Kwik Way Stores, Inc. v. Caldwell, 85SC281
| Decision Date | 16 November 1987 |
| Docket Number | No. 85SC281,85SC281 |
| Citation | 745 P.2d 672 |
| Parties | KWIK WAY STORES, INC., a Colorado corporation, Petitioner, v. Donna CALDWELL and James Waits, Respondents. |
| Court | Colorado Supreme Court |
Goodbar & Johnson, David M. Johnson, Colorado Springs, for petitioner.
Alan Jensen, Colorado Springs, for respondents.
We granted certiorari to review the decision of the court of appeals in Kwik Way Stores, Inc. v. Caldwell, 709 P.2d 36 (Colo.App.1985), which reversed a default judgment in favor of the petitioner-plaintiff, Kwik Way Stores, Inc. (Kwik Way), as a result of the failure of the respondents-defendants, Donna Caldwell and James Waits, to appear for their depositions after having been duly served with a deposition-subpoena, and remanded the case to the trial court for further proceedings. We reverse in part, affirm in part, and remand the case for further proceedings.
In December 1982, Kwik Way, the owner and operator of several convenience stores, filed separate suits against Donna Caldwell and James Waits in the District Court of El Paso County. Kwik Way sought actual and punitive damages for libel and slander, outrageous conduct, and interference with business and contractual relations, and also requested an order permanently enjoining Caldwell and Waits from similar conduct in the future. Kwik Way's claims were based on the alleged conduct of Caldwell and Waits during former litigation in the United States District Court. In the federal litigation, Caldwell, who is a former employee of Kwik Way, sued Kwik Way for allegedly violating the Fair Labor Standards Act. The United States Department of Labor subsequently entered that litigation on behalf of all former and present Kwik Way employees. The federal litigation proceeded as a class action and was ultimately settled by a consent judgment for unpaid overtime in favor of approximately sixty current and former Kwik Way employees. 1
Kwik Way's complaint against Caldwell and Waits in the El Paso County District Court alleged that during the course of the federal litigation they defamed Kwik Way by statements, newspaper advertisements, and letters, that Caldwell and Waits solicited other Kwik Way employees to initiate additional and unjustified litigation against Kwik Way, that Caldwell and Waits harassed Kwik Way's former and present employees, and that Caldwell and Waits interfered with Kwik Way's business relationship with its employees and customers. Caldwell and Waits were not represented by counsel during the earlier phase of the case and did not file answers to the complaint.
As part of pretrial discovery, Kwik Way subpoenaed Caldwell and Waits for their depositions. When Caldwell and Waits failed to appear, Kwik Way filed a motion for default pursuant to C.R.C.P. 37(d). At the default hearing, Waits advised the court that he failed to appear for the deposition because his attorney, who had not yet entered the case, told him that he (Waits) was under no obligation to appear if he had not been personally served with the subpoena. The trial court, noting that two affidavits on file showed personal service of the subpoenas on Caldwell and Waits, entered a default, ruling as follows:
Mr. Waits, the rules require that if you are a party to an action--and you are a party in this case--that you appear at depositions. And if you fail to cooperate in these matters, that then your pleading can be stricken. That's what the court is going to do. I'm going to strike your pleadings. This is not something that you can go to and decide you do want to appear or you don't.
* * *
* * *
The court's going to strike the pleadings of the defendants and their default will be entered under Rule 37 for failure to comply with the discovery. And we'll set the matter down for default hearing.
The trial court then informed Caldwell and Waits that the default would be set aside if they were able to produce testimony from the lawyer that he advised him in a manner consistent with Waits' prior statement to the court. The court set the case for a hearing on damages.
At the damages hearing Caldwell and Waits were represented by counsel. The trial court advised defense counsel that his role at the hearing would be as follows:
[Y]our function in this hearing will be to observe the proceedings and advise your clients as to what is going on and not to interpose objections or to present arguments; because they stand in default, and they stand in a position of being without any pleadings. So it would be inappropriate for this matter to be transformed into a trial.
Kwik Way presented its evidence on damages, 2 but the court refused to permit counsel for Caldwell and Waits to present evidence on their behalf, to object to evidence presented by Kwik Way, or to cross-examine witnesses called by Kwik Way. The court awarded Kwik Way $25,000 in actual damages and $25,000 in punitive damages on its claim for defamation and interference with business relations. It also permanently enjoined Caldwell and Waits from contacting Kwik Way employees without court consent and from making any libelous statements about Kwik Way's alleged violation of state or federal wage-and-hour regulations.
Caldwell and Waits appealed from the judgment. The court of appeals reversed the judgment for two reasons: (1) the trial court erred in entering a default without a specific finding that Caldwell and Waits willfully failed to attend the deposition; and (2) the trial court did not permit Caldwell and Waits to cross-examine Kwik Way's witnesses at the damages hearing or present evidence in mitigation of damages. In remanding the case to the trial court for further proceedings, the court of appeals held that if the trial court on remand enters a default, it must permit Caldwell and Waits to participate fully in the damages hearing. We granted certiorari to review both aspects of the court of appeals' decision.
