Alpha Beta Capital Partners, L.P. v. Pursuit Investment Management, LLCAlpha Beta Capital Partners, L.P. v. Pursuit Investment Management, LLC
- Reporters:
- , ,
- Before:
- Prescott, Devlin, D’Addabbo
The plaintiff, following the defendants’ appeal from the trial court’s judgment in the plaintiff’s favor, sought sanctions from the defendants for their failure to comply with postjudgment discovery orders. The court had previously granted the plaintiff’s application for a prejudgment remedy, and, thereafter, granted the plaintiff’s postjudgment motions to increase the judgment amount and for disclosure of assets to assist it with securing the additional amount of the judgment. The court ordered the defendants to provide the plaintiff with additional documents, stating that if the defendants failed to substantially comply with its order, S and C, the individual defendants who operated the defendant companies, would each be required to appear for an examination of judgment debtor. Thereafter, after failing to produce many of the documents they were required to disclose, S and C were ordered by the court to appear for an examination of judgment debtor and, subsequently, the defendants were ordered to provide the plaintiff with supplemental disclosures. The court thereafter issued an order of sanctions against the defendants for their failure to comply with the court’s discovery orders, ordering monetary sanctions comprised of attorney’s fees and litigation costs, and the defendants amended their appeal and this court severed this claim from the appeal. Held that the court’s order of sanctions met the requirements that a trial court must deem satisfied before imposing sanctions, and, therefore, the court’s order did not constitute an abuse of discretion: the court’s order was reasonably clear, notwithstanding the defendants’ claim that there was neither a clear order nor a violation of any such order, S and C were under oath when testifying during the examination of judgment debtor, and, having sworn to provide truthful testimony, understood that they were required to provide such testimony during the proceeding; moreover, the trial court properly found that the defendants violated the court’s discovery order, as there was ample evidence in the record, which purportedly contradicted the testimony that S and C had provided at the examination of judgment debtor, from which the trial court reasonably could have inferred that S and C conducted themselves with obvious dishonesty; furthermore, the court’s order of sanctions was proportionate to the defendants’ violation of the court’s discovery orders that occurred after the examination of judgment debtor, because the court found that the defendants engaged in a continuous practice of disobeying the court’s discovery orders, the plaintiff suffered harm, including attorney’s fees and litigation costs, as a result of the defendants’ failure to provide documents that the court had ordered them to disclose that were pertinent to the plaintiff’s ability to identify assets that could be used to satisfy the judgment, and the defendants’ failure to disclose the documents deprived the plaintiff of information that it needed to collect on the judgment, part of which was not secured by a prejudgment remedy, and the court’s order of sanctions was appropriate because it reimbursed the plaintiff for the attorney’s fees and other litigation costs that it incurred in order to compel the defendants to provide it with certain documents that the court had ordered they disclose, and that the plaintiff needed, to obtain a remedy to which it was entitled, and, in the absence of the court’s order of sanctions, the plaintiff unfairly would have borne this cost.
PRESCOTT, J. This appeal involves a challenge to sanctions imposed by the trial court to remedy extensive discovery abuses by the defendants that frustrated the plaintiff’s attempt to collect on a significant monetary judgment. The defendants, Pursuit Opportunity Fund I, L.P. (POF), Pursuit Opportunity Fund I Master Ltd. (POF Master), Pursuit Capital Management Fund I, L.P. (PCM), Pursuit Capital Master (Cayman) Ltd. (PCM Master), Pursuit Investment Management, LLC (PIM), Northeast Capital Management, LLC (Northeast), Anthony Schepis, and Frank Canelas, Jr.,1 appeal from the trial court’s order of sanctions, in which the court awarded the plaintiff, Alpha Beta Capital Partners, L.P., attorney’s fees and litigation costs for the defendants’ discovery abuses. On appeal, the defendants claim that the court’s order of sanctions constituted an abuse of discretion because the order failed to meet the three requirements that a trial court must deem satisfied before imposing sanctions and that this court must analyze to determine whether the trial court’s order constituted an abuse of discretion. See Ridgaway v. Mount Vernon Fire Ins. Co., 328 Conn. 60, 70–71, 176 A.3d 1167 (2018) (citing Millbrook Owners Assn., Inc. v. Hamilton Standard, 257 Conn. 1, 17–18, 776 A.2d 1115 (2001)).2 We disagree with the defendants’ claim and, accordingly, affirm the judgment of the trial court.
