Velma Walker v. Hunter Donaldson, Llc Rebecca Rohlke ( 2016 )

Filed
Washington State
Court of Appeals
Division Two
October 25, 2016
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
VELMA WALKER, individually and as a
class representative; JAMES STUTZ,
individually and as a class representative;
KARL WALTHALL, individually and as a No. 46814-0-II
class representative; GINA CICHON, (Consol. with No. 47134-5-II)
individually and as a class representative, and;
MELANIE SMALLWOOD, individually and
as a class representative,
Respondents,
UNPUBLISHED OPINION
v.
HUNTER DONALDSON, LLC, a California
limited liability company; MULTICARE
HEALTH SYSTEM, a Washington nonprofit
corporation; MT. RAINIER EMERGENCY
PHYSICIANS, a Washington for-profit
corporation; REBECCA A. ROHLKE,
individually, on behalf of the marital
community and as agent of Hunter Donaldson;
JOHN DOE ROHLKE, on behalf of the
marital community; RALPH WADSWORTH,
individually, on behalf of the marital
community, and as agent of Hunter Donaldson,
and; JANE DOE WADSWORTH, on behalf of
the marital community.
Appellants.
SUTTON, J. — Ralph Wadsworth and Rebecca Rohlke appeal the trial court’s orders to
compel discovery, award sanctions, and enter judgments against them for their willful violations
of the court’s orders. We hold that the trial court had the authority to hear the plaintiffs’ motions
to compel because plaintiffs’ counsel satisfied CR 26(i)’s requirements. We also hold that the trial
No. 46814-0-II
(Consol. with No. 47134-5-II)
court’s orders to compel were clear and that the trial court’s finding, that Wadsworth and Rohlke
had control over the corporate documents, is supported by the record. Thus, we hold that the trial
court did not abuse its discretion when it ordered them to answer the discovery and produce all
responsive documents.
We also hold that the trial court’s finding, that Wadsworth and Rohlke willfully violated
the court’s orders, is supported by the record. Thus, we hold the trial court did not abuse its
discretion when it awarded sanctions and entered judgments against them.1 We affirm the trial
court’s orders, and we also award Walker her reasonable attorney fees and costs on appeal.
FACTS
I. BACKGROUND
A. PROPOSED CLASS ACTION COMPLAINT
This appeal arises from a proposed class action complaint filed by Velma Walker and other
plaintiffs (collectively “Walker”), against Hunter Donaldson, LLC, and its corporate employees,
Wadsworth, the corporate owner, and Rohlke, a corporate officer. Walker received healthcare
services from MultiCare and other defendants for traumatic injuries caused by third-party
tortfeasors. MultiCare contracted with Hunter Donaldson, a California corporation, to act as its
agent in Washington, and to file and collect medical services liens under RCW 60.44.020.2
1
The trial court granted a CR 54(b) certification.
2
RCW 60.44.010 provides that medical care providers for a person who has received a traumatic
injury shall have a lien upon any claim, right of action, and/or money to which the person is entitled
against any tortfeasor.
2
No. 46814-0-II
(Consol. with No. 47134-5-II)
Walker alleged that Hunter Donaldson, Wadsworth, Rohlke, and MultiCare fraudulently
registered Rohlke as a Washington State notary, that she falsified medical liens on behalf of
MultiCare, and that she violated state law. Walker also alleged that because of Rohlke’s fraudulent
representations, Hunter Donaldson was not authorized to act as an agent for MultiCare and, thus,
the liens were invalid. Walker further alleged that Wadsworth’s and Rohlke’s actions deprived
Walker and other plaintiffs of the use of their medical funds because Hunter Donaldson had filed
and collected on the medical services liens, and that Hunter Donaldson received higher payments
on the liens than the payments negotiated with the plaintiffs’ health insurance plans. Walker
alleged fraud, conspiracy, negligence, Consumer Protection Act3 violations, and other tort actions
on behalf of the proposed class members.
B. INITIAL DISCOVERY REQUEST
In May 2013, Walker served Hunter Donaldson, Wadsworth, and Rohlke with the
complaint, the amended complaint, and the initial discovery, including interrogatories, requests
for production, and requests for admission. The discovery sought information related to the
3
Ch. 19.86 RCW.
3
No. 46814-0-II
(Consol. with No. 47134-5-II)
allegations against Hunter Donaldson,4 Wadsworth,5 and Rohlke involving their contract with
MultiCare.
C. REMOVAL TO FEDERAL COURT AND REMAND
On May 31, 2013, Hunter Donaldson and Wadsworth then removed the action to federal
district court. On June 10, Hunter Donaldson and Wadsworth sent a letter to Walker objecting to
the May 1 discovery requests because “the original June 10 deadline . . . to respond to discovery
served with the initial complaint [was] no longer effective.” Clerk’s Papers (CP) at 244. Hunter
Donaldson and Wadsworth also stated that “[s]hould [Walker] have a contrary view, [they deny]
all requests for admission and [object] to all interrogatories and requests for production.” CP at
244.
On January 17, 2014, the parties agreed to a 30-day stay of the federal court proceedings
to facilitate settlement negotiations. On January 22, the federal district court remanded the action
to Pierce County Superior Court. On February 17, the stay of proceedings expired without the
parties having settled the action.
4
Walker requested that Hunter Donaldson produce all documents related to requests for
reimbursement of business expenses from Wadsworth and Rohlke between 2008 and 2013.
