CCI v. America II Electronics, Inc.

915 So. 2d 1278, 2005 WL 3481365
CourtDistrict Court of Appeal of Florida
DecidedDecember 21, 2005
Docket2D04-5395, 2D05-16
StatusPublished
Cited by9 cases

This text of 915 So. 2d 1278 (CCI v. America II Electronics, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CCI v. America II Electronics, Inc., 915 So. 2d 1278, 2005 WL 3481365 (Fla. Ct. App. 2005).

Opinion

915 So.2d 1278 (2005)

CHANNEL COMPONENTS, INC., Canaan Ames, and Christopher T. Lowder, Appellants,
v.
AMERICA II ELECTRONICS, INC., Appellee.

Nos. 2D04-5395, 2D05-16.

District Court of Appeal of Florida, Second District.

December 21, 2005.

*1279 Theodore "Ted" E. Karatinos of Prugh, Holliday & Karatinos, P.L., Tampa; and Randall V. Shanafelt of The Shanafelt Law Firm, P.A., Clearwater, for Appellants.

Richard E. Fee of Fee & Jeffries, P.A., Tampa, for Appellee.

ALTENBERND, Judge.

Channel Components, Inc. (CCI), and two of its principals, Canaan Ames and Christopher Lowder, appeal a judgment in the amount of $79,282 entered against them as a sanction for their violation of certain discovery orders. The judgment was entered in favor of America II Electronics, Inc. (America II), the plaintiff in the underlying pending action seeking damages and an injunction against Mr. Ames and Mr. Lowder for their alleged violations of a noncompete agreement. The appellants argue that the judgment constitutes a criminal sanction for discovery violations, entered without the procedural protections required for such sanctions, and in an amount unrelated to the harm caused by their violation of discovery orders. In actuality, the judgment is the result of the proper imposition of a coercive *1280 civil sanction for contempt. The trial court scrupulously complied with the procedural requirements for entering this form of sanction judgment. Under the circumstances of this case, we find no abuse of discretion in the amount of the fine imposed.

The underlying litigation in this case began in February 2002, when America II filed its complaint against two former employees, Mr. Ames and Mr. Lowder. The complaint alleged that the two were tortiously interfering with the business relationships of America II and had breached their employment contracts with America II by violating a noncompetition provision and a provision prohibiting the disclosure of certain proprietary information. America II also sued CCI, a new corporation formed and operated by Mr. Ames and Mr. Lowder, alleging that the company was tortiously interfering in America II's business relationships. The complaint sought injunctive relief and damages. America II had the defendants served simultaneously with the complaint and certain discovery requests. Thus, America II began to seek the discovery necessary to prosecute its case in February 2002.

In July 2002, after the defendants only partially complied with the discovery requests, America II filed a motion to compel the discovery. The motion specifically alleged that America II had made a good faith effort to resolve the discovery dispute prior to filing the motion and detailed some of the steps America II took in that regard. On October 3, 2002, the trial court orally granted the motion to compel discovery. The trial court entered a written order on October 8, 2002, specifically detailing what items needed to be produced for America II and requiring the defendants to produce them on or before October 11, 2002.

On October 24, 2002, America II filed a motion for an order to show cause and for the imposition of discovery sanctions. The motion alleged that the defendants had again failed to produce the requested, and now court-ordered, documents and requested an order to show cause "why [the defendants] should not be held in contempt of court" for failing to comply with the October 8 order. America II noted in its motion that the documents were critical in its preparation for depositions it had scheduled in the case.

After a hearing on November 21, 2002, the trial court held that the defendants were "in continuing violation" of the October 8, 2002, order compelling discovery. The court entered a written order on December 13, 2002, detailing the provisions of the October 8, 2002, order with which the defendants had not complied. The court did not hold the defendants in contempt or issue an order to show cause, but the written order admonished: "[T]his Court will treat any further violation of the October Order, or the terms of this Order, as willful. In the event of such a violation, this Court will entertain a motion to strike the Defendants' pleadings and enter judgment in favor of Plaintiff."[1]

On January 23, 2003, America II filed yet another motion for contempt and for sanctions, again alleging that the defendants had not complied with the discovery requests or the orders of the court compelling discovery. This motion was heard before the trial court on April 1, 2003. At the conclusion of this hearing, the trial court orally pronounced its finding that the defendants had still not complied with the *1281 discovery as ordered by the court and thus were in contempt of court. The trial judge indicated he was giving the defendants one more week to comply with the discovery ordered. He instructed the defendants to submit, within that time period, an itemized list in response to the items ordered by the court. The list was to designate what items were provided, and if an item was not provided, the defendants were instructed to specifically note on the list that the documents requested did not exist. The trial judge ruled that if the defendants did not provide the discovery as ordered on or before 5 p.m. on April 8, 2003, a coercive fine of $2500 per day would be imposed for each day the defendants remained in noncompliance, for a maximum of thirty days. If the defendants remained in noncompliance after the thirty-day period, the trial judge indicated he would strike the defendants' pleadings and affirmative defenses. Although the trial court announced this ruling on April 1, it was not reduced to writing until June 5, 2003.

On April 4, 2003, the defendants filed a motion requesting an extension of time to provide the discovery until April 11, 2003. The trial court denied the extension. On April 9 and 10, the defendants filed "supplemental discovery" consisting of two pages setting forth the items listed in the trial court's order compelling discovery and indicating that one subset of documents was attached and that three other subsets had already been provided. As to a specific request for correspondence, e-mails, or notes evidencing conversations between the defendants and the clients they had in common with America II, the defendants indicated for the first time that there were no such documents in existence. America II, however, had previously taken the depositions of Mr. Ames and Mr. Lowder. Both men had referred to a computer software program that they used in their work at CCI that tracked correspondence with their customers. Both men also indicated that they sometimes communicated by e-mail with customers and vendors. In light of this, in June 2003, America II filed a motion seeking an order setting a specific amount of the sanctions, pursuant to the April 1 ruling imposing a $2500-per-day fine for the defendants' failure to comply with discovery and seeking an order striking the pleadings and affirmative defenses of the defendants. Around this same time, the defendants' counsel of record withdrew from the case, and the defendants retained new counsel to represent them.

On August 18, 2003, the parties appeared before the court on America II's motion to set sanctions and strike the defendants' pleadings. There were immediate disputes over what documents had been provided by the defendants' prior counsel, what remained to be provided, and who was at fault for any noncompliance. The trial judge continued the hearing in light of these disputes.

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Cite This Page — Counsel Stack

Bluebook (online)
915 So. 2d 1278, 2005 WL 3481365, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cci-v-america-ii-electronics-inc-fladistctapp-2005.