Adriana Intern. Corp. v. Thoeren, s. 88-6107
| Decision Date | 10 September 1990 |
| Docket Number | Nos. 88-6107,88-6424,s. 88-6107 |
| Citation | 913 F.2d 1406 |
| Parties | ADRIANA INTERNATIONAL CORPORATION, Plaintiff-counter-defendant-Appellant, and Lewis & Company; L. Burke Lewis; Amy J. Cassedy; Arthur L. Martin, Intervenors-Appellants, v. Konstantin THOEREN; Patrola Films, Inc.; Patrola, G.m.b.H., Defendants-counter-claimants-Appellees, v. Hans A. KUNZ; Anthony M. Midgen; Kemal Zeinal-Zade; Arian Films Productions, Ltd., Third-party-defendants-Appellants. Burke LEWIS; Amy J. Cassedy; Arthur L. Martin; Lewis & Company, Intervenors-Appellants, and Hans A. Kunz; Anthony M. Midgen; Arian Films Productions, Ltd., Cross-defendants-Appellants, v. Konstantin THOEREN, et al.; Patrola Films, Inc.; Patrola, G.m.b.H., Defendants-counter-claimants-cross- claimants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Michael K. Collins, Los Angeles, Cal., for appellants Adriana Intern. Corp., et al. and Hans A. Kunz, et al.
L. Burke Lewis, Lewis & Co., Malibu, Cal., for appellant Lewis & Co., et al.
Michael K. Zweig, Sacks & Zweig, Santa Monica, Cal., for appellees Konstantin Thoeren, et al.
Appeal from the United States District Court for the Central District of California.
Before ALARCON, BRUNETTI and O'SCANNLAIN, Circuit Judges.
Adriana International Corporation, Arian Film Productions, Kemal Zade, Hans Kunz and Anthony Midgen (collectively "Adriana") appeal from the district court's dismissal of Adriana International Corporation's complaint, striking of all their answers to cross-claims and entry of default judgment as a sanction for discovery abuses. The court entered a judgment in favor of Thoeren for $8.5 million. 1
The imposition of discovery sanctions pursuant to Fed.R.Civ.P. 37 is reviewed for abuse of discretion. North American Watch Co. v. Princess Ermine Jewels, 786 F.2d 1447, 1450 (9th Cir.1986). Absent a definite and firm conviction that the district court made a clear error in judgment, this court will not overturn a Rule 37 sanction. Halaco Engineering Co. v. Costle, 843 F.2d 376, 379 (9th Cir.1988). Findings of fact related to a motion for discovery sanctions are reviewed under the clearly erroneous standard. Id. If the district court fails to make factual findings, the decision on a motion for sanctions is reviewed de novo. United States for the Use and Benefit of Wiltec Guam, Inc. v. Kahaluu Construction Co., 857 F.2d 600, 603 (9th Cir.1988).
We apply an abuse of discretion standard in reviewing all aspects of a district court's decision in imposing sanctions under Rule 11. Cooter & Gell v. Hartmarx Corp., --- U.S. ----, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990).
The underlying actions in this case involve an oral agreement between Adriana and Thoeren pursuant to which Thoeren was to produce movies in the Soviet Union. As part of this deal, Adriana Corporation was formed. Thoeren was to own 30% of the stock, in addition to receiving a salary. The remainder of the stock was owned by Kunz, Zade and Midgen. All of the Adriana stock was to be held in trust by Adriana Film Productions (AFP), a Bahamian corporation controlled by Zade in which Kunz and Midgen are officers and directors. No films were ever produced pursuant to the agreement.
In October, 1986 Adriana sued Thoeren for breaching the agreement. Thoeren filed an answer and counterclaims against Adriana Corporation. Thoeren also filed cross-claims against Zade, Kunz, Midgen and AFP. Lewis was hired to represent Adriana Corporation, Zade, Kunz, Midgen and AFP. On December 16, Thoeren requested an initial meeting with counsel pursuant to Local Rule 6. Lewis failed to appear for the meeting.
On December 31, Thoeren served notice of a discovery request seeking depositions on February 5 and production of documents on February 2. Another copy of this request was sent to Adriana on January 30, 1987.
On February 2, 1987 Adriana failed to produce any documents as requested in the December 31 notice and sent no written response. On February 5, 1987 Lewis and his client failed to appear for the properly noticed deposition of Adriana Corporation. On February 9, Lewis served a response to Thoeren's request for production of documents listing various objections.
On February 13, Adriana sent a letter to Thoeren alleging Thoeren's attorney had a conflict of interest and refusing to produce any documents or attend discovery based on this. On February 24, Thoeren again requested production of documents by March 2 and depositions on March 5. On March 2, Adriana refused to produce any documents.
On March 3, the district court ordered Adriana to produce all documents requested and appear for deposition. The court warned Adriana that they were getting into "deep trouble." On March 4, Adriana produced a few documents. On March 24, the court ordered monetary sanctions against Lewis and Adriana for their refusal to sign the Local Rule 6 Joint Statement. On March 16, the court denied Adriana's motion to disqualify Thoeren's counsel and sanctioned them for bringing a frivolous motion. The court also ordered a special master to preside over discovery. Adriana did not pay the court-ordered sanctions when requested by Thoeren on March 17 and 23.