5
Walker requested that Wadsworth produce the following: all documents related to the liens
recorded on behalf of MultiCare and legally executed by Wadsworth between 2010 and 2013; all
documents to or from MultiCare related to Rohlke’s application for notary public in Washington;
all communications to and from MultiCare’s vice president in charge of the revenue cycle between
2009 and 2013; all communications to and from MultiCare related the execution and collection of
the liens between 2009 and 2013; all work schedules and calendars between 2010 and 2013; all
state and federal tax returns for 2009-2012; and all cell phone bills for the time period between
January and April 2013.
4
No. 46814-0-II
(Consol. with No. 47134-5-II)
D. CR 26(i) CONFERENCE
On March 6, the parties held a CR 26(i) telephone conference because they disagreed about
whether the May 2013 discovery was still valid due to the removal to, and remand from, federal
court. On March 10, Walker sent a letter to defense counsel, requested depositions, and stated that
a CR 26(i) conference related to the initial discovery had been held the week before.
I understand from our CR 26(i) conference last week that you will take the position
that the removal somehow eviscerated that set of discovery so we will file our
motion to compel on Thursday and obtain guidance from the Court on that issue.
CP at 232.
II. MOTION AND ORDER TO COMPEL
A. MARCH 2014 MOTION AND THE TRIAL COURT’S ORDER TO COMPEL
On March 13, 2014, Walker filed her first motion to compel discovery from Hunter
Donaldson and Wadsworth.6 Walker argued that the discovery requests to Hunter Donaldson and
Wadsworth had been outstanding since May 1, 2013.
At the hearing on March 28, defense counsel confirmed that she represented Hunter
Donaldson, Wadsworth, and Rohlke. Defense counsel argued that removal of the action to federal
court mooted the May 2013 discovery request, that they had timely objected on June 10, 2013, that
the requests were overly broad, that some of the discovery referred to confidential medical
information, and that Walker could have simply served the discovery requests again, but had not
done so. Hunter Donaldson and Wadsworth asked the trial court to rule that the discovery had
6
The March 28 motion to compel did not seek to compel discovery from Rohlke.
5
No. 46814-0-II
(Consol. with No. 47134-5-II)
been served on March 28, to allow them 30 days to respond, or to direct Walker to serve the
discovery requests again.
Before addressing the merits of the motion to compel, the trial court confirmed that the
protective order it had entered earlier addressed the confidential medical information, that the
requested discovery related to the allegations in the amended complaint, and that the parties had
held a CR 26(i) conference on March 6. After hearing arguments, the trial court granted the motion
to compel, ruled that the May 2013 discovery did not need to be reserved, and ordered that “[a]ll
outstanding discovery responses will be produced by no later than close of business on April 25,
2014; and . . . [t]he responses will include a good faith attempt to fully answer each interrogatory
or request for production, or provide an objection justified in law.” CP at 283.
B. DISCOVERY RESPONSES
On April 11, the parties appeared in court on a related matter, and the trial court asked
defense counsel whether the discovery would be produced by the April 25 deadline. Defense
counsel responded that it was “[their] plan to produce the discovery.”7 Verbatim Report of
7
Although Rohlke was not included in the initial motion to compel, defense counsel, who
represented Hunter Donaldson, Wadsworth, and Rohlke, advised the trial court on April 11 that
the corporate defendants planned to comply with the trial court’s March 28 order to compel.
6
No. 46814-0-II
(Consol. with No. 47134-5-II)
Proceedings (VRP) (April 11, 2014) at 27. On April 25, Hunter Donaldson, Wadsworth, and
Rohlke provided partial responses, made numerous blanket objections, and did not produce any
documents.8
C. TELEPHONE CONFERENCE, E-MAIL, AND SUPPLEMENTAL RESPONSES
On May 2, 2014, the parties held a CR 26(i) telephone conference to discuss the discovery
request and the April 25 responses and objections. After the telephone conference, Hunter
Donaldson and Wadsworth “informally” produced a single spreadsheet of medical services lien
data to Walker. CP at 381. However, they did not identify the specific request for production that
the data answered or clarify their prior responses.9
On May 6, Hunter Donaldson and Wadsworth informally produced 40 pages of emails
related to Hunter Donaldson’s failure to pursue liens against patients with commercial insurance.
A large number of the emails were partially or entirely redacted without a privilege log or any
explanation for the redactions,10 and the discovery responses were not signed or certified as
8
Wadsworth and Rohlke objected to several of the requests for production and stated that the
requests were “overly broad, unduly burdensome to respond to and not reasonably tailored to the
discovery of admissible information” related to Walker’s claims. They also stated that the requests
were “vague, ambiguous . . . and inaccurate,” and that Wadsworth and Rohlke “[would] produce
responsive documents identified as a result of a reasonable search.” CP 308-368. In subsequent
hearings, defense counsel argued that the trial court’s March 28 order to compel did not require
Hunter Donaldson, Wadsworth, or Rohlke to actually produce documents by April 25, but only
required that they serve their answers to the discovery by April 25.
9
Hunter Donaldson and Wadsworth admitted that this same spreadsheet had been previously
provided in discovery to MultiCare and Walker in a separate, related lawsuit.
10
See CR 26(b)(6).
7
No. 46814-0-II
(Consol. with No. 47134-5-II)
required under CR 26(g).11 On May 13, Walker’s counsel emailed defense counsel about the lack
of responses and stated that “[he] would love to hear from [Hunter Donaldson] that [the discovery
responses were] coming today or tomorrow so we can avoid the motion practice.” CP at 372.
