Castillo v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 20 September 1991
• Docket Number: No. 90-2802,90-2802
• Citation: 938 F.2d 776
• Parties: 1991-2 Trade Cases 69,525, 20 Fed.R.Serv.3d 295 Guillermo CASTILLO, Plaintiff-Appellant, and James Walker and Dean Engelbrecht, counsel for plaintiff, Appellants, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Burnham City Hospital, and City of Champaign, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 776

938 F.2d 776

1991-2 Trade Cases 69,525, 20 Fed.R.Serv.3d 295

Guillermo CASTILLO, Plaintiff-Appellant and James Walker and Dean Engelbrecht, counsel for plaintiff, Appellants, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Burnham City Hospital, and City of Champaign, Defendants-Appellees.

No. 90-2802.

United States Court of Appeals Seventh Circuit.

Argued April 18, 1991.

Decided July 30, 1991.

Rehearing Denied Sept. 20, 1991.

James G. Walker, Dean Engelbrecht, Bloomington, Ill., for Guillermo Castillo.

Lawrence R. Samuels, Jeffrey A. Berman, Jacquelyn F. Kidder, Ross & Hardies, Chicago, Ill., Robert C. Hofmann, Dougherty, Hofmann & Goodwin, Danville, Ill., for St. Paul Fire & Marine Ins. Co.

Glenn A. Stanko, Reno, O'Byrne & Kepley, Champaign, Ill., for Burnham City Hosp.

Steve M. Helm, Dukes, Martin, Helm & Ryan, Danville, Ill., for City of Champaign.

James Walker, pro se.

Dean Engelbrecht, pro se.

Before WOOD, Jr., and CUDAHY and RIPPLE, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

Chief Judge Baker labelled the behavior of plaintiff, a doctor, and his counsel "the most outrageous example of evasion and obfuscation that I have seen in years," and "a deliberate frustration of defendants' attempt to secure discovery." He sanctioned the doctor and both of his counsel, holding one in civil contempt. Thereafter Judge Baker dismissed the doctor's case with prejudice saying he was "truly sorry to be brought to this situation" finding it "most distasteful" and "an unfortunate duty." The doctor appeals, represented by attorneys James G. Walker and Dean R. Engelbrecht of James Walker, Ltd. of Bloomington, Illinois, the trial attorneys personally involved who also seek sanction relief in their own behalf. Objected to by the doctor and his counsel on appeal are the sanctions, the contempt and the dismissal. They also launch a counterattack. We affirm Judge Baker in all respects. The doctor and his attorneys' conduct which wasted much district court and attorney time need not waste much more here. The issues will only briefly be examined.

The story begins when doctor Guillermo Castillo, a physician who enjoyed medical staff privileges at Burnham City Hospital in Champaign, Illinois, refused to increase his medical malpractice coverage to the limits required by the medical staff bylaws of the hospital. These new higher limits, a minimum of one million dollars per occurrence and three million dollars aggregate, were imposed to comply with an underwriting requirement of the hospital's malpractice carrier, St. Paul Fire and Marine Insurance Company. ¹ The doctor's failure to comply resulted in the suspension of his medical staff privileges at the hospital. The doctor responded by filing this suit alleging violations of the Sherman and Clayton Acts, the Civil Rights Act of 1871, and the Illinois Antitrust Act, seeking declaratory and injunctive relief, damages, and attorney's fees. ² Any possible merit those allegations might have is not directly at issue in this appeal.

Prior to the discovery problems the doctor sought to have the firm of Reno, O'Byrne and Kepley, P.C. of Champaign, Illinois, disqualified as attorneys for the hospital because the firm had represented the doctor in prior years in other matters. At that same earlier time the firm had represented the hospital as well. Judge Baker carefully examined the conflict charges after briefs and oral arguments. He found no substantial relationship between the firm's prior representation of the doctor and its present representation of the hospital. Largely the prior representation of the doctor was found to have been personal--such as the preparation of wills, profit sharing plans and trusts. There had been, however, some discussion about the doctor being a self-insurer, as the doctor did become, and of insurance plans. Judge Baker found those early attorney-client discussions unrelated to the allegedly anti-competitive practices of the hospital in suspending the doctor from its staff. In any event, whatever relevant information might have passed from the doctor to his former counsel, now the hospital's counsel, was found by Judge Baker not to be of confidential nature, and was in any event easily discoverable. When Judge Baker made that ruling, however, he had no idea how difficult discovery would soon prove to be.

