Aurora Credit Services v. Liberty West Dev.

• Decision Date: 16 February 2006
• Docket Number: No. 20041080-CA.,20041080-CA.
• Citation: 129 P.3d 287,2006 UT App 48
• Parties: AURORA CREDIT SERVICES, INC., a Minnesota corporation, on behalf of itself and all other shareholders of Liberty West Development, a corporation, Plaintiff and Appellant, v. LIBERTY WEST DEVELOPMENT, INC., a Utah corporation; XM International, a Utah limited liability company; and Dennis W. Gay, an individual, Defendants and Appellees.
• Court: Utah Court of Appeals

129 P.3d 287

2006 UT App 48

AURORA CREDIT SERVICES, INC., a Minnesota corporation, on behalf of itself and all other shareholders of Liberty West Development, a corporation, Plaintiff and Appellant, v. LIBERTY WEST DEVELOPMENT, INC., a Utah corporation; XM International, a Utah limited liability company; and Dennis W. Gay, an individual, Defendants and Appellees.

No. 20041080-CA.

Court of Appeals of Utah.

February 16, 2006.

Rehearing Denied March 7, 2006.

Eric P. Hartman, Salt Lake City, for Appellant.

James E. Magleby and Christine T. Greenwood, Magleby & Greenwood PC, Salt Lake City, for Appellees.

Before Judges BENCH, DAVIS, and McHUGH.

MEMORANDUM DECISION

DAVIS, Judge:

¶ 1 Plaintiff Aurora Credit Services, Inc. (Aurora) appeals the trial court's entry of final judgment in favor of Defendants. We affirm.

¶ 2 This appeal arises out of Aurora's failure to respond to discovery requests.¹ On December 4, 2002, Defendants served Aurora with document requests and interrogatories. Defendants did not receive responses to these discovery requests in a timely manner and, as such, filed a motion to compel on January 14, 2003. See Utah R. Civ. P. 37(a). The trial court granted the motion in an order dated April 8, 2003 (April 8 Order), giving Aurora until May 19, 2003, to respond to Defendants' discovery requests and ordering all discovery to be completed by May 26, 2003. Although Aurora purported to serve written responses to Defendants' discovery requests on May 7, 2003, Aurora refused to produce any of the documents requested and provided very little information in response to Defendants' interrogatories. Defendants therefore filed a motion for sanctions pursuant to rule 37 of the Utah Rules of Civil Procedure. See id. 37(b). The trial court granted Defendants' motion for sanctions and dismissed Aurora's second amended complaint with prejudice. Aurora timely filed this appeal.

¶ 3 Aurora argues that it was under no obligation to respond to Defendants' discovery requests because the requests were mailed to an incorrect address,² despite the fact that Aurora's counsel actually received the requests a week after they were mailed. Because Defendants' discovery requests purportedly were not served in accordance with rule 5 of the Utah Rules of Civil Procedure, see id. 5(b)(1) (requiring that service upon a party's attorney be made upon the attorney's "last known address"), Aurora contends that the trial court had no authority to grant Defendants' motion to compel. We review the grant or denial of a motion to compel discovery under an abuse of discretion standard. See Pack v. Case, 2001 UT App 232, ¶ 16, 30 P.3d 436.

¶ 4 Utah courts have held that actual notice of discovery requests is sufficient to invoke rule 37. See, e.g., Morton v. Continental Baking Co., 938 P.2d 271, 275 (Utah 1997) (affirming the trial court's dismissal of plaintiff's claims under rule 37 where plaintiff "admitted that he received the discovery requests as well as the motion to compel" because it was "disingenuous for [plaintiff] to ... argue that he was not aware of his obligation to respond"); Utah Dep't of Transp. v. Osguthorpe, 892 P.2d 4, 8 (Utah 1995) (affirming default judgment against defendant under rule 37, even though defendant denied receiving some of the discovery motions, because defendant "was given ample notice of the proceedings against him and his obligations under the law"). And, under the Utah Rules of Civil Procedure, a party responding to discovery requests must do so within thirty days of their service or risk suffering the consequences for failure to do so. See Utah R. Civ. P. 33(b)(3)-(4) (interrogatories), 34(b)(2) (production of documents), 37(a)-(b) (sanctions for failure to cooperate in discovery); Tuck v. Godfrey, 1999 UT App 127, ¶ 27, 981 P.2d 407 ("Under [r]ule 34, parties have thirty days in which to serve a written response to discovery requests. Failure to respond in the appropriate time frame may subject the noncomplying party to sanctions under [r]ule 37." (citation omitted)); W.W. & W.B. Gardner, Inc. v. Park W. Vill., Inc., 568 P.2d 734, 738 (Utah 1977) (affirming default judgment pursuant to rule 37, where defendant failed to respond to discovery within thirty days, because "[a] defendant may not ignore with impunity the requirements of [r]ules 33 and 34, and the necessity to respond within thirty days").

