Weiss v. THI of N.M. at Valle Norte, L.L.C. , 2013 NMCA 54 ( 2012 )

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integrity of this document
New Mexico Compilation
Commission, Santa Fe, NM
'00'04- 14:05:06 2013.05.16
Certiorari Denied, April 3, 2013, No. 34,054
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2013-NMCA-054Filing Date: December 26, 2012
Docket No. 30,296
ROCHELLE WEISS, as Personal
Representative for the Wrongful Death
Beneficiaries of Florence Zuckerman, deceased,
Plaintiff-Appellee,
v.
THI of NEW MEXICO AT VALLE NORTE,
LLC; THI of NEW MEXICO, LLC; THI of
BALTIMORE, INC.; FUNDAMENTAL
ADMINISTRATIVE SERVICES, LLC;
FUNDAMENTAL CLINICAL CONSULTING,
LLC; and JIMMY D. MELTON, administrator,
Defendants-Appellants.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Geraldine E. Rivera, District Judge
Harvey Law Firm
Dusti D. Harvey
Jennifer J. Foote
Albuquerque, NM
The Sorey Law Firm, PLLC
R. Daniel Sorey
Longview, TX
for Appellee
Proctor & Associates, P.C.
Lori D. Proctor
Houston, TX
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Serpe, Jones, Andrews, Callender & Bell, PLLC
John S. Serpe
Randall Jones
Houston, TX
for Appellants
OPINION
CASTILLO, Chief Judge.
{1} A nursing home and its affiliates and administrator (Defendants) appeal from a
district court decision denying their motion to compel arbitration and stay proceedings. The
court based its denial on its conclusion that Defendants waived their right to arbitrate and
that the arbitration agreement is unconscionable. Defendants also appeal the imposition of
$25,000 in sanctions against them. The parties have resolved the underlying issues of waiver
and unconscionability, so we do not address them. We affirm the imposition of sanctions.
I. BACKGROUND
{2} Because our sole issue on appeal relates to the imposition of sanctions, we provide
only a short background of the events leading up to the hearing at which the sanctions were
imposed. Rochelle Weiss (Plaintiff), the personal representative for Florence Zuckerman,
sued Defendants over alleged injuries and harm to Mrs. Zuckerman, who died in February
2008 at the THI of New Mexico Valle Norte nursing home. Shortly after filing her
complaint, Plaintiff in early March 2009 began serving discovery requests on Defendants.
Over the next few months, Plaintiff granted several extensions to Defendants to respond to
interrogatories and requests for production, but Defendants produced only a small percentage
of the documents requested. In mid-August 2009, Plaintiffs filed a motion to compel
discovery.
{3} Between the filing of the motion and the motion hearing, on September 1, 2009, a
scheduling conference was held, during which the district court established a time line for
trial preparation activities, including deadlines for discovery, and it set a date for a ten-day
jury trial beginning in August 2010. Several days later, the parties held a teleconference
regarding the production of discovery requested, but no agreement was reached. In early
October 2009, the court heard Plaintiff’s motion to compel, granted the motion orally, and
gave Defendants two weeks, until October 21, to produce the documents. The district court
issued a written order requiring the production of discovery by October 21, although the
written order was not filed until October 22.
{4} About this time, Defendants discovered the admission agreement signed by Mrs.
Zuckerman and also noticed that it contained an arbitration clause. Based on this
information, Defendants, on October 29, 2009, filed a motion to compel arbitration and to
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stay the proceedings under the Federal Arbitration Act (FAA), 9 U.S.C. § 3 (2011).
Defendants did provide some discovery on November 2 but thereafter refused to engage in
discovery because their position was that the proceedings were automatically stayed upon
the filing of their motion to compel arbitration.
{5} Plaintiff filed a motion for discovery sanctions on November 12, 2009. On January
28, 2010, the district court heard Plaintiff’s motion for sanctions together with Defendants’
motion to compel arbitration and stay the proceedings. Defendants provided some discovery
documents the day before and the day of that hearing.
{6} The court denied Defendants’ motion to compel, granted Plaintiff’s motions for
sanctions, imposed a $25,000 fine on Defendants, and ordered Defendants to produce all
remaining discovery items within five days. Defendants appealed the district court’s order.
