834 F.2d 869 (10th Cir. 1987), 85-2857, M.E.N. Co. v. Control Fluidics, Inc.

Docket Nº85-2857.
Citation834 F.2d 869
Party NameM.E.N. CO., a joint venture, Daniel P. Svilar, Nick Bebout, Eli Bebout, John L. Larsen, and Margaret Leann Larsen as Executrix of the Estate of G. Lloyd Larsen, Plaintiffs-Appellees, v. CONTROL FLUIDICS, INC., International Water Savings Systems, Inc., Walter O. Heinze, John White, and Water Savings Devices Limited Partnership, Defendants-Appellant
Case DateDecember 03, 1987
CourtUnited States Courts of Appeals, Court of Appeals for the Tenth Circuit

Page 869

834 F.2d 869 (10th Cir. 1987)

M.E.N. CO., a joint venture, Daniel P. Svilar, Nick Bebout,

Eli Bebout, John L. Larsen, and Margaret Leann

Larsen as Executrix of the Estate of G.

Lloyd Larsen, Plaintiffs-Appellees,

v.

CONTROL FLUIDICS, INC., International Water Savings Systems,

Inc., Walter O. Heinze, John White, and Water

Savings Devices Limited Partnership,

Defendants-Appellants.

No. 85-2857.

United States Court of Appeals, Tenth Circuit

December 3, 1987

Page 870

Patrick Dixon of Murane & Bostwick, Casper, Wyo., for defendants-appellants.

Michael D. Zwickl of Beech Street Law Offices, Casper, Wyo., for plaintiffs-appellees.

Before SEYMOUR and ANDERSON, Circuit Judges, and BROWN, [*] District Judge.

SEYMOUR, Circuit Judge.

The District Court for the District of Wyoming entered a default judgment against defendants after they and their attorneys failed to provide discovery or appear for noticed depositions, and then failed to obey a court order to appear for depositions, file a pretrial memorandum, and pay sanctions to plaintiffs. Defendants moved to vacate the default judgment primarily on the ground that defendants' attorneys, rather than defendants personally, had been at fault. The court denied the motion. Defendants appeal the default judgment, the denial of the motion to vacate, and the denial of an earlier motion to dismiss the action for failure to state a claim. Because the court's sanction was directed to defendants rather than their attorneys, we reverse the default judgment and remand for findings on whether defendants' conduct meets the appropriate standard.

I.

Defendants are based in New York City, with the exception of defendant Heinze who has retired to Arizona. When plaintiffs brought suit in Wyoming in September

Page 871

1984, defendants' New York counsel, Terri Feinstein, hired Robert J. O'Neil as Wyoming counsel. The extent of communication, or the lack thereof, between Feinstein, O'Neil, and their clients is central to our disposition of this case.

In January 1985, a pretrial conference took place and a schedule was established. The cutoff for discovery was set for May 10, the final pretrial for June 24, and the trial for July 29. The court subsequently extended the discovery cutoff four times, primarily because defendants failed to respond to plaintiffs' discovery requests or to attend depositions.

In April 1985, the court denied defendants' motion to dismiss. Plaintiffs then attempted to depose defendant White and the president of defendant Control Fluidics, Inc., Biller, in New York. O'Neil arranged for the deposition to be rescheduled because he had not yet submitted any written discovery to plaintiffs. Feinstein then rejected the second date noticed by plaintiffs as inconvenient, but apparently made no attempt to suggest dates that were convenient. It is not clear from the record whether she consulted with her clients before rejecting the date plaintiffs set; she already had other commitments herself on that date. O'Neil told plaintiffs that the date was not convenient. Although plaintiffs' counsel denies that he cancelled the deposition, O'Neil assumed that he had. Plaintiffs traveled to New York for the scheduled depositions even though plaintiffs' counsel admits that he knew defendants would not appear. Defendants, not surprisingly, did not attend. Plaintiffs then moved to compel discovery and for sanctions. The hearing on this motion was set for June 24, the date of the final pretrial conference.

Meanwhile, O'Neil left for National Guard duty in Idaho for three weeks. During his absence, plaintiffs obtained the third discovery cutoff extension and noticed the deposition of defendant Heinze. The notice was sent directly to Heinze. He did not receive it until the morning of the deposition or shortly before, 1 and did not appear at the deposition, which was scheduled in a different city.

O'Neil returned on the 18th of June. According to local court rules, the pretrial memorandum was due on the 19th, five days before final pretrial conference. O'Neil and Feinstein apparently each thought the other would prepare the memorandum; neither did. Consequently...

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