Klau-Med, Inc. v. Bodyworks Medical, Inc.

964 P.2d 1150, 156 Or. App. 138, 1998 Ore. App. LEXIS 1533
CourtCourt of Appeals of Oregon
DecidedSeptember 23, 1998
DocketC96-0175CV; CA A96426
StatusPublished
Cited by5 cases

This text of 964 P.2d 1150 (Klau-Med, Inc. v. Bodyworks Medical, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Klau-Med, Inc. v. Bodyworks Medical, Inc., 964 P.2d 1150, 156 Or. App. 138, 1998 Ore. App. LEXIS 1533 (Or. Ct. App. 1998).

Opinion

*140 ARMSTRONG, J.

Plaintiff appeals from a judgment dismissing its action as a sanction for discovery violations. Because we conclude that the court failed to consider less onerous sanctions for the violations and to explain why those lesser sanctions were inadequate, we reverse.

Plaintiff brought this action for breach of contract and intentional interference with business relations in February 1996. On March 28, 1996, defendants served plaintiff with a request for production of documents in the action. On May 16, 1996, plaintiff served a response to that request, objecting to certain requests and agreeing to produce certain documents. On August 14,1996, defendants served a second production request, seeking, among other documents, any and all of plaintiffs banking records for the years 1994 to 1995. In that request, defendants also sought any documents reflecting any law enforcement investigations of Alex Wright, whom defendants understood to be plaintiffs chief executive, in regard to banking irregularities or checks written on insufficient funds for the period between 1990 and the date of the request. Plaintiff did not respond to that request.

On September 25,1996, defendants filed a motion to compel production. On September 27,1996, defendants filed a motion to compel Wright’s appearance at deposition. A hearing on both motions was held on September 30,1996. At the hearing, plaintiff agreed to produce, pursuant to a confidentiality agreement, certain documents as ordered by the court, but argued that it could not be required to produce Wright for deposition because he was no longer an employee of the company.

At the time of the hearing, the attorneys for both sides believed that Wright was residing in Florida. Wright’s wife, Kimberly Wright, who had taken over his position as plaintiffs chief executive, was present at the hearing and did not offer any information to contradict that belief. The trial court ruled that defendants should be allowed to depose Wright but that defendants would bear the burden of paying for Wright to come to Oregon from Florida. 1

*141 On October 9, 1996, the trial court entered an order requiring plaintiff to produce the documents discussed at the September 30 hearing, as well as any documents showing law enforcement investigations of checks written on insufficient funds by plaintiff or Wright, along with an authorization to examine plaintiffs financial records, within ten days of the September 30 hearing. On the same date, the trial court entered a second order requiring plaintiff to make Wright available for deposition at defendants’ expense. On October 18, 1996, defendants filed a motion to compel Wright’s appearance for deposition on November 5 and 6, 1996, at plaintiffs expense, on the ground that new information existed to show that Wright was still employed by plaintiff. On October 31, 1996, plaintiff advised defendants that Wright would not be available for deposition until late December 1996 or early January 1997. 2 At that time, defendants still believed that Wright was in Florida. On November 4,1996, defendants moved to dismiss the action pursuant to ORCP 46 B, 3 on the ground that plaintiff had failed to comply with the court’s discovery order by refusing to produce Wright for deposition. A hearing on the motion was held on November 25, 1996. At the hearing, defendants also argued as grounds for dismissal that plaintiff had failed to comply with the court’s document production orders. Plaintiff did not appear at the hearing. The trial court granted the motion to dismiss, based on its conclusion that plaintiff willfully had violated the earlier discovery orders.

On November 26, plaintiff filed a motion for rehearing and reconsideration, claiming excusable neglect. A rehearing was held on December 9, 1996. At that hearing, *142 defendants notified the court that they had received information that Wright was incarcerated at the federal penitentiary in Sheridan, Oregon, and had been there since April 22, 1996. Defendants argued that plaintiff had been aware of Wright’s whereabouts at the time of the September 30 hearing, yet had done nothing to correct the misperception that he was in Florida. 4

On January 13,1997, the trial court issued an order dismissing the action, stating:

“This matter came to the above court on December 9, 1996, by way of a motion for expedited hearing for reconsideration of the court’s order of dismissal. The court having reviewed defendant’s [sic] motion, papers and supporting affidavits, plaintiffs opposition papers and supporting affidavits and other pleadings and argument of the parties in this case, the court makes the following findings:
“1. On October 9, 1996[,] Circuit Court Judge Alan C. Bonebrake entered orders with respect to the deposition of Alex Wright and compelling plaintiffs to produce documents.
“2. Plaintiff and plaintiff’s counsel were made aware of these orders.
“3. Plaintiff has failed to comply with the court’s orders regarding the deposition of Alex Wright and the order compelling plaintiff to produce documents in response to defendants’ production requests.
“4. Plaintiffs previous counsel with plaintiff’s CEO and wife of Alex Wright present in court indicated Mr. Wright was in Florida and did so in a hearing on September 30,1996.
“5. Plaintiff has failed to comply with the court’s orders of October 9,1996.
*143 “6. The failure of plaintiff to comply with the court’s orders of October 9,1996, was knowing and willful.
“7. Plaintiffs current counsel was aware that Mr. Wright was not in Florida but in Oregon on September 30, 1996. She did not inform the court that Mr. Wright was in Oregon in Federal custody and had been in Oregon at the time previous counsel represented Mr. Wright was in Florida (previous counsel apparently didn’t know Alex Wright was in Federal custody in Oregon).
“8. Ms. Hoffman[, plaintiffs current counsel,] represented to the defendant’s [sic] counsel that she would make Mr. Wright available for deposition at a time that was weeks after the trial setting. Ms. Hoffman knew she was going to ask the court for a reset but had not as yet done so. She was not in a position to know whether or not the court would grant her soon-to-[be-]made request for a reset. She also knew or should have known Mr. Wright was not scheduled to be released from Federal custody at the time she indicated Mr. Wright would ‘be in town and available for depositions * * *.’
“9. Ms. Hoffman has intentionally perpetrated the assertion that Mr. Wright was and is in Florida through her filings of Affidavits on November 26th and December 4th and a memorandum filed on December 2,1996.

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Bluebook (online)
964 P.2d 1150, 156 Or. App. 138, 1998 Ore. App. LEXIS 1533, Counsel Stack Legal Research, https://law.counselstack.com/opinion/klau-med-inc-v-bodyworks-medical-inc-orctapp-1998.