At oral argument before this Court, the parties explained that they had settled the case except
for the matter of the imposition of sanctions. Accordingly, we limit our opinion to the issue
of sanctions.
II. DISCUSSION
{7} Defendants make two arguments. First, they argue that sanctions were inappropriate
because the sanctions were based in part on litigation activities that occurred after
Defendants had filed their motion to compel arbitration. According to Defendants, the filing
of the motion should have automatically stayed the proceedings, and they thus were
“substantially justified” in resisting discovery and were in compliance with discovery rules
because they reasonably believed that the proceedings had been stayed. See Rule 1-
037(B)(2) NMRA. In their second point, Defendants contend that the court provided no
basis for the amount of the sanctions at $25,000 and did not base it on any evidence or
representation of fees incurred by Plaintiff. We address each argument in turn.
A. Stay of the Proceedings
{8} In their memorandum in support of their motion to compel arbitration, Defendants
cited the FAA for their contention that proceedings should be stayed upon such an
application. See 9 U.S.C. § 3. Defendants reiterated that contention in their response to
Plaintiff’s motion for sanctions by citing to New Mexico’s Uniform Arbitration Act (the
Act), NMSA 1978, §§ 44-7A-1 to -32 (2001). See § 44-7A-8(f). Defendants contend that
the district court must automatically stay the proceedings upon receiving a motion to compel
arbitration. We disagree with Defendants’ reading of the statutes.
{9} Because this involves a matter of statutory interpretation, we are faced with a
question of law, and our review is de novo. See Cooper v. Chevron U.S.A., Inc., 2002-
NMSC-020, ¶ 16, 132 N.M. 382, 49 P.3d 61. We follow the plain meaning rule, requiring
a court to give effect to a statute’s language and refrain from further interpretation when the
language is clear and unambiguous. See Sims v. Sims, 1996-NMSC-078, ¶ 17, 122 N.M.
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618, 930 P.2d 153.
{10} We first address the federal law. The FAA states that “the court . . ., upon being
satisfied that the issue involved in such suit or proceeding is referable to arbitration under
such an agreement, shall on application of one of the parties stay the trial of the action until
such arbitration has been had.” 9 U.S.C. § 3. Rather than occurring automatically upon a
motion to compel arbitration, a stay in the proceedings under the FAA occurs only when the
court is satisfied that the issue is referable to arbitration. See United Nuclear Corp. v. Gen.
Atomic Co. (United Nuclear I), 93 N.M. 105, 123, 597 P.2d 290, 308 (1979) (“Section 3 of
the [FAA] provides for a stay of pending court action on application of one of the parties
when the [district] court is satisfied that the issue involved is referable to arbitration and that
the applicant for the stay of court proceedings is not in default in proceeding with such
arbitration.”). That language invokes the discretion of the court and requires either a hearing
or a ruling by the court informed by an analysis of the viability of a request for arbitration.
{11} We now turn to the New Mexico statute. The Act states: “If a party makes a motion
to the court to order arbitration, the court on just terms shall stay any judicial proceeding that
involves a claim alleged to be subject to the arbitration until the court renders a final decision
under this section.” Section 44-7A-8(f). Here, too, the stay is not triggered automatically
but requires the court, “on just terms,” to assess whether the claim is subject to arbitration.
The New Mexico Supreme Court has spoken only once on the meaning of the phrase “just
terms” and has concluded that it translates roughly to “reasonable terms.” See Pankey v. Hot
Springs Nat’l Bank, 42 N.M. 674, 683, 84 P.2d 649, 654 (1938) (stating that the phrase, in
the context of bringing in another party as an appellee, means “such reasonable terms as will
save the adverse party harmless in the premises” (internal quotation marks and citation
omitted)). In the context of the Act, we conclude that, before staying the proceedings, a
district court must utilize its reasonable discretion to determine whether a case is arbitrable.
