The Stars' Desert Inn Hotel & Country Club, Inc. v. Richard Hwang

105 F.3d 521, 97 Cal. Daily Op. Serv. 609, 36 Fed. R. Serv. 3d 1434, 97 Daily Journal DAR 948, 1997 U.S. App. LEXIS 1271, 1997 WL 27115
CourtCourt of Appeals for the Ninth Circuit
DecidedJanuary 27, 1997
Docket95-15915
StatusPublished
Cited by56 cases

This text of 105 F.3d 521 (The Stars' Desert Inn Hotel & Country Club, Inc. v. Richard Hwang) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Stars' Desert Inn Hotel & Country Club, Inc. v. Richard Hwang, 105 F.3d 521, 97 Cal. Daily Op. Serv. 609, 36 Fed. R. Serv. 3d 1434, 97 Daily Journal DAR 948, 1997 U.S. App. LEXIS 1271, 1997 WL 27115 (9th Cir. 1997).

Opinions

SKOPIL, Circuit Judge:

Richard Hwang appeals the district court’s entry of a default judgment in favor of The Stars’ Desert Inn Hotel & Country Club, Inc. (“Stars”) as a sanction for failing to comply with a court order to submit to deposition and failing to pay court-ordered monetary sanctions. Hwang contends that the district court did not have jurisdiction. Alternatively, he argues that the court abused its discretion in entering a default judgment. We affirm.

I.

On March 16, 1994, Stars, a Las Vegas casino, filed this diversity action against Richard Hwang, a citizen of Taiwan, in an attempt to collect a gambling debt. The complaint alleged that Hwang owed Stars $1,885,000 pursuant to a two million dollar line of credit with Stars. Based on information acquired through independent investigation, Stars determined that Hwang resided in a guarded and gated community in Beverly Hills. Stars employed a process server to attempt personal service upon Hwang. On six separate occasions, however, the process server was denied entrance by the gate guard. On the last attempt, after the gate guard confirmed that Hwang did indeed reside at that address, the process server left the summons and complaint with the gate guard.

Hwang filed a motion to quash service asserting that Stars failed to serve him properly pursuant to Fed.R.Civ.P. 4. Hwang claimed that, as a citizen of Taiwan, he could only be served in accordance with Rule 4(f) governing service upon individuals in a foreign country. Further, Hwang argued that even if Rule 4(f) did not apply, Stars failed to serve him properly under Rule 4(e) governing service within the United States because the Beverly Hills residence was not his dwelling house or usual place of abode. The district court rejected both arguments and denied Hwang’s motion to quash. Shortly thereafter, Hwang filed his answer to the complaint.

Stars’ discovery efforts began in August 1994. Stars sent Hwang a notice stating that his deposition would be taken in Las Vegas on September 23, 1994. One week before the scheduled deposition, Hwang’s counsel notified Stars that Hwang would be in the Orient on September 23, and would therefore be unable to appear at the deposition. Counsel stated that he expected Hwang to return to California in early October, intimating that Hwang would be available for deposition at that time. Thereafter, communication between the parties broke down and they failed to agree on a date for the rescheduled deposition. Stars nevertheless proceeded with the deposition on September 23. Hwang did not appear. Stars promptly filed a motion requesting that the court strike Hwang’s answer and enter a default judgment against him as a sanction for failing to appear at the deposition.

The district court found that “both parties were at least partially responsible” for failing to find a mutually agreeable date for the rescheduled deposition, and thus denied Stars’ motion for sanctions. In an attempt to expedite Hwang’s deposition, the court or[523]*523dered the parties to reach an agreement on a deposition date prior to November 29. Further, the court warned Hwang that

any failure by Defendant to make himself available for deposition within the time period set forth by the court (or any authorized extension thereof), or any failure by Defendant to appear for his rescheduled deposition, will result in the granting of sanctions, which may include the granting of a default judgment in Plaintiffs favor.

On October 31, Stars asked Hwang to provide at least two dates prior to November 29, on which his deposition could be taken in Las Vegas. Hwang did not respond to this request. Stars thereafter set a deposition date for November 23 and sent notice to Hwang. Two days before the deposition was to occur, Hwang’s counsel informed Stars that Hwang was “in the Orient attending to important business matters,” and would not be appearing at the rescheduled deposition. As an alternative, counsel offered to make Hwang available for deposition in China at any time on or before the November 29 deadline set by the court. Stars balked at this proposal and promptly filed a second motion for sanctions with the court.

After argument from counsel on the motion, a magistrate judge directed the parties to brief the issue of where Hwang’s deposition should be taken. After briefing was completed, a second hearing was held in which Hwang’s counsel candidly stated that Hwang would not return to Nevada for purposes of deposition, and expressed exasperation at his client’s unwillingness to do so. Counsel acknowledged his client’s ■ “lack of attentiveness” with respect to the litigation, and indicated that it appeared that Hwang did not intend to cooperate with his own counsel on the matter, much less opposing counsel.

Despite this disclosure from Hwang’s counsel, the magistrate judge declined to grant Stars’ request for a default judgment. Instead, the court imposed sanctions of $2,100 against Hwang, and ordered him to either appear in Las Vegas for his deposition on or before February 10, 1995 or prepay Stars’ expenses to have his deposition .taken in Taiwan by that date. Further, the magistrate judge instructed counsel for Hwang “to convey to his client that obviously if he fails to appear now, the options available to the Court and to the parties are really going to be very narrow and will almost require a default in the case.”

Immediately after this order was entered, Stars informed Hwang that the estimated expense of taking the deposition in Taiwan would be $20,000 to $40,000. More than three weeks later, and eleven days before the February 10 deadline imposed by the court, Hwang informed Stars that he would neither appear for deposition in Las Vegas nor prepay the estimated expenses to have his deposition taken in Taiwan. Thus, February 10 passed without Hwang’s deposition being taken. Thereafter, Stars filed a third motion for sanctions pursuant to Fed.R.Civ.P. 37. In his opposition to the motion, Hwang contended that he did not willfully disobey the court’s order, but rather merely refused to prepay the “excessive” estimate of expenses for taking his deposition in Taiwan.

The district court issued an order striking Hwang’s answer and granting a default judgment. The court gave three reasons for imposing this sanction. First, the court held that

it is not Plaintiffs responsibility to justify the estimate of expenses proposed. The court ordered Defendant to make himself available for deposition by a certain date. He was given options which were designed to ensure that the deposition would be taken and that the inconvenience of any decision to hold the deposition in Taiwan would be borne by him. Therefore, if Defendant believed that the expense estimate proposed by counsel for Plaintiff was unreasonable, it was incumbent upon him to suggest or provide a more mutually acceptable arrangement in order to comply with the court’s Order and hold the deposition before the scheduled date.

The court found that counsel for Hwang failed to make any such suggestion or provision. Second, the court ruled that if Hwang found the expense . estimate excessive, he should have sought a protective order. Finally, the court found that Hwang had not paid the $2,100 sanction imposed by the court [524]*524after his second failure to appear for deposition.

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105 F.3d 521, 97 Cal. Daily Op. Serv. 609, 36 Fed. R. Serv. 3d 1434, 97 Daily Journal DAR 948, 1997 U.S. App. LEXIS 1271, 1997 WL 27115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-stars-desert-inn-hotel-country-club-inc-v-richard-hwang-ca9-1997.