The following facts and procedural history are relevant to the defendants’ claims on appeal. In September, 2015, the plaintiff ‘‘filed an application for a prejudgment remedy and a proposed summons and complaint against the defendants.’’3 Alpha Beta Capital Partners, L.P. v. Pursuit Investment Management, LLC, 193 Conn. App. 381, 398, 219 A.3d 801 (2019) (Alpha Beta I), cert. denied, 334 Conn. 911, 221 A.3d 446 (2020). The plaintiff then filed a seven count amended substitute complaint against the defendants, alleging ‘‘(1) breach of contract, (2) breach of the covenant of good faith and fair dealing, (3) unjust enrichment, (4) conversion, (5) statutory theft under
In June, 2016, the trial court granted the plaintiff’s application for a prejudgment remedy in the amount of $5,421,582. Id., 399. After a bench trial held later that year, ‘‘the court rendered judgment [partially] in favor of the plaintiff against PCM, POF, PIM, Schepis, Canelas, and Northeast in the total amount of . . . $5,422,540.’’ (Internal quotation marks omitted.) Id., 401. Then, ‘‘[o]n January 4, 2017 . . . the court granted the plaintiff’s motion to increase the [judgment] amount by $947,731 to a total of $6,369,313 . . . . On the same date, the court granted the plaintiff’s motion for disclo
Ultimately, ‘‘[t]he defendants appeal[ed], and the plaintiff cross appeal[ed], from the judgment of the trial court . . . [In this appeal], the defendants also [challenged] the [order] of the trial court granting the plaintiff’s postjudgment motion to increase the amount of [the judgment] and [the order] granting the plaintiff’s motion’’ to discover assets that could be used to satisfy the judgment, $947,731 of which had not been secured by a prejudgment remedy. Alpha Beta I, supra, 193 Conn. App. 389. This court disposed of that appeal in Alpha Beta I. See id., 389–90.
At a hearing before the trial court on January 12, 2017, the defendants stated that they would disclose assets sufficient to satisfy the increase in the judgment amount within thirty days. Accordingly, the court ordered the defendants to make these disclosures by February 14, 2017.
On March 31, 2017, the plaintiff moved the court for an order requiring the defendants to comply with its January 12, 2017 order and to impose sanctions against the defendants because they had failed to make the disclosures that the court had ordered them to make by February 14, 2017. In light of the defendants’ failure to comply with its previous order, the court, on April 12, 2017, ordered the defendants to provide the plaintiff with documents spanning sixty-six categories. The court required them to provide these documents by May 3, 2017. The defendants agreed that they would provide these documents to the plaintiff by this date. Moreover, the court stated that, if the defendants failed substantially to comply with its order by May 3, 2017, then Schepis and Canelas would be required to appear for an examination. Instead of complying with this order, however, the defendants, on May 3, 2017, moved for a protective order in which they challenged, inter alia, the court’s authority to order postjudgment asset discovery. The court denied this motion.
On that same date, the plaintiff served postjudgment interrogatories on the defendants, in accordance with
On August 21, 2017, the court granted this motion. The court also reiterated that the defendants were obligated to provide the plaintiff with the disclosures that the court previously had ordered them to make in its January 12 and April 12, 2017 orders. The court ordered
On October 20, 2017, the plaintiff moved for the court to order the defendants to produce the required documents and to appear for an EJD, and requested that the court impose sanctions against the defendants for failing to comply with the court’s discovery orders. On November 6, 2017, the court ordered the defendants to provide the plaintiff with the disclosures that the court had ordered them to make in its January 12, April 12, and August 21, 2017 orders. The court ordered the defendants to comply with this order by November 16, 2017, or risk being held in contempt of court. The court also agreed to sanction the defendants and ordered them to reimburse the plaintiff for the cost of preparing the plaintiff’s October 20, 2017 motion.6 As for further sanctions, the court stated that it would ‘‘reserve decision on the need for [them] depending on the defendants’ compliance with this order.’’ The court also ordered ‘‘Schepis and . . . Canelas . . . to appear on November 22, 2017 . . . to be examined as [j]udgment debtors.’’ The court later granted a motion by the defendants asking the court to move the deadline for document disclosures to December 8, 2017, and the date of the EJD to December 13, 2017.
By the time that the EJDs commenced on December 13, 2017, the defendants had provided the plaintiff with only a small fraction of the sixty-six categories of documents that they had agreed to make available pursuant to the April 12, 2017 agreement and that the court most recently ordered them to produce in its November 6, 2017 order.7 The defendants told the court that they had not produced many of the documents that they were required to disclose because they did not have them in their possession.
Both Schepis and Canelas testified under oath during the EJD. Despite being sophisticated investors with significant assets, however, Schepis and Canelas claimed that they were able to recall little information about their finances. For example, when asked which accountant prepared his personal tax returns, Schepis represented that he could not remember who prepared them. Canelas provided similar answers concerning the tax returns about which he was asked. For example, he asserted that he did not know who had prepared the 2016 tax return for one of the entities that he controlled and operated with Schepis.
