Coast 360 v. Richard T. Damian

Opinion

FILE ?19 N)V 13 1:113 2 SUPERIOR )URT OF GUA I 4

6 IN THE SUPERIOR COURT OF GUAM 7 COAST 360 FEDERAL CREDIT UNION CWTh CASE NO. CVO500-17 8

9 Plaintiff,

10 vs DECISION AND ORDER 11 RICHARD T. DAMIAN 12 Defendant. 13

15 This matter came before the Honorable Arthur R. Barcinas on September 24, 2019, upon 16 the Plaintiffs Motion for Sanctions filed August 12, 2019. Plaintiff Coast 360 Federal Credit 17 Union (“Coast 360” or “Plaintiff’) is represented by Attorney William B. Brennan. Defendant 18 Richard T. Damian (“Mr. Damian” or “Defendant”) is currently pro se.1 Having reviewed the 19 pleadings and considered the arguments in this matter, the Court issues the following Decision 20 and Order. 22 On May 23, 2017, Plaintiff Coast 360 Federal Credit Union (“Coast 360” or “Plaintiff’) 23 filed a Complaint in this matter seeking inter alia, the imposition and foreclosure of an 24 equitable lien on certain real property located in Guam (“the Property”). The funds, which were 25 used primarily to improve on the Property, were issued pursuant to a loan agreement and note 26

27 Defendant was previously represented by Attorney Joseph C. Razzano (“Attorney Razanno”). On August 30, 2019, Attorney Razzano moved to withdraw as Defendant’s counsel, noting a breakdown in communication despite 28 counsel’s numerous attempts to contact the Defendant. Subsequently, the Court finding good cause, granted Attorney Razanno’s Motion to Withdraw on September 24, 2019. Decision and Order Civil Case No. CVO500-17; Coast 360 federal Credit Union v. Richard T. Damian

i executed by the Defendant’s nephew and secured by a mortgage on the Property in favor of the 2 Plaintiff. Defendant Richard T. Damian (“Mr. Damian” or “Defendant”) is the title holder of the 3 Property at issue in the Complaint. 4 Mr. Damian was served with the Complaint and Summons in Hawaii on May 28, 2017. 5 Mr. Damian subsequently, filed his Answer on May 22, 2018. The Court issued a Scheduling 6 Order and Discovery Plan on June 29, 2018, and the parties subsequently engaged in discovery. 7 Thereafter, on September 24,2018, the Defendant filed a Motion for Summary Judgment. 8 On September 28, 2018, the Plaintiff noticed the first deposition of the Defendant. The 9 deposition was to be conducted via video conference on October 10, 2018, at 9:00 a.m. CST, 10 and October 9, 2018, at 1:00 p.m. HST. The Notice was served on Counsel for the Defendant. ii However, at the request of Defendant’s Counsel, the parties agreed to reschedule the 12 Defendant’s deposition. In addition, Plaintiff’s Counsel also requested the Defendant’s 13 assistance in coordinating a site visit to inspect the Property. The Defendant has since failed to 14 respond to the Plaintiffs request to visit or inspect the Property. 15 On January 30, 2019, the Plaintiff noticed the deposition of the Defendant for a second 16 time. The deposition was to be conducted via video conference on February 21, 2019, at 10:00 17 a.m. CST, and February 20, 2019, at 2:00 p.m. HST. The second deposition date was 18 prearranged with Defendant’s Counsel to assure the Defendant’s availability, and to assure the 19 availability of a court reporter and video conferencing service in Hawaii in advance of the 20 Amended Notice. The Amended Notice was served on Counsel for the Defendant. The 21 Defendant failed to appear on February 21, 2019, for the second noticed deposition. Counsel for 22 the Defendant however, was present for Mr. Damian’s second noticed deposition. 23 On June 24, 2019, after coordinating with Defendant’s Counsel, the Plaintiff noticed the 24 deposition of the Defendant for a third time. The deposition was to be conducted via video 25 conference on July 11, 2019, at 10:00 a.m. CST, and July 10, 2019, at 2:00 p.m. HST. The third 26 Notice was served on Counsel for the Defendant. The Defendant failed to appear on July 11, 27 2019, for the third noticed deposition. Counsel for the Defendant however, was also present for 28 Mr. Damian’s third noticed deposition.

