Court Denies Motion to Dismiss Complaint as Discovery Sanction, Finding No Willful Disregard or Bad Faith

Gen. Med., PC v. Morning View Care Ctrs., 2006 WL 2045890 (S.D. Ohio July 20, 2006)

Plaintiff’s complaint alleged claims for breach of contract and tortious interference arising out of a contract for General Medicine to provide medical care at six of Morning View’s residential health care facilities. In this opinion, the district court adopted the magistrate’s Report and Recommendation that defendant’s motion to dismiss complaint as a discovery sanction be denied.

After answering the complaint, defendant requested document production from the plaintiff on August 25, 2005. Hearing nothing, on October 21, 2005, defense counsel reminded plaintiff’s counsel that the documents were overdue. Plaintiff’s attorney responded on November 4, 2005 and stated that he would let defendant know the following week when the documents would be available. Slightly more than two months later, on January 5, 2006, defendant filed a motion to compel discovery, which the court granted. It ordered production of the documents by April 7, 2006. On April 14, 2006, defendant filed the instant motion for dismissal of the case under Rule 37 for failure to comply with the discovery order. Specifically, defendant complained that plaintiff did not comply with certain document requests. Plaintiff’s denied defendant’s assertions of non-compliance, arguing: (1) that it did not have the documents requested, or (2) that it had already produced the requested documents.

Reflecting on the parties’ arguments, the court observed:

[A]t its core this discovery dispute amounts to Morning View asserting that General Medicine should have more documents than it produced and General Medicine maintaining that it does not have any more documents responsive to the discovery requests. When the requesting party has doubts about the adequacy of a production, it has the right to take discovery about how the producing party maintains its documents. But absent evidence that the response is not true, when a party formally binds itself in response to a discovery request to the position that it does not have documents, there is nothing a court can do.

With respect to one particular request for production, plaintiff had offered Dr. Thomas Mark Prose’s testimony that General Medicine produced all documents in its possession that were responsive. The court appeared satisfied with plaintiff’s explanation that some of the requested information had not been produced because it was not in active files and would be “expensive to retrieve”:

Dr. Prose testified that these financial summaries, Bates P1807-15 and P1824- 25, were generated from an electronic data base during the regular course of General Medicine’s business. When physicians rendered services, they filled out a document reflecting that treatment and faxed it to billing. Billing then keyed it into General Medicine’s billing data base. All of that electronic information was then sent periodically to Medicare, which then reimbursed General Medicine.

Unfortunately, General Medicine switched to a different provider of billing software in 2004. Billing information from 1999-2002 is no longer in its billing database. That information is saved on tape or discs, but it would be expensive to retrieve. General Medicine is willing to make the data available to Morning View, but Morning View would have to bear the expense of accessing the data.

The court noted that, in determining whether to dismiss an action for failure to cooperate with discovery, four factors should be considered: (1) whether the party acted willfully, in bad faith or with fault; (2) whether any prejudice resulted from the failure to comply; (3) whether or not the party was warned that failure to comply could lead to extreme sanctions; and (4) if less drastic sanctions were previously imposed or should be considered. The court concluded that dismissal was not appropriate, and that defendant had failed to establish facts demonstrating that additional sanctions were warranted beyond the award of attorneys’ fees already imposed by the magistrate.

The court found no evidence of bad faith on the part of plaintiff:

Defendant has failed to demonstrate that General Medicine acted with willful disregard for the March 29, 2006 discovery order, nor has it proved that Plaintiff acted in bad faith. Dr. Prose testified that despite his belief that responsive documents had been produced in the earlier litigation regarding Morning View’s New Philadelphia facility, he followed his attorney’s instructions in the Fall of 2005 to search again for documents responsive to Defendant’s requests for production of documents. Similarly, he searched again after receiving the March 29 Order.