28 Fla. L. Weekly Supp. 34a
Online Reference: FLWSUPP 2801STOC
Insurance — Homeowners — Discovery — Failure to comply — Sanctions — Insurer’s answer and affirmative defenses are stricken, and default judgment is entered in favor of insureds where insurer has committed numerous discovery violations, intentionally failed to meet court-imposed deadlines, refused to comply with court-ordered sanctions, and exhibited abusive behavior toward witnesses, opposing counsel and court
WILLIAM STOCKTON and JENNIFER STOCKTON, Plaintiffs, v. AVATAR PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant. Circuit Court, 9th Judicial Circuit in and for Orange County. Case No. 2017-CA-011236-O, Division 35. March 10, 2020. Patricia L. Strowbridge, Judge. Counsel: Nathan E. Wittman, Morgan & Morgan, P.A., Orlando, for Plaintiffs. Curt L. Allen, Christopher M. Ballard, and Brian A. Hohman, for Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FORENTRY OF JUDGMENT BY DEFAULT
THIS MATTER came before the Court on December 20, 2019, upon the Plaintiff’s Motion for Entry of Judgment by Default, and the Court, having considered the arguments of counsel, having carefully reviewed the applicable case law and the filings within the court file, and having handled several discovery matters in this case, both in court and by telephone in chambers, and being otherwise fully informed, does hereby make the following findings of fact and rulings of law:
I. Procedural History and Findings of Fact
The following recitation outlines the numerous violations of discovery, intentional failures to meet court imposed deadlines, refusals to comply with court ordered sanctions, abusive behavior toward witnesses, opposing counsel and the Court, which has caused the Court to conclude that all reasonable steps have been taken to avoid the striking of Defendant’s pleadings. The actions of the Defendant and their counsel have, however, continued to be unacceptable and inappropriate, by any measure.
On December 29, 2017, the Plaintiffs filed a complaint against the Defendant insurance company alleging that their home sustained damage covered under a policy of insurance issued by the Defendant. The Defendant was served with the complaint and Plaintiffs’ initial discovery requests on January 5, 2018.
Defendant filed a Motion for Extension of Time to respond to Plaintiffs’ initial discovery, and Plaintiffs did not object to the additional 30 days requested. Instead of responding to the discovery on or before March 21, 2018, as provided in the Order on Defendant’s Motion for Extension of Time, Defendant again moved for an extension of time, requesting an additional three weeks, until April 11, 2018, to respond to Plaintiffs’ initial discovery. Plaintiffs objected to the additional extension of time, arguing that they did not believe the Defendant was acting in good faith, and that the extension of time was for the purpose of avoiding discovery prior to a scheduled hearing on the Defendant’s Motion to Dismiss the Complaint, noticed for April 5, 2018.
The Defendant subsequently served its discovery responses, on March 27, 2018, one week after the deadline imposed by the Court’s order of February 28, 2018. The Defendant’s responses contained unsworn Answers to Interrogatories with objections to most of the questions, objections to every document sought in the Request for Production, except for the policy of insurance, and legally insufficient responses to the Requests for Admissions. Defendant would, over the course of this litigation, file no less than fourteen (14) Motions for Extension of Time, and ultimately failed to comply with many deadlines, without seeking and obtaining an Order for extension of time.
Also of note during this same time frame, on March 1, 2018, Plaintiffs filed a Notice of Intent to Take Corporate Representative’s Deposition and Demand for Designation of Representative Deponent. On April 6, 2018, Plaintiffs filed another Notice of Intent to Take Corporate Representative Deposition and Demand for Designation of Representative Deponent, again insisting upon the scheduling of a corporate representative deposition.
Plaintiffs’ Amended Complaint was thereafter dismissed without prejudice on April 5, 2018, upon the Defendant’s Motion to Dismiss. A Second Amended Complaint was filed by the Plaintiffs on April 11, 2018. Defendant was ordered to respond to the Second Amended Complaint within 10 days, but Defendant instead filed a Motion for Summary Judgment, arguing that no payment was owed under the policy.
