Superior Composite Structures, LLC v. Abersham Commercial Services, Ltd. et al
Filing
124
ORDER granting 103 Motion for sanctions; denying 107 Motion for Reconsideration. Signed by Chief Judge Karen E. Schreier on 10/19/2012. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
SUPERIOR COMPOSITE
STRUCTURES, LLC,
Plaintiff,
vs.
MALCOLM PARRISH,
Defendant.
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Civ. 10-4066-KES
ORDER GRANTING PLAINTIFF’S
MOTION FOR SANCTIONS
Plaintiff, Superior Composite Structures, LLC, brought suit against
defendant, Malcolm Parrish, who is proceeding pro se, alleging causes of action
for breach of contract, negligent misrepresentation, fraudulent
misrepresentation, and deceit. Superior Composite moves to have Parrish
sanctioned for his failing to comply with this court’s March 14, 2012, order to
fully answer the interrogatories and requests for production of documents.
Parrish moves for reconsideration of the March 14, 2012, order.
BACKGROUND
The pertinent facts to this order are as follows:
Parrish is the chief executive officer for Abersham Commercial Services,
Ltd., which is involved in producing modular housing panels out of high-tech
materials made from recycled glass. Superior Composite, through its managers
Lee Celske and Rick Ostergaard, expressed interest in selling these houses.
Parrish stated that he, through Abersham, could provide a “turn key” Ambiente
Housing Plant, which could produce 500 modular houses a year.
Superior Composite and Parrish entered into a series of written
agreements, including an “Agreement in Principal” dated August 12, 2008.
Docket 1-1. Superior Composite agreed to purchase an Ambiente Housing
Plant from Abersham with a production capacity of 500 houses per year for
$9 million, with $500,000 due at the end of year one, $500,000 due at the end
of year two, and the remaining $8 million paid in cash in progress payments
“defined in the Plant Design Build contract.” Docket 1-1 at 1. The August 12,
2008, agreement included phases for building the Ambiente Plant and stated
that Abersham would receive a technology licensing fee in the amount of
8 percent of each house’s sale price. In return, Superior Composite would
receive an exclusive territory within the United States to sell the houses.
Superior Composite paid an initial $250,000 deposit to Abersham.
On June 9, 2008, Abersham provided a firm order to buy 100,000 square
feet of housing from Superior Composite, reserved the right to purchase
another 100,000 square feet of housing, and stated that Abersham wanted to
receive the houses at a rate of ten per month. Docket 1-2. Abersham stated
that firm dates and costs for these houses would be determined at a later date.
On April 2, 2009, Parrish wrote to Ostergaard and Celske and stated that
Superior Composite needed “to increase the deposit by 100k.” Docket 1-3.
Superior Composite paid an additional $100,000 to Abersham. The contractual
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relationship eventually disintegrated, and Superior Composite brought this
action against Abersham and Parrish on June 14, 2010.
In the early stages of this lawsuit, Abersham and Parrish’s first counsel
withdrew because “despite repeated attempts by [counsel] to obtain defendants’
compliance with Rule 26(a) . . . and despite the undeniable fact that a
significant amount of such information exists, defendants have failed to comply
with their disclosure obligation.” Docket 11 at 1. Abersham was unable to
secure substitute counsel, which led the clerk of court to enter a default
against it because corporations cannot proceed pro se in court. Dockets 29, 32.
After holding a hearing on damages, where no representative of Abersham
appeared, the court granted Superior Composite’s motion for default judgment
against Abersham in the amount of $849,895.98. Docket 57. Only Parrish
remains as a defendant in this action.
All prediscovery disclosures required by Rule 26(a) were originally due
on February 28, 2011. Docket 33-1 at 1. Superior Composite, however, did not
require Parrish to meet this deadline because of the aforementioned attorney
problems. After failing to find counsel, Parrish represented to the court on
March 21, 2011, that he would be proceeding pro se. Superior Composite then
requested an April 20 deadline for the prediscovery disclosures. Parrish
emailed Superior Composite two days before the deadline and asked for a
seven-day extension, which Superior Composite granted. Then, on April 27,
2011, Parrish emailed Superior Composite and informed them that he was
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having problems with the court’s electronic filing system and that was the
reason for not providing the prediscovery disclosures. Superior Composite
responded to the email by reminding Parrish that discovery did not need to be
filed with the court but instead needed to be given to the agreed upon thirdparty intermediary. Docket 33-1 at 2. Parrish did not respond, and Superior
Composite brought a motion to compel discovery on May 4, 2011. Docket 33.