III. MAY 2014 MOTION TO COMPEL, MOTION FOR SANCTIONS, SUPPLEMENTAL RESPONSES, AND
THE TRIAL COURT’S ORDER
On May 15, Walker filed a second motion to compel and also filed a motion for sanctions
under CR 37(b)(2) against Hunter Donaldson, Wadsworth, and Rohlke. Walker’s counsel certified
that “he discussed these issues by email with the Hunter Donaldson defendants’ [counsel] on May
13, 2014.” CP at 292. On May 22, for the first time in their supplemental discovery responses,
Wadsworth and Rohlke stated that they had “no responsive documents within [their] possession
or control” and that the documents were “in the possession or control of Hunter Donaldson.” Their
counsel signed and certified the supplemental discovery responses under CR 26(g). Hunter
Donaldson did not provide any supplemental responses.
On May 23, the trial court heard Walker’s second motion to compel. Walker argued that,
although Hunter Donaldson, Wadsworth, and Rohlke had stated that they would produce
documents after a reasonable search, they had failed to produce any documents in response to the
May 2013 discovery request. Walker also argued that the defendants violated the trial court’s
11
CR 26(g) requires that an attorney of record sign and certify the discovery responses as being
provided (1) consistent with these rules, (2) not interposed for any improper purpose, and (3) not
unreasonable or unduly burdensome or expensive. If a certification is made in violation of
CR 26(g), the court shall impose, upon the person who made the certification or the party on whose
behalf the certification was made, an appropriate sanction, which may include an order for
reasonable attorney fees.
8
No. 46814-0-II
(Consol. with No. 47134-5-II)
March 28 order to compel because they failed to produce all responsive documents by April 25,
and they had represented to the court on April 11 that the deadline would be met. Walker requested
an award of fees and costs under CR 37(b)(d) for both motions to compel.
Hunter Donaldson, Wadsworth, and Rohlke repeated their argument that removal of the
case to federal court mooted the discovery request, and that they had timely objected to the
discovery. They also argued that the May 2, 2014, phone call with Walker did not satisfy the meet
and confer requirement under CR 26(i), and that the May 13 email by Walker’s counsel did not
satisfy the certification requirement under CR 26(i). They asked that “the motion should be denied
just for lack of conference” and then stated that
Hunter Donaldson is absolutely willing and happy to make document production;
we just need some help and clarification and illumination on a target from plaintiffs’
counsel. There hasn’t been really any attempts to confer with Hunter Donaldson
on this issue by [plaintiff’s counsel]. We’ve had one phone call, May 2nd, to
discuss document production and [plaintiff’s counsel] helped some, gave us some
idea of specific things he was looking for, and Hunter Donaldson produced those
to him immediately informally, and since then there’s been no discussion of this
document production issue despite Hunter Donaldson’s attempts to contact
[plaintiff’s counsel] about it.
VRP (May 23, 2014) at 4-5.
The trial court then held the following colloquy,
THE COURT: I’m confused by the 26(i) reference. Isn’t the 26(i) reference now
moot because the Court entered an order on March 28th that required that there be
full compliance by April 25th? . . . So the requirement of CR 26(i) is over, that
would have come in March.
VRP (May 23, 2014) at 5.
[WALKER’S COUNSEL]: Yes. . . . [T]here was a single document that was
produced, it is Ms. Rohlke’s notary certificate by the State of Washington stating
she had a notary license. That’s the document they produced. So I ask Your Honor
9
No. 46814-0-II
(Consol. with No. 47134-5-II)
to sanction these interrogatories. These were propounded a year ago and they were
served when the lawsuit was filed.
So finally in the start of 2014, time came to answer the discovery; they
refused. There was a first motion to compel, as the Court is aware of, and the Court
generously gave them 30 more days . . . to fully comply with the discovery request
and they have not done so.
VRP (May 23, 2014) at 6-7.
[DEFENSE COUNSEL]: I’d like to clarify what the original order on this
discovery was; that the motion to compel was the result of the procedural quagmire
after the case was removed and subsequently remanded, and Hunter Donaldson had
simply asked that the discovery be re-propounded. That motion was not regarding
the content of any discovery, it was regarding when it had to be answered and
Hunter Donaldson and all defendants then answered the discovery. This is the
plaintiff’s first motion about the content of this discovery and I think it’s
disingenuous to try and rope in this first motion as Hunter Donaldson having
violated it when that’s not the case here.
Hunter Donaldson answered that discovery, said it would produce
documents as a result of a reasonable search and is willing to do that and is happy
to do that, but we need some clarification from the plaintiffs on that and we have
gotten very little despite many attempts to get them about what they would like to
see.
VRP (May 23, 2014) at 10-11.
After hearing arguments, the trial court ruled,
This will be my ruling. I am going to impose a daily sanction between now and
May 30th for $ 100.00 per day, between now and May 30th, until proper answers
are produced, documents are produced, and the appropriate signatures are on all the
documents.
I think my order was quite clear in March, and I also think -- I agree with
[Walker’s counsel] that the interrogatories and request for production are tailored
to the issues in this case, are not overbroad or vague, and should be completely
answered. I’m also imposing $2,500.00 in attorney’s fees for [Walker’s counsel’s]
presence.
VRP (May 23, 2014) at 11-12.
