Opinion
¶1 John B. Mitchell (John)
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appeals from the district courts ruling that barred him from presenting evidence of damages as a sanction for failing to file supplemental discovery disclosures as required by rule 26(a)(1)(C) of the Utah Rules of Civil Procedure. We reverse the imposition of sanctions against John without considering the issue on the merits because he presented a plausible basis for reversal and Defendants inadequately briefed the argument. In their cross-appeal, Defendants challenge the district courts decision to strike their Answer and Counterclaim as a sanction for their violation of the courts discovery orders. We affirm the district courts entry of default against Defendants because their challenge is unsupported by any reasoned analysis of the district courts ruling and, thus, they have failed to carry their appellate burden.
BACKGROUND
¶2 In 2006, John accepted a position with Arco Industrial Sales (Arco) and moved from Pennsylvania to Utah. At the time, Arco was wholly owned by Johns father, John A. Mitchell (Jack). According to John, he took the job because Jack and Arco (collectively Defendants) made multiple promises on which he relied. These promises related to Johns compensation and included representations that Jack would transfer ownership of Arco to John within five years. During Johns tenure, additional promises were made to induce him to remain employed at the company, including assurances he would receive income, bonuses, and profit sharing equal to Jack. John eventually resigned from his position at Arco because Defendants failed to fulfill all of their promises.
¶3 In 2017, John filed this lawsuit, asserting claims for breach of agreement, misrepresentation, promissory estoppel, breach of fiduciary duty, unjust enrichment, and an accounting. Defendants filed an answer to the complaint, raising multiple defenses to Johns claims and asserting a counterclaim seeking repayment of loans allegedly made to John by both Arco and Jack. John then timely filed an initial, but incomplete, disclosure of damages as required by rule 26(a)(1) of the Utah Rules of Civil Procedure. The initial disclosure stated John was seeking “the value of the equity in Arco that was promised to him,” income and benefits promised but not paid, damages from lost business opportunities, and “emotional hardship and suffering in an amount to be determined later.” As to the amount or calculation of these damages, the disclosure only stated: “Plaintiffs damages will be determined after discovery and will be the subject of expert testimony.”
¶4 John served Defendants with his first set of discovery requests on October 30, 2017. Believing Defendants had not produced all of the documents he requested, John subsequently sought intervention from the district court. Among other things, John represented to the court that Defendants failed to produce financial statements, accounting records, tax returns, and business valuations. John stated he needed this information to calculate his damages. John also sought copies of Arcos corporate documents, including minutes taken at meetings of the shareholders and the board of directors. The district court granted Johns motion in part and ordered Defendants to produce the documents within thirty days.
¶5 Defendants turned over a handful of documents, but John again doubted they had produced everything he requested. Accordingly, he filed a Motion for Sanctions, asking the district court to impose terminating sanctions by striking Defendants’ Answer and Counterclaim and entering default in his favor if all the documents were not produced within seven days. The district court granted Johns motion and detailed the documents Defendants were required to produce. The court warned Defendants that if they failed to comply with its discovery order, the “likely next step is to strike [their] Answer and Counterclaim and enter default judgment in favor of [John].”
¶6 Despite the district courts clearly worded order, Defendants did not produce the requested documents within the required timeframe. This prompted John to file a third motion with the district court, again requesting terminating sanctions. Johns motion detailed Defendants’ ongoing failure to produce documents and also contained allegations that Defendants destroyed relevant evidence when they replaced Arcos computer server and scrubbed the laptop John used during his employment at Arco.
¶7 The district court denied Johns motion for terminating sanctions, concluding there was no credible evidence Defendants scrubbed his laptop after they were informed of their obligation to preserve the information on it. The court also concluded John failed to present credible evidence that Defendants intentionally destroyed electronically stored information (ESI) or acted in bad faith when they replaced Arcos computer server. As to Johns allegations that Defendants failed to comply with the district courts order compelling them to produce certain documents, the court noted John failed to specifically identify the documents he believed were being withheld. Accordingly, the court ruled John was not entitled to sanctions pursuant to rule 37 of the Utah Rules of Civil Procedure.