Superior Composite’s motion was granted by United States Magistrate Judge
John Simko on June 15, 2011, after Parrish failed to respond to the motion.
Docket 43 at 4.
Superior Composite served its requests for admissions on Parrish on
May 19, 2011. In its requests for admissions, Superior Composite informed
Parrish that the requests for admissions would be deemed admitted if he failed
to answer. Docket 46-1 at 1. After not receiving a response from Parrish within
the allotted time, Superior Composite brought a motion to deem the requests
for admissions admitted on June 29, 2011. Docket 45. Parrish finally provided
his response to Superior Composite’s requests for admissions on
September 13, 2011, and asked the court to admit the late documents, which
the court did. Dockets 73; 81.
Superior Composite sent Parrish a set of interrogatories and requests for
production of documents (RFPs) on December 5, 2011. On December 8, 2011,
Parrish’s second set of attorneys filed a notice of appearance. Docket 84.
Superior Composite sent Parrish’s newly acquired attorneys copies of the
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interrogatories and RFPs on December 27, 2011. Docket 89-1 at 1. On
January 6, 2012, counsel for Parrish requested and was given a two-week
extension to answer the interrogatories and RFPs, which were originally due on
January 9, 2012. Counsel for Parrish requested an additional extension on
January 23, 2012. Superior Composite agreed to a January 26 deadline.
Superior Composite finally received Parrish’s answers to the interrogatories on
January 26, and it received Parrish’s responses to the RFPs on January 30.
Docket 89-1 at 1-2.
After reviewing Parrish’s responses to the interrogatories and RFPs,
Superior Composite sent a letter to Parrish’s counsel on February 7, 2012,
indicating that the responses were deficient and asking for complete answers.
Docket 89-1 at 2. Parrish’s counsel responded two days later and indicated
that they would respond within a “reasonable amount of time.” Id. With no
word from Parrish or his attorneys, Superior Composite filed a motion to
compel full answers to its interrogatories and RFPs on February 14, 2012.
Docket 89. On March 14, 2012, after Parrish failed to respond to the motion,
the court entered an order to compel requiring Parrish to fully answer the
interrogatories and RFPs by April 13, 2012. Docket 91.
On March 16, 2012, Parrish’s attorneys withdrew, with permission from
the court, because Parrish was unable to pay them. Dockets 92-95. Parrish
then entered a response to the court’s March 14 order on April 13, 2012, which
included additional answers to the interrogatories, but no additional responses
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to the RFPs. Docket 101. After reviewing Parrish’s additional answers, Superior
Composite filed its current motion on April 24, 2012, asking the court to
sanction Parrish for failing to comply with the March 14 order. Parrish
thereafter filed his motion for reconsideration on May 8, 2012.
DISCUSSION
To impose sanctions under Federal Rule of Civil Procedure 37, “there
must be an order compelling discovery, a willful violation of that order, and
prejudice to the other party.” Chrysler Corp. v. Carey, 186 F.3d 1016, 1019 (8th
Cir. 1999). The court’s March 14 order compelled Parrish to fully respond to
Superior Composite’s interrogatories and RFPs.
Parrish moves this court to reconsider its March 14 order. Parrish relies
on Rule 60(b)(1) in support of his motion. See Anderson v. Raymond Corp., 340
F.3d 520, 525 (8th Cir. 2003) (identifying that the Eighth Circuit has
determined that motions for reconsideration are “nothing more than Rule 60(b)
motions when directed at non-final orders”). Under Rule 60(b)(1), “the court
may relieve a party . . . from a final judgment, order, or proceeding” when the
party demonstrates “mistake, inadvertence, surprise, or excusable neglect.”
Fed. R. Civ. P. 60(b)(1).
Parrish argues that he made a mistake by overlooking Superior
Composite’s motion to compel, which led to the court’s March 14 order by
default. Docket 113 at 3. The court is not convinced that Parrish’s nonresponse to Superior Composite’s motion was a genuine mistake when viewed
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alongside his other actions before the court during this litigation. Nonetheless,
the court will assess his objections and responses to the several interrogatories
that Superior Composite has identified as being deficient in its motion for
sanctions to see if the March 14 order would have been different had Parrish
responded to Superior Composite’s motion.
Before analyzing the individual interrogatories, a few standard principles
of discovery require recitation. The scope of discovery is governed by Rule 26,
and Rule 26 is extremely broad. See 8 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 2007 at 119-120 (3d ed. 2010) (hereinafter
“Wright & Miller”). The reason for broad discovery is that “[m]utual knowledge
of all the relevant facts gathered by both parties is essential to proper litigation.
