Dambrowski v. Champion Intern. Corp.

• Decision Date: 06 June 2000
• Docket Number: No. 99-021.,99-021.
• Citation: 2000 MT 149,300 Mont. 76,3 P.3d 617
• Parties: Michael DAMBROWSKI, Plaintiff and Appellant, v. CHAMPION INTERNATIONAL CORP. and Compensation Adjusters, Inc. and Carol Posterino, individually and d/b/a Compensation Adjusters, Inc., Defendants and Respondents. Rex Palmer, Real Party in Interest and Appellant.
• Court: Montana Supreme Court

3 P.3d 617

2000 MT 149

300 Mont. 76

Michael DAMBROWSKI, Plaintiff and Appellant, v. CHAMPION INTERNATIONAL CORP. and Compensation Adjusters, Inc. and Carol Posterino, individually and d/b/a Compensation Adjusters, Inc., Defendants and Respondents.

Rex Palmer, Real Party in Interest and Appellant.

No. 99-021.

Supreme Court of Montana.

Submitted on Briefs July 29, 1999.

Decided June 6, 2000.

Rehearing Denied July 6, 2000.

Rex Palmer, Attorney at Law, Missoula, Montana, For Appellant.

Keith Strong, John A. Kutzman; Dorsey & Whitney, Great Falls, Montana, for Champion International.

Donald C. Robinson, Steven M. Hamilton; Poore, Roth & Robinson, Butte, Montana, for Compensation Adjusters, Inc., and Carol Posterino, For Respondents.

Justice W. WILLIAM LEAPHART delivered the Opinion of the Court.

¶ 1 Rex Palmer appeals the orders of the District Court.

¶ 2 We affirm.

¶ 3 We restate the issues as follows:

¶ 4 1. Whether the District Court abused its discretion in imposing discovery sanctions. ¶ 5 2. Whether the District Court erred in denying Palmer's motion to disqualify the Honorable Judge Larson.

Standard of Review

¶ 6 We review a district court's grant of sanctions pursuant to Rule 37, M.R.Civ.P., for abuse of discretion. See Eisenmenger v. Ethicon, Inc. (1994), 264 Mont. 393, 402, 871 P.2d 1313, 1319.

Factual and Procedural Background

¶ 7 We note the pertinent facts in what is an extraordinarily lengthy record. While employed with Champion International Co. (Champion), Michael Dambrowski (Dambrowski) filed claims for employment-related injuries. At the time of those claims, Champion was self-insured for purposes of workers' compensation and employed Compensation Adjusters, Inc. (Compensation Adjusters) to handle the adjustment of workers' compensation claims for Champion's employees. In September, 1994 Dambrowski filed a complaint against the Respondents in the present case "for intentional torts, statutory violations and violation of the covenant of good faith and fair dealing in the adjusting and settling of his Montana Workman's Compensation claim." Dambrowski's claims arose out of his employment with Champion. In May, 1996 Compensation Adjusters and Carol Posterino (Posterino) listed Dambrowski's attorney, Rex Palmer (Palmer), as a trial witness. Compensation Adjusters later contended that it had a compelling need to obtain Palmer's opinion work product regarding his handling of Dambrowski's case. In June, 1996 Palmer filed a motion to bar Respondents from calling him as a witness. In August, 1996 Compensation Adjusters and Posterino moved to compel Palmer to submit to a discovery deposition. Palmer opposed that motion at a hearing.

¶ 8 In January, 1997 the District Court denied Dambrowski's motion in limine to prevent Respondents from calling Palmer as a witness and granted Respondents' motion to depose Palmer, concluding that their motion would "not work substantial prejudice to any party and additional discovery was clearly contemplated under the Pre-Trial Order." At a scheduling conference held later in January, 1997, the District Court requested that the deposition be done before the end of April.

¶ 9 In April, 1997 Compensation Adjusters' counsel and Palmer agreed on May 28, 1997 as the date for his deposition. Thereafter, Compensation Adjusters and Posterino filed a notice of Palmer's deposition. On May 13, 1997 Compensation Adjusters faxed Palmer a proposed subpoena duces tecum. On May 27, 1997 Palmer filed a motion to quash subpoena and motion for protective order and canceled his deposition. Following a hearing, the District Court denied Dambrowski's motion for a protective order, ordered that Palmer's deposition be taken within ten days, and directed Palmer to log the items in his file that he claimed were privileged.

