25 Fla. L. Weekly Supp. 623a
Online Reference: FLWSUPP 2507ACQUInsurance — Personal injury protection — Discovery — Failure to comply — Sanctions — Motion for sanctions against insurer that violated two court orders to produce documents related to global settlement which medical provider’s reply to insurer’s answer to complaint alleges included instant PIP claim and was breached by insurer — Violations of orders are not justified by fact that multiple law firms represented insurer — Insurer and counsel have been previously sanctioned, insurer was involved in violations as evinced by corporate representative’s denial of existence of documents regarding global settlement that insurer now admits exist, delay has prejudiced provider severely and created significant problems of judicial administration, and insurer has no reasonable justification for noncompliance — Insurer and its corporate representative are found in contempt of court, and claim that instant PIP claim was included in global settlement is found to be established — Insurer is prevented from opposing claim of global settlement or opposing global settlement in any way
STAND-UP MRI & DIAGNOSTIC CENTER, P.A., as assignee of Dennis Acquaro, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2016 20757 CONS . Div. 78. September 28, 2017. Shirley A. Green, Judge. Counsel: David B. Alexander, Bradford Cederberg, P.A., Orlando, for Plaintiff. Michael Rosenberg, Roig Lawyers, Deerfield Beach, for Defendant.
ORDER GRANTING PLAINTIFF’S AMENDED MOTIONFOR SANCTIONS AND AMENDED MOTION FORCONTEMPT OF COURT AGAINST DEFENDANT,STATE FARM MUTUAL AUTOMOBILE INSURANCECOMPANY, AND DEFENDANT, STATE FARM MUTUALAUTOMOBILE INSURANCE COMPANY’SCORPORATE REPRESENTATIVE
THIS MATTER having come before this Honorable Court on Plaintiff’s Amended Motion for Sanctions and Amended Motion For Contempt of Court Against Defendant, State Farm Mutual Automobile Insurance Company, and Defendant, State Farm Mutual Automobile Insurance Company’s Corporate Representative, bearing certificate of service date July 28, 2017, and this Honorable Court having heard arguments of counsel on August 24, 2017 and being otherwise fully advised in the premises, finds as follows:
1. This matter arises out of a motor vehicle collision that occurred on or about 7/21/2011.
2. The Plaintiff in this matter is STAND-UP MRI & DIAGNOSTIC CENTER, P.A., as assignee of Dennis Acquaro.
3. The Defendant in this matter is STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.
4. Plaintiff’s Complaint was filed on May 27, 2016.
5. The Florida Rules of Civil Procedure were invoked in this matter, via Court Order, executed on July 19, 2016.
6. Defendant filed Defendant’s Answer and Affirmative Defenses on August 11, 2016.
7. Plaintiff’s Reply to Defendant’s Answer and Affirmative Defenses was filed on August 31, 2016.
8. Within Plaintiff’s Reply to Defendant’s Answer and Affirmative Defenses, Plaintiff properly plead that “the subject claim was included in a global settlement with State Farm of all expired demands served by Bradford Cederberg.” Plaintiff has further plead that “State Farm breached the settlement by failing and refusing to make the second wire transfer as contemplated by the settlement agreement in the time frame set forth in the agreement (or at any time thereafter).” In addition, Plaintiff, via its Reply, has set forth within the pleadings that “[t]here were no limitations or exclusions placed upon the expired demands to be settled. The settlement included all expired demands, regardless of issue.” As a result, Plaintiff has properly raised within the pleadings that this matter was included within a global settlement of expired pre-suit demand letters (also known as Notices of Intent to Initiate Litigation) and that Defendant breached said global settlement.
9. On October 14, 2016, a hearing occurred on discovery issues and documents to be brought by the deponent to the deposition of the Defendant’s Corporate Representative. The Court executed an Order on October 19, 2017 ordering the Defendant’s Corporate Representative to bring to the deposition all documentation/information listed in the duces tecum portion of the Plaintiff’s Amended Notice of Taking Deposition Duces Tecum.
