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The Hanover Insurance Co. v. Harding Enterprises, LLC

United States District Court, E.D. Missouri, Southeastern Division

January 22, 2018

HARDING ENTERPRISES, LLC, et al., Defendants.



         This matter is before the Court on the Motion to Strike Pleadings and for Default Judgment of Plaintiff The Hanover Insurance Company (“Hanover”). (Doc. 23.)

         I. Background

         On July 11, 2017, Hanover filed a Complaint against Defendants Harding Enterprises, LLC, Diamond H Ranch, LLC, Greggory Harding, and Andrea Dawn Harding. (Doc. 1.) Plaintiff alleges that Defendants breached contracts related to funds advanced by Plaintiff to Defendants for bonded construction contracts. Plaintiff requests indemnity and reimbursement and specific performance. Plaintiff further asserts fraud claims as to Defendants Greggory A. Hardin, Andrea D. Harding, and Diamond H.

         On December 12, 2017, Plaintiff filed the instant Motion to Strike Pleadings and for Default Judgment. (Doc. 23.) Plaintiff argues that Defendants have failed to timely respond to Plaintiff's interrogatories in accordance with Federal Rule of Civil Procedure 33(b)(2), and have failed to comply with Rule 26 disclosures by not producing any documents with their initial disclosures. Plaintiff submitted the Affidavit of James A. Breckenridge, counsel for Plaintiff, in accordance with Local Rule 37-3.04(A). Plaintiff requests that the Court strike Defendants' pleadings and grant default judgment for Hanover and against Defendants, jointly and severally, in the amount of $4, 976, 855, under Rule 37(d).

         Defendants did not file a Response to Plaintiff's Motion. The Court held a telephonic status conference with the parties on January 3, 2018. (Doc. 26.) Following the status conference, the Court issued an Order to Show Cause, directing Defendants to show cause no later than January 10, 2018, why Plaintiff's Motion to Strike Pleadings and for Default Judgment should not be granted. (Doc. 27.)

         On January 10, 2018, Defendants filed a Response to the Court's Show Cause Order. (Doc. 28.) Defendants first argue that Plaintiff's written discovery was served prior to the Rule 26(f) conference in violation of Rule 26(d)(1). They next cite Defendant Andrea Harding's recent diagnosis of breast cancer, Defendants' plan to file bankruptcy, and defense counsel's two-week vacation in December 2017, as cause for the failure to answer Plaintiff's discovery. Defendants request five business days to “either answer Plaintiff's improperly served written discovery or file bankruptcy.” (Doc. 28 at p. 3.)

         Plaintiff filed a Reply to Defendants' Response, in which Plaintiff argues that Defendants are ignoring or delaying legitimate lawsuits against them while they hide their assets through bankruptcy or otherwise. (Doc. 29.) Plaintiff notes that the United States District Court for the District of Alabama entered a default judgment against Harding Enterprises, LLC and Gregory A. Harding for $5, 884, 577.48. Plaintiff has filed an Additional Reply on this date, stating that Defendants still have not answered any discovery requests, nor have they filed for bankruptcy. (Doc. 30.) Plaintiff renews its request that the Court enter judgment against Defendants under Rule 37(d) as a sanction.

         II. Standard

         Rule 37(b)(2), Federal Rules of Civil Procedure, allows the Court to impose sanctions upon those parties who fail to comply with discovery Orders, but a Default Judgment may only be considered as a sanction if there is: (1) an order compelling discovery; (2) a willful violation of that Order; and (3) prejudice to the other party. See, Keefer v. Provident Life and Acc. Ins. Co., 238 F.3d 937, 940 (8th Cir. 2000), citing Schoffstall v. Henderson, 223 F.3d 818, 823 (8th Cir. 2000); see also, Mems v. City of St. Paul, Dep't of Fire and Safety Servs., 327 F.3d 771, 779 (8th Cir. 2003). Further, “a district court has wide discretion to impose sanctions for a party's failure to comply with discovery requests.” United States v. Big D Enterprises, Inc., 184 F.3d 924, 936 (8th Cir. 1999); see also, Collins v. Burg, 169 F.3d 563, 565 (8th Cir. 1999)(Rule 37 “gives a district court broad authority to impose sanctions for failure to respond to discovery requests.”); Boogaerts v. Bank of Bradley, 961 F.2d 765, 768 (8th Cir. 1992)(“Rule 37(b)(2)(C) authorizes the Court to exercise discovery abuse sanctions by dismissing a parties' action, or striking pleadings or entering a default judgment against the abusive litigant.”).

         However, “[t]he court's ‘discretion is bounded by the requirement of Rule 37(b)(2) that the sanction be “just” and relate to the claim at issue in the order to provide discovery.'” Hairston v. Alert Safety Light Prods., Inc., 307 F.3d 717, 719 (8th Cir. 2002), quoting Avionic Co. v. General Dynamics Corp., 957 F.2d 555, 558 (1992). The sanction of a default judgment is authorized under a combination of Rules 37(d), and 37(b)(2)(C), Federal Rules of Civil Procedure, upon the failure of a party to attend his own deposition, or upon his failure to respond to Interrogatories or Requests for Production of Documents. In this respect, Rule 37(d) provides as follows:

If a party * * * fails (1) to appear before the officer who is to take the deposition, after being served with a proper notice, or (2) to serve answers or objections to interrogatories submitted under Rule 33, after proper service of the interrogatories, or (3) to serve a written response to a request for inspection submitted under Rule 34, after proper service of the request, the court in which the action is pending on motion may make such orders in regard to the failure as are just, and among others it may take any action authorized under paragraphs (A), (B), and (C) of subdivision (b)(2) of this rule. * * * In lieu of any order or in addition thereto, the court shall require the party failing to act * * * to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.

         As the Rule abundantly makes clear, the available sanctions, under Rule 37(d), for a party's failure to attend a deposition, or to respond to Interrogatories, are discretionary. See Boardman v. Nat'l Med. Enterprises, 106 F.3d 840, 843 (8th Cir. 1997); Hazen v. Pasley, 768 F.2d 226, 229 (8th Cir. 1987).

         Among the possible sanctions are those enumerated in Rule 37(b)(2)(A), (B) and (C), and Rule 37(b)(2)(C) authorizes the ...

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