On March 23, the special master ordered Adriana to disclose information regarding AFP. Adriana did not, and Thoeren was unable to serve AFP as the corporation was incorrectly identified in the pleadings. On April 30, the special master ordered Adriana to produce documents no later than May 4 and awarded sanctions against Adriana. On May 4, Adriana again failed to produce documents. The special master found that Adriana's failure to produce documents was willful.
Adriana produced some documents on May 6, 1987. On May 19, the court found Lewis and Adriana in contempt for failure to pay the sanctions ordered on March 16 and sanctioned them an additional $2,500.
On June 8, the special master ordered Adriana to produce documents claimed by Adriana to be privileged. On June 23, Midgen's deposition was to be taken. On that day, Adriana made an oral motion for a protective order to stop all discovery which was denied by the special master. The deposition was canceled due to Lewis' illness and reset for June 24. The special master also ordered production of documents still not produced, and further ordered On July 1, Lewis informed Thoeren that Kunz and Zade would not appear for the depositions. No motions for protective orders were filed. Kunz and Zade failed to appear for depositions on July 7-10. Lewis continued to refuse to produce various documents.
Kunz' deposition on July 7th and 8th, Zade's deposition on July 9th and 10th, and Thoeren's deposition on July 14, 15 and 16.
On November 10, the special master again ordered production of documents. The special master gave Adriana twenty days to appeal the order to the district court but Adriana did not. Adriana did not produce the documents.
On November 23, the district court ordered the deposition of Kunz and Zade for December 14. Kunz and Zade failed to appear for depositions and no motions for protective orders were filed.
On February 16, 1988 the district court granted Thoeren's motion to dismiss Adriana Corporation's complaint, to strike Adriana's answers to the cross and counterclaims and to enter a default judgment. The court based its decision on the willful refusal of Adriana, acting through their counsel, to proceed with discovery and to obey the orders of the court and the special master. The court entered a default judgment for $8.5 million for Thoeren against Adriana on April 14. The court amended its judgment on April 29 to correct some clerical errors.
Adriana filed a motion to reconsider the judgment, which was denied. The court sanctioned Adriana under Fed.R.Civ.P. 11 for the motion to reconsider because it was frivolous. Adriana then appealed to this court, presenting a myriad of arguments in their four opening briefs. 2
Adriana argues that the special master's actions in imposing discovery sanctions were unconstitutional because the special master was performing the functions of an Article III judge. However, an objection to the appointment of a special master must be made at the time of the appointment or within a reasonable time thereafter or the party's objection is waived. Spaulding v. University of Washington, 740 F.2d 686, 695 (9th Cir.), cert. denied, 469 U.S. 1036, 105 S.Ct. 511, 83 L.Ed.2d 401 (1984), overruled on other grounds Atonio v. Wards Cove Packing Co., 810 F.2d 1477 (9th Cir.1987).
Adriana did not object to the appointment of the special master at the time of the appointment. Adriana attended numerous meetings, depositions and hearings with the special master regarding discovery throughout March, April, May and June of 1987. Adriana finally objected to the appointment of a special master on July 6, 1987. Because the objection was not filed within a "reasonable time" of the appointment, Adriana waived its objection to the special master's appointment.
The district court imposed the sanction of a default judgment against Adriana pursuant to Fed.R.Civ.P. 37(b) and (d) because of their numerous discovery abuses. 3
In their opening brief, Adriana does not dispute the facts but instead argues that their actions do not constitute discovery abuses. The district court found that Adriana, through their counsel, had violated several court orders. The court cited to the failure to produce documents as ordered by the court on March 3 and subsequently by the special master; failure to appear as ordered at deposition on July 7-10, on November 23, and on December 14-16; failure to make themselves available for deposition in June, 1987 and making misrepresentations regarding the depositions; and...
To continue reading
Request your trial
-
Monterey Bay Military Hous., LLC v. Pinnacle Monterey LLC
... ... entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d ... 3 (N.D.Cal.2013) ; Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1417 n. 12 (9th ... ...
-
Devin v. United Services Auto. Assn.
... ... 641; Adriana Intern. Corp. v. Thoeren (9th Cir.1990) 913 F.2d 1406, ... ...
-
Chemtall, Inc. v. Citi-Chem, Inc.
... ... Mazda Motor Corp., 123 F.3d 1353, 1367 (11th Cir.1997), ... & PROC. CIVIL 2d § 2688 (1997 Supp.); Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir ... ...
-
Lutz v. Glendale Union High School
... ... See Fed.R.Civ.P. 38(b); Pac. Fisheries Corp. v. HIH Cas. & Gen. Ins., Ltd., 239 F.3d 1000, 1002 n. 2 ... See Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1408 (9th ... ...
-
Current Status of Rule 11 in the Ninth Circuit and Washington State
...105. Id. at 1535, 1539. 106. Id. at 1542. 107. 844 F.2d 646 (9th Cir. 1988). 108. Id. at 652. See also Adriana Corp. v. Lewis and Co., 913 F.2d 1406 (9th Cir. 1990) (frivolous motion to reconsider); West Coast Theater Corp. v. Portland, 897 F.2d 1519 (9th Cir. 1990) (complete failure to art......
-
§53.3.8 Strategic and Practical Considerations
...a reasonable time thereafter or the party's objection is waived.") (quoting Fed. R. Civ. P. 53(b)); Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1410 (9th Cir. 1990), cert, denied sub nom. Lewis & Co. v. Thoeren, 498 U.S. 1109 (1991); see also Johnson Controls v. Phoenix Control Sys., 886......