10
No. 46814-0-II
(Consol. with No. 47134-5-II)
The trial court granted Walker’s second motion to compel and entered an order to compel
the production of discovery responses and all responsive documents by Hunter Donaldson,
Wadsworth, and Rohlke.12 The trial court also granted Walker’s motion for sanctions and awarded
monetary sanctions under CR 37 against Hunter Donaldson, Wadsworth, and Rohlke. The trial
court’s May 23 order stated,
Defendant Hunter Donaldson, Wadsworth and Rohlke are hereby [o]rdered
to produce full and complete responses to Plaintiff’s first Interrogatories and
Requests for Production of Documents, specifically including all responsive
documents, and sign the same. It is further [ordered] that Defendant Hunter
Donaldson, Wadsworth and Rohlke are jointly ordered to pay $2500 in attorney
fees, and pay sanctions until they comply with this order, as follows:
Wadsworth, Rohlke and Hunter Donaldson shall jointly pay $100.00 per day
through May 30, 2014, and $1000.00 per day for each day after May 30, 2014, for
each day that Hunter Donaldson, Rohlke, and Wadsworth have not fully answered
plaintiff’s interrogatories, produces full and complete responses to plaintiffs’
requests for production, signed the discovery requests, and delivered the same to
plaintiffs’ counsel.
CP at 400-02.
On May 29, Wadsworth and Rohlke served Walker with their second supplemental
responses to the initial discovery request but did not provide supplemental answers or documents.
Instead, they confirmed that they had produced all responsive documents in their possession except
their tax returns, and they objected to most of the discovery with blanket objections. Their counsel
signed and certified the discovery responses under CR 26(g). On June 9, Walker’s counsel wrote
a letter to counsel for Hunter Donaldson, Wadsworth, and Rohlke and reminded them that
12
Even though Rohlke was not named in the initial motion to compel, Rohlke was included in the
second motion to compel and in the trial court’s May 23 order to compel.
11
No. 46814-0-II
(Consol. with No. 47134-5-II)
sanctions were accruing and that they owed Walker the discovery and the production of
documents.13
IV. MOTIONS AND ORDERS FOR SANCTIONS AND ENTRY OF JUDGMENT
A. JULY HEARING
On July 17, 2014, Walker filed a motion for entry of a partial judgment against Wadsworth
and Rohlke for $51,300, the amount of the accrued sanctions to date. Walker also requested that
the trial court impose sanctions and enter a judgment against their counsel in the amount of $5,000
for his violation of CR 26(g).14 Walker argued that Wadsworth and Rohlke continued to violate
the May 23 order to compel by withholding documents. Walker argued that Wadsworth and
Rohlke were corporate employees, they continued to have daily involvement with Hunter
Donaldson, they had access to the corporate documents requested in discovery, and they should
be required to provide the requested documents.
Wadsworth and Rohlke argued that the requested documents were the corporate property
of the Hunter Donaldson, and that they did not have control of them. Hunter Donaldson argued
that because Wadsworth and Rohlke continued to be intimately involved in the daily operations
within Hunter Donaldson, that entry of a judgment jointly against Wadsworth and Rohlke would
13
In June 2014, Hunter Donaldson filed Chapter 11 Bankruptcy and a notice of automatic stay of
proceedings. On July 29, Hunter Donaldson filed an emergency motion for preliminary injunction
in the bankruptcy court and requested a stay of all actions against Wadsworth and Rohlke in the
Walker lawsuit. On August 6, the bankruptcy court denied Hunter Donaldson’s motion for a
preliminary injunction to enjoin the proceedings against Wadsworth and Rohlke.
14
Walker’s motion for sanctions and the entry of judgment did not include Hunter Donaldson, due
to the bankruptcy stay entered with respect to Hunter Donaldson.
12
No. 46814-0-II
(Consol. with No. 47134-5-II)
“create a judgment against Hunter Donaldson” and would violate the automatic bankruptcy stay.
CP at 489. Wadsworth and Rohlke also renewed their objections to producing tax records.
On August 1, the trial court heard Walker’s second motion for sanctions and for entry of
judgment. Before proceeding on the merits, the trial court confirmed that the bankruptcy court’s
stay applied only to Hunter Donaldson, and that the trial court could proceed as to Wadsworth and
Rohlke. The following colloquy took place:
[COUNSEL FOR HUNTER DONALDSON]: So in order for you to impose
sanctions based on their not getting documents from Hunter Donaldson, that would
presuppose a finding today that Hunter Donaldson is in continuing violation of that
order, which of course - -
THE COURT: No, I will not.
[COUNSEL FOR HUNTER DONALDSON]: -- the Court cannot do.
THE COURT: I will not do that.
VRP (August 1, 2014) at 11.
THE COURT: I can't believe that they don't have written electronic
communications between Wadsworth and [MultiCare vice president], work
schedules or calendars, cell phone bills. I mean, that seems to be pretty
straightforward.
[COUNSEL FOR WADSWORTH AND ROHLKE]: Our position is that Ralph
Wadsworth and Rebecca Rohlke did not have control over the company's E-mail
server on which E-mails and calendars are located, and they do not have control
over bill records.
VRP (August 1, 2014) at 14.
[COUNSEL FOR HUNTER DONALDSON]: E-mails and other documents that
were generated in the course of their business are documents of the company.
They're owned and in possession of two other companies under the stay, nothing
can be done to force that those documents be turned over. No order can be issued
as a result of anybody not turning those over because of the stay.
13
No. 46814-0-II
(Consol. with No. 47134-5-II)
VRP (August 1, 2014) at15.
The trial court found that Wadsworth and Rohlke, as corporate employees of Hunter
Donaldson, had access to the requested corporate documents and stated,
THE COURT: [Their failure to produce the documents is] not being condoned.
The relief requested today is not to compel, I have already done that. The relief
requested today is to -- enter judgment, and I’m going to do that. I’m not going to
sanction [counsel for Wadsworth and Rohlke]. So whatever it is through today,
I’m prepared to enter an order against Wadsworth and Rohlke only.
....