{12} Adoption of Defendants’ assertion that a stay of the proceedings is mandatory and
is automatically triggered by a filing of a motion to compel would subvert the court’s
jurisdiction and lead to the absurd result of giving either party the unilateral power to halt
litigation. Defendants overreach in trying to find analogous cases from other jurisdictions
to support their theory. For instance, they point to Citibank (South Dakota) NA v. Reikowski,
760 N.W.2d 97 (N.D. 2009), for the proposition that a mere motion to compel arbitration
automatically triggers a stay in the proceedings. However, that court relied on a South
Dakota law with wording that is significantly different from the New Mexico statute. See
S.D. Codified Laws § 21-25A-7 (2004) (“Any action or proceeding involving an issue
subject to arbitration shall be stayed if an order for arbitration or an application therefor has
been made . . . .” (emphasis added)). Other state jurisdictions are equally unhelpful to
Defendants’ argument. And federal case law offers numerous examples of providing
discretion to lower courts to determine the merits of a motion for arbitration before requiring
a stay of the proceedings. See, e.g., In re Gandy, 299 F.3d 489, 494 (5th Cir. 2002) (“A
court must stay its proceedings if it is satisfied that an issue before it is arbitrable under the
agreement.”); MicroStrategy, Inc. v. Lauricia, 268 F.3d 244, 249 (4th Cir. 2001) (“[A] party
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may demand a stay of federal judicial proceedings pending exercise of a contractual right
to have the subject matter of the federal action decided by arbitration, unless the party
seeking arbitration is ‘in default’ of that right.” (internal quotation marks and citation
omitted)); Houlihan v. Offerman & Co., 31 F.3d 692, 695 (8th Cir. 1994) (“A federal court
must stay court proceedings and compel arbitration once it determines that the dispute falls
within the scope of a valid arbitration agreement.”); Jones v. Gen. Motors Corp., 640 F.
Supp. 2d 1124, 1128-29 (D. Ariz. 2009) (“If a district court decides that an arbitration
agreement is valid and enforceable, then it should either stay or dismiss the claims subject
to arbitration.”); Lorntzen v. Swift Transp., Inc., 316 F. Supp. 2d 1093, 1095 (D. Kan. 2004)
(stating that the FAA requires a district court to stay the proceedings in favor of an
arbitration agreement except when the agreement is invalid as matter of law).
{13} We conclude that because the issue was found to be not “referable to arbitration” the
court could not “on just terms” order an immediate stay of the proceedings without
addressing the merits of the right to arbitrate the issue at hand. 9 U.S.C. § 3; § 44-7A-8(f).
Therefore, the district court had the discretion to stay or not stay the proceedings depending
on the viability of the right to arbitrate, and Defendants’ argument that they were justified
in withholding discovery fails. Further, because the parties settled the issue of arbitrability,
we need not analyze the court’s justifications for denying the motion to compel arbitration
and to stay the proceedings.
B. The Sanctions
{14} We now turn to the merits of the district court’s decision to impose sanctions against
Defendants. At the close of the hearing on the parties’ motions, the district court imposed
the sanction of $25,000 based on several findings. The court found that “Defendants clearly
had no intention of following” the court’s October 2009 order to compel discovery and
instead “unilaterally decided that all matters would be stayed.” Additionally, the court
described the response to Plaintiff’s discovery requests as dilatory, even when considering
the documents presented on the day before and day of the January 2010 hearing on
sanctions. The court also found that Defendants’ counsel “misrepresented several pertinent
facts” during the January hearing, characterizing the attorney’s statements as “careless and
sloppy at best and intentional[ly] unethical at worst.” We observe that the district court
imposed sanctions based not only on its statutory authority to manage the discovery process
but also on the court’s inherent powers to control the proceedings. See State ex rel. N.M.
State Highway & Transp. Dep’t v. Baca (Baca), 120 N.M. 1, 4, 896 P.2d 1148, 1151 (1995)
(concluding that courts have “inherent power to impose . . . sanctions on both litigants and
attorneys . . . to regulate their docket, promote judicial efficiency, and deter frivolous filings”
(internal quotation marks and citation omitted)); Seipert v. Johnson, 2003-NMCA-119, ¶ 9,
134 N.M. 394, 77 P.3d 298 (stating that a “district court could properly sanction under its
inherent power to control the litigation and the conduct of the parties before it”).
