Abdo v. Jones

IN THE COURT OF APPEALS OF NORTH CAROLINA
2022-NCCOA-740
No. COA22-271
Filed 15 November 2022
Johnston County, No. 20 CVS 1536
LUAI ABDO, Plaintiff,
v.
KEMAL ALI JONES, Defendant.
Appeal by Plaintiff from order entered 28 October 2021 by Judge D. Jack
Hooks, Jr., in Johnston County Superior Court. Heard in the Court of Appeals 4
October 2022.
David J. Martin for Plaintiff-Appellant.
Sue, Anderson & Bordman, LLP, by Stephanie W. Anderson, for Unnamed
Defendant-Appellee Erie Insurance Exchange.
Russ, Worth & Cheatwood, PLLC, by Philip H. Cheatwood, for Unnamed
Defendant-Appellee United Services Automobile Association.
COLLINS, Judge.
¶1 Plaintiff Luai Abdo appeals an order granting Unnamed Defendant Erie
Insurance Exchange’s motion for sanctions and dismissing Plaintiff’s complaint with
prejudice as to Defendant Kemal Ali Jones and Unnamed Defendants Erie and
United Services Automobile Association (“USAA”). Plaintiff makes no argument that
the trial court erred by dismissing the complaint against Jones. After careful review,
ABDO V. JONES
2022-NCCOA-740
Opinion of the Court
we conclude the trial court did not err by dismissing Plaintiff’s complaint against
Erie. However, we conclude the trial court erred by dismissing Plaintiff’s complaint
against USAA. Accordingly, we affirm in part and reverse in part, and remand for
further proceedings.
I. Procedural History and Factual Background
¶2 Plaintiff was involved in an automobile accident with Jones in July 2017. In
June 2020, Plaintiff filed an amended complaint against Jones, which included claims
against Erie and USAA for underinsured motorist coverage. Erie answered and
served its “First Request for Production of Documents” and “First Set of
Interrogatories” on Plaintiff in early June. USAA answered in early July.
¶3 Plaintiff responded to Erie’s discovery requests by the end of July but failed to
provide all the requested documents. Erie notified Plaintiff by email on 31 August
that his responses were deficient and requested supplemental discovery, including
Plaintiff’s pre-accident medical records. When Erie had not received a response to its
supplemental discovery request by December 2020, Erie filed a motion to compel.
Plaintiff served supplemental discovery responses in March 2021 but objected to
Erie’s request for pre-accident medical records. The trial court entered a Consent
Order on 24 March 2021, signed by Plaintiff’s attorney and Erie’s attorney, ordering
Plaintiff to produce the requested documents by 24 May 2021.
¶4 Shortly after the Consent Order was entered, Plaintiff’s attorney separated
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2022-NCCOA-740
Opinion of the Court
from his law firm. The law firm withdrew its representation of Plaintiff, and
Plaintiff’s attorney individually entered a notice of appearance on Plaintiff’s behalf
on 12 May 2021.
¶5 On 25 August 2021, by which time Plaintiff still had not produced the
court-ordered discovery, Erie filed an Amended Motion for Sanctions or, in the
Alternative, to Dismiss for Failure to Prosecute, “pursuant to Rules 26, 33, 34, 37,
and 41 of the North Carolina Rules of Civil Procedure,” requesting “entry of an order
dismissing [Plaintiff’s] case as sanctions for failing to comply with the Court’s Order
to Compel Discovery or, in the alternative, to dismiss [Plaintiff’s] case for failure to
prosecute.” The trial court heard Erie’s motion on 27 September 2021. Plaintiff and
Erie argued at the hearing; neither Defendant nor USAA made an appearance at the
hearing.
¶6 By written order entered 28 October 2021 (“Dismissal Order”), the trial court
found, in pertinent part:
11. That as of the date of the hearing on September 27,
2021, [Plaintiff] had not served the unnamed defendant
with any of the documents that he agreed to provide to the
unnamed defendant in the March 24, 2021 Consent Order;
12. That at the hearing of this matter, [Plaintiff’s attorney]
appeared and provided no evidence to the Court that he
had attempted to obtain any of the documents that were
agreed to in the March 24, 2021 Consent Order;
13. That [Plaintiff’s attorney] has willfully failed to comply
with the March 24, 2021 Consent Order;
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2022-NCCOA-740
Opinion of the Court
14. That the Court has considered less severe sanctions
than dismissal in ruling on these motions but believes
dismissal appropriate as this matter [w]as handled by
[Plaintiff’s attorney] in its entirety and he has willfully
failed to comply. While understanding the file was perhaps
under the supervision of another partner or attorney
during its tenure with the [former law firm], all official
actions have been signed and handled by [Plaintiff’s
attorney]. Thus he has been aware at all times, even if he
was subordinate while at the [former law firm]. He was
certainly aware on May 12, when he filed his appearance
with the Court.
