Charles L. Woody
Clifford F. Kinney,Jr.
Robert Patrick Paulson
Spilman Thomas & Battle, PLLC
Charleston, West Virginia
Attorneys for the Appellants
|Marc. B. Chernenko
William E. Watson
William E. Watson & Associates
Wellsburg, West Virginia
Attorneys for the Appellee
William L. Casto
JUSTICE DAVIS delivered the Opinion of the Court.
1. The imposition of sanctions by a circuit court under W. Va. R. Civ. P. 37(b) for the failure of a party to obey the court's order to provide or permit discovery is within the sound discretion of the court and will not be disturbed upon appeal unless there has been an abuse of that discretion. Syllabus point 1, Bell v. Inland Mutual Insurance Co., 175 W. Va. 165, 332 S.E.2d 127 (1985).
2. The imposition of sanctions by a circuit court under Rule 37(d) of the West Virginia Rules of Civil Procedure is within the discretion of the trial court and will not be disturbed absent an abuse of discretion.
3. An interpretation of the West Virginia Rules of Civil Procedure presents a question of law subject to a de novo review. Syllabus point 4, Keesecker v. Bird, 200 W. Va. 667, 490 S.E.2d 754 (1997).
4. A party who has successfully obtained an order compelling discovery has a duty to act in good faith with the opposing party when the opposing party seeks clarification of what is sought under the order compelling discovery. Further, a party moving for sanctions under Rule 37(b) of the West Virginia Rules of Civil Procedure, for failure to comply with an order compelling discovery, must file with the motion an affidavit certifying that the attorney has conferred with opposing counsel and worked in good faith to resolve the issues raised in the motion but was unsuccessful.
5. Under appropriate circumstances, a party may be sanctioned under Rule 37(d) of the West Virginia Rules of Civil Procedure for failing to attend a deposition notwithstanding the fact that the party cancelled the deposition. The factors to be considered in determining whether sanctions are appropriate are: (1) the timing of the cancellation; and (2) whether good cause for the cancellation has been shown.
6. Before a circuit court may impose the sanction of dismissal or default judgment under Rule 37(d) of the West Virginia Rules of Civil Procedure for a party's failure to attend a deposition, the court must first make a finding that the party's failure was due to willfulness or bad faith. Once this finding has been made, the circuit court must then weigh the following factors to determine if default judgment or dismissal is an appropriate sanction: (1) the degree of actual prejudice to the other party; (2) the effectiveness of less drastic sanctions; and (3) any other factor that is relevant under the circumstances presented.
This is an appeal by Barry, Bette & Led Duke, Inc. (hereinafter referred to as Duke) and Grant V. Hesser (hereinafter referred to as Mr. Hesser), appellants/defendants below, from an order of the Circuit Court of Tyler County granting judgment to Cattrell Companies, Inc. (hereinafter referred to as Cattrell), appellee/plaintiff below. The judgment against Duke and Mr. Hesser was imposed under Rules 37 (b) and (d) of the West Virginia Rules of Civil Procedure as a sanction for discovery violations. (See footnote 1) In this appeal, Duke and Mr. Hesser argue that the sanction was improper and unduly harsh. Upon review of the parties' arguments, (See footnote 2) the pertinent authorities, and the record designated for appellate consideration, we affirm in part, reverse in part, and remand for further proceedings.
On March 29, 2001 and June 20, 2001, Cattrell wrote to Duke and Mr. Hesser
and requested deposition dates for Mr. Hesser and a representative of Duke. Duke and Mr.
Hesser did not respond to either letter. Consequently, on July 6, 2001, Cattrell noticed the
depositions to take place on July 19, 2001. Subsequently, on July 18, 2001, counsel for Duke
and Mr. Hesser telephoned Cattrell to advise that the depositions needed to be rescheduled
because the deponents were not available. Alternative deposition dates were offered by Duke
and Mr. Hesser, but Cattrell refused to cooperate in rescheduling the depositions. Instead,
Cattrell filed another motion for sanctions, this time under Rule 37(d) for failure to attend
depositions. In the second motion for sanctions, Cattrell again sought to have Duke and Mr.
