McGillivray v Bank of Federated States of Micronesia [1995] FMSC 7; 7 FSM Intrm. 19 (Pon. 1995) (2 February 1995)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as McGillivray v Bank of the Federated States of Micronesia, [1995] FMSC 7; 7 FSM Intrm. 19 (Pon. 1995)

DUNCAN McGILLIVRAY,
Plaintiff,

vs.

BANK OF THE FSM et al.,
Defendants.

___________________________________

CIVIL ACTION NO. 1993-052

ORDER AND MEMORANDUM OF DECISION

Andon L. Amaraich
Chief Justice

Hearing: November 22, 1994
Decided: February 2, 1995

APPEARANCES:

For the Plaintiff:
Delson Ehmes, Esq.
P.O. Box 1018
Kolonia, Pohnpei FM 96941

[7 FSM Intrm. 020]

For the Defendants:
Douglas Parkinson, Esq.
Law Offices of R. Barrie Michelsen
P.O. Box 1450
Kolonia, Pohnpei FM 96941

HEADNOTES

Civil Procedure - Dismissal
Dismissal with prejudice is a drastic sanction to be applied only in extreme situations. McGillivray v. Bank of the FSM, [1995] FMSC 7; 7 FSM Intrm. 19, 23 (Pon. 1995).

Civil Procedure - Dismissal
Where just, the court has discretion to enter a judgment of default based on a party's failure to obey an order or permit discovery, FSM Civ. R. 37(b)(2)(C), or based on a plaintiff's failure to prosecute his case, FSM Civ. R. 41(b). McGillivray v. Bank of the FSM, [1995] FMSC 7; 7 FSM Intrm. 19, 23 (Pon. 1995).

Civil Procedure - Dismissal
The purpose of the rule allowing dismissal for failure to prosecute is to guard against delay in litigation and harassment of the defendant, as well as preventing undue delays in disposition of pending cases and avoiding congestion in trial court calendars. McGillivray v. Bank of the FSM, [1995] FMSC 7; 7 FSM Intrm. 19, 23 (Pon. 1995).

Civil Procedure - Dismissal
The sanction of dismissal with prejudice should be allowed only in the face of a clear record of delay or contumacious conduct by the plaintiff, or upon a serious showing of willful default. McGillivray v. Bank of the FSM, [1995] FMSC 7; 7 FSM Intrm. 19, 23 (Pon. 1995).

Civil Procedure - Dismissal
Where the plaintiff has failed to obey the court's discovery orders, and has repeatedly refused to submit to a deposition although the court has tried to accommodate plaintiff's claim of financial hardship, and failed to make a good faith effort to respond to interrogatories, the plaintiff has demonstrated an express lack of a good faith effort to move the litigation forward, leaving the court no choice but to dismiss the case with prejudice. McGillivray v. Bank of the FSM, [1995] FMSC 7; 7 FSM Intrm. 19, 23-26 (Pon. 1995).

* * * *

COURT'S OPINION

ANDON L. AMARAICH, Chief Justice:

The issue in this case concerns whether the Court should grant defendants' motion to dismiss the case pursuant to Rules 41(b) and 37(b)(2)(C) of the FSM Rules of Civil Procedure. According to defendants, the case should be dismissed with prejudice for plaintiff's "complete failure to prosecute his case, including refusal to comply with this court's rules of procedure and willful disobedience of this court's orders." Plaintiff filed an opposition to the defendants' motion, and a hearing was held on November 22, 1994. This Order and Memorandum of Decision addresses the issues and arguments raised by the parties.

Facts

On July 8, 1993, after being fired from his position at Defendant Bank of the FSM, Plaintiff McGillivray filed the complaint in this case. In that complaint, plaintiff seeks damages in excess of three million dollars based on a variety of alleged tort and civil rights claims. Sometime after the filing of the complaint, defendants made their first attempt to depose plaintiff. Defendants first offered to conduct the deposition in California where plaintiff had relocated after his dismissal from the Defendant Bank. Plaintiff refused, however, stating that he "would prefer that [he] come to Pohnpei for deposition" in August. Aff. Attorney for Plaintiff para. 5 (attachment to Pl.'s Opp'n to Defs.' Motion to Dismiss). Plaintiff did not visit Pohnpei in August, however, and the deposition also did not take place in California.