Schepis and Canelas were also asked about their sources of income and where they deposit their earnings. During his testimony, Schepis was presented with
Canelas provided similarly evasive answers to questions about his personal finances. He claimed that he could not recall receiving a $776,000 disbursement from his former attorney and could not recall whether he received disbursements from entities that he controlled and operated. Asked whether he had an account into which he could deposit money, Canelas asserted that he could not recall. He also represented that he did not have a checking account and could not recall the last time that he had a bank account. In light of this representation, the plaintiff’s counsel asked him how he retrieves cash when he needs it, to which he responded that he asks his wife for it, whom he described as being a stay-at-home mother who does charity work and is his ‘‘sole source of money.’’ He also asserted that his wife pays his bills and that he does not.
On the same date as the EJD, the court, in light of the defendants’ evasive and incredible responses during the EJD and their failure to provide the plaintiff with the documents that the court, in previous discovery orders, had required them to disclose, entered new orders to address these issues.9 First, the court continued the EJD until February 6, 2018.10 The court also ordered that, by December 22, 2017, Schepis and Canelas were to produce the following: ‘‘1. [f]ederal and state income tax returns for each of tax years 2015 and 2016 identifying the preparer(s)’ name(s); 2. [a]n unredacted copy of [a document containing financial information from the defendants’ prior counsel]; 3. [f]ederal and state income tax returns for the tax years 2015 and 2016, identifying the preparer’s name, for (a) [POF], (b) [PCM], (c) [PIM], (d) Pursuit Partners, LLC, and (e) [Northeast].’’ Indeed, the court had, in three prior orders, commanded that the defendants produce the tax returns listed in its December 13, 2017 order. Additionally, the court ordered the defendants’ counsel to ‘‘submit a responsive pleading’’ to the court’s November 6, 2017 order requiring the defendants to provide the plaintiff with the documents that, on April 12, 2017, they agreed to make available to the plaintiff and had
On January 2, 2018, the plaintiff moved for the court to order the defendants to comply with the court’s December 13, 2017 order. In this motion, the plaintiff stated that the defendants had provided some, but not all, of the documents that the court’s December 13, 2017 order required them to produce and that they had failed to submit a responsive pleading to the court’s November 6, 2017 order, despite being required to produce all of these items by December 22, 2017.
The plaintiff then filed a second motion on February 13, 2018, in which it requested that the court order Schepis and Canelas to provide the information that they claimed that they could not recall during the EJD and impose sanctions for Schepis’ and Canelas’ conduct during the EJD. In addition, the plaintiff requested that, in light of the testimony that Schepis and Canelas did provide during the EJD and the defendants’ failure to provide the plaintiff with documents that the court had previously ordered them to produce, the court compel the defendants to provide the plaintiff with supplemental disclosures covering ten categories of information. Some of the categories of documents requested in this motion pertained to documents that the court already had ordered the defendants to produce in prior orders, such as statements for securities accounts that either Schepis or Canelas owned, but the motion also contained requests for the defendants to produce documents covering new categories of information.
On March 8, 2018, the court ordered the defendants to ‘‘to identify . . . the preparer’s name of the state income tax returns for the tax years 2015 and 2016, for (a) [POF], (b) [PCM], (c) [PIM], (d) Pursuit Partners, LLC, and (e) [Northeast], an[d] the preparer for the federal tax returns of Pursuit Partners, LLC.’’ With respect to the ten categories of documents that the plaintiff asked the court to order the defendants to provide, the court ordered the parties to conference to attempt to resolve any issues with respect to the defendants’ providing these documents. If, however, the parties were unable to resolve the issues, the court instructed the plaintiff’s counsel to submit an affidavit describing the categories of documents that remained in dispute by March 22, 2018. The court also reserved its decision on the other orders requested by the plaintiff.
On March 22, 2018, the plaintiff’s counsel submitted an affidavit to the court in which he averred that the defendants agreed to produce some, but not all, of the ten categories of documents that the plaintiff had requested in its February 12, 2018 motion. On April 4, 2018, the court, having reviewed the affidavit, ordered the defendants to provide the plaintiff with supplemental disclosures within the categories of documents that
On April 24, 2018, the plaintiff’s counsel filed an affidavit with the court in which he averred that the defendants had provided nothing in the way of compliance with the court’s April 4, 2018 order. The court, on June 6, 2018, then ordered the ‘‘[p]laintiff . . . to submit a supplemental filing identifying the outstanding discovery by June 14, 2018, [and that the defendants] respon[d] to th[is] [supplemental] filing . . . by July 2, 2018. The court also ordered that ‘‘[a] hearing [be held] to consider an order for fees and [p]enalties . . . .’’ On June 14, 2018, the plaintiff submitted two affidavits in response to the court’s June 6, 2018 order. In the first affidavit, the plaintiff’s counsel averred that the defendants had only partially complied with the court’s April 4, 2018 order, in which it ordered them to make supplemental disclosures to the plaintiff. In the second affidavit, the plaintiff’s counsel sought an award of attorney’s fees, averring that the plaintiff had incurred $31,610 in attorney’s fees and $1258.05 in other litigation expenses preparing for and taking the December 13, 2017 EJD and attempting to obtain the defendants’ compliance with the court’s discovery orders.
