Johnson v. Allis Chalmers Corp.

• Citation: 162 Wis.2d 261,470 N.W.2d 859
• Decision Date: 05 June 1991
• Docket Number: No. 89-0649,89-0649
• Parties: Robert H. JOHNSON and Cheryl L. Johnson, Plaintiffs-Appellants-Petitioners, v. ALLIS CHALMERS CORPORATION, and Sperry Rand Corporation, Defendants-Respondents.
• Court: United States State Supreme Court of Wisconsin

Page 859

470 N.W.2d 859

162 Wis.2d 261

Robert H. JOHNSON and Cheryl L. Johnson Plaintiffs-Appellants-Petitioners, v. ALLIS CHALMERS CORPORATION, and Sperry Rand Corporation Defendants-Respondents.

No. 89-0649.

Supreme Court of Wisconsin.

Argued Feb. 27, 1991.

Decided June 5, 1991.

John C. Albert, argued, of Brill & Eustice, Sun Prairie, Michael J. Wyngaard, and Wyngaard & Wilson, Madison, on briefs, for plaintiffs-appellants-petitioners.

Michael J. Gonring, argued, Margaret C. Kelsey and Quarles & Brady, on brief, Milwaukee, for defendant-respondent, Sperry Rand Corp.

Bruce D. Huibregtse, argued, Gila Shoshany and Stafford, Rosenbaum, Rieser and Hansen, on brief, Madison, for defendant-respondent, Allis Chalmers Corp.

BABLITCH, Justice.

Robert and Cheryl Johnson (the Johnsons) appeal from a court of appeals' decision which affirmed the circuit court's order dismissing their products liability personal injury action against Allis Chalmers Corporation (Allis Chalmers) and Sperry Rand Corporation (Sperry) for their failure to comply with the circuit court's scheduling and discovery orders. Because the Johnsons' conduct in failing to comply with the court's orders was egregious and without a "clear and justifiable excuse," we conclude that the circuit court did not abuse its discretion by dismissing the Johnsons' cause of action. In reaching this conclusion, we hold that dismissal may be imposed as a sanction regardless of whether the opposing party has been prejudiced by the delays in discovery and regardless of whether the party bears personal responsibility for the noncompliance of their attorney.

The facts of this case are not in serious dispute. We adopt the findings of fact made by the court of appeals because our review of the record corroborates those findings and they were not challenged by the parties in their briefs to this court. Robert Johnson was injured in a farm accident involving a tractor and bale handler on December 20, 1979. Just short of three years later, on December 17, 1982, he and his wife sued Allis Chalmers, the manufacturer of the tractor, and Sperry, the manufacturer of the bale handler, seeking to recover damages on grounds of strict liability and negligence.

During the first half of 1983 Sperry pursued discovery of various items which, after two motions and an order to compel compliance, was apparently completed by mid-August of that year.

On November 11, 1983, Allis Chalmers served a demand for production of documents on the Johnsons. No response was forthcoming, although the Johnsons' counsel permitted Allis Chalmers' attorney to inspect some materials. On December 5, 1983, Allis Chalmers' attorney requested that the Johnsons respond to the demand. The request was renewed in writing on three separate occasions between January 5, 1984, and January 3, 1985, without any response from the Johnsons' attorneys.

Following a pretrial conference on December 10, 1985, the court issued an order requiring the Johnsons to name expert witnesses and provide an itemization of special damages by February 1, 1986. Allis Chalmers and Sperry were to name their expert witnesses by June 1, 1986, and all discovery was to be completed prior to a second pretrial conference scheduled for October, 1986. On February 3, 1986, two days after the deadline for the Johnsons' disclosure of experts and itemization of damages, the Johnsons' counsel submitted a list of thirteen names designated as "expert witnesses" and a statement of "non-exclusive particulars as special damages." The latter document was a brief list of various categories of damage. Alongside each item was a dollar figure preceded by the phrase "at least."

Between February 4 and April 9, 1986, Allis Chalmers' counsel made five unsuccessful attempts to schedule a deposition of the Johnsons' liability expert. On April 9, the Johnsons' attorney indicated that he would not make the witness available until May 12, 1986--less than three weeks before the date on which Allis Chalmers and Sperry were required to disclose their own experts. Consequently, both companies moved to extend their expert witness deadlines from June 1, 1986, to a date thirty days after the Johnsons produced their experts for deposition. The motion also requested an order directing the Johnsons to provide a specific itemized list of their special damages. The court heard the motion on April 17, 1986, and granted it by an order issued on June 18, 1986, but made effective as of April 22, 1986.

