Eletech, Inc. v. Conveyance Consulting Group
308 Neb. 733
| Neb. | 2021Background
- Eletech sued Jonathan Jones, Conveyance Consulting Group, Inc. (CCG), and Jones Consulting for alleged self‑dealing and usurpation of corporate opportunities; appellants answered and filed counterclaims.
- Eletech served written discovery in January 2017; appellants’ initial responses were served in March 2017 but Eletech later moved to compel incomplete/evasive answers in November 2018.
- Appellants’ first counsel moved to withdraw (Dec. 2018); the court allowed withdrawal and continued the motion to compel to permit appellants to obtain new counsel.
- Appellants repeatedly missed hearings, failed to provide full supplemental responses after a February 2019 order compelling specified interrogatories and productions, and received multiple warnings that sanctions could include liability and dismissal.
- Second counsel (limited representation) withdrew in July 2019 after breakdowns in communication and a conditional replacement counsel withdrew when appellants failed to cooperate.
- The court entered discovery sanctions on July 15, 2019: judgment for Eletech for $407,187.46, joint and several allocations among defendants, and dismissal with prejudice of appellants’ counterclaims. Appellants appealed; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (Eletech) | Defendant's Argument (Appellants) | Held |
|---|---|---|---|
| Whether the court abused its discretion allowing first counsel to withdraw | Withdrawal was proper; notice and continuances protected appellants | Court failed to consider prejudice, pending motion to compel, and adequate notice | Waived by appellants for failure to object below; withdrawal did not abuse discretion |
| Whether granting motion to compel after counsel withdrawal was improper | Motion was timely, specified deficiencies, and court gave notice and 10 days to comply | Eletech waited too long and lacked specificity; compulsion after withdrawal was unfair | Appellants waived these arguments; the order specifically identified discovery and was not an abuse |
| Whether court erred permitting second counsel to withdraw | Gnuse validly withdrew for good cause after lack of client cooperation and provided notice | Withdrawal ignored pending sanctions and prejudiced appellants | Appellants failed to raise these objections below; withdrawal was permitted and not erroneous |
| Whether dismissal/judgment as sanctions under Neb. Ct. R. Disc. §6‑337 was excessive | Appellants were recalcitrant, ignored orders and warnings over months; dismissal appropriate to deter and remedy prejudice | Court imposed dismissal without findings of willfulness/bad faith, without proper notice, and without considering lesser sanctions | Trial court did not abuse discretion—record showed repeated failures, warnings, and prejudice; sanctions upheld |
Key Cases Cited
- Yeransian v. Willkie Farr, 305 Neb. 693, 942 N.W.2d 226 (addresses preservation/waiver of appellate issues)
- Eddy v. Builders Supply Co., 304 Neb. 804, 937 N.W.2d 198 (explains purposes and scope of sanctions under Neb. Ct. R. Disc. § 6‑337)
- Ecker v. E & A Consulting Group, 302 Neb. 578, 924 N.W.2d 671 (procedure concerning withdrawal and waiver principles)
- First Express Servs. Group v. Easter, 286 Neb. 912, 840 N.W.2d 465 (preservation of issues and appellate review limits)
- Hill v. Tevogt, 293 Neb. 429, 879 N.W.2d 369 (factors for assessing discovery sanctions)
- Stanko v. Chaloupka, 239 Neb. 101, 474 N.W.2d 470 (dismissal as sanction for recalcitrant party)
