No. 60277-2-I.The Court of Appeals of Washington, Division One.
June 23, 2008.
Appeal from a judgment of the Superior Court for King County, No. 06-2-05608-6, Julie A. Spector, J., entered June 27, 2007.
Reversed and remanded by unpublished per curiam opinion.
PER CURIAM.
A trial court’s reasons for dismissing an action and entering a default judgment as a sanction for discovery violations must be apparent in the record or supported by written findings of fact and conclusions of law. Here, prior to dismissing a complaint filed by MRI Americas, LLC (MRI), the trial court ordered MRI to comply with certain prior orders and to make immediate payments of previously awarded amounts. However, because the trial court failed to file any findings or conclusions explaining its rationale for the conditions or the ultimate dismissal of the complaint, and its reasoning is not apparent in the record, we reverse and remand the dismissal and default judgment. Similarly, we reverse the trial court’s order directing entry of final judgment under CR 54(b) on a partial summary judgment in favor of Transgroup Worldwide Logistics (Transgroup) based on the lack of findings and conclusions to support such an order.
FACTS
In February 2006, MRI filed suit against Lions Gate Shipping Ltd., Empire Shipping Agency Ltd., and Transgroup asserting breach of contract and various other claims regarding a shipment of copper slag from Canada to Poland. After Lions Gate and Empire obtained summary judgment dismissal on jurisdictional grounds, the trial court ordered MRI to pay them $2,879.43 in costs and $29,477.50 in attorneys’ fees under Washington’s long-arm statute.
Following the withdrawal of MRI’s counsel in January 2007, MRI failed to respond to various discovery requests from Transgroup, the remaining defendant. Transgroup sought and obtained summary judgment on its counterclaims based on MRI’s failure to respond to requests for admissions. When MRI failed to respond to two orders compelling discovery responses, Transgroup moved to dismiss the complaint as a sanction.
On April 25, 2007, based on its determination “that [MRI] has failed to abide by the case schedule, has failed to comply with court orders, and has failed to pay costs and sanctions previously ordered,” the trial court ordered MRI to obtain new counsel by April 27, and by May 25, to (1) pay Lions Gate and Empire $2,879.43 in costs and $29,477.50 in attorneys’ fees as previously ordered; (2) pay Transgroup $22,822.31 in damages on its counterclaims as previously ordered; (3) pay Transgroup $2,500 in sanctions for discovery violations; (4) pay Transgroup $4,427.94 in costs and fees for further sanctions for discovery violations; (5) produce discovery responses to Transgroup’s interrogatories and requests for production as ordered January 12; (6) produce a possible primary witness list as ordered March 21; and (7) produce an agreed schedule for remaining discovery. The trial court also ordered that if MRI did not comply in a timely manner, “the complaint of Plaintiff MRI Americas, LLC shall be dismissed with prejudice and a default judgment shall be entered against Plaintiff MRI Americas, LLC pursuant to Civil Rule 37 (b)(2)(C).”
New counsel for MRI had already filed an appearance on April 20. Before the May 25 deadline, MRI submitted its witness list and supplemented its other discovery answers in response to Transgroup’s claims of deficiencies. MRI also filed a motion for reconsideration of the April 25 order, arguing it should not be required to pay the monetary awards as a condition to proceeding with its case against Transgroup.
After a hearing on September 14, the trial court “determined that [MRI] has failed to comply in a timely manner with the requirements of the order dated April 27, [sic] 2007” and dismissed the complaint with prejudice and directed entry of default judgment against MRI pursuant to CR 37(b)(2)(C).
