REGINALD WILLIAMS and CHANEL WILLIAMS v. PREPARED INSURANCE COMPANY , 274 So. 3d 398 ( 2019 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
REGINALD WILLIAMS and CHANEL WILLIAMS,
Appellants,
v.
PREPARED INSURANCE COMPANY,
Appellee.
No. 4D18-692
[June 12, 2019]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Michael L. Gates, Judge; L.T. Case No. 15-14454 CACE
(12).
Melissa A. Giasi of Sivyer Barlow & Watson, P.A., Tampa, for appellants.
Melinda S. Thornton and Scott A. Cole of Cole, Scott & Kissane, P.A.,
Miami, for appellee.
CIKLIN, J.
In this breach of homeowners insurance contract suit, Prepared
Insurance Company (“the insurance company”) was unable to procure the
presence of an initial witness who was listed by Reginald and Chanel
Williams (“the plaintiffs”) but later omitted from their witness list. The
insurance company, and ultimately the trial court, placed fault on the
plaintiffs and their law firm for the witness’s refusal to appear for
deposition. As a sanction, the trial court (1) struck the plaintiffs’
pleadings, and (2) imposed sanctions on the plaintiffs’ law firm for bad
faith litigation. We agree with the plaintiffs that the plaintiffs and their
law firm cannot be held accountable for the failure of a non-party to appear
for a deposition. Additionally, the trial court failed to identify any rule or
court order that the plaintiffs and their attorneys failed to obey. We
reverse.
After the plaintiffs allegedly suffered damage to their home due to a
broken pipe, Chanel Williams was put into contact with Ramon Rodriguez,
whom she identified as a “public adjuster.” 1 The plaintiffs then retained
the Strems Law Firm (“the law firm”), which sent the insurance company
a letter advising of its retention and providing contact information for
Rodriguez, whom the law firm identified as “our loss consultant.”
The insurance company ultimately denied the plaintiffs’ home damage
claim based on its inability to “properly investigate” the incident.
Thereupon the plaintiffs sued the insurance company for breach of
contract.
Before the plaintiffs filed their trial witness list, the insurance company
sought to depose Rodriguez. It issued notices of deposition duces tecum
directed to both Rodriguez and an unnamed corporate representative of
the company with whom Rodriguez was affiliated, Let Us Claim
Consultants, Inc. Assuming that Rodriguez would appear for deposition
as the corporate representative of Let Us Claim Consultants, Inc., the
insurance company attempted service of Rodriguez at a Pembroke Pines
address which turned out to be a UPS store. Eventually, the insurance
company obtained substitute service of Rodriguez at a Miramar address
discovered by the insurance company through a search of Florida Division
of Corporations records.
Rodriguez did not appear for the December 2015 deposition, and based
on the insurance company’s motions for rule to show cause, the trial court
issued orders to show cause directed to Rodriguez and “the corporate
representative” of Let Us Claim Consultants, Inc. For case management
purposes, the trial court directed the insurance company to re-notice the
depositions and set the show cause hearing for a date after the depositions.
The insurance company re-noticed the depositions for May 2016. For this
1 “Public adjuster” is defined as follows:
A “public adjuster” is any person, except a duly licensed attorney at
law as exempted under s. 626.860, who, for money, commission, or
any other thing of value, prepares, completes, or files an insurance
claim form for an insured or third-party claimant or who, for money,
commission, or any other thing of value, acts on behalf of, or aids
an insured or third-party claimant in negotiating for or effecting the
settlement of a claim or claims for loss or damage covered by an
insurance contract or who advertises for employment as an adjuster
of such claims. The term also includes any person who, for money,
commission, or any other thing of value, solicits, investigates, or
adjusts such claims on behalf of a public adjuster.
§ 626.854(1), Fla. Stat. (2015).
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deposition, the insurance company obtained substitute service of
Rodriguez at the UPS store in Pembroke Pines. Rodriguez did not appear
for deposition.
