Day on Torts
This is a decision about a divorce trial but we are reviewing it on Day on Torts because we always write about cases involving train wrecks.
Seriously, we will cover this case because it contains some useful reminders about (1) a party’s obligation when briefing issues on appeal; (2) the appropriateness of a court’s use of findings of fact and conclusions of law submitted by a party; and (3) discovery sanctions. The opinion is 31 pages long and a large portion of those pages are related to the tortured procedural history in the trial court. Rather than recount the history, below is just enough to give you a flavor of what the trial court was confronted with:
1. The parties had been married 32 years and had 3 grown children.
2. Wife engaged in a lengthy extramarital affair and Husband filed for divorce.
3. During the marriage, the parties had lived on substantial passive income from Husband’s interests in several family businesses. Wife sought to characterize that income as marital property.
4. During the divorce proceedings, Wife hired 7 different lawyers, requested five continuances of the trial and filed five motions to compel discovery, eight motions for civil contempt or sanctions, and one motion to reconsider for discovery non-compliance.
5. Wife served four sets of interrogatories and five sets of production of documents. Other discovery was also served but it was ultimately quashed. The primary goal of all this discovery was to allow Wife’s consulting experts to value Husband’s business interests and to attempt to establish the business interests were marital property.
6. In an effort to resolve the seemingly never-ending discovery war, the trial court ordered the parties experts to meet and confer and conduct two document reviews in Arkansas at one of the family businesses at issue.
7. In response to Wife’s discovery, Husband produced over 20,000 pages of documents, signed releases for documents not in his possession and offered at least 4,000 other documents for review and copying.
8. Shortly before trial, Wife switched consulting experts and ultimately failed to provide proper expert disclosures by the deadline in the trial court’s scheduling order.
9. Although Wife tried to cure the problem by filing late disclosures, the trial court granted Husband’s motion to exclude her experts.
10. At trial, the trial court awarded a divorce based on Wife’s adultery. The family business were classified as separate property and the marital estate was divided equally. Wife was awarded significant home furnishings and nearly $1.1 million dollars in cash. She was also awarded alimony in the amount of $8,000 per month for 10 years.
11. Husband was awarded $100,000 as sanctions for wife’s abuse of the discovery process.
On appeal, Wife raised several issues. First, she argued the trial court abused its discretion by “plagiarizing” Husband’s proposed findings of fact and conclusions of law without regard to the factual and legal errors they contained. Because the trial judge was scheduled to leave the bench, Wife claimed he had hurriedly adopted the Husband’s submission and failed to conduct an independent review. As for the issue of the trial court using a party’s submission, the Court of Appeals noted it was a “long-standing practice in this state for a trial court to request the parties submit finding and fact and conclusions of law and orders following a hearing or trial on the merits.” The Supreme Court had previously approved of such a practice if the following conditions were met: (a) the trial court does not require the parties to prepare the order or proposed findings; (b) the trial court carefully reviews the submission to ensure it properly reflects the court’s opinion; (c) the order disposes of all relevant issues ; (d) and irrelevant matters are not included. The Court of Appeals found it significant that more than 3 months passed between the conclusion of the trial and the entry of the final judgment, Wife had failed to offer a single citiation to the record to support her allegations and the trial judge had modified the Husband’s proposed findings of fact and conclusions of law which indicated he had carefully reviewed the matter to ensure it reflected his opinion.
Wife’s next issues on appeal were as follows:
II. This court should rule on all aspects of this case based upon a de novo review.
II. This court should enter findings of fact pursuant to Tenn. Code. Ann. §27-1-113.
Not surprisingly, the Court of Appeals found these issues to be inadequate pursuant to the Tennessee Rules of Appellate Procedure and instead declared them to be an unacceptable invitation for the Court to hunt for error. The Court of Appeals reminded litigants that for an issue to be appropriately presented for review that it must specifically outlined in the brief and supported by citations to the record or legal authority. Despite Wife’s failure to properly develop reviewable issues, the Court of Appeals deduced some issues from the briefs. The only ones we will address relate to discovery sanctions; we are not reviewing those dealing with the division of marital property and alimony.
As for discovery sanctions, Wife contended it was error for the trial court to deny her motion for sanctions on the eve of trial and she also took issue with the trial court’s award of a $100,000 sanction against her for discovery abuse. In her motion for sanctions, Wife had asked for the “severest sanction” for Husband’s delay in producing documents, his perjury and unclean hands and for denying her right to a fair trial. As a sanction, Wife requested Husband’s business interests be classified as marital property. After reviewing Tennessee Rule of Civil Procedure 37.02 and case law interpreting it, the Court of Appeals affirmed the trial court’s decision finding Wife had failed to explain why the more than 20,000 documents produced by Husband were not sufficient, and Wife failed to explain what documents were still missing or delayed that would have helped her case. More importantly, Wife had repeatedly argued these documents were needed by her experts but yet her experts had been excluded for failing to comply with the trial court’s scheduling order and Wife had not appealed that ruling. Finally, Wife did not offer any proof in the record of the Husband’s alleged perjury or unclean hands.
Finally, we turn to the $100,000 discovery sanction against Wife. While this is a staggering amount of money to be assessed against an individual, the Court of Appeals found it was not an abuse of discretion for several reasons. First, even an “economically disadvantaged spouse is not insulated from monetary sanctions when he or she engages in culpable conduct such as abuse of the discovery process.” Second, Husband actually requested $185,685 in sanctions and submitted an affidavit detailing the more than $300,000 in attorney fees he had incurred during the five years of litigation. After recounting Wife’s discovery antics, the Court of Appeals ultimately concluded that while reasonable minds could differ as to the amount the actual award was not an abuse of discretion given the trial court’s wide discretion over discovery sanctions pursuant to both Tenn. R. Civ. P. 37 and it inherent powers.
Leo Berg v. Julie Ann Rutledge Berg, No. M2013-00211-COA-R3-CV (Tenn. Ct. App. June 25, 2014) .