State ex rel. Stenehjem v. Maras

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
APRIL 20, 2021
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2021 ND 68State of North Dakota ex rel.
Wayne Stenehjem, Attorney General, Plaintiff and Appellee
v.
Terpsichore Maras, aka Terpsichore Maria
Helen Lindeman, aka Terpischore Lindeman,
aka Terpsichor Maras-Lindeman, aka
Terpsichore Maras-Lindeman, aka Terpsichor
Maras, aka Terpsichore P Lindeman, aka
Terpsechore Maras-Lindeman, aka Tore
Maras-Lindeman, aka Terpsichor Lindeman,
aka Terpsechore Maras-Lindeman, aka
Terpsehore P Maras-Lindeman, aka Terpsehore
Pete Maras-Lindeman, aka Terpsehore
Maras-Lindeman, doing business as A Magic
City Christmas, MLLabs-Events, Respondent and Appellant
No. 20200304
Appeal from the District Court of Ward County, North Central Judicial
District, the Honorable Todd L. Cresap, Judge.
AFFIRMED.
Opinion of the Court by Tufte, Justice.
Brian M. Card, Assistant Attorney General, Office of Attorney General,
Bismarck, N.D., for plaintiff and appellee; submitted on brief.
David C. Thompson, Grand Forks, N.D., for respondent and appellant;
submitted on brief.
State ex rel. Stenehjem v. Maras
No. 20200304
Tufte, Justice.
[¶1] Terpsichore Maras appeals from a default judgment issued as a sanction
for discovery abuses and a judgment dismissing her counterclaim for lack of
jurisdiction. We affirm the default judgment, concluding the district court did
not abuse its discretion. We also affirm the judgment dismissing Maras’s
counterclaim, concluding she failed to comply with notice requirements for
claims against the State of North Dakota, which are jurisdictional.
I
[¶2] The case arises out of the Attorney General’s investigation of Maras for
violation of consumer fraud protection laws. In January 2018, in a separate
case, the Attorney General sought to enforce various subpoenas he issued
under his power to investigate consumer fraud. See Case No. 51-2018-CV-191;
see also N.D.C.C. § 51-15-05 (providing investigative subpoena powers). The
Attorney General alleged Maras was engaging in solicitation of charitable
donations, without registering as a charitable organization, in connection with
an event she held out to be a fundraiser called “A Magic City Christmas.”
[¶3] In July 2018, the Attorney General commenced the present case seeking
penalties, restitution, costs, and attorney’s fees for alleged violations of
consumer fraud protection laws, as well as an injunction and cancellation of a
trade name. Maras pled a counterclaim for abuse of process. She alleged she is
an investigative journalist who wrote critically of the Attorney General. She
asserted the Attorney General’s investigation, which she described as a
“directed multi-front administrative and judicial onslaught against her,” was
designed to destroy her credibility. She sought money damages for severe
emotional distress and damage to her reputation.
[¶4] The Attorney General moved to dismiss Maras’s counterclaim. The
district court granted the motion, concluding it lacked jurisdiction because
Maras had not complied with N.D.C.C. § 32-12.2-04, which requires a person
bringing a claim against the State of North Dakota or a state employee to give
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notice to the director of the Office of Management and Budget. The court
entered judgment dismissing the counterclaim.
[¶5] The Attorney General moved the district court to issue orders compelling
Maras to comply with discovery requests. The court issued two orders to
compel. In its second order, the court warned Maras that her “continued failure
to cooperate in discovery may result in sanctions pursuant to N.D.R.Civ.P.
Rule 37, which include rendering a default judgment against her.” The
Attorney General later moved for default judgment, asserting Maras continued
to defy discovery requests.
[¶6] On August 7, 2020, the district court granted default judgment against
Maras as a sanction for discovery abuses and defiance of its orders. The court
noted she had been held in contempt in the companion lawsuit, and it found
she had not complied with the court’s orders to compel in the present case—
specifically that she “did not provide any response whatsoever” to the court’s
second order to compel. The court found Maras’s actions were “deliberate and
in bad faith.” The court entered judgment in favor of the Attorney General,
enjoining Maras from soliciting future charitable donations, cancelling her
trade name, and ordering civil penalties, restitution, attorney’s fees, and costs.
II
[¶7] Maras asserts the district court erred when it dismissed her abuse of
process counterclaim for lack of subject matter jurisdiction. She argues that
the N.D.C.C. § 32-12.2-04 notice requirements do not apply to compulsory
counterclaims and that the district court had subject matter jurisdiction over
her claim.
[¶8] The N.D.C.C. § 32-12.2-04 notice requirements for claims against the
State of North Dakota or a state employee are jurisdictional. Voigt v. State,
2008 ND 236, ¶ 4, 759 N.W.2d 530. Dismissal for lack of jurisdiction is
appropriate when the notice requirements are not met. See id. at ¶ 5. Maras
does not challenge the court’s factual finding that she did not provide notice.
She argues the notice requirements are not applicable to her counterclaim.
When jurisdictional facts are not in dispute, this Court reviews challenges to
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the district court’s subject matter jurisdiction de novo. Schirado v. Foote, 2010
ND 136, ¶ 7, 785 N.W.2d 235.
[¶9] The Attorney General argues we should summarily affirm the judgment
because there is precedent governing the notice issue raised by Maras in this
appeal. The Attorney General relies on Dickinson Air Service, Inc. v. Kadrmas,
397 N.W.2d 55, 58 (N.D. 1986) and Laufer v. Doe, 2020 ND 159, ¶¶ 14, 19, 946
N.W.2d 707. However, those cases concerned statutes dealing with actions for
damages caused by the application of pesticide. See N.D.C.C. § 28-01-40
(repealed); N.D.C.C. § 4.1-33-18. They did not concern claims or actions against
the State of North Dakota or a state employee. Nor did they require this Court
to interpret the statutory language at issue in this case. Thus, contrary to the
Attorney General’s assertion, we have not addressed the question presented by
this appeal.