The Hon. Heather Higbee, assigned to this Division in 2018, denied the Defendant’s Motion for Summary Judgment on July 31, 2018, and ordered the Defendant to file a responsive pleading within 20 days. Having not previously or timely filed a Motion to Dismiss the Second Amended Complaint, Defendant responded to Judge Higbee’s Order, not by filing a responsive pleading as directed, but by filing a Motion for Reconsideration requesting that it be allowed to file a Motion to Dismiss because the Plaintiffs had alleged multiple breaches of the insurance contract in one count, which Defendant asserted was “quite undeniably. . . improper”. The Motion for Reconsideration was denied, and the Defendant filed its Answer and Affirmative Defenses on August 20, 2018.
Plaintiff’s initial discovery was served with the original Complaint, as mentioned above. Thereafter, Plaintiff sought additional discovery in the form of depositions of the Corporate Representative of the Defendant, and of the witnesses listed in the Defendant’s unsworn answers to interrogatories. Defendant sought the depositions of the Plaintiffs and of the witnesses identified by the Plaintiffs as supporting the factual allegations of their Complaint.
What followed can only be described as “scorched earth” litigation behavior on the part of the Defendant, consisting of abusive treatment of Plaintiff’s counsel during court hearings, email correspondence and depositions (as evidenced by exhibits and transcripts filed in the court file), abusive treatment of the individual Plaintiffs and their witnesses (as evidenced by transcripts filed in the court file), disrespect for the Court and the Orders of the Court, and a pervasive lack of good faith and fair dealing in the defense of the case.
During the time this case has been pending before Division 35 of the Ninth Judicial Circuit, the case was first assigned to Judge Heather Higbee, prior to being assigned to the undersigned through judicial rotation. Judge Higbee sanctioned the Defendant on December 27, 2018 for discovery abuses related to the scheduling/conduct of the corporate representative deposition. The sanction Order followed a hearing held on November 15, 2018, stemming from a witness deposition that was conducted on July 27, 2018 and a corporate representative deposition that was noticed for October 3, 2018, but did not take place.
Anticipating further discovery issues, Judge Higbee’s December 27, 2018 Order outlined that she was declining to strike the Defendant’s pleadings at that time, but found Defendant’s positions with regard to the scheduling, and subsequent objection to, the corporate representative’s deposition was “unjustified and deserving of sanction”. Judge Higbee ordered the rescheduling of the corporate representative’s deposition before the end of January 2019, and directed the Defendant to review the areas of inquiry identified by the Plaintiff, and to “formally” object to any proposed areas of inquiry on or before November 26, 2018. Judge Higbee further directed that any such formally objected to areas of inquiry should be brought to a Short Matters hearing prior to the rescheduled deposition. The Defendant was ordered to pay the attorney fees and costs incurred by the Plaintiff for the attendance at the October 3, 2018 deposition and for the need to seek the assistance of the Court by the filing of a Motion and attendance at the hearing.
Despite Judge Higbee’s clear directive, the Defendant filed no formal objections at any time prior to the rescheduled deposition, but objected throughout the rescheduled deposition, and instructed Kendra Shaw, the corporate representative (who is an attorney licensed to practice in Florida) not to answer the questions posed by the Plaintiff’s counsel, based upon defense counsel’s issues with the areas of inquiry. Ms. Shaw, in her capacity as corporate representative, was asked directly to properly answer the questions and she declined to do so.
In addition to the December 27, 2018 Order, Judge Higbee also entered an Order on November 27, 2018 finding the Defendant “in violation” of her previous Order as to overdue discovery responses. And, on January 2, 2019, Judge Higbee entered an Order relative to a hearing held on December 11, 2018 which struck portions of the Defendant’s Answer and Affirmative Defenses as being “immaterial, impertinent and/or scandalous matter(s)” and struck the Fourth Affirmative Defense, finding “the inference or suggestions of ‘fraud’ was improperly pled. Defendant was granted “leave of court to file an amended answer within ten (10) days of the December 11, 2018 hearing.” On December 21, 2018, Defendant filed an Amended Answer reasserting the Fourth Affirmative Defense, re-alleging “fraud” with the same lack of factual specifics, in defiance of Judge Higbee’s ruling striking the affirmative defense just ten days earlier.
The parties’ first appearance before the undersigned Judge, occurred on January 17, 2019. The Defendant had filed objections to the issuance of subpoenas to third parties (who had been identified by the Defendant in earlier discovery), and the Defendant was seeking sanctions against the Plaintiff for proceeding with a deposition of an individual named Wayne Frazier, which deposition had been coordinated and set for August 31, 2018. The Notice of Mr. Frazier’s deposition was filed in the court file on July 24, 2018.
