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Top Notch Solutions, Inc. v. Crouse and Associates Insurance Brokers, Inc.

United States District Court, W.D. Washington, Seattle

July 29, 2019

TOP NOTCH SOLUTIONS, INC. and ROBERT RASHIDI, Plaintiffs,
v.
CROUSE AND ASSOCIATES INSURANCE BROKERS, INC., MCGRIFF, SEIBELS & WILLIAMS, INC., and LAW OFFICES OF PUCIN & FREIDLAND, P.C., Defendants.

          ORDER RE: DEFENDANTS' MOTIONS FOR SANCTIONS

          MARY ALICE THEILER UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         Defendants Crouse and Associates Insurance Brokers, Inc. (Crouse) and McGriff, Seibels & Williams, Inc. (MSW) filed motions for sanctions against plaintiffs Top Notch Solutions, Inc. and Robert Rashidi. (Dkts. 165 & 168.) Plaintiffs object to the requested sanctions. (Dkts. 180 & 181.) The Court, having considered the motions, responses, and the remainder of the record, finds defendants entitled to sanctions as set forth below.

         BACKGROUND

         Plaintiffs initiated this matter in April 2017. (See Dkt. 1-1.) The Court set a June 4, 2018 deadline for the completion of discovery (Dkt. 39), later extended to January 7, 2019 (Dkt. 77). In early October 2018, the parties stipulated to a temporary stay in the proceedings and continuance of the trial and other dates to accommodate medical treatment and surgery for plaintiffs' counsel, Jan Brucker. (Dkts. 100 & 101.)

         In a joint status report requested by the Court, plaintiffs committed to producing all outstanding written discovery by November 20, 2018 and proposed a deadline of April 1, 2019 for completion of discovery. (Dkt. 106 at 2.) In December 2018, defendants MSW and Crouse filed motions to compel responses to discovery requests propounded in May and June 2018 respectively. (Dkts. 112 & 121.) Crouse noted the absence of any responses in the three months prior to counsel's surgery or as of the agreed November 2018 due date, belated and incomplete responses to interrogatories received more than two months after counsel's surgery, and a failure to produce documents. (Dkts. 112 & 124.) MSW noted deficient responses to requests for production, including a failure to identify which documents in bulk productions were responsive to specific requests. (Dkt. 121.) Counsel for plaintiffs denied any need for Crouse's motion to compel given discovery responses submitted after her surgery (Dkts. 119 & 120), but did not respond to MSW's motion.

         By Order dated January 17, 2019, the Court took note of a report from MSW that plaintiffs' counsel may have experienced a family medical issue and directed the parties to submit an updated status report. (Dkt. 127; see also Dkt. 126.) In early February 2019, counsel for plaintiffs partially responded to the motions to compel, describing her ongoing personal and family issues and continuing production of documents. (Dkts. 128 & 129.) She requested an extension of time to complete responses to the motions, summarize document production, and continue to supplement discovery responses, and objected to duplicative and redundant requests. In a joint status report submitted shortly thereafter, defendants noted plaintiffs had recently produced questionably relevant documents and described ongoing issues with the absence and/or sufficiency of responses to outstanding requests. (Dkt. 131.) The Court subsequently reset deadlines, including a discovery completion date of May 15, 2019, and referred all non-dispositive motions in this matter to the undersigned. (Dkt. 133.)

         At a hearing on March 11, 2019, the undersigned heard argument on defendants' motions to compel. (Dkt. 137.) Counsel for plaintiffs conceded the failure to fully comply with requests for discovery, pointing to her health and other issues. The Court granted Crouse's motion in part, finding plaintiffs had waived any objections to responding to all interrogatories by failing to timely respond or submit a request for relief, but otherwise deferred a ruling. (Id.) The Court ordered counsel for plaintiffs to associate additional counsel to assist with the litigation and to submit a plan for completing discovery within thirty days of the plan submitted, and required that counsel identify with specificity the documents responsive to individual discovery requests.

         Plaintiffs associated additional counsel and submitted a discovery plan. The plan set dates for satisfying various document requests and indicated plaintiffs would produce any additional documents to pre-existing and then pending discovery requests by May 10, 2019, and supplement with any additional documents found. (Dkt. 141.) On May 16, 2019, the day after the discovery deadline, plaintiffs' counsel notified counsel for defendants of additional documents to be produced (see Dkt. 152 at 3) and counsel for defendants requested a ruling on their motions to compel. Plaintiffs' counsel requested additional time to complete responses to outstanding discovery requests. (Dkt. 152.)