Page 2 of $ Decision and Order e Civil Case No. CVO500-17; Coast 360 Fede,-at Credit Union v. Richard T. Da,nian

On August 12, 2019, the Plaintiff filed the instant motion requesting that the Court 2 sanction the Defendant for failing to appear at the two separate and duly-noticed depositions, 3 and for failing to respond to the Plaintiff’s request to inspect the Property at issue. Specifically, 4 the Plaintiff requests that the Court order Mr. Damian to pay reasonable costs and attorney fees 5 related to the duly noticed depositions, as well as the instant motion. Further, the Plaintiff 6 requests that the Court also strike the Defendant’s Answer and enter default accordingly as a 7 result of Mr. Damian’s willful conduct that has hindered the Plaintiff’s ability to conduct 8 discovery in this matter. 9 The Defendant, on the other hand, argues that the Plaintiff’s motion does not comply 10 with the procedural rules of this Court. Specifically, the Defendant maintains that the Plaintiff ii failed to satisfy certain requirements before filing the instant discovery dispute and therefore, 12 argues that the Court should decline to hear or decide the Plaintiff’s motion. The Defendant 13 asserts that the applicable rules require that the parties must first meet and confer to discuss 14 discovery disputes, provide a certification for those disputes arising from the failure to respond 15 to inspection requests, and file a stipulation outlining the remaining issues before seeking court 16 intervention. further, in his Opposition filed September 16, 2019, the Defendant includes a 17 Cross-Motion for Sanctions requesting that the Court sanction the Plaintiff for failing to satisfy 18 the procedural prerequisites before filing the instant motion. In its Reply filed on September 23, 19 2019, the Plaintiff contends that the Defendant’s cross-motion is not properly before the Court 20 and thus, the Court should decline to address the Defendant’s request for sanctions. 21 On September 24, 2019, a hearing was held on the instant motion. At the hearing, the 22 Court also granted Attorney Razzano’s Motion to Withdraw as counsel. Nevertheless, the Court 23 accepted the arguments on the parties’ briefs and subsequently took the matter under 24 advisement. 26 I. The Plaintiff is not required to provide a certification of good faith efforts to 27 resolve the Defendant’s failure to appear at his own duly noticed depositions before seeking court intervention. 28

Page 3 of $ Decision and Order . Civil Case No. CVO500-17; Coast 360 Federal Credit Union v. Richard T. Damian

Rule 37 of the Guam Rules of Civil Procedure (“GRCP”) provides, in relevant part, that 2 if a party fails to attend his or her own deposition, after being served with proper notice, the 3 Court on motion may make such orders in regard to the failure as are just, including any action 4 authorized under Rule 37(b)(2)(A)-(C). See Guam R. Civ. P. 37(d)(1). further, Rule 37 5 provides that “[i]n lieu of any order or in addition thereto, the court shall require the party 6 failing to act or the attorney advising that party or both to pay the reasonable expenses, 7 including attorney’s fees, caused by the failure unless the court finds that the failure was 8 substantially justified or that other circumstances make an award of expenses unjust.” Guam R. 9 Civ. P. 37(d) (emphasis added). Rule 37(d) however, treats a party’s failure to attend his or her 10 own deposition differently than the failure of a party to serve answers to interrogatories or 11 respond to a request for inspection. See Guam R. Civ. P. 37(d)(2)-(3). The Rule states “[amy 12 motion specifying a failure rtnder clause [37(d)(2) or (3)] shall include a certification that the 13 movant has in good faith conferred or attempted to confer with the party failing to answer or 14 respond in an effort to obtain such answer or response without court action.” Guam R. Civ. P. 15 37(d) (emphasis added). 16 Here, while the Defendant claims that Rule 37(d) requires that the Plaintiff certify that 17 the parties met and conferred or attempted to meet and confer in good faith, it is clear that such 1$ requirement explicitly applies only to motions specifying a failure “under clause (2) or (3) of 19 [37(d)]” — that is, a party’s failure to serve answers to interrogatories or respond to requests for 20 inspection. See Guam R. Civ. P. 37(d). In the instant motion, the Plaintiff moves for sanctions 21 based on the Defendant’s failure to attend two duly noticed depositions under Rule 37(d)(l). 22 See Guam R. Civ. P. 37(d)(l). Thus, because the Plaintiff seeks sanctions solely under 23 37(d)(l), no meet and confer, or certification of good faith efforts to resolve the Defendant’s 24 failure to attend his own duly noticed depositions, is required under the plain language of Rule 25 37(d). 26 Similarly, CVR 37.1 of the Local Rule of the Superior Court of Guam is inapplicable to 27 a motion for sanctions for a party’s failure to attend his or her own duly noticed deposition. 2$ CVR 37.1 provides, in relevant part, “[p]rior to the filing of any motion relating to a discovery

Page 4of8 Decision and Order . Civil Case No. CVO500-17; Coast 360 federal Credit Union e. Richard T. Dantian

1 dispute, counsel for the parties shall meet or attempt to meet in a good faith effort to eliminate

