693 F.2d 1350 (11th Cir. 1982), 81-5351, State Exchange Bank v. Hartline

• Docket Number: 81-5351.
• Citation: 693 F.2d 1350
• Date: 20 December 1982
• Parties: The STATE EXCHANGE BANK, a banking corporation organized and existing under the laws of the State of Florida, Plaintiff-Appellee, v. R.F. HARTLINE and Mrs. R.F. Hartline, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1350

693 F.2d 1350 (11th Cir. 1982)

The STATE EXCHANGE BANK, a banking corporation organized and

existing under the laws of the State of Florida,

Plaintiff-Appellee,

v.

R.F. HARTLINE and Mrs. R.F. Hartline, et al., Defendants-Appellants.

No. 81-5351.

United States Court of Appeals, Eleventh Circuit

December 20, 1982

William A. Wehunt, Atlanta, Ga., Zuckerman, Spaeder, Taylor & Kolker, Michael R.

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Smith and William W. Taylor, III, Washington, D.C., Zuckerman, Spaeder, Taylor & Evans, Coral Gables, Fla., for defendants-appellants.

Mahoney, Hadlow & Adams, Thomas M. Baumer, Baumer & Bradford, Jacksonville, Fla., John E. Norris, Lake City, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before RONEY and KRAVITCH, Circuit Judges, and TUTTLE, Senior Circuit Judge.

RONEY, Circuit Judge:

In four suits on promissory notes, defendants appeal the striking of their affirmative defenses, dismissal of their counterclaims, and entry of summary judgment for the plaintiff bank. Viewing these actions as well within the district court's discretion because of defendants' numerous violations of pretrial orders, we affirm.

The propriety of striking the affirmative defenses and counterclaims is the key to this decision. The defendants concede that without these defenses, the plaintiff bank is entitled to summary judgment on its promissory notes. They admit executing and defaulting on the notes.

A brief review of the proceedings illustrates why the district court took the rather drastic step of striking defendants' pleadings. In 1973 defendants agreed to purchase and lease cattle from various breeders. To finance these ventures, defendants obtained over $200,000 in loans from plaintiff bank. When defendants stopped paying on those loans, the bank filed suit on the promissory notes. It brought three actions in 1976 and one in 1977. In defense the borrowers alleged in effect that the bank had conspired with the breeders to defraud them by, among other things, providing fewer and inferior cattle than the agreement required. Defendants also counterclaimed against the bank and breeders for common-law and securities fraud.

After filing their affirmative defenses and counterclaims and removing the actions to federal court, defendants did little to further the litigation of their defenses and counterclaims, all that stood in the way of a judgment for plaintiff. Defendants did not begin to take discovery until February 1981, nearly four years after the bank filed its last action. Defendants apparently never served their counterclaims on any of the breeders named as counterdefendants.

Defendants disregarded many court orders. After the district court in 1977 ordered counsel to meet and arrive at a pretrial stipulation, the court found that defendants were to blame for the failure to hold a meeting. At that time, the court refused to impose sanctions as requested by the bank. The court warned defendants, however, that they were expected to comply literally with all future orders. The court had to threaten to strike their pleadings and grant them an extension of time before defendants finally filed a pretrial stipulation and designated the first of many local counsel.

The suits largely lay dormant over the next two years except that plaintiffs engaged in discovery. As with the filing of the pretrial stipulation, the discovery process featured unnecessary delay caused by defendants. Defendants Manfred and Theresa Rudy did not adequately answer interrogatories until after the court twice compelled them to respond, threatened them with dismissal of their counterclaim and required them to pay the attorney's fees incurred by plaintiff in seeking the court orders.

In January 1980 the court ordered the parties' counsel to confer and file a joint status report. Despite receiving an extension of time, joint defense counsel failed to attend a scheduled status conference. Indeed, he did not respond to the January order or to plaintiff's subsequent motion to strike defendants' pleadings until October, claiming incredibly that he had just then opened his mail from January and that he

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thought he had withdrawn from the cases....