Swain v. Morse

332 Mich.App. 510

957 N.W.2d 396

Renee SWAIN, Plaintiff-Appellant,

v.Michael MORSE, Mark Zarkin, and Steven Lellis On the Green, LLC, Defendants-Appellees.

No. 346850

Court of Appeals of Michigan.

Submitted May 13, 2020, at Detroit.

Decided June 11, 2020, 9:05 a.m.

Fieger, Fieger, Kenney & Harrington, PC (by Sima G. Patel and Geoffrey N. Fieger, Southfield) for Renee Swain.

Mike Morse Law Firm, Southfield (by Stacey L. Heinonen ) and Deborah Gordon Law, Bloomfield Hills (by Deborah L. Gordon ) for Michael Morse.

Vandeveer Garzia, PC (by Anthony J. Kostello, Troy, and Scott K. McCormick) for Mark Zarkin and Steven Lellis on the Green, LLC.

Before: Beckering, P.J., and Fort Hood and Shapiro, JJ.

Per Curiam.

Plaintiff sued defendant Michael Morse, alleging sexual assault and battery, intentional infliction of emotional distress (IIED), and additional counts arising from an alleged incident at Lelli's On the Green, a restaurant owned and operated by defendant Mark Zarkin through his company, defendant Steven Lellis On the Green, LLC (Lelli's).¹ Plaintiff appeals the trial court's opinion and order dismissing her verified complaint as a discovery sanction for untruthful deposition testimony. She also challenges the trial court's earlier opinions and orders granting summary disposition for Zarkin and Lelli's and partial summary disposition for Morse under MCR 2.116(C)(10) (no genuine issue of material fact). For the reasons stated in this opinion, we affirm the grant of summary disposition to Zarkin and Lelli's but reverse the dismissal of plaintiff's complaint against Morse as a discovery sanction and the grant of summary disposition to Morse on the IIED claim.

I. BACKGROUND

This case stems from plaintiff and Morse's April 6, 2017 meeting at Lelli's. According to plaintiff,² she was having dinner with a group of friends when Morse approached the table and initiated conversation. The group then began taking pictures, and plaintiff offered to pose for a photograph with Morse. The photograph was taken by Zarkin, the restaurant's owner and Morse's friend. Later in the evening, plaintiff asked to take a "selfie" with Morse and he agreed to do so. Plaintiff testified that she complained about glare and focus issues on her phone and Morse suggested that they go to a different area of the restaurant to take the picture. According to plaintiff, after they took the photograph in this "secluded" area, Morse put his arm around her and grabbed her left breast through her clothing, squeezed it, and asked, "Is that better?" Morse denies that he grabbed or touched plaintiff's breast.

About a week later, plaintiff reported her allegations to the Farmington Hills police, and defendants learned of the accusation through the police. According to plaintiff, one of her friends who was at the dinner told her that Zarkin wanted to arrange a meeting to discuss what had happened. Plaintiff ultimately agreed to meet with Morse at Lelli's on May 6, 2017, and, in response to her request, the police arranged for plaintiff to wear a recording device during the meeting. A transcript of the recording shows that Morse apologized to plaintiff during their meeting, but he never admitted or denied touching her breast. Plaintiff said she forgave Morse and gave him a hug. Plaintiff gave the recording to the police and eventually the prosecutor decided not to bring charges.

On May 15, 2017, plaintiff filed a verified complaint alleging sexual assault and battery against Morse, premises liability against Zarkin and Lelli's, and, as to all defendants, IIED,³ civil conspiracy, negligence, gross negligence, and wanton and willful misconduct. Immediately, an issue arose regarding the scope of Morse's deposition. Plaintiff sought to depose Morse about other allegations of sexual misconduct against him, and Morse sought and obtained a protective order barring plaintiff's counsel from asking Morse questions about acts unrelated to plaintiff. The order did not definitively foreclose discovery or admission of such evidence, in that it allowed plaintiff to submit an offer of proof relating to other-acts evidence. Plaintiff did so, filing a motion captioned, "Motion for Offer of Proof Regarding MRE 404(b)." The motion set forth other allegations of sexual misconduct against Morse, and the trial court denied the motion without prejudice. Plaintiff sought interlocutory appeal of the denial of her motion for 404(b) discovery, and on February 20, 2018, we granted leave.⁴ On August 9, 2018, this Court reversed the trial court's denial of plaintiff's motion for discovery of 404(b) evidence, vacated the underlying protective order, and remanded for further proceedings.⁵

We granted a stay of the lower-court proceedings while plaintiff's prior appeal was pending.⁶ On remand, the trial court heard oral arguments on defendants’ pending motions for summary disposition and sanctions. On November 20, 2018, the trial court issued an opinion and order granting summary disposition of all counts for Zarkin and Lelli's. In a separate opinion and order, the court granted Morse summary disposition of plaintiff's claims for IIED, civil conspiracy, and negligence, but concluded that there were questions of fact precluding summary disposition of plaintiff's claim for sexual assault and that she could proceed with the claim of gross negligence and willful and wanton misconduct to support a claim of exemplary damages.

