12 Fla. L. Weekly Supp. 498a
Insurance — Personal injury protection — Discovery — Failure to comply — Sanctions — Default — Where over course of more than a year insurer has failed to comply with discovery rules and multiple court orders requiring discovery, insurer was unable to offer any explanation for continued failure to comply with orders other than understaffing of its own legal office, misconduct is not result of neglect or experience of attorney but is attributable to insurer’s disobedience, insurer has previously been sanctioned dozens of times by court, delay prejudiced insured by causing him to incur more attorney’s fees than claim itself, delay has created significant problems of judicial administration, and insurer failed to timely pay sanction which it had been advised was condition precedent to its continued defense, insurer’s pleadings are stricken and default judgment is entered against insurer
MARLON ELLIS, Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 04-13524 COCE (53). February 9, 2005. Robert W. Lee, Judge. Counsel: Bradley S. Hartman, Cooper City, for Plaintiff. Thomas A. Freehling, Coral Gables, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S PLEADINGS, ENTER DEFAULT, AND DEFAULT JUDGMENT
THIS CAUSE came before the Court on February 3, 2005 for hearing of the Plaintiff’s Motion to Strike Defendant’s Pleadings, Enter Default, and Default Judgment, and the Court’s having reviewed the Motion; heard argument; reviewed the relevant legal authorities; made a thorough review of the matters filed of record; and been sufficiently advised in the premises, the Court finds as follows:
This order is the fourth in a series attempting to obtain Defendant’s compliance with discovery rules and related court orders in this case. Because the Court finds that no viable alternative sanction exists to assure the Defendant’s future compliance, the Court grants the relief sought by Plaintiff.
Findings of Fact: On December 8, 2003, the Plaintiff filed its complaint for unpaid PIP benefits in the amount of $2,060.80 for lost wages, plus interest. On January 20, 2004, the Defendant had general counsel file its Notice of Appearance.
The primary defense in Defendant’s Answer is that the benefits due under the insurance policy have been exhausted. As a result, the claims received by the Defendant, as well as when they were received and how much the Defendant paid, are absolutely critical to the Plaintiff’s being able to prove its claim.
On April 2, 2004, the Plaintiff served upon Defendant a set of Interrogatories, as well as a First Request for Production, and a First Request for Admissions.
By May 20, 2004, the Defendant had provided absolutely no response to the Plaintiff’s discovery requests. On that day, the Plaintiff filed his Ex-Parte Motion to Compel. On June 7, 2004, the Honorable William Herring entered his Order granting the Plaintiff’s Motion to Compel, providing that the Defendant “shall have ten (10) days from the entry of this Order” to respond to the discovery requests. A copy of this Order was mailed to defense counsel.
The Defendant failed to comply with Judge Herring’s order.
On June 23, 2004, the Plaintiff served its Motion to Compel due to the Defendant’s failure to comply with Judge Herring’s Order of June 7.
On June 28, 2004, the Defendant finally served a response to Plaintiff’s discovery requests. They were, however, woefully inadequate and incomplete. The Defendant also simultaneously filed its Motion to Grant Relief from Admissions setting forth without further specificity that “[t]hrough inadvertence, a response was not filed within the prescribed time.”
On July 14, 2004, the Plaintiff served upon Defendant a Second Request for Admissions.
On August 3, 2004, after hearing, Judge Herring entered an Order granting Plaintiff’s Motion for Sanctions, directing that the Defendant “produce all assignments, notices of assignment, and HCFA forms received from Plaintiff’s medical providers or other documents providing notice of such claims within 10 days.” The order also required that the Defendant produce a PIP payment ledger within the same deadline. The Court further awarded sanctions in the amount of $500.00 to be paid within thirty days. Payment of the sanction was a “condition precedent to [Defendant’s right to] continue to defend this lawsuit.”
The Defendant once again failed to comply with the Court order.
On September 27, 2004, the Defendant served its Notice of Filing Documents Pursuant to Court Order Dated August 3, 2004. Absolutely nothing was attached to either the Court’s copy or the Plaintiff’s copy.
On October 21, 2004, the Plaintiff served its Motion to Strike Defendant’s Pleadings, Enter Default, and Default Judgment. By this time, the Defendant had still failed to provide the PIP payment ledger ordered by Judge Herring. The Defendant had tendered the $500.00 sanction more than thirty days late. The work privilege log referred to in Defendant’s Answer to Interrogatories was not provided.