¶ 10 Palmer's deposition was reset for June 4, 1997. At his deposition, Palmer stated that unless Respondents agreed to a stipulation that he had prepared, he would not answer questions about his file for Dambrowski or his representation of him. Respondents rejected Palmer's proposed stipulation and the deposition was concluded. That same day, the District Court held a hearing on Palmer's deposition. Thereafter, Compensation Adjusters and Posterino moved to disqualify Palmer as counsel. Champion moved for the imposition of sanctions against Palmer pursuant to Rules 11 and 37, M.R.Civ.P., and for dismissal of the case with prejudice. On June 16, 1997 the District Court stayed all existing discovery obligations and deadlines until further order of the District Court. On June 23, 1997 Palmer responded to Champion's motion for sanctions but did not request a hearing on sanctions. The parties jointly moved the District Court to vacate all deadlines, including the trial date, and the District Court granted their motion on July 28, 1997. In October, 1997, Palmer filed a "Local Rule 3F Reminder to Court" but again did not request a hearing on Champion's motion for sanctions.

¶ 11 In an Opinion and Order entered in April, 1998, the District Court denied Compensation Adjusters and Posterino's motion, which Champion joined, to disqualify Palmer from representing Dambrowski but also directed Palmer's associate to "act as lead counsel in this matter in both the pre-trial and trial phases, until the litigation has concluded." Turning to Dambrowski's motions to quash subpoena and for a protective order regarding the deposition of Rex Palmer, the District Court concluded that it had previously determined those issues in its January, 1997 Order and that Palmer "must pay as sanctions the cost of Champion's and Compensation Adjust[e]rs' response to the Motion...." The District Court further ordered that Palmer would "appear and cooperate at a deposition to be scheduled by Defendants at their convenience. Prior to the deposition, Palmer must submit a new document log to the Court with specific reasons for the withholding of any documents."

¶ 12 Further, the District Court denied Champion's motion to dismiss the action but found that "Palmer's behavior and lack of respect toward opposing counsel, and this Court is reprehensible.... Palmer personally, not Dambrowski, must pay all costs of Champion's and Compensation Adjust[e]r's preparation for and participation in the two scheduled depositions as well as the hearings that resulted from Palmer's failure to cooperate. Additionally, Palmer must pay the cost of preparation of all briefs filed as a result of his failure to comply with the Court's orders beginning January 6, 1997." Champion submitted a sealed statement of fees; Compensation Adjusters and Posterino submitted statements of fees and costs. Palmer filed objections to Respondents' fees and costs and requested "a hearing regarding the reasonableness and factual accuracy of [Respondents'] fees and cost statement." The District Court set a hearing for July 15, 1998. Compensation Adjusters and Posterino filed a notice of deposition for Palmer, scheduling his deposition for June 26, 1998.

¶ 13 On June 16, 1998 Dambrowski petitioned this Court for a writ of supervisory control. Three days later, Dambrowski moved the District Court for a stay of proceedings; the District Court denied Dambrowski's motion. On June 22, 1998 Dambrowski filed a motion to amend and a request for stay with this Court. On June 26, 1998 Palmer attended his deposition and produced his file together with an objection log. At his deposition Palmer answered under objection Respondents' questions about his handling of Dambrowski's case. Thereafter, this Court granted Dambrowski's motion for a stay of proceedings. In response, the District Court vacated the July, 1998 hearing on Defendants' costs and fees. In August, 1998 we denied Dambrowski's petition for supervisory control without prejudice, concluding that "whether Palmer's deposition should have been ordered and taken is moot" as his deposition had been taken.

¶ 14 In September, 1998 the District Court held a scheduling conference and granted Palmer's request to resume the role of lead counsel. Palmer advised the District Court that he questioned whether sanctions should be imposed, and the District Court granted Palmer until October 1, 1998 to file a request for hearing. On October 1, 1998 Palmer filed a "Request for Hearing on Whether Sanctions Should Be Awarded." On October 13, 1998 Palmer moved for the disqualification of the Honorable John W. Larson "as regards the sanctions issues." In his disqualification affidavit, Palmer stated that "[i]f the matter in dispute were to continue before the judge who had ruled without a hearing, any ruling consistent with the original ruling would be tainted with the implication that the matter had been pre-judged."

¶ 15 In November, 1998 the District Court held a hearing on sanctions. The District Court determined that Palmer's affidavit, which accompanied his motion to disqualify the Honorable John Larson, was "insufficient on its face and not in accordance with the statute." The District Court ruled further that it had previously determined that sanctions were appropriate and that "it's just an issue of how much." However, the District Court allowed Palmer to argue why sanctions were inappropriate. The District Court granted Respondents' motions for sanctions and directed them to prepare orders awarding them fees and costs.

¶ 16 In December, 1998 the District Court entered its Order regarding sanctions. The District Court denied Dambrowski's motion to disqualify. Further, "[p]ursuant to the mandates of Rules 37(b) and (d)," the District Court ordered that Palmer reimburse Champion $16,704.12 and that Palmer reimburse Compensation Adjusters and Posterino $8,873.98. In December, 1998 Palmer filed a notice of appeal from the District Court's orders.

Discussion

¶ 17 1. Whether the District Court abused its discretion in imposing discovery sanctions.

¶ 18 Palmer argues that the District Court erred in...