Tag: discovery sanctions

Discovery Sanctions and Getting Medical Records Into Evidence – Illinois Case Note

In Fraser v. Jackson, 2014 IL App (2d) 130283, the Second District affirmed a $600K-plus jury verdict for the personal injury plaintiff.  The Court also upheld the trial court’s exclusion of defendant’s medical expert testimony at trial and found that the defendant failed to answer plaintiff’s request to admit medical records in good faith.

Discovery Sanctions: Rule 219 and 213 Interplay

Illinois Supreme Court Rule 213(f)(3) requires a party, upon written interrogatory to identify controlled expert witnesses and provide testimonial subjects, conclusions, opinions, qualifications and any written reports.  SCR 213(f)(3).  The rule demands strict compliance.  Rule 219 provides a trial judge with an array of sanctions options including barring testimony from a party or its expert where it fails to comply with discovery rules or orders.  SCR 219(c)(iv).  Sanctions are committed to the trial court’s discretion and the purpose of sanctions is not to punish; but to motivate discovery compliance. (¶¶ 28-29).

 The Court found that the trial court properly barred defendant’s medical expert from testifying.  The defendant violated several discovery orders and its retained expert failed to respond to a documents subpoena despite repeated requests.  The trial judge gave defendant many chances to comply with discovery and entered progressive sanctions before barring outright the defendant’s expert from testifying.

Medical Records: Evidentiary Foundation Rules

The Court also held that plaintiff laid a sufficient foundation for the admission of his medical bills in evidence.

In Illinois, the evidentiary foundation for admitting medical records can be established by a doctor’s deposition testimony or through testimony of a non-doctor employee familiar with the medical practice’s billing methods and reasonableness of the charges. (¶40).

At trial, the plaintiff offered evidence deposition testimony of several treating physicians and a medical billing specialist – all of whom testified that plaintiff’s medical treatment and bills were reasonable and commensurate with the type of injury that plaintiff suffered in the car crash.  This testimony cumulatively satisfied the foundation requirements for admitting medical bills into evidence.

 Costs and Attorneys’ Fees (Rule 219(b) and 216 interplay)

 The Court upheld the trial court’s $4,000 plus sanctions award against defendant for failing to respond in good faith to plaintiff’s request to admit that the medical bills were reasonable and necessary. 

Illinois law allows a plaintiff to utilize a Rule 216 Request to Admit to seek admissions that his medical treatment and related expenses were reasonable and necessary in view of the plaintiff’s injury. 

Rule 219(b) allows a plaintiff to recover fees and costs where he proves a requested fact that the defendant denies where the denial isn’t in good faith, based on privilege or some other permissible reason – even if the defendant doesn’t have a specific intent to obstruct the litigation process.  SCR 219(b), ((¶¶44-46).

The court found the defendant’s failure to admit the reasonableness and amount of plaintiff’s medical bills was not in good faith.  Because of the defendant’s denial, the plaintiff had to open up a case in another state (Wisc.) and subpoena a medical records agent to testify telephonically at trial.  The Court found that because defendant made plaintiff jump through so many logistical hoops to get a billing agent to testify on a mundane issue, the trial court’s fees and costs award was proper.  (¶47).

 Take-aways:

– A trial court has wide latitude to assess discovery sanctions including barring witnesses;

– A request to admit a fact that’s not subject to meaningful dispute should be admitted by the opposing side.  Otherwise, the party denying the requested fact or document will have to pay the requesting party’s fees and costs incurred in proving that fact/document.

 

7 Blown Discovery Deadlines Over 18 Months = Dismissal With Prejudice As Rule 219 Sanction (IL 1st Dist.)

Let’s see.  12 court hearings over a year-and-a-half devoted entirely to discovery disputes.  7 missed deadlines – 3 of which were “final” – and one of those 3 was even “final, final, final, final, final!”.  And still – no discovery compliance from the plaintiff.  There  was even an intermediate contempt sanction of a $500 fine and another court order assessing a daily fine of $50 to induce plaintiff to appropriately respond to defendant’s discovery.  Again, nothing. So what’s a judge to do?

In Illinois, she has options.  Many of them.  Supreme Court Rule 219 gives the court wide latitude to fashion myriad sanctions against litigants to ensure discovery compliance and dissuade future violations.  The sanctions options include striking pleadings and defenses, entering default orders and barring a violating party from raising defenses or offering evidence on the subject of the unanswered discovery requests.  Even outright dismissal with prejudice, the harshest sanction of all, is allowed if the discovery abuse is severe enough.  See SCR 219(c)(v).

Master Hand Contractors, Inc. v. Convent of Sacred Heart, 2013 IL App (1st) 123788-U, a factual snapshot of which is the lead-in to this article, illustrates especially egregious discovery conduct.  There, the trial court dismissed a mechanics’ lien plaintiff’s suit with prejudice after it violated 7 court discovery orders (3 with “final” deadlines) over an 18-month time span.  The First District affirmed the trial court’s ultimate sanction based on the plaintiff’s pattern of discovery abuses and blatant flouting of multiple court orders.

Facts: Plaintiff general contractor filed a mechanics lien suit to recover on a $2,000,000-plus construction contract for renovation work on a private school.  The plaintiff’s lien claim was nearly $400,000.  The case quickly degenerated into an acrimonious discovery dispute with the defendant school repeatedly serving unanswered discovery requests on the plaintiff contractor.  Most of the school’s discovery requests sought plaintiff’s “electronically stored information” (ESI).  Over the course of a year-and-a-half and 12 separate hearings devoted to discovery issues,  the contractor still hadn’t properly answered the school’s ESI requests.  Eventually, the trial court – after first assessing several progressive sanctions short of dismissal – had seen enough and dismissed plaintiff’s suit with prejudice under Supreme Court Rule 219(c)(v).  Master Hand, ¶¶ 9-10.  The contractor appealed on the basis that the dismissal sanction was too harsh.