         At a second hearing on June 5, 2019, counsel for plaintiffs indicated they were continuing to produce documents and, with the exception of some banking records, expected completion of discovery by June 10, 2019. Counsel for defendants argued prejudice from the late and still ongoing production, pointing to the need to update expert reports, the June 20, 2019 dispositive motion deadline, and expenses associated with the delays. Counsel for plaintiffs reiterated prior explanations for the delays. The Court found ample evidence plaintiffs had not complied with their discovery obligations and sanctions appropriate. The Court granted the motions to compel, but deferred a ruling on specific sanctions pending further briefing. (Dkt. 158.) The Court now considers herein MSW's Petition for Attorney's Fees and Discovery Sanctions (Dkt. 165) and Crouse's Motion for Sanctions (Dkt. 168).

         DISCUSSION

         MSW seeks an award of attorney's fees related to its motion to compel and the failure to comply with discovery, and an order excluding as inadmissible any documents produced after the close of discovery on May 15, 2019. (Dkt. 165.) MSW argues its request for $17, 356.50 in fees is commensurate with discovery abuses dating back more than a year from present. In support of an order of inadmissibility, MSW notes plaintiffs continued to produce over 1, 880 documents after the close of discovery and have neither indicated their discovery production is complete, nor updated the discovery index.

         Crouse seeks dismissal of plaintiffs' claims and monetary sanctions, including $10, 325.50 in attorney's fees associated with its motion to compel and an additional $20, 000.00. (Dkt. 168.) Crouse notes the discovery plan submitted by plaintiffs did not contemplate responses to unanswered interrogatories, despite the Court-ordered waiver of plaintiffs' objections. Crouse states that, while plaintiffs supplemented their responses, they have not withdrawn their objections and it remains unclear whether they continue to withhold information. Plaintiffs continued to produce over 4, 000 documents after the May 15, 2019 deadline, without specificity as to responsiveness, produced some of those documents days after the date they had proposed for discovery completion, and indicated additional transmissions of documents may be expected. (See Dkt. 169, ¶9 and Ex. 3.)

         Plaintiffs respond that they provided significant information and documents even before the filing of the motions to compel and that, while they did require additional time to respond, defendants' discovery requests have been extremely broad and unduly burdensome. (Dkts. 180 & 181.) They deny any impediment to defendants' preparation of defenses or dispositive motions, stating the documents and information relied upon in pending motions for summary judgment were produced well before the discovery deadline or obtained from the deposition of plaintiff Robert Rashidi. In relation to Crouse's interrogatories, plaintiffs maintain the Court-ordered waiver of objections necessitated responses to more discovery requests than permitted under the rules and the production of documents with little to no relevance to this case. Plaintiffs' counsel notes the engagement of six additional individuals to assist in ongoing document review and redaction.

         Plaintiffs reject the propriety of the sanctions requested. They assert defendants improperly seek compensation for time expended to review responsive discovery and ask that the Court defer a ruling on sanctions. They assert the proper remedy, if any, “is to now equalize the equation” by extending time and adjusting case event dates, up to and including the trial date. (Dkt. 180 at 3.)[1]

         A. Reasonable Attorney's Fees

         Under Federal Rule of Civil Procedure 37(a), the Court “must” award reasonable expenses associated with a motion to compel discovery, including attorney's fees, if the moving party prevails on the motion. Fed.R.Civ.P. 37(a)(5)(A). Exceptions to this rule apply if: (i) the movant filed the motion before attempting in good faith to obtain the discovery without court action; (ii) the opposing party's failure to comply was substantially justified; or (iii) other circumstances make an award of expenses unjust. Id.

         As reflected in both the motions to compel and the motions for sanctions, and as discussed in two hearings, plaintiffs repeatedly and over a lengthy period of time failed to comply with discovery deadlines. These failures followed multiple attempts to obtain discovery without court action and necessitated the filing of motions to compel, the involvement of the Court, and the association of additional counsel. While plaintiffs' counsel offered explanations, they do not fully account for the delays and omissions in responding to defendants' requests for discovery. Moreover, despite the fact the deadlines for completion of discovery and for filing dispositive motions have passed (see Dkt. 133), and despite the association of additional counsel, plaintiffs have yet to complete their production of documents or responses to interrogatories. The arguments in opposition to the request for attorney's fees are not persuasive. It cannot be ...


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