BancorpSouth Bank v. Kleinpeter Trace, L.L.C.
155 So. 3d 614
| La. Ct. App. | 2014Background
- BancorpSouth filed suit to enforce four notes issued to Kleinpeter Trace, L.L.C., secured by mortgages and guarantees, seeking payment on notes three and four and foreclosing on related collateral.
- Gladney and Kleinpeter Trace primarily claimed lack of liability for notes three and four due to alleged fraud by Tanner, BancorpSouth and Denison, and alleged unauthorized collateralization related to notes tied to the Bluffs project.
- Discovery disputes arose: belated production, destruction of the Abreo file, preservation failures, and contested production of electronic documents and emails; a pivotal Tanner/Denison email emerged late in proceedings.
- The trial court granted multiple discovery-related orders (October 2012 and January 2013 judgments) and ultimately dismissed BancorpSouth’s claims against Kleinpeter Trace and Gladney and struck defenses to the reconventional demand, awarding $225,000 in fees to Kleinpeter Trace and Gladney.
- BancorpSouth appealed, challenging the protective order denial, the grant of the motion to compel, the sanctions, the adverse presumption for the Abreo file, and the attorney-fee award.
- The appellate court reversed in part, vacated in part, and remanded, ruling that certain sanctions and the fee award were improper while affirming other discovery rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the protective order and discovery compulsion were proper | BancorpSouth contends the protective order was improper and the motion to compel overly broad. | Kleinpeter Trace and Gladney argue the bank withheld documents improperly and discovery should be compelled. | The court affirmed the protective-order/compel rulings (6:333(I)(2) protective scope proper). |
| Whether sanctions for discovery abuses were appropriate | BancorpSouth asserts sanctions were unwarranted because conduct predated orders or was not willful. | Kleinpeter Trace and Gladney claim willful noncompliance and pattern of abuse justify sanctions. | The court reversed the dismissal and striking of defenses, finding sanctions were not properly grounded in willful noncompliance. |
| Whether an adverse presumption for Abreo file spoliation was proper | BancorpSouth argues the presumption is unsupported and overly punitive. | Kleinpeter Trace and Gladney contend spoliation justifies adverse presumption. | Adverse presumption sustained for Abreo file; affirmed as appropriate depending on spoliation theory. |
| Whether the May 15, 2013 attorney-fee award was proper | BancorpSouth disputes the amount/authorization of fees under 1471 and 1469(4). | Kleinpeter Trace and Gladney maintain fees were warranted for obtaining the January judgment and sanctions. | The award was vacated to the extent it covered more than reasonable expenses; remanded to determine reasonable fees incurred in obtaining the January judgment. |
Key Cases Cited
- Hutchinson v. Westport Insurance Corporation, 886 So.2d 438 (La. 2004) (dismissal as sanction reserved for extreme discovery misconduct)
- MTU of North America, Inc. v. Raven Marine, Inc., 475 So.2d 1063 (La. 1985) (limits sanctions to reasonable expenses in obtaining the order)
- Paradise v. Al Copeland Investments, Inc., 22 So.3d 1018 (La. App. 1st Cir. 2009) (adverse presumption in spoliation contexts; reasonableness of explanation waved)
- Robertson v. Frank’s Super Value Foods, Inc., 7 So.3d 669 (La. App. 5th Cir. 2009) (spoliation and adverse presumption; cautions about tort theories)
- Hebert v. Hebert, 351 So.2d 1199 (La. 1977) (written judgments control over oral reasons; standard for appeal)