Payne v. Dewitt

• Decision Date: 23 November 1999
• Docket Number: No. 89796.,89796.
• Citation: 1999 OK 93,995 P.2d 1088
• Parties: Rick PAYNE and Jennifer Payne, husband and wife, Plaintiffs/Appellees, v. Larry DEWITT, Defendant/Appellant.
• Court: Oklahoma Supreme Court

995 P.2d 1088

1999 OK 93

Rick PAYNE and Jennifer Payne, husband and wife, Plaintiffs/Appellees, v. Larry DEWITT, Defendant/Appellant.

No. 89796.

Supreme Court of Oklahoma.

November 23, 1999.

Ray H. Wilburn, A. Mark Smiling, Wilburn, Masterson & Smiling, Tulsa, Oklahoma, for appellant.

H. Gregory Maddux, Maddux & Maddux, Tulsa, Oklahoma, for appellees.¹

OPALA, J.

¶ 1 The dispositive question tendered on certiorari is whether there was error in the trial court's imposition of 12 O.S.Supp.1996 § 3237(B)(2)² sanctions against the defendant for noncompliance with both notice-imparting and court-ordered discovery process by failing to appear twice at scheduled depositions? We hold: (1) there is no error in the nisi prius declaration of liability by default judgment and in the order directing a bench trial on the damages issues; (2) the trial court's refusal to allow defendant's participation at the hearing (on damages) is excessive and must be set aside; and (3) the award of counsel fee and costs is supported by the record.

I THE ANATOMY OF LITIGATION

¶ 2 Rick Payne [Payne] sustained injuries on 11 November 1995 when his vehicle was rear-ended by a car owned by Larry Dewitt [owner or Dewitt]. The latter vehicle left the scene of the accident before the driver's identity could be ascertained. The car's owner was identified by a check of the car's license tag.

¶ 3 Payne and his wife brought a tort claim against Dewitt, alleging that he was the vehicle's driver and that his willful, wanton and reckless actions caused the accident. Payne claimed personal injury, loss of consortium for his wife, property damage to his vehicle of $8,281.20 and punitive damages. Dewitt answered, (a) denying any negligence and damages, (b) urging failure to state a claim upon which relief can be granted, (c) alleging the causation is unrelated to Dewitt's actions, (d) asserting the negligence of third parties over whom Dewitt had no control and (e) claiming that he was not a proper party.

¶ 4 Because Dewitt failed to appear for a "noticed deposition" on 31 January 1997, Payne moved for sanctions and default judgment.³ According to his motion, numerous attempts were made to take Dewitt's deposition, and only Dewitt's counsel appeared at the one set for January 31. In his response, Dewitt argued that the quest for default judgment and damages without evidence is contrary to law and that the sanctions are premature. The trial court's 9 April 1997 order notified the parties that Payne's motion for sanctions would be heard on 15 May 1997.

¶ 5 The trial court ruled at the May 15 hearing that Payne's motion for sanctions "should be sustained" and that he "should be entitled to fees and costs to be determined upon application". Dewitt's counsel was warned that further sanctions would be imposed if Dewitt did not appear for a court-ordered deposition on May 19. When Dewitt failed to appear at that deposition, Payne renewed his quest for default judgment and prayed for costs and counsel fee. At the May 22 hearing on the renewed motion, the trial court declared Dewitt liable upon default for want of appearance for depositional discovery and ruled that (1) there would be a bench hearing on damages on June 25, (2) at that hearing Dewitt could not cross-examine Payne's witnesses, object to introduction of testimony or exhibits offered, or otherwise participate in the evidentiary process, and (3) Payne was entitled to costs and counsel fee upon application.⁴

¶ 6 At the beginning of the June 25 hearing, Dewitt's counsel requested a jury trial on the issue of damages as well as an opportunity to cross-examine witnesses and to submit evidence. The trial court denied the request and struck Dewitt's answer as sanctions for his willful obstruction of discovery by failing to attend two earlier-scheduled depositions. After trying the damages issues sans jury and without participation by Dewitt's counsel, the trial court awarded Payne actual damages of $35,906.56 ($1,849.50 for medical expenses, $335.68 for lost wages, $9,021.38 for property damage, $25,000 for pain and suffering, $2,500 for the wife's loss of consortium) and punitive damages of $38,706.56. Dewitt's counsel was allowed to participate in a severed hearing on Payne's quest for counsel fee and costs. The trial court awarded Payne a $4,450.50 counsel fee and $242.50 in costs.

¶ 7 The Court of Civil Appeals [COCA] affirmed, pronouncing that (a) Dewitt's noncompliance with the two earlier discovery requests warranted the extreme sanction of default judgment on liability and bars his participation at the bench hearing on damages and (b) the award of damages, counsel fee and costs stands supported by the record.