1. Standard of Review
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{15} “We review a [district] court’s decision to impose discovery sanctions under Rule
1-037(B)(2) for an abuse of discretion.” Lewis ex rel. Lewis v. Samson, 2001-NMSC-035,
¶ 13, 131 N.M. 317, 35 P.3d 972. Under this standard, “we will disturb the [district] court’s
ruling only when the [district] court’s decision is clearly untenable or contrary to logic and
reason.” Id. (internal quotation marks and citation omitted). “In conducting our review[,]
we must be mindful of the nature of the conduct and level of culpability found by the
[district] court and whether the [district] court’s sanction appears more stern than necessary
in light of the conduct prompting the sanction.” Enriquez v. Cochran, 1998-NMCA-157, ¶
20, 126 N.M. 196, 967 P.2d 1136. “[I]mplicit in the standard of review is the question of
whether the court’s findings and decision are supported by substantial evidence.” Id.{16} The abuse of discretion standard is also used for review of the imposition of Rule 1-
011 NMRA sanctions, see Rangel v. Save Mart, Inc., 2006-NMCA-120, ¶ 12, 140 N.M. 395,
142 P.3d 983, and for bad faith participation in a settlement conference or mediation. See
Carlsbad Hotel Assocs. v. Patterson-UTI Drilling Co., 2009-NMCA-005, ¶ 20, 145 N.M.
385, 199 P.3d 288. We conclude that this same standard can be used in evaluating sanctions
imposed based on the inherent power of a court to control its proceedings.
2. The Basis for Sanctions
{17} Discovery sanctions “may only be imposed when the failure to comply is due to the
willfulness, bad faith or fault of the disobedient party.” United Nuclear Corp. v. Gen.
Atomic Co. (United Nuclear II), 96 N.M. 155, 202, 629 P.2d 231, 278 (1980). Sanctions are
intended to “preserve the integrity of the judicial process and the due process rights of the
other litigants.” Sanchez v. Borrego, 2004-NMCA-033, ¶ 19, 135 N.M. 192, 86 P.3d 617(internal quotation marks and citation omitted). New Mexico’s rules of civil procedure state
that if a district court grants a motion to compel discovery
the court shall . . . require the party or deponent whose conduct necessitated
the motion or the party or attorney advising such conduct or both of them to
pay to the moving party the reasonable expenses incurred in obtaining the
order, including attorney[] fees, unless the court finds that the opposition to
the motion was substantially justified or that other circumstances make an
award of expenses unjust.
Rule 1-037(A)(4). The court gave its order to compel discovery orally from the bench on
October 7, 2009, giving Defendants two weeks to produce all documents requested. We
have previously noted that our “Supreme Court has held that a district court’s oral ruling
may justify sanctions under Rule 1-037.” Allred ex rel. Allred v. Bd. of Regents of the Univ.
of N.M., 1997-NMCA-070, ¶ 19, 123 N.M. 545, 943 P.2d 579. Here, the district court
followed up with a written order on October 22, listing the deadline as October 21.
{18} Rather than comply with the order to compel discovery, Defendants responded a
week later, on October 29, by filing their motion to compel arbitration and to stay the
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proceedings. Defendants did not comply with the court’s order of October 7 because they
claimed that they needed 120 days to do so, not the fourteen days provided by the court’s
oral and written orders or the thirty days offered by Plaintiff’s counsel. At no point did
Defendants file a motion for a protective order or claim a privilege with respect to the
documents sought by Plaintiff. See Rule 1-037(D) (“The failure to act . . . may not be
excused on the grounds that the discovery sought is objectionable unless the party failing to
act has applied for a protective order as provided by Rule 1-026 NMRA.”); Rule 1-
026(B)(7)(a) (“When a party withholds information otherwise discoverable under these rules
by claiming that it is privileged or subject to protection . . ., the party shall make the claim
expressly[.]”).
{19} Defendants’ dilatory responses to discovery requests “were not merely accidental or
inadvertent.” Enriquez, 1998-NMCA-157, ¶ 33. Instead, Defendants’ actions “show a
sustained and deliberate disobedience of the court orders concerning discovery.” Miller v.
City of Albuquerque, 88 N.M. 324, 331, 540 P.2d 254, 261 (Ct. App. 1975) (“Under these
circumstances[,] we cannot say that the award of attorney fees . . . was unfair, arbitrary,
manifest error, or not justified by reason.”). We conclude that substantial evidence existed
below for the district court to impose sanctions on Defendants for their discovery violations
and misrepresentations to the court.
