Nicholas v. Jones

2022 Ark. App. 55

640 S.W.3d 417

Janet NICHOLAS, Appellant

v.Mike JONES, Appellee

No. CV-20-612

Court of Appeals of Arkansas, DIVISION II.

Opinion Delivered February 2, 2022

Brett D. Watson, Attorney at Law, PLLC, by: Brett D. Watson, for appellant.

Joe D. Byars, P.A., Ltd.; and Byars, Hall & LaFreniere, PLLC, Fort Smith, by: Joe D. Byars, Jr., for appellee.

RITA W. GRUBER, Judge

Appellant Janet Nicholas appeals from an order of the Sebastian County Circuit Court striking her counterclaim against appellee Mike Jones as a sanction for discovery violations, arguing that the circuit court abused its discretion. We affirm.

On May 21, 2019, Mike filed a complaint against Janet alleging that she was in default on a promissory note and lease agreement. Janet filed an answer on July 12 and a counterclaim on July 15, which alleged breach of contract, fraudulent inducement, and unjust enrichment. Mike filed an answer on July 26 and an amended complaint on August 30, adding the allegation that Janet failed to pay the taxes required under the lease agreement.

On October 18, Mike served Janet with his first set of interrogatories and requests for production of documents. Janet responded on November 20. On December 10, Mike's counsel faxed a good-faith letter to Janet's counsel that outlined issues with eight of the responses and requested supplementation. On December 19, Mike's counsel sent a second set of interrogatories and requests for production by email. Janet's counsel sent an email on January 22, 2020, and asked for a "couple more weeks to get the discovery responses out" due to his being out of the office, complications with his wife's pregnancy, and the delivery date being moved up. It also stated that he would address the good-faith letter.

Mike moved to compel on February 6, seeking "further response" to the first set of discovery and responses to the second set of discovery. It detailed the issues with Janet's responses to the first set of discovery. Interrogatory No. 1 asked Janet to identify each person with knowledge of any relevant facts relating to the lawsuit. Interrogatory No. 3 asked Janet to list each person and information about each person who witnessed or observed any events at issue in the case. Interrogatory No. 4 asked about the witnesses to be called at trial. Janet's responses to these interrogatories basically identified the parties, noting that discovery was ongoing and that the responses would be supplemented.

The motion to compel also took issue with Janet's response to interrogatory No. 15 and request for production No. 7, which asked Janet to list each payment made on the promissory note with the amount and date and to provide proof of each payment. Janet responded that she made monthly payments, and Mike was in possession of the payments and knew when he received them. Janet objected to the request for production on the basis that "the request calls for personal, sensitive, or confidential information that should only be released under a protective order regulating the use and dissemination of said information." Mike also challenged a similar objection to request for production No. 6, which asked her to produce copies of all sales records maintained in the operation of the leased premises, including "bank statements from the operation of the business, the tax returns for the operation of the business, profit and loss statements, financial statements, sales tax reports, and other accounting records reflecting sales and expenses, and tax return for the years 2016, 2017, 2018, and 2019." The motion to compel stated that although Mike provided Janet with a proposed protective order, she had not approved it or suggested any modifications. Mike asked that Janet be compelled to provide the requested information or that Janet to be ordered to either approve the proposed protective order or produce an acceptable one.

Mike also challenged Janet's response to interrogatory No. 17, which requested that Janet identify and describe all communication between the parties concerning the private club permit/liquor license, including the approximate date of the communication, the content of the communication, and whether the communication is in writing. Janet's response stated that the "parties met together prior to the commencement of the lease to discuss the Lease Agreement and Promissory Note. The parties met between January and March 2019 to discuss the continuation of the lease and purchase of the permit." Mike asked the court to compel Janet to provide substantive content of the communications between the parties and identify whether the communications were oral or written.

