Techniarts Video, Inc. v. 1631 Kalorama Associates, 89-174.

• Decision Date: 05 April 1990
• Docket Number: No. 89-174.,89-174.
• Citation: 572 A.2d 1051
• Parties: TECHNIARTS VIDEO, INC., et al., Appellants, v. 1631 KALORAMA ASSOCIATES, et al., Appellees.
• Court: D.C. Court of Appeals

572 A.2d 1051

TECHNIARTS VIDEO, INC., et al., Appellants, v. 1631 KALORAMA ASSOCIATES, et al., Appellees.

No. 89-174.

District of Columbia Court of Appeals.

Argued January 23, 1990.

Decided April 5, 1990.

Stephen C. Glassman, Washington, D.C., for appellants.

Marc S. Moskowitz, Washington, D.C., for appellees.

Before STEADMAN and FARRELL, Associate Judges, and KERN, Senior Judge.

FARRELL, Associate Judge:

Appellant, Techniarts Video, Inc. (Techniarts), appeals from an order of the Superior Court dismissing its amended complaint with prejudice. In the original complaint, Techniarts alleged that appellees, 1631 Kalorama Associates (Kalorama), a District of Columbia general partnership, had breached an oral contract to compensate Techniarts on an hourly basis for engineering and consulting services provided for the conversion of a warehouse and roller skating rink in Northwest Washington, D.C. to a television and movie production studio. Citing various omissions in the original complaint, Techniarts sought and, in a June 23, 1987 order, received leave to amend the complaint. The revised complaint, however, went beyond the scope of that order in several ways, the most significant of which was an increase in the ad damnum clause and a change in the theory of recovery from one based on an hourly rate to one computed by taking a percentage of the total cost of the project. The motions judge then granted Kalorama's motion to dismiss the complaint with prejudice on the ground that it exceeded the order permitting amendment.

On appeal, Techniarts contends that given the preference this court has expressed for a trial on the merits, the absence of significant prejudice to Kalorama, and the fact that the trial court did not consider less severe sanctions, the dismissal was an abuse of discretion. We agree and reverse.

I.

Techniarts is owned and managed by Judith Deitz and her husband William Moore. It provides a variety of services related to the construction of sound, television and motion picture studios. Moore contends that in May of 1985 he entered into an agreement with Edward T. Morgan, a general partner of Kalorama,¹ whereby Techniarts would provide the necessary services for construction of the studio and Morgan would pay for those services once he had obtained construction financing. Morgan denies that any such agreement existed.

In their original complaint filed on August 4, 1986, Techniarts alleged breach of an oral contract by which defendants Morgan, Kalorama, and Citadel, Inc., had promised to pay Techniarts for its time and services and to reimburse it for all sums expended to subcontractors or otherwise on Kalorama's behalf. The named plaintiff in the complaint as filed was Techniarts Video, Inc., a Maryland corporation. Techniarts sought a total of $134,191.38 based upon the time it had spent on the project and the hourly rates for the various tasks performed.² In an affidavit in support of a motion for summary judgment filed contemporaneously with the complaint,³ Moore stated that this sum included $57,305.13 in costs expended by Techniarts to various subcontractors. In his deposition on April 17, 1987, by contrast, he conceded that Techniarts had not actually paid the $57,305.13 to its subcontractors but that it continued to hold these bills and still owed this money.

On April 24, 1987, appellees filed a motion to dismiss and for costs on the grounds, inter alia, that Kalorama, as a District of Columbia general partnership, could not be sued in its own name, and that Moore's affidavit had misrepresented that Techniarts expended $57,305.13 to its subcontractors. Kalorama asserted that this misrepresentation was willful and sought sanctions pursuant to Super.Ct.Civ.R. 11 (1989). The motion to dismiss and the request for sanctions were denied by Judge Salzman on June 23, 1987.⁴

In response to the motion to dismiss, Techniarts, on May 22, 1987, filed a motion for leave to amend the complaint.⁵ The motion sought to name Techniarts as a District of Columbia general partnership with Moore and Deitz as general partners, to add an additional count seeking recovery in quantum meruit, and to increase the ad damnum clause to reflect more accurately the firm's time damages. Although the motion was granted on June 23, 1987,⁶ the court's order provided leave only to indicate that the plaintiff was a District of Columbia general partnership and to add a count sounding in quantum meruit.⁷ Kalorama filed a second motion to dismiss on July 30, 1987, asserting that Techniarts had failed to file its amended complaint within 20 days as required by Super. Ct.Civ.R. 15(a).⁸ Techniarts responded that Kalorama's reliance on Rule 15(a) was misplaced since that rule only imposes a 20 day limit when a pleading has been dismissed or stricken with leave to amend; in the present case the original complaint was neither dismissed nor stricken, nor had Judge Salzman imposed any time limit in the order allowing amendment. Before the motion was considered, however, Techniarts, on August 19, filed its amended complaint.