The insurance company moved for sanctions and to strike the plaintiffs’
breach of insurance contract pleadings, alleging in part that the plaintiffs
failed to appear for deposition, failed to provide discovery, and that “their
own Loss Consultants have failed to appear for deposition.” The trial court
entered an agreed order in which it provided that the motion was granted
in part and denied in part and directed the plaintiffs as a sanction to
reimburse the insurance company a small amount of money. The order
did not identify the portions of the motion that were granted and denied.
The litigation stretched into 2017. As the trial date approached, the
plaintiffs, in January of 2017, listed an engineer/general contractor as
their expert witness and asserted that he would testify as to the cost and
scope of repairs necessary based on his inspection of the property and
information and photographs provided by the plaintiffs. In their trial
witness list, the plaintiffs also named Rodriguez as a fact witness and
provided Rodriguez’s Pembroke Pines address.
In June, in response to a motion to show cause, the trial court entered
an order directing Rodriguez and the corporate representative of Let Us
Claim Consultants, Inc. to appear for deposition within twenty days or
appear before the court on July 6 to explain why they should not be held
in contempt. Also in June, the insurance company moved to compel a
“better address and for sanctions.” The insurance company asserted that
in April, the plaintiffs provided the Pembroke Pines address for Rodriguez,
but the insurance company’s substitute service of Rodriguez at that
address, which it had come to discover was a UPS store, had not resulted
in Rodriguez appearing for deposition. The insurance company further
alleged that the plaintiffs’ listing of a UPS store address established that
they “knowingly provided an address at which personal service cannot be
effectuated, rather than providing a proper service address for their
witness, and have further refused to produce their witness for deposition,
requiring [the insurance company] to subpoena Ramon Rodriguez.” The
insurance company requested the court direct the plaintiffs to “provide a
proper service address for Ramon Rodriguez, or produce [him] for
deposition,” and it sought fees and additional costs as a sanction.
A hearing was held, during which counsel for the plaintiffs asserted
that the Pembroke Pines address it provided was the address on
Rodriguez’s estimate and that his law firm did not realize it was an
incorrect address. Plaintiffs’ counsel also stated that he had conducted a
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Google search “last night” and found an Orlando address related to Let Us
Claim Consultants, Inc.
The trial court directed plaintiffs’ counsel to “provide [the insurance
company] with an address within ten days from the date hereof and to call
Mr. Rodriguez and say that there’s a subpoena coming, and if he dodges
it, then we’ll take it up directly with him and he may be down here with
BSO.”
After the hearing, the plaintiffs and their law firm provided an Orlando
address for Rodriguez. Of note, the plaintiffs also amended their witness
list to omit Rodriguez.
Rodriguez’s deposition was set for August 30. After unsuccessful
attempts at service but before the deposition date, the insurance company
moved to compel compliance, strike the plaintiffs’ pleadings, and impose
fees and costs as sanctions, alleging in part that the plaintiffs had
“outright refused to produce Ramon Rodriguez . . . the person who was
disclosed on [the law firm’s] Letter of Representation as an agent of the
firm . . . and a witness disclosed on the Plaintiff’s witness list for trial.”
The insurance company asserted that its numerous attempts at service at
the Orlando address were unsuccessful. It further asserted that the
plaintiffs’ law firm had not put Rodriguez on notice that he would be served
at the Orlando address, as the process server’s notes reflected that on one
occasion, someone was home but would not answer the door, and on
another occasion, Rodriguez’s father told the process server that Rodriguez
was working in Miami.
After the insurance company filed its motion to compel compliance,
strike pleadings and impose sanctions and before the motion was heard,
it obtained service on Rodriguez at the Orlando address on August 22.
Predictably, Rodriguez again failed to appear. The insurance company
filed a supplemental motion reciting that it served Rodriguez on August 22
and, in a separate motion, moved for an order to show cause directed to
Rodriguez. In its motion, the insurance company pointed out that the
plaintiffs and their law firm were arranging the scheduled deposition:
“[Plaintiffs’] counsel provided a better address for Ramon Rodriguez and
the deposition was coordinated and rescheduled for August 30, 2017.”