3. The Amount of Sanctions
{20} Defendants further argue that the judge provided no reasoning behind the $25,000
amount of the sanction and did not base it on any evidence or representation of fees incurred
by Plaintiff.
{21} Discovery sanctions short of dismissal are commonly based on the moving party’s
costs and attorney fees that result from the dilatory party’s failure to comply with discovery
requests and orders. See, e.g., In re Chavez, 2000-NMSC-015, ¶¶ 32-33, 129 N.M. 35, 1
P.3d 417; Gonzales v. Surgidev Corp., 120 N.M. 151, 155, 899 P.2d 594, 598 (1995). The
New Mexico Supreme Court has stated that a district court “must award reasonable expenses
to the affected party when the other party has failed to comply with a discovery order.”
Marchman v. NCNB Tex. Nat’l Bank, 120 N.M. 74, 91, 898 P.2d 709, 726 (1995). “In
determining the nature of the sanctions to be imposed, the [district] court must balance the
nature of the offense, the potential prejudice to the parties, the effectiveness of the sanction,
and the imperative that the integrity of the court’s orders and the judicial process must be
protected.” Enriquez, 1998-NMCA-157, ¶ 48. It is appropriate that the “sanctions imposed
[be] proportional to the offenses.” Gonzales v. N.M. Dep’t of Health, 2000-NMSC-029, ¶
16, 129 N.M. 586, 11 P.3d 550.
{22} In the case before us, Defendants’ actions went beyond mere violations of discovery
rules to include material misrepresentations to the court. We have long held that a court’s
power is broader than merely the statutory authority to impose sanctions to cover a
prejudiced party’s costs when the offending party has violated a rule or statute. See Miller,
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88 N.M. at 329, 540 P.2d at 259 (“[C]ourts have inherent power to manage their own affairs
so as to achieve the orderly and expeditious disposition of cases.”). Further, our Supreme
Court has concluded that “an award of attorney fees without a basis in a statute, contractual
provision, or court rule may be justified as an exercise of a court’s inherent powers when
litigants, their attorneys, or both have engaged in bad faith conduct before the court or in
direct defiance of the court’s authority.” N.M. Right to Choose/NARAL v. Johnson,
1999-NMSC-028, ¶ 16, 127 N.M. 654, 986 P.2d 450 (internal quotation marks and citations
omitted). Our Supreme Court has thus recognized that “a court’s inherent authority extends
to all conduct before that court and encompasses orders intended and reasonably designed
to regulate the court’s docket, promote judicial efficiency, and deter frivolous filings.” Baca,
120 N.M. at 8, 896 P.2d at1155; see Martinez v. Martinez, 1997-NMCA-096, ¶ 23, 123 N.M.
816, 945 P.2d 1034 (reiterating that “courts have inherent power to impose sanctions on both
litigants and attorneys in order to regulate their docket, promote judicial efficiency, and deter
frivolous claims”). In that vein, “a court must be able to command the obedience of litigants
and their attorneys if it is to perform its judicial functions.” Baca, 120 N.M. at 4, 896 P.2d
at 1151. In these circumstances, a court is permitted to “vindicate its judicial authority” and
impose sanctions. Id. at 5, 896 P.2d at 1152; accord Landess v. Gardner Turf Grass, Inc.,
2008-NMCA-159, ¶ 19, 145 N.M. 372, 198 P.3d 871; In re Jade G., 2001-NMCA-058, ¶ 28,
130 N.M. 687, 30 P.3d 376 (“Under its inherent authority, a court may sanction parties and
attorneys to ensure compliance with the proceedings of the court.”). In the case before us,
the district court had the authority to exercise its inherent authority to impose sanctions in
order to regulate its docket and preserve the integrity of the judicial process.