On November 9, 2004, the Defendant finally served a PIP payment ledger (“No-Fault Payment Register”). It, however, was incomplete in that it failed to disclose how much had been paid to each vendor, and the total amount paid. Additionally, the ledger had clear inconsistencies between the dates of service and the dates the claims were received. The Plaintiff was also provided a second PIP payment ledger with no inconsistencies as to dates of service or treatment, but with no amounts allowed, amounts paid, or total amount paid. It is clear when reviewing the two ledgers in tandem that the claim dates may have been adjusted to reflect that no benefits remained to pay the lost wages at issue in this lawsuit. The Court has attached copies of these two ledgers to this Order as an Exhibit.
On November 18, 2004, in an attempt to try to resolve the deficiencies apparent in the ledgers, the Plaintiff served upon Defendant its First Supplemental Request for Production seeking “[c]opies of all cancelled checks for PIP benefits paid.”
On December 15, 2004, the Defendant filed its Motion for Final Summary Judgment with 29 pages of exhibits. The Defendant did not serve a copy of the Motion or the attachments on Plaintiff. At the hearing, defense counsel argued that it believed that it had no obligation to serve a copy on Plaintiff until the Motion was actually set for hearing. Because by the time of the instant hearing the Defendant had not yet set its Motion for hearing, it acknowledged that it still had not provided to Plaintiff the Motion or any of its attachments.
By January 6, 2005, the Defendant had still not provided copies of the checks requested in the First Supplemental Request for Production. On that date, the Plaintiff filed its Motion to Compel.
On January 18, 2005, this Court entered its Order requiring that the Defendant produce the canceled checks within ten days. The Defendant failed to comply.
On January 25, 2005, the Court set for hearing the Plaintiff’s Motion to Strike Pleadings, Enter Default and Default Judgment, setting the hearing for February 3, 2005.
On February 3, 2005, despite continuing to be delinquent, the Defendant still had not provided complete responses to the discovery. Critical to the Plaintiff’s ability to prosecute this claim, the Defendant still has not provided a complete PIP ledger as well as copies of all canceled checks. At the hearing, the Defendant was unable to offer any explanation for its continued failure to comply with this Court’s multiple orders, as well as the rules of discovery, over the course of almost a year.
Conclusions of Law: The appropriate analysis for determining whether to enter a default judgment as a sanction is, in this Court’ s view, set forth in Kozel v. Ostendorf, 629 So.2d 817 (Fla. 1994), as recently addressed by the appellate court in American Express Co. v. Hickey , 869 So.2d 694 (Fla. 5th DCA 2004). Although these cases deal with dismissals with prejudice as a sanction, the effect of a default judgment as a sanction is the same: either action disposes of the case. The Florida Supreme Court has set forth some principles for addressing the matter, and some guidelines for determining whether such a sanction is appropriate. These principles include whether the purpose of the Florida Rules of Civil Procedure is being upheld, i.e., “to encourage the orderly movement of litigation.” Another principle is that the client should not generally be punished for unilateral action of its attorney. Additionally, the analyzing court should consider whether “a sanction less severe than dismissal [or default] appears to be a viable alternative.” Kozel, 629 So.2d at 818. In deciding whether these principles are being upheld, the Supreme Court set forth six guidelines for a trial court to use:
(1) whether the attorney’s conduct was willful, deliberate, or contumacious, rather than an act of neglect or experience;
(2) whether the attorney has been previously sanctioned;
(3) whether the client was personally involved in the act of disobedience;
(4) whether the delay prejudiced the opposing party through undue expense;
(5) whether the attorney offered reasonable justification for noncompliance; and
(6) whether the delay created significant problems of judicial administration.
Id. These guidelines were reiterated by the Fifth District Court of Appeal in American Express, 869 So.2d at 695.
In Kozel, as in American Express, the sanction of dismissal was used by the trial court “based solely on the attorney’s neglect.” The Supreme Court directed that the trial court reconsider this sanction in light of the above guidelines. Id.; American Express, 869 So.2d at 695. In American Express, however, the appellate court emphasized that “sanctions other than dismissal are appropriate in those situations when the attorney, and not the client, is responsible for the error.” 869 So.2d at 695 (emphasis added).