Subsequent to plaintiff's refusal to submit to the deposition in California and his failure to visit Pohnpei as offered, defendants noticed plaintiff for a deposition in Pohnpei in November 1993. Plaintiff responded by requesting a short continuance, and defendants rescheduled the deposition for sometime between December 16-21, 1993. After plaintiff later refused these dates, counsel for both sides agreed to a deposition in the latter half of January 1994, and defendants noticed the deposition for January 31, 1994. See id. para. 8.

Rather than submitting to the agreed upon deposition, plaintiff filed a motion for a protective order, wherein plaintiff asked the Court not to require his deposition until after other methods of discovery were deemed insufficient. In an Order and Memorandum of Decision dated May 16, 1994, the Court denied plaintiff's motion and directed the plaintiff to submit to an oral deposition within sixty days, noting that "[a]ny plaintiff who brings a multi-million dollar lawsuit that involves issues of his credibility has to expect that he will be deposed prior to trial, and, barring truly extraordinary circumstances, not present here, has to be prepared to make himself available for such discovery." McGillivray v. Bank of the FSM (I), [1994] FMSC 9; 6 FSM Intrm. 404, 408 (Pon. 1994). The Court further noted that "[e]ven if it is now very burdensome for the plaintiff to come to Pohnpei for a deposition, he cannot ... complain [since] he previously refused an opportunity to be deposed in California." Id. The Court further stated that it was unpersuaded by plaintiff's contention that the deposition should be postponed in favor of less burdensome forms of discovery since plaintiff also had refused to cooperate with regard to defendants' written interrogatories.[1] In that regard, the Court's Order of May 16 also denied plaintiff's request for an enlargement of time in which to respond to defendants' written interrogatories, stating that "none of the excuses offered by the plaintiff justify more than a brief extension to answer the interrogatories, and certainly none justify the fact that no responses have been filed after four months." Id.

On May 30, 1994, plaintiff filed his responses to certain of defendants' interrogatories, while refusing to answer others. Plaintiff's refusal to submit additional responses resulted in defendants filing of a motion to compel specific answers. On July 15, 1994, after a hearing where both sides argued their positions, the Court granted defendants' motion to compel and ordered plaintiff to respond to five interrogatories no later than August 4, 1994. Plaintiff did not file his responses to the five interrogatories within the August 4 time period specified by the Court, and to date still has not filed those responses.

In addition to his failure to provide the court ordered responses to interrogatories, plaintiff likewise continued to evade the Court's order that he submit to an oral deposition. Instead of making himself available within the sixty day period set by the Court, plaintiff filed a second protective order in which he petitioned the Court to allow an additional 45 days in which to submit to the deposition and asked the Court to require that the deposition take place in the United States. The Court accommodated plaintiff in his request for an enlargement of time, but refused to relocate the deposition to the United States, declaring that "[t]he deposition shall be held in the State of Pohnpei unless the defendants agree to depose the plaintiff elsewhere." Order at 1 (July 15, 1994).

Based on the ruling of the Court, Defendants next noticed plaintiff's deposition for August 29, 1994, the final day before expiration of the extended deadline period. Rather than submit, plaintiff, on that same day, filed two more motions, one in which he sought to extend the time for submitting to the oral deposition until October, while the other sought to enlarge the time within which he had been ordered to respond to defendants' five written interrogatories. By this time, almost a full month had passed since the expiration of the deadline for filing plaintiff's responses to the five written interrogatories. Plaintiff's motion regarding the oral deposition also sought once more to change the location of the deposition, this time offering to pay the costs of bringing defendants' counsel to the United States. The Court denied both motions on August 31. The Court later issued a Memorandum of Decision in which it explained the basis for its rulings. In that memorandum, which issued on September 5, 1994, the Court noted that it had set multiple, separate deadlines for plaintiff to respond to defendants' interrogatories, and that the plaintiff had violated each one of them. McGillivray v. Bank of the FSM (II), [1994] FMSC 29; 6 FSM Intrm. 486, 489 (Pon. 1994). The Court then went on to conclude that

McGillivray has been given every opportunity to meet his responsibility to cooperate in discovery by submitting to a deposition. The undisputed evidence shows that he has offered inconsistent explanations for his continued failure to submit to a deposition. . . . He req postponement afterafter postponement. His own counsel admits that he has been unable to contact McGillivray about this litigation for weeks at a time... . The Court has given McGillivray the it ofy douut it i it is tims time to e to draw the line. Therefore, the plaintiff's motion to enlarge time and change the venue of the deposition is denied.

