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Wang v. Fou

United States District Court, M.D. North Carolina

January 17, 2019

XINDA WANG, Plaintiff,
v.
JANET YIJUAN FOU, Defendant.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Joi Elizabeth Peake United States Magistrate Judge.

         This matter comes before the Court on Defendant/Counter Claimant Janet Yijuan Fou's Motion for Sanctions [Doc. #32] made pursuant to Federal Rules of Civil Procedure 37(b) and 37(d). Plaintiff Xinda Wang has filed a Response [Doc. #34], Defendant has filed a Reply [Doc. #35], and Plaintiff has filed a Response to Defendant's Reply [Doc. #36]. For the reasons set out below, the Court will recommend that Defendant's Motion for Sanctions be granted, that the Clerk enter default against Plaintiff as to Defendant's counterclaims, that Plaintiff's complaint be dismissed with prejudice, and that Defendant be awarded costs.

         I. FACTS, CLAIMS, AND PROCEDURAL HISTORY

         Plaintiff Xinda Wang commenced this action in state court on January 5, 2017. Thereafter, Defendant removed the matter to this Court pursuant to 28 U.S.C. § 1441. Plaintiff, a citizen of China, alleges that Defendant improperly filed a notice of lis pendens against Plaintiff's real property in Durham County, North Carolina, in an attempt to force payment for a judgment that a New Jersey court awarded to Defendant against Plaintiff. Plaintiff claims that the filing of the notice constituted an abuse of process and that the filing and Defendant's subsequent failure to cancel the notice constitutes an unfair act in or affecting commerce. Plaintiff contends that Defendant's alleged conduct has injured Plaintiff by creating a cloud over the real estate, preventing Plaintiff from selling it.

         Defendant has filed a counterclaim, contending that the notice of lis pendens against the real property at issue was lawfully ordered and authorized by the Superior Court in New Jersey. Defendant asserts that the Appellate Division of New Jersey affirmed the trial court's finding that Defendant's ex-husband, Joe Fou, “executed a series of fraudulent transfers of the property including the transfer to Plaintiff. . . .” (Answer [Doc. #5] at 3.) Defendant requests that the Court give Full Faith and Credit to the judgment and opinion of the New Jersey appellate court and that the real property at issue be transferred from the name of Plaintiff into the name of Defendant. Defendant further seeks damages, dismissal of Plaintiff's Complaint, and an award of costs.

         In connection with the claims at issue, Defendant served Plaintiff with discovery requests. Defendant served Plaintiff with a Request for Production of Documents on June 14, 2017 [Doc. #19-1 at pp. 9-14] and with a Second Request for Production of Documents on August 31, 2017 [Doc. #19-1 at pp. 15-20].[1] Plaintiff failed to respond and failed to produce any documents. In addition, on June 14, 2017, Defendant noticed Plaintiff's deposition for July 21, 2017 [Doc. #19-1 at p. 23], but Plaintiff failed to appear. Counsel for Defendant sent a Letter on September 20, 2017 [Doc. #19-1 at p. 26] requesting responses to the discovery requests. On October 18, 2017, Defendant again served the document production requests and deposition notice [Doc. #19-1 at p. 25]. Plaintiff failed to respond and failed to appear at her deposition or provide any date for taking her deposition.

         Thereafter, on October 27, 2017, Defendant filed a Motion to Compel Discovery [Doc. #19]. In an Order [Doc. #24] dated November 29, 2017, the Court granted Defendant's Motion. In considering the Motion, the Court found that Plaintiff's failure to participate in discovery and her failure to comply with her discovery obligations were without legitimate basis and unreasonable. The Court noted that, to the extent Plaintiff complained of the burdensomeness of participating in discovery in this District, that Plaintiff elected to file the case here and that the dispute involves Plaintiff's claim of ownership of property in this District. The Court also found that Plaintiff unreasonably failed to take advantage of alternative options offered by Defendant for conducting discovery and taking Plaintiff's deposition. The Court, considering the expense and effort already incurred by Defendant and the likelihood of future discovery disputes, found good cause to grant Defendant's Motion. The Court therefore ordered that Plaintiff respond to Defendant's Document Production requests by December 20, 2017, and to appear in this District for a deposition on January 10, 2018. In addition, the Court specifically warned Plaintiff that further failure to comply with her discovery obligations and failure to comply with the Court's Order would subject her to sanctions under Rule 37(b) and 37(d), which could include dismissal of Plaintiff's claims, entry of default against Plaintiff on Defendant's counterclaims, and an award of Defendant's costs and fees.