THE COURT: I already ordered Wadsworth and Rohlke to produce those records
and they’ve failed to do it. I mean, at the very least what I could do is enter a
judgment that would go right up to the date that the bankruptcy stay was filed. I
mean, as you can tell, I’m not very happy about what’s happened in this case. I
think Rohlke and Wadsworth and frankly Hunter Donaldson have been evading the
Court’s orders.
VRP (August 1, 2014) at 16-17.
The trial court found “that Defendants Ralph Wadsworth and Rebecca Rohlke remained in
violation of the Court’s May 23 order compelling discovery responses” through August 1, and
granted Walker’s motion for entry of judgment in the accrued amount of $51,300. CP at 568. The
judgment and order were filed on August 1, 2014. The trial court did not award sanctions or enter
judgment against defendants’ counsel.
B. SEPTEMBER HEARING
On September 17, Walker filed another motion for sanctions and entry of judgment against
Wadsworth and Rohlke. Walker also moved nunc pro tunc to clarify that the trial court’s
August 1 order found Wadsworth and Rohlke in contempt of the May 23 order to compel because
the order included a condition that imposed continuing sanctions. On September 26, another trial
court judge heard these motions.
14
No. 46814-0-II
(Consol. with No. 47134-5-II)
At the hearing, Walker argued that Wadsworth and Rohlke had failed to fully respond to
the May 2013 discovery requests and had not yet provided calendars, emails, cell phone records,
and other written correspondence related to their contract with MultiCare.15 In response,
Wadsworth and Rohlke argued that the trial court’s August 1 order should not be characterized
nunc pro tunc as an order granting CR 37 sanctions based on willful violations or as a contempt
order, because the court did not use the language required to find statutory contempt under
RCW 7.21 in its ruling or in its order. Wadsworth and Rohlke also argued that they did not possess
any additional responsive documents and that they believed they had complied in good faith when
they provided their responses.
The trial court found that the remaining responsive records were within Wadsworth’s and
Rohlke’s possession and control, that they willfully evaded the trial court’s previous order, and
that they were in contempt of the court’s order under CR 37, stating,
THE COURT: [Hunter Donaldson’s counsel], you’ve respectfully and
appropriately argued . . . the positions here, but I think these individuals are—are
indeed trying to hide behind the form of an LLC and they don’t want to comply.
That’s the conclusion that I draw from what the evidence is. And the sanctions
should continue.
VRP (September 26, 2014) at 31.
The trial court granted Walker’s motion for sanctions and for entry of judgment. However,
the trial court denied the motion for a nunc pro tunc order that the August 1 order was an order for
statutory contempt, but found Wadsworth and Rohlke were in contempt of court under
15
Wadsworth and Rohlke produced the requested tax returns two days after Walker filed the
September 17 motion.
15
No. 46814-0-II
(Consol. with No. 47134-5-II)
CR 37(b)(2)(D) “for their willful failure to comply with the Court’s May 23, 2014, Order
compelling discovery responses.” CP at 912. The trial court awarded sanctions of $1,000 per day
from July 18 to September 26, and entered a second judgment in the amount of $70,000 against
Wadsworth and Rohlke.
C. DECEMBER HEARING
On December 4, Walker filed a motion for entry of a third judgment against Wadsworth
and Rohlke. Walker requested that the trial court find them in contempt under CR 37(b)(2)(D),
and requested that the trial court enter an additional judgment of $18,000 for their willful and
deliberate refusal to comply with the trial court’s orders between September 27 and October 15,
2014.16 Wadsworth and Rohlke argued that the trial court no longer had jurisdiction because they
had appealed the earlier sanctions, judgments, and underlying orders. They also argued that they
had misunderstood the trial court’s previous orders to compel, that they had a “good faith belief”
that they were no longer required to produce the corporate documents,17 and that the requested
discovery documents were no longer necessary. CP at 981.
On December 19, the trial court granted Walker’s motion for sanctions and entry of
judgment, and entered a judgment in the amount of $18,000 against Wadsworth and Rohlke. The
trial court stated,
16
On October 15, Wadsworth and Rohlke produced over 40,000 pages of discovery documents,
and provided their third supplemental responses.
17
On October 28 and 29, Wadsworth and Rohlke both admitted in their depositions that they had
access to their emails and calendars.
16
No. 46814-0-II
(Consol. with No. 47134-5-II)
THE COURT: [Counsel for Wadsworth and Rohlke], I recognize the result is harsh
on your clients, but the Court’s order was clear. I disagree with your assessment
that [the prior judges]’s order was not clear. I think the order that this Judge entered
was clear as well. I think I have to and must retain the authority to enforce a
contempt order, and I am going to do so.
VRP (December 19, 2014) at 12. The trial court made the following findings of fact:
1. Defendants Ralph Wadsworth and Rebecca Rohlke are hereby found to
be in contempt of court pursuant to CR 37(b)(2)(D) for their willful failure to
comply with the Court’s May 23, 2014, Order compelling discovery responses and
September 26, 2014, Order Granting Plaintiffs’ Motion for Sanctions for the period
from September 26, 2014, to October 15, 2014.
2. Judgment shall be entered in favor of Plaintiffs and against Ralph
Wadsworth and Rebecca Rohlke for their continued failure to comply with the
Court’s May 23, 2014, Order compelling discovery responses in the amount of
$1,000.00 per day from September 17, 2014, through October 15, 2014, totaling
$18,000.00.