Despite coordinating the deposition with the Plaintiff’s counsel and being served with the Notice of Deposition over a month before the deposition, Defendant waited until just before 6 pm on August 29, 2018, to file a Motion for Protective Order and For Award of All Reasonable Expenses Incurred, alleging that the Plaintiff was improperly attempting to take the deposition of a “consulting expert” retained by the Defendant, and asserting that “until such time as he is designated as a testifying trial expert, Plaintiffs cannot depose him.”
Plaintiff’s counsel advised Defendant’s counsel that the deposition would be cancelled if the Defendant’s counsel would stipulate that Mr. Frazier would not be called to testify at the trial (then expected to occur in April 2019). Defendant’s counsel refused to so stipulate, and Plaintiff’s counsel advised that the deposition would go forward as scheduled, absent an Order of Protection from the Court.
Thereafter, the deposition occurred, but Defendant’s counsel inexplicably elected to not appear. Mr. Frazier appeared, however, and directly refuted the allegations of the Defendant’s Motion for Protective Order, stating that he was not retained as a consulting expert, and had provided no consulting services to the Defendant or Defendant’s counsel. An Order was entered on February 28, 2019, outlining all of the aforestated, and denying the relief requested by Defendant’s.
Defendant’s counsel then noticed video depositions of the custodian of records and the corporate representatives of the roofing company and environmental services company that had provided the repair estimates, which Plaintiff relies upon in the case. The environmental services company, Healthy Home Services, LLC (“HHS”), consists of the field inspector, Dana Aiken and his wife, Sally Aiken, who handles the office work. Defendant scheduled separate depositions of Sally Aiken, the Custodian of Records of HHS, and the Corporate Representative of HHS. Defendant’s counsel, Curt Allen, Esq., was advised at the beginning of the depositions (approximately 10:27 am) that the Aikens had to leave by 2 pm, because they were responsible for picking up their seven year old granddaughter after school.
The transcript of the deposition reflects abusive and accusatory questioning of Sally Aiken, as the Records Custodian of HHS, by Mr. Allen, and abusive and unprofessional behavior directed toward Plaintiff’s counsel. Despite being advised of the Aikens’ need to pick up their granddaughter after school, several threats were made to keep Sally Aikens beyond that time period, because Plaintiff’s counsel was making objections. Attorney Allen repeatedly told Plaintiff’s counsel to “stop talking” when Plaintiff’s counsel was making objections to the questioning, and repeatedly insulted and berated Mr. Wittman in the presence of the witness, for stating objections to his questioning. In sum, Mr. Allen’s behavior during the deposition of this witness was inexcusably unprofessional and abusive. Mr. Wittman terminated the deposition because of the abusive behavior and advised that he would be seeking a protective order from the Court.
Later that day, Defendant’s counsel cancelled several other depositions that had been scheduled for the following day, and then filed a series of Motions seeking an order of contempt against Sally Aiken personally, and for sanctions to be imposed against Healthy Home Services, LLC, the Plaintiff and Plaintiff’s counsel, for the costs of all of the depositions which were cancelled by Defendant’s counsel, as well as all of the costs associated with the terminated deposition of Sally Aiken. The tone and language of these Motions is similar to the transcript of Sally Aiken’s deposition. These Motions were heard and denied on August 21, 2019.
Going back to the February 28, 2019 Order that dealt with the issue of Mr. Frazier’s deposition, this Order also addressed Defendant’s objections to Notices of Production directed to non-parties, Wizard Roofing and Blue Sky Multi Services. These Notices were objected to, without explanation. At the hearing held on January 17, 2019, Defendant’s counsel argued that the records being sought were privileged, and therefore, were not discoverable. Defendant was given ten (10) days to brief its arguments relative to privilege. Fourteen (14) days later, the Defendant filed its legal brief addressing the privilege arguments.