To that end, either party may compel the other to disgorge whatever facts he
has in his possession.” Hickman v. Taylor, 329 U.S. 495, 507-08 (1947).
Rule 26 allows discovery of any matter relevant to the claim or defense of
any party. Wright & Miller, § 2007 at 119. Information is discoverable if it is
“reasonably calculated to lead to the discovery of admissible evidence.” Fed. R.
Civ. P. 26(b)(1). “Once the requesting party has made a threshold showing of
relevance, the burden shifts to the party resisting discovery to show specific
facts demonstrating that the discovery is not relevant, or how it is overly broad,
burdensome, or oppressive.” Signature Development, LLC v. Mid-Continent Cas.
Co., No. Civ. 11-5019-JLV, 2012 WL 4321322, at *7 (D.S.D. Sept. 18, 2012).
“The articulation of mere conclusory objections . . . is insufficient to carry the
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resisting party’s burden,” and, instead, the party must make a “specific
showing of reasons why the relevant discovery should not be had.” Id.
Keeping these principles in mind, the court will now analyze the
interrogatories in question.
Interrogatories 11 & 271
Interrogatory 11 asks Parrish to identify “any and all facts that support
[his] denial of the allegations set forth in the Complaint,” including the
assertions made in previous affidavits, responses, and the answer. Docket 101
at 11.
Parrish’s objection argues that the interrogatory is “vague, ambiguous
and unintelligible in that it requires facts that support facts.” Id. Parrish
drafted and filed the documents that contain his denials of the allegations set
forth in the complaint. Interrogatory 11 merely asks Parrish to explain the
facts, and the source of those facts, underlying the denials.
Further, many of Parrish’s assertions made in the documents referenced
in the interrogatory are conclusions or disputed facts that Superior Composite
believes require additional facts. Parrish implicitly argues through his objection
that facts cannot support other facts when he claims that the interrogatory is
“unintelligible in that it requires facts that support facts.” This argument is
1
Interrogatories 11 and 27 are similar and, thus, will be discussed in
sequence.
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neither persuasive nor intelligible. Thus, Parrish’s objections to Interrogatory
11 lack merit.
Parrish answers Interrogatory 11 by referencing the very facts that he
was asked to support. Docket 101 at 12. Such a circular response is not an
adequate answer.
Interrogatory 27 asks Parrish to identify “any and all facts that support
your claims made in your pleadings” including his claims that:
(a)
He can provide a “turn key” Ambiente Housing Plant which has the
capability of producing 500 modular houses per year as well as sell
the licensing rights to certain technology and provide any exclusive
sales and production territory.
(b)
He has the ability to perform his obligations in the “Agreement in
Principal.”
(c)
He can provide layouts, design and equipment for a physical plant
and a facility to manufacture the recycled glass modular panels.
(d)
He would have purchased 100 (or more) homes from Superior
Composite Structures once the plant was operational.
(e)
Superior Composite Structures was unable to pay for the “turn
key” Ambiente Housing Plant.
(f)
He provided additional video information, wall samples, and
other information to Superior Composite Structures in an
effort to help it provide money for the factory.
(g)
If financing was in place, a factory would have been built.
(h)
The $250,000 paid to him was for feasibility rather than a down
payment on equipment.
Docket 101 at 23-24.
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Parrish objects on the grounds that the interrogatory is vague, it is not
reasonably calculated to lead to the discovery of admissible evidence, and it is
compound and based on assumptions of fact that are not true. There is not a
vagueness problem because Superior Composite provided specific examples of
the assertions that Parrish has put forth. Parrish should have provided facts
that supported those assertions. Further, because of the nature of the suit
between the parties, the court finds that all of the assertions listed above are
reasonably calculated to lead to the discovery of admissible evidence because
they all deal with the business relationship, and the contracts formed because
of said relationship, that existed between the parties.
Lastly, the compound nature of the interrogatory does not pose a
problem. The parties agreed to a maximum of fifty interrogatories in their
scheduling order. Docket 90 at 1. Of the twenty-seven interrogatories, Parrish
objected to two of them, Interrogatories 21 and 27, based upon the argument
that they are compound. If Superior Composite would have separated each
distinct question asked in those two interrogatories, the total number of
interrogatories would still be less than fifty. Thus, the court finds that Parrish’s
objections to Interrogatory 27 lack merit.