Rodriguez failed to appear on August 30 and during a hearing held in
early 2018, the trial court entertained the insurance company’s motion to
once again compel compliance, strike pleadings, and impose fees as
sanctions.
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Subsequently, the trial court entered a written order striking the
plaintiffs’ pleadings and imposing fees as sanctions against the plaintiffs’
law firm. The court found that based on the letter of representation sent
by the law firm to the insurance company, Rodriguez was an agent of the
law firm. The court then recounted the history of the insurance company’s
attempts to depose Rodriguez, including its July 2017 order compelling
the plaintiffs to provide another address for Rodriguez and to put
Rodriguez on notice that he would be served with a subpoena. The court
then held: “[The insurance company] has been attempting to obtain the
deposition of witness Ramon Rodriguez, and has been prejudiced by the
time, expense, and inability to prepare a proper defense at trial based on
his failure to appear.”
The trial court found that striking of the plaintiffs’ pleadings was the
only sufficient remedy, and it then addressed and applied the Kozel2
factors first finding that plaintiffs’ counsel and thus the plaintiffs’ law firm
of record was willfully disobedient:
Strems Law Firm is experienced and has been handling this
case since the claim was initially reported to [the insurance
company]. They . . . have repeatedly failed and/or refused to
(1) assist [the insurance company] in obtaining the deposition
of Ramon Rodriguez, despite admonitions to warn Ramon
Rodriguez that ignoring or dodging a subpoena would have
consequences; (2) appear for duly noticed depositions; and (3)
participate in meaningful discovery as it pertains to the loss
consultant who was held out to be an agent of Strems Law
Firm and the Plaintiffs.
The trial court observed that plaintiffs’ counsel failed to appear at the
August 30, 2017 deposition and that his non-appearance indicated
plaintiffs’ counsel “was aware, or strongly suspected, that the deposition
would not proceed.” Additionally, the court made a finding that counsel
had previously been sanctioned:
Although the Court has previously reserved as to the issue of
the amount of fees and costs to be awarded, the Court has
specifically granted a Motion to Compel Better Address and
for Sanctions regarding Ramon Rodriguez. The Court has also
found that Ramon Rodriguez, upon proper notice, should be
compelled to come before the Court and demonstrate good
cause for his failure to appear. Considering that Ramon
2 Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1993).
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Rodriguez has been held out as an agent of the Plaintiffs and
Strems Law Firm, a sanction against him is a sanction against
the Plaintiffs and Strems Law Firm.
Notably, as to the plaintiffs themselves, the trial court did not find that the
plaintiffs were involved in any act of disobedience, but it observed that “the
Plaintiffs[] retained Ramon Rodriguez as their public adjuster and failed to
produce the public adjuster agreement and contract.”
The trial court then found that the insurance company was prejudiced
by the conduct of the plaintiffs and their law firm, as it had incurred
significant fees and costs and had “been deprived of testimony by the first
person who saw the loss after the Plaintiffs themselves.” The court further
found that the plaintiffs’ counsel did not provide “reasonable justification”
for “non-compliance.” The court rejected the plaintiffs’ and law firm’s
assertion that they provided all addresses they could find for Rodriguez.
The trial court found that Rodriguez was an agent of the Strems law firm
and summed up its findings by holding that the delay in the litigation
negatively impacted the judicial administration of the case, as the matter
had to be postponed. The court found that no other sanction but striking
the pleadings would remedy the noncompliance. The court also imposed
fees and costs, payable by the plaintiffs’ law firm, for bad faith conduct.
In a separate order, the trial court granted the insurance company’s
second motion for better address, and it ordered the plaintiffs to provide a
better address within ten days. The court ultimately entered a final
judgment in favor of the insurance company.
