Opinion
No. C0-01-2233.
Filed June 25, 2002.
Appeal from the District Court, Hennepin County, File No. CT-99-9610.
Hugh D. Jaeger, Keith E. Ekstrom, (for appellant)
Timothy J. O'Connor, Lind, Jensen, Sullivan Peterson, 150 South Fifth Street, Suite 1700, Minneapolis, MN 55402 (for respondents)
Counsel, who previously represented all defendants in this action, filed an ineffective notice of withdrawal on appeal. "[W]ithdrawal will be effective only if written notice of withdrawal is served on the client and all parties who have appeared," if the notice includes "the address at which the client can be served and the address and phone number at which the client can be notified of matters relating to the appeal," and if the notice is "accompanied by proof of service." Minn.R.Civ.App.P. 143.05, subd. 2. Counsel did not provide proof of service on any of his clients, did not provide addresses or phone numbers for serving and notifying Joyce Gay, her late husband's estate, or the four business entities who were defendants in this action, and provided only the name and an address (which proved to be invalid) of a non-lawyer who is neither a party to the case nor authorized to represent any of the business entities in legal proceedings in this state . See Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753, 754-55 (Minn. 1992) (appearance by corporation through non-attorney in court proceedings constitutes unauthorized practice of law and is prohibited). Because counsel did not comply with rule 143.05, the notice of withdrawal was ineffective.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant attorney challenges the district court's judgment dismissing his claim against respondent clients for discovery violations, arguing that appellant was in substantial compliance with the discovery orders and the district court erred by not selecting a less severe sanction. We reverse.
FACTS
Appellant Hugh D. Jaeger, P.A., is a law firm that provided patent and trademark services to respondents Joyce D. Gay, her late husband, Thomas Gay, and various companies owned by them (the "Gays"). Jaeger sued the Gays to recover $104,807.89 for disbursements incurred ($28,637.84) and services rendered ($76,170.05) from 1993 through April 1999. During that time, Jaeger had drafted and applied for seven individual patents on behalf of the Gays but was paid only $22,616.45. Jaeger alleges that Thomas Gay requested him to delay billing to keep legal bills from accruing on the books of certain of his companies. The Gays' defense was that they had already paid Jaeger in full for all services and disbursements.
After the parties commenced discovery, each complained that the other was not fully responding. And each party brought multiple motions to compel further discovery by the other. The district court conducted five separate discovery hearings.
At the close of the first hearing, the court made an oral order that required Jaeger to produce the requested documents in seven days and for the Gays to respond to Jaeger's interrogatories and document requests in the subsequent seven days. The court refused to grant fees to either party. Jaeger notified the Gays that they could pick up two boxes of documents at his office.
At the close of the second hearing, the district court observed,
It seems as if both parties here are refusing discovery, based upon the discovery responses that I saw in the file. Both sides are tending to say things aren't relevant. * * * Provide the backup documentation, if that's what defense wants.
* * * I think there is a basis for getting some of the corporate documents that have been requested [by appellant]. So I certainly don't have any trouble extending the discovery deadline.
The district court subsequently issued an order granting in part, and denying in part, the Gays' summary judgment motion, but did not issue any order pertaining to discovery.
A third discovery hearing was held some months later but the record does not contain a transcript of that hearing and the court did not issue any discovery orders.
When the court continued to receive correspondence from the parties complaining of each other's discovery shortcomings, the court issued an amended scheduling order and wrote to counsel stating:
It is unclear to me who is at fault but I am extremely displeased with the progress of this case and the lack of cooperation between the parties. * * * If this case is not settled or ready for trial [by Sept. 15, 2000)], I will entertain cross motions to dismiss and to strike the defendant's answer.
A fourth discovery hearing was held and the court orally ordered Jaeger to produce copies of the backup documentation supporting all billed disbursements within ten days. No written order was issued. Albeit ten days late, Jaeger subsequently produced most of the requested backup documentation, some of it redacted.
The Gays again wrote the court, complaining that some documents were partially redacted and requesting that they be allowed to see the original documents. Jaeger responded that the Gays had not contacted him directly about any problems with the documents and reiterated that the Gays had always been welcome to review the documents in his office. Jaeger subsequently produced additional documents, redacting only information pertaining to other clients. The Gays then moved to dismiss Jaeger's action, complaining that Jaeger had still failed to produce all back-up documentation to support his claim of disbursements. It appears that all documentation had now been produced except that pertaining to certain telephone charges.
At the fifth discovery hearing, Jaeger argued that any missing documentation represented only a minuscule portion of the requested discovery and that it was not in his possession, but with his former law firm. The district court found that Jaeger "repeatedly and willfully" ignored the court's discovery orders with intent to delay the litigation. The court dismissed the complaint with prejudice. Jaeger appeals.