Parrish’s answers to Interrogatory 27 following his objections are limited
both in quantity and substance. Specifically with regard to subparts (a), (b),
and (c) and the assertions therein, Parrish answers the interrogatory by stating
“his 40+ years of experience in engineering and manufacturing, his intimate
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knowledge of the product and the process, and that he is confident in his
abilities” are the facts that support such assertions. But these responses do
little in terms of providing facts to support the assertions in (a), (b), and (c). In
his brief Parrish claims that he has “proved [these assertions] statistically and
mathematically.” Docket 107-1 at 4. Parrish, therefore, admits that he is aware
of certain facts, i.e., statistics and mathematics, that support the assertions,
but he failed to provide the statistics and mathematics in his response. Thus,
the court finds that Parrish’s answers to Interrogatory 27 are inadequate.
Interrogatory 12
Interrogatory 12 asks Parrish to identify “any and all facts regarding the
formation and operation” of Abersham since its inception, including “the date
on which and location in which the entity was formed; the shareholders,
owners or members since inception; the officers, directors or managers since
inception; the person who is the custodian of its company minutes or company
records; the person who is the custodian of its financial, accounting, or
bookkeeping records; and all countries, states, territories in which it has
registered to do business.” Docket 101 at 12.
Parrish objects, arguing that the interrogatory is “vague and is not
reasonably calculated to lead to the discovery of admissible evidence.” Id. Part
of Superior Composite’s claim is that Abersham’s corporate veil should be
pierced and Parrish should therefore be liable for Abersham’s damages. Thus,
the information sought in Interrogatory 12, namely the organization and
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operations of Abersham, will likely lead to the discovery of admissible evidence.
Parrish’s objection lacks merit.
In addition, Parrish failed to fully answer the interrogatory. He did not
provide the names of the shareholders, owners, or members since inception nor
did he provide the name of the person who is the custodian of company
minutes or company records, unless his statement that he was “in charge of
the day to day operations and bookkeeping” was meant to imply that he was
the custodian of company records. Parrish failed to fully answer Interrogatory
12.
Interrogatories 13 & 14
Interrogatory 13 asks Parrish to identify “any and all persons who paid
money to you or any entities in which you have an ownership interest
regarding the Ambiente housing system in the last 10 years.” Docket 101 at 13.
Parrish objects, arguing that the interrogatory will not lead to admissible
evidence and that it “requires the disclosure of non-discoverable information
under the doctrine of Financial Disclosure Privilege and further because it
invades the financial privacy interests of third parties who have not received
notice of this interrogatory or otherwise agreed to release the requested
information.” Id. Responses to the interrogatory are relevant considering
Superior Composite’s claims of negligent misrepresentation, fraudulent
misrepresentation, and deceit. Whether Parrish received money from other
individuals or entities may help determine whether certain representations
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made by Parrish and/or Abersham were negligent, fraudulent, or deceitful.
Further, the court is not persuaded by Parrish’s “Financial Disclosure Privilege”
argument. Parrish has not provided any legal authority in support of his
argument nor has he filed for a protective order. Thus, Parrish’s objections are
unfounded.
Parrish failed to provide any substantive response to Interrogatory 13
even after this court’s March 14 order compelling him to do so. The only
addition to Parrish’s response was a further explanation of his objection. Thus,
Parrish’s answer to Interrogatory 13 is inadequate.
Interrogatory 14 is a follow-up question based on Interrogatory 13,
asking Parrish to identify detailed information regarding any transactions he or
Abersham had with other individuals regarding the Ambiente Housing System.
Parrish responded only with “Not applicable.” Docket 101 at 14. Because
Parrish failed to answer Interrogatory 13, the court finds that Parrish failed to
answer this interrogatory.
Interrogatory 15
Interrogatory 15 asks Parrish to identify “any and all patents that are
owned (or have even been owned) by you or any entities in which you have (or
had) an ownership interest, including (but not limited to) whether you (or any
entity in which you have (or had) an ownership interest) own or ever owned the
patent on the technology for the bead plant as represented on the Ambiente
homes website.” Docket 101 at 14.
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Parrish objects, arguing that the interrogatory is vague and ambiguous.
The court overrules Parrish’s objection on the ground that the interrogatory is
quite clear; it asks Parrish to identify any patents that he has ever owned.