CP at 1152-53. Wadsworth and Rohlke18 appealed.19
ANALYSIS
Wadsworth and Rohlke argue that the trial court lacked the authority to hear Walker’s
second motion to compel because the May 2 telephone conference did not satisfy the meet and
confer requirement of CR 26(i). Wadsworth and Rohlke also argue that the May 13 email by
Walker’s counsel did not meet the certification requirement of CR 26(i). Wadsworth and Rohlke
argue that a literal compliance with CR 26(i) is required based on this court’s holdings in Clarke
18
Hunter Donaldson did not appeal.
19
On January 30, 2015, the trial court granted the class action settlement and dismissed Walker’s
claims with prejudice. The settlement agreement was filed on January 30, 2015.
17
No. 46814-0-II
(Consol. with No. 47134-5-II)
v. Office of Attorney General20 and Case v. Dundom.21 We hold that because Walker satisfied CR
26(i)’s requirements, the trial court had the authority to hear the motion to compel.
I. THE TRIAL COURT’S AUTHORITY TO HEAR THE MOTION TO COMPEL
We review the trial court’s decision to hear a CR 37 motion to compel de novo. Case v.
Dundom, 115 Wash. App. 199, 202, 58 P.3d 919 (2002) (citing Rudolph v. Empirical Research Sys.,
Inc., 107 Wash. App. 861, 866, 28 P.3d 813 (2001)).
A. CR 26(i) REQUIREMENTS
CR 26(i) sets forth the requirements for counsel to meet and confer and for the moving
party to certify compliance with these requirements prior to filing a motion to compel discovery
and/or sanctions:
Motions; Conference of Counsel Required. The court will not entertain any
motion or objection with respect to [rule 26] unless counsel have conferred with
respect to the motion or objection. Counsel for the moving or objecting party shall
arrange for a mutually convenient conference in person or by telephone. If the
court finds that counsel for any party, upon whom a motion or objection in respect
to matters covered by such rules has been served, has willfully refused or failed to
confer in good faith, the court may apply the sanctions provided under rule 37(b).22
Any motion seeking an order to compel discovery or obtain protection shall include
counsel’s certification that the conference requirements of this rule have been met.
20
Cl. Ch. v. Office of Attorney General, 133 Wash. App. 767, 138 P.3d 144 (2006).
21
Case v. Dundom, 115 Wash. App. 199, 58 P.3d 919 (2003).
22
CR 37(b) authorizes the trial court to order sanctions for a party’s failure to answer a question
after being directed or ordered to do so by the court. A party’s failure to abide by the court’s order
may be considered a contempt of court.
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No. 46814-0-II
(Consol. with No. 47134-5-II)
CR 26(i) (emphasis added). CR 26(i)’s meet and confer requirement is designed to facilitate
nonjudicial solutions to discovery problems by requiring a conference and certification of the
conference by the moving party before the court may hear the motion. Case, 115 Wash. App. at 204.
We have held that a “contemporaneous, two-way communication” is necessary before the trial
court has the authority to hear a motion to compel because the rule requires the moving party to
arrange for a telephone or in person conference, and to certify that CR 26(i) requirements have
been met. Clarke v. Office of Attorney General, 133 Wash. App. 767, 780, 138 P.3d 144 (2006);
Case, 115 Wash. App. at 204; see Rudolph, 107 Wash. App. at 867.
B. COMPLIANCE WITH CR 26(i)
On March 6, 2014, Walker’s counsel held the first telephone conference with defense
counsel for Hunter Donaldson, Wadsworth, and Rohlke to discuss whether the May 2013
discovery was still valid after the case had been remanded from federal court. Walker’s counsel
confirmed this discussion in a letter dated March 10. Walker then filed her first motion to compel
and her counsel certified that the March 6 telephone discussion complied with CR 26(i).23 The
trial court heard Walker’s first motion to compel on March 28 and defense counsel was present.24
The trial court ordered that “[a]ll outstanding discovery responses will be produced by no later
than close of business on April 25, 2014.” CP at 282. On April 11, defense counsel appeared in
23
The certification stated “[Walker’s counsel] certifies that he discussed these issues by telephone
with the [Hunter Donaldson Defendants’ counsel] on March 6, 2014.” CP at 118.
24
Hunter Donaldson, Wadsworth, and Rohlke do not assign error to the trial court’s authority to
hear the March 28, 2014 order.
19
No. 46814-0-II
(Consol. with No. 47134-5-II)
court on a related matter and told the court that “it was [their] plan to produce the discovery” by
the April 25 court-ordered deadline. VRP (April 11, 2014) at 27. On April 25, Hunter Donaldson,
Wadsworth, and Rohlke responded to many of the discovery requests by stating that responsive
documents would be produced after a reasonable search. They also made numerous objections,
and did not produce any documents.
Walker’s counsel then arranged for and held a second telephone conference on May 2 to
discuss the outstanding discovery requests before filing a second motion to compel. After the
May 2 telephone conference, Walker’s counsel then followed up with a May 13 email, and also
certified that the CR 26(i) requirements had been met, relying on the May 13 email.
Under the mandatory language of CR 26(i) that counsel for the moving party shall arrange
for a telephone conference before filing a motion to compel, Walker’s counsel met this requirement
before filing the second motion to compel. Further, under the mandatory language of CR 26(i)
requiring that the moving party “shall include counsel’s certification that the conference
requirements of this rule have been met,” Walker’s counsel also met this requirement. Walker’s
counsel had a contemporaneous two-way conversation with defense counsel, unlike the counsel
20
No. 46814-0-II
(Consol. with No. 47134-5-II)
for the moving party in Clarke, 25 Case,26 and Rudolph.27 Clarke, 133 Wash. App. 780-81; Case,
115 Wash. App. at 202-04; Rudolph, 107 Wash. App. at 867. Because trial counsel met the
requirements of CR 26(i), we hold that the trial court had the authority to hear the motion to compel
on May 23.