{23} In penalizing Defendants $25,000, the court chose to impose a sanction less severe
than dismissal of the case or the striking of an affirmative defense. In Allred, we deemed the
more severe sanction of dismissal appropriate after the district court found “that [the
p]laintiffs’ conduct in failing to comply with reasonable discovery requests and [the
p]laintiffs’ misrepresentations to the court constituted a pattern of disregard for the discovery
rules and the rulings of the court.” 1997-NMCA-070, ¶ 26. Here, under similar
circumstances, the district court imposed a less severe monetary sanction that is permitted
when exercising its inherent powers. See Avlin Inc. v. Manis, 1998-NMCA-011, ¶ 12, 124
N.M. 544, 953 P.2d 309. It is true that the court did so without evidence presented by
Plaintiff itemizing her discovery costs that resulted from Defendants’ dilatory discovery
conduct. At the hearing on sanctions, however, Plaintiff did inform the court that
Defendants had claimed that it would cost them $50,000 to comply with the October
discovery order. The court could have reasonably halved that figure to come up with the
$25,000 sanction. Cf. MHC Inv. Co. v. Racom Corp., 323 F.3d 620, 628 n.13 (8th Cir.
2003) (considering $25,000 the “minimum amount a [c]ourt can award in order to deter” a
law firm’s improper behavior); In re White, 18 Cal. Rptr. 3d 444, 471 (Ct. App. 2004)
(considering $25,000 “a reasonable and responsible monetary sanction to compensate this
court in part for the cost of processing, reviewing, and deciding” frivolously filed writ
petitions); Barnhill v. Iowa Dist. Ct. for Polk Cnty., 765 N.W.2d 267, 277 (Iowa 2009)
(affirming a $25,000 sanction without a specific accounting because “it balanced the twin
purposes of compensation and deterrence set forth in our case law”); Multifeeder Tech., Inc.
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v. British Confectionery Co., 2012 WL 4135848, *10 (D. Minn. 2012) (mem. & order)
(ordering a sanction of $25,000 “for the abuse of the [c]ourt’s processes”); Zurich
Reinsurance (UK) Ltd. v. Canadian Pacific, Ltd., 613 N.W.2d 760, 766 (Minn. Ct. App.
2000) (concluding that the district court did not abuse its discretion in awarding $25,000 to
insured as sanction for indemnity insurer’s refusal to admit that insured could enter into a
reasonable settlement of claims without insurer’s authorization or consent); Skepnek v.
Mynatt, 8 S.W.3d 377, 380-81 (Tex. App. 1999) (upholding a $25,000 sanction to be paid
into registry of court for filing a false affidavit).
{24} In addition, an award of sanctions need not be tied to the prejudice to the opposing
party but may be linked to the affront to the court and the judicial process. See Sanchez,
2004-NMCA-033, ¶ 19 (stating that “whether prejudice to [the d]efendant resulted is not the
issue; the issue is counsel’s abuse of the discovery process”); Reed v. Furr’s Supermarkets,
Inc., 2000-NMCA-091, ¶ 29, 129 N.M. 639, 11 P.3d 603 (stating that “the overriding
concern is abuse of the discovery process”). “[A]n abuse of the discovery process affects
more than private litigants. It also affects the integrity of the court and, when left unchecked,
would encourage future abuses.” Gonzales, 120 N.M. at 157, 899 P.2d at 600.
{25} Here, the district court found not only that “Defendants clearly had no intention of
following” the court’s order to compel discovery but also that their counsel “misrepresented
several pertinent facts to the [c]ourt” at the January 2010 hearing. The court also noted that
Defendants’ counsel failed to read the briefs and a key Plaintiff’s affidavit. Thus,
Defendants’ misconduct went beyond the discovery violations; the court also warned
Defendants’ counsel not to come before the judge again with misrepresentations because
they had not read the briefs or because they had not done the work. The court’s award of
sanctions encompassed both discovery violations covered by the rules and misbehavior
before the court that fell under the court’s inherent powers to “command the obedience of
litigants” and “vindicate its judicial authority.” Baca, 120 N.M. at 4, 5, 896 P.2d at 1151,
1152. We cannot say in this instance that the imposition of $25,000 in sanctions was not
supported by substantial evidence or that they were not proportional to the offenses
committed, see Gonzales, 2000-NMSC-029, ¶ 16, or that the sanctions were “more stern than
reasonably necessary.” United Nuclear II, 96 N.M. at 241, 629 P.2d at 317 (internal
quotation marks and citation omitted); see Seipert, 2003-NMCA-119, ¶ 20 (stating that “an
affront to the court . . . warrants the imposition of sanctions severe enough to put a stop to
the practice”); Pizza Hut of Santa Fe, Inc. v. Branch, 89 N.M. 325, 328, 552 P.2d 227, 230
(Ct. App. 1976) (noting that “[s]anctions may be light or drastic dependent on the facts and
circumstances of each case” and affirming a sanction that the district court “conscientiously
believed . . . was reasonable and proper”). “It is not our responsibility as a reviewing court
to say whether we would have chosen a more moderate sanction.” United Nuclear II, 96
N.M. at 239, 629 P.2d at 315 (internal quotation marks and citation omitted).