MRI challenges the sanction of dismissal with prejudice and default judgment as well as the certification of the partial summary judgment on Transgroup’s counterclaims for immediate entry of judgment under CR 54(b).[1]
DISCUSSION
Trial courts have the authority to dismiss an action for violation of discovery orders under CR 37(b)(2)(C).[2]
Generally, we review a trial court’s imposition of sanctions for noncompliance with discovery orders for abuse of discretion.[3] The trial court’s reasons for imposing such sanctions “should, typically, be clearly stated on the record so that meaningful review can be had on appeal.”[4] Where a trial court dismisses an action for violation of discovery orders, “it must be apparent from the record that (1) the party’s refusal to obey the discovery order was willful or deliberate, (2) the party’s actions substantially prejudiced the opponent’s ability to prepare for trial, and (3) the trial court explicitly considered whether a lesser sanction would probably have sufficed.”[5]
Essentially, MRI contends that the trial court abused its discretion in dismissing because (1) MRI’s failure to meet all the conditions of the April 25 order, particularly the immediate payment requirements, was justified; (2) Transgroup was not substantially prejudiced by the discovery delays or the delays in payments; and (3) no findings indicated that the trial court considered lesser sanctions. Transgroup contends that the trial court’s reasoning is apparent from the record. We disagree.
The trial court did not enter any findings of fact or conclusions of law explaining its reasons for imposing the particular conditions of the April 25 order or for its ultimate dismissal of the case. It is not at all apparent from the record how the $32,356.93 award to Lions Gate and Empire involved a discovery order, or how MRI’s failure to immediately pay that award caused substantial prejudice to Transgroup, such that dismissal was the only appropriate remedy. The record does not indicate whether the trial court considered the sufficiency of MRI’s discovery responses following the April 25 order, the prejudice to Transgroup resulting from discovery delays, and MRI’s partial compliance or whether the trial court dismissed the case merely based on MRI’s failure to pay the monetary awards. And nothing in the record demonstrates that the trial court explicitly considered whether a lesser sanction would have probably sufficed before dismissing the case on September 14.
Although the record demonstrates that MRI failed to meet its discovery obligations or comply with discovery orders during the 90 days it was unrepresented, it is undisputed that after April 25 new counsel took steps to supply the missing discovery and pursue MRI’s remaining claims against Transgroup. Under the circumstances here, given the lack of findings and conclusions to explain the conditions of the April 25 order, the specific reasons for the September 14 dismissal, and the decision to reject less harsh sanctions, the trial court abused its discretion by dismissing the case with prejudice and ordering a default judgment against MRI. We therefore reverse the September 14 order dismissing MRI’s complaint with prejudice and entering default judgment against MRI and remand for further proceedings.
MRI also challenges the trial court’s certification of Transgroup’s partial summary judgment under CR 54(b).[6] Entry of a final judgment under CR 54(b) requires (1) more than one claim for relief or more than one party against whom relief is sought; (2) an express determination that no just reason exists for delay; (3) written findings supporting that determination; and (4) an express direction for entry of judgment.[7] It is especially important that the trial court identify the specific risk of harm without an immediate appeal.[8]
Despite the statement in the original order granting partial summary judgment to Transgroup that there was “no cause for delay” in entering an immediate judgment, the trial court did not file any written findings of fact and conclusions of law to support the entry of a final judgment under CR 54(b) with that order. Although the later order directing entry of judgment under CR 54(b) refers to findings of fact and conclusions of law and states that “the requirements of CR 54(b) have been met,” the record on appeal does not include a filed copy of any findings and conclusions supporting entry of final judgment. Moreover, while the record includes an unsigned document containing findings and conclusions speaking to the relationship between Transgroup’s counterclaims and MRI’s original claims, it does not address risk of harm in delaying an appeal, judicial administrative interests, equity, res judicata ramifications, prejudice, or other relevant factors.[9] In light of this record, we reverse the June 8 order certifying the partial summary judgment under CR 54(b).
Reversed and remanded.
[T]he court in which the action is pending may make such orders in regard to the failure as are just, and among others the following: . . . (C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceedings or any part thereof, or rendering a judgment by default against the disobedient party[.]
Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross claim, or third party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination in the judgment, supported by written findings, that there is no just reason for delay and upon an express direction for the entry of judgment. The findings may be made at the time of entry of judgment or thereafter on the court’s own motion or on motion of any party. In the absence of such findings, determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
Page 1021