10. A subsequent hearing occurred on October 27, 2016. At said October 27, 2016 hearing, Defendant sought clarification/reconsideration of this Court’s October 19, 2017 Court Order. After hearing arguments on October 27, 2016, this Court executed an Amended Order on November 2, 2016. Said November 2, 2016 Order sets forth the documentation/information to be brought to the deposition of Defendant’s Corporate Representative. Specifically, this Court’s Amended Order required, in part, the following documents/information be brought by the Defendant’s Corporate Representative to the deposition:
“[A]ny and all documentation, in any form, between January 1, 2015 and the present that pertains in any manner to settlement or pre-settlement communications involving expired pre-suit demand matters with Bradford Cederberg, P.A., whether written, electronic or otherwise (including, e-mails, text messages, correspondence) between or among any of the following: Defendant’s counsel (including any member of the Conroy Simberg firm) and Plaintiff’s counsel that is/are in the possession of the Defendant (note: this last request from the Duces Tecum is not specific to just documentation contained within any individual claim file — it pertains to any and all described documentation that is in the possession of the Defendant in reference to the thirty-seven (37) claims at issue. If the Defendant is not in possession of any documentation or information that fits this description, the Defendant may so state.”
11. In violation of this Court’s November 2, 2016 Amended Order, Defendant and Defendant’s Corporate Representative failed to bring the documentation/information to the deposition as Ordered. At the deposition of Defendant’s Corporate Representative on January 10, 2017, Defendant failed to produce any of the court ordered settlement documents/information and Defendant’s Corporate Representative claimed to have no knowledge of the existence of any global settlement. Defendant has subsequently admitted that there was in fact a global settlement. In fact, Defendant has conceded that Defendant has in its possession hundreds, if not thousands, of pages of settlement documents. Counsel for Defendant did not dispute the existence of a global settlement at the hearing on August 24, 2017. To date, Defendant has failed to produce even one (1) page of said settlement documents/information.
12. At the October 27, 2016 hearing, this Court also addressed Defendant’s Motion for Extension of Time to Respond to Plaintiff’s Request to Produce to Defendant (Court Order executed November 15, 2016, nunc pro tunc October 27, 2016). The Court granted Defendant’s Motion for Extension of Time requiring Defendant to produce no later than November 7, 2016 the following:
“Any and all documentation, in any form, between January 1, 2015 and the present that pertains in any manner to settlement or pre-settlement communications involving expired per-suit demand matters with Bradford Cederberg, P.A., whether written, electronic or otherwise (including, but not limited to : e-mails, text messages, correspondence, voice mail messages or notes of any kind) between or among any of the following: Defendant, Defendant’s counsel (including any member of the Conroy Simberg firm), Plaintiff and/or Plaintiff’s counsel (note: this is not specific to just documentation contained within any individual claim file — it pertains to any and all described documentation that is in the possession of the Defendant in reference to the thirty-seven (37) claims/cases as listed in Plaintiff’s Notice of Hearing attached hereto as Exhibit ‘A’ and the nine (9) claims/cases as listed in Plaintiff’s Notice of Hearing attached hereto as Exhibit ‘B’.”
13. The pattern and practice of Defendant in this matter continued and in violation of this Court’s oral announcement at the October 27, 2016 hearing (Court Order executed November 15, 2016, nunc pro tunc October 27, 2016) Defendant failed to comply with this Court’s ruling. Defendant’s violation of this Court’s Order executed November 15, 2016, nunc pro tunc October 27, 2016, unfortunately and unbelievably was the second Court Order violated by Defendant in this matter. As mentioned above, to date, Defendant has failed to produce even one (1) page of said Court Ordered settlement documents/information.
14. Defendant in circumvention of this Court’s Orders and the judicial process has “embarked upon and traveled down a path of intentional delay and abuse of the system in clear violation of the Orders of this Court . . .” Georges v. Insurance Technicians, Inc., 448 So. 2d 1185 (Fla. 4th DCA 1984).
