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Fellows v. Sundahl

United States District Court, D. Utah

December 11, 2017

RANDY W. FELLOWS, an individual; Plaintiff;
v.
DAN R. SUNDAHL, an individual; EQUIFUND CAPITAL, INC., a Utah corporation; TERRY M. DERU, an individual; BELSEN GETTY, LLC, a Utah limited liability company; PAUL M. HALLIDAY, JR., an individual; HALLIDAY WATKINS & MANN, P.C., a Utah professional corporation; and DOES I-L; Defendants.

          REPORT AND RECOMMENDATION RE: MOTION TO STRIKE AND ENTER DEFAULT AGAINST DEFENDANTS DAN R. SUNDAHL AND EQUI FUND CAPITAL, INC.

          PAUL M. WARNER, CHIEF UNITED STATES MAGISTRATE JUDGE

         District Judge Jill N. Parrish Chief Magistrate Judge Paul M. Warner District Judge Jill N. Parrish referred this case to Chief Magistrate Judge Paul M. Warner pursuant to 28 U.S.C. § 636(b)(1)(B).[1] Before the court is Plaintiff Randy Fellows' (“Fellows”) motion to strike and enter default against defendants Dan R. Sundahl and Equifund Capital, Inc. (the “Motion”).[2] Having reviewed Motion and the relevant law, the court renders the following Report and Recommendation .[3]

         BACKGROUND

         This is a fraud case. On July 13, 2016, Fellows brought a complaint in this court alleging thirteen causes of action arising under federal, state, and common law against various Utah- based individuals and entities. The Motion has little to do with the underlying facts of the case, however. Instead, it relates to the actions (and inaction) of Defendant Dan R. Sundahl and his corporation, Defendant Equifund Capital, Inc (collectively, “Sundahl”).

         On November 14, 2016, Magistrate Judge Furse issued a scheduling order in this case requiring that fact discovery be completed by June 30, 2017.[4] Pursuant to that order, Fellows sent Sundahl a first set of interrogatories, requests for production, and requests for admissions on March 9, 2017.[5] Fellows sent a second set of discovery requests on May 18, 2017.[6] Sundahl submitted his responses to the first set of discovery requests on April 5, 2017.

         On June 7, 2017, Plaintiff moved the court to compel discovery and impose sanctions on Sundahl.[7] That motion alleged that Sundahl's responses to Plaintiff's first discovery request contained several deficiencies: Interrogatory No. 21 was not fully answered, and no documents were produced in response to Request for Production Nos. 1, 3, 4, 5, 6, and 7.[8] The motion further alleged that Fellows sent a meet-and-confer letter to Sundahl's counsel on May 18, 2017 that outlined the alleged deficiencies and provided until May 25, 2017 to properly respond to the first discovery request.[9] Sundahl did not respond to the letter.[10] On June 2, 2017, Fellows sent another request for full responses via email and attached his previous letter.[11] Sundahl never responded to the email. Id.

         On June 16, 2017 (nine days after Plaintiff's motion to compel and impose sanctions), Sundahl apparently responded to Plaintiff's second set of discovery requests but did not produce any documents requested in his response.

         Three days later, on June 19, 2017, Sundahl objected to Plaintiff's motion to compel and impose sanctions. His objection promised that he would produce “all Discovery available before Mr. Sundahl's deposition on or before June 22, 2017.”[12]

         Another three days later, on June 22, 2017, the parties gathered at the office of Plaintiff's counsel for Sundahl's scheduled deposition. Despite promising to produce “all Discovery available, ” Sundahl arrived with a one-page, computer-generated spreadsheet.[13] Sundahl's deposition could not proceed, so the parties continued the deposition until July 21, 2017. A transcript of the attempted deposition on June 22, 2017, indicates that Sundhal had represented to Plaintiff that Sundhal had in its possession documents responsive to the requests, but that Sundhal “was unable to find the boxes that have the documents in them.”[14]

         On June 29, 2017, the undersigned issued a docket text order requiring Plaintiff to “notify the court of the status of his motion within five (5) days of this order.”[15] Plaintiff responded on July 5, 2017 and informed the court that Sundahl had failed to produce documents as he had promised. The next day, the court ordered Sundahl to respond to Plaintiff's motion to compel within five days.[16] Sundahl ignored the court's order, so on July 18, 2017, the court granted in part Plaintiff's motion to compel.[17] In so doing, the court required Sundahl to respond to Plaintiff's Interrogatory No. 21 and Requests for Production Nos. 1, 3, 4, 5, 6, and 7.[18] Out of “an abundance of caution, ” the court granted Sundahl an additional five days to explain to the court why Plaintiff's request for fees and expenses should be denied.[19]

         Sundahl responded seven days later, on July 25, 2017.[20] His perfunctory, two-paragraph response alleged that Mr. Sundahl fell in May 2017 and was in a sling until July 2017, so he “has cooperated in discovery as much as he has been physically able to move boxes.”[21] The court found Sundahl's excuse “unpersuasive” and granted Plaintiff's request for fees and costs.[22] The court directed Plaintiff to file an affidavit and cost memorandum detailing the expenses and fees incurred in connection with filing the motion to compel.[23] Thereafter, Sundahl would have fourteen days to respond to Plaintiff's affidavit.[24]

         Plaintiff promptly filed an affidavit, and Sundahl did not respond. The court found Plaintiff's stated costs reasonable but awarded only $3, 500.00 of Plaintiff's requested $4, 512.50 in attorney's fees.[25] The court ordered Sundahl to make the payment and file a notice with the court indicating the payment had been timely made.[26]

         The court's thirty-day deadline is now long past, as is the June 30th deadline for fact discovery. Sundahl has not paid the required award of attorney's fees, and he still has not complied with the court's order regarding discovery. Plaintiff alleges that he is unable to prepare for trial because of Sundahl's continued refusal to comply with the court's discovery orders. He asks the court to strike Sundahl's answer and enter a default in favor of Plaintiff against Sundahl. Sundahl did not oppose Plaintiff's motion within the fourteen-day period required by DUCivR 7-1(b)(3)(B).

         LEGAL STANDARD

         When a party or a party's officer fails to obey an order to provide discovery, this court “may issue further just orders.” Fed.R.Civ.P. 37(b)(2)(A). Such orders may include “striking pleadings in whole or in part” and “rendering a default judgment against the disobedient party.” Fed.R.Civ.P. 37(b)(2)(A)(iii), (vi). The court has discretion to impose any sanction that is “just and related to the particular claim which was at issue in the order to provide discovery.” Ehrenhaus v. Reynolds, 965 F.2d 916, 920 (10th Cir. 1992) (internal quotation marks and citation omitted). However, a default judgment is a particularly severe sanction, and the court must make certain considerations.

         First, default judgment “will be imposed only when the failure to comply with discovery demands is the result of willfulness, bad faith, or some fault of petitioner rather than inability to comply.” F.D.I.C. v. Daily, 973 F.2d 1525, 1530 (10th Cir. 1992) (internal citations, quotation marks, and alterations omitted). “A ‘willful failure' is an intentional failure rather than involuntary noncompliance.” Id.

         Second, the court should consider, on the record, a number of factors outlined by the Tenth Circuit in Ehrenhaus. Those include:

(1) the degree of actual prejudice to the defendant;
(2) the amount of interference with the judicial ...

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