Based on its findings, the trial court ordered that, “in the Court’s discretion and after
having considered less severe sanctions than dismissal, the unnamed defendant
Erie’s Motion for Sanctions is hereby GRANTED and that [Plaintiff’s] Complaint is
hereby dismissed with prejudice as to all defendants and unnamed defendants.”
Plaintiff timely appealed.
II. Discussion
¶7 Plaintiff argues the following: dismissal was not proper under Rule 37 because
Plaintiff was not engaged in systematic violations of court orders and lesser sanctions
were available; the trial court failed to make the requisite findings of fact to support
dismissal under Rule 41; and the trial court erred by dismissing Plaintiff’s complaint
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2022-NCCOA-740
Opinion of the Court
against Defendant and USAA.1
A. Rule 37
¶8 Rule 37 of the North Carolina Rules of Civil Procedure authorizes a trial court
to impose sanctions, including dismissal, upon a party that “fails to obey an order to
provide or permit discovery[.]” N.C. Gen. Stat § 1A-1, Rule 37(b)(2) (2021). “[T]rial
courts are vested with broad discretion in ordering sanctions under Rule 37(b).” GEA,
Inc. v. Luxury Auctions Mktg, Inc., 259 N.C. App. 443, 452, 817 S.E.2d 422, 429-30
(2018) (citation omitted). “Not only is the decision to impose Rule 37(b) sanctions
within the sound discretion of the trial court, but so too is the choice of Rule 37(b)
sanctions to impose.” Id. at 452, 817 S.E.2d at 430 (citation omitted).
¶9 “[B]efore dismissing a party’s claim with prejudice pursuant to Rule 37, the
trial court must consider less severe sanctions.” Hursey v. Homes by Design, Inc., 121
N.C. App. 175, 179, 464 S.E.2d 504, 507 (1995) (citing Goss v. Battle, 111 N.C. App.
173, 177, 432 S.E.2d 156, 159 (1993)). However, “[a] trial court is not required to list
and specifically reject each possible lesser sanction prior to determining that
dismissal is appropriate.” Honeycutt Contractors, Inc. v. Otto, 209 N.C. App. 180, 185,
1Erie begins its brief by pointing out that, “[n]otwithstanding the fact that [Plaintiff]
only presented one issue for appeal in the record for appeal, [Plaintiff] presents three issues
in his Brief.” However, we note that “[p]roposed issues on appeal are to facilitate the
preparation of the record on appeal and shall not limit the scope of the issues presented on
appeal in an appellant’s brief.” N.C. R. App. P. 10(b).
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703 S.E.2d 857, 860-61 (2011) (citation omitted). “A trial court may be reversed for
abuse of discretion only upon a showing that its ruling was so arbitrary that it could
not have been the result of a reasoned decision.” Hursey, 121 N.C. App. at 177, 464
S.E.2d at 505 (citing White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)).
B. Dismissal as to Erie
¶ 10 Here, Erie notified Plaintiff on 31 August 2020 that his interrogatory responses
were deficient and requested supplemental discovery, including Plaintiff’s
pre-accident medical records; Plaintiff failed to address the deficiency in his
interrogatory responses. Erie filed a motion to compel in December, and on 24 March
2021, the trial court entered a Consent Order compelling Plaintiff to produce the
requested documents by 24 May 2021. When Erie filed its motion for sanctions, over
three months after the Consent Order’s deadline, Plaintiff had yet to produce the
ordered documents. When Erie’s motion for sanctions was heard on 27 September
2021, over four months after the Consent Order’s deadline, Plaintiff had yet to
produce the ordered documents. At the hearing on Erie’s motion, Plaintiff “provided
no evidence to the Court that he had attempted to obtain any of the documents . . . [.]”
¶ 11 In its Dismissal Order, after making findings of fact detailing Plaintiff’s
repeated failures to produce discovery and comply with the Consent Order, the trial
court made a finding that it “has considered less severe sanctions than dismissal in
ruling on these motions but believes dismissal appropriate as this matter [w]as
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Opinion of the Court
handled by [Plaintiff’s attorney] in its entirety and he has willfully failed to comply.”