II THE TRIAL COURT'S DECLARATION OF LIABILITY UPON DEFAULT AND ITS ORDER DIRECTING BENCH TRIAL ON DAMAGES ISSUES FOR VIOLATION OF THE DISCOVERY PROCESS ARE JUSTIFIED ON THIS RECORD

¶ 8 The trial court's declaration of liability upon default and order directing nonjury trial on the damages rests on statute-authorized sanctions. Section § 3237(B)(2) of the Oklahoma Discovery Code⁵ — which is patterned on the Federal Rules of Civil Procedure [FRCP]⁶ — authorizes a broad spectrum of sanctions for abuse of the discovery process.⁷ COCA measured the imposition of these sanctions by the five-factor test employed by the U.S. Court of Appeals for the Tenth Circuit⁸ and recently applied by another division of COCA in Hotels, Inc. v. Kampar Corp.⁹ These factors are: (1) the quantum of prejudice noncompliance has caused the adversary (or moving) party, (2) the extent of interference with the judicial process, (3) culpability of the litigant, (4) whether the court warned the party in advance that noncompliance could lead to dismissal or default judgment, and (5) the efficacy of lesser sanctions.¹⁰

¶ 9 Like its federal counterpart, § 3237 allows the trial court to sanction a disobedient party by dismissal of its claim or by a default judgment.¹¹ These draconian penalties should be applied only when a party's failure to comply with a discovery order is occasioned by fault, willfulness, or bad faith.¹² The correctness of nisi prius imposition of sanctions under § 3237 is to be gauged by an abuse-of-discretion standard.¹³ Whether default (or dismissal) is a proper sanction is a question that calls for a fact-specific inquiry.¹⁴ In making that decision, the trial court's discretion, while broad, is not unbridled. The sanction must be both fair¹⁵ and related to the particular claim (or defense) at issue in the discovery order.¹⁶

¶ 10 We hold that on this record the nisi prius declaration of liability — for both actual and punitive damages¹⁷ — as well as the order directing a nonjury trial of damages¹⁸ meets the criteria established by extant jurisprudence. Dewitt refused to appear at "noticed" and court-ordered depositions spanning a five-month period of time. He was warned through his counsel that default would follow if he failed to appear at the court-ordered deposition. His testimonial evidence was essential to the nisi prius determination of liability for the harm incurred by Payne. Dewitt's counsel was present at the hearing on sanctions and offered no explanation or justification for his client's absence. On this record, the trial court was clearly justified in inferring that Dewitt sought to protect himself from revealing the circumstances of the ownership of the vehicle, his presence at the wheel when the accident happened as well as his motives for the hit-and-run behavior.

¶ 11 According to the course of the common law and upon application of orderly process, the nisi prius declaration of liability to be established by a quantum determined at a nonjury hearing on damages is a permissible and fit sanction for Dewitt's act of escaping testimonial compulsion.

III THE SANCTION OF BARRING CROSS-EXAMINATION AND OTHER TRUTH-TESTING DEVICES AT THE POST-DEFAULT NONJURY HEARING ON DAMAGES IS CONTRARY TO THE ORDERLY PROCESS OF ASSESSING DAMAGES

¶ 12 In the assessment of damages following entry of default judgment, a defaulting party has a statutory right to a hearing on the extent of unliquidated damages.¹⁹ 12 O.S.1991 § 688.²⁰ Encompassed within this right is the opportunity to a fair post-default inquest at which both the plaintiff and the defendant can participate in the proceedings by cross-examining witnesses and introducing evidence on their own behalf.²¹ A default declaration, imposed as a § 3237(B)(2) sanction, cannot extend beyond saddling the defendant with liability for the harm occasioned and for imposition of punitive damages. The trial court must leave to a meaningful inquiry the quantum of actual and punitive damages without stripping the party in default of basic forensic devices to test the truth of the plaintiff's evidence.

¶ 13 The trial court's bar of Dewitt's participation in the post-default damages inquest robs him of statutorily-granted rights and strips him of the law's protection against an unwarranted amount of damages in violation of due process. Obstacles that unreasonably impede full disclosure of the truth are an anathema to due process.²²

¶ 14 The crippling of Dewitt by stripping him of basic due process truth-testing devices is contrary to the orderly process of assessing damages. We hence set aside the concomitant order that encroaches on Dewitt's ability to use basic truth-testing devices at the § 688 proceeding by depriving him of the opportunity to cross-examine witnesses, object to testimony or exhibits, or otherwise to participate at the hearing. The nisi prius court should have left for trial the quantum of actual and of punitive damages without stripping the defendant of basic forensic devices to test the truth of Payne's evidence.

¶ 15 If at any post-remand stage of the § 688 proceeding want of Dewitt's testimony should be found as a barrier to a meaningful inquest into damages, the trial judge may anew address that plaintiff-encountered...