Id. at 488-89. Although the Court issued its Memorandum of Decision almost five months ago, plaintiff still has not submitted responses to the five interrogatories. Plaintiff also has not submitted to a deposition, notwithstanding his counsel's statement to the Court that plaintiff had arranged to travel to Pohnpei for deposition in October of 1994. See Aff. Attorney for Plaintiff para. 6 (attachment to Plaintiff's Motion to Enlarge Time and for Change of Venue (Aug. 29, 1994)).

Defendants have now filed a motion to dismiss this case with prejudice pursuant to Rules 41(b) and 37(b)(2)(C) of this Court's Rules of Civil Procedure. Plaintiff opposes the motion to dismiss, arguing that his financial situation remains such that it would be impossible for him to attend a deposition in Pohnpei. In fact, plaintiff claims that he cannot be considered to have violated the discovery orders of the Court because it is "beyond the [financial] capability of the plaintiff" to obey those orders. Plaintiff also claims that the deposition is not to obtain information but rather "to force the plaintiff to drop his case because when the plaintiff offered to pay for [defendants'] counsel's fare to the United States, the defendants declined." Lastly, plaintiff requests a stay of these proceedings until he is financially capable of complying with the discovery orders of the Court.

Plaintiff's motion in opposition to dismissal contains additional information that the Court deems relevant to its resolution of this conflict. In an affidavit of plaintiff's counsel submitted in support of the opposition to defendants' motion to dismiss, plaintiff's counsel reports that he attempted to withdraw his representation due to his client's inattention to this matter. Specifically, plaintiff's counsel reports that his client left California without contacting counsel for an extended period of time, and that it was only after much effort that plaintiff's counsel was able to locate his client who had moved first to Arizona and later to Oklahoma. Upon reestablishing contact with his client, counsel was informed by plaintiff that he still intended to go forward with his case. See Aff. Attorney for Plaintiff paras. 16, 17 (attachment to Pl.'s Opp'n to Defendants' Motion to Dismiss (Sept. 16, 1994)).

Discussion

Although "dismissal with prejudice is a drastic sanction to be applied only in extreme situations," Syracuse Broadcasting Corp. v. Newhouse, [1959] USCA2 535; 271 F.2d 910, 914 (2d Cir. 1959), defendants nonetheless argue that such an outcome is warranted under the present circumstances. In requesting dismissal, defendants rely on Rules 37 and 41 of the FSM Rules of Civil Procedure. Rule 37(b) provides for dismissal with prejudice where a party disobeys an explicit discovery order of the court. Specifically, Rule 37(b)(2)(C) states that the Court, where "just," has the discretion to enter a judgment of default based on a party's "fail[ure] to obey an order to provide or permit discovery." An involuntary dismissal with prejudice also may be appropriate under Rule 41(b), which provides for such an outcome on the basis of a plaintiff's failure to prosecute his case. Although the main purposes of Rule 41 is to guard against delay in litigation and harassment of a defendant, 9 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 21971), the rule also serveserves the dual purpose of "prevent[ing] undue delays in the disposition of pending case[] and ... avoid[ing] congestion in the calendars of the [trial courts]. Link v. Wabash R.R., [1962] USSC 126; 370 U.S. 626, 629[1962] USSC 126; , 82 S. Ct. 1386, 1388, 8 L. Ed. 2d 734, 737 (1962). In recognition of the serious nature of the sanction of dismissal with prejudice, however, the law is clear that dismissal under Rule 41(b), like Rule 37, should be allowed "only in the face of a clear record of delay or contumacious conduct by the plaintiff," Durham v. Florida East Coast Ry. Co., [1967] USCA5 908; 385 F.2d 366, 368 (5th Cir. 1967), or "upon a serious showing of willful default," Gill v. Stolow, [1957] USCA2 105; 240 F.2d 669, 670 (2d Cir. 1957).