Hesser's defenses struck and default judgment rendered against them.
A hearing was held on the second motion for sanctions on August 9, 2001. (See footnote 11) At the conclusion of the hearing, the circuit court granted Cattrell's previous motion for discovery sanctions under Rule 37(b), based on a failure to comply with the court's order of February 8, 2000, and granted Cattrell's motion under Rule 37(d), based on a failure to appear at a deposition. By order rendered October 1, 2003, the circuit court struck Duke and Mr. Hesser's defenses and entered default judgment against them under both Rule 37(b) and Rule 37(d). The order also awarded $562,647.83 in damages, and prejudgment interest in the amount of $226,292.32. (See footnote 12) This appeal followed. (See footnote 13)
Rule 37(d) of the West Virginia Rules of Civil Procedure provides this Court with authority to strike the pleadings of Defendants [Mr.] Hesser and [BB&L Duke] and to render a judgment by default in favor of the Plaintiff, Cattrell Companies, Inc., as a result of the Defendants' failure to attend at the July 19, 2001 depositions.
Thus, the sanction under Rule 37(d) was based solely on Duke and Mr. Hesser's failure to attend scheduled depositions. We must determine whether the circuit court's application of Rule 37(d) to the facts before it was in error. (See footnote 19)
We begin by examining the pertinent language of Rule 37(d), which states that sanctions may be imposed when a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails . . . to appear before the officer who is to take the deposition[.] According to its terms, this section is applicable in the context of a deposition only if a party fails . . . to appear for the deposition. Duke and Mr. Hesser claim that Rule 37(d) is not triggered in this case because they did not fail to appear at their depositions, but rather canceled the depositions. Thus, the question we must answer is whether or not a party may be said to have failed to appear for a deposition as contemplated in Rule 37(d) when that party has actually canceled the deposition.
In making this determination, we find it prudent to examine how this aspect of Rule 37(d) has been previously applied. This Court has addressed the meaning of a failure to appear on only one prior occasion, in Chandos, Inc. v. Samson, 150 W. Va. 428, 146 S.E.2d 837 (1966). Chandos is not directly on point, however, as that case involved a failure to appear by a defendant who had been declared legally incompetent and was confined to a mental institution at the time the circuit court entered default judgment. (See footnote 20) Unlike the case at hand, there was no dispute that the defendant had failed to appear at the deposition. Thus, Chandos is not instructive to our resolution of the instant case. In the absence of any prior authority from this Court aiding our analysis, we must look elsewhere for guidance. Because the pertinent language of Rule 37(d) of the Federal Rules of Civil Procedure is identical to our own rule, we look to how the failure to appear facet of Rule 37(d) has been applied in federal courts when a deponent has canceled a scheduled deposition. (See footnote 21)
Some federal courts appear to apply a strict interpretation of Rule 37(d) and indicate that sanctions under this rule are appropriate only where there has been an actual failure to appear. Under this interpretation, cancelling a deposition would not trigger sanctions under Rule 37(d). For example, in Williams v. Board of County Commissioners of the Unified Government of Wyandotte County and Kansas City, Kansas, 192 F.R.D. 698, 705-06 (D. Kan. 2000), the United States District Court denied a defendant's request for sanctions for failure to appear at a deposition where the plaintiff had provided advanced notice of an inability to appear. In Williams, the defendants served on the plaintiff an Amended Notice of Deposition (See footnote 22) setting the date to depose plaintiff at December 13, 1999. (See footnote 23) Id. at 705. The court noted that the defendants did not consult with plaintiff's counsel about this date prior to serving the notice. Id. Shortly after serving the notice, and apparently without engaging in any discussion with the plaintiff regarding the deposition, defendants filed a motion to compel plaintiff's attendance at the deposition. Id. at 705-06. Thereafter, on December 8, 1999, five days prior to the scheduled deposition, plaintiff's counsel notified the defendants in writing that he was unavailable to produce his client for deposition on December 13, 1999 due to his previously scheduled appearance at a Missouri Workers' Compensation Hearing. Id. at 706. Defendants responded with a letter dated December 10, 1999, asking plaintiff's counsel for dates and times to reschedule the deposition. Id. Based upon these facts, the district court reasoned:
there is no evidence before the Court to establish that Plaintiff failed to appear for a scheduled deposition on December 13, 1999. In a letter from Defendants' counsel to Plaintiff's counsel dated December 10, 1999, Defendants' counsel requested Plaintiff's counsel forward dates and times to reschedule the December 13, 1999 deposition. Based on mandatory language within Rule 37(d) requiring actual failure to report to a scheduled deposition before sanctions can be imposed, and based on Defendants' failure to allege in sufficient detail Plaintiff's failure to report to a scheduled deposition, Defendants' motion for sanctions will be denied.