The above guidelines are just that, guidelines. The Florida Supreme Court has, in other cases, offered additional matters for a trial court to consider. When a sanction is entered as the result of failure to comply with a court order, the Supreme Court has held that “[a] deliberate and contumacious disregard of the court’s authority will justify application of this severest of sanctions [dismissal or default . . .], as will bad faith, willful disregard or gross indifference to an order of the court, or conduct which evinces deliberate callousness.” Mercer v. Raine, 443 So.2d 944, 946 (Fla. 1983) (emphasis added). Against this background, this Court will consider the record in this case as it pertains to the Defendant, United Automobile Insurance Company.
Whether the attorney’s conduct was willful, deliberate, or contumacious, rather than an act of neglect or experience. The Court finds that the misconduct at issue lies at the feet of the Defendant itself, i.e., the client. The incomplete, inconsistent and contradictory PIP payment ledgers were prepared by the client, not the attorney. This factor is more specifically addressed in the following paragraph. The Court specifically finds that the misconduct is not the result of neglect or experience of the attorney. The attorney handling this particular file clearly has an overload of cases himself.
Whether the attorney has been previously sanctioned. Because the sanction of a default judgment is a severe sanction, the Court will go beyond the attorney in this case and consider this guideline as it pertains to the client itself. This particular Defendant has been sanctioned dozens of times by this Court alone. Having now handled two different civil divisions and having had the opportunity to review hundreds of files from predecessor judges, the undersigned judge is also personally aware that this Defendant has been sanctioned dozens of times by other judges for similar conduct. The Defendant itself, and not its attorneys, has paid thousands of dollars is sanctions. The client itself then must clearly be aware of the misconduct. And yet, the sanction of fees alone has been unable to remedy the Defendant’s misconduct. It is clear to this Court that if the Defendant is not intentionally attempting to ignore court orders, it is certainly acting with “gross indifference” or “deliberate callousness” in seeking to comply. See Mercer, 443 So.2d at 946. Moreover, the attorneys work directly for the client’s Office of the General Counsel. They have no clients other than United Automobile Insurance Company.
Although the Court cannot make an exhaustive list of sanctions and/or compel orders it has issued against this Defendant in other cases, the Court has been able to compile a representative list from a cursory review of its own “Order” file kept in chambers, as well as a review of clerk files currently in the judge’s office, which include:
· Order Granting Plaintiff’s Motion for Sanctions, Striking Defendant’s Pleadings, and Entering Default Judgment, Case No. 03-13760 COCE 53, Feb. 8, 2005 (noting Defendant’s failure to change its conduct despite being sanctioned in the amount of $1000, which it failed to timely pay).
· Order Granting Plaintiff’s Motion to Compel, Case No. 04-3524 COCE 53, Jan. 18, 2005.
· Order Compelling Discovery, Case No. 03-14131 COCE 53, Nov. 9, 2004 (Judge Herring).
· Order Granting Plaintiff’s Motion to Compel Supplemental Discovery, Case No. 04-63 COSO 62, Sept. 24, 2004 (reserving jurisdiction to award fees as a sanction).
· Order Granting Plaintiff’s Motion to Compel Supplemental Interrogatories, Case No. 03-2257 COSO 62, Sept. 24, 2004 (awarding fees as a sanction).
· Order Granting Plaintiff’s Motion to Compel, Case No. 03-14131 COCE 53 (Judge Herring).
· Order Granting Plaintiff’s Motion to Compel Discovery, Case No. 03-7457 COSO 62, Sept. 13, 2004 (reserving jurisdiction to award fees as a sanction).
· Order Granting Plaintiff’s Motion to Compel Discovery, Case No. 04-2651 COSO 62, Sept. 10, 2004 (reserving jurisdiction to award fees as a sanction).
· Order Granting Plaintiff’s Motion to Enforce Court Order, Case No. 03-2105 COSO 62, Sept. 2, 2004 (awarding sanctions of $500.00).
· Order Granting Plaintiff’s Motion to Compel Discovery, Case No. 03-855 COSO 62, Sept. 2, 2004 (awarding sanctions of $500.00).
· Order Granting Plaintiff’s Motion to Enforce Court Ordered Discovery, Case No. 03-2263 COSO 62, Sept. 2, 2004 (awarding sanctions of $500.00).
· Order to Compel Discovery, Case No. 04-3453 COSO 62, Aug. 23, 2004.