Only “after having considered less severe sanctions than dismissal” did the trial court
order Plaintiff’s complaint dismissed.
¶ 12 Based on the facts of this case, and the trial court’s consideration of lesser
sanctions, the trial court’s decision to dismiss Plaintiff’s complaint against Eerie as a
sanction for his willful failure to comply with the Consent Order was not “so arbitrary
that it could not have been the result of a reasoned decision.” Hursey, 121 N.C. App.
at 177, 464 S.E.2d at 505 (citation omitted). Accordingly, Plaintiff’s complaint against
Erie was properly dismissed under Rule 37.
¶ 13 Because Plaintiff’s complaint against Erie was properly dismissed under Rule
37, we do not address Plaintiff’s argument that the trial court erred by dismissing his
complaint under Rule 41.
C. Dismissal as to USAA
¶ 14 Plaintiff next argues that the trial court erred by dismissing his complaint
against USAA because USAA did not file a motion to compel, join Erie’s motion for
sanctions, attend the hearing, or request relief from the trial court. We agree.
¶ 15 The imposition of sanctions under Rule 37 for failure to obey a court order is
an abuse of discretion where there is no record evidence that the party failed to obey
a court order. See Baker v. Rosner, 197 N.C. App. 604, 677 S.E.2d 887 (2009). In
Baker, plaintiffs filed a complaint against multiple defendants – Prudence and Ed
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Rosner, Jo Faulk, and Nova Realty, Inc. – alleging fraud and unfair and deceptive
trade practices. Id. at 605, 677 S.E.2d at 889. Plaintiffs requested certain documents
be produced, and the trial court entered a consent order directing the Rosners and
Faulk to produce the documents. Id. When the Rosners and Faulk failed to produce
the documents, plaintiffs filed a motion for sanctions, pursuant to Rule 37. Id. The
trial court entered an order allowing the motion for sanctions, ordering each
defendant’s answer be stricken, and entering default judgment against each
defendant as to plaintiffs’ claims for fraud. Id. at 606, 677 S.E.2d at 889. This Court
concluded that the trial court abused its discretion by sanctioning Nova because
plaintiffs did not seek discovery from Nova and Nova was not a party to the consent
order; thus, Nova was not a disobedient party. Id. at 607, 677 S.E.2d at 890.
¶ 16 Although the parties in Baker were situated differently, Baker’s reasoning
applies here. In this case, Erie sought discovery from Plaintiff, while USAA did not.
When Plaintiff’s discovery responses were deficient, Erie requested supplemental
discovery; USAA did not. When Plaintiff did not respond to Erie’s supplemental
discovery request, Erie filed a motion to compel; USAA did not. Erie and Plaintiff
signed the Consent Order compelling the production of documents; USAA was not a
party to the Consent Order. When Plaintiff failed to comply with the Consent Order’s
deadline, Erie filed a motion for sanctions, while USAA did not. Erie attended the
hearing to argue that sanctions were appropriate; USAA did not attend the hearing.
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The Dismissal Order granting Erie’s motion for sanctions describes Plaintiff’s failures
to provide Erie with discovery; it makes no mention of USAA. Thus, as in Baker,
there is no record evidence that Plaintiff violated any discovery orders as to USAA.2
Accordingly, the trial court abused its discretion by dismissing Plaintiff’s complaint
against USAA.
III. Conclusion
¶ 17 Plaintiff makes no argument that the trial court erred by dismissing his
complaint against Defendant. Furthermore, the trial court did not err by dismissing
Plaintiff’s complaint against Erie. However, the trial court erred by dismissing
Plaintiff’s complaint against USAA. Accordingly, the trial court’s order is affirmed
as to Defendant and Erie and reversed as to USAA, and remanded for further
proceedings.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
Judges TYSON and INMAN concur.
2 USAA argues that Yahudah Washitaw of E. Terra Indians v. PHH Mortg. Corp., No.
5:17-CV-00377-BR, 2017 U.S. Dist. LEXIS 210027 (E.D.N.C. Dec. 21, 2017), supports its
position that it need not have moved for sanctions. That court stated, “[i]f the court dismisses
a plaintiff's complaint upon a defendant’s Rule 12(b)(6) motion and the same legal arguments
apply to its claims against remaining defendants, the court may dismiss the complaint in its
entirety.” Id at *4. Dismissal upon 12(b)(6) grounds is not analogous to dismissal as a
sanction under Rule 37. We are neither bound by the federal district court’s opinion nor
persuaded to apply its reasoning here.