Stuart Reed and Michael Reed v. Michael Cassady, 2015 Ind. App. LEXIS 139

Plaintiff Michael Cassady sued Stuart and Michael Reed, Distinctive Transportation Services, Inc. (DTS), and related entities, alleging the Reeds diverted DTS assets and profits to Reed-controlled companies and breached fiduciary duties.
Cassady served discovery; DTS’s responses were allegedly evasive and incomplete, and Cassady moved to compel; the trial court ordered full compliance and later imposed sanctions for ongoing discovery noncompliance.
The court awarded a $10,000 sanction on September 30, 2013 (later enforced against DTS) and a $30,000 sanction on February 26 / March 4, 2014 for continued discovery failures.
The court found DTS in contempt for failing to pay the $10,000 sanction and gave DTS 30 days to pay or else the court would issue a warrant for arrest of DTS’s primary officer to coerce compliance; the court also held all Defendants jointly and severally liable for the $30,000 sanction.
The Reeds appealed the April 22, 2014 order (the appeal here) arguing the court erred by threatening arrest of a corporate officer for corporate nonpayment and by imposing joint-and-several liability on all Defendants for the $30,000 sanction.
The Court of Appeals affirmed: it held the trial court did not abuse its discretion in (1) treating contempt/coercive incarceration of an officer as available where corporate actors control compliance and refuse to act, and (2) imposing joint-and-several discovery sanctions on the Defendants under the facts presented.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trial court could order arrest of DTS’s primary officer if DTS failed to pay $10,000 sanction (civil contempt coercion)	Cassady: Civil contempt coercion (including arrest) is authorized to compel corporate compliance; court may bind officers who control corporate action	Reeds: Officer cannot be arrested for corporate nonpayment; contempt/arrest of officer inappropriate here	Court: Affirmed. Civil contempt coercive incarceration is permissible where officer controls corporation, had opportunity to purge, and record showed officer prevented compliance
Whether trial court erred by imposing $30,000 sanction jointly and severally on all Defendants	Cassady: Sanction valid under T.R. 37; joint liability appropriate because Reeds and entities were implicated and discovery targeted Reed-related companies	Reeds: Sanction should have applied only to DTS (or not to them individually) because discovery requests targeted DTS; joint liability improper	Court: Affirmed. Trial court did not abuse discretion; factual record supported joint-and-several liability given allegations and discovery directed at Reed companies and Reeds’ roles

Whitaker v. Becker, 960 N.E.2d 111 (Ind. 2012) (trial court has broad discretion to impose discovery sanctions up to dismissal or default)
Wright v. Miller, 989 N.E.2d 324 (Ind. 2013) (appellate review of sanction rulings for abuse of discretion; courts should act fairly given case circumstances)
Brightpoint, Inc. v. Pedersen, 930 N.E.2d 34 (Ind. Ct. App. 2010) (appellate court will not reweigh evidence when reviewing sanctions)
Scott v. Randle, 736 N.E.2d 308 (Ind. Ct. App. 2000) (defining joint-and-several liability where multiple parties acted together to warrant shared sanction)
Reich v. Sea Sprite Boat Co., 50 F.3d 413 (7th Cir. 1995) (a command to a corporation is a command to its responsible officers who may be held in contempt for preventing compliance)
Duemling v. Fort Wayne Cmty. Concerts, Inc., 188 N.E.2d 274 (Ind. 1963) (civil contempt fines payable to aggrieved party and imprisonment may be used to coerce compliance)
Ex parte Chambers, 898 S.W.2d 257 (Tex. 1995) (officer held personally bound by order directed to corporation when officer was sole actor capable of compliance)