Karppi v. Greenville Terrazzo Co., Inc.

• Decision Date: 03 June 1997
• Docket Number: No. 2695,2695
• Citation: 327 S.C. 538,489 S.E.2d 679
• Parties: Paul KARPPI, d/b/a P/C Technology, Respondent, v. GREENVILLE TERRAZZO CO., INC., and Ogden Teck, Inc., Defendants, of whom Greenville Terrazzo Co., Inc. is Respondent, and of whom Ogden Teck, Inc. is Appellant. . Heard
• Court: South Carolina Court of Appeals

Page 679

489 S.E.2d 679

327 S.C. 538

Paul KARPPI, d/b/a P/C Technology, Respondent, v. GREENVILLE TERRAZZO CO., INC., and Ogden Teck, Inc., Defendants, of whom Greenville Terrazzo Co., Inc. is Respondent, and of whom Ogden Teck, Inc. is Appellant.

No. 2695.

Court of Appeals of South Carolina.

Heard June 3, 1997.

Decided June 30, 1997.

[327 S.C. 540] Robert C. Wilson, Jr., Greenville, for appellant.

Roy F. Harmon, III, Greenville, for respondent Paul Karppi.

Larry N. Briggs, Greenville, for respondent Greenville Terrazzo Co., Inc.

HOWELL, Chief Judge:

The trial court struck the pleadings of Ogden Teck, Inc. and ordered it in default as a sanction for failing to comply with discovery orders. Ogden Teck appeals. We reverse and remand.

I.

Respondent, Paul Karppi d/b/a P/C Technology (Karppi), brought this action in June 1995 against Appellant Ogden Teck, and its co-defendant, Greenville Terrazzo Co., Inc. (Terrazzo). Karppi's complaint alleges various causes of action arising from Karppi's purchase from Terrazzo of floor covering material that was manufactured by Ogden Teck. Terrazzo and Ogden Teck denied liability, and Ogden Teck filed a counterclaim against Karppi, as well as a cross-claim against Terrazzo.

In February 1996 Karppi made two discovery requests of Ogden Teck which form the basis of the instant dispute. On February 27 Karppi served his first requests for production of documents, which included requests Karppi, not satisfied with the responses to his two discovery requests, particularly the opposition to deposing Herbert Ogden, moved to compel Mr. Ogden's deposition on May 15. Following a hearing, the trial court issued a discovery order on June 29, which reflected the agreement of the parties. The June 29 order provided, in pertinent part, that Ogden Teck must fully and completely respond to outstanding discovery requests within thirty days and that Herbert Ogden must be made available for deposition in Greenville if he was an officer of Ogden Teck at any time after the action was filed. Otherwise, the parties "agreed to take his deposition by telephone."

                for "Corporate documents and communications of Ogden Teck, Inc., including Articles of Incorporation, By-Laws, Stock Certificates, and minutes from [327 S.C. 541] annual meetings of the Board of Directors and Shareholders."   Also on February 27, Karppi noticed Herbert Ogden's deposition for March 14, 1996, in Greenville.  Ogden Teck responded that Herbert Ogden, a Pennsylvania resident, was not a control officer in the corporation;  thus, he was neither required to, nor would he voluntarily submit to a deposition in South Carolina.  However, Ogden Teck offered Marilyn Ogden for a deposition because she was familiar with the facts of the case
                

At a July 11 status conference, the trial court ordered Ogden Teck to comply with the terms of the prior discovery order by July 31, and set the case for trial during the week of August 12. Because Ogden Teck never made Herbert Ogden available for a deposition, Karppi filed on August 1 a second notice for the deposition for August 6. ¹ On August 9, Karppi filed a second motion to compel discovery. Following a hearing on the matter, the trial court found that the justifications offered by Ogden Teck for its failure to comply with the June 29 order were inadequate, and that Ogden Teck had "intentionally and willfully violated the Orders of this Court." ²

Having found that Ogden Teck willfully and intentionally failed to comply with the discovery order, the trial court struck Ogden Teck's answer, counterclaim and cross-claim, and ordered that default be entered against it. The trial court ordered the case to go to trial, at which Ogden Teck "may appear and cross examine Plaintiff's witnesses only on the issue of damages." ³

II.

Ogden Teck contends the trial judge abused his discretion in striking its pleadings. We agree. ⁴

