Shreve v. Warren Assoc., Inc.

• Decision Date: 19 March 1987
• Docket Number: No. 17038,17038
• Citation: Shreve v. Warren Assoc., Inc., 355 S.E.2d 389, 177 W.Va. 600 (W. Va. 1987)
• Parties: Randy Gene SHREVE, et al. v. WARREN ASSOC., INC., et al. Randy Gene SHREVE v. McKISSICK PRODUCTS, INC.
• Court: West Virginia Supreme Court

Page 389

355 S.E.2d 389

177 W.Va. 600

Randy Gene SHREVE, et al. v. WARREN ASSOC., INC., et al.

Randy Gene SHREVE v. McKISSICK PRODUCTS, INC.

No. 17038.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 14, 1987.

Decided March 19, 1987.

Syllabus by the Court

1. Rule 37 of the West Virginia Rules of Civil Procedure is designed to permit the use of sanctions against a party who refuses to comply with the discovery rules, i.e., Rules 26 through 36.

2. "W.Va.R.Civ.P. 37(d) permits a trial court to assess attorneys' fees against a party failing to answer interrogatories 'unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.' W.Va.R.Civ.P. 37(d)." Syllabus Point 4, Michael v. Henry, --- W.Va. ---, 354 S.E.2d 590 (1987).

3. In determining an award of reasonable expenses, including attorney's fees, under Rule 37, first, the reasonable expenses including attorney's fees, are subject to court review as to reasonableness and are ordinarily confined to expenses incurred in obtaining the derelict discovery and those expenses caused by the failure to promptly obtain the discovery material; second, the defaulting party has the burden of proving that his failure to supply the requested discovery was substantially justified or that other circumstances would make an award of expenses unjust; and, third, a trial court's action in setting an award is subject to review for an abuse of discretion.

4. There is a general provision for extending time to answer interrogatories. Rule 33(a) of the West Virginia Rules of Civil Procedure, after setting thirty days as the normal time period to answer interrogatories, provides: "The court may allow a shorter or longer time."

G. Charles Hughes, Moundsville, and William E. Watson, William E. Watson & Associates, Wellsburg, for appellants.

John H. Tinney, David B. Thomas, John R. Fowler and Mary S. Sanders, Meyer, Darragh, Buckler, Bebenek & Eck, Charleston, for appellees.

MILLER, Justice:

In this appeal, we are asked to consider the propriety of the circuit court's assessment under Rule 37(d) of the West Virginia Rules of Civil Procedure of approximately $10,000 in legal fees and expenses against counsel for the plaintiffs based on their failure to timely answer interrogatories. We conclude the circuit court abused its discretion in ordering the assessment. ¹

The facts underlying the Rule 37(d) sanction are essentially not in dispute. The plaintiffs' attorneys originally instituted a product liability action on behalf of their clients, Randy and Anita Shreve. Randy Shreve had been injured in February, 1981, when a large hook on a drilling rig broke causing pieces of the equipment to strike his leg which resulted in a partial amputation of the leg. Suit was filed in December, 1982, against a number of defendants. The parties have in their briefs designated these original defendants as the "major defendants" and we will use this appellation.

After this first suit was filed, the plaintiffs' attorneys obtained, independently of any formal discovery, several invoices which led them to conclude that the defendant, McKissick Products, Inc. (McKissick), might have made the product involved in the accident. A second action was then filed in February, 1983, against McKissick and the two civil actions were consolidated in August, 1983.

At the time suit was filed against McKissick, the plaintiffs served interrogatories under Rule 33 and a request for production of documents under Rule 34. Subsequently, the plaintiffs' attorneys agreed with McKissick's attorneys to extend the time for McKissick's answer to the complaint and to the plaintiffs' discovery requests until April 15, 1983. An agreed order was entered to this effect on March 18, 1983. Thereafter, McKissick filed its answer and obtained a further agreement with the plaintiffs' counsel that it could generally delay its response to the plaintiffs' discovery requests. A formal order embodying this agreement was entered on September 8, 1983.