Among other things, the order required the Johnsons to: (1) provide the defendants, by May 5, 1986, with a list of all medical witnesses expected to testify at trial, together with "three alternative dates" (none later than June 30) on which they would be available for deposition; and (2) provide "specific information ... for each ... item of special damages" by May 15, 1986.

The Johnsons failed to comply with the order by the indicated dates. Then, on May 19, 1986, their counsel sent Allis Chalmers' lawyer a letter setting deposition dates for five of the thirteen experts. No alternate dates were provided for several of the witnesses despite several requests by Allis Chalmers' counsel in the ensuing months.

On November 5, 1986, Sperry and Allis Chalmers filed motions seeking dismissal of the action for the Johnsons' failure to comply with the court's orders and applicable procedural statutes and rules. The motion asserted that the defendants still had received no response to Allis Chalmers' November 11, 1983, demand for documents, nor any response to the court's order of April 22, 1986, requiring more specific information regarding the claimed damages and a list of medical trial witnesses.

On July 13, 1987, the court issued a decision finding that the Johnsons' counsel had violated the prior orders. The court concluded, however, that "the sanction of dismissal ... is at this point too drastic a sanction," and instead set a date for further hearing to compel discovery and to consider an award of reasonable attorney fees to Sperry and Allis Chalmers. The hearing was adjourned to allow the parties to work matters out, which they apparently failed to do, and several more months passed with no response from the Johnsons' counsel to various orders. In March, 1988, Sperry again moved for dismissal.

Allis Chalmers did not join the motion because it had in the meantime filed for bankruptcy and further proceedings in this action had been stayed by the bankruptcy court. ¹ After the hearing on Sperry's motion, but before a decision, the Johnsons' attorneys provided both defendants with several hundred pages of documents purportedly dealing with their special damage claims. By this time, nearly two years had passed since the deadline for providing this information specified in the 1986 order.

On September 29, 1988, the circuit court granted Sperry's motion to dismiss. The court began by noting that this was the second motion seeking dismissal for the Johnsons' failure to comply with the same discovery orders. Then, after discussing the purposes and policies underlying pretrial discovery and noting that the "[t]wo scheduling orders have been breached by [the Johnsons] with no reason given or modification requested until the defendants brought their motion [to dismiss]," the court concluded:

This court is reluctant to dismiss lawsuits for nominal technical reasons. It is loath to impose sanctions that have effects beyond those to counsel. There is a point, however, at which further tolerance regarding a parties' [sic] actions cannot be extended.

The actions of the plaintiffs have been neither nominal nor technical. They have been substantial and egregious and for which justification has not been provided.

On October 26, 1988, after the bankruptcy stay was lifted, Allis Chalmers filed its own motion to dismiss for the same reasons set forth in Sperry's earlier motion. At about the same time, the Johnsons moved the court to reconsider the Sperry decision. At the hearing on both of these motions on January 20, 1989, the Johnsons' counsel provided the defendants with a formal response to Allis Chalmers' November 11, 1983, request for production of documents.

Cheryl Johnson testified at the hearing that she and her husband had promptly provided their attorneys with all requested materials and that they were unaware of the two motions to dismiss filed by the defendants until shortly after the second hearing. She stated that after the second hearing, an attorney for the firm told the Johnsons that the motions to dismiss were made because the Johnsons' case "had not been attended to." Cheryl Johnson further testified that they had consulted other counsel concerning terminating their representation with the firm, but chose to remain with the firm after being advised that it would be difficult for a new firm to step into the case at such a late stage. The Johnsons also discussed malpractice actions against the firm.

At the conclusion of the hearing, the court, noting that Allis Chalmers was in the same position as Sperry had been when its dismissal motion was heard, granted Allis Chalmers' motion to dismiss and denied the Johnsons' motion for reconsideration of the Sperry Decision. On March 13, 1989, the court entered a written order confirming the oral decision to dismiss the action with prejudice pursuant to secs. 802.10(3)(d), ² 804.12(2), ³ and 805.03, ⁴ Stats. The court began by discussing its earlier findings that the Johnsons had failed to comply with the earlier orders and applicable procedural statutes and ruled that they had also violated the December 10, 1985 and April 22, 1986 orders relating to expert witness depositions and disclosure of special damages. Then, noting that the Johnsons had "failed to show a clear and justifiable excuse" for the violations and had "made no attempt at any time to obtain an extension or modification of the ... order[s]," the court...