The answer Parrish provides is insufficient. It reads as follows: “Malcolm
Parrish, nor any entity in which he had an ‘ownership interest’ in, owned any
patents ‘on the technology’ for the ‘bead plant’ as ‘represented’ on the Ambiente
homes website.” Id. at 14-15. First, the response is unintelligible. Second,
Parrish attempts to limit his response to a small group of possible patents
whereas the question clearly asks him to identify “any and all” patents he has
ever owned. For these reasons, Parrish’s answer to Interrogatory 15 is
insufficient.
Interrogatory 17
Interrogatory 17 asks Parrish to “identify any and all facts regarding
crimes that you have been convicted of (whether in the United States or the
United Kingdom), including (without limitation) the crime convicted of and the
punishment received for each such crime (including (but not limited to) the
length of incarceration for each crime).” Docket 101 at 15.
Parrish objects, arguing that the interrogatory “is overbroad and not
reasonably calculated to lead to the discovery of admissible evidence.” Id. at 16.
Specifically, Parrish argues that “[u]nder Federal Rule of Evidence 609(b), it
limits the time to the prior 10 years. Propounding Party’s question appears to
include a duration of time not offered under Rule 609, therefore, Defendant
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maintains the objection that the interrogatory is overbroad.” Id. Rule 609
provides guidance on when evidence is admissible, not discoverable. Because
evidence “need not be admissible in court to be discoverable,” Parrish’s
objection is overruled. Gov’t of Ghana v. ProEnergy Serv., LLC, 677 F.3d 340,
345 (8th Cir. 2012).
Assuming his objection was indeed genuine, Parrish should have
provided an answer for the previous ten years. But similar to his answers to
other interrogatories, he failed to respond to the portion of the question to
which he had no dispute.
Interrogatory 18
Interrogatory 18 asks Parrish to identify “each and every time you have
been in the United States since January 1, 2011, and identify each and every
time you plan to be in the United States between January 1, 2012 and May 31,
2012.” Docket 101 at 16.
Parrish objects, arguing that the interrogatory is “overbroad and not
reasonably calculated to lead to the discovery of admissible evidence.” Id.
Superior Composite argues that the information is relevant because it sheds
light on Parrish’s credibility as a witness. The court ordered Parrish to pay
$386.37 to Superior Composite on August 1, 2011. Docket 64. On October 24,
2011, Parrish moved this court for an extension of time to pay the sum of
$386.37 because he had “absolutely no means of satisfying the payment.”
Docket 79. Superior Composite argues that if Parrish traveled to the United
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States during the time periods stated in the interrogatory, then he must have
been able to pay the $386.37 owed, and, therefore, he misrepresented to this
court the fact that he did not have such funds. Evidence is discoverable even if
its sole purpose is to impeach a witness’s anticipated testimony. See Lyon v.
Bankers Life & Cas. Co., No. Civ. 09-5070, 2011 WL 124629, at *6 (D.S.D.
Jan. 14, 2011) (“A party seeking discovery is merely required to make a
threshold showing of relevance[.]”). Therefore, Parrish’s objection is overruled.
Interrogatory 19
Interrogatory 19 asks Parrish to identify certain facts about the Ambiente
housing system factory in or near Waukesha, Wisconsin.
Parrish responded by answering three out of the five questions. The first
non-response was because Parrish requested further clarification in terms of
which “design build contract” Superior is referencing. Superior has since
identified the contract, and Parrish is now claiming that the contract is
confidential. Docket 107-1 at 5. Parrish argues that if he relays “information of
a confidential nature to third parties without the consent or knowledge of the
parties involved then [he] would be breaching said confidences and thereby
potentially exposing [him]self to further litigation.” Docket 113 at 4. Parrish has
not indicated that he has attempted to get authorization from the third parties
involved with the contract so that he can disclose the asked-for information.
Further, Parrish has not moved this court for a protective order. Thus,
Parrish’s first objection is overruled.
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The second non-response was to the interrogatory that asked Parrish to
identify “[a]ny and all payments made to the Ambiente Housing Midwest, LLC
or any Klumb family member.” Docket 101 at 17. Parrish objects on the basis
that he “is extremely uncomfortable with, and feels that it is inherently wrong
to publicize, without their consent or knowledge, financial information
regarding private third-party individuals, who are not a party to this matter.”
Id. at 17-18. Other than his feelings of uncomfortableness, Parrish has not
given this court adequate reasons to sustain his objection. He has not
indicated that there actually are confidentiality agreements in place, with the
exception of the “design build contract.” He has not indicated that third parties
actually want the information withheld. He has not moved this court for a
protective order. Instead, Parrish appears to be attempting to use the existence
of tangentially related third parties in such a manner that will allow him to
avoid disclosing discoverable information. The court is not persuaded and finds
that Parrish’s answer to Interrogatory 19 is inadequate.