The present case demonstrates a level of disregard for the discovery orders of this court, as well as the "clear record of delay" and the "serious showing of willful default," that justifies dismissal with prejudice. Moreover, although courts are generally instructed to refer to Rule 37, which deals explicitly with discovery abuses, when reviewing motions for sanctions due to a party's abuse of the discovery process, the facts of the present case warrant dismissal under Rule 41 as well, because in addition to plaintiff's failure to permit or provide discovery, plaintiff has utterly failed to move forward with his case.

With respect to Rule 37, plaintiff has failed to obey discovery orders of this Court compelling him to submit to an oral depositions and to provide responses to interrogatories within the periods of time specified by the Court. Shortly after plaintiff refused defendants' offer to depose him in California, plaintiff began claiming that financial hardships prevented him from travelling to Pohnpei in order to submit to a deposition. On one occasion, plaintiff even reported that he was on the verge of bankruptcy. Although these excuses of financial hardship do not excuse plaintiff's failures to comply with the Court's orders that he respond to written interrogatories, the Court listened patiently to plaintiff's excuses and requests, and made many attempts to accommodate those requests. Moreover, the Court has clung to its conciliatory approach even where other statements made by plaintiff appeared to contradict his claims of financial hardship.[2] At plaintiff's behest, the times in which to respond to interrogatories and to submit to oral deposition were enlarged, and then enlarged again. From the time that the plaintiff refused to submit to the offer of deposition in California, however, the Court consistently stated that plaintiff's deposition would take place in Pohnpei. Notwithstanding the Court's unquestionable determination that the deposition would occur in Pohnpei, however, plaintiff has refused to submit to the deposition, and has instead filed repeated, duplicative requests to relocate the deposition to the United States.[3]

In addition to plaintiff's willful failure to submit to the oral deposition in the manner ordered by the Court, plaintiff also has disregarded no less than three deadlines for the submission of plaintiff's responses to written interrogatories. Moreover, even if the Court were inclined to devote further attention to plaintiff's reported financial difficulties, those difficulties have no application to plaintiff's unwillingness to comply with the Court's orders compelling answers to defendants' five written interrogatories. Although plaintiff filed motions for protective orders and for enlargements of time in order to avoid answering those interrogatories, the Court has made it exceedingly clear to plaintiff that he could not avoid providing his responses. Almost an entire year has passed since those interrogatories were first presented upon plaintiff, yet plaintiff has not filed the responses that specifically were ordered by the Court.

In sum, plaintiff, in contravention of the repeated and serious efforts to engage in discovery on the part of the Court and the defendants, and despite the efforts of both the Court and the defendants to accommodate his requests,[4] has carried on a more than year-long pattern of delay. This pattern has consumed an abundance of this Court's time and resources, yet the litigation remains mired at the very earliest stages of discovery. Despite its best efforts, the Court can discern no good faith basis for plaintiff's dilatory conduct in this case. The Court's belief that the plaintiff has not made a good faith effort to continue with this litigation is bolstered by the fact that the plaintiff has made no attempt to keep the Court or his own counsel informed of his whereabouts in the United States.