¶8 John then filed a motion for reconsideration. He directed the district court to statements Defendants made in response to his motion for terminating sanctions wherein they represented they had copied and preserved “all files and documents” from his company laptop before it was scrubbed and had produced that information in discovery. John argued the undisputed evidence showed that, contrary to Defendants’ assertions, they had not produced all the documents they allegedly backed up from his laptop before it was scrubbed.
¶9 The district court concluded it was unable to rule on Johns motion for reconsideration because of the “competing narratives of what has been produced.” The court ordered Defendants to arrange for a time when John could inspect their “electronic devices, including computers, software, emails, and servers, to locate any additional ESI [John] believe[d was] missing.” When Johns computer forensics vendor conducted the inspection, she located numerous documents Defendants had not produced. According to John, the inspection confirmed that Defendants had produced only a “small portion” of the documents backed up when his laptop was scrubbed. The inspection also uncovered other relevant and responsive documents that Defendants failed to produce despite repeatedly assuring the district court they had fully complied with Johns discovery requests.
¶10 The district court heard oral argument on Johns allegations of discovery violations. The court found Defendants failed to produce documents and ESI requested by John, noting their failure to do so was in violation of the courts orders and was “willful and due to the fault of Defendants.” As a sanction for these willful violations, the district court struck Defendants’ Answer and Counterclaim and entered default against them. The court stated it would hold an evidentiary hearing on the issue of Johns damages. See Utah R. Civ. P. 55(b)(2) (permitting a district court to conduct an evidentiary hearing on damages after default is entered if it deems one “necessary and proper”).
¶11 In a written order following its oral ruling, the district court detailed the bases for its grant of terminating sanctions. The court found “Defendants did not produce documents and electronically stored information responsive to Plaintiffs discovery requests” in violation of “the Courts orders entered on February 16, 2018, and July 2, 2018.” The court further found Defendants willfully “failed to meet” their discovery obligations and “intentionally failed to conduct the level of inspection necessary to ensure that responsive documents were produced.” Noting that Defendants made their own determination of what information was relevant, the court found that many of the documents Defendants failed to produce were “at the heart of [the] dispute” and there was “no basis for not producing those documents.”
¶12 Nearly a year after default was entered against them but before the evidentiary hearing on Johns claims for damages, Defendants filed a motion in limine requesting an order barring John from introducing any evidence of damages because he failed to supplement his damages disclosure as required by rule 26(a)(1)(C) of the Utah Rules of Civil Procedure. Specifically, they alleged John failed to furnish any method or formula for calculating damages. John opposed the motion, arguing it should be denied because (1) he no longer had any obligations under rule 26 once the default was entered against Defendants, (2) Defendants waited too long to complain about his damages disclosure, and (3) any deficiencies were the result of Defendants’ well-documented failures to meet their discovery obligations.
¶13 At a hearing on Defendants’ motion, the district court ruled that John had a continuing obligation under rule 26(a)(1)(C) to supplement his damages disclosure but failed to do so. The court then considered, but rejected, Johns arguments that his failure to comply with rule 26 was either harmless or the result of good cause. See id. R. 26(d)(4) (“If a party fails to disclose or to supplement timely a disclosure or response to discovery, that party may not use the undisclosed witness, document, or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.”). The district court subsequently entered an order dismissing Johns lawsuit, concluding his violation of rule 26(a)(1)(C) was “fatal to his ability to put on damages evidence.”
¶14 John appeals the dismissal of his claims and Defendants cross-appeal from the entry of default against them.
ISSUES AND STANDARDS OF REVIEW
¶15 John challenges the district courts decision to bar his evidence of damages because he failed to comply with rule 26(a)(1)(C) of the Utah Rules of Civil Procedure. “[W]e review a district courts interpretation and application of our rules of civil procedure for correctness.” Sanders v. Sanders, 2021 UT App 122, ¶ 4, 502 P.3d 1230.
