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KCI Auto Auction, Inc. v. Anderson

United States District Court, D. Kansas

October 22, 2019

KCI AUTO AUCTION, INC., Judgment Creditor,
v.
ALONZO D. ANDERSON. Judgment Debtor.

          MEMORANDUM AND ORDER

          GWYNNE E. BIRZER UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on Judgment Creditor KCI Auto Auction, Inc.'s Motion to Compel and Request for Sanctions against Judgment Debtor Alonzo Anderson and Suggestions in Support of the Same (“Motion to Compel and Request for Sanctions”) (ECF No. 16). Due to the Judgment Debtor's failure to respond to the discovery requests at issue and failure to respond to the Motion to Compel and Request for Sanctions, this Court ordered him to appear in-person on October 4, 2019 to show cause why the Motion to Compel and Request for Sanctions should not be granted as unopposed.

         Judgment Creditor, KCI Auto Auction, Inc., appeared through counsel, Shawn E. Stewart for the October 4, 2019 hearing. Judgment Debtor Alonzo Anderson failed to appear at the October 4, 2019 hearing. After consideration of the Motion to Compel and Request for Sanctions, all exhibits, and the arguments made at the October 4, 2019 hearing, the Court GRANTS IN PART AND DENIES IN PART the Motion to Compel and Request for Sanctions.

         I. Background

         On July 17, 2018, Judgment Creditor KCI Auto Auction, Inc. (“KCI”) registered a foreign judgment in this Court for enforcement against Judgment Debtor Alonzo Anderson (“Anderson”).[1] The foreign judgment stems from a case filed by KCI against Anderson in the United States District Court for the Western District of Missouri, captioned KCI Auto Auction, Inc. v. Alonzo D. Anderson, et al, Case Number 17-06086-CV-SJ-NKL.

         In that case, KCI brought a diversity action against Anderson, along with seven other individuals and three entities, for breach of contract, action on account, promissory estoppel, account stated, fraudulent misrepresentation, fraudulent conveyance, unjust enrichment and quantum merit, conversion, replevin, civil conspiracy, constructive trust, injunctive relief, negligence per se and alter ego/piercing the corporate veil.[2] These allegations arise from certain business transactions and dealings involving motor vehicles that Anderson and the other defendants purchased from KCI.[3] Highly Summarized, KCI, a wholesale motor vehicle auctioneer located in Missouri, sold vehicles to Anderson and the other defendants pursuant to a “floor plan” account for which Anderson and the other defendants, after taking possession of the vehicles, allegedly did not pay in full.[4]

         Litigation on the merits of KCI's claims against Anderson[5] ended after the Western District of Missouri Court granted KCI's motion for summary judgment on April 13, 2018.[6]The Court found that KCI had a valid contract with Anderson as a result of an oral “floor plan” agreement made with two other defendants, who were found to be agents acting on behalf of Mr. Anderson.[7] The Court also found Anderson signed and executed an “Auction Guarantee, ” in which Anderson personally guaranteed full payments of any debts.[8] Thus, the Court found Anderson liable to KCI for $443, 957.85 in damages.[9] This summary judgment order is the foreign judgment KCI registered in this Court for enforcement.[10]

         Following the Western District of Missouri Court's summary judgment decision, KCI served Anderson with post-judgment interrogatories and requests for document production in that case. When Anderson failed to respond to the discovery, KCI filed a motion to compel, which was granted by the Western District of Missouri Court on November 17, 2018.[11] When Anderson again failed to respond to KCI's discovery despite the Court's Order to do so, KCI motioned to hold Anderson in civil contempt.[12] The matter was referred to a Magistrate Judge for a hearing on January 22, 2019 for Anderson to show cause why he should not be held in contempt of Court for failure to comply with the November 17, 2018 order.[13] Anderson did not show up for the hearing. Thus, the Magistrate Judge entered a Report and Recommendation recommending the District Judge find Anderson in contempt for failure to abide by the Court's orders, and also recommending the U.S. Marshal arrest Anderson and bring him before the Court.[14]

         The District Judge adopted the Report and Recommendation on March 11, 2019, finding Anderson in contempt of Court. The District Judge also ordered: (1) the U.S. Marshal to arrest Anderson and bring him before the Court; (2) for Anderson to be incarcerated until he fully answers the post-judgment discovery; and (3) monetary sanctions of $250 a day to accrue against Anderson for each day of noncompliance.[15] On March 12, 2019, the Western District of Missouri Court issued a Writ of Body Attachment for the U.S. Marshal to arrest and detain Anderson and bring him before the Court.[16]However, the U.S. Marshal could not enforce the Writ because Anderson does not reside within the jurisdictional limitations provided by Fed.R.Civ.P. 4.1(b).[17]

         After registering the foreign judgment in this Court, KCI, in an effort to learn about Anderson's assets, property and income from which the foreign judgment may be satisfied, served Anderson with a First Set of Post-Judgment Interrogatories and First Set of Post-Judgment Requests for Production of Documents in this case on March 15, 2019.[18] The discovery requests were served upon Anderson by mailing the same to his last known address.[19] Responses to the discovery requests were due April 15, 2019, but Anderson did not respond.

