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Tennessee Chancellor Issues Civil Death Penalty in Real Estate Case

A Tennessee Chancellor, Deanna B. Johnson, recently issued the civil death penalty in favor of a firm client in a real estate case. 

The case, Jerrod Brown, et ux. v. Beverly Luecke, et ux., Chancery Court for Williamson County, Tennessee, involved the sale of a residence.  Among other things, the Plaintiffs alleged that the Defendants misrepresented certain conditions of the residence and removed valuable trees from the surrounding premises. The Defendants denied all such claims and moved to dismiss the Plaintiffs' Complaint.

Subsequently, the Plaintiffs' counsel was sanctioned for failing to timely file a response to the dismissal motion.  That motion was denied, and the Defendants propounded written discovery to further develop the case.  More than a year later, no responses to the discovery requests had been served, and the Defendants filed a Motion to Compel and for Sanctions.  No timely response was filed to this motion.  As a result, Chancellor Johnson granted the Motion to Compel and, once again, sanctioned the Plaintiffs' counsel.

This sanction was not timely paid nor were complete responses to the outstanding discovery requests provided in accordance with the Court's ruling, which resulted in yet another compel motion being filed.  When the Plaintiffs failed to substantively respond to this motion, Chancellor Johnson dismissed the case with prejudice and issued another monetary sanction.  The Court's Findings of Fact and Conclusions of Law provided, in pertinent part:

Findings of Fact

                1.            The Plaintiffs, Jarrod Brown and Allison Brown (“Plaintiffs”), filed their Complaint in this action on May 12, 2015.  (See Complaint.)

                2.            On June 18, 2015, the Defendants filed a Motion to Dismiss.  The Plaintiffs failed to file a timely response to the Defendants’ motion in accordance with Local Rule 5.03(c).  As a result, the Honorable James G. Martin, III, Chancellor, sanctioned the Plaintiffs’ counsel by awarding the Defendants attorney’s fees in the amount of $200.00.  (See Order entered on July 20, 2015.)

                3.            On or about August 3, 2016, the Defendants filed their first Motion to Compel and for Sanctions (“First Motion”) regarding written discovery that had been propounded to the Plaintiffs almost one year ago.  (See First Motion.)  Once again, despite Judge Martin’s monetary sanction, the Plaintiffs failed to file a timely response to the Defendants’ motion in accordance with Local Rule 5.03(c).  (See Response to First Motion.)

                4.            As a result, the Honorable Deanna B. Johnson, Chancellor, entered an Order on August 17, 2016 (“August 17 Order”) granting the Defendants’ motion and additional sanctions in the form of attorney’s fees in an amount to be determined.  (See Order entered on August 17, 2016.)  Among other things, the Court’s August 17 Order required the Plaintiffs to provide “full, complete, and responsive answers to the Defendants’ written discovery requests in accordance with the Tennessee Rules of Civil Procedure on or before August 23, 2016.”  (Id.

                5.            Notwithstanding, on August 18, 2016, the Court held a hearing on the Defendants’ First Motion and considered the Plaintiffs’ untimely response.  Upon suggestion of the Defendants’ counsel, the Court orally extended the Plaintiffs’ deadline for providing the discovery responses until August 25, 2016.  The Court reiterated its intent to award the Defendants attorney’s fees as a further sanction following submission of an affidavit in accordance with the Tennessee Rules of Professional Conduct.  (See Transcript from August 18, 2016, Hearing.)

                6.            Immediately after the hearing, the Defendants’ counsel discussed the parties’ ongoing discovery dispute with the Plaintiffs’ counsel in the hallway outside the courtroom.  (See Rule 5.04 Certificate of Good Faith to Second Motion to Compel and for Sanctions (“Second Motion”)).  However, the parties were unable to resolve their discovery dispute.  (Id.)

                7.            Later that day, the Defendants’ counsel drafted an Order reflecting the Court’s oral rulings from the morning hearing.  However, the parties’ counsel were unable to agree on a mutually satisfactory version of the Order, and the Defendants’ counsel lodged their version of the Order that afternoon.  (See Exhibits 5 and 6 to Second Motion.)  The Plaintiffs did not provide the Court with any competing version of the Order in accordance with the Local Rules.