¶16 Defendants’ cross-appeal challenges the district courts decision to strike their Answer and Counterclaim as a sanction for their failure to obey the courts discovery orders. We review this ruling of the district court for abuse of discretion. Kilpatrick v. Bullough Abatement, Inc., 2008 UT 82, ¶ 23, 199 P.3d 957.
ANALYSIS
I. Sanctions for Rule 26 Damages Disclosure
¶17 Rule 26(a)(1)(C) of the Utah Rules of Civil Procedure “require[s], at a minimum, a disclosure that damages are in fact being claimed, the categories of any such damages, and a description of the method by which the party intends to compute those damages.” Butler v. Mediaport Ent. Inc., 2022 UT App 37, ¶ 22, 508 P.3d 619. If a party fails to meet its obligation under the rule, “that party may not use the undisclosed witness, document, or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.” Utah R. Civ. P. 26(d)(4).
¶18 Johns primary argument on appeal is that his violation of rule 26(a)(1)(C) was either harmless or excused by good cause and, thus, the district court abused its discretion when it barred all his evidence of damages. See Bodell Constr. Co. v. Robbins, 2009 UT 52, ¶ 35, 215 P.3d 933 (“When a party fails to make timely disclosure, the district court is required to impose discovery sanctions on that party unless the failure to disclose is harmless or the party shows good cause for the failure to disclose.” (cleaned up)). He makes an additional legal argument, however, that he had no obligation under rule 26 to supplement his damages disclosure once the district court struck Defendants’ Answer and Counterclaim, and that because Defendants filed their motion in limine many months after the default was entered, rule 26 was not applicable at the time the court ruled on the motion.
¶19 According to John, a pleading that is stricken is treated as never having had a legal life. See Hansen v. Department of Fin. Insts., 858 P.2d 184, 187 n.3 (Utah Ct. App. 1993); see also Statewide Envt Services, Inc. v. Fifth Third Bank, 352 S.W.3d 927, 932 (Ky. Ct. App. 2011) (holding that once the district court struck a partys deficient answer, it was “as if no answer at all had been filed”). Thus, John argues, when the district court struck Defendants’ Answer, it was deleted from the record and should be treated as a nullity. From that point forward, John reasons, rule 26 ceased to have any application in this matter because a plaintiffs obligations under that rule are triggered by the filing of the defendants answer. See Utah R. Civ. P. 26(a)(2)(A) (providing a partys initial disclosures must be served on the other parties within fourteen days after the filing of the first answer to the plaintiffs complaint). John argues that once the default was entered, this matter was governed solely by rule 55 of the Utah Rules of Civil Procedure—which details the procedures to be followed when a party fails to file an answer. As to damages, rule 55(b)(2) provides that the district court may conduct a hearing “to determine the amount of damages” if it deems one “necessary and proper.”
¶20 Although the district court determined a hearing on damages was necessary, John asserts there is no provision in rule 55 permitting Defendants—the defaulted parties—to conduct discovery in preparation for the damages hearing. But even assuming a district court has discretion to permit discovery, John notes that Defendants did not seek such permission. Instead, they inappropriately invoked rule 26 and asked the court to bar John from presenting any evidence of damages. John argues the grant of Defendants’ motion placed Defendants in a better position than other defaulted defendants. Additionally, he contends, nothing in the caselaw suggests Defendants should be treated more favorably because they were defaulted as a sanction rather than because they failed to participate in the litigation.
¶21 John presents a logical and facially persuasive argument. Unfortunately, we cannot address it on the merits because Defendants do not acknowledge it in their responsive brief, nor do they present any opposing argument. Rather, Defendants’ appellate brief focuses exclusively on their argument that any evidence of Johns damages was properly excluded by the district court because John cannot show that his violation of rule 26 was harmless or that he had good cause for the failure. See id. R. 26(d)(4). Defendants argue that they “had no way of determining what amounts of damages [John] was claiming on any of his causes of actions” and they were left to “make some educated guesses about the types and amounts of damages.” But Johns argument that rule 26 had no application in this matter once default was entered is unrebutted by Defendants.
