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Keywords

damageslitigationattorneydiscoverynegligencemotionwillbad faithcivil procedure
damagesattorneydiscoveryliabilitymotionwillworkers' compensationsustainedbad faithcivil procedure

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Schuff v. A.T. Klemens & Son, 303 Mont. 274, 16 P.3d 1002, 2000 MT 357

Facts

William Schuff died from severe burns after an accident at M & H Gas Station while repairing a submersible pump. The incident occurred on September 12, 1991, when accumulated gas fumes ignited. Schuff's estate alleged negligence against Klemens, claiming faulty electrical work contributed to the accident. Klemens denied responsibility, asserting it only connected the pump to a new electrical service panel. The litigation was prolonged, with Klemens accused of discovery violations, leading to a default judgment against them.

Schuff initiated this action in 1991 to recover damages for the alleged wrongful death of her husband, William Schuff, who died as a result of burns sustained at the M & H Gas Station in Great Falls, Montana. The accident occurred on September 12, 1991, while Schuff's husband, an employee of Kenneco, Inc., was repairing a submersible pump in a manhole above an underground gasoline storage tank at the station. Accumulated gas fumes ignited, and engulfed Schuff in flames. He died from the resulting severe burn injuries on September 25, 1991.

Issue

Did the District Court abuse its discretion in denying Klemens' motion to disqualify the Marra firm from representing Schuff, and was the entry of a default judgment against Klemens appropriate as a sanction for discovery violations?

Klemens raises the following issues: 1. Did the District Court abuse its discretion when it denied Klemens' motion to disqualify the Marra firm from representing Schuff? 2. Did the District Court abuse its discretion when it entered a default judgment against Klemens on the issue of liability as a sanction under Montana Rules of Civil Procedure 37(d) for alleged discovery abuses?

Rule

The court applied Rule 37(d) of the Montana Rules of Civil Procedure, which allows for default judgment as a sanction for failure to comply with discovery requests.

The court stated that 'Rule 37(d), M.R.Civ.P., permits a court, under certain specific circumstances, to impose a default sanction without first issuing an order to compel discovery.'

Analysis

The court found that Klemens' discovery violations were willful and in bad faith, justifying the imposition of a default judgment. The court also determined that Klemens was not prejudiced by the Marra firm's continued representation of Schuff, as there was no substantial relationship between the prior representation and the current case.

The court concluded that Klemens committed 'no less than four direct discovery violations' that were subject to Rule 37(d), M.R.Civ.P. The court concluded that '[c]onsidering all of this evidence together … the concealment of this information over a period of 3 ½ years, from the first service of interrogatories, was willful and in bad faith.'

Conclusion

The Supreme Court affirmed the District Court's decision to impose a default judgment against Klemens for discovery violations but reversed the ruling on certain offsets and the award of attorney fees.

The District Court issued an order and amended judgment on January 4, 1999. The District Court concluded that Schuff was not entitled to prejudgment interest for the medical and funeral expenses received from workers' compensation, or for the lost earnings award.

Who won?

Colleen Karen Schuff prevailed in the case, as the court upheld the default judgment against Klemens and awarded damages, citing Klemens' willful discovery violations.

Schuff prevailed in part, as the court determined that Klemens' claims for collateral source reduction and offset must be reduced by the costs of recovery to Schuff, including 'reasonable' attorney's fees.

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