Id. See also O'hara v. Board of Educ. of the Brooklyn City Sch. Dist., 72 Fed. Appx. 311, 314-15, 2003 WL 21774013, **3 (6th Cir. 2003) (mem) (reversing lower court's imposition of sanctions and finding Rule 37(d) did not apply where plaintiff's counsel canceled a deposition for personal reasons because 37(d) permits the court to impose sanctions against a party who fails to appear for the taking of his properly noticed deposition.).
Other courts addressing this issue have applied a less strict interpretation to Rule 37(d). In these cases, where a party has provided notice that the deponent will not appear, the courts have based their determination of whether to sanction largely upon the particular facts involved, including the reason for the non-appearance and the amount of notice provided. A demonstration of this mode of reasoning may be found in the case of N.L.R.B. v. Cable Car Advertisers, Inc., 319 F. Supp.2d 991 (N.D Cal. 2004). In this case, the N.L.R.B. issued, on January 6, 2004, a series of investigative subpoenas directed at Cable Car, which included two subpoenas that ordered the attendance of two of Cable Car's managing agents at depositions on January 20, 2004. Cable Car at 994. On January 16, 2004, Cable Car's counsel informed the N.L.R.B. by phone that Cable Car's managing agents would not appear at their scheduled depositions. Id. Cable Car later explained that the decision not to appear for the scheduled depositions was based upon concern that its managing agents would be required to appear for more than one deposition depending upon the outcome of another discovery dispute. (See footnote 24) In affirming the lower court's imposition of sanctions, the district court explained
Cable Car's position is not substantially justified inasmuch as it unilaterally cancelled depositions on a Friday, only three days before their scheduled date. Cable Car has little justification in failing to object earlier, especially since the face of the subpoenas stated that objections to the subpoena must be made by a petition to revoke . . . and must be received within five days of your having received the subpoena. It waited until the eleventh hour to cancel the deposition, causing the Board to incur certain alleged costs.
319 F. Supp.2d at 1001. (See footnote 25)
Another illustrative case is Tepsic v. National Railroad Passenger Corp., 1995 WL 540125 (E.D. La. 1995). In Tepsic, the court was presented with a defense motion for imposition of sanctions under Rule 37(d) based on plaintiffs' cancellation of four depositions. Tepsic at *1. Two of the depositions were for named plaintiffs Elizabeth and Charles Tepsic, who were husband and wife. After several unsuccessful attempts to schedule depositions for Elizabeth and Charles Tepsic, their depositions were scheduled for July 25, 1995. Id. On July 24, 1995, only one day prior to the scheduled depositions, plaintiffs' counsel notified the defendant that Elizabeth Tepsic would be unable to attend due to medical problems. Id. (See footnote 26) Thereafter, on July 25, the day of the scheduled depositions, plaintiffs' counsel notified defendant that Charles Tepsic would not be able to appear for a deposition until his wife's medical crisis had been resolved. Id. In deciding whether to impose sanctions for a failure to appear with respect to these two depositions, the court concluded that an award of expenses for the failure of plaintiffs, Elizabeth Tepsic and her husband Charles, to attend scheduled depositions would be unjust despite the late hour of the notice as the cancellations resulted from the severe medical condition of Elizabeth Tepsic. Id.
