Popovich v. Indiana Department of State Revenue

ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
JAMES K. GILDAY GREGORY F. ZOELLER
GILDAY & ASSOCIATES, P.C. INDIANA ATTORNEY GENERAL
Indianapolis, IN JOHN P. LOWREY
DEPUTY ATTORNEY GENERAL
Indianapolis, IN
IN THE
INDIANA TAX COURT
Mar 07 2016, 11:13 am
______________________________________________________________________
NICK POPOVICH, )
)
Petitioner, )
)
v. ) Cause No. 49T10-1010-TA-00053
)
INDIANA DEPARTMENT OF STATE )
REVENUE, )
)
Respondent. )
______________________________________________________________________
ORDER ON RESPONDENT’S REQUEST FOR EXPENSES
PURSUANT TO INDIANA TRIAL RULE 37(A)(4)
FOR PUBLICATION
March 7, 2016
WENTWORTH, J.
The Indiana Department of State Revenue argues that it is entitled to expenses
in the amount of $5,175.25 for successfully defending against Nick Popovich’s second
motion to compel. See generally Popovich v. Indiana Dep’t of State Revenue (Popovich
II), 7 N.E.3d 419 (Ind. Tax Ct. 2014), reh’g denied. The Court agrees.
BACKGROUND1
In December of 2011, Popovich subpoenaed the Department’s designated Trial
Rule 30(B)(6) witness, directing him to bring several pages of original documentation to
a deposition. Less than 24 hours before the deposition, the Department emailed
Popovich to explain that it would bring only copies of the requested documentation to
the deposition because the original documents could not be removed from its offices.
That same afternoon, Popovich stated that he would file another motion to compel if the
Department did not bring at least 27-pages of specified original documentation to the
deposition. When the Department’s witness appeared at the deposition without any
original documents, Popovich promptly adjourned the deposition. Approximately two
weeks later, in January of 2012, Popovich filed his second motion to compel the
production of original documents.
On April 24, 2012, after conducting a hearing, the Court denied Popovich’s
second motion to compel because Popovich did not document his attempts to resolve
the matter informally as required by Indiana Trial Rule 26(F). See Popovich II, 7 N.E.3d
at 422-23. Popovich subsequently filed a motion to reconsider, arguing that the
Department’s obdurate behavior throughout the discovery process had made complying
with Trial Rule 26(F) futile. On June 2, 2014, the Court denied that motion. See
Popovich v. Indiana Dep’t of State Revenue (Popovich III), No. 49T10-1010-TA-00053,
13 N.E.3d 954, at *2 (Ind. Tax Ct. 2014).
1
The Court has discussed the facts and procedural history regarding the parties’ discovery
disputes on several occasions and, therefore, it will only provide an abbreviated version of both
for purposes of this matter. See Popovich v. Indiana Dep’t of State Revenue (Popovich I), 7
N.E.3d 406, 409-11 (Ind. Tax Ct. 2014); Popovich v. Indiana Dep’t of State Revenue (Popovich
II), 7 N.E.3d 419, 420-21 (Ind. Tax Ct. 2014), reh’g denied; Popovich v. Indiana Dep’t of State
Revenue (Popovich IV), 17 N.E.3d 405, 407-09 (Ind. Tax Ct. 2014).
2
On October 22, 2014, the Court conducted a hearing on the Department’s
request for expenses as required by Indiana Trial Rule 37(A)(4). Additional facts will be
supplied as necessary.
LAW
Indiana Trial Rule 37(A)(4) concerns the awarding of expenses for successfully
defending against discovery enforcement motions. The Rule, in relevant part, states:
If [a] motion is denied, the court shall, after opportunity for hearing,
require the moving party or the attorney advising the motion or both
of them to pay to the party or deponent who opposed the motion
the reasonable expenses incurred in opposing the motion, including
attorney’s fees, unless the court finds that the making of the motion
was substantially justified or that other circumstances make an
award of expenses unjust.
Ind. Trial Rule 37(A)(4) (emphasis added). Thus, when a discovery enforcement
motion, like Popovich’s second motion to compel, is denied, a presumption arises that
the Court will also order the reimbursement of the prevailing party’s reasonable
expenses. See Penn Cent. Corp. v. Buchanan, 712 N.E.2d 508, 511 (Ind. Ct. App.
1999), trans. denied; Georgetown Steel Corp. v. Chaffee, 519 N.E.2d 574, 576 (Ind. Ct.