2 the necessity for hearing the motion or to eliminate as many of the disputes as possible.” CVR 3 7.1(a) (emphasis added). Further, CVR 37.1 imposes other procedural requirements including 4 inter alia a stipulation or declaration of counsel discovery issues remain unresolved. See CVR 5 37.1(b). Here, the Plaintiff is not seeking to compel discovery. The Plaintiffs Motion for 6 Sanctions merely seeks monetary and/or equitable remedies for the Defendant’s failure to 7 attend his own deposition and therefore, is essentially, neither a discovery motion nor a motion 8 concerning a discovery dispute. See Mendez, 200$ WL 1 13$17$5 at *1 (“Rules 37.1 and 37.2 9 of the Local Rules of Civil Procedure are inapplicable to a motion for sanctions brought 10 pursuant to Rule 37(d) of the Federal Rules of Civil Procedure because Rule 37(d) is not a 11 motion for discovery”). Accordingly, the requirements of CVR 37.1 related to discovery 12 disputes are not applicable to the Plaintiffs Motion for Sanctions for the Defendant’s failure to 13 attend his duly noticed depositions. 14 further, the Defendant’s interpretation that CVR 37.1’s meet and confer requirement 15 applies to a motion for sanctions under Rule 37(d)(1) of the GRCP would add a requirement by 16 the Local Rules that is inconsistent with the GRCP. See GR 1.1(c) (“These Rules supplement 17 the Guam Rules of Civil Procedure and . . . shall be construed so as to be consistent with the 18 [GRCP]”) see also CVR 1.1 (“the provisions of the Civil Rules shall apply . . . except where 19 they may be inconsistent with rules or provisions of law specifically applicable thereto”). 20 Therefore, the Court rejects the Defendant’s interpretation. As explained above, Rule 37(d)(l) 21 specifically exempts motions for a party’s failure to attend a duly noticed deposition from any 22 meet and confer, certification, or stipulation requirement. ç Guam R. Civ. P. 37(d)(l). 23 Accordingly, having determined that the Plaintiff was not required under GRCP 37 or 24 CVR 37.1 to meet and confer or provide a certification of good faith efforts to resolve the 25 Defendant’s failure to appear at his own duly noticed depositions, the Court will now address 26 the merits of the Plaintiff’s Motion for Sanctions2. 27

28 2 Having found that the Plaintiff did not fail to follow the requirements of GRCP 37(d) or CVR 37.1, the Court need not address the issues relating to the Defendant’s Cross-Motion for Sanctions.

Page 5 of $ Decision and Order . Civil Case No. CVO500-17; Coast 360 Federal Credit Union v. Richard T. Damian

II. Plaintiff’s Motion for Sanctions 2 Rule 30 of the GRCP authorizes a party to take the oral deposition of “any person, 3 including a party. . . without leave of court.” $ Guam R. Civ. P. 30(a)(l). In other words, no 4 subpoena is needed to compel the deposition of a party to an action. The only requirement is 5 that the party be served with proper notice of the deposition beforehand. $ Guam R. Civ. P. 6 30(b)(1); see also Jules Jordan Video, Inc. v. 144942 Can. Inc., 617 F.3d 1146, 1158 (9th Cir. 7 2010) (finding that a “simple notice of deposition is sufficient to compel [a party’s] $ attendance”). As determined above, where a party to an action fails to attend his or her own 9 deposition, after being served with proper notice, the Court on motion may make such orders in 10 regard to the failure as are just. Guam R. Civ. P. 37(d)(1). Further, “[i]n lieu of any order or in ii addition thereto the court shall require the party failing to act or the attorney advising that party 12 or both to pay the reasonable expenses, including attorney’s fees, caused by the failure unless 13 the court finds that the failure was substantially justified or that other circumstances make an 14 award of expenses unjust.” Guam R. Civ. P. 37(d) (emphasis added). In other words, the Court 15 must impose reasonable expenses and attorney’s fees on the falling party if the party’s failure 16 to appear at his or her own deposition was not substantially justified and if no other 17 circumstances make such sanction unjust. 18 Here, it is undisputed that the Defendant was duly notified of all three depositions 19 scheduled for October 2018, february 2019, and July 2019. At the request of Defendant’s 20 counsel, the October 2018 deposition was rescheduled. The Defendant however, failed to 21 appear for both depositions rescheduled for February 2019, and again for July 2019. The 22 Defendant does not provide the Court with any explanation to substantially justify his failure to 23 attend the properly noticed depositions. Further, there are no other circumstances that would 24 make an award of reasonable costs and attorney’s fees particularly unjust in this instance. The 25 Court however, notes that for each attempted deposition, counsel for both parties remained in 26 contact with each other in order to coordinate dates and times between Guam and Hawaii, and 27 to assure the Defendant’s availability well in advance of noticing the depositions. The Court 2$ also recognizes that Counsel for the Defendant has had communication difficulties with the