15. In Johnson v. Allstate Ins. Co., the Fifth District Court of Appeals, summed up the issue before this Court as follows:
“A party may not ignore a valid order of court except at its peril. There are avenues of redress by appellate review for orders which may be erroneous, but so long as such orders are entered by a court which has jurisdiction of both the subject matter and the parties, they cannot be completely ignored without running the risk that an appropriate sanction may be imposed.” Johnson v. Allstate Ins. Co., 410 So. 2d 978, 980 (Fla. 5th DCA 1982).
16. In Johnson v. Allstate Ins. Co., the Court found that violations of “two valid orders of the court requiring a response to an interrogatory” was sufficient, given the facts, to dismiss a complaint. See Johnson v. Allstate Ins. Co., 410 So. 2d at 979 (Fla. 5th DCA 1982). As detailed above, in the instant matter, Defendant has violated two (2) separate and valid Orders of this Court.
17. The Florida Rules of Civil Procedure provides guidance once an order regarding discovery has been violated. Fla. R. Civ. P. 1.380(b)(2) states in pertinent part as follows:
“If a party or an officer, director, or managing agent of a party or a person designated under rule 1.310(b)(6) or 1.320(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or rule 1.360, the court in which the action is pending may make any of the following orders:
(A) An order that the matters regarding which the questions were asked or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order.
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence.
(C) An order striking out pleadings or parts of them or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part of it, or rendering a judgment by default against the disobedient party.
(D) Instead of any of the foregoing orders or in addition to them, an order treating as a contempt of court the failure to obey any orders except an order to submit to an examination made pursuant to rule 1.360(a)(1)(B) or subdivision (a)(2) of this rule. . . .
Instead of any of the foregoing orders or in addition to them, the court shall require the party failing to obey the order to pay the reasonable expenses caused by the failure, which may include attorneys’ fees, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.” (emphasis added).
18. In Kozel v. Ostendorf, the Florida Supreme Court enumerated six (6) factors for a Court to consider when analyzing whether the actions of a party/counsel required the ultimate sanction of dismissal/striking of pleadings. The six (6) factors are as follows:
“1) whether the attorney’s disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience;
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, loss of evidence, or in some other fashion;
5) whether the attorney offered reasonable justification for noncompliance;
and
6) whether the delay created significant problems of judicial administration.”
Kozel v. Ostendorf, 629 So. 2d 817, 818 (Fla. 1993).
19. In Erdman v. Bloch, the Fifth District Court of Appeals reaffirmed the six (6) Kozel factors and stated “[i]f consideration of these factors suggests the attorney was at fault and if a sanction less severe than dismissal appears to be a viable alternative, the trial court should employ such an alternative.” Erdman v. Bloch, 65 So. 3d 62, 66 (Fla. 5th DCA 2011) [36 Fla. L. Weekly D1191b] (emphasis added).
20. As it pertains to the first Kozel factor (whether the attorney’s disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience), this Court finds that based upon the record and the actions of Defendant and its counsel, the disobedience was willful. In this matter, three prominent law firm in Florida have represented Defendant since Plaintiff’s Complaint was filed, Cole Scott & Kissane, P.A., Conroy Simberg, and now Roig Lawyers. At the August 24, 2017 hearing, counsel for Defendant attempted to attribute the many violations to the multiple law firms that have been involved in this matter. The Court finds Defendant’s argument without merit. Each of the attorneys that have represented Defendant in this matter have been partners at their respective firms, if not long time associates. As Plaintiff counsel pointed out during the August 24, 2017 hearing, Defendant’s decision in this matter to utilize three different law firms, without more, does not explain or justify the multiple violations. Defendant provided this Court with no record evidence that the substitution of counsel for Defendant caused or justified such egregious violations.
21. As it pertains to the second Kozel factor (whether the attorney has been previously sanctioned), this Court is aware of prior sanctions against Defendant and counsel for Defendant in other matters. This Court should not have to sanction Defendant in every matter to force compliance with this Court’s Orders.