Interrogatory 20
Interrogatory 20 asks Parrish to identify “any and all testing that has
been performed with regard to the Ambiente housing system.” Docket 101 at
18.
Parrish objects, arguing that the interrogatory is vague, ambiguous, and
overly broad. The court disagrees. The “Ambiente housing system” is quite
specific, especially since it is defined at the beginning of the interrogatories.
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Docket 89-2 at 2. Thus, tests that have been performed with regard to the
Ambiente housing system should be easily identifiable.
Further, Parrish states that some of the data and tests are available on a
website and have been provided to Superior Composite during the course of
their business relationship. If Superior Composite has already been provided
with such tests, then Parrish can reference those tests in his answer. But as it
stands now, Superior Composite does not know if it has been presented with
every test performed regarding the Ambiente housing system.
Parrish also answers by stating that the Universities of Maine, Manitoba,
Puerto Rico, and Texas have all evaluated the material. These are “in addition
to evaluation[s] performed or commissioned by third parties, for which [Parrish]
lacks detailed information but is generally aware have taken place.” Docket 101
at 18. Parrish needs to identify the other evaluations that he admits he is
aware of by identifying who performed the tests or through some other method.
This response is similar to his response to Interrogatory 27; Parrish readily
admits that he is knowledgeable of the information asked in the interrogatory,
but he still refuses to provide an adequate response. Parrish’s objection is
overruled.
Interrogatory 23
Interrogatory 23 asks Parrish to identify, with regard to the glass bead
component of the Ambiente housing system, “(a) whether it was installed in the
Wisconsin factory and, if not, why it was not installed; (b) whether the bead
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plant is included in the turn-key factory that you claim you are still able to
provide; and (c) the cost of the equipment for the bead plant.” Docket 101 at
20.
Parrish objects, arguing that the interrogatory will not lead to the
discovery of admissible evidence “because it concerns facts unrelated to the
dealings between [the parties].” Id. Superior Composite is claiming negligent
misrepresentation, fraudulent misrepresentation, and deceit. Part of these
claims are based on Parrish’s alleged representation that there was a similar
plant in the United States that was operational. See, e.g., Docket 1 at 7. Thus,
the interrogatory is reasonably calculated to lead to the discovery of admissible
evidence.
Parrish’s objection also relies on his “confidential information relating to
a third party” argument that, under the circumstances and for the reasons
stated prior, this court finds unpersuasive. Parrish’s objections to Interrogatory
23 lack merit.
In terms of answering the interrogatory, Parrish provided an answer to
(a). With regard to (b), Parrish stated that he needs “clarification as to which
‘factory’ Propounding Party is referring to.” Docket 101 at 21. As is clear in the
question, the “factory” that is in question is the factory that Parrish allegedly
claims he can still provide. With regard to (c), Parrish stated that he needs
“further information. Costs can vary depending on location of raw materials,
market conditions, amount of bead required, and other factors.” Id. This
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answer is not sufficient. Parrish can provide estimates and identify them as
such. Thus, Parrish’s answer to Interrogatory 23 is insufficient.
Interrogatory 25
Interrogatory 25 asks Parrish to identify, from and after January 1,
2000, “any and all house orders that you or any of the companies in which you
have an ownership interest have provided to any person and for each such
house order identify the developer or purchaser.” Docket 101 at 21.
Parrish objects, arguing that the interrogatory is vague, ambiguous, and
seeks confidential information from third parties. There is nothing vague or
ambiguous about the interrogatory when considered in light of this litigation.
Parrish is a businessman and as such should know what an order is. Further,
Parrish’s vague “confidentiality” argument is no more persuasive here than in
any of the prior interrogatories. Parrish’s objections lack merit.
Parrish answers the interrogatory by stating that “he has received orders
from third parties for materials for the construction of homes, but has been
unable to fill those orders because he was not in control of commercial
production.” Docket 101 at 22. This does not adequately identify the orders.
Parrish failed to identify the developer or purchaser of those orders as asked by
the interrogatory. Parrish’s answer is insufficient.
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Interrogatory 26
Interrogatory 26 asks Parrish to identify “any and all transfers of
anything of value (in excess of $5,000 US Dollars) that you have made since
January 1, 2005, including transfers to family members (including, but not
limited to, your spouse and children).” Docket 101 at 22.