                8.            On August 22, 2016, the Court entered an Order (“August 22 Order”) extending the discovery deadline until August 25, 2016, and, once again, sanctioning the Plaintiffs’ counsel by awarding the Defendants attorney’s fees in the amount of $3,180.00.  (See Order entered August 22, 2016.)  As further support for the sanction, the Court noted that Judge Martin previously sanctioned the Plaintiffs’ counsel in 2015.  (Id.)  In addition, the Order clearly provided that the sanction was to be paid to the Defendants’ counsel within thirty (30) days from entry of the Order, or by no later than September 21.  (Id.

                9.            Copies of the August 22 Order were sent to both parties’ counsel via U.S. Mail on or about August 29, 2016.  (See Order entered August 22, 2016.)

                10.          As of August 23, 2016, inasmuch as both counsel were aware, the Court’s August 17 Order was in effect, requiring the Plaintiffs to provide supplemental responses to the Defendants’ discovery requests by August 23.  That deadline came and went without any responses having been provided. 

                11.          On August 24, 2016, the Defendants’ counsel inquired to the Plaintiffs’ counsel when he could expect to receive the responses, and he was assured that they would be provided by August 25, as discussed at the hearing.  (See Exhibit 7 to Second Motion.)

                12.          The August 22 Order required the Plaintiffs to “provide full, complete, and responsive answers to the Defendants’ written discovery requests in accordance with the Tennessee Rules of Civil Procedure on or before August 25, 2016.”  (See Order entered August 22, 2016.)  However, on August 25, the Plaintiffs’ counsel failed to serve the supplemental responses on the Defendants’ counsel in accordance with the Local Rules and the Tennessee Rules of Civil Procedure.  (See Section 5.03(c) and (f) of the Local Rules and Rule 5.02(2) of the Tennessee Rules of Civil Procedure.) 

                13.          Supplemental responses were provided to the Defendants’ counsel by hand-delivery the following day, on August 26, 2016, at his office in Brentwood, Tennessee.  (See Memorandum of Law in Support of Second Motion at p. 5.)  However, as provided herein, those responses woefully failed to comply with the August 22 Order or the Tennessee Rules of Civil Procedure.

                14.          The Plaintiffs’ counsel also failed to comply with the August 22 Order by paying the sanction on or before September 21, 2016.  (See Order entered August 22, 2016.) 

                15.          On September 22, 2016, the Defendants’ counsel inquired by email to the Plaintiffs’ counsel when he could expect to receive payment for the sanction.  (See Exhibit 10 to Second Motion.)  No response was received to this email.  (See Memorandum of Law in Support of Second Motion at p. 6 and Rule 5.04 Certificate of Good Faith to Second Motion to Compel and for Sanctions.)  Before filing the Second Motion, the Defendants’ counsel attempted to reach the Plaintiffs’ counsel by telephone to discuss these matters.  (Id.)  However, he was unable to reach her.  (Id.)

                16.          On September 26, 2016, the Defendants filed their Second Motion.  (See Second Motion.)  In addition, the Defendants filed a Motion to Expedite the hearing on their Second Motion for the Court’s next docket day, October 6.  (See Motion to Expedite.)  No opposition to the Motion to Expedite was filed by the Plaintiffs. 

                17.          Following service of the Second Motion, on September 28, 2016, the Plaintiffs’ counsel paid the sanction to the Defendants’ counsel by hand-delivering a check in the amount of $3,180.00 to his office in Brentwood, Tennessee.  (See Response to Defendants’ Second Motion.)

                18.          On September 29, 2016, the Court granted the Defendants’ request to expedite the hearing, and the Second Motion was placed on the October 6 docket.  (See Defendants’ Motion to Strike Plaintiffs’ Response to Second Motion to Compel and for Sanctions at p. 1.)  The Court informed the parties’ counsel by email of its ruling on September 29.  (Id.)  Once again, the Plaintiffs did not oppose hearing the Second Motion on October 6.  (Id.

                19.          On October 3, 2016, the Plaintiffs fax-filed a response to the Defendants’ Second Motion.  Essentially, the response stated that the sanction contained within the August 22 Order had been paid on September 28 and this issue was “now moot.”  (See Response to Defendants’ Second Motion and Motion for Expedited Hearing at p. 1.)  For the first time, the response also stated: “No attorney is currently available to attend the hearing on October 6, 2016 due to prior obligations.”  (Id.

                20.          Tellingly, the Plaintiffs’ response did not, among other things, address why the payment of the sanction was not timely or offer any response whatsoever to the lengthy arguments provided by the Defendants in support of the Second Motion with regard to the deficiencies in the Plaintiffs’ supplemental responses to individual interrogatories and requests for production of documents.  (Id.)