This Court possesses authority to dismiss cases based on a plaintiff's refusal to abide by its discovery orders. Hahn v. FSM, Civil Action No. 1992-084 (May 12, 1994). In Hahn, the Court dismissed the case with prejudice after plaintiff refused to travel to Pohnpei in order to submit to a deposition. Plaintiff's refusal was based on the fact that the cost of traveling to Pohnpei would have exceeded the amount in dispute. Although plaintiff argues that the facts in Hahn are distinguishable from the facts of the present case, where the Plaintiff simply cannot afford to travel to Pohnpei, the Court does not see the logic in plaintiff's argument. While the Court can understand that a plaintiff such as Hahn, who stands to spend more than he could win in the suit, would choose to sacrifice his case by disregarding a court order to submit to discovery, the Court sees no similar justification for a plaintiff such as McGillivray, who claims to have a good faith claim for three million dollars. Moreover, the Court already has considered and accommodated plaintiff's claims of financial hardship (even where plaintiff made statements that appeared directly to contradict that claim).[5] The Court permitted plaintiff wide latitude to arrange for the most convenient time in which to submit to deposition in Pohnpei. At all times, however, the Court stated that plaintiff's deposition would take place in Pohnpei.[6] Also, plaintiff's financial hardship, as stated above, presents no explanation for plaintiff's failure to respond to defendants' written discovery. Accordingly, the Court concludes that the precedent laid down in Hahn is directly controlling upon the facts of this case. In both cases, the Court was faced with a plaintiff's blatant disregard of its discovery orders. In fact, the failure on the part of the plaintiff here is far more pronounced than that of his counterpart in Hahn. Here, in addition to plaintiff's refusal to comply with four notices of deposition, and no less than eight attempts to set a date for deposition by defendants, plaintiff also has refused to put forth the minimal effort necessary to answer five short interrogatories. There is simply no excuse for plaintiff's conduct. In an Order dated September 5, the Court stated that "it is time to draw the line" on plaintiff's failure to conform to discovery. Now, almost five months after the Court drew its "line," plaintiff still has not complied with the discovery orders of this Court. Accordingly, the Court sees no alternative but to dismiss this case pursuant to Rule 37.

The facts of the case likewise support defendants' claim for dismissal pursuant to Rule 41. Rule 41(b) states, in pertinent part, that "[f]or failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him." As stated above, plaintiff has made no attempt to move forward in the prosecution of his case.[7] With the exception of eighteen short interrogatories, plaintiff has not engaged in any discovery of his own, nor has he made any good faith efforts to cooperate with the attempts of the defendants to perform their discovery. Rather, plaintiff has wasted valuable court resources by filing numerous, duplicative motions in which plaintiff has sought to delay or frustrate the progress of this case. Instead of filing responses to interrogatories or submitting to deposition, plaintiff has filed motions for enlargements of time, motions for protective orders, and motions for stays of the proceedings. When the Court has rejected plaintiff's motions and arguments, plaintiff has simply filed additional motions restating its previously rejected arguments. Notwithstanding plaintiff's lack of cooperation, the Court has devoted substantial attention to the arguments made by plaintiff. The Court simply cannot afford to continue to devote additional resources to this case by allowing it to continue.

Dismissal under Rule 41(b) is supported further by plaintiff's failure to keep his Counsel and the Court informed of his whereabouts during the pendency of this action. In plaintiff's counsel's most recent affidavit to the Court, plaintiff's counsel reported that he "planned to withdraw as counsel because [he] ha[d] not heard from [his] client." Plaintiff's counsel also stated that he was receiving "disconnection messages from the phone number provided by the plaintiff" and that he "finally found [plaintiff] in Oklahoma after having been temporarily staying in Arizona." This inattentiveness, characteristic of plaintiff's entire approach to this case, clearly is not the behavior of a litigant with a credible three million dollar claim. Rather, it demonstrates an express lack of a good faith effort to move forward with the litigation, and it leaves the Court no alternative but to conclude that plaintiff has effectively abandoned the case.

Conclusion

For the foregoing reasons, It is hereby ordered that defendants' motion is granted and this action is dismissed with prejudice.

* * * *

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[1] The Court, in its Order of May 16, stated as follows:

The plaintiff argues that any information that the defendants seek by deposition can and should be sought first by less burdensome means. The argument rings hollow when, after four months, the plaintiff has failed to respond to less burdensome discovery (interrogatories), and when the plaintiff has refused the defendants' offer to minimize the burden of deposition by taking it in California.