· Order Granting Plaintiff’s Motion to Compel Supplemental Discovery, Case No. 03-7344 COSO 62, Aug. 17, 2004 (reserving jurisdiction to award fees as a sanction).
· Order Granting Plaintiff’s Motion to Compel Responses to Supplemental Discovery, Case No. 03-2257 COSO 62, Aug. 5, 2004 (awarding sanctions of $500.00).
· Order Granting Plaintiff’s Motion for Sanctions, Case No. 04-3524 COCE 53, Aug. 3, 2004 (Judge Herring) (awarding sanctions of $500.00).
· Order Granting Plaintiff’s Motion to Compel Discovery, Case No. 03-2105 COSO 62, July 30, 2004 (reserving jurisdiction to award fees as a sanction).
· Order Granting Plaintiff’s Motion to Compel Discovery, Case No. 03-2263 COSO 62, July 30, 2004 (reserving jurisdiction to award fees as a sanction).
· Order Granting Plaintiff’s Second Motion to Enforce Court Order, Case No. 04-1428 COSO 62, July 15, 2004 (awarding sanctions of $500.00 per day, plus additional $50.00 for each day not in compliance).
· Order of Default, Case No. 04-1428 COSO 62, June 10, 2004 (awarding sanctions of $250.00).
· Order Granting Plaintiff’s Motion to Compel, Case No. 04-3524 COCE 53, June 7, 2004 (Judge Herring).
Whether the client was personally involved in the act of disobedience. As stated above, the Court finds that the client itself was and is personally involved in the act of disobedience in this case.
Whether the delay prejudiced the opposing party through undue expense. This case involves lost wages of just over $2000.00. And yet, the Court is quite comfortable in concluding that Plaintiff has reasonably incurred far more fees than this in simply trying to get the information requested — information that it clearly has a right to obtain in order to establish its claim at trial. At this point in this particular case, the Defendant’s actions have caused the Plaintiff to have to incur more attorney fees than the claim itself. Further defense of this claim is simply not warranted.
Whether the attorney offered reasonable justification for noncompliance. The Defendant has offered no credible explanation as to why it has continually failed to comply with this Court’s orders or the rules of discovery. The Court finds that none exists. The Defendant cannot create the problem by consistently providing an apparent insufficient number of attorneys and staff to handle its cases, and then try to claim as an excuse that its attorneys have too much work.
Whether the delay created significant problems of judicial administration. It is no secret that United Automobile has hundreds of cases pending in the civil division of the Broward County Court. And yet, the undersigned judge has to spend an inordinate amount of time with this party, particularly when compared to other similar cases involving the same type of dispute against other insurers. Much of this Court’s attention is drawn to motion practice involving motions to compel and motion for sanctions against United Automobile, the great majority of which have later been determined to be meritorious. Notwithstanding that these are county court cases, this Court’s own administrative office has advised the Court that it has more than thirty (30) cases involving United Automobile Insurance Company as a defendant that are more than two years old, clearly beyond the guidelines set forth in the Rules of Judicial Administration. Indeed, some are more than five years old. As for this particular case, the Court has had to spend more than a day on this file alone to research and draft this Order, in addition to the time spent at the hearing.
As a separate ground, the Court notes that the Defendant was clearly placed on notice that its paying of the $500.00 sanction by September 3, 2004 was a condition precedent to its continued defense of this case. It failed to timely comply. The Defendant cannot now be heard to complain. Cf. Mondeja v. Cuevas, 583 So.2d 1115, 1116 (Fla. 3d DCA 1991); Smith v. Gunsaullus, 511 So.2d 1108, 1109 (Fla. 1st DCA 1987).
In sum, this Court sees no viable alternative sanction in this particular case. Perhaps the Defendant will begin to take the steps necessary to insure that the Florida Rules of Civil Procedure and orders of the court meet with consistently prompt and complete compliance. Perhaps the Defendant will begin to see that dilatory conduct will not meet with tacit approval by the court. Accordingly, it is hereby
ORDERED and ADJUDGED that the Defendant’s pleadings are hereby STRICKEN and a default judgment entered against the Defendant. The Court will also award fees and costs pursuant to statute. The Plaintiff is directed to submit a proposed judgment in conformance with the terms of this Order, and reserving jurisdiction to award fees and costs.
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