Page 6 of $ Decision and Order . e Civil Case No, CVO500-17; Coast 360 federal Credit Union v. Richai’d T. Da,nian

1 Defendant despite counsel’s diligent efforts to advance Mr. Damian’s defense. Accordingly, 2 because the Defendant failed to attend his duly noticed deposition not only once, but twice, 3 even after numerous attempts to accommodate the Defendant, the Court hereby SANCTIONS 4 the Defendant for failing to appear at the properly noticed depositions scheduled for February 5 2019 and July 2019. The Court hereby ORDERS Mr. Damian to pay to the Plaintiff those 6 reasonable costs and attorney’s fees related to the two missed depositions, as well those 7 reasonable costs and expenses related to the instant Motion. $ III. Plaintiff’s request for additional sanctions beyond fees and costs. 9 In addition to the Court imposing reasonable costs and attorney’s fees, the Plaintiff 10 requests that the Court also impose a sanction on the merits. Specifically, the Plaintiff requests ii that the Court strike the Answer and enter default judgment against the Defendant for his 12 failure to attend his own depositions and to respond to the Plaintiff’s request to inspect the 13 Property. The Plaintiff asserts that the Defendant has willfully frustrated the Plaintiffs ability 14 to complete discovery in this matter thereby prejudicing the Plaintiff and causing significant 15 delay. Thus, the Plaintiff argues default against the Defendant is also warranted. 16 Default judgments are an available sanction under Rule 37 of the GRCP, and may be 17 used, at the discretion of the trial court, where there has been “flagrant, bad faith disregard of 18 discovery duties.” See Fargo Pac., Inc. v. Imamura, No. CV96-0049A, 1997 WL 208983, at *3 19 (D. Guam Apr. 21, 1997), aff’d, 166 F.3d 1217 (9th Cir. 199$) (citing Wanderer v. Johnston, 20 910 F.2d 652, 655-656 (9th Cir. 1990)); see also National Hockey League v. Metro. Hockey 21 Club, Inc., 427 U.S. 639, 340 (1976) (default as a Rule 37 sanction is authorized only where 22 the failure to comply is due to willfulness, bad faith, or fault of the party). In other words, a 23 finding of willfulness, bad faith, or fault on the party is required prior to entering default as a 24 discovery sanction. Id. (emphasis added). Further, due to the drastic and dispositive nature of 25 default as a sanction tool, it is authorized only in extreme circumstances. at (citing Fjelstad 26 v. American Honda Motor Co., Inc., 762 F.2d 1334 (9th Cir. 1985). 27 Here, although the Plaintiff maintains that the Defendant’s conduct was willful, there 2$ are no specific facts before the Court to support a finding that Defendant’s conduct satisfied the

Page 7 of$ Decision and Order Civil Case No. CVO500-17; Coast 360 Federal Credit Union v. Richard T. Damian

i threshold requirements of extreme circumstances, willfulness, or bad faith. Other than a 2 conclusory statement that the Defendant’s failure to appear at his own depositions and respond 3 to a request for inspection was willful, the record is devoid of any discussion regarding the 4 reasons for the Defendant’s absences or failure to respond. Thus, for that reason and without 5 more, the Court cannot make the threshold finding of extreme circumstances, willfulness, or 6 bad faith required to support default as a sanction against the Defendant3. Accordingly, the 7 Court declines to impose the extreme sanction of default against the Defendant, and finds 8 imposing attorney’s fees and costs is in an appropriate sanction at this time. 9 CONCLUSION io For the foregoing reason, the Court GRANTS the Plaintiff’s Motion for Sanctions. 11 Accordingly, the Court hereby SANCTIONS the Defendant for failing to appear at the 12 properly noticed depositions scheduled for February 2019 and July 2019. The Court hereby 13 ORDERS Mr. Damian to pay to the Plaintiff those reasonable costs and attorney’s fees related 14 to the two missed depositions, as well those reasonable costs and expenses related to the instant 15 Motion. Further, the Court declines to impose the extreme sanction of default against the 16 Defendant, and finds that imposing attorney’s fees and costs is in an appropriate sanction at 17 this time. 18

19 2019 IT IS SO ORDERED___________ NnV13 __ 20

21 COURT BO 77

24 HONORABLE ARTHUR R. BARCINAS 25 Judge, Superior Court of Guam Siinerior Court ot Guam 26

27 Having determined that• the record lacks the facts necessary to support a threshold finding of extreme 28 circumstances, willfulness, or bad faith, the Court need not analyze the factors determinative of whether the entry of default as a sanction is proper. See Wanderer v. Johnston, 910 f.2d 652, 654 (9th Cir. 1990).

Page 8 of 8