Sterling Promotional Corp. v. General Accident Insurance Co. of New York

86 F. App'x 441
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 6, 2004
DocketDocket No. 03-7150
StatusPublished
Cited by5 cases

This text of 86 F. App'x 441 (Sterling Promotional Corp. v. General Accident Insurance Co. of New York) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sterling Promotional Corp. v. General Accident Insurance Co. of New York, 86 F. App'x 441 (2d Cir. 2004).

Opinion

SUMMARY ORDER

Familiarity is assumed as to the facts, the procedural context, and the specification of appellate issues. Briefly, appellant Sterling Promotional Corp. (“Sterling”) brought suit against its first-party marine insurer, appellee Travelers Property & Casualty Co. (“Travelers”), in the United States District Court for the Southern District of New York. Sterling sought a declaratory judgment that its policy with Travelers covered damage to a shipment of teddy bears. In a judgment entered on January 27, 2003, the district court (Owen, J.) dismissed Sterling’s case pursuant to Federal Rule of Civil Procedure (“FRCP”) 37(b)(2) and (d), and FRCP 41(b). It did so after Sterling’s president, Steven Linder, repeatedly failed to appear for his own deposition, even after the court ordered him to appear. The court also held Sterling and its attorney, Benjamin J. Golub, jointly and severally liable for Travelers’ attorneys’ fees.

A district court may dismiss a plaintiffs case “for failure of the plaintiff to prosecute or to comply with ... any order of court.” Fed.R.Civ.P. 41(b). Similarly, a district court may dismiss where a plaintiff fails to comply with discovery orders, including the failure to attend its own deposition. Fed.R.Civ.P. 37(b)(2), (d).1 A dis[443]*443missal for failure to comply with discovery “is a harsh remedy to be used only in extreme situations, and then only when a court finds willfulness, bad faith, or any fault on the part of the prospective deponent.” Bobal v. Rensselaer Polytechnic Inst., 916 F.2d 759, 764 (2d Cir.1990) (quotation marks, internal and external citations omitted). Nevertheless, because of its need to control the proceedings before it, “[a] district court has broad power to impose ... sanctions in response to abusive litigation practices.” Friends of Animals, Inc. v. U.S. Surgical Corp., 131 F.3d 332, 334 (2d Cir.1997). This Court thus reviews the imposition of such sanctions only for abuse of discretion. Id.

The factors relevant in deciding whether to grant a motion for dismissal, when it is based on the failure to comply with a court order, or the failure to comply with discovery, include (1) the duration of the offending conduct, (2) whether notice was given that the conduct could result in dismissal, (3) whether the conduct prejudiced the movant, (4) the balance of the court’s need to manage its docket against the parties’ interests in being heard on the merits, and (5) the possibility that a lesser sanction would be effective. See Baffa v. Donaldson, Lufkin & Jenrette Secs. Corp., 222 F.3d 52, 62-63 (2d Cir.2000) (factors analyzed in reviewing dismissal under Rule 41(b)); Nieves v. City of New York, 208 F.R.D. 531, 535 (S.D.N.Y.2002) (similar factors under Rule 37(b)) (citing Bambu Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849, 852-54 (2d Cir.1995)).

First, Sterling’s president, Linder, effectively evaded his deposition for over two years. Sterling argues that it did not evade “all meaningful discovery” for that period of time. It notes that it timely complied with some of Travelers’ discovery requests, and was prepared to produce an employee, Ms. Arce, for the first scheduled deposition. Further, Sterling argues that the failure of Linder to appear at subsequently scheduled depositions was justified by his demanding work schedule, a medical problem, and his pending divorce action.

However, despite being served with a discovery request in September 2000, Sterling did not agree to schedule a deposition until the district court ordered it over one year later. Travelers concedes that it canceled that initial deposition, but argues that it then took two more letters to the court to get Sterling to produce Linder for a deposition on May 15, 2002. Linder unexpectedly terminated that deposition after just over one hour, citing a non-emergency doctor’s appointment. Sterling promised to reschedule, but did not do so until Travelers filed a motion to dismiss. Sterling then canceled a July 26, 2002 deposition on July 25, 2002. At the next scheduled deposition, September 5, 2002, Linder and counsel walked out when Travelers’ counsel took a lunch break, despite having been told prior to the session that there would be such a break. Finally, Linder, without timely notice, failed to appear for his deposition on October 3, 2002. In sum, after over two years and a motion to dismiss, Travelers remained unsuccessful in securing Linder’s deposition. Thus, although Sterling did partially cooperate in discovery, its failures were notable, substantial, and recurring.

Second, Sterling was clearly on notice that its failure to produce Linder for deposition would result in dismissal. Travelers moved for dismissal on June 19, 2002. [444]*444Sterling’s attorney told the court on October 3, 2002, that he had informed Linder of the consequences of failing to appear on that day. Indeed, that Sterling was clearly on notice that it risked dismissal is undeniable given that Linder submitted an affidavit “in opposition to defendant’s motion to dismiss,” in which he specifically contended that “it would be unfair and unreasonable [for the district court] to dismiss” Sterling’s case under the circumstances.

Third, Travelers was prejudiced by the inability to depose Linder. Despite the fact that Travelers had obtained some relevant evidence from Sterling, and had deposed Sterling’s expert, Sterling is purportedly a “one man” business — and Travelers has not been able to speak to the “one man.” Its inability to speak with Linder, and the unlikelihood of being able to do so (given Linder’s past behavior) prejudiced Travelers’ ability to defend itself.

Fourth, the district court balanced its interest in maintaining its docket against Sterling’s right to be heard on the merits. It is clear from the record that the district coui’t had a great deal of difficulty getting Linder to schedule and appear at his deposition. In an October 1, 2002 conference call during which the court ordered the October 3, 2002 deposition, the coxxrt repeatedly asked Sterling’s attorney why he was ignorant of Linder’s schedule; the court expressed its frustration with Linder’s behavior and noted, “I have to run this court and the only way I can run this coxxrt is to say something’s going to happen.” The court thus weighed its interest in managing its docket against Sterling’s interest in being heax’d.

Fifth, the district coui’t considered the efficacy of lesser sanctions. This Court has noted that were it “to adopt a position that overly inhibits the imposition of the harsher sanctions authorized by Rule 37, [it] would turn the nxle into a ‘paper tiger.’ ” Sieck v. Russo, 869 F.2d 131, 134 (2d Cir.1989) (affirming the granting of a default judgment where “defendants were aware of, and consciously absented themselves from, ... scheduled depositions”).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Houghtaling v. Fischer
W.D. New York, 2022
Friedman v. Radujko
Second Circuit, 2021
Dwarven Forge, LLC v. Whitaker
D. Connecticut, 2020

Cite This Page — Counsel Stack

Bluebook (online)
86 F. App'x 441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sterling-promotional-corp-v-general-accident-insurance-co-of-new-york-ca2-2004.