Parrish objects, arguing that the interrogatory is not reasonably
calculated to lead to admissible evidence and that it is “non-discoverable
information under the doctrine of Financial Disclosure Privilege[.]” Id. at 22-23.
Superior Composite correctly argues that such information will provide context
to Parrish’s credibility much like the information in Interrogatory 18. Moreover,
Parrish has stressed that he “would have purchased 100 (or more) homes from
[Superior Composite’s] plant once it was operational.” Docket 65 at 2. Whether
Parrish actually had the funds to do so is highly relevant evidence in this case.
Therefore, Parrish’s objections are overruled.
Parrish did not attempt to answer Interrogatory 26. Thus, his answer is
insufficient.
Requests for Production of Documents
Superior Composite claims that Parrish has failed to produce any
additional documents following the court’s order to compel. Docket 105 at 6.
But Superior Composite has not indicated, with a limited exception, which
documents they want Parrish to produce. As a result, the court can only
analyze the testing documents that Superior Composite references in its brief.
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Superior Composite requested that Parrish produce any and all
documents relied upon in answering Interrogatory 20, the interrogatory that
asked about which tests were performed with regard to the Ambiente Housing
System. As discussed earlier, Parrish mentioned tests that have been
performed by various universities. Parrish must produce documents that
support his statements that such tests occurred as well as any other tests that
he is aware of but failed to identify in Interrogatory 20.
More generally, Parrish must produce any and all documents in
accordance with this order as well as the Federal Rules of Civil Procedure,
keeping in mind that the rules are “liberal in scope and interpretation.”
In summary, Parrish has not provided the court with sufficient reasons
to grant his motion to reconsider. First, the court is not convinced that
Parrish’s failure to respond to Superior Composite’s motion to compel was an
honest mistake when considered in light of his other conduct during this
litigation. There are several examples of Parrish’s complete disregard for the
discovery process, perhaps the most notable of which is that his own attorneys
asked to withdraw because he was refusing to provide required discovery.
Second, even if Parrish had responded to Superior Composite’s motion to
compel, the above analysis shows that the parties would be in the same
position—the court would have entered an order compelling complete
responses and Parrish’s subsequent answers would be grossly inadequate. As a
result, the court will not alter its March 14 order.
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SANCTIONS
To impose sanctions under Federal Rule of Civil Procedure 37, “there
must be an order compelling discovery, a willful violation of that order, and
prejudice to the other party.” Chrysler Corp., 186 F.3d at 1019. The March 14
order satisfies the first prong.
After considering the above analysis, the court finds that Parrish failed to
comply with the court’s March 14 order compelling Parrish to fully respond to
Superior Composite’s interrogatories and RFPs. Parrish added very little to his
responses even after the court’s clear order compelling him to answer them
fully. Some of his answers remained exactly the same. Some responses were
not even answers in that they were entirely objections and explanations of such
objections. When additional answers were provided, they were either
incomplete, so vague that they were insufficient, unintelligible, or some
combination of the three. While Parrish consistently objected on the basis that
the interrogatory was vague and ambiguous, the only things that were vague
and ambiguous were Parrish’s answers. Moreover, Parrish did not provide even
one additional document requested by Superior Composite’s RFPs. Parrish’s
failure to properly respond to most of Superior Composite’s interrogatories, the
manner in which he did respond, and his failure to provide any additional
documents requested in the RFPs, results in the court’s conclusion that
Parrish’s violation of the March 14 order was willful.
23
The court’s determination that Parrish’s violation was willful is further
supported by Parrish’s past conduct in this litigation. Parrish has asked for
and been granted several extensions in this case. Parrish’s own counsel
withdrew because Parrish refused to hand over discoverable information. A
court order was required to get Parrish to hand over his initial disclosures as
required by the federal rules.2 Parrish only responded to Superior Composite’s
requests for admissions after it brought a motion to have the requests for
admissions deemed admitted because of Parrish’s unwillingness to respond to
them. After a careful examination of the history of this litigation, the court
concludes that this is another example of Parrish’s complete and utter
disregard for the discovery rules, the litigation process as a whole, and, now,
the court itself.
Lastly, the court examines whether Parrish’s noncompliance prejudiced
Superior Composite. See Rule 37(b)(2). Parrish’s conduct has caused delays in
discovery and has forced Superior Composite to incur additional expenses and
spend unnecessary time filing motions. Receiving Parrish’s complete and
honest responses to the interrogatories and RFPs are especially important here
because Superior Composite cannot depose Parrish, who is a resident of the
United Kingdom. Therefore, Parrish’s conduct has hampered Superior
Composite’s ability to proceed forward with this case. The court finds that
2
Parrish did not respond to the motion to compel.