                21.          On October 4, 2016, the Defendants filed a Motion to Strike the Plaintiffs’ response based primarily on Section 5.03(c) and (f) of the Local Rules and Rule 5.02(2) of the Tennessee Rules of Civil Procedure.  (See Defendants’ Motion to Strike Plaintiffs’ Response to Second Motion to Compel and for Sanctions.)

                22.          On October 5, 2016, the Plaintiffs fax-filed an Affidavit of [the Plaintiffs' attorney of record].  (See Affidavit.) 

                23.          On October 6, 2016, a hearing was held on the Defendants’ Second Motion.  Despite the Plaintiffs’ response stating that no attorney was available to attend the hearing, [an attorney] appeared on behalf of the Plaintiffs.  (See Transcript from October 6, 2016, Hearing.)

                24.          At the hearing, the Plaintiffs’ counsel failed to articulate to the satisfaction of the Court why the sanction contained within the August 22 Order was not paid until one week after it was due.  (See Transcript from October 6, 2016, Hearing.)  The Plaintiffs’ counsel failed to even address, let alone dispute, the Defendants’ assertions regarding the deficiencies in the Plaintiffs’ supplemental responses to individual interrogatories and requests for production of documents.  (Id.

                25.          The Plaintiffs’ supplemental responses to Interrogatories Nos. 1, 2, 17, 19, and 20 and Requests for Production of Documents Nos. 1, 11, 12, 13, 14, 21, 23, 24, 25, 27, and 29 do not comply with the August 22 Order or the Tennessee Rules of Civil Procedure.  (See Order entered August 22, 2016, and Memorandum of Law in Support of Second Motion at pp. 7-26.)

                26.          Although all of the foregoing supplemental responses are problematic at best, the Court makes a specific finding with regard to the Plaintiffs’ supplemental response to Interrogatory No. 2.  The Plaintiffs have listed the names of approximately 150 individuals and entities whom they claim have knowledge of this routine real estate case, but the Plaintiffs have failed to identify them in accordance with the instructions of the written discovery requests or the Tennessee Rules of Civil Procedure.  The Plaintiffs’ original response to this interrogatory listed only eight individuals or entities.  (See Memorandum of Law in Support of Second Motion at pp. 10-13.)

                27.          This tactic employed by the Plaintiffs regarding Interrogatory No. 2 constitutes a discovery abuse.  See Sender v. Mann, 225 F.R.D. 645, 650-51 (D. Colo. 2004).  See also Tamas v. Family Video Movie Club, Inc., 304 F.R.D. 543, 546 (N.D. Ill. 2015) (a party who listed over 3,000 individuals without any information related thereto does not satisfy discovery obligations); Jama v. City & Cty. of Denver, 304 F.R.D. 289, 293 (D. Colo. 2014) (same); Lipari v. U.S. Bancorp., N.A., 2008 WL 1874373 (D. Kan. July 22, 2008) (same); Guantanamera Cigar Co. v. Corporacion Habanos, S.A., 263 F.R.D. 1 (D.D.C. Aug. 18, 2009) (a party must “make a reasonable inquiry and [] provide[] [more than] a laundry list of undifferentiated witnesses”); Long v. Liberty Wood Nursing Center, 2014 WL 369257 (M.D.N.C. July 23, 2014) (same). 

                28.          Despite having been sanctioned on two different occasions by two different judges, the Plaintiffs and the Plaintiffs’ counsel have routinely failed to comply with the Court’s Orders, the Local Rules, or the Tennessee Rules of Civil Procedure.  For example, the Plaintiffs have repeatedly filed untimely pleadings in violation of Local Rule 5.03(c).  The Plaintiffs have repeatedly failed to serve pleadings on the Defendants’ counsel in accordance with Local Rules 5.03(c) and (f) and Rule 5.02(2) of the Tennessee Rules of Civil Procedure. 

                29.          At the same time, on two occasions, regarding providing the supplemental responses and untimely payment of the sanctions award in the August 22 Order, the Plaintiffs have complied with the Local Rules by hand-delivering the same to the Defendants’ counsel’s office in Brentwood, Tennessee.  The office of the Plaintiffs’ counsel is also located in Brentwood. 