On appeal, the plaintiffs argue that the order under our review should
be reversed because the trial court failed to identify the order or rule the
law firm failed to obey, erred in sanctioning them for conduct of a non-
party, and made findings not supported by the record.
Analysis
“Florida Rule of Civil Procedure 1.380 governs sanctions for failure to
comply with discovery orders and provides that a trial court may enter ‘[a]n
order striking out pleadings,’” among other remedies. Precision Tune Auto
Care, Inc. v. Radcliffe, 804 So. 2d 1287, 1290 (Fla. 4th DCA 2002)
(alteration in original); see also Fla. R. Civ. P. 1.380. A trial court’s
imposition of sanctions for discovery violations is reviewed for an abuse of
discretion. See id. “While sanctions are within a trial court’s discretion,
it is also well established that dismissing an action for failure to comply
with orders compelling discovery is ‘the most severe of all sanctions which
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should be employed only in extreme circumstances.’” Ham v. Dunmire,
891 So. 2d 492, 495 (Fla. 2004) (quoting Mercer v. Raine, 443 So. 2d 944,
946 (Fla. 1983)). “[A] deliberate and contumacious disregard of the court’s
authority will justify application of this severest of sanctions, as will bad
faith, willful disregard or gross indifference to an order of the court, or
conduct which evinces deliberate callousness.” Id. (quoting Mercer, 443
So. 2d at 946).
To ensure that a party and an attorney of record’s mere negligence
during the discovery process does not result in dismissal of a complaint
with prejudice, the Florida Supreme Court has developed a required
procedure. In Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1993), the supreme
court “articulated a test identifying six factors pertinent in the
determination of whether a dismissal with prejudice is a warranted
response to an attorney’s behavior.” Ham, 891 So. 2d at 496. The court
must consider the following:
1) whether the attorney’s disobedience was willful, deliberate,
or contumacious, rather than an act of neglect or
inexperience; 2) whether the attorney has been previously
sanctioned; 3) whether the client was personally involved in
the act of disobedience; 4) whether the delay prejudiced the
opposing party through undue expense, loss of evidence, or in
some other fashion; 5) whether the attorney offered
reasonable justification for noncompliance; and 6) whether
the delay created significant problems of judicial
administration.
Id. (quoting Kozel, 629 So. 2d at 818). “Upon consideration of these
factors, if a sanction less severe than dismissal with prejudice appears to
be a viable alternative, the trial court should employ such an alternative.”
Id. (quoting Kozel, 629 So. 2d at 818).
Finding a wholesale dismissal was the only reasonable option, the trial
court entered an order striking the plaintiffs’ pleadings. The order under
appeal contains 29 paragraphs of factual findings which essentially
recount the history of the insurance company’s attempts to depose
Rodriguez, and Rodriguez’s continued failure to appear for deposition even
after he was subpoenaed.
The closest the trial court came to identifying a discovery violation
related to the plaintiffs’ law firm by finding that the law firm “ha[s]
repeatedly failed and/or refused to (1) assist [the insurance company] in
obtaining the deposition of Ramon Rodriguez, despite admonitions to warn
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Ramon Rodriguez that ignoring or dodging a subpoena would have
consequences; (2) appear for duly noticed depositions; and (3) participate
in meaningful discovery as it pertains to the loss consultant who was held
out to be an agent of [the law firm].”
As to the law firm, it appears the trial court based sanctions in part on
the failure of the law firm to appear for Rodriguez’s August deposition. But
the court identified no authority requiring the law firm to appear. The
court found that the law firm’s waiver of appearance at the deposition
indicated the law firm “was aware, or strongly suspected, that the
deposition would not proceed,” and that the law firm thus engaged in
misconduct. Rodriguez exhibited a pattern of not appearing at
depositions, so it was not necessarily unreasonable for the law firm to
waive its appearance at the Orlando deposition. The law firm’s election to
not appear at the deposition does not equate to misconduct and the trial
court’s findings are not supported by the record.
