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Sweet Craft Limited v. Operational Solutions, Inc.

United States District Court, D. Kansas

March 25, 2015

SWEET CRAFT LIMITED, Plaintiff,
v.
OPERATIONAL SOLUTIONS, INC. and KENT GOSS, Defendants.

REPORT AND RECOMMENDATION

K. GARY SEBELIUS, Magistrate Judge.

This matter comes before the court upon Plaintiff Sweet Craft Limited's Motion for Sanctions (ECF No. 18). Defendants Operational Solutions, Inc. and Kent Goss oppose the motion. For the reasons stated below, the magistrate judge respectfully recommends the district judge render default judgment against these defendants in an amount to be determined by the district judge.

I. Relevant Background

Plaintiff brings claims against defendants for breach of fiduciary duty, negligent misrepresentation, unjust enrichment/quantum meruit, breach of contract, fraud, and conversion.[1] On August 6, 2014, the court held a scheduling conference and subsequently entered a scheduling order providing a discovery deadline of January 16, 2015.[2] On August 22, 2014, plaintiff noticed the deposition duces tecum of Operational Solutions' 30(b)(6) representative, set for September 23, 2014.[3] Plaintiff states the parties agreed to reschedule the deposition to allow for continued settlement talks, which ultimately proved unsuccessful. On October 30, 2014, plaintiff served requests for production and interrogatories.[4] On November 14, 2014, plaintiff again noticed the deposition duces tecum of Operational Solutions' 30(b)(6) representative, set for December 15, 2014.[5] On December 11, 2015, Operational Solutions' counsel notified plaintiff's counsel that Operational Solutions would not produce a 30(b)(6) representative to appear at its deposition.[6] Plaintiff did not consent to postponing or suspending the deposition. Instead, plaintiff's counsel appeared for the deposition and made a record of Operational Solutions' failure to appear.[7] Both defendants also failed to timely respond to plaintiff's written discovery.

On January 7, 2015, plaintiff filed an unopposed motion to compel discovery, for sanctions, and for extensions of scheduling order deadlines.[8] On January 21, 2014, the court granted in part and denied in part the motion. Specifically, the court ordered defendants to respond without objection within fourteen days to the First Interrogatories of Plaintiff Sweet Craft Limited to Defendant Operational Solutions, Inc.; First Request for Production of Documents and Other Things of Plaintiff Sweet Craft Limited Directed to Defendant Operational Solutions, Inc.; First Interrogatories of Plaintiff Sweet Craft Limited Directed to Defendant Kent Goss; and the First Request of Production of Documents and Other Things of Plaintiff Sweet Craft Limited Directed to Defendant Kent Goss.[9] The court also ordered the parties to confer about rescheduling Operational Solutions' deposition, which was to take place no later than thirty calendar days from the date of the order. The court also ordered Operational Solutions to produce, without objection, all documents sought in the deposition notice.

Additionally, the court also granted in part and denied in part plaintiff's request for sanctions. Like the present motion before the court, plaintiff's prior request for sanctions included the sanctions listed in Fed.R.Civ.P. 37(b)(2)(A), which amounted to a sanction precluding defendants from defending this suit. Applying the factors set out by the Tenth Circuit in Ehrenhaus v. Reynolds , [10] the court concluded that these sanctions were not yet appropriate. However, the court required Operational Solutions to pay plaintiff's reasonable expenses, including attorney fees, incurred as a result of the missed deposition. The court directed the parties to confer and attempt to reach an agreement regarding the appropriate amount of fees and expenses. The court also cautioned defendants that any further failure to participate in discovery may result in severe sanctions, including a recommendation of default judgment.

According to plaintiff's motion, the parties conferred on January 22, 2015, and on January 28, 2015. During those discussions, plaintiff claims that defense counsel stated his intent to comply with the court orders regarding discovery. However, plaintiff states that a short time later, defense counsel informed plaintiff that he would not respond to any discovery. Plaintiff's motion indicates that to date, defendants have failed to respond as ordered to any of plaintiff's discovery requests and have failed to provide dates for Operational Solutions' deposition. In response, defendants admit they have not responded to any of plaintiff's discovery requests or provided any dates for Operational Solution's deposition.

II. Discussion

When a party fails to attend its own deposition, serve answers to interrogatories, or respond to a request for inspection, the court may impose sanctions listed in Fed.R.Civ.P. 37(b)(2)(A)(i)-(vi).[11] Those sanctions include:

(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or ...

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