To the contrary, however, the court found that sanctions were proper with respect to the two other cancelled depositions that were included in the defense motion for Rule 37(d) sanctions. One of those cancelled depositions involved an employee of the defendant. Id. at *2. The employee's deposition was cancelled by the plaintiffs the day before it was scheduled to occur. Id. The reason given by plaintiffs' counsel for cancelling the deposition was that [s]omething very personal has taken place. I have just finished a three day jury trial and cannot be present for the depositions on Friday. Id. In a memorandum opposing the motion for sanctions, plaintiffs' counsel merely stated that he had been involved the entire week in a jury trial and was exhausted among other personal problems. Id. Noting that by the time of the cancellation the employee had already traveled from Decatur, Illinois, to New Orleans for the deposition, the court stated:
The fact that plaintiffs' counsel was involved in a jury trial earlier in the week does not excuse his late cancellation of [the employee's] deposition. Counsel could have cancelled the deposition earlier, when he first became aware that he would, in fact, be involved in a jury trial on some of the days preceding the deposition.
The final canceled deposition for which sanctions were imposed by the Tepsic court involved the defendant's expert witness. By correspondence dated July 13, 1995, defense counsel confirmed that the expert's deposition was scheduled for July 19, 1995, and the expert's report would be provided on July 17, 1995. Tepsic at *3. Plaintiffs' counsel cancelled the expert's deposition on July 18, once again on the day before the deposition was to occur. Id. The reason given for the cancellation was that plaintiffs' counsel had not received the expert's report until July 17. Id. Unpersuaded by this argument, the court commented that
plaintiffs' counsel was informed, pursuant to defense counsel's July 13, 1995 correspondence, that he would be receiving [the expert's] report on July 17, 1995. If plaintiffs' counsel believed that receiving the report two days prior to the deposition would not provide him with sufficient time to view the report, he should have cancelled the deposition upon receipt of defense counsel's correspondence. Further, . . . it was pursuant to plaintiffs' motion that defendants' deadline to submit expert reports was extended to July 28, 1995. Interestingly, in this same motion, plaintiffs also sought, and received, a cut-off date of July 15, 1995 for the taking of all expert depositions.
Id. (footnote omitted).
(See footnote 27)
In another 37(d) case, Ogletree v. Keebler Co., Inc., 78 F.R.D. 661 (N.D. Ga. 1978), the defendant and plaintiff had agreed that the plaintiff would be deposed on October 28, 1977. 78 F.R.D. at 661. Sometime prior to the scheduled deposition, however, defendant was notified that plaintiff had suffered an injury that would prevent her appearance at the scheduled deposition. Id. After again consulting with plaintiff's counsel, defense counsel re-scheduled the deposition for December 1, 1977, at 2:00 P.M. Id. at 661-62. Two hours before the scheduled deposition, plaintiff's counsel called the defendant requesting a postponement due to a scheduling conflict. Id. at 662. The deposition was then scheduled for December 8, 1977, at 2:00 P.M. One hour prior to this deposition the defendant received a call from a secretary for plaintiff's counsel, who explained that counsel was in court in Albany, Georgia, and could not attend the deposition. The court granted the defendant's subsequent motion for sanctions under Rule 37(d) and explained:
In the instant action, the court concludes that defendant was not given reasonable notice of the latter two deposition cancellations, inasmuch as the postponements were sought within two hours of the scheduled deposition. It is therefore entitled to recover its expenses in connection with those attempts. The court notes that the rule provides for assessment of expenses against the attorney advising the party as well as against the party who fails to act. Since in the instant action the last two cancellations appear to be the fault of plaintiff's attorney, and not of the plaintiff, the court directs that he reimburse defendant Keebler Company for its expenses in connection with those postponed depositions. The court finds that any expenses associated with the deposition scheduled for October 28, 1977 should be borne by the defendant since injury to the plaintiff caused the postponement and reasonable notice of the change appears to have been given. Accordingly, defendant Keebler Company's request for expenses is granted, and defendant is directed to submit within ten (10) days an affidavit setting forth the expenses associated with the latter two deposition cancellations.
Id. (footnote omitted).