II. THE TRIAL COURT’S ORDERS TO COMPEL
Wadsworth and Rohlke argue that they did not have control over the corporate documents,
the trial court did not find that they had control, and thus, the trial court abused its discretion when
it ordered them to produce the corporate documents. We hold that the trial court did find that
Wadsworth and Rohlke had control over the corporate documents, and that the trial court’s finding
is supported by the record. Thus, we hold that the trial court did not abuse its discretion when it
ordered them to produce all responsive documents by April 25, 2014.
25
In Clarke, the moving party certified that she complied with the conference requirement when
the parties agreed that they spoke on the telephone twice to resolve outstanding discovery issues
and agreed on a time when the moving party would review the outstanding material. 133 Wn.
App. 780. However, we held that because Clarke “failed to retrieve the information and, instead,
without a further CR 26(i) conference to discuss any remaining discovery issues, filed the motion
to compel,” the telephone discussions did not satisfy the CR 26(i) conference requirement. 133
Wash. App. 780-81.
26
In Case, we held that the moving party failed to satisfy the “in person or by phone” requirement
under CR 26(i) when he mailed three letters regarding discovery and stated that he would file a
motion to compel if he did not receive answers, but did not pursue further communication before
he filed the motion to compel. 115 Wash. App. at 202-04.
27
In Rudolph, we held that a letter by the moving party to opposing counsel which mentioned the
conference requirement was insufficient when the letter did not indicate that the parties attempted
to arrange for such a conference and the motion did not contain a CR (26(i) certification that the
conference requirements had been met. 107 Wash. App. at 867.
21
No. 46814-0-II
(Consol. with No. 47134-5-II)
We review a trial court’s ruling on a motion to compel for an abuse of discretion. Rivers
v. Wash. State Conference of Mason Contractors, 145 Wash. 2d 674, 684, 41 P.3d 1175 (2002). An
abuse of discretion occurs when the trial court’s decision rests on untenable grounds or when no
reasonable judge would have reached the same conclusion. Mayer v. STO Indus., Inc., 156 Wash. 2d
677, 684, 132 P.3d 115 (2006).
On May 22, 2014, for the first time, Wadsworth and Rohlke stated that they had “no
responsive documents” because the corporate documents were “in the possession or control of
Hunter Donaldson.” CP at 455-458, 463-67. At the hearing, the trial court rejected Wadsworth
and Rohlke’s argument because it had already ordered them to produce all responsive documents
by April 25.28
At the subsequent court hearings on August 1, September 26, and on December 19, the
trial court again rejected their argument that they lacked control. Instead, the trial court found that
Wadsworth and Rohlke, as corporate employees, continued to have daily involvement in Hunter
Donaldson, and the trial court ruled that they had control over the corporate documents and were
required to produce all responsive documents. The record also shows that on October 15,
Wadsworth and Rohlke produced 40,000 documents including corporate documents which they
later admitted had been under their control. The trial court’s finding, that Wadsworth and Rohlke
had control over the corporate documents, is supported by the record. Thus, we hold that the trial
28
Although Rohlke was not included in the initial motion to compel, defense counsel’s response
to the trial court on April 11, 2014, indicated that the corporate defendants, which included Rohlke,
planned to comply with the trial court’s March 28 order to compel. Defense counsel also signed
the trial court’s May 23 order to compel on behalf of the corporate defendants, including Rohlke.
22
No. 46814-0-II
(Consol. with No. 47134-5-II)
court did not abuse its discretion when it ordered the discovery and the production of all responsive
documents by Wadsworth and Rohlke.
III. CR 37 DISCOVERY SANCTIONS
Wadsworth and Rohlke argue that the trial court abused its discretion when it awarded
CR 37 sanctions against them. We disagree and hold that the trial court did not abuse its discretion
in awarding sanctions against Wadsworth and Rohlke.
We review a trial court’s award of CR 37 sanctions for an abuse of discretion. Wash. State
Physicians Ins. Exch. & Ass’n v. Fisons Corp., 122 Wash. 2d 299, 338, 858 P.2d 1054 (1993). A
party may not simply ignore or fail to respond to discovery requests—they must answer, object,
or seek a protective order. CR 37(d); Magaña v. Hyundai Motor America, 167 Wash. 2d 570, 584,
220 P.3d 191 (2009). “‘A party’s disregard of a court order without reasonable excuse or
justification is deemed willful.’” Magaña, 167 Wash. 2d at 584 (quoting Rivers, 145 Wash. 2d at 686-
87). A trial court need not tolerate deliberate and willful discovery abuse. Magaña, 167 Wash. 2d
at 576. If a party fails to comply with an order to compel discovery, a trial court may impose
sanctions under CR 37. A trial court has broad discretion as to the choice of a sanction for a party’s
violation of a discovery order. Fisons, 122 Wash. 2d at 339. We overturn a trial court’s sanction
only if it is clearly unsupported by the record. Magaña, 167 Wash. 2d at 583. “[S]ince the trial court
is in the best position to decide an issue, deference should normally be given to the trial court's
decision.” Magaña, 167 Wash. 2d at 583.
23
No. 46814-0-II
(Consol. with No. 47134-5-II)
A. THE LANGUAGE OF THE COURT’S ORDERS TO COMPEL
Wadsworth and Rohlke argue that the trial court’s orders to compel were not clear. We
disagree because the trial court’s orders were clear.
As discussed above, the trial court entered orders to compel on March 28 and May 23. The
plain language of trial court’s orders29 required the corporate defendants “to produce full and
complete responses” and production, and “specifically including all responsive documents.”