¶ 5 Here, Defendants served Aurora with their discovery requests on December 4, 2002. However, due to the single-digit typographical error in counsel's address, Aurora did not receive the discovery requests until approximately December 11, 2002. At the very latest, therefore, Aurora was required to serve written responses to Defendants' discovery requests on or before January 10, 2003.³ Yet, Aurora's first written response did not come until January 16, 2003, when Aurora argued in a motion to strike the discovery requests that a prior court order precluded Defendants from conducting further discovery. It was not until January 27, 2003, when Aurora filed its opposition to Defendants' motion to compel, that Aurora first raised the issue of Defendants' allegedly inadequate service. Quite simply, Aurora did not respond to Defendants' discovery requests within the thirty days required by the Utah Rules of Civil Procedure and did not even raise the issue of proper service of Defendants' discovery requests until well after the thirty days had expired. Because Aurora did not file any written response whatsoever within the thirty days defined in the Utah Rules of Civil Procedure, it was well within the trial court's discretion to grant Defendants' motion to compel discovery pursuant to rule 37.

¶ 6 Aurora next argues that it did not violate the April 8 Order because that Order required Aurora to "respond" to Defendants' discovery requests and Aurora did just that when it served written responses and objections on May 7, 2003. We review the trial court's finding that Aurora violated the April 8 Order for an abuse of discretion. See Schoney v. Memorial Estates, Inc., 790 P.2d 584, 585 (Utah Ct.App.1990) ("Management of the actions pending before it is uniquely the business of the trial court and while an appellate court may, of course, intervene if discretion is abused, we accord trial courts considerable latitude in this regard and considerable deference to their determinations concerning discovery."). A "complete failure" to comply with discovery is not required to find that a motion to compel discovery has been violated. Hales v. Oldroyd, 2000 UT App 75, ¶ 18, 999 P.2d 588 ("No finding of a `complete failure' to comply with discovery is required. Indeed, dismissal as a discovery sanction has been upheld for late or incomplete discovery responses.").

¶ 7 Here, the trial court did not abuse its discretion in determining that Aurora violated the April 8 Order. The body of that Order consists of three paragraphs. In the first paragraph, the trial court granted Defendants' motion to compel discovery and gave Aurora until May 19, 2003, to respond to Defendants' discovery requests. In the second paragraph, the trial court stated that it would appoint a special master to preside over any discovery "disputes" that remained after Aurora responded. Finally, the third paragraph of the April 8 Order ordered all discovery to be completed by May 26, 2003.⁴ Despite the clear language of the April 8 Order, to date Aurora has provided almost no information in response to Defendants' interrogatories and has refused to produce any of the documents Defendants requested. Instead, on May 7, 2003, Aurora chose to serve written responses that consisted primarily of objections, all of which were served almost four months after they were due and were therefore waived. See Tuck, 1999 UT App 127 at ¶ 28, 981 P.2d 407 ("Any challenge to the merits of a discovery request must be timely filed ... or the claim will be waived."); Hales, 2000 UT App 75 at ¶ 24, 999 P.2d 588 (same).

¶ 8 Aurora also has continued to rely upon the special master language contained in the April 8 Order, arguing that Aurora was "harmed by the court's failure to abide by its prior promise to appoint a special master." However, such argument is contrary to the very language of that Order, which called for the appointment of a special master if there remained any discovery "disputes" after Aurora responded to Defendants' discovery requests. The language referencing the special master in no way relieved Aurora from complying with the April 8 Order. Furthermore there was no discovery "dispute" to resolve here; instead, Aurora simply refused to provide information and documents in response to Defendants' discovery requests. Because Aurora failed to adequately respond to Defendants' discovery requests by May 19, 2003, and completely disregarded the trial court's discovery cut-off date of May 26, 2003, the trial court did not abuse its discretion in determining that Aurora violated the April 8 Order.

¶ 9 Aurora next contends that the trial court erred when it dismissed Aurora's second amended complaint with prejudice pursuant to rule 37(b). Under rule 37(b), a party that "fails to obey an order to provide or permit discovery" may be subject to an order "dismissing the action or proceeding." Utah R. Civ. P. 37(b)(2)(C). A party's conduct merits sanctions under this rule if "(1) the party's behavior was willful; (2) the party has acted in bad faith; (3) the court can attribute some fault to the party; or (4) the party has engaged in persistent dilatory tactics tending to frustrate the judicial process." Morton v. Continental Baking Co., 938 P.2d 271, 276 (Utah 1997). "To support a finding of willfulness, there need only be any intentional failure as distinguished from involuntary noncompliance. No wrongful intent need be shown. Once this threshold is met, the choice of an appropriate discovery sanction is primarily the responsibility of the trial judge." Tuck...