate; USAA did not attend the hearing.
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                                                2022-NCCOA-740

                                             Opinion of the Court

       The Dismissal Order granting Erie’s motion for sanctions describes Plaintiff’s failures

       to provide Erie with discovery; it makes no mention of USAA. Thus, as in Baker,

       there is no record evidence that Plaintiff violated any discovery orders as to USAA.2

       Accordingly, the trial court abused its discretion by dismissing Plaintiff’s complaint

       against USAA.

                                         III.     Conclusion

¶ 17          Plaintiff makes no argument that the trial court erred by dismissing his

       complaint against Defendant. Furthermore, the trial court did not err by dismissing

       Plaintiff’s complaint against Erie. However, the trial court erred by dismissing

       Plaintiff’s complaint against USAA. Accordingly, the trial court’s order is affirmed

       as to Defendant and Erie and reversed as to USAA, and remanded for further

       proceedings.

              AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

              Judges TYSON and INMAN concur.

              2 USAA argues that Yahudah Washitaw of E. Terra Indians v. PHH Mortg. Corp., No.
       5:17-CV-00377-BR, 2017 U.S. Dist. LEXIS 210027 (E.D.N.C. Dec. 21, 2017), supports its
       position that it need not have moved for sanctions. That court stated, “[i]f the court dismisses
       a plaintiff's complaint upon a defendant’s Rule 12(b)(6) motion and the same legal arguments
       apply to its claims against remaining defendants, the court may dismiss the complaint in its
       entirety.” Id at *4. Dismissal upon 12(b)(6) grounds is not analogous to dismissal as a
       sanction under Rule 37. We are neither bound by the federal district court’s opinion nor
       persuaded to apply its reasoning here.