However, on December 5, 2018, the trial court issued an opinion and order dismissing plaintiff's entire complaint against Morse as a sanction for discovery misconduct.⁷ Defendants’ motions seeking sanctions were filed in response to plaintiff's deposition testimony regarding the amount and duration of financial support she had received from her friend Ken Koza. Morse asserts that Koza's financial support is relevant to whether he assaulted plaintiff because the support ceased shortly before plaintiff filed suit and so demonstrates a financial motivation for plaintiff to have fabricated her claim. Morse asserted that plaintiff committed perjury on those matters because she testified that Koza had made deposits of $10,000 into her bank account for only three months, while her bank records showed that she received $10,000 per month from Koza from February 2, 2015 through May 2016. Also, while plaintiff originally estimated that all payments from Koza stopped in March or May 2017, she later testified that she stopped receiving financial support from Koza at the end of 2016, which was inconsistent with her bank records that showed the regular payments did not stop until May 2017 as she originally estimated.

Citing the bank records, the court found that plaintiff "lied under oath" at her deposition. The trial court concluded that plaintiff's false statements warranted dismissal because: (1) they were not the product of mistake or misunderstanding, (2) she did not supplement or correct her deposition testimony, and (3) the statements were material. This appeal followed.

II. DISMISSAL FOR UNTRUTHFUL DEPOSITION TESTIMONY

Plaintiff argues that the trial court abused its discretion by dismissing her complaint against Morse as a discovery sanction. We agree for several reasons.⁸ First, plaintiff's deposition testimony did not violate any court rule or order, which typically occurs before the harsh sanction of dismissal is imposed. Second, plaintiff's testimony did not undermine the integrity of the judicial process because defendant was able to obtain contradictory evidence through discovery, and plaintiff's veracity can be addressed at trial through impeachment. Third, though the issue of Koza's financial support is relevant, it is not dispositive and Morse was not substantially prejudiced by plaintiff's testimony.

A. COURT RULES

"Dismissal is a drastic step that should be taken cautiously." Brenner v. Kolk , 226 Mich. App. 149, 163, 573 N.W.2d 65 (1997). Severe sanctions such as default or dismissal are predicated on a flagrant or wanton refusal to facilitate discovery that typically involves repeated violations of a court order.

See, e.g., Bass v. Combs, 238 Mich. App. 16, 26, 34, 604 N.W.2d 727 (1999) (affirming dismissal when the plaintiff violated "several court orders over a fifteen-month period"), overruled in part on other grounds by Dimmitt & Owens Fin., Inc. v. Deloitte & Touche (ISC), L.L.C. , 481 Mich. 618, 627-628; 752 N.W.2d 37 (2008) ; Mink v. Masters , 204 Mich. App. 242, 244-245, 514 N.W.2d 235 (1994) (affirming a default judgment when the defendant twice failed to comply with the trial court's order compelling discovery). Cf. Frankenmuth Mut. Ins. Co. v. ACO, Inc. , 193 Mich. App. 389, 399, 484 N.W.2d 718 (1992) (holding that default judgment for failure to respond to interrogatories was an abuse of discretion "in the absence of an order or some other compelling circumstance").

The cases relied on by the trial court involved violations of orders or court rules and repeated efforts to stall discovery. None concerned allegations that a party lied at deposition, let alone a court finding to that effect. For instance, in Kalamazoo Oil Co. v. Boerman , 242 Mich. App. 75, 89, 618 N.W.2d 66 (2000), the trial court entered a default judgment against the defendant as a sanction for failing to appear for his deposition in violation of a court order compelling his attendance. This Court affirmed, finding that "[t]he record reveals defendant's deliberate noncompliance with court rules and a discovery order in addition to what the trial court evidently viewed as an attempt to mislead the court and disrupt the progression of the lawsuit." Id. Similarly, in LaCourse v. Gupta , 181 Mich. App. 293, 294-296, 448 N.W.2d 827 (1989), the plaintiff's case was dismissed after she repeatedly failed to disclose her expert witnesses despite a court order to do so. This Court found that dismissal was warranted because "[t]here were only two weeks left before the scheduled trial date, [and] there was a...