Karppi v. Greenville Terrazzo Co., Inc.

489 S.E.2d 679, 327 S.C. 538, 1997 S.C. App. LEXIS 95

• Court: Court of Appeals of South Carolina
• Decided: June 30, 1997
• Docket: 2695
• Status: Published

Opinions

HOWELL, Chief Judge:

The trial court struck the pleadings of Ogden Teck, Inc. and ordered it in default as a sanction for failing to comply with discovery orders. Ogden Teck appeals. We reverse and remand.

I.

Respondent, Paul Karppi d/b/a P/C Technology (Karppi), brought this action in June 1995 against Appellant Ogden Teck, and its co-defendant, Greenville Terrazzo Co., Inc. (Terrazzo). Karppi’s complaint alleges various causes of action arising from Karppi’s purchase from Terrazzo of floor covering material that was manufactured by Ogden Teck. Terrazzo and Ogden Teck denied liability, and Ogden Teck filed a counterclaim against Karppi, as well as a cross-claim against Terrazzo.

In February 1996 Karppi made two discovery requests of Ogden Teck which form the basis of the instant dispute. On February 27 Karppi served his first requests for production of documents, which included requests for “Corporate documents and communications of Ogden Teck, Inc., including Articles of Incorporation, By-Laws, Stock Certificates, and minutes from annual meetings of the Board of Directors and Shareholders.” Also on February 27, Karppi noticed Herbert Ogden’s deposition for March 14,1996, in Greenville. Ogden Teck responded that Herbert Ogden, a Pennsylvania resident, was not a control officer in the corporation; thus, he was neither required to, nor would he voluntarily submit to a deposition in South Carolina. However, Ogden Teck offered Marilyn Ogden for a deposition because she was familiar with the facts of the case.

Karppi, not satisfied with the responses to his two discovery requests, particularly the opposition to deposing Herbert Ogden, moved to compel Mr. Ogden’s deposition on May 15. Following a hearing, the trial court issued a discovery order on June 29, which reflected the agreement of the parties. The June 29 order provided, in pertinent part, that Ogden Teck must fully and completely respond to outstanding discovery requests within thirty days and that Herbert Ogden must be made available for deposition in Greenville if he was an officer of Ogden Teck at any time after the action was filed. Otherwise, the parties “agreed to take his deposition by telephone.”

At a July 11 status conference, the trial court ordered Ogden Teck to comply with the terms of the prior discovery order by July 31, and set the case for trial during the week of August 12. Because Ogden Teck never made Herbert Ogden available for a deposition, Karppi filed on August 1 a second notice for the deposition for August 6.¹ On August 9, Karppi filed a second motion to compel discovery. Following a hearing on the matter, the trial court found that the justifications offered by Ogden Teck for its failure to comply with the June 29 order were inadequate, and that Ogden Teck had “intentionally and willfully violated the Orders of this Court.”²

Having found that Ogden Teck willfully and intentionally failed to comply with the discovery order, the trial court struck Ogden Teck’s answer, counterclaim and cross-claim, and ordered that default be entered against it. The trial court ordered the case to go to trial, at which Ogden Teck “may appear and cross examine Plaintiffs witnesses only on the issue of damages.”³

II.

Ogden Teck contends the trial judge abused his discretion in striking its pleadings. We agree.⁴

“The imposition of sanctions is generally entrusted to the sound discretion of the Circuit Court.” Downey v. Dixon, 294 S.C. 42, 45, 362 S.E.2d 317, 318 (Ct.App.1987). A trial court’s exercise of its discretionary powers with respect to sanctions imposed in discovery matters will be interfered with by the Court of Appeals only if an abuse of discretion has occurred. Clark v. Ross, 284 S.C. 543, 328 S.E.2d 91 (Ct.App.1985). The burden is upon the party appealing from the order to demonstrate the trial court abused its discretion. Clark, 284 S.C. at 570, 328 S.E.2d at 107. An abuse of discretion may be found where the appellant shows that the conclusion reached by the trial court was without reasonable factual support and resulted in prejudice to the rights of appellant, thereby amounting to an error of law. Dunn v. Dunn, 298 S.C. 499, 502, 381 S.E.2d 734, 735 (1989) (citing Darden v. Witham, 263 S.C. 183, 209 S.E.2d 42 (1974)).

