Properties Intern. Ltd. v. Turner, 82-3036
| Decision Date | 31 May 1983 |
| Docket Number | No. 82-3036,82-3036 |
| Parties | PROPERTIES INTERNATIONAL LTD., a Barbados corporation, Plaintiff-Appellant, v. Glenn W. TURNER, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Charles S. Dale, Jr., Fort Lauderdale, Fla., for plaintiff-appellant.
Kendell Wherry, Asst. U.S. Atty., Orlando, Fla., Glenn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup, William S. Estabrook, III, Gilbert S. Rothenberg, Tax Div., U.S. Dept. of Justice, Washington, D.C., for defendants-appellees.
Appeal from the United States District Court for the Middle District of Florida.
Before GODBOLD, Chief Judge, FAY and CLARK, Circuit Judges.
This is an appeal arising from consolidated proceedings to foreclose various mortgages and federal tax liens on real property owned by Glenn W. Turner. Properties International Limited (PIL), assignee of one of the mortgages, was sanctioned by the district court for failure to comply with various discovery orders. These sanctions included dismissal of PIL's complaint seeking foreclosure of its mortgage, declaration that the mortgage was unenforceable, cancellation of PIL's tax sale certificate on the property, and striking of PIL's answer to the Government's supplemental complaint seeking foreclosure of its tax liens on the property. PIL appeals imposition of these sanctions and we affirm.
Mr. Turner and his former wife, Alice A. Turner, own two tracts of land. The larger tract is encumbered by a first mortgage originally held by First State Bank of Miami. The smaller tract is not encumbered by a specific mortgage but has numerous tax sale certificates outstanding against it. The entire property is encumbered by a second mortgage held by the JAR/T Trust, an entity which the Government contends is controlled by Mr. Turner. The entire property is also encumbered by federal tax liens of over $1.1 million against Mr. Turner.
PIL, a Barbados corporation, gained an interest by purchasing the note and mortgage held by First State Bank and a tax sale certificate on the smaller tract. PIL sought to substitute itself for First State Bank in these proceedings and the bank sought to dismiss its case. The district court refused to permit this substitution because it had no assurance that PIL would submit itself to the jurisdiction of the court, and PIL had not provided information about the persons who controlled the corporation. The Government suspects that PIL is owned or controlled by Mr. Turner or his associates. If true, PIL could not be permitted to enforce the mortgage. PIL later agreed to submit to the jurisdiction of the district court, but it did not and has not disclosed whether Mr. Turner or anyone associated with him has an interest in the corporation.
After the court refused to allow this substitution, various depositions, interrogatories, court hearings and orders sought information of the true nature of PIL. PIL failed to supply witnesses at depositions, incompletely answered interrogatories and failed to cooperate with Government discovery or the district court. The Government filed motions for sanctions against PIL and seeking cooperation with discovery. A magistrate held a hearing on the motion to impose sanctions. As a result, the magistrate made a Report and Recommendation to the district court, recommending that the
sanctions be imposed. In its report, the magistrate made the following findings:
1.) That on April 10, 1981, Properties [PIL] failed to appear for a deposition duly noticed by the United States.
2.) That Properties has failed to respond to the 6th set of interrogatories served by the United States on April 28, 1981.
3.) That Properties failed to file objections or seek a protective order in response to the discovery initiatives of the United States.
4.) That the explanation of Properties; that it was impossible to identify the proper individual to appear for the April 10, 1981 deposition, and that Barbadian law permits directors of a corporation to refuse to disclose financial documents; is insufficient, at this late date, to justify or explain its willful failure to provide or permit discovery.
The district court then held a hearing and adopted the findings of the magistrate. Instead of imposing the requested sanctions, the district court ordered PIL to provide the Government with complete discovery. Again, PIL failed to cooperate. The district court held another hearing on the motions for sanctions and a motion for entry of default judgment. In accordance with the findings made at that hearing, a judgment was entered in the form of a Rule 37(b) judgment and provided for: (1) dismissal with prejudice of PIL's foreclosure suit; (2) striking of PIL's answer to the Government's supplemental complaint in the Government's foreclosure action; (3) a declaration that PIL's note and mortgage on the property are unenforceable; (4) the cancellation of PIL's tax sale certificate on the property; and (5) a declaration that any judicial...
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