         Despite the Court's November 29, 2017 Order, Plaintiff failed to produce complete responses to Defendant's Request for Documents and failed to appear for the Court-ordered deposition. In light of Plaintiff's non-compliance, Defendant filed a Motion for Sanctions, seeking dismissal of Plaintiff's complaint, entry of default against Plaintiff as to Defendant's counterclaims, and an award of costs. On April 13, 2018, the Court granted that Motion in part, but allowed Plaintiff a final opportunity to cure her discovery failures. In that Order, the Court first noted that Plaintiff's document production was clearly deficient. Although Defendant requested documents related to (1) any real property Plaintiff owns, (2) a copy of Plaintiff and Plaintiff's husband's passports and licenses, and (3) plane tickets documenting all trips to the United States or payments for the same, Plaintiff limited her response to documents related to the Durham property at issue, without objecting or presenting any reasonable basis for objection as to the other requested documents. Moreover, the Court noted that even as to the property itself, Plaintiff's production of 6 pages of documents was clearly deficient where Plaintiff claimed to be a bona fide purchaser for value.

         In addition, the Court found that Plaintiff's ongoing failure to appear for her deposition was in bad faith. Plaintiff contacted Defendant prior to January 10, 2018, requesting a later date for her deposition, contending that she was unable to travel from China due to early pregnancy. However, the Court noted that Plaintiff did not file any motions or notices with the Court or request an extension of the deadline set by the Court, despite prior warnings that non-compliance could result in severe sanctions. Further, documents submitted by Defendant reflected that Plaintiff's physician's notes supporting her purported inability to travel were of questionable validity.[2]

         The Court ultimately concluded that Plaintiff had continued to engage in an ongoing pattern of non-compliance with her discovery obligations and had ignored clear warnings from the Court. However, in light of Plaintiff's purported health concerns and the severity of sanctions requested, the Court extended to Plaintiff a final opportunity to cure her discovery failures and thus comply with her discovery obligations. In its April 13, 2018 Order, the Court directed Plaintiff to provide the remaining responsive documents and required her to appear for a deposition on May 17, 2018, or at an earlier date if agreed to by the parties. The Court further ordered Plaintiff to compensate Defendant for all costs and attorney's fees incurred by Defendant in attempting to obtain discovery and in litigating the Motion to Compel. This Court expressly informed Plaintiff that if she failed to cure her discovery failures or otherwise comply with this Court's Order, that “the Court will recommend dismissal of Plaintiff's claims and entry of default on Defendant's counterclaims as an appropriate sanction. . . .” (Order [Doc. #31] at 8.)

         On May 24, 2018, Defendant filed the instant Motion for Sanctions, notifying the Court that Plaintiff failed to comply with the Court's Order. In the Motion, Defendant seeks entry of default against Plaintiff as to Defendant's counterclaims, dismissal of Plaintiff's complaint, and an award of costs and fees. (Def.'s Br. [Doc. #3] at 4.)

         II. STANDARD

         Federal Rule of Civil Procedure 37(d)(1)(A) gives the Court discretion to order sanctions against a party who “fails, after being served with proper notice, to appear for that [party's] deposition” or who “fails to serve its answers, objections, or written response” to a properly served request under Rule 34. Further, Rule 37(b) provides that “[i]f a party . . . fails to obey an order to provide or permit discovery . . . the court where the action is pending may issue further just orders.” The Court may impose a host of sanctions, including, but not limited to, staying proceedings until the disobedient party complies with the order, dismissing the case in whole or in part, and rendering a default judgment against the disobedient party. Fed.R.Civ.P. 37(b)(2)(A)(i)-(vii). Notably, the Court must also order the disobedient party to pay “the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(b)(2)(C).

         While the Court has broad discretion to impose sanctions against a party who fails to comply with a discovery order, the range of that discretion is more limited when the Court imposes default judgment as opposed to a less severe sanction. Riggins v. Steel Techs., 48 Fed.Appx. 460, 462 (4th Cir. 2002) (citing Hatchcock v. Navistar Int'l Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995)). The Fourth Circuit has established four factors the Court must consider before imposing default judgment as a discovery ...


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