Lenze v. Synthes, Ltd.

• Decision Date: 06 April 1989
• Docket Number: CA-CV,No. 1,1
• Citation: Lenze v. Synthes, Ltd., 160 Ariz. 302, 772 P.2d 1155 (Ariz. App. 1989)
• Parties: Thomas A. LENZE, Plaintiff-Appellee, v. SYNTHES, LTD., a.k.a. Synthes A.G., Chur, a Swiss corporation d.b.a. Synthes, Ltd., U.S.A., Defendant-Appellant. 88-043.
• Court: Arizona Court of Appeals

Page 1155

772 P.2d 1155

160 Ariz. 302

Thomas A. LENZE, Plaintiff-Appellee, v. SYNTHES, LTD., a.k.a. Synthes A.G., Chur, a Swiss corporation d.b.a. Synthes, Ltd., U.S.A., Defendant-Appellant.

No. 1 CA-CV 88-043.

Court of Appeals of Arizona Division 1, Department B.

April 6, 1989.

[160 Ariz. 303] Edward Louis Barry, and Edward P. McNeff, Phoenix, for plaintiff-appellee.

Jennings, Strouss & Salmon by William T. Birmingham, M. Byron Lewis, Phoenix, for defendant-appellant.

OPINION

CONTRERAS, Presiding Judge.

In this appeal, we consider the question of whether the trial court, in denying a motion to set aside a default judgment entered as a sanction for failure to comply with a discovery order, abused its discretion by failing to conduct an evidentiary hearing to determine whether appellant, as opposed to its trial counsel, was responsible for misconduct in the discovery process. We conclude that the trial court should have conducted an evidentiary hearing to determine the extent, if any, of appellant's involvement in the failure to comply with the discovery order. We therefore remand the matter and direct the trial court to conduct an evidentiary hearing.

PROCEDURAL HISTORY

Thomas A. Lenze (Lenze) filed a complaint against Synthes, Ltd., aka Synthes Chur, dba Synthes, Ltd., U.S.A. (Synthes), seeking damages for personal injuries caused by an allegedly defective orthopedic device manufactured by Synthes. Synthes filed an answer to the complaint, and appeared for an initial corporate deposition through its executive vice-president, James Gerry (Gerry). During his deposition, Gerry testified that Synthes was one of a group of internationally affiliated corporations under the common ownership and control of a Swiss foundation known as the Association for the Study of Internal Fixation (ASIF). Gerry also stated that when a surgeon reports a mishap involving one of its products to Synthes, Synthes is able to obtain and provide the surgeon with: (1) a metallurgical analysis of the failed product conducted by an affiliated entity known as Institute Straumann, and (2) an analysis and critique of the surgical technique provided by an ASIF orthopedic surgeon. Lenze filed a second notice of deposition dated March 23, 1987, seeking to depose the corporate defendant with respect to "defendant's position, precisely and in full detail, on whether the intramedullary rod in question failed due to metallurgical defect, and the factual, medical and scientific basis therefor." The failure of Synthes to timely comply with this discovery request is the subject matter of this appeal. Lenze's notice set the deposition for March 31, 1987. At the request of defense counsel Gregory Lantz (Lantz), Lenze's counsel, Edward Barry (Barry), orally agreed to reschedule the deposition for April 24, 1987. The oral agreement was confirmed by way of an amended notice of deposition dated April 15, 1987. On April 24, 1987, Barry telephoned Lantz approximately two hours prior to the scheduled deposition to confirm the deposition and was informed by Lantz that his client would not be appearing. No reason was given. During the telephone conversation, Barry agreed not to seek sanctions for the defendant's failure to appear and the deposition was rescheduled for April 30, 1987. Lantz suggested a telephonic deposition but Barry declined, citing the need to address certain documents during the proceeding.

On April 29, 1987, Barry telephoned Lantz to confirm the time set for the deposition. His calls were not returned. On the morning of April 30th, Barry again telephoned Lantz and was advised by Lantz that no one would be appearing on Synthes' behalf. During this telephone conversation Barry expressed anger and frustration concerning the non-appearances, but nevertheless offered a final opportunity for the defendant to voluntarily appear at the deposition. Accordingly, the deposition was reset for May 6, 1987. On May 6, Lantz telephoned Barry's office and advised the receptionist that the deposition would not proceed because the prospective deponent was "out of town at a convention."