Rule 37 expressly grants the trial court power to order judgment by default for either the violation of a court order, or, upon motion, for a party’s failure to respond to certain discovery requests. Rule 37(b)(2)(C) & (d), SCRCP. However, when the court orders default or dismissal, or the sanction itself results in default or dismissal, the end result is nevertheless harsh medicine that should not be administered lightly. See generally Orlando v. Boyd, 320 S.C. 509, 466 S.E.2d 353 (1996); Baughman v. American Tel. & Tel. Co., 306 S.C. 101, 410 S.E.2d 537 (1991). Before invoking this severe remedy, the trial court must determine that there is some element of bad faith, -willfulness, or gross indifference to the rights of other litigants. See Orlando; Baughman. The sanction imposed should be reasonable, and the court should not go beyond the necessities of the situation to foreclose a decision on the merits of a case. Balloon Plantation v. Head Balloons, 303 S.C. 152, 399 S.E.2d 439 (Ct.App.1990). The sanction should be aimed at the specific misconduct of the party sanctioned. Balloon Plantation, 303 S.C. at 154, 399 S.E.2d at 440. Furthermore, whatever sanction is imposed should serve to protect the rights of discovery provided by the Rules of Civil Procedure. Downey, 294 S.C. at 45, 362 S.E.2d at 318; Kershaw Co. Bd. of Educ. v. United States Gypsum Co., 302 S.C. 390, 396 S.E.2d 369 (1990).

We reluctantly agree with the appellant that the trial court abused its discretion by ordering the sanction involved in this appeal, because the sanction imposed was unduly harsh under the circumstances, and because the sanction was not limited in scope with regard to the violation by the appellant of the court’s order. See Balloon Plantation. The need for the trial court to narrowly tailor its sanction to the offense committed by a party is never more evident than in cases involving multiple parties. Where, as here, multiple parties are involved, the trial court must closely scrutinize the dynamics of the litigation and be extremely cautious before striking the pleadings of a transgressing party because of the effects such action is likely to have on the other parties. Although the trial court made the requisite finding that Ogden Teck “intentionally and willfully violated the Orders of this Court,” the court failed to properly tailor its sanction to address the specific violation committed by Ogden Teck vis-a-vis Karppi.

In striking Ogden Teck’s pleadings in their entirety, including its cross-claim against Terrazzo, the trial court went beyond what was reasonably necessary to redress the wrong that was committed by Ogden Teck. There is no evidence in the record that Terrazzo’s rights of discovery have been violated by Ogden Teck. Neither has Terrazzo moved for any relief due to any alleged misconduct by or on behalf of Ogden Teck. Dismissal of Ogden Teck’s potentially meritorious cross-claim against Terrazzo serves no one’s interest but Terrazzo’s. Terrazzo’s discovery rights are simply not the discovery rights that the trial court was properly protecting by imposing the sanction in this case, and it was an abuse of the court’s discretion to attempt to do so in this instance.

In essence, Terrazzo received a windfall due to the over-breadth of the trial court’s sanction, because Terrazzo was wholly removed from the instant discovery dispute. The trial court failed to aim its sanction at the specific misconduct of Ogden Teck, and in so doing, ran afoul of the requirement that the sanction imposed be reasonable — comprehensive, yet not overly broad. See Downey v. Dixon, 294 S.C. 42, 362 S.E.2d 317 (Ct.App.1987) (holding that the trial court erred by imposing a sanction that was too lenient to adequately serve to protect the Rules). Indeed, the sanction imposed in this case is a “shotgun blast” rather than a mere “rifle shot.” Balloon Plantation, 303 S.C. at 154, 399 S.E.2d at 440.