         On May 23, 2019, KCI filed the instant Motion to Compel and Request for Sanctions. In regard to the post-judgment discovery KCI filed in this Court, KCI asks the Court to: (1) compel Anderson to respond fully, without objection, to the discovery requests; (2) impose sanctions against Anderson for his failure to respond to the discovery requests, including his arrest and incarceration and monetary sanctions of $1, 000 a day until the discovery is fully answered; and (3) to order Anderson to pay KCI's attorney's fees and expenses incurred in making the instant Motion.[20] Additionally, KCI asks this Court to enforce the Contempt Order and Writ of Body Attachment issued by the Western District of Missouri by arresting and incarcerating Anderson until he purges himself of the contempt found by that Court.[21]

         Because Anderson did not respond to the Motion to Compel and Request for Sanctions, this Court filed a Notice of Hearing and Order to Show Cause for Anderson to appear in person on October 4, 2019.[22] The Court stated Anderson's failure to appear at the hearing would likely result in the Court granting KCI's Motion, as allowed by law.[23]The Notice of Hearing and Order to Show Cause was served upon Anderson by mail to his last known address.[24] Even though mailing is sufficient to accomplish service, [25] the Court also ordered the U.S. Marshal to personally serve the Notice of Hearing and Order to Show Cause on Anderson. However, Anderson evaded service.[26] KCI, through its counsel, appeared at the October 4th hearing, but Anderson failed to appear.

         II. Legal Standard

         Pursuant to Fed.R.Civ.P. 69(a)(2), in “aid of the judgment or execution, the judgment creditor . . . may obtain discovery from any person--including the judgment debtor--as provided in these rules or by the procedure of the state where the court is located.” Here, KCI, the Judgment Creditor, has issued interrogatories pursuant to Fed.R.Civ.P. 33 and requests for production of documents pursuant to Fed.R.Civ.P. 34, to Anderson, the Judgment Debtor, in order to learn about his assets, property and income from which the foreign judgment may be satisfied.

         Rules 33 and 34 each allow thirty days for responses to interrogatories and requests for production of documents.[27] Per Rule 37(a)(3)(B)(iii) and (iv), if a party fails to timely answer an interrogatory or respond to a document request, the party seeking discovery may move for an order compelling an answer or response.[28]

         III. Duty to Confer

         Before the Court can rule on the Motion, it must determine whether the parties conferred as required by Rule 37(a)(1), Rule 37(d) and D. Kan. Rule 37.2. Here, KCI asks the Court to relieve it from conferring with Anderson due to the lack of response to the discovery and Motion filed in this case, and also due to the lack of response in the Western District of Missouri case. In this circumstance, given Anderson's lack of response, ordering KCI to confer would likely be futile, and thus ruling on the merits is appropriate.[29]

         IV. Discussion

         A. KCI's Request for Anderson to Fully Respond, without Objection, to the Discovery Issued in this Court

         As stated above, KCI, in this Court, served post-judgment discovery requests to Anderson on March 15, 2019, making the responses due April 15, 2019. Anderson failed to respond to the discovery requests, prompting KCI to file the instant Motion to Compel and Request for Sanctions. Anderson failed to respond to the Motion and show up for the October 4, 2019 hearing regarding the same. Thus, because of Anderson's failure to timely respond, the Court will grant KCI's request to compel responses to the outstanding discovery requests.[30]

         The Court will also grant KCI's request that Anderson answer the discovery requests without objection. Rule 33 provides the “grounds for objecting to an interrogatory must be stated with specificity” and “[a]ny ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure.”[31] The same is true for requests for production of documents under Rule 34.[32] Anderson failed to respond to KCI's Motion and failed to show up for the October 4, 2019 hearing. The Court, therefore, finds Anderson has not provided good cause for why he failed to timely answer or object to any discovery request.

         Accordingly, the Court orders Anderson to fully and without objection respond to KCI's First Set of Post-Judgment Interrogatories and First Set of Post-Judgment Requests for Production Documents by November 6, 2019. Anderson is further ordered to bring his responses to Court on November 6, 2019 for a 10:00 AM[33] hearing regarding the same.

         Failure to show up for the November 6, 2019 hearing with discovery responses may result in the undersigned certifying facts to the District Judge for a finding of contempt of this Court's Orders, with possible sanctions to include monetary fines and/or incarceration.

         B. KCI's Request for Sanctions for Failure to Answer the Discovery Issued in this Court

         As sanctions for Anderson's failure to respond to the post-judgment discovery filed in this Court, KCI requests the Court to: (1) order Anderson's arrest and incarceration and to impose monetary sanctions of $1, 000 a day until the discovery is fully answered; and (2) order Anderson to pay reasonable expenses, including attorney's fees, caused by Anderson's failure to respond to the post-judgment discovery requests.

         Rule 37(d) allows for sanctions when a party fails to respond to discovery after being properly served. Specifically, Rule 37(d)(3) states:

Sanctions may include any of the orders listed in Rule 37(b)(2)(A)(i)-(vi). Instead of or in addition to these sanctions, the court must require the party failing to act, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was ...

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