Finally, the United States Court of Appeals for the Ninth Circuit affirmed a dismissal based on multiple discovery violations that included the failure to appear at depositions in Henry v. Gill Industries, Inc., 983 F.2d 943 (9th Cir. 1993). With respect to the deposition issue, the court stated
[plaintiff] Henry argues that he never failed to appear for his noticed deposition because each such deposition was vacated by agreement of the parties. He suggests that the ordinary difficulties in coordinating calendars should not be grounds for discovery sanctions. The record shows, however, and the district court found that Henry twice notified defendants the business day before his properly noticed depositions were to have taken place that he would not attend. . . . Henry thus asks this court to hold that, even though he twice forced cancellation of his deposition by notifying Gill at the last minute that he would not appear, such conduct does not constitute a failure to appear because Gill's counsel, instead of sitting in a conference room waiting for Henry not to arrive, attempted to reschedule the deposition. We reject the suggestion that an unreasonable refusal to be deposed must be met with an unreasonable refusal to reschedule in order to warrant sanctions under Rule 37.
Henry, 983 F.2d at 947.
After considering the foregoing cases, we are persuaded that the less strict interpretation of Rule 37(d) creates a more rational and just rule. Accordingly, we now hold under appropriate circumstances, a party may be sanctioned under Rule 37(d) of the West Virginia Rules of Civil Procedure for failing to attend a deposition notwithstanding the fact that the party cancelled the deposition. The factors to be considered in determining whether sanctions are appropriate are: (1) the timing of the cancellation; and (2) whether good cause for the cancellation has been shown. (See footnote 28)
Applying this standard to the case at hand, we are unable to conclude that the circuit court abused its discretion in finding Duke and Mr. Hesser's cancellation of depositions was sanctionable. The depositions of Mr. Hesser and a representative of Duke had been scheduled for July 19, 2002. Only one day before these depositions were to take place, Duke and Mr. Hesser telephoned Cattrell and canceled the depositions. There was no medical emergency or other compelling reason for the cancellation. The reason given was merely that Duke and Mr. Hesser's West Virginia counsel had been unable to receive an answer from New York counsel, and that New York counsel had been involved in a five- week trial. Under these circumstances, sanctions could be imposed under Rule 37(d). Accordingly, we affirm the circuit court's order insofar as it determined that sanctions should be imposed for Duke and Mr. Hesser's failure to attend depositions. Having determined that sanctions in general were appropriate, however, we now consider whether the particular sanctions imposed by the circuit court, striking Duke and Mr. Hesser's defenses, entering default judgments against them, and awarding damages to Cattrell, were justified.
This Court has previously held that in order to impose the severe sanctions of striking a party's answer or entering default judgment for the failure to appear at a deposition, such failure must be willful.
Under the provision of Rule 37(d), R.C.P., the answer of
a defendant should not be stricken from the record upon motion
of the plaintiff for the failure of a defendant to appear for the
taking of a deposition, after being served with proper notice, and
a valid default judgment cannot be granted under said Rule
unless competent evidence is presented or an affidavit is filed
with the motion under the provisions of Rule 43(e), R.C.P.,
showing that the defendant wilfully failed to appear. Syl. pt. 1, Chandos, Inc. v. Samson, 150 W. Va. 428, 146 S.E.2d 837 (1966). We take note
that Rule 37(d) has been amended since our 1966 decision in Chandos. Furthermore, in conducting our research of this issue, we have observed that many federal courts interpreting more modern versions of the rule allow sanctions not only for willfulness, but also for bad faith or other fault by the offending party. See Henry v. Gill Indus., Inc., 983 F.2d 943 (9th Cir. 1993) (Where the drastic sanctions of dismissal or default are imposed, however, the range of discretion is narrowed and the losing party's non-compliance must be due to willfulness, fault, or bad faith. (citation omitted)); S.E.C. v. Research Automation Corp., 521 F.2d 585, 588 (2d Cir. 1975) (discussing Rule 37(d) and commenting that [r]ecognizing the severity of the sanction of a judgment granting affirmative relief by default, we have held that, notwithstanding the elimination of the term 'willful' from Rule 37 as a result of the 1970 amendments, the sanction should not be imposed because of negligence, and that the plaintiff must demonstrate that the defendant's failure to comply is due to willfulness, bad faith or fault and not to an inability to comply. (citing Flaks v. Koegel, 504 F.2d 702, 708-09 (2d Cir. 1974)); Fox v. Studebaker-Worthington, Inc., 516 F.2d 989, 993 (8th Cir. 1975) (Where . . . the drastic sanctions of dismissal or default are imposed, the range of discretion is more narrow and the losing party's non-compliance must be due to wilfulness, fault or bad faith. (citation omitted); Mercado v. Division of New York State Police, 989 F. Supp. 521, 524 (S.D.N.Y. 1998) (stating that [d]ismissal with prejudice is a harsh remedy to be used only in extreme situations . . . ., and then only when a court finds willfulness, bad faith, or any fault on the part of the prospective deponent.) (internal citations omitted).