The trial court also seemed to base sanctions on the failure of the law
firm or plaintiffs to participate in meaningful discovery, but the court did
not identify any discovery orders the plaintiffs violated. We have scoured
the record and find nothing which would support the trial court’s order or
its decision to involuntarily dismiss the lawsuit.
To the extent the trial court found that the law firm failed to obey the
court’s order and inform Rodriguez that he was required to be available for
a subpoena, the record reveals no evidence supporting such a finding.
Finally, to the extent the trial court was focused on the law firm’s failure
to produce Rodriguez for a deposition, the trial court did not cite to any
authority requiring the law firm to do so and we ourselves are unaware of
any. Rodriguez is not the type of witness a party is required to produce,
such as an expert or corporate representative. Cf. State Farm Mut. Auto.
Ins. Co. v. Swindoll, 54 So. 3d 548, 552 (Fla. 3d DCA 2011); Precision Tune
Auto Care, 804 So. 2d at 1288. He is a fact witness. While sanctions can
be based on a party’s failure to provide an address for its witness, see
Jones v. Publix Super Markets, Inc., 114 So. 3d 998, 1004 (Fla. 5th DCA
2012), the trial court’s findings reflect that the law firm did provide a valid
address—the Orlando address—and that Rodriguez was served there. The
trial court did not find that the Orlando address was not provided in a
timely fashion.
The trial court also erred in basing a finding of noncompliance on a
determination that Rodriguez was an agent of the law firm. The original
letter of representation sent by the law firm to the insurance company
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provided that the insurance company could speak to “Rodriguez or any of
our agents” about specified topics. To the extent the letter of
representation sent by the law firm to the insurance company gives the
appearance of an agency relationship between the firm and Rodriguez, the
evidence and record was insufficient to establish that Rodriguez’s failure
to appear for deposition fell within the scope of any such agency
relationship.
Ironically, because the trial court’s finding of a discovery violation was
erroneous and unsupported by the record, there was never a need for the
trial court to engage in a Kozel analysis in the first instance.
The trial court also sanctioned the plaintiffs by imposing fees and costs
based on its inherent authority to award fees for bad faith litigation. The
trial court’s discretion to exercise its inherent authority to impose
attorney’s fees for bad faith conduct is reviewed for an abuse of discretion.
See Goldman v. Estate of Goldman, 166 So. 3d 927, 929 (Fla. 3d DCA
2015). Aside from fees based on statute, rule, or contract, trial courts have
the “inherent authority . . . to assess attorneys’ fees for the misconduct of
an attorney in the course of litigation.” Moakley v. Smallwood, 826 So. 2d
221, 224 (Fla. 2002). “The inequitable conduct doctrine permits the award
of attorney’s fees where one party has exhibited egregious conduct or acted
in bad faith.” Bitterman v. Bitterman, 714 So. 2d 356, 365 (Fla. 1998). But
the “doctrine is rarely applicable,” and is “reserved for those extreme cases
where a party acts ‘in bad faith, vexatiously, wantonly, or for oppressive
reasons.’” Id. (quoting Foster v. Tourtellotte, 704 F.2d 1109, 1111 (9th Cir.
1983)).
Because the trial court erred in striking the plaintiffs’ pleadings based
on their law firm’s “failure” to produce Rodriguez for deposition, it follows
that it also erred in imposing attorney’s fees based on the same theory.
The record does not support a finding of bad faith against the plaintiffs’
law firm.
The plaintiffs also challenge the validity of the February 2018 order
requiring them to provide a “better” address for Rodriguez. We agree with
the plaintiffs that the trial court erred in entering the order, as the
plaintiffs had already provided an address and Rodriguez was served at
that address.
Based on the foregoing, we reverse and remand for further proceedings.
The remaining issues raised on appeal are either moot, unpreserved, or
without merit and we decline to address them.
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Reversed and remanded.
TAYLOR and LEVINE, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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