DECISION
The district court is vested with the authority to impose sanctions on a party who fails to comply with a discovery order. Minn.R.Civ.P. 37.02. If a party fails to obey an order to provide or permit discovery, including an order made pursuant to Rule 35 or 37.01, the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:
* * * *
(3) An order striking pleadings or parts thereof, staying further proceedings until the order is obeyed, dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party.
Id. A district court is justified in dismissing a claim when a party willfully fails to comply with a discovery order without justification or excuse. Breza v. Schmitz, 311 Minn. 236, 237, 248 N.W.2d 921, 922 (1976). This court will not reverse a district court's dismissal of an action for procedural irregularities unless the district court abused its discretion. Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn. 1990).
However, a dismissal with prejudice is the most severe sanction available and should be granted only in exceptional circumstances because it runs contrary to the objective of the law to decide cases on their merits. Firoved v. Gen'l Motors Corp., 277 Minn. 278, 283, 152 N.W.2d 364, 368 (1967). As a result, we have applied a heightened standard of scrutiny to dismissals with prejudice. Chicago Greatwestern Office Condo. Assoc. v. Brooks, 427 N.W.2d 728,731 (Minn.App. 1988).
When determining whether the district court abused its discretion by dismissing an action for discovery violations, we examine several factors, including (1) the existence of a specific deadline for discovery of the requested materials; (2) the existence of a clear warning by the court that such a sanction would automatically result if the party failed to comply with the discovery deadline (considered a "significant" factor); (3) the available alternatives to dismissal; (4) whether failure to cooperate in discovery was an isolated occurrence or part of a pattern; (5) whether failure to cooperate with discovery was willful or without justification; and (6) the prejudicial effect that the lack of the information would have on the party seeking discovery. Breza, 311 Minn. at 237, 248 N.W.2d at 922 (willful or without justification); Beal v. Reinertson, 298 Minn. 542, 544, 215 N.W.2d 57, 58 (1974) (specific deadline for discovery, length of discovery, and prejudice to the parties); Sudheimer v. Sudheimer, 372 N.W.2d 792, 795 (Minn.App. 1985) (explicit deadline and warning required about possible sanction, and availability of alternatives to dismissal); Williams v. Grand Lodge of Freemasonry AF AM, 355 N.W.2d 477, 480 (Minn.App. 1984) (isolated occurrence or part of a pattern), review denied (Minn. Dec. 20, 1984).
In Jadwin v. City of Dayton, this court held that an order compelling discovery should contain two elements: "(1) a date certain by which compliance is required, and (2) a warning of potential sanctions for non-compliance." Jadwin v. City of Dayton, 379 N.W.2d 194, 196 (Minn.App. 1985) (citations omitted). We have held that sanctions for failure to comply with a discovery order should not be imposed in the absence of either of these elements. Id. at 197; see also Hoyland v. Kelly, 379 N.W.2d 150, 152 (Minn.App. 1985) (stating that this court required an explicit warning prior to imposing a sanction of dismissal), review denied (Minn. Feb. 19, 1986).
Here, the record indicates that while the district court set specific deadlines by oral orders from time to time, no explicit warning was ever given that failure to meet those deadlines would lead to a dismissal. No written orders were issued, and Jaeger substantially complied with all oral orders.
Further, the primary factor to be considered in a dismissal for discovery violations is the prejudice to the parties. Hous. Redev. Auth. of St. Paul v. Kotlar, 352 N.W.2d 497, 499 (Minn.App. 1984). The defendant must show "particular prejudice of such a character that some substantial right or advantage will be lost or endangered" Sudheimer, 372 N.W.2d at 794 (quoting Firoved, 277 Minn. at 283-84, 152 N.W.2d at 368). "Such prejudice should not be presumed nor inferred from the mere fact of delay." Firoved, 277 Minn. at 284, 152 N.W.2d at 368. And a defendant's ordinary expense and inconvenience of preparing for trial do not qualify as the prejudice that would justify a dismissal. Id. at 283, 152 N.W.2d at 368. The prejudice must be of a character that cannot adequately be "compensated by the allowance of costs, attorney fees or the imposition of other reasonable conditions." Id. at 283, 152 N.W.2d at 368.
Here, the district court could have imposed less severe alternative sanctions to the dismissal of Jaeger's complaint. The court could have alleviated any prejudice to the Gays by simply striking Jaeger's claims for the undocumented disbursements. The record reveals that Jaeger did provide adequate backup documentation for the legal services rendered, Jaeger provided documentation for the great majority of his claimed disbursements, and there is some indication that the Gays may have had some of the missing backup documentation in their possession.
Under these facts and in the absence of any clear warning by the district court that it would dismiss Jaeger's complaint if he failed to meet specified deadlines, we conclude that the district court abused its discretion in ordering the dismissal of the complaint.
Reversed and remanded.