In December, 1983, McKissick filed and served a set of five interrogatories upon the plaintiffs. On December 19, 1983, the plaintiffs' attorneys filed a motion for an enlargement of time to respond to McKissick's interrogatories. This was based on their claim that they needed discovery from the major defendants who were subject to a number of plaintiffs' discovery motions which were pending before the court. ²

In January, 1984, McKissick filed a motion to compel the plaintiffs to answer its interrogatories and the plaintiffs filed a motion to compel McKissick to answer the plaintiffs' interrogatories and request for documents. The plaintiffs claimed in their motion that McKissick's attorneys had violated the general agreement adopted between counsel that enabled McKissick to defer answering the plaintiffs' discovery motions until the plaintiffs had obtained additional discovery from the major defendants. The parties made these motions returnable to a hearing before the court on February 2, 1984. From the record before us, it does not appear that the February 2, 1984 hearing was held. ³

Subsequently, in the spring and summer of 1984, the plaintiffs engaged in additional discovery against the major defendants including another set of interrogatories on McKissick. ⁴ On August 28, 1984, McKissick filed another motion to compel discovery against the plaintiffs and, in the alternative, a motion for summary judgment. A hearing on this motion as well as the earlier motions to compel discovery by the plaintiffs against the major defendants was held on October 2, 1984. The trial court took these motions under advisement.

On October 29, 1984, a status conference was held before the court, but no order was entered disposing of the pending motions between the plaintiffs and McKissick. The status conference order did reflect "that the Court indicated that it would rule upon the pending motions during the month of November, 1984." Apparently, the lack of any ruling caused McKissick on November 26, 1984, to serve another notice on the plaintiffs that it would renew its motion for summary judgment, motion to compel answers to interrogatories, and motion for fees for failure to respond to its interrogatories.

These motions were heard on December 18, 1984, and the judge, without objection from the plaintiffs, granted a summary judgment in favor of McKissick. The court took the discovery sanction request of McKissick under advisement and directed counsel for McKissick to submit an affidavit setting forth the costs and attorney's fees incurred.

Subsequently, in January, 1985, the major defendants settled with the plaintiffs and, about the same time, the circuit judge died. Another circuit judge was assigned to hear McKissick's motion for sanctions and a hearing was held on this matter in June, 1985. The court found in its October 15, 1985 order that the plaintiffs "offered no legally sufficient reason for their failure to respond to the proper interrogatories."

The court's assessment of attorney's fees and expenses incurred by McKissick was based, according to its October 15, 1985 order, on the time expended by McKissick's attorneys from "the filing of its Motion to Compel Discovery on January 9, 1984, up to and including the granting of McKissick's motion for summary judgment on December 18, 1984." This was found to be $10,098.78.

I.

We initially dispose of the argument by the plaintiffs' attorneys that sanctions under Rule 37(d) could not be entered after McKissick had been dismissed from the case by summary judgment. This proposition would be correct if McKissick had made no Rule 37(d) motion prior to its dismissal from the case. In Butler v. Pettigrew, 409 F.2d 1205 (7th Cir.1969), the Seventh Circuit without any extended discussion held that a party's attempt to get Rule 37 sanctions after it was dismissed from the case was untimely. See also Molina v. El Paso Independent School District, 583 F.2d 213 (5th Cir.1978); Popeil Bros., Inc. v. Schick Electric, Inc., 516 F.2d 772 (7th Cir.1975).

In the present case, however, McKissick had made its motion well before the summary judgment and the circuit court had by order specifically deferred ruling on it until a later time. Under these circumstances, McKissick was not precluded from pursuing its motion.

II.

Turning to the merits, it cannot be doubted that Rule 37 is designed to provide sanctions in order to ensure that those persons who are subject to discovery requests promptly and adequately respond. We said in Prager v. Meckling, --- W.Va. ---, ---, 310 S.E.2d 852, 854 (1983):

"Ordinarily, Rule 37 is designed to permit the use of sanctions against a party who refuses to comply with the discovery rules, i.e., Rules 26 through 36."

Rule 37 also recognizes that the derelict party can avoid the sanctions of paying expenses, including attorney's fees, by showing that his conduct was "substantially justified" or that such an award would be "unjust." ⁵ This language occurs in Rule 37(a)(4), in Rule 37(b)(2)(E), and in Rule 37(d), this latter section being applicable to this case. ⁶ Recently, we spoke to the utilization of sanctions under Rule 37(d) in Michael v. Henry, --- W.Va. ---, 354 S.E.2d 590 (1987), and concluded that they were inappropriate as plaintiff's counsel had a justifiable reason for delaying his answers to the defendant's interrogatories and stated this general rule in Syllabus Point 4:

"W.Va.R.Civ.P. 37(d) permits a trial court to assess attorneys' fees against a party failing to answer interrogatories 'unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.' W.Va.R.Civ.P. 37(d)."

Other guidelines emerge from court decisions involving an award of reasonable expenses, including attorney's fees, under Rule 37. First, the reasonable expenses, including attorney's fees, are subject...