Sanctions for Discovery Abuse Affirmed in Williamson County Divorce: Berg v. Berg

August 18, 2014 K.O. Herston 0 Comments

Knoxville divorceFacts: The parties divorced after 32 years of marriage. They survived mostly on substantial passive income from minority interests in several family businesses Husband inherited. Wife argued these entities, inherited from Husband’s parents, were marital property rather than Husband’s separate property. In pursuit of this theory, Wife engaged multiple consulting expert witnesses. By the time the case came to trial, Wife was represented by her seventh lawyer. On appeal, she was represented by her eighth attorney.

Wife’s seven successive trial attorneys served repeated volleys of discovery seeking evidence to support Wife’s claims that the business entities inherited from Husband’s parents were marital assets. Although Husband and his family produced well over 20,000 pages of documents, signed releases for what often amounted to antiquated information such as bank records or tax returns, and allowed Wife’s experts at least two opportunities for extensive document reviews in Arkansas (where the business entities were located), Wife remained unsatisfied with the quality and quantity of discovery she received.

Wife filed five motions to compel discovery, eight motions for either civil contempt or sanctions, and one motion to reconsider sanctions for discovery non-compliance. Although each of Wife’s motions for sanctions or for contempt were denied, the trial court in the parties devoted tremendous resources to accommodating Wife’s endless discovery requests.

Wife switched consulting forensic experts within weeks of trial and then failed to properly disclose any experts to testify regarding the voluminous documents produced by Husband. Her efforts to salvage the situation with complete disclosure was too little too late, as the trial court granted Husband’s motion to exclude her experts.

The case was tried over five days. Without experts, Wife had to rely exclusively on lay testimony and her own estimates for valuation.

The trial court classified the interest in the family businesses as Husband’s separate property, equally divided the marital estate, and awarded Wife rehabilitative alimony for 10 years. Husband was awarded $100,000 as sanctions for Wife’s repeated abuses of the discovery process engendered by Wife’s employment of seven attorneys, her demands for continuances or necessitating continuances, and her relentless pursuit of meritless motions for sanctions and for contempt.

Wife appealed numerous issues, all of which were affirmed on appeal. The only issue worth noting, in my opinion, is the $100,000 award for sanctions.

On Appeal: The Court of Appeals affirmed the trial court.

Wife argued her discovery requests and motions had merit such that the trial court abused its discretion in awarding Husband $100,000 as discovery sanctions.

Rule 37.02 of the Tennessee Rules of Civil Procedure provides a broad but not exclusive list of sanctions available to a trial court when a party fails to obey an order compelling discovery. By its plain language, the provisions of Rule 37.02 primarily apply to sanctions for non-compliance with a court order. However, trial courts also possess the inherent authority to order sanctions as necessary to prevent abuse of the discovery process.

The discovery rules would be ineffectual if courts did not have the authority to impose sanctions for their abuse. Thus, the Tennessee Rules of Civil Procedure authorize serious sanctions against persons who seek to evade or thwart full and candid discovery, including being found in contempt, having been found in contempt, having designated facts be taken as established, striking pleadings, dismissing an action or claim or granting judgment by default, or assessing expenses and attorney’s fees.

These sanctions serve a three-fold purpose: (1) to secure a party’s compliance with the discovery rules, (2) to deter other litigants from violating the discovery rules, and (3) to punish parties who violate the discovery rules.

After reviewing the record, the Court wrote:

[T]he litigation of this matter was quite protracted. Wife engaged in a plethora of intentional or unintentional delay tactics by asking for at least five continuances of the trial; she was represented by seven successive attorneys in the trial court who served four sets of interrogatories, five sets of requests for production, and an amended set of interrogatories and requests for production, with the latter being quashed and the fifth request for production held in abeyance after Husband filed a motion for protective order….

Wife filed no less than five motions to compel, eight motions for either civil contempt or sanctions and one motion to reconsider sanctions, all of which were denied…. Wife repeatedly asked for the same relief even when Husband was clearly acting in good faith in complying with the court’s orders….

The trial court possessed the authority to impose sanctions against Wife pursuant to Rule 37 as well as under the umbrella of its “inherent powers,” and while reasonable minds can differ as to the monetary award of $100,000, we find no abuse of discretion in the award of monetary sanctions for abuse of discovery in this case.

Accordingly, the trial court’s award of sanctions for discovery abuse was affirmed.

Berg v. Berg (Tennessee Court of Appeals, Middle Section, June 25, 2014).

Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.

Sanctions for Discovery Abuse Affirmed in Williamson County Divorce: Berg v. Berg was last modified: August 18th, 2014 by K.O. Herston

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