We first address whether the court of appeals correctly held that a party's failure to comply with discovery obligations must be willful before a default can be entered against the noncomplying party. The present version of C.R.C.P. 37(d) provides as follows:
If a party or an officer, director, or managing agent of a party, or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails: (1) To appear before the officer who is to take his deposition, after being served with a proper notice; or (2) to serve answers or objections to interrogatories submitted under Rule 33, after proper service of the interrogatories; or (3) to serve a written response to a request for inspection submitted under Rule 34, after proper service of the request, the court in which the action is pending on motion may make such orders in regard to the failure as are just, and among others it may take any action authorized under subparagraphs (A), (B), and (C) of subsection (b)(2) of this Rule. 3
(Emphasis added). C.R.C.P. 37(b)(2) authorizes the court in which the action is pending to "make such orders in regard to the failure as are just, and among others the following:"
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence;
(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party. 4
(Emphasis added).
We conclude that, contrary to the ruling of the court of appeals, it is not necessary that a party's failure to appear for a deposition be willful in order for a trial court to enter a default or other sanction under C.R.C.P. 37(d). Rather, we hold that, while willfulness is one factor to consider, a trial court may impose the sanction of default under C.R.C.P. 37(d) when a party's failure to appear for a deposition was the result of bad faith or fault amounting at least to gross negligence.
Prior to 1970, C.R.C.P. 37(d), 1 C.R.S. (1963), provided as follows:
If a party or an officer or managing agent of a party wilfully fails to appear before the officer who is to take his deposition, after being served with a proper notice, or wilfully fails to serve answers to interrogatories submitted under rule 33, after proper service of such interrogatories, the court on motion and notice may strike out all or any part of any pleading of that party, or dismiss the action or proceeding or any part thereof, or enter a judgment by default against that party.
(Emphasis added).
The Colorado rule was a substantially verbatim counterpart of the then existing Fed.R.Civ.P. 37(d). 5
Under the pre-1970 rule, the sanction of default was limited to those situations in which a party's failure to appear for a deposition was willful. See, e.g., Manning v. Manning, 136 Colo. 380, 317 P.2d 329 (1957) (); Salter v. Board of County Comm'rs, 126 Colo. 39, 246 P.2d 890 (1952), aff'd, 130 Colo. 504, 277 P.2d 232 (1954) (). In considering the pre-1970 version of Fed.R.Civ.P. 37(d), the United States Supreme Court in Societe Internationale v. Rogers, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958), indicated that while a party's inability to comply with a discovery order will not support the dismissal of that party's complaint as a sanction, factors other than willfulness, such as bad faith and fault, could properly be considered in applying sanctions under the rule. 6
Amendments to Fed.R.Civ.P. 37(d) i...
To continue reading
Request your trial
-
Payne v. Dewitt
...62 Brooklyn L.Rev. 585 (1996). 12. See Societe Internationale, supra note 7, 357 U.S. at 212, 78 S.Ct. at 1096; Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672, 677 (Colo.1987) (when imposing default judgment, a court should first make a finding of willful disobedience, bad faith consisting......
-
State Farm Mut. Auto. Ins. Co. v. Brekke, No. 03SC585, 03SC719.
...where liability is ordinarily established by default but damages are resolved in a hearing. C.R.C.P. 55; cf. Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672, 679 (Colo.1987). Because a damages hearing will be held regardless of the participation of the insurance provider, its participation ......
-
J.P. v. District Court In and For 2nd Judicial Dist. of Denver
...in imposing a sanction which is commensurate with the seriousness of the disobedient party's conduct." Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672, 677 (Colo.1987); see also Nagy, 762 P.2d at 161. Sanctions can include issue or witness preclusion or the limitation of testimony. Freedman......
-
State Farm Mutual Automobile Insurance Company v. Brekke, Case No. 03SC585 (CO 1/31/2005)
...where liability is ordinarily established by default but damages are resolved in a hearing. C.R.C.P. 55; cf. Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672, 679 (Colo. 1987). Because a damages hearing will be held regardless of the participation of the insurance provider, its participation......
-
Disciplinary Opinions
...Id. 15. 25 P.3d 24, 26 n.1 (Colo. 2001). 16. C.R.C.P. 55(b). 17. Snow v. Dist. Court, 194 Colo. 335, 337, 572 P.2d 475, 476 (1977). 18. 745 P.2d 672, 678-79 (Colo. 1987) (citations omitted). 19. The Court notes that, were it to accept the complaint's contention that Respondent caused seriou......
-
Motions for Default Judgments
...Footnotes: 1. Kwik Way Stores, Inc. v. Caldwell, 709 P.2d 36 (Colo. 1985), rev'd on other grounds, Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672 (Colo. 1987). 2. C.R.C.P. 55(a). 3. C.R.C.P. 55(b). 4. C.R.C.P. 12(a). 5. C.R.C.P. 3. 6. Emerick v. Emerick, 129 P.2d 908 (Colo. 1942). 7. Carls......
-
Tcl - Attorney Discipline and Disability Process and Procedure - Part Ii - March 2007 - Professional Conduct and Legal Ethics
...adopted, would seem to make disabled lawyers immune to C.R.C.P. 37 sanctions. See id. at 1264, citing Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672 (Colo. 53. C.R.C.P. 251.23(g); C.R.C.P. 251.27(a). 54. C.R.C.P. 251.23(d). 55. Id. 56. Id. See People v. Schwartz, 8890 P.2d 82, 83 (Colo. 19......