After considering the legal arguments, The Defendant was ordered to produce an appropriate Privilege Log within ten (10) days and to coordinate an in camera review of documents alleged to be privileged within thirty (30) days thereafter. The Order specified that a failure to comply with the deadlines set out above would result in a waiver of the claims of privilege. Defendant did not file the Privilege Log until March 14, 2019, and did not provide the documents to the Court for an in camera review until April 19, 2019, failing to meet either deadline, without explanation. On July 8, 2019, the Court entered its Order finding that neither individual claimed to be a “consulting expert” was, in fact, a consulting expert, and was instead, a fact witness, relevant to the case. Further, the Court noted the Defendant’s history of failing to comply with discovery deadlines and court orders relative to discovery deadlines. As warned in the February 28, 2019 Order, Defendant’s failure to comply with the deadlines outlined in the February 28, 2019, all claims of work product privilege were deemed waived, although the Court found that the documents listed on the Privilege Log would not have been covered by an attorney work product privilege.
On May 16, 2019, the Defendant scheduled its Motions relative to Sally Aikins’ depositions for August 21, 2019, and thereafter, on May 29, 2019, the Plaintiff noticed a Motion to Enforce the February 28, 2019 Order, to be heard on August 23, 2019. A third hearing was scheduled for August 26, 2019 upon the Plaintiff’s Motion to Strike the Fourth Affirmative Defense (the fraud defense that was re-alleged with no substantive changes after having been struck by Judge Higbee).
At the hearing on August 21, 2019, the Court denied the Defendant’s Motions, and advised the Defendant’s counsel that the Court had read the transcript of the deposition of Sally Aikins and was concerned with Defendant’s counsel’s behavior toward the third party witness and toward opposing counsel.
At the hearing on August 23, 2019, the Court found that the Defendant had been obstructing discovery and ordered the Defendant to pay the attorney fees and costs incurred by the Plaintiff, specifying that the Plaintiff was to provide the Defendant with the fees and costs claimed within thirty (30) days, and the Defendant would have five (5) business days thereafter to provide specific objections, if any, to the Plaintiff’s claimed fees and costs. If no specific objections were provided within the time frame, then the fees and costs claimed by the Plaintiff were to be paid within thirty (30) days thereafter, and if objections were provided, the objections were to be set for hearing within thirty (30) days. After the Court announced the ruling, counsel for the Defendant, Mr. Allen, expressed frustration with the Court and announced an intention to appeal the ruling of the Court, and to seek the disqualification of this Judge. The Court advised that those filings would be addressed when filed. They were never filed.
Later that day, Mr. Allen filed an Emergency Motion to Continue August 26, 2019 hearing, alleging in writing his intention to appeal the ruling of the Court from August 23, 2019 and to seek disqualification of the presiding judge. On August 26, 2019, the Court denied the request to continue the hearing, noting that neither a Notice of Appeal, nor a Motion to Disqualify the Trial Judge, had been filed. The Court dismissed the Fourth Affirmative Defense without prejudice and allowed the Defendant twenty (20) days to amend the pleading. The written Order from the August 23, 2019 hearing was entered on September 24, 2019, giving Plaintiff until October 24, 2019 to submit its claimed fees and costs to Defendant.
The Plaintiff filed a Motion for Default Final Judgment, Motion to Enforce September 24, 2019 Order and Motion for Contempt of Court on December 5, 2019, alleging that the time records and accounting for fees and cost were delivered to the Defendant’s counsel on October 24, 2019, in accordance with the Order, but no objections had been received, and no payments made. A later amendment to the Motion alleged that counsel for the Defendant improperly asserted attorney client privilege and instructed a witness not to answer questions during a deposition, and that counsel for the Defendant continued to assert such a privilege, even after contact with the Court by phone resulted in a ruling that the witness, a former independent contractor who did work for the Defendant, was not a “client” of the attorney for the Defendant.
Plaintiff’s counsel submitted documentation, including transcripts of depositions and court proceedings, as well as pleadings and court orders, of other cases involving these defense attorneys. These cases have no precedential value as to the decisions of this Court, however, the Court does note that the issue of improper instruction to witnesses during depositions, has been the subject of prior sanction orders. Attorney Allen has advised this Court, on more than one occasion, that he has been a member of the Florida Bar for twenty-five (25) years, with the not so subtle implication that he knows the applicable law better than his opposing counsel, and perhaps the Court. However, it appears that, despite these previous sanction orders, and prior orders of this Court, he continues to instruct witnesses to not answer proper questions during depositions.
