GRADY & JENNINGS CONCRETE, INC. v. HENRY E. BARTLETT and others [Note 1]

HADLEY, P.J. The plaintiff corporation commenced this action in the Pittsfield District Court in September, 2012, alleging that the defendant failed to pay for concrete services the plaintiff provided with regard to a construction project on which the defendant acted as general contractor. [Note 2] The defendant was served with the complaint, but he did not file an answer within the time allowed. On October 11, 2012, at the request of the plaintiff, a default judgment was entered by the clerk-magistrate.

On October 15, 2012, the defendant filed a motion to vacate the default judgment. Attorney Mark E. Verzani (“Verzani”) appeared in the case on behalf of the defendant on November 15, 2012. Verzani had an office in New York State, but was admitted to practice law in Massachusetts. After a hearing on the motion to vacate judgment on November 15, the motion was allowed. The defendant, through his attorney, subsequently filed an answer and a counterclaim, as well as a third-party complaint against M. Ostrander, LLC (“Ostrander”), which performed excavation work on the construction project. A case management conference was held on April 25, 2013, and a discovery deadline of November 29, 2013, was established by the court. A trial date of January 14, 2014, was set.

On October 15, 2013, counsel for Ostrander sent written discovery in the form of interrogatories and requests for documents to Verzani. He neither responded nor asked for additional time to answer. On October 16, 2013, the plaintiff’s attorney sent Verzani a notice for the defendant’s deposition to take place on November 26, 2013. He received no response from Verzani.

On November 25, 2013, the attorney representing Ostrander e-mailed Verzani and inquired whether the defendant’s written discovery responses would be brought to the deposition the next day. Verzani responded with an e-mail stating that he was traveling in California and would not be returning until December 11, 2013. Ostrander’s attorney

Page 50

followed up with an e-mail inquiring whether Verzani had arranged to have someone else represent the defendant at his deposition. Verzani did not respond. Neither the defendant nor Verzani appeared for the deposition on November 26, 2013.

The plaintiff and the third-party defendant, through their attorneys, filed motions for sanctions for the defendant’s failure to respond to any written discovery and his failure to appear at a properly noticed deposition. The plaintiff requested an order dismissing the defendant’s counterclaims and striking his answer and affirmative defenses. Ostrander requested a similar order dismissing the third-party complaint, striking the defendant’s answer to the third party’s counterclaim, and entering a default judgment against the defendant on Ostrander’s counterclaim. Both parties also requested an award of their attorney’s fees expended in the fruitless effort to obtain discovery from the defendant. Verzani filed no written opposition to the motions on the defendant’s behalf.

The motions for sanctions were scheduled to be heard on December 19, 2013. On December 18, 2013, plaintiff’s counsel called Verzani and asked whether he would be appearing at the hearing on the motions. Verzani told him that he would not be appearing and that he would be withdrawing from the case because he could no longer practice law in Massachusetts due to a Federal indictment. On that same date, Verzani faxed his own affidavit to the court clerk stating that he would not be able to attend the hearing because he had a prior pending motion hearing in a civil proceeding in the Bronx, New York. Ultimately, neither the defendant nor his attorney appeared in court on December 19, 2013. A hearing was held without them, and the motion judge took the matter under advisement.

On January 9, 2014, the judge issued his decision. He determined that neither the defendant nor his attorney had provided any reason for the defendant’s failure to respond to discovery. He found their behavior to be wilful and in bad faith. He issued an order dismissing the defendant’s counterclaims and his third-party complaint. He also ordered that judgment for the plaintiff would enter. He scheduled a hearing for the assessment of damages on January 30, 2014.

According to the docket, on January 10, 2014, Verzani filed an emergency motion to withdraw from the case. It is unclear what action, if any, was taken with regard to that motion, and a copy of that motion has not been provided to us.

On January 30, 2014, an assessment of damages hearing was held, and the judge who heard the matter took it under advisement. On February 3, 2014, the court ordered that judgment was to enter for the plaintiff against the defendant in the amount of $8,950.00, plus interest and costs. The defendant was also ordered to pay $3,165.00 for attorney’s fees. On the limited record before us, we cannot discern whether attorney’s fees were awarded based on a contract provision or as a sanction.

On February 11, 2014, the defendant, acting without an attorney, filed a handwritten motion asking the court to vacate both the judgment that had been entered against him and the order dismissing his third-party complaint. He asserted that despite numerous attempts to reach his attorney, he had received no information from Verzani. He represented that it was not until January 10, 2014, that he received documents from Verzani informing the defendant that he was having “legal trouble” and that he had to withdraw from the case. The defendant stated that Verzani had told him in a telephone message on January 13, 2014, that the court would delay the trial until the defendant got a new attorney. He said that Verzani had told him he would receive notice of a new date from the court. The defendant also stated that he continued to call Verzani but got no response.

Page 51

He also represented that on February 5, 2014, the defendant spoke to another attorney who called the court clerk to inquire as to the status of the matter for the defendant. That attorney told the defendant the clerk had informed him that judgment had already entered against the defendant. The defendant again tried to speak with Verzani, to no avail.