                30.          The Plaintiffs’ Complaint was filed on May 12, 2015.  (See Complaint.)  However, almost 18 months later, the Plaintiffs have failed to demonstrate that they are serious about developing this case for trial.  For example, the most recent compel motions regard the Defendants’ written discovery requests, which were propounded on the Plaintiffs more than a year ago.  In addition, based upon the failure of the Plaintiffs and the Plaintiffs’ counsel to comply with the Court’s Orders, the Local Rules, or the Tennessee Rules of Civil Procedure, it does not appear that this case will be in a posture to be tried any time in the near future.  

Conclusions of Law

                1.            The Tennessee Rules of Civil Procedure provide for various sanctions that may be awarded for repeated failures to comply with the Court’s Orders, the Local Rules, and other provisions of the Tennessee Rules of Civil Procedure, up to and including an award of attorney’s fees and dismissal of a lawsuit with prejudice.  Tenn. R. Civ. P. 37.02.  For example, Rule 37.02 provides as follows:

[I]f a party fails to obey an order entered under Rule 26.06, 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: . . . An order . . . dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party[.]

Tenn. R. Civ. P. 37.02(C).

                2.            In addition, “trial courts possess the inherent authority to take actions to prevent abuse of the discovery process” and “wide discretion is afforded to the trial courts to determine the appropriate sanction.”  Alexander v. Jackson Radiology Associates, P.A., 156 S.W.3d 11, 15 (Tenn. Ct. App. 2004) (citing Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 133 (Tenn. 2004)).

                3.            The Court recognizes and has considered that its powers are not unlimited, and it must exercise such powers, including the power to enter a dismissal against a party under Rule 37.02(C), with both restraint and discretion.  Id.  The Court also recognizes and understands that its imposition of such sanctions should neither be used like a sword nor frequently.  Id.

                4.            However, an award of attorney’s fees and a dismissal sanction against a party under Rule 37.02(C) are appropriate where there has been a clear record of delay or contumacious conduct, including the failure to properly supplement discovery responses, or to participate in discovery in the matter set forth in the Tennessee Rules of Civil Procedure.  Amanns v. Grissom, 333 S.W.3d 90, 99 (Tenn. Ct. App. 2010).  The Court “must and do[es] have the discretion to impose sanctions such as dismissal in order to penalize those who fail to comply with the Rules and, further, to deter others from flouting or disregarding discovery orders.”  Holt v. Webster, 638 S.W.2d 391, 394 (Tenn. Ct. App. 1982) (citing National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 642-43 (1976)). 

                5.            Based upon the foregoing, the Court holds that an attorney’s fee award and entry of a dismissal with prejudice against the Plaintiffs is both appropriate and necessary in this case for multiple reasons, each of which would serve as a basis for fees and/or dismissal under Rule 37.02 standing alone. 

                6.            In that regard, the Plaintiffs have, among other things, unnecessarily and improperly delayed this proceeding by failing to participate in discovery in a manner which complies with the Tennessee Rules of Civil Procedure for over a year.  The Court has extended the Plaintiffs numerous opportunities to do so, but the Plaintiffs have simply chosen not to take those opportunities.

                7.            Further, it is clear that the Court’s numerous attempts to discourage the Plaintiffs’ improper behavior have gone entirely unheeded.  The Court has previously admonished and sanctioned the Plaintiffs and the Plaintiffs’ counsel for precisely the type of conduct that is now, once again, before the Court.  The Plaintiffs’ conduct has made it clear to the Court that they have not and do not intend to comply with its orders and directives by continuing to conduct themselves in a manner which this Court considers manifestly contumacious.

                8.            Inasmuch as these actions or inactions fall at the feet of the Plaintiffs’ counsel, as opposed to the Plaintiffs themselves, the Court may award appropriate sanctions against a party for the misdeeds of their counsel.   In re Foreign Court Subpoena, 2012 WL 2126960 (Tenn. Ct. App. June 12, 2012).

                9.            Finally, the Plaintiffs’ response to the Defendants’ Second Motion does not even address, let alone dispute, the Defendants’ assertions regarding the deficiencies in the Plaintiffs’ supplemental responses to individual interrogatories and requests for production of documents or explain why the Plaintiffs’ counsel failed to timely pay the sanction contained in the August 22 Order.  Moreover, at the hearing on October 6, 2016, the Plaintiffs’ counsel failed to articulate to the satisfaction of the Court why the sanction contained within the August 22 Order was not timely paid and failed to even address the Defendants’ assertions regarding the deficiencies in the Plaintiffs’ supplemental responses to individual interrogatories and requests for production of documents.  Pursuant to Local Rule 5.03(c), the Court could have granted the Defendants’ Second Motion on this basis alone.