These other cases, also reflect two familiar patterns of behavior that are concerning, in their similarity to this case. One deals with the abuse of the Court’s and opposing counsel’s calendar. . .the repeated requests for extensions of time, followed by refusals to comply in good faith when extensions are agreed upon or granted by the Court, the refusal to schedule depositions within a reasonable period of time, requiring the filing of motions to compel, the persistent refusal to properly comply with court imposed deadlines often followed by specious arguments for the non-compliance, and the last minute filing of objections or motions for protective order, despite having had plenty of advance notice of the request by opposing counsel. These behaviors have been persistent throughout this case, including Mr. Allen’s most recent insistence that the hearing scheduled for December 20, 2019 (Notice of Hearing dated October 30, 2019) could not proceed because he was entitled to have this matter considered at an “evidentiary hearing”. Despite being repeatedly told by the Court that the hearing on December 20, 2019, was an evidentiary hearing, Mr. Allen insisted it was not, and therefore, the Court could not proceed to hear the Plaintiff’s motion.
The second pattern of behavior, reflected in these unrelated cases, deals with the demeaning and unprofessional treatment of opposing counsel during depositions, in court hearings and in pleadings. Mr. Allen appears to believe that his aggressive and insulting treatment of his opposing counsel is both appropriate and justified. He is incorrect on both counts.
At the hearing on December 20, 2019, the Defendant was represented by both Mr. Allen and Mr. Ballard. Plaintiff was represented by Mr. Wittman. Among the pre-hearing court filings, Mr. Wittman submitted a copy of an email from Mr. Ballard dated December 13, 2019, advising Mr. Wittman that “Avatar has not and will not agree to your entitlement to fees and costs in this matter.” The email then purports to articulate non-specific objections to the “ledger and excel spreadsheet” submitted by Mr. Wittman pursuant to the Court’s sanction Order of September 24, 2019. In that Order, the Defendant was unambiguously directed to provide its specific objections, if any, to Plaintiff’s submitted fees and costs within five business days of receipt. The Order determined Plaintiff’s entitlement, and clearly required payment of all claimed fees and costs within thirty (30) days, if no timely objection was made.
When questioned about the email on December 20, 2019, Mr. Allen and Mr. Ballard indicated that the Defendant “intends to appeal” the Court’s ruling, and therefore does not intend to pay the attorney fees and costs of the Plaintiff. In other words, the intent of the Defendant is to contemptuously violate the Court’s Order of September 24, 2019. To date there has been no compliance with the Court’s Order of September 24, 2019, and there has been no appeal filed, nor any stay entered, which would give the Defendant color of authority in its violation of the Court’s Order.
II. Applicable Legal Standard
The Florida Supreme Court has adopted the following factors to consider in determining whether to grant the extreme sanction requested by the Plaintiffs in this case: “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 (Fla. 1993) “Upon consideration of these factors, if a sanction less severe. . .appears to be a viable alternative, the trial court should employ such an alternative.” Id.
The actions of the attorneys in this case have been willful, deliberate and contumacious. The attorneys have been previously sanctioned for similar conduct in both this case, and in other cases for similar reasons. The client was personally involved in some of the acts of disobedience, in that the corporate representative is an attorney, and was present for her deposition when counsel for the Defendant was improperly instructing her not to answer questions. The corporate representative was directly asked to answer the questions over the improper instruction of her counsel and declined to do so. The corporate representative was presumably also aware of the previous sanction orders entered in this case. The Plaintiff in this case has been prejudiced by unreasonable delay, and unnecessary cost incurred to file numerous motions to obtain compliance with discovery. The attorneys offered no reasonable justification for noncompliance, and, in fact, offered primarily incorrect statements of the law, disparaging comments about Plaintiff’s counsel, and challenges to the authority and integrity of the Court. The behavior of the Defendant and its counsel has caused unnecessary problems for judicial administration in that valuable court hearing time has been utilized for frivolous discovery disputes and refusal to comply with Court orders. Previous sanctions have had little or no effect upon the Defendant’s behavior, and there has been no indication that the Defendant or its counsel have accepted responsibility for any of the inappropriate behavior that previously occurred. There has been no discernible improvement in the manner in which this case has been handled, and the challenges to the authority of the Court have continued unabated.
III. Conclusion
For all of the aforestated reasons, the Motion for Entry of Judgment by Default is hereby GRANTED. The Answer and Affirmative Defenses of the Defendant are hereby stricken as a sanction for violations of discovery as provided for in Rule 1.380(b)(2).