We have also observed that several federal courts have provided certain criteria to be considered prior to imposing a sanction of dismissal or default judgment. In this regard, the court in the Henry v. Gill case, discussed above, explained that
[b]ecause the sanction of dismissal is such a harsh penalty, the district court must weigh five factors before imposing dismissal: (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions. Porter v. Martinez, 941 F.2d 732, 733 (9th Cir. 1991) (citations and internal punctuation omitted). The first two of these factors favor the imposition of sanctions in most cases, while the fourth cuts against a . . . dismissal sanction. Thus the key factors are prejudice and the availability of lesser sanctions. Wanderer v. Johnston, 910 F.2d 652, 656 (9th Cir. 1990).
983 F.2d 943, 948. Similarly, in Shamis v. Ambassador Factors Corp., a United States District Court discussed the imposition of dismissal as a sanction for a violation of Rule 37(d) as follows:
It is well settled law in this Circuit that the sanction of dismissal
sought by Defendants here is a drastic penalty which should be
imposed only in extreme circumstances. . . . Accordingly, this
harsh remedy is appropriate only when a court finds
willfulness, bad faith, or any fault on the part of the
plaintiff. . . . In addition to a finding that [Plaintiff] acted
willfully or in bad faith, employing dismissal as a sanction
requires findings that (1) Defendants were seriously prejudiced
by [Plaintiff's] actions; and (2) that alternative sanctions would
not adequately punish [Plaintiff] and deter future discovery
34 F. Supp. 2d 879, 887 (S.D. New York 1999) (internal citations omitted). See also In re
Sumitomo Copper Litigation, 204 F.R.D. 58, 60 (S.D.N.Y. 2001) (A number of factors may be considered when deciding whether discovery abuse warrants the entry of a default judgment against the transgressor. Among those factors are: '(a) willfulness or bad faith of the noncompliant party; (b) the history, if any, of noncompliance; (c) the effectiveness of lesser sanctions; (d) whether the noncompliant party had been warned about the possibility of sanctions; (e) the client's complicity; and (f) prejudice to the moving party.' . . . The need to deter discovery abuse and efficiently control dockets may also legitimately be taken into consideration. (internal citations omitted)); Sadler v. Dimensions Health Corp., 178 F.R.D. 56, 59 (D. Md. 1998) (discussing dismissal or default as sanction for violations of 37(b) and (d), and stating a court seeking to impose dismissal as a discovery sanction under Rule 37 must inquire into: (1) whether the noncomplying party acted in bad faith; (2) the amount of prejudice the noncompliance has caused the adversary, which necessarily includes an inquiry into the materiality of the evidence the party failed to produce; (3) the need for deterring the particular type of noncompliance; and (4) the effectiveness of less drastic sanctions. (citations omitted)). Cf. In re Rossmiller, 140 B.R. 1000, 1003-04 (D. Col. 1992) (discussing Rule 37(d) in context of failure to respond to interrogatories or requests for production and commenting that [a] default judgment is a harsh sanction that will be imposed only when the failure to comply with discovery demands is the result of 'wilfulness, bad faith, or [some] fault of petitioner' rather than inability to comply, and further stating that [i]n making findings on the issue of fault, a court should consider . . . (1) the degree of actual prejudice to [the] other party; (2) the amount of interference with the judicial process; and (3) the culpability of the litigant. Finally, the cases teach that a court should not enter a default judgment without first considering if lesser sanctions would be effective. (internal citations omitted)); Mutual Fed. Sav. & Loan Ass'n v. Richards & Assoc., 872 F.2d 88, 92 (4th Cir. 1989) (discussing violations of 37(d), apparently in context of interrogatories and requests for production of documents where there had been discovery orders that were violated, and observing the following four part test to be used when sanction imposed is judgment by default: (1) whether the noncomplying party acted in bad faith; (2) the amount of prejudice [the] noncompliance caused [the] adversary, which necessarily includes an inquiry into the materiality of the evidence [that was not produced]; (3) the need for deterrence of the particular sort of noncompliance; and (4) the effectiveness of less drastic sanctions. (citation omitted)).