Held: trial court affirmed.  Plaintiff’s case dismissed with prejudice.

Rules/Reasoning:

Supreme Court Rule 219 provides for progressive sanctions including dismissal with prejudice.  A court also has inherent authority to control its docket and to sanction discovery abuses.  Master Hand, ¶15.  Dismissal power is proper where the “record shows deliberate and continuing disregard for the court’s authority.”  Id.  A trial court’s decision to impose sanctions is reviewed for an abuse of discretion which means, in the discover sanctions context, that “no reasonable person would agree with the position adopted by the trial court.”  Master Hand, ¶ 13.

Here, because plaintiff violated so many court orders over such a lengthy time frame, the trial court had discretion to dismiss plaintiff’s case.  The First District also noted that the trial court “progressively disciplined” the plaintiff; giving it many chances to comply with discovery – as evidenced by the three “final” deadlines issued by the court – and to escape sanctions.  Master Hand, ¶ 15.  The Court also pointed out that the trial judge was uniquely qualified to assess the propriety of the defendant’s discovery requests (which plaintiff claimed was “abusive”) since the judge specifically handled mechanics lien cases and was versed in document-intensive construction disputes.

Take-aways: Discovery rules and court orders aren’t suggestions or advisory.  While dismissal with prejudice is extreme and there are more mild sanctions choices, the trial court here didn’t dismiss plaintiff’s case lightly.  In fact, each sanction assessed by the court was carefully calibrated to give the plaintiff a chance to comply with discovery and to have its case heard on the merits.  But after so many hearings and blown deadlines, the case became farcical and the court had no choice but to dismiss it.  Master Hand also underscores the importance of having proper ESI search and production protocols in place.  It’s clear that plaintiff’s lack of ESI discovery savvy was a major deficiency in its discovery responses and was critical to the trial court’s dismissal sanction.

 

Lost Profits and Breach of Contract Damages: Illinois Law

imageIn Santorini Cab Corporation v. Banco Popular, 2013 IL App (1st) 122070, the plaintiff cab company sued a bank for breaching two contracts to transfer taxicab medallions totalling $96,000 ($48,000 each).  The plaintiff sought damages for lost profits (profits it would have earned had the bank transferred the medallions) and the increased value of the medallions as of the trial date.

After a bench trial, the court entered judgment for the cab company but in an amount (about $40,000) much lower than the company sought.  The trial court previously entered partial summary judgment for the bank and excluded plaintiff’s lost profits evidence as a discovery sanction.  The court also ruled that the proper measure of plaintiff’s damages was the difference between the medallions’ contract price and their value on the date of breach (2007); not on the trial date (2011).  The cab company appealed.

Holding: Trial court affirmed.

Reasons: The trial court properly barred the plaintiff from offering lost profits evidence.  The Court noted that plaintiff repeatedly failed to respond to defendant’s discovery requests for information to support plaintiff’s claimed damages.

Lost Profits Standards and Discovery Sanctions

Under Illinois law, lost profits can be awarded as long as there is a sufficient basis to estimate them with  reasonable certainty.  Lost profits won’t be awarded where the proof is remote or speculative.  (¶¶ 18-19).  The plaintiff has the burden of proving lost profits by presenting a reasonable basis for their computation.  A common source of lost profits evidence is a plaintiff’s track record of past profits as a gauge of what future profits would have been (if there was no breach of contract).

Here, the plaintiff didn’t meet its burden of proving lost profits.  Since the plaintiff failed to comply with defendant’s lost profits discovery on multiple occasions, the trial court properly struck plaintiff’s damage claims as a discovery sanction under Supreme Court Rule 219.

Rule 219 gives the trial court wide latitude to impose discovery sanctions, including barring a non-complying party from offering evidence on issues sought by the ignored discovery requests.  (¶¶ 21-22).

Contract Damages – From When to When?

The Court also affirmed the trial court’s damage award of $37,550 which consisted of the difference in the (a) contract price of each medallion ($48,000) and (b) the medallion’s value on the date of breach ($66,775).

Breach of contract damages seek to put the plaintiff in the position he would have been in had the contract been performed, but not in a better position.  Contract damages should not provide plaintiff with a windfall.  (¶ 26).

In a personal property case, the measure of damages is the difference between the contract price and the market price of the item at the time of breach.  ¶ 27. But where there is no market for the item, this rule doesn’t apply.  Instead, the damage amount is “actual loss” to the buyer as shown by the  evidence.  (¶¶ 26-27).

Here, there was a definite market for cab medallions.  The evidence was that there were thousands of cab medallions bought and sold over a 3 1/2 year period preceding the trial date and several medallions were sold the month of the bank’s breach.  The Court found that the trial court properly averaged the sale price of medallions sold in Chicago during the month and year of breach (Feb. 2007) and sustained the lower court’s damage award for the plaintiff.

Take-aways:

Santorini provides a nice gloss on contract damages and lost profits requirements in the personal property context.  It clarifies that contract damages involving personal property  are measured on the date of breach; not a later trial date.  This case also shows how crucial it is to timely and properly answer discovery requests on damages issues; especially if you have the burden of proof at trial.

It’s crucial for parties to vigilantly update discovery responses – especially on damage computations – so they aren’t barred from offering damages evidence at trial.