CITIZENS INSURANCE COMPANY OF THE MIDWEST, AS SUBROGEE OF WILLIAM MAGEE v. LC ELECTRONICS, USA, INC. et al
ORDER denying 98 Motion for Sanctions. The parties are to comply with the deadlines established in the 111 Order Granting Joint Motion to Amend Case Management Plan entered June 8, 2012. Signed by Magistrate Judge William G. Hussmann, Jr., on 8/21/2012. (NRN)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
Under the E-Government Act and
Judicial Conference policy
CITIZENS INSURANCE COMPANY OF
THE MIDWEST, an Indiana Corporation, as
Subrogee of William Magee,
LG ELECTRONICS, USA, INC., a New Jersey
Corporation, and SEARS ROEBUCK &
COMPANY, a New York Corporation,
ENTRY ON PLAINTIFF’S MOTION FOR SANCTIONS PURSUANT
TO FED. R. CIV. P. 37, TO EXTEND DISCOVERY IN LIGHT
OF DEFENDANTS’ DISCOVERY VIOLATIONS, AND TO
PRECLUDE THE DEPOSITION OF PLAINTIFF’S ENGINEER
This matter is before the Honorable William G. Hussmann, Jr., United
States Magistrate Judge, on Plaintiff’s Motion for Sanctions filed on April 23,
2012. (Docket Nos. 98-101). Defendants filed their Response in opposition to
Plaintiff’s Motion for Sanctions on May 10, 2012. (Docket. No. 103). Plaintiff did
not file a reply brief.
Plaintiffs filed this motion seeking sanctions for Defendants’
misrepresentation and concealment of documents during the discovery process.
For the reasons outlined below, the Magistrate Judge finds that Plaintiff’s Motion
for Sanctions should be DENIED.
This dispute arises out of a fire that occurred at the home of Plaintiff’s
subrogor, William Magee. Prior to this suit being filed experts from both sides
spent several days examining the scene and cause of the fire. On March 17,
2011, Plaintiff filed its Complaint against Defendants. One month later Plaintiff
served Interrogatories and Requests for Production of Documents upon
Defendants. Upon not receiving a response within 30 days, Plaintiff filed a
Motion to Compel Answers to Interrogatories and the Production of Documents.
(Docket No. 26). This court granted the motion and ordered Defendants to
respond by September 12, 2011. (Docket No. 29). Defendants answered the
questions vaguely, forcing Plaintiff to file additional motions to compel. (See
Docket Nos. 33, 38). On December 7, 2011, this court granted, in part, and
denied, in part, the additional motions, stating:
Defendants shall respond to interrogatories and requests for
production and shall produce an appropriate 30(b)(6)
deponent to address information known by the company with
respect to the electrical wiring, lamp and lamp covers,
condenser and condenser connections to the Trio Model No.
7957754 for a time period two years prior to the fire at issue
in this case and two years after that incident. Defendants are
also to provide basic information concerning whether the
following Trio refrigerator model numbers used the same
wiring, lamp and lamp covers, condenser and condenser
connections and are of the same capacity as Model No.
7957754 at issue in this case. If the following model
numbers meet the parameters described above, information
concerning those items must also be produced. The model
numbers are: 7957755, 7957756, 7957757, 7957771, and
Defendants shall provide an appropriate 30(b)(6) deponent to
address whether any claims of fires resulting from lights
remaining on were filed as a part of the McLennan, et al. v. LG
Electronics, USA, Inc. class action filed in the District of
Plaintiff is granted leave to serve additional interrogatories or
requests for production addressing the items specified in
subparagraph (a) above.
Defendants’ compliance with this order shall be performed
within thirty (30) days of the date of this order.
(Docket No. 60).
Defendant Sears assigned a third-party administrator to obtain the
information required under the court’s order. However, through a typographical
error, the third-party administrator conducted a search in which an “8” instead
of a “5” was used for the third digit of the model numbers. (Defendants’
Response at 7; Exhibit F, ¶ 8). A search, therefore, was conducted by the thirdparty administrator using the incorrect model numbers, which resulted in a
report that there was no record of fires, overheating, or short circuiting for the
models searched. (Id.). Thus, the Defendants relayed to Plaintiff that there were
no records of fires, overheating, or short circuiting for the models at issue in this
Meanwhile, on January 9, 2012, Plaintiff filed its first Motion for Sanctions
against Defendants. Plaintiff claimed that Defendants failed to respond to
interrogatories and requests for production, failed to designate a FED. R. CIV. P.
30(b)(6) deponent relative to the electrical system of the refrigerators, failed to
designate a FED. R. CIV. P. 30(b)(6) deponent to address claims of fires alleged in
the New Jersey class action suit, and failed to comply with the court’s December
7, 2011 order by “failing to confer with Plaintiff’s counsel to schedule depositions
and to confer of [sic] proposed amendments of the case management plan.”