¶22 Our supreme court has previously held that it is appropriate to rule in favor of an appellant if the appellant establishes “a prima facie showing of a plausible basis for reversal” and the appellee fails to brief the argument. AL-IN Partners, LLC v. LifeVantage Corp., 2021 UT 42, ¶ 19, 496 P.3d 76 (cleaned up). “This is a lower standard than the typical burden of persuasion on appeal.” Id. “[A] court may rule in favor of an appellant for purposes of that case if the appellee inadequately briefs an argument and the appellant provides a plausible basis for reversal.” Utah Dept of Transp. v. Coalt, Inc., 2020 UT 58, ¶ 45, 472 P.3d 942. Because John has met his appellate burden of making a prima facie showing of a plausible basis to rule in his favor, we reverse the grant of Defendants’ motion in limine without resolving Johns argument on the merits.
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¶23 Thus, in this case, Johns inadequate disclosure of the amount and calculation of his damages does not prevent him from proceeding against Defendants. On remand, we leave it to the district court to establish the proper procedures to determine damages consistent with rule 55.
II. Terminating Sanctions for Discovery Violations
¶24 Defendants’ cross-appeal challenges the district courts entry of default against them. Defendants’ appellate brief, however, fails to sufficiently address any of the bases on which the district courts ruling rests. For example, Defendants assert John was told that information had been transferred to Arcos new servers and fault him for failing to take advantage of their offer to inspect the new servers. This argument is unresponsive to the district courts determinations that (1) it was Defendants responsibility—not Johns—to review the Arco server and produce the documents delineated in Johns discovery requests, (2) Defendants failed to produce documents and ESI responsive to Johns discovery requests and the courts orders, and (3) their failure was willful because they made their own unilateral determination of which documents were relevant.
¶25 Defendants’ appellate brief also contains a lengthy discussion of the reasons for scrubbing Johns laptop and replacing Arcos servers. It then lists some of the documents John uncovered during the search conducted by his computer forensics vendor, referring to them as “allegedly unproduced documents” and summarily stating that John has failed to explain how these documents were responsive to his discovery requests. Defendants’ unsupported assertions cannot be reconciled with the district courts unchallenged finding that Johns review ultimately uncovered information he had requested, the district court had ordered, and Defendants willfully failed to produce. Other than to simply state that the sanction imposed by the district court was harsh and extreme, Defendants’ brief does not otherwise address the appropriateness of the sanction chosen by the district court.
¶26 In short, Defendants’ brief contains no reviewable challenge to the district courts conclusion that terminating sanctions were appropriate pursuant to rule 37 because Defendants violated the courts orders when they willfully failed to produce documents and ESI responsive to Johns discovery requests. See Utah R. Civ. P. 37(b) (authorizing a district court to “dismiss all or part of the action, strike all or part of the pleadings, or render judgment by default on all or part of the action” if the court determines the party failed to follow the courts orders). Although they purport to challenge the district courts conclusion that sanctions were appropriate under rule 37(b), Defendants’ brief contains only unresponsive statements largely unsupported by record citations. In light of these deficiencies in their appellate briefing, Defendants have failed to persuade this court “that the district courts ruling constituted error.” Duchesne Land, LC v. Division of Consumer Prot., 2011 UT App 153, ¶ 8, 257 P.3d 441. Accordingly, we affirm the district courts order striking Defendants’ Answer and Counterclaim as a sanction for their discovery violations.
CONCLUSION
¶27 The order of the district court granting Defendants’ motion in limine and barring John from presenting evidence of his damages at an evidentiary hearing is reversed. The district courts entry of default against Defendants for discovery violations is affirmed. This matter is remanded to the district court for further proceedings consistent with this opinion.
FOOTNOTES
1
. Because the parties have the same surname, we refer to them by their first names for clarity, with no disrespect intended by the apparent informality.
2
. Because we do not reach the merits of Johns argument, this is “a non-merits decision that is not intended to have precedential value.” Sumsion v. Bay Harbor Farm, 2018 UT App 114, ¶ 25 n.7, 427 P.3d 511.
OLIVER, Judge:
JUDGE AMY J. OLIVER authored this Opinion, in which JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.