In regard to request for production No. 8 requesting photographs or written inventories of all furniture, fixtures, inventory, and equipment pertaining to the subject property, Janet responded that documents responsive to this request will be made available for copying and inspection at a time mutually agreeable to the parties. Finally, the motion asked the court to compel Janet to respond to the second set of interrogatories and requests for production propounded on December 19, 2019. The motion noted that although Janet's counsel asked for more time on January 22, 2020, the request was made after the January 21 due date, and there had been no response to date.

The record does not reflect that Janet responded to the motion to compel. On March 6, the circuit court found that the motion was "well taken" and should be granted. The order directed Janet "to respond to Plaintiff's Interrogatories and Requests for Production of Documents on or before March 13, 2020."

On June 15, Mike filed a motion for contempt and sanctions stating that although Janet had responded to the second set of discovery, she had failed to provide supplemental responses to his first det of discovery requests. Mike asked the court to require Janet to show cause as to why she should not be held in contempt and for appropriate sanctions, citing Rule 37 of the Arkansas Rules of Civil Procedure, including an order striking the pleadings in the event the failure to produce the information continues.

Janet filed a response on July 9 stating that she had not willfully disobeyed the court's March 6 order to compel and that the sanction requested was "extreme and unsuitable" under the circumstances. Counsel explained that he had spent much of January, February, and March away from work due to complications with his wife's pregnancy and that he was completing his judicial-election campaign in White and Prairie Counties. He stated that the responses to the second set were served on March 13 but that due to his "continued limited means and time in the office," he had not yet been able to provide supplemental responses to the first set of discovery. He added that the following week, "Covid-19 gripped the nation, and almost everything shut down," and because he had a vulnerable infant at home, he was "largely" unable to work in the office or see clients during the shutdown, which continued through May. Counsel also indicated that he sustained a severe back injury rendering him effectively immobile until he received an epidural in mid-June, which had only recently allowed him to return to the office on a part-time basis.

Counsel further stated that supplementation of the first set of discovery responses was a priority and would have been fulfilled but for "an unprecedented series of events throughout the first half of 2020." Counsel explained there was no willful or intentional disregard of the court's order and that events outside of Janet's control inhibited her ability to timely comply; thus, contempt or sanctions were not suitable, and striking a pleading was extreme under the circumstances.

In his reply, Mike noted that the first set of discovery had been filed nine months prior, and the information had yet to be provided. While Mike was empathetic to Janet's counsel's issues, the reply nevertheless noted that Janet's counsel was able to run a successful campaign to be elected as a circuit judge throughout the same time period. If he had timely provided the requested information, none of his 2020 travails would have affected the discovery proceedings. Mike stated that, contrary to Janet's assertion that there was no prejudice to Mike, the case had not moved forward in many months and could not without the information requested.

At the outset of the July 30 hearing on the motion, Mike's counsel indicated that Janet approved his proposed protective order. Mike asked that Janet's counterclaim be struck and that he be granted judgment on his claims because Janet had been ordered to comply with the discovery requests five months prior and failed to do so, and case law supported his request under the circumstances.

Janet's counsel went through the issues preventing discovery responses. Janet had been taking care of her elderly mother, and shortly after the papers had been signed, her husband died. As a result, Janet had someone named "Ron" taking care of her business. Janet's counsel stated that the "lion's share" of the documents had been produced "as of today." In regard to interrogatory No. 15 and request for production No. 7, he thought that 384 pages of documents had been turned over relating to payments and bank records. As for interrogatory No. 17, counsel stated that there had been only oral communication but thought they could give more information. He also acknowledged that they had photographs requested in request for production No. 8 and would submit them. And in reference to interrogatory No. 6 pertaining to sales records and tax returns, these documents were in Ron's possession and would need to be subpoenaed. Janet's counsel said they had been in contact with Ron in answering the second set of discovery but had since lost contact. Janet's counsel argued that the sanctions requested by Mike would be extreme given the facts. He stated that the cases where pleadings had been...