The amended complaint, in addition to adding a count in quantum meruit, went beyond Judge Salzman's order in several ways. First, Techniarts called itself a Maryland (rather than District of Columbia) general partnership; second, the complaint added Charles Lamb, the other general partner of Kalorama, as a party defendant; third, it increased the ad damnum clause; and fourth, it changed the theory of recovery from a sum certain amount based upon the time Techniarts had spent on the project to a straight 10% of the total cost of construction. Techniarts estimated the construction costs at $6,505,000 and therefore assessed its damages at $650,500, a more than four-fold increase from its original complaint. Arguing that this 10% figure represented a reasonable value for its services by industry standards, Techniarts claimed the same amount of damages in the quantum meruit count.

In light of the amended complaint, Kalorama filed a supplement to its July 30 motion to dismiss calling for dismissal on the ground that the amended complaint went beyond Judge Salzman's order, and again sought sanctions against Techniarts for misrepresentations.⁹ After a hearing on October 8, 1987, Judge Goodrich ruled from the bench that the amended complaint would be dismissed with prejudice because it had exceeded the scope of Judge Salzman's June 23rd order. He denied Techniarts' motion to reconsider on February 16, 1988, concluding:

Plaintiffs' Motion for Reconsideration presents no new facts or arguments, upon which relief may be granted. The Court believes that in light of the misrepresentations made by the Plaintiffs and the fact that the amended complaint went beyond the scope of Judge Salzman's order, it was correct in dismissing the Plaintiffs' complaint with prejudice.¹⁰

Techniarts appeals from this order.¹¹

II.

On appeal, Techniarts contends that if its amended complaint did indeed exceed the scope of Judge Salzman's order, the additions were not the result of any willful misrepresentations and were not prejudicial to Kalorama. Thus, rather than imposing the extreme sanction of dismissal with prejudice, it contends Judge Goodrich should have considered lesser sanctions and at most struck those portions of the complaint that went beyond the order to amend.

As a general matter, dismissal under Rule 41(b) lies within the exercise of the trial court's discretion, which this court will not disturb absent clear evidence of abuse. See Frazier v. Center Motors, 418 A.2d 1018, 1020 (D.C.1980). Given the severity of dismissal as a sanction, however, and the oft-stated preference for trial on the merits, this discretion must be exercised carefully and in accordance with standards identified in our cases. Brown v. Cohen, 505 A.2d 77, 78 (D.C.1986); LaPrade v. Lehman, supra note 10, 490 A.2d at 1155; Shimer v. Edwards, 482 A.2d 399, 400-01 (D.C.1984); Frazier, supra, 418 A.2d at 1020; Pollock v. Brown, 395 A.2d 50, 52 (D.C.1978); Garces v. Bradley, 299 A.2d 142, 144 (D.C.1973). Thus, dismissal should be adopted as a remedy only in extreme circumstances and only after the trial court has considered lesser sanctions. Granville v. Hunt, 566 A.2d 65, 66 (D.C. 1989); LaPrade v. Lehman, supra, 490 A.2d at 1155; see also District of Columbia v. Greene, 539 A.2d 1082, 1084 (D.C. 1988); National Voter Contact, Inc. v. Versace, 511 A.2d 393 (D.C.1986); Vernell v. Gould, 495 A.2d 306, 311 (D.C.1985); Braxton v. McNamara, 429 A.2d 183, 184 (D.C.1981).¹² The inquiry should include whether the conduct calling for sanctions was willful and whether the other party was prejudiced by it, Vernell, supra; Brown v. Cohen, supra, 505 A.2d at 78-79; Garces, supra, 299 A.2d at 144-45; and the sanction imposed should, wherever possible, be tailored to the offense. Pollock v. Brown, supra, 395 A.2d at 52; see also Peek v. District of Columbia, 567 A.2d 50, 54 (D.C.1989); Vernell, supra (trial court abuses its discretion where the sanction is too strict or unnecessary under the circumstances). These factors serve as a basis for determining whether or not the trial court has abused its discretion. Pollock, supra, 395 A.2d at 52.

In the present case, the parties do not dispute that the amended complaint went beyond the scope of Judge Salzman's order. The only point in dispute is whether this action warranted...