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Superior Composite was and continues to be prejudiced by Parrish’s
noncompliance. Parrish has willfully violated a court order and prejudiced
Superior Composite in doing so; thus, the court finds that Rule 37(b)(2)
sanctions are appropriate here.
The court will now determine what sanctions are appropriate under the
circumstances. Rule 37(b)(2) requires “that the sanction be ‘just’ and relate to
the claim at issue in the order to provide discovery.” Hairston v. Alert Safety
Light Products, Inc., 307 F.3d 717, 719 (8th Cir. 2002) (citation omitted). “While
the sanction of dismissal is drastic and should therefore be used only in
exceptional cases, a district court is not required to impose the least onerous
sanction so long as it considers whether a lesser sanction is available or
appropriate.” Brennan v. Qwest Communications Int’l, Inc., Civil No. 07-2024,
2009 WL 1586721, at *7 (D. Minn. June 4, 2009).
Rule 37(b)(2) provides the following for examples of sanctions that the
court can impose:
i.
ii.
iii.
iv.
v.
vi.
directing that the matters embraced in the order or other
designated facts be taken as established for purposes of the
action, as the prevailing party claims;
prohibiting the disobedient party from supporting or
opposing designated claims or defenses, or from introducing
designated matters in evidence;
striking pleadings in whole or in part;
staying further proceedings until the order is obeyed;
dismissing the action or proceeding in whole or in part;
rendering a default judgment against the disobedient party;
or
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vii.
treating as contempt of court the failure to obey any order
except an order to submit to a physical or mental
examination.
Fed. R. Civ. P. 37(b)(2)(A). Additionally, the court can require the disobedient
party to pay the reasonable expenses, including attorneys’ fees, caused by the
failure. Fed. R. Civ. P. 37(b)(2)(C).
Here, because of the number of interrogatories and RFPs involved and
the nature of such interrogatories and RFPs, options (i), (ii), and (iii) would not
resolve the problems created by Parrish’s noncompliance while still preserving
any chance Parrish has at litigating this case on the merits. Such sanctions
seem appropriate when there is a particular issue, claim, or statement of fact
that is causing discovery problems. Here, however, the interrogatories and
RFPs essentially cover every claim, defense, and fact that is relevant to this
case.
Staying the proceedings certainly does not resolve the prejudice to
Superior Composite from Parrish’s failure to cooperate in discovery. Likewise,
dismissing the action is not an option because Parrish is the defendant in this
case. Finding Parrish in contempt is not a practical alternative because Parrish
does not reside in the United States, and it would be difficult for the court to
gain physical custody of Parrish.
Thus, the court is left with two viable options: (1) award reasonable
expenses, including attorneys’ fees, to Superior Composite and hope Parrish
26
complies with this order as well as the March 14 order, or (2) grant a default
judgment in Superior Composite’s favor.
After much thought, the court finds that this case, while close, is not
exceptional or drastic enough to grant a default judgment against Parrish at
this time. The court will give Parrish one additional 30-day time period to
respond to the interrogatories and RFPs in compliance with the findings in this
order as well as the March 14 order of this court. The court warns Parrish that
failure to do so within 30 days may lead to the entry of a default judgment in
Superior Composite’s favor. Additionally, Parrish is ordered to pay Superior
Composite its reasonable expenses, including attorneys’ fees, incurred in
preparing its motion for contempt.
CONCLUSION
Parrish has not met his burden for the court to reconsider its March 14,
2012, order compelling Parrish to fully respond to Superior Composite’s
interrogatories and RFPs. Parrish’s objections lacked merit nearly to the point
of being frivolous. Further, Parrish failed to provide a complete and sufficient
answer to thirteen different interrogatories, some of which had sub-parts, and
failed to produce any additional documents in response to the RFPs.
Accordingly, it is
ORDERED that Superior Composite’s motion for sanctions (Docket103)
is granted.
27
IT IS FURTHER ORDERED that Parrish will have until November 19,
2012, to respond to Superior Composite’s interrogatories and requests for
production in compliance with this order and the order entered on March 14,
2012.
IT IS FURTHER ORDERED that Superior Composite will have until
November 1, 2012, to submit a verified statement of attorneys’ fees and
expenses incurred in preparing the motion for sanctions.
IT IS FURTHER ORDERED that Parrish’s motion for reconsideration
(Docket 107) is denied.
Dated October 19, 2012.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
CHIEF JUDGE
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