(Plaintiff’s Brief in Support at 2). Three (3) weeks after the January 8, 2012
deadline to comply, Defendants fully complied with the court’s December 7
order. However, this court denied Plaintiff’s first Motion for Sanctions. (Docket
It was not until late January that Defendants discovered the typo in the
model numbers. On March 2, 2012, after a search using the corrected model
numbers, Defendant Sears created an Excel spreadsheet with 18 names and a
“Loss Description” of incidents where consumers referenced fires, overheating,
warping, and burning with reference to the model numbers at issue in this case.
(Defendants’ Response, Exhibit P). In addition, defense counsel also sent to
Plaintiff’s counsel a letter advising that it was the defense counsel’s belief that
with the production of this spreadsheet, together with LG’s January 20
spreadsheets and supplemental answers to discovery, all discovery issues
between the parties had been resolved. (Id.).
Plaintiffs, however, took the position that discovery issues had not been
resolved. On March 20, 2012, the parties conducted a discovery conference.
Plaintiff’s counsel stated that he would not agree to produce his expert, Charles
Fricke (“Fricke”), unless Defendants provided the addresses for all of the
consumers identified by both LG and Sears. Plaintiff did not state any further
issues with respect to the entries produced by LG on January 20. In compliance
with Plaintiff’s March 20 request, Defendants produced the requested
information and addresses on April 4, 2012.
Plaintiff filed this motion on April 23, 2012. Plaintiff asks the court to
sanction Defendants for their alleged concealment and misrepresentation.
Further, Plaintiff seeks to extend discovery and barr Defendants from deposing
Plaintiff’s engineer, Fricke, until the close of the extended discovery.
Under FED. R. CIV. P. 37, a district court may impose sanctions upon a
party who violates an order directing discovery. Moore v Doe, 108 F.3d 1379 (7th
Cir 1997). When a party fails to obey a discovery order, the district court may
impose sanctions, including directing that designated facts be taken as
established. FED. R. CIV. P. 37(b)(2)(A). In addition sanctions depend upon the
condition of finding “willfulness, bad faith, or fault.” American Nat. Bank and
Trust Co. of Chicago v. Equitable Life Assur. Soc. of U.S., 406 F.3d 867, 877 (7th
Cir. 2005). The court defined fault to mean objective unreasonableness.
Marrocco v. General Motors Corp., 966 F.2d 220, 224 (7th Cir. 1992).
Under FED. R. CIV. P. 37, courts have wide latitude in fashioning
appropriate sanctions, as long as the sanctions are reasonable under the
circumstances. Insight, Inc. v Spamhaus Project, 658 F.3d 637 (7th Cir. 2011).
The sanctions must be proportional to the party’s misconduct. Collins v Illinois,
554 F.3d 693 (7th Cir 2009). While sanction of dismissal is the ultimate
sanction, it is fitting when a party has a clear record of delay or contumacious
conduct and other less drastic sanctions have proven unavailable. Rice v. City of
Chicago, 333 F.3d 780 (7th Cir. 2003). However, the Seventh Circuit stated that
finding must rest upon clear and convincing evidence before a court can resort
to the sanction of dismissal. Wade v. Soo Line R.R. Corp., 500 F.3d 559, 564 (7th
In this case, Plaintiff attempts to demonstrate that Defendants
intentionally withheld information requested by the Plaintiff and ordered by this
court. When the court ordered Defendants to produce the requested information
for model numbers 7987755, 7987756, 7987757, 7987771, and 7987772,
Defendant Sears’ third-party administrator accidentally erred in typing the
correct model numbers. The administrator used an “8" instead of a “5" in the
third digit of the model numbers. This court should not sanction a party due to
a third party’s typographical error.
Plaintiff has not demonstrated by clear and convincing evidence that
Defendants willfully withheld information. Nor has Plaintiff fully justified why
any sanctions should be issued. Defendants did make a mistake, but they did
remedy that mistake and have now disclosed everything Plaintiff requested.
The Magistrate Judge, being duly advised, now DENIES the Plaintiff’s
Motion for Sanctions. This court concluded that Defendant Sears’ third-party
administrator did not intend to delay litigation. Furthermore, Defendants were
not willful, acting in bad faith, or at fault with the error that caused a delay in
discovery. In addition, Defendants will not be awarded their costs for the failure
of Plaintiff to comply with Local Rule 37.1 before filing this motion, nor will
Fricke be barred from testifying. The parties are to comply with the deadlines
established in the Order Granting Joint Motion to Amend Case Management
Plan entered June 8, 2012. (Docket No. 111).
SO ORDERED the 21st day of August, 2012.
William G. Hussmann, Jr.
United States Magistrate Judge
Southern District of Indiana
Michael J. Black
BLACK & MOSS, P.C.
Scott W. Hoyne
JOHNSON & BELL, LTD.
Stephen M. Brandenburg
JOHNSON & BELL, LTD.
Mickey J. Lee
STEWART & IRWIN P.C.
Cecilio L. Franco IV
JOHNSON & BELL, LTD.
Mary F. Schmid
STEWART & IRWIN
Edward W. Hearn
JOHNSON & BELL
Matthew K. Wollin
JOHNSON & BELL, LTD.
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