McGillivray (I), 6 FSM Intrm. at 408.
^[2] On several occasions, plaintiff has indicated either that he was financially secure, or that he could afford to travel to Pohnpei for a deposition. In a letter sent by plaintiff to defendants' counsel on December 17, 1993, and submitted as an exhibit by defendants, plaintiff gave the impression that he was not experiencing financial hardship when he stated that his "impeccable and unquestionably excellent finance career continues on with my impressive and high profile new position." Additionally, in an affidavit filed in support of plaintiff's August 29, 1994, motion to enlarge time, plaintiff stated that "he had been unable to arrange with his employer to come for the deposition except sometime in late October 1994." Finally, although plaintiff complains that it is "impossible" for him to afford the trip to Pohnpei, plaintiff's August 29 motion also contained an offer to pay "for the [defendants'] counsels' way to the United States for deposition," an offer that was reiterated in plaintiff's recent opposition to defendants' motion to dismiss.

Thus, in one motion, plaintiff's opposition to defendants' motion to dismiss, plaintiff claims both that it is "impossible" for him to afford the trip to Pohnpei, but that he can afford to pay for defendants' counsel to travel to the United States. Plaintiff goes on to argue that "[i]f Mr. McGillivray is to come to Pohnpei, it will be more expensive or as expensive to him as if he pays for [defendants'] counsel to go to the United States because he will be missing work when travelling and not being deposed and at the same time paying for his travel expenses like he would be doing for counsel if counsel travels to the United States." Clearly, plaintiff's statements raise doubt as to whether it is actually "impossible" for him to pay his way to Pohnpei, or whether it would merely be inconvenient. The outcome of this question is unnecessary, however, in light of the Court's earlier determination that plaintiff, under the facts of this case, was required to submit to a deposition in Pohnpei.

^[3] The Court cannot be more specific as to the exact state in which plaintiff demands to be deposed, since the plaintiff has moved at least two times without updating his earlier requests that his deposition be relocated to California.

^[4] Defendants, too, have attempted to accommodate the plaintiff, first by offering to conduct the oral deposition in California, and then in Pohnpei as the plaintiff himself had requested, and also by agreeing continually to plaintiff's requests that depositions be rescheduled. Since the first attempt to depose plaintiff, defendants have rescheduled plaintiff's deposition on no less than eight separate occasions.

^[5] The Court also rejects plaintiff's contention that plaintiff's deposition is not being sought to obtain information but rather "to force plaintiff to drop his case because when the plaintiff offered to pay for [defendants'] counsel's fare to the United States, the defendants declined." Plaintiff's claim cannot be considered seriously in light of the fact that defendants have been trying to depose plaintiff since the earliest stages of this litigation, long before plaintiff's evasive conduct placed him in jeopardy of having his case dismissed for refusing to cooperate in discovery. Clearly, defendants' initiated their attempts to depose the plaintiff in order to obtain information. Additionally, plaintiff neglects to mention that the defendants' initial offer to depose plaintiff in California was refused by the plaintiff. Specifically, it was only after plaintiff's history of uncooperative behavior created doubt as to whether plaintiff would make himself available for a deposition in the United States that defendants' rescinded their offer to conduct the deposition in the United States. Finally, as the Court stated in its order of May 16, "[a]ny plaintiff who brings a multi-million dollar lawsuit that involves issues of his credibility has to expect that he will be deposed prior to trial." McGillivray (I), 6 FSM Intrm. at 408. For these reasons, the Court does not accept plaintiff's suggestion of an ulterior motive on the part of defendants.

^[6] Although plaintiff is correct in pointing out that the Court possesses the "discretion to order that the deposition of a non-resident plaintiff be taken at the plaintiff's home or place of business upon a showing of undue hardship on the plaintiff to travel to the forum of the litigation," Morris v. Truk, [1988] FMSC 15; 3 FSM Intrm. 454, 457 (Truk 1988), the Court has already held that the facts of this case do not warrant such a course of action, and that decision will not be reconsidered in this opinion. Moreover, the holding in Morris is of little value to the plaintiff here, because the Court in that case refused to relocate plaintiff's deposition to the United States even though the plaintiff claimed that he could not travel due to serious illness. Id. at 458.

^[7] Although plaintiff seems to suggest that the Court granted a protective order preventing him from conducting discovery until after he responded to defendants' discovery requests, see Aff. Plaintiff's Counsel in Support of Opposition to Motion to Dismiss para. 10, the Court ordered exactly the opposite, stating that the problem was not that the plaintiff was seeking too much discovery, but that he was not doing enough discovery to move his case forward.