Barry filed a motion for discovery sanctions on May 11, 1987, requesting an order striking Synthes' answer, or, in the alternative, a conditional order that the answer be stricken in the event Synthes failed to make itself available for a deposition by a time and date set by the court. The motion was heard on an accelerated basis by the Honorable Marilyn Riddel, sitting for the vacationing trial judge, the Honorable Cheryl Hendrix. During telephonic oral argument the following day, counsel stipulated to the following court order:

Counsel agree the defendant shall have until noon on Tuesday, May 19, 1987 to produce the proper person from defendant corporation for deposition here in Phoenix, Arizona. The time and place will be arranged between counsel. Should said person not be produced by the deadline, upon affidavit of failure, the pleadings of defendants will be stricken and a default entered.

Although Barry advised Lantz that he would make himself available for the deposition every day during the week prior to the deadline specified in the order, Lantz did not contact Barry to propose deposition arrangements until late in the afternoon of May 18th. At this time, Lantz offered to supply a deponent on the day after the deadline. Barry refused any further extensions, and filed an affidavit of counsel regarding the failure to appear for a deposition.

On May 19, the date of the deadline, Lantz filed a motion for relief from discovery order in which he sought a one-day extension of the deadline. The motion cited two purported excuses for the failure to comply with the order: (1) the defendant was a Pennsylvania corporation, and "transportation to this venue is not especially easy"; and (2) identifying a witness with the appropriate technical expertise to testify and make travel arrangements for his appearance in Phoenix prior to the deadline was "slightly beyond the possible."

Although finding that a one-day delay would not prejudice Lenze, Judge Hendrix denied Synthes' motion, stating:

The Motion fails to contain specific facts to demonstrate why the Order of May 12, 1987 has not been complied with. The court has been advised the person to be deposed is Donald Cox who resides in Riverside, California. Therefore, transportation not being especially easy is not good cause for the failure to comply. Difficulty in identifying an appropriate witness is not good cause because both parties have listed Mr. Cox as a witness and Defendant has had since March 31st to identify the appropriate person....

Since Judge Riddel entered an explicit and unambiguous Order on May 12, 1987, this Court is bound to follow it.

Judge Hendrix struck Synthes' answer pursuant to Rule 37(b)(2)(C), Arizona Rules of Civil Procedure, thereby permitting Lenze to enter a default and proceed as if by default. The court's minute entry of May 19, 1987 stated that "Defendant still has a right to appear and be heard on the issue of damages."

The default was subsequently entered, and following a bench trial on the issue of damages, the court entered formal written judgment for Lenze on September 22, 1987 in the amount of $87,412 plus costs. Synthes thereafter obtained new counsel who moved to set aside the default and default judgment and to grant a new trial. The trial court denied Synthes' motions on November 19, 1987. This appeal followed.

On appeal, Synthes makes two arguments. First, Synthes contends that the trial court abused its discretion in failing to set aside the default and default judgment and in failing to grant a new trial inasmuch as Synthes could have complied with the discovery order if it had been given a one-day extension. Second, Synthes contends that the trial court abused its discretion in refusing to grant Synthes a Birds International ¹ type hearing in order to determine Synthes' complicity in the events leading to the entry of default. We decide this appeal on the basis of the second contention. Therefore, we have not considered the first contention and express no opinion on the argument contained therein.

STANDARD OF REVIEW

The applicable standard of review of a trial court order striking pleadings for discovery misconduct is whether, on the state of the record, a clear abuse of discretion has been demonstrated. Rule 60(c), Arizona Rules of Civil Procedure; Daou v. Harris, 139 Ariz. 353, 359, 678 P.2d 934, 940 (1984); Old Pueblo Plastic Surgery, P.C. v. Fields, 146 Ariz. 178, 179, 704 P.2d 819, 820 (App.1985).

The trial court's discretion in entering a default for failure to comply with an order compelling discovery is more limited than when it employs lesser sanctions. Poleo v. Grandview Equities, Ltd., 143 Ariz. 130, 133, 692 P.2d 309, 312 (App.1984). The trial court's power to employ the ultimate sanctions of dismissal or entry of default judgment is circumscribed by due process considerations. J-R Constr. Co. v. Paddock Pool Constr. Co., 128 Ariz. 343, 344-45, 625 P.2d 932, 933-34 (App.1981); Golleher v. Horton, 119 Ariz. 604, 606, 583 P.2d 260, 262 (App.1978). However, although circumscribed by due process...