[¶10] Section 32-12.2-04(1), N.D.C.C., states in relevant part:
A person bringing a claim against the state or a state employee for
an injury shall present to the director of the office of management
and budget within one hundred eighty days after the alleged injury
is discovered or reasonably should have been discovered a written
notice stating the time, place, and circumstances of the injury . . . .
Under N.D.C.C. § 32-12.2-01(1), claim “means any claim for money damages
brought against the state or a state employee for an injury caused by the state
or a state employee . . . .”
[¶11] Maras’s counterclaim sought damages based on the tort of abuse of
process for the injuries of emotional distress and damage to her reputation.
She sought money damages “in an amount greater than Fifty Thousand
Dollars.” Her counterclaim, compulsory or otherwise, therefore falls within the
plain-language definition of “any claim” because it is one for money damages
against the State for an injury. Maras does not assert she provided written
notice of her claim to the director of the OMB, nor is there anything in the
record to indicate she did. The notice requirements set out in N.D.C.C. § 32-
12.2-04(1) are jurisdictional, and “strict compliance” is required. Ghorbanni v.
North Dakota Council on the Arts, 2002 ND 22, ¶ 8, 639 N.W.2d 507. Because
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Maras sought to bring a claim for money damages against the State and she
did not comply with N.D.C.C. § 32-12.2-04(1), we conclude the district court did
not err when it dismissed her claim for lack of subject matter jurisdiction.
III
[¶12] Maras argues the district court abused its discretion when it ordered
default judgment as a sanction for discovery abuses. She asserts the Attorney
General’s discovery requests were abusive. She claims the Attorney General
sought documents she either did not possess or information that the Attorney
General had already acquired through administrative subpoena powers in a
different case.
[¶13] Rule 37, N.D.R.Civ.P., vests the district court with a “wide spectrum” of
sanctions for discovery abuses, including entry of default judgment. Vorachek
v. Citizens State Bank of Lankin, 421 N.W.2d 45, 50 (N.D. 1988). The court has
“broad discretion” when applying a sanction for a discovery violation. Nelson
v. Nelson, 2019 ND 221, ¶ 13, 923 N.W.2d 386. “Dismissal of an action or entry
of a default judgment as a sanction for discovery abuse should be imposed only
if there is a deliberate or bad faith non-compliance which constitutes a flagrant
abuse of or disregard for the discovery rules.” Vorachek, at 50-51.
[¶14] A party challenging the court’s sanction has the burden of showing an
abuse of discretion. Nelson, 2019 ND 221, ¶ 13. “A court abuses its discretion
when it acts in an arbitrary, unreasonable, or unconscionable manner, it
misinterprets or misapplies the law, or when its decision is not the product of
a rational mental process leading to a reasoned determination.” Id. A party
challenging the imposition of sanctions meets his or her burden “only when it
is clear that no reasonable person would agree with the trial court’s assessment
of what sanctions are appropriate.” Id.[¶15] The district court found Maras “consistently ignored” its discovery orders
deliberately and in bad faith:
Based upon [Maras’s] failure to comply with the Court’s past
orders compelling discovery, her failure to respond to the Court’s
most recent order, her consistent disregard of the State’s discovery
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requests, and her willful failure to produce any responsive
documents in this matter, the Court finds that [Maras’s] non-
compliance is deliberate and in bad faith. [Maras’s] disregard for
the rules of discovery has been a constant refrain from the first
filing of this matter, and it has become clear to the Court she has
no intention of complying with past or future discovery orders.
As she argued to the district court, Maras maintains on appeal that her non-
compliance was permissible because the discovery requests were for
“documents and information of which she was not in possession.” However, the
district court found Maras did not respond to “requests for documents that are
clearly in her control, including tax documents, banking records, online
accounts, e-mail communications, and recordings she already admitted to
creating.” The record supports the court’s finding.
[¶16] Maras also maintains that the Attorney General’s discovery requests
were abusive because they were duplicative of information the Attorney
General had already acquired through administrative subpoena powers. Even
if some documents were duplicative, that would not excuse her non-compliance
with the district court’s orders. See Nelson, 2019 ND 221, ¶ 13 (“even when a
party believes the district court’s discovery order is erroneous, the party must
comply as long as it remains in force”); Bertsch v. Bertsch, 2007 ND 168, ¶ 15,
740 N.W.2d 388 (“Even if [the appellant] thought the district court’s order was
erroneous, she should have complied with it.”); Flattum-Riemers v. Flattum-
Riemers, 1999 ND 146, ¶ 11, 598 N.W.2d 499 (failure to obey an order, even if
erroneous and later reversed, is punishable as contempt of court).
[¶17] The district court gave Maras multiple warnings and ample opportunity
to comply with its discovery orders, and she did not do so. See Nelson, 2019 ND
221, ¶ 19 (affirming the striking of claims as a sanction for discovery abuses
when the district court gave plaintiff “multiple opportunities to comply and he
refused”). The record supports the court’s finding that Maras’s non-compliance
was deliberate and in bad faith. We hold the district court did not abuse its
discretion when it ordered default judgment as a sanction for discovery abuses.
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IV
[¶18] The Attorney General has filed a “Motion for Summary Affirmance” and
a motion to strike various factual allegations in Maras’s briefing on appeal. We
deny both motions.
V
[¶19] We affirm the default judgment and the judgment dismissing Maras’s
counterclaim.
[¶20] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
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