"The imposition of sanctions is generally entrusted to the sound discretion of the Circuit Court." Downey v. Dixon, 294 S.C. 42, 45, 362 S.E.2d 317, 318 (Ct.App.1987). A trial court's exercise of its discretionary powers with respect to sanctions imposed in discovery matters will be interfered with by the Court of Appeals only if an abuse of discretion has occurred. Clark v. Ross, 284 S.C. 543, 328 S.E.2d 91 (Ct.App.1985). The burden is upon the party appealing from the order to demonstrate the trial court abused its discretion. Clark, 284 S.C. at 570, 328 S.E.2d at 107. An abuse of discretion may be found where the appellant shows that the conclusion reached by the trial court was without reasonable factual support and resulted in prejudice to the rights of appellant, thereby amounting to an error of law. Dunn Rule 37 expressly grants the trial court power to order judgment by default for either the violation of a court order, or, upon motion, for a party's failure to respond to certain discovery requests. Rule 37(b)(2)(C) & (d), SCRCP. However, when the court orders default or dismissal, or the sanction itself results in default or dismissal, the end result is nevertheless harsh medicine that should not be administered lightly. See generally Orlando v. Boyd, 320 S.C. 509, 466 S.E.2d 353 (1996); Baughman v. American Tel. & Tel. Co., 306 S.C. 101, 410 S.E.2d 537 (1991). Before invoking this severe remedy, the trial court must determine that there is some element of bad faith, willfulness, or gross indifference to the rights of other litigants. See Orlando; Baughman. The sanction imposed should be reasonable, and the court should not go beyond the necessities of the situation to foreclose a decision on the merits of a case. Balloon Plantation v. Head Balloons, 303 S.C. 152, 399 S.E.2d 439 (Ct.App.1990). The sanction should be aimed at the specific misconduct of the party sanctioned. Balloon Plantation, 303 S.C. at 154, 399 S.E.2d at 440. Furthermore, whatever sanction is imposed should serve to protect the rights of discovery provided by the Rules of Civil Procedure. Downey, 294 S.C. at 45, 362 S.E.2d at 318; Kershaw Co. Bd. of Educ. v. United States Gypsum Co., 302 S.C. 390, 396 S.E.2d 369 (1990).

v. Dunn, 298 S.C. 499, 502, 381 S.E.2d 734, 735 (1989) (citing Darden v. Witham, 263 S.C. 183, 209 S.E.2d 42 (1974)).

We reluctantly agree with the appellant that the trial court abused its discretion by ordering the sanction involved in this appeal, because the sanction imposed was unduly harsh under the circumstances, and because the sanction was not limited in scope with regard to the violation by the appellant of the court's order. See Balloon Plantation. The need for the trial court to narrowly tailor its sanction to the offense committed by a party is never more evident than in cases involving multiple parties. Where, as here, multiple parties are involved, the trial court must closely scrutinize the dynamics of the litigation and be extremely cautious before striking the pleadings of a transgressing party because of the effects such action is likely to have on the other parties. Although the trial court made the requisite finding that Ogden Teck "intentionally and willfully violated the Orders of this Court," the court failed to properly tailor its sanction to address the specific violation committed by Ogden Teck vis-a-vis Karppi.

In striking Ogden Teck's pleadings in their entirety, including its cross-claim against Terrazzo, the trial court went beyond what was reasonably necessary to redress the wrong that was committed by Ogden Teck. There is no evidence in the record that Terrazzo's rights of discovery have been violated by Ogden Teck. Neither has Terrazzo moved for any relief due to any alleged misconduct by or on behalf of Ogden Teck. Dismissal of Ogden Teck's potentially meritorious cross-claim against Terrazzo serves no one's interest but Terrazzo's. Terrazzo's discovery rights are simply not the discovery rights that the trial court was properly protecting by imposing the sanction in this case, and it was an abuse of the court's discretion to attempt to do so in this instance.

In essence, Terrazzo received a windfall due to the overbreadth of the trial court's sanction, because Terrazzo was wholly removed from the instant discovery dispute. The trial court failed to aim its sanction at the specific misconduct of Ogden Teck, and in so doing, ran afoul of the requirement that the sanction imposed be reasonable--comprehensive, yet not overly broad. See Downey v. Dixon, 294 S.C. 42, 362 S.E.2d 317 (Ct.App.1987) (holding that the trial court erred by imposing a sanction that was too lenient to adequately serve to protect the Rules). Indeed, the sanction imposed in this case is a "shotgun blast" rather than a mere "rifle shot." Balloon Plantation, 303 S.C. at 154, 399 S.E.2d at 440.

While the sanction imposed in this case constitutes a windfall for Terrazzo with regard to the trial court's disposal of the cross-claim, we also recognize that the striking of Ogden Teck's answer creates undue and unwarranted prejudice against Terrazzo where none previously existed. If the answer is struck then liability is presumed as to Ogden Teck. Thus, Terrazzo is summarily stripped By no means do we condone the clear violation of the June 29 order by Ogden Teck. To the contrary, we find Ogden Teck's actions with regard to this discovery dispute to be repugnant and worthy of appropriate sanctions. ⁵ Under these circumstances, however, the harsh sanction that was imposed was not commensurate with Ogden Teck's disobedience, and any number of lesser, more narrowly tailored sanctions would have sufficed to protect Karppi's rights while adequately punishing the wrongdoing of Ogden Teck. See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 96 S.Ct. 2778, 2781, 49 L.Ed.2d 747 (1976) (stating policy reasons for the imposition of sanctions under Rule 37: "to penalize those whose conduct may be deemed to warrant such a sanction, [and] to deter those who...