Catrinar v Wynnestone Communities Corporation et al

Filing 59

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S 38 Third MOTION to Compel Discovery and for Discovery Sanctions - Signed by Magistrate Judge R. Steven Whalen. (CCie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

LAWRENCE CATRINAR,
Plaintiff,

No. 14-11872

v.

District Judge John Corbett O’Meara
Magistrate Judge R. Steven Whalen

WYNNESTONE COMMUNITIES
CORPORATION, ET AL.
Defendants.
/
OPINION AND ORDER
On May 9, 2014, Plaintiff Lawrence Catrinar filed suit against his former employer
Defendant Wynnestone Communities Corporation and Gilbert B. Silverman
(“Defendants”)1 alleging violations of the Family Medical Leave Act (“FMLA”), 29
U.S.C. § 2614, et seq. as well as breach of contract and promissory estoppel. On July 1,
2014, Defendants filed a counterclaim, alleging breach of fiduciary duty, theft,
conversion, fraudulent concealment, and fraudulent misrepresentation by Plaintiff.
Before the Court is Plaintiff’s Third Motion to Compel Discovery and for
Discovery Sanctions [Doc. #38]. I granted Plaintiff’s first motion to compel, which
sought production of Mr. Silverman’s tax returns, on September 21, 2015 [Doc #56].

1

Mr. Catrinar was the president of Wynnestone; Mr. Silverman was the owner.
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Plaintiff’s second motion to compel was resolved by stipulated order [Doc. #37]. The
document requests at issue in the present motion are those that were ordered to be
produced by June 5, 2015 in the orders granting the first and second motions.2
There are two components to Plaintiff’s motion: he seeks an order compelling
discovery, and also an order imposing sanctions under Fed.R.Civ.P. 37, including entry of
a default judgment against Defendants. I will discuss each in turn.
Sanctions
In general, Fed. R. Civ. P. 37 provides for sanctions for failure to make disclosures
or cooperate in discovery. Rule 37(b) provides for sanctions where a party fails to
comply with a court order regarding discovery, including, under Rule 37(b)(2)(A)(vi),
entry of default judgment where it is the defendant who has been disobedient. A motion
for sanctions under this Rule is addressed to the Court’s discretion. National Hockey
League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 96 S.Ct. 2778, 49 L.Ed.2d
747 (1976); Regional Refuse Systems, Inc. V. Inland Reclamation Co., 842 F.2d 150, 154
(6th cir. 1988). However, entry of a default judgment against a party “for failure to
cooperate in discovery is a sanction of last resort,” and may not be imposed unless
noncompliance was due to “willfulness, bad faith, or fault.” Bank One of Cleveland, N.A.
v. Abbe, 916 F.2d 1067, 1073 (6th Cir. 1990)(citations omitted). See also Grange Mut.

2

The specific document requests at issue are listed in Exhibit 6 to Plaintiff’s
motion [Doc. #38]. The present Order applies to those requests.
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Cas. Co. v. Mack, 270 Fed. Appx. 372, 376 (6th Cir.2008) (explaining that default
judgment is the court's most severe discovery sanction).
The Court’s discretion is informed by the four-part test described in Harmon v.
CSX Transportation, Inc., 110 F.3d 364, 366-67 (6th Cir. 1997): (1) whether the party’s
failure is due to willfulness, bad faith, or fault; (2) whether the adversary was prejudiced
by the dismissed party’s conduct; (3) whether the dismissed or defaulted party was
warned that failure to cooperate could lead to dismissal or entry of default judgment; and
(4) whether less drastic sanctions were imposed or considered before dismissal or default
judgment was ordered. See also Bank One of Cleveland, N.A. v. Abbe, 916 F.2d 1067,
1073 (6th Cir. 1990).
In deciding whether to impose “the draconian sanction” of default judgment, the
first factor–the party’s willfulness or bad faith in failing to comply with a discovery
order–looms large. Intercept Security Corp. V. Code-Alarm, Inc., 169 F.R.D. 318, 321-22
(E.D. Mich. 1996), citing Societe Internationale Pour Participations Industrielles et
Commerciales, S.A. v. Rogers, 357 U.S. 197, 212, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958).
However, a prior warning that failure to comply with a discovery order will result in a
default judgment is pivotal both to the determination of willfulness and to the ultimate
decision to order that sanction. See Harris v. Callwood, 844 F.2d 1254, 1256 (6th Cir.
1988).
To say that this case has been aggressively litigated at the discovery stage would