App. 1988), trans. denied. This award of expenses is mandatory, subject only to a
showing that the losing party’s conduct was substantially justified or that other
circumstances make an award of expenses unjust. Penn Cent., 712 N.E.2d at 511. “[A]
person is ‘substantially justified’ in seeking to compel or in resisting discovery, for
purposes of avoiding the sanctions provided by [Trial Rule 37(A)(4)], if reasonable
persons could conclude that a genuine issue existed as to whether a person was bound
to comply with the requested discovery.” Id. at 513.
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ANALYSIS AND DISCUSSION
The issue before the Court is whether the Department is entitled to be
reimbursed for expenses incurred in successfully defending against Popovich’s second
motion to compel. The resolution of this issue depends on the answers to the following
questions: 1) whether Popovich was substantially justified in filing the second motion to
compel; and 2) whether the Department’s request for expenses in the amount of
$5,175.25 is reasonable.2
(1)
Popovich claims that he was substantially justified in filing his second motion to
compel original documents because he only sought to recover the costs from the
canceled deposition that was caused by the Department’s malfeasance. (See Pet’r Br.
Supp. Award Expenses Re His First Mot. Compel & Resp’t Mot. Protective Order &
Opp’n Award Expenses Resp’t Re His Second Mot. Compel (“Pet’r Br.”) at 13, Oct. 15,
2014.) More specifically, Popovich points out that the Department ignored his
subpoena, failed to avail itself of the motion to quash remedy, and slept on its
knowledge that it would not comply with his subpoena until the eleventh hour. (See
Pet’r Br. at 14; Expenses Hr’g Tr. at 57-63, Oct. 22, 2014.) Popovich further explains
that if he had more clearly “couched” his second motion to compel as a Trial Rule 45(F)
motion for contempt for failure to obey the subpoena, he likely would have prevailed
and, therefore, was substantially justified in filing his second motion to compel. (See
Expenses Hr’g Tr. at 57, 61-62.)
2
The Court will not separately address whether other circumstances would make an award of
expenses unjust because Popovich’s arguments on that issue are essentially the same as his
substantial justification arguments. (Compare Expenses Hr’g Tr. at 56-63 with 67-69, Oct. 22,
2014.)
4
This Court has already explained that Popovich cannot “walk away from the
requirements of the remedy he sought” on the basis that he meant to file a different
motion. See Popovich III, 13 N.E.3d 954, at *1. Similarly, the Court has explained that
Popovich cannot evade the requirements of Trial Rule 26(F) by pointing his finger at the
Department. See Popovich II, 7 N.E.3d at 422-23. See also, e.g., Hill v. Fitzpatrick,
827 N.E.2d 138, 139-42 (Ind. Ct. App. 2005) (upholding discovery sanctions despite an
attorney’s attempt to shift the blame to opposing counsel). When Popovich filed his
second motion to compel, the requirements of Trial Rule 26(F) to have an informal
meeting to attempt to reconcile the issue and to document his attempts in his motion
were clear. See Ind. Trial Rule 26(F); see also generally Walker v. McCrea, 725 N.E.2d
526 (Ind. Ct. App. 2000). Accordingly, a reasonable person could not conclude that the
Department’s mulish behavior relieved Popovich from complying with the requirements
of Trial Rule 26(F). In other words, two wrongs do not make a right here.
Consequently, the Court finds that Popovich was not substantially justified in filing his
second motion to compel.
(2)
The Department has requested an award of $5,175.25 for expenses for
successfully defending against Popovich’s second motion to compel. (See Resp’t Br.
Resp. Pet’r Mot. Trial Rule 37 Sanctions, Including J. & Fees (“Resp’t Br.”) at 11-12,
May 5, 2014; Resp’t Notice Aff. Supp. Award Fees & Costs Pursuant to Ind. Trial Rule
37(A)(4), Oct. 20, 2014.) In support of its request, the Department submitted the
affidavit of its attorney, John P. Lowery, as evidence of the expenses incurred in
resisting both Popovich’s second motion to compel and his motion to reconsider. (See
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generally Aff. John P. Lowrey Supp. Award Fees & Costs Pursuant to Ind. Trial Rule
37(A)(4), Oct. 20, 2014.) Popovich does not question the reliability of the
Department’s submission nor does he claim that the requested amount of expenses is
unreasonable. (See Pet’r Br. at 13-15.) (See also generally Expenses Hr’g Tr.) Having
considered the evidence presented and the requirements of Trial Rule 37(A)(4), the
Court finds that Popovich must pay the Department’s expenses of $5,175.25.
CONCLUSION
Popovich was not substantially justified in filing his second motion to compel, and
therefore, the Department is entitled to a reimbursement for expenses in the amount of
$5,175.25 for successfully defending against that motion.
SO ORDERED this 7th day of March 2016.
_____________________________
Martha Blood Wentworth, Judge
Indiana Tax Court
Distribution: James K. Gilday, John P. Lowrey
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