Hammoudeh v. Jada – 10/9/2009

October 20, 2009

Arizona Court of Appeals Division Two Holds That When It Is Apparent from the Record That Discovery Violations Are the Fault of the Party, As Opposed To the Party’s Attorney, Court Need Not Hold Evidentiary Hearing Prior to Sanctioning Party with Dismissal or Entry of Default Judgment.

Jada and Hammoudeh agreed to the sale of Hammoudeh’s 2003 Mercedes to Jada.  After a dispute,  Hammoudeh refused to undo the deal, and Jada failed to make further payments.  Hammoudeh repossessed the vehicle and filed a complaint for breach.  Jada counterclaimed, alleging fraud, conversion, and racketeering. 

During litigation, Jada filed two sets of discovery requests, first in July 2007 and again in November 2007.  He also filed his Rule 26.1 initial disclosure statement.  After Hammoudeh failed to respond to either discovery request or make any initial disclosure statement, Jada filed a motion to compel discovery and for attorney’s fees.  In February 2008, just before a hearing on the motion to compel, Hammoudeh responded to the discovery requests.  The trial court awarded attorney’s fees to Jada based on the untimely responses.  In May 2008, Jada gave notice to the court that Hammoudeh’s responses were inadequate.  Jada then moved to strike Hammoudeh’s complaint and his answer to Jada’s counterclaim.  Hammoudeh did not respond.  During the September 2008 hearing on Jada’s motion, the trial court rejected Hammoudeh’s request for an evidentiary hearing, granted Jada’s motion to strike Hammoudeh’s pleadings, and subsequently held a default hearing regarding damages.  Hammoudeh appeared only on the first day of the two-day damages hearing, which resulted in a default judgment awarding Jada over $20,000 in damages, plus costs and attorney’s fees.

In a unanimous decision, the Court of Appeals affirmed the trial court’s decision to deny Hammoudeh’s request for an evidentiary hearing prior to entering default judgment.  Hammoudeh argued that the trial court should have held a hearing to determine whether Hammoudeh’s attorney, not Hammoudeh personally, caused the failure to comply with discovery requests.  The Court explained that Rule 37(b)(2), Arizona Rules of Civil Procedure, gives a court power to strike pleadings or enter a default judgment as sanctions against a party for failure to comply with discovery orders.  To issue a harsh sanction such as dismissal, the court must find that the party, not only the party’s attorney, obstructed discovery.  The Court noted that, although an evidentiary hearing “may often be necessary” to make such a finding, one was not required here because the “facts are apparent from the record.” 

After examining Hammoudeh’s pattern of incomplete and delayed discovery responses, the Court concluded that the record demonstrated that the trial court was within its discretion to conclude that an evidentiary hearing was not necessary in this case.

Judge Vásquez authored the opinion; Judges Eckerstrom and Brammer concurred.