22. As it pertains to the third Kozel factor (whether the client was personally involved in the act of disobedience), this Court finds that Defendant, State Farm Mutual Automobile Insurance Company, was involved in the violations. Specifically, this Court’s Orders executed on November 2, 2016 and November 15, 2016 (nunc pro tunc October 27, 2016) required involvement by Defendant. The Court’s November 2, 2016 Order was directed to Defendant’s Corporate Representative and what documents/information were required to be brought to the deposition. When asked by Plaintiff’s counsel about the subject global settlement documents/information, Defendant’s Corporate Representative testified in part that “[t]here’s none in my possession.” When asked “[i]s there any in possession of State Farm Mutual Automobile Insurance Company?” Defendant’s designated Corporate Representative as to said settlement responded “I don’t know.” See Deposition Transcript of Defendant’s Corporate Representative taken on January 10, 2017, Page 30, Lines 4-9. As discussed above, Defendant has since admitted that there was without question a global settlement. For Defendant’s Corporate Representative to testify under oath that there was no documents/information regarding, a now admitted, global settlement, reaches to the level of egregious and a contempt of Court.
23. As it pertains to the fourth Kozel factor (whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion), this Court finds based upon the record, arguments of counsel on August 24, 2017, and the actions of Defendant that the delay in this litigation has prejudiced the Plaintiff severely. Defendant’s violations of two (2) Court Orders has effectively stonewalled the Plaintiff and has prevented the Plaintiff from moving this matter forward. Each and every violation by Defendant has delayed this case and caused Plaintiff’s counsel to expend additional time, expenses and resources that would not have been necessary had Defendant complied with this Court’s Orders, the Rules of Civil Procedure and Florida law. The deposition of Defendant’s Corporate Representative in this matter and at least forty-five (45) additional matters occurred over a period of approximately four (4) months, between October 2016 and January 2017. Each of the depositions took place in Jacksonville, Florida, which was Defendant’s Corporate Representative’s location. Plaintiff’s counsel is located in Orlando, FL and was required to be present at each and every deposition of Defendant’s Corporate Representative in Jacksonville, FL, due in large part to the fact that Defendant produced no documents prior to the depositions. Defendant handed counsel for Plaintiff the claim file documents only after each of the above noted depositions began. This Court finds that this improper tactic was deliberate and willful. Of course, not having the documents prior to the deposition caused substantial prejudice to Plaintiff, as counsel for Plaintiff, had no time to review the documents prior to asking Defendant’s Corporate Representative questions surrounding same. Further, Defendant’s violations have caused Plaintiff to conduct the deposition of Defendant’s Corporate Representative without the benefit of the Court Ordered documents/information. This Court simply will not tolerate such a prejudicial delay.
24. As it pertains to the fifth Kozel factor (whether the attorney offered reasonable justification for noncompliance), this Court finds based upon the record, the arguments of counsel on August 24, 2017, and the actions of Defendant, that reasonable justification for noncompliance has not been provided by Defendant or counsel for Defendant. During the course of the hearing on August 24, 2017, counsel for Defendant admitted that the orders had been violated but provided little to no justification for the noncompliance. At the August 24, 2017 hearing, counsel for Defendant argued that the Court’s Orders executed on November 2, 2016 and November 15, 2016 (nunc pro tunc October 27, 2016) were “overly broad” and Defendant was unsure what was required. This Court finds said argument by Defendant without merit. As correctly pointed out by counsel for Plaintiff at the August 24, 2017 hearing, a hearing occurred on October 27, 2016 wherein lengthy argument was made by both Defendant’s counsel and Plaintiff’s counsel surrounding Defendant’s request for clarification of this Court’s October 19, 2016 Order. Thereafter, the Court did amend said order and executed its Amended Order on November 2, 2016. For Defendant to now claim, on August 24, 2017, that the Defendant’s justification for noncompliance with this Court’s Amended Order executed November 2, 2016, almost ten (10) months prior, is because same is “overly broad” is disingenuous at very best. Since this Court executed its Amended Order on November 2, 2016, Defendant has not moved for clarification/reconsideration and has not utilized the appellate process to obtain redress. As a result, Defendant’s allegation that the Court’s Amended Order is “overly broad” is not a reasonable justification for noncompliance. Of important note, Defendant has not utilized the available appellate process to obtain redress regarding any Court Order in the instant matter and instead has voluntarily and egregiously ignored this Court’s Orders.