While the sanction imposed in this case constitutes a windfall for Terrazzo with regard to the trial court’s disposal of the cross-claim, we also recognize that the striking of Ogden Teck’s answer creates undue and unwarranted prejudice against Terrazzo where none previously existed. If the answer is struck then liability is presumed as to Ogden Teck. Thus, Terrazzo is summarily stripped of its ability to defend on the ground that the materials sold were not, in fact, defective. Surely the trial court did not intend to punish or reward Terrazzo with its imposition of sanctions against Ogden Teck based on its discovery dispute with Karppi. The practical effect of the trial court’s sanction, however, is to do just that, thereby unnecessarily foreclosing a decision on the merits of this case. Balloon Plantation.

By no means do we condone the clear violation of the June 29 order by Ogden Teck. To the contrary, we find Ogden Teck’s actions with regard to this discovery dispute to be repugnant and worthy of appropriate sanctions.⁵ Under these circumstances, however, the harsh sanction that was imposed was not commensurate with Ogden Teck’s disobedience, and any number of lesser, more narrowly tailored sanctions would have sufficed to protect Karppi’s rights while adequately punishing the wrongdoing of Ogden Teck. See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 96 S.Ct. 2778, 2781, 49 L.Ed.2d 747 (1976) (stating policy reasons for the imposition of sanctions under Rule 37: “to penalize those whose conduct may be deemed to warrant such a sanction, [and] to deter those who might be tempted to such conduct in the absence of such a deterrent.”).⁶ Therefore, we find that the trial court abused its discretion with its imposition of this harsh and unjustifiable sanction.

Accordingly, for the foregoing reasons, the decision of the trial court is reversed, and the case is remanded for further proceedings, including the imposition of appropriate sanctions, if any, not inconsistent with this opinion.

REVERSED AND REMANDED.

GOOLSBY, J., concurs. ANDERSON, J., concurs in a separate opinion.

1 . Based on our disposition of the issue concerning the inappropriate severity of the sanction in this case, we need not decide the issue of the sufficiency of notice given for the second deposition of Herbert Ogden.

2 . Specifically the court noted that “[t]he only things submitted are a self-serving letter from Mr. Ogden himself asserting he was not an officer at the time the action was filed and a letter from an alleged physician stating, without explanation or comment, that Mr. Ogden could not travel because of age and illness. This very simply will not suffice.”

3 . It appears that the original trial scheduled for the week of August 12, 1996, was continued due to an illness of Greenville Terrazzo’s principal.

4 . Karppi argues as a sustaining ground for the order below that Ogden Teck’s appeal should be dismissed because its brief was untimely filed. We need not consider this argument, however, because this Court has previously granted Ogden Teck’s motion to extend.

5 . We do not agree with appellant’s contention that Ogden Teck did not violate the June 29 order. The order clearly required Ogden Teck to fully and completely respond to outstanding discovery requests within thirty days. Plainly this included Karppi's request for production of documents, including the corporate records, which, inter alia, should have indicated whether or not Herbert Ogden was a control officer in the corporation. However, despite the clear mandate of this order, as well as the trial court's reaffirmation thereof at the July 11 status conference, there is no evidence in the record that Ogden Teck responded at all, much less within thirty days. Furthermore, the trial court was free to reject Ogden Teck’s belated attempts at proffering a halfhearted excuse for its failure to tender Herbert Ogden for deposition in Greenville. Accordingly, the finding in the August 28 default order that "[a]t no time has Defendant Ogden Teck, Inc. offered a response to the outstanding discovery requests as ordered by this Court," was proper.

6 . While we agree that the trial court was well within its power to penalize Ogden Teck for what the court found to be willful disobedience, under these circumstances it seems from the record as though the attorney for Ogden Teck' was at least as much to blame as the party itself, for its indiscretions. To penalize Ogden Teck so severely for apparently relying on the advice of its attorney, under these circumstances, is clearly unjust, and would not properly serve the purposes for sanctions. Cf. Dunn v. Dunn, 298 S.C. 499, 381 S.E.2d 734 (1989).