After thoroughly considering the foregoing cases, we have determined that our prior holding in syllabus point 1 of Chandos should be modified. Recognizing that dismissal and default are drastic sanctions that should be imposed only in extreme circumstances, we now hold that before a circuit court may impose the sanction of dismissal or default judgment under Rule 37(d) of the West Virginia Rules of Civil Procedure for a party's failure to attend a deposition, the court must first make a finding that the party's failure was due to willfulness or bad faith. Once this finding has been made, the circuit court must then weigh the following factors to determine if default judgment or dismissal is an appropriate sanction: (1) the degree of actual prejudice to the other party; (2) the effectiveness of less drastic sanctions; and (3) any other factor that is relevant under the circumstances presented.
Applying this test to the case at hand, we initially conclude that the record demonstrates wilfulness and bad faith on the part of Duke and Mr. Hesser. The argument that counsel's unresponsiveness to Cattrell's various requests to schedule depositions and the late hour of Duke and Mr. Hesser's ultimate cancellation of the depositions were justified because Duke and Mr. Hesser's New York counsel had been involved in a trial for five weeks is simply not persuasive, particularly when Cattrell's first request to schedule the deposition was seven weeks prior to the cancellation. We additionally take note that Mr. Hesser was never even advised that Cattrell had requested or scheduled a time to take his deposition, which strongly indicates that there was never any real intention to have Mr. Hesser appear for the deposition and makes the late hour of its cancellation more egregious in our eyes.
After finding the existence of wilfulness and bad faith, we must next weigh the remaining factors of the test: (1) the degree of actual prejudice to Cattrell; (2) the effectiveness of less drastic sanctions; and (3) any other factor that is relevant under the circumstances presented. After weighing these factors, we conclude that the sanctions imposed by the circuit court were unduly harsh. While Cattrell has certainly suffered prejudice from Duke and Mr. Hesser's conduct, we do not believe that the prejudice suffered was of a degree to warrant a default judgment. There is nothing in the record indicating any impediment to Cattrell taking the depositions in the future, for example there is no allegation that any deponent has died or otherwise become unavailable. Likewise, there has been no indication that the delay in obtaining the desired depositions will cause Cattrell to be adversely affected at trial. Under these circumstances, we find that the circuit court abused its discretion by virtue of the sanctions it imposed. Accordingly, the circuit court's order is reversed insofar as it struck Duke and Mr. Hesser's defenses, entered default judgments against them, and awarded damages to Cattrell. (See footnote 29)
Although we find that the particular sanctions imposed by the circuit court in this case were too harsh, less onerous sanctions are certainly appropriate. Consequently, we direct the circuit court to enter an order imposing the following sanctions: (1) Cattrell's costs and/or attorney fees incurred in connection with the cancellation of the depositions scheduled for July 19, 2001, shall be assessed to Duke and Mr. Hesser; (2) Cattrell's attorney's fees and costs incurred in seeking sanctions shall be assessed to Duke and Mr. Hesser. Given the previous delays in this case, we further direct that the trial judge shall set an expedited discovery schedule. On remand, the cancelled depositions shall be noticed and completed within thirty days, and shall take place within the State of West Virginia. Any document reviews shall likewise take place within the State of West Virginia. Finally, Cattrell's attorney's fees and costs of this appeal are assessed to Duke and Mr. Hesser. Thus, the circuit court shall enter an order awarding reasonable attorney's fees and costs to Cattrell.