{26} We conclude that the district court did not abuse its discretion in deciding to award
sanctions based on Defendants’ failure to comply with the discovery order and their
counsel’s misrepresentations and unpreparedness in court.
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III. CONCLUSION
{27} For the foregoing reasons, we affirm the district court’s granting of Plaintiff’s motion
for discovery sanctions.
{28} IT IS SO ORDERED.
____________________________________
CELIA FOY CASTILLO, Chief Judge
I CONCUR:
__________________________________
CYNTHIA A. FRY, Judge
TIMOTHY L. GARCIA, Judge (dissenting)
GARCIA, Judge (dissenting).
{29} I respectfully dissent in this case. I agree with the majority that the district court did
not abuse its discretion when it determined that Defendants’ dilatory response to discovery
requests warranted the imposition of a monetary sanction under Rule 1-037(A)(4). Plaintiff
was entitled to recover the reasonable expenses incurred in obtaining the production of the
documents requested, including attorney fees. Majority Opinion, ¶¶ 17-19. When this
monetary sanction was imposed, however, it is undisputed that Plaintiff had not been given
the opportunity to present any evidence to establish the actual amount of its reasonable
expenses and attorney fees incurred due to Defendants’ dilatory acts in withholding
discovery. Majority Opinion, ¶ 23. Effectively, no evidence was presented, substantial or
otherwise, regarding the reasonable expenses and attorney fees incurred in obtaining the
production of the documents requested. See Gonzales, 2000-NMSC-029, ¶ 15 (recognizing
that discovery sanctions are fact-based and must be supported by substantial evidence).
{30} Although the majority presents a reasonable premise that the district court can also
use its inherent authority to control the proceedings in its courtroom and impose a sanction,
there is no indication in the record that the district court actually exercised its inherent
authority in this case. Majority Opinion, ¶¶ 16, 22-25. Despite the fact that substantial
monetary sanctions may well be warranted under Rule 1-037(A)(4) for the dilatory tactics
practiced by Defendants in order to deny the discovery ordered by the district court, based
upon the record before us, it is impossible to determine whether the $25,000 sanction
imposed by the court was clearly untenable or contrary to logic or reason. Without some
means of measurement, we have no justifiable way to determine whether the district court
acted properly and did not abuse its discretion. See Baca, 120 N.M. at 8, 896 P.2d at 1155([G]eneralized conclusions, without more, do not justify a finding of bad faith sufficient to
support an attorney’s fee award.”). The actual evidence may support a different result. It
10
is impossible to make such a determination at this time.
{31} I recognize and understand the district court’s frustration with Defendants and how
this may have led to a hasty decision regarding the award of sanctions. Not only had
Defendants already stonewalled the discovery process, but they also appeared at the January
2010 hearing unprepared and made misrepresentations that were “careless and sloppy at best
and intentionally unethical at worst.” Despite this conduct, I cannot agree with the majority
that the sanction imposed by the district court at the January 2010 hearing was based upon
its inherent authority. Plaintiff should have been awarded the reasonable expenses and
attorney fees that they incurred under Rule 1-037(A)(4) due to Defendants’ conduct,
including the time and expense incurred at the January 2010 hearing. This matter should be
remanded to the district court to hold an evidentiary hearing in order to determine the
amount of expenses and attorney fees Plaintiff actually incurred and is now entitled to
receive as a sanction imposed against Defendants under Rule 1-037(A)(4).
____________________________________
TIMOTHY L. GARCIA, Judge
Topic Index for Weiss v. THI of N.M. at Valle Norte, L.L.C., No. 30,296
APPEAL AND ERROR
Standard of Review
CIVIL PROCEDURE
Arbitration
Discovery
Sanctions
Stay of Proceedings
EVIDENCE
Discovery
REMEDIES
Arbitration
STATUTES
Interpretation
Legislative Intent
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