25. As it pertains to the sixth Kozel factor (whether the delay created significant problems of judicial administration), this Court finds based upon the record and the actions of Defendant, the delay has created significant problems of judicial administration. Plaintiff has been prevented from moving this matter to resolution as a result of Defendant’s violations and this Court has executed two (2) separate orders which have been directly violated. It is Plaintiff’s position that the Defendant’s actions in this matter have not only delayed the disposition of this matter, the Defendant’s actions have shown a complete disrespect for this Court and for the judiciary as a whole. This Court agrees. If the actions of Defendant in the instant matter are not severely sanctioned, it is the citizens of Florida that would suffer the underpinning consequences of a hindered judiciary. The Defendant cannot be permitted to hamper this Court’s administration of justice.
26. Based upon the forgoing, this Court has fully considered and analyzed all six (6) factors set forth in Kozel v. Ostendorf surrounding dismissing/striking of pleadings and finds that all six (6) factors have been satisfied.
27. This Court is well aware of the fact that striking of any pleadings should only be employed by this Court as a sanction in the most egregious of situations. This Court finds that Defendant’s conduct in the instant matter was equivalent to willfulness and deliberate disregard for this Court’s Orders, the judicial system as a whole, and Florida law. See Erdman v. Bloch, 65 So. 3d at 66 [36 Fla. L. Weekly D1191b], also see Ham v. Dunmire, 891 So. 2d 492, 495-96 (Fla. 2004) [30 Fla. L. Weekly S6a]. Finally, based upon the above, both Defendant and Defendant’s counsel are at fault for the violations. Id. Although this Court believes strongly that it could strike Defendant’s pleadings from the record in this matter, pursuant to Fla. R. Civ. P. 1.380(b)(2), the record before this Court, totality of the circumstances, argument of counsel on August 24, 2017, as well as the authority and analysis outlined above, this Court recognizes the severity of striking of pleadings. In this matter “a sanction less severe than dismissal appears to be a viable alternative . . .” Erdman v. Bloch, 65 So. 3d at 66. However, this Court must severely sanction Defendant for its egregious actions in this matter.
It is therefore, ORDERED AND ADJUDGED that:
1. Plaintiff’s Amended Motion for Sanctions and Amended Motion For Contempt of Court Against Defendant, State Farm Mutual Automobile Insurance Company, and Defendant, State Farm Mutual Automobile Insurance Company’s Corporate Representative, bearing certificate of service date July 28, 2017, is hereby GRANTED.
2. Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, and Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY’s Corporate Representative are hereby FOUND in contempt of court.
3. Plaintiff’s claim in this matter that the instant matter was included in a global settlement of all expired pre-suit demand letters served by Bradford Cederberg, P.A. upon Defendant and other State Farm entities, is hereby FOUND to be established.
4. Defendant is hereby PREVENTED from opposing Plaintiff’s claim that the instant matter was included in a global settlement of all expired pre-suit demand letters served by Bradford Cederberg, P.A. upon Defendant and other State Farm entities, and Defendant is further PREVENTED from opposing said global settlement in anyway.
5. Defendant is hereby PREVENTED from introducing any evidence in opposition to Plaintiff’s claim that the instant matter was included in a global settlement of all expired pre-suit demand letters served by Bradford Cederberg, P.A. upon Defendant and other State Farm entities, and Defendant is further PREVENTED from introducing any evidence in opposition to said global settlement.
6. Plaintiff has incurred reasonable attorney’s fees and costs associated with Defendant’s violations of multiple Court Orders and Defendant’s contempt of court in this matter, Plaintiff is hereby ENTITLED to all its reasonable attorney’s fees and costs associated with Defendant’s violations of multiple Court Orders, including but not limited to, all attorney’s fees and costs associated with the motions, hearings, Orders, and deposition of Defendant’s Corporate Representative. The Court RESERVES jurisdiction to determine amount of Plaintiff’s reasonable attorney’s fees and costs.