Wadsworth’s and Rohlke’s additional argument, that the trial court did not require them to produce
corporate documents until the court’s September 26 order, is refuted by the plain language of the
trial court’s orders. We hold that the trial court’s orders were clear.
B. CONTROL OVER THE CORPORATE DOCUMENTS
Wadsworth and Rohlke argue that they did not have control over the corporate documents
of Hunter Donaldson and that the trial court did not find that they had control. We disagree and
hold that the trial court’s finding, that Wadsworth and Rohlke had control over the corporate
documents of Hunter Donaldson, is supported by the record.
The trial court found that Wadsworth and Rohlke had control over the corporate documents
based on their continuing involvement in Hunter Donaldson. The trial court did not believe, and
in fact it rejected, Wadsworth’s and Rohlke’s explanations that they lacked control over the
corporate documents. Wadsworth and Rohlke also admitted in their depositions that they had
29
The March 28 order was directed to Hunter Donaldson and Wadsworth. On April 11, defense
counsel, representing Hunter Donaldson, Wadsworth, and Rohlke, advised the trial court that the
corporate defendants planned to comply with the court’s order. The May 23 order was directed to
Hunter Donaldson, Wadsworth, and Rohlke.
24
No. 46814-0-II
(Consol. with No. 47134-5-II)
control over their emails and calendars. The trial court’s finding, that Wadsworth and Rohlke had
control over the corporate documents, is supported by the record.
C. THE SANCTIONS
1. The Burnet factors
Wadsworth and Rohlke also argue that the trial court abused its discretion by not
considering the Burnet30 factors before imposing a monetary sanction. However, the Burnet
factors do not apply to a monetary sanction. Blair v. TA-Seattle E. No. 176, 171 Wash. 2d 342, 351,
254 P.3d 797 (2011). Thus, the trial court did not abuse its discretion in awarding a monetary
sanction without considering the Burnet factors.
2. The trial court’s finding of willful violation
The trial court found that Wadsworth and Rohlke had been ordered to produce all
responsive documents by April 25, and that they repeatedly failed to do so. The trial court also
found that they failed to fully comply with the trial court’s orders until October 15, 2014, the date
they produced 40,000 documents to Walker. The trial court also found that, based on Wadsworth’s
and Rohlke’s failure to comply, they willfully violated the trial court’s orders to compel. The trial
court’s findings are supported by the record. Because the trial court’s findings support the court’s
award of sanctions, we hold that the trial court did not abuse its discretion in awarding sanctions
and in entering judgments against Wadsworth and Rohlke.
30
Burnet v. Spokane Ambulance, 131 Wash. 2d 484, 933 P.2d 1036 (1997).
25
No. 46814-0-II
(Consol. with No. 47134-5-II)
ATTORNEY FEES AND COSTS
Walker requests attorney fees and costs on appeal under RAP 14.2,31 RAP 18.1(a),32
CR 37(a)(4),33 and CR 37(b).34 We award Walker her reasonable attorney fees and costs.
RAP 14.2 authorizes an appellate court to award costs to the prevailing party on appeal.
RAP 18.1(a) allows a party to recover its reasonable attorney fees and costs on appeal if an
applicable law grants that party a right to recover attorney fees and costs. A party may recover
attorney fees and expenses on appeal under CR 37. Magaña, 167 Wash. 2d at 593; RAP 18.1(a).
CR 37((a)(4) requires an award of reasonable expenses, including attorney fees, to a party moving
to compel discovery payable by the “party . . . whose conduct necessitated the motion or the party
or attorney advising such conduct or both of them.” CR 37(b) requires a party failing to obey a
discovery “order or the attorney advising him or her or both to pay the reasonable expenses,
including attorney fees, caused by the failure.”
31
A commissioner or clerk of the appellate court will award costs to the party that substantially
prevails on review. RAP 14.2.
32
A party may recover reasonable attorney fees or expenses on review before the Court of Appeals
if applicable law grants to a party the right to recover. RAP 18.1(a).
33
If a motion is granted, the court shall, after an opportunity for hearing, require the party whose
conduct necessitated the motion 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.
CR 37(a)(4).
34
CR 37(b) permits a court to impose sanctions for failure to comply with a court order.
26
No. 46814-0-II
(Consol. with No. 47134-5-II)
Wadsworth’s and Rohlke’s “willful violation” was not substantially justified. Thus, an
award of reasonable attorney fees and costs on appeal to Walker, as the prevailing party, is
appropriate under RAP 14.2, RAP 18.1(a), CR 37(a)(4) and CR 37(b).
CONCLUSION
We hold that the trial court had the authority to hear the plaintiffs’ motions to compel
because plaintiffs’ counsel satisfied CR 26(i)’s requirements. We also hold that the trial court’s
orders to compel were clear and that the trial court’s finding, that Wadsworth and Rohlke had
control over the corporate documents, is supported by the record. Thus, we hold that the trial court
did not abuse its discretion when it ordered them to answer the discovery and produce all
responsive documents. We also hold that the trial court’s finding, that Wadsworth and Rohlke
willfully violated the trial court’s orders, is supported by the record. Thus, we hold the trial court
27
No. 46814-0-II
(Consol. with No. 47134-5-II)
did not abuse its discretion when it awarded sanctions and entered judgments against them. We
affirm the trial court’s orders, and we also award Walker her reasonable attorney fees and costs on
appeal.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,
it is so ordered.
SUTTON, J.
We concur:
WORSWICK, P.J.
JOHANSON, J.
28