In the doctor's brief the only actual example of the claimed conflict which is cited is a verbatim section of the deposition transcript where defendants' counsel inquires about how long the doctor has been a professional corporation, whether his business expenses are run through the corporation, whether he is basically a paid employee of the corporation, whether he draws a salary, and a final question about whether his self-insurance is accomplished by maintaining a pool or if the doctor's professional corporation is deemed adequate for the purpose. Some of that information would be available from state records, some questions are almost self-answering, but in any event all properly discoverable, and obviously could not have been considered confidential information passed by the doctor to his then-attorneys. The hospital attorneys' prior representation of the doctor in other matters gave the defendants no advantage or insight into his professional corporate affairs of any consequence. We have no basis to disturb Judge Baker's factual findings. If the district court's findings had been otherwise the doctor would, of course, have a legitimate and well-recognized complaint. Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221 (7th Cir.1978). In our view Judge Baker was correct in his assessment of this professionally sensitive situation.

Discovery then began and so did the trouble. In June 1989 each of the defendants, after considerable scheduling difficulties, undertook to depose Dr. Castillo, but did not get very far with it even though it took all day and 281 pages of transcript. The doctor was at this session represented by attorney Dean Engelbrecht, an associate of Walker. The session began by counsel objecting, without prior notice to defendants, to producing certain documents previously requested on the basis that the documents were irrelevant, duplicative, or a violation of physician-patient privilege. The doctor's counsel also made it plain that the requested documents would not be provided because he argued the hospital had itself previously refused to provide the doctor with the same types of documents. Counsel also stated that this was the last and only time the doctor would be made available for a deposition. In spite of this rocky beginning and without the previously requested documents, defendants' counsel proceeded.

After that, from time to time similar objections to questions followed. Sometimes there was a claim the question called for the doctor to speculate or give a legal opinion. If it was deemed irrelevant the doctor was also instructed not to answer in spite of Rule 30(c) requiring that evidence objected to shall be taken subject to objections. A number of questions for one reason or another did not get answered. When counsel for defendants tried to pursue a question which the doctor or his lawyer had tried to fence away the doctor's counsel charged harassment. Counsel, among other things, protected the doctor from answering questions about claimed damages, the meaning of letters the doctor had signed, and other questions related to the allegations of the complaint. The objections were on the basis that the doctor was not a lawyer and the letters and complaint, although signed by the doctor, had been composed by his present counsel. The questions called for legal conclusions or violated the privilege, it was claimed. Then followed some discussion about whether the deposition would have to be of the doctor's counsel. The doctor, however, needed little protection by his counsel as he was very adept at evading the questions, giving unresponsive answers and stonewalling.

Judge Baker fully reviewed the deposition objections after defendants filed motions to compel discovery and to require answers from the doctor. He found no merit in the particular objections whether for relevance or privilege or otherwise. Even if some particular question may have had some basis for an objection, that would not cure the overwhelming and continuing abuse of the discovery process by the plaintiff and his counsel throughout much of the deposition.

After reading the deposition, this court fully agrees with Judge Baker. It is plain, as Judge Baker said, that the doctor's counsel was engaged in a "deliberate frustration of defendants' discovery attempts." As a result of that conduct Judge Baker assessed fees and expenses of $6,317.66 divided equally between the doctor and his counsel. That assessment was fully warranted. A district judge has wide discretion in these discovery matters and we will not disturb the rulings absent a clear finding of abuse of discretion, Brown-Bey v. United States, 720 F.2d 467, 470-71 (7th Cir.1983), and there was none.

As some of the deposition questions therefore had not been answered, Judge Baker directed that they forthwith be answered without interference from the doctor's counsel. A further effort was made to depose the doctor. This time it was attorney James Walker who appeared with the doctor, but this lawyer substitution did not improve the situation. Attorney Engelbrecht was also present. As Judge Baker later found and as is evident to us from the deposition, the doctor's counsel willfully and contumaciously disobeyed the court's order by interfering with the questions posed by defendants' counsel, and by directing the doctor not to respond to certain questions already approved by the court. The only issue of any possible consequence was the challenge to the questions allegedly on the basis of attorney-client privilege which, if answered, might waive the privilege. Judge Baker...