A hearing was held on the defendant’s motion for relief from judgment. The defendant testified under oath that he never received any of the written discovery that had been propounded in the case and that Verzani did not notify him of the November 26, 2013, deposition. The judge who heard from the parties on the defendant’s motion issued a written decision dated February 21, 2014. The motion judge indicated that he assumed the defendant’s statements were true. He found that Verzani’s inattention to the case was egregious. He noted that the judge who issued the order for sanctions had found that the neglect was the result of a consciously chosen course of conduct by the defendant’s attorney and therefore was not excusable under Mass. R. Civ. P. 60. The judge also found that the defendant had not demonstrated the existence of a meritorious defense, and he denied the defendant’s motion for relief.

In this appeal, the defendant asserts that the sanctions that were imposed pursuant to Mass. R. Civ. P. 37(d) were unduly severe and that the default judgment entered against him should be removed.

Rule 37(d) provides that when a party wilfully fails to appear for a properly noticed deposition, or fails to answer interrogatories, or fails to serve a written response to a request for documents, the court on motion “may make such orders in regard to the failure as are just.” This may include, pursuant to Rule 37(b)(2)(C), an order dismissing the action or any part thereof or entering default judgment against the disobedient party. Rule 37(d) also provides that in lieu of, or in addition to, any order, “the court may require the party failing to act or the attorney advising him or both to pay the reasonable expenses, including attorney’s fees, caused by the failure.” Id. Rule 37(d) does not require that a party refusing discovery be in violation of a judge’s discovery order.

Generally, the purpose of this rule is to provide litigants and the court with a mechanism for compelling discovery and to deter litigants from ignoring their legitimate discovery obligations. Our system of justice favors the substantive resolution of disputes on the merits. In many cases, however, a trial on the merits would be impossible without adequate discovery, and in some instances a party who fails to respond to discovery may forfeit his or her right to a trial.

At the same time, an order of dismissal or default judgment is considered a drastic sanction to be utilized in extreme situations. Courts are reluctant to impose either of these litigation-ending sanctions for a failure to comply with discovery rules. There are a number of alternative ways of obtaining discovery from a noncompliant litigant, including an order compelling discovery, use of the procedures set forth in Mass. R. Civ. P. 33 regarding interrogatory answers, and the order of payment of an opposing party’s attorney’s fees caused by the failure to provide discovery responses.

In reviewing a sanction of dismissal or default judgment, it is generally required that such orders “be predicated on a finding of wilfulness or bad faith.” Keene v. Brigham & Women’s Hosp., Inc., 439 Mass. 223, 236 (2003). In addition, on appeal, we consider whether the sanction was “just.” In doing so, we examine whether the order was “appropriately punitive in relation to the objectionable behavior, and appropriately remedial in relation to the disadvantage visited.” Grassi Design Group, Inc. v. Bank of Am., N.A.,

Page 52

74 Mass. App. Ct. 456, 460 (2009). A clear violation of a discovery obligation, followed by a failure to embrace an opportunity to comply, in the absence of any subsequent showing of a willingness to comply, will usually warrant “the ultimate sanction.” Roxse Homes Ltd. Partnership v. Roxse Homes, Inc., 399 Mass. 401, 406 (1987).

After reviewing the history of this case, we find that the motion judge was justified in concluding that Verzani had ignored all of his client’s discovery obligations and that his limited communications with opposing counsel did not reflect a willingness to comply. Moreover, ordinarily it would be reasonable to assume that a litigant is aware of his attorney’s actions, or in this case, inaction. Here, however, at the time sanctions were imposed, there was no actual evidence that the defendant himself had been apprised of his discovery obligations, of his lawyer’s legal problems, or of his lawyer’s failure to act on the defendant’s behalf with regard to discovery. To the contrary, counsel for the opposing parties reported that Verzani had told them that he was under indictment and was unable to represent the defendant, and that he intended to withdraw from the case.

Of course, the judge who heard the motion for sanctions did not have the benefit of the defendant’s subsequent affidavit and sworn testimony attesting that he was unaware of the discovery in question. Nonetheless, it appears that at the time the defendant was defaulted, there was at least some uncertainty as to what the defendant knew, and whether he, as opposed to his lawyer, was intentionally refusing to fulfill his discovery obligations.

As noted above, when considering a motion for sanctions, a judge should impose only sanctions “as are just,” and given the drastic nature of an order of default or dismissal, these sanctions should be imposed only after the court explores whether any lesser sanctions are reasonable. After reviewing the history of this case, we find that the order imposing sanctions of default judgment and dismissal was too severe, and that depriving the defendant of an opportunity to be heard on the merits of the case solely because of his lawyer’s unwillingness or inability to represent him would not be just.

Accordingly, the order denying the defendant’s motion to vacate judgment is reversed, and the judgments entered on the plaintiff’s complaint, defendant’s counterclaims, and defendant’s third-party complaint are vacated. The case is returned to the Pittsfield District Court for further proceedings consistent with this opinion, with a direction that the defendant fulfill all of his outstanding discovery obligations forthwith and that sanctions less severe than default and dismissal, such as an order for payment of the opposing parties’ attorney’s fees, may be imposed.