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be an understatement. Nevertheless, whatever disputes remain, it is apparent that
Defendants have provided a considerable amount of discovery, and I accept at face value
their offers to allow Plaintiff the opportunity to inspect additional documents. I will
address their claim that they simply do not possess a number of documents in the next
section. But I do not find that Defendants have acted with willfulness or bad faith, and
there has been neither a previous warning that they could be subject to a default
judgment, nor the imposition of a lesser discovery sanction. Therefore, there will be no
default judgment under Rule 37.
In addition to Defendants’ lack of willfulness or bad faith, there is a fairly simple
solution to the outstanding discovery issues. This includes giving the Defendants the
opportunity to verify that they do not possess many of the documents that have been
requested. I therefore decline to impose any Rule 37 sanctions at this time.
Compelling Discovery
The briefs and responses filed in this motion more resemble summary judgment
arguments (or perhaps jury arguments) that discussions focused on discovery. They also
reflect what appears to be an unfortunate lack of communication between counsel for the
parties. Plaintiff essentially complains that little if anything has been produced;
Defendants state that they have produced over 11,000 pages of documents, and have
offered Plaintiff’s counsel the opportunity to inspect further documents. Defendants also
argue that the previous stipulated order should be modified to deny discovery as to what it

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characterizes as “soon to be dismissed” claims. They also state that “with regard to a great
many of the requests, Defendants have conducted a diligent search and are not in
possession of responsive documents.” Defendants’ Response [Doc. #44], p. 23.
First, nothing has been dismissed at this point, and there is no basis to modify or
vacate, in whole or in part, any of the Court’s previous discovery orders. Therefore,
Defendants must undertake a diligent and good-faith search for responsive documents,
and produce, or permit the inspection of, all documents within their possession or control
that are responsive to Plaintiff’s requests, subject to any claim of privilege. If the
Defendants do claim privilege, they will submit a privilege log.
In terms of Defendants’ claim that they do not possess certain documents,
Plaintiff’s citation to EnvTech, Inc. v. Suchard, 2013 WL 4899085, *5 (D.Nev.
2013)(unpublished), is apropos:
“Where a party does not have responsive documents, it must come forward
with an explanation of the search conducted with sufficient specificity to
allow the court to determine whether the party made a reasonable inquiry
and exercised due diligence. Information regarding the search conducted
should be provided through declarations under oath detailing the nature of
the efforts to locate responsive documents.”
Therefore, as to any documents that Defendants claim they do not have, the person
or persons who searched for those documents must provide to Plaintiff a written
declaration, under oath, detailing the steps taken to locate responsive documents and the
results of the search. This will also obviate the need to allow Plaintiff’s representatives to
search Defendants’ email servers, a remedy that I generally find pregnant with mischief in
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any event.
Conclusion
For these reasons and under these terms, Plaintiff’s motion [Doc. #38] is
GRANTED IN PART AND DENIED IN PART.
Plaintiff’s request for Rule 37 sanctions is DENIED.
Plaintiff’s request for an order compelling discovery is GRANTED, as follows:
A. Defendants will undertake a diligent and good-faith search for responsive
documents, and produce, or permit the inspection of, all documents within their
possession or control that are responsive to Plaintiff’s requests, subject to any claim of
privilege. If the Defendants claim privilege as to any documents, they will submit a
privilege log.
B.

As to any documents that Defendants claim they do not have, the person or

persons who searched for those documents will provide to Plaintiff a written declaration,
under oath, detailing the steps taken to locate responsive documents and the results of the
search.

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C. Responsive documents will be produced or made available for inspection
within 30 days of the date of this Order.
IT IS SO ORDERED.

s/R. Steven Whalen
R. STEVEN WHALEN
UNITED STATES MAGISTRATE JUDGE
Date: March 21, 2016

CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was sent to parties of record on
March 21, 2016, electronically and/or by U.S. mail.
s/C. Ciesla
Case Manager

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