In support of the requested attorney’s fees, the plaintiff’s counsel averred that he bills at an hourly rate of $400. He stated that he spent fourteen hours preparing for the December 13, 2017 EJD; 3.7 hours taking the December 13, 2017 EJD; 2.8 hours preparing the plaintiff’s January 2, 2018 motion; 35.2 hours preparing the plaintiff’s February 13, 2018 motion; and 1.5 hours arguing motions related to the defendants’ noncompliance at a June 6, 2018 status conference.
In addition, the plaintiff’s counsel requested that the plaintiff be awarded $8730 for the services of an attorney from Reed Smith LLP (Reed Smith), who served as the plaintiff’s cocounsel. The plaintiff’s counsel further stated that cocounsel from Reed Smith bills at an hourly rate ranging from $450 to $800 and engaged in 14.4 hours of work on the plaintiff’s behalf.
Thereafter, the defendants filed their response to the plaintiff’s affidavits. Notably, the defendants filed this response on July 19, 2018, even though the court ordered them to file it by July 2, 2018.12 The defendants essentially made three arguments in their response. First, they argued that the award of attorney’s fees that the plaintiff requested for preparing, attending, and taking the December 13, 2017 EJD was excessive. The defendants did, however, concede that the plaintiff should receive an award for some of the fees incurred for the EJD, stating that ‘‘a reasonable award of attorney’s fees related to the December 13, 2017 EJDs should be in an amount significantly less.’’ (Emphasis added.) Second, the defendants argued that the plaintiff should not be awarded attorney’s fees for work performed after
On July 23, 2018, the court issued the order of sanctions that is the subject of the present appeal. The court’s decision to sanction the defendants was predicated on two factual findings. First, ‘‘[t]he court [found] that an award of [attorney’s] fees and costs [was] appropriate because [Schepis and Canelas] conducted themselves at the [EJD] on December 13, 2017, before the court with obvious dishonesty . . . .’’ Second, the court found that, after conducting themselves with ‘‘obvious dishonesty’’ at the EJD on December 13, 2017, the defendants ‘‘then . . . engaged in a continuous practice of disobeying the court’s discovery orders.’’
Having made these findings and determined that an order of sanctions was appropriate, the court awarded the plaintiff $17,962.05, which amounted to $16,704 in attorney’s fees and $1258.05 in litigation costs. The court calculated the attorney’s fee portion of the award using an hourly rate of $360 for the hours that both the plaintiff’s counsel and cocounsel from Reed Smith billed. Specifically, the court awarded: 3.7 hours, as requested, for attending and taking the December 13, 2017 EJD, stating that ‘‘[t]he court awards the fees requested because of the egregious duplicity displayed by the individual defendants at the EJD before the court’’; 2.8 hours, as requested, for preparing its January 2, 2018 motion because ‘‘it represent[ed] an effort to assure compliance with a court order’’; 30.2 hours of fees for the plaintiff’s February 12, 2018 motion, deducting five hours from the 35.2 hours of fees that the plaintiff requested because these five hours were ‘‘spent on matters not caused by [the] defendants’ inappropriate conduct’’; and 1.5 hours, as requested, for the plaintiff’s counsel’s appearance at the June 6, 2018 status conference because ‘‘[t]he motions argued [at that conference] related to discovery and were necessitated by [the] defendants’ [noncompliance] with court orders . . . .’’ Moreover, the court awarded the plaintiff attorney’s fees for 8.2 hours of work by cocounsel from Reed Smith, an amount less than the plaintiff had requested. The court also did not award the plaintiff for the fourteen hours of work that the plaintiff’s counsel claimed to have spent preparing for the December 13, 2017 EJD ‘‘because preparation for the [EJD] was required regardless of [the] defendants’ subsequent conduct.’’ This appeal followed.
In its articulation, the court reiterated that it based its award of attorney’s fees and costs in its July 23, 2018 order of sanctions on the number of hours and hourly rate that it deemed reasonable for the time that the plaintiff’s counsel and cocounsel from Reed Smith had spent taking the testimony of Schepis and Canelas at the December 13, 2017 EJD, preparing the plaintiff’s January 2 and February 12, 2018 motions, and participating in the June 6, 2018 status conference.
With respect to the March 8, 2018 order of sanctions, the court stated that the amount that it awarded the plaintiff in that order reflected the cost of preparing its October 20, 2017 motion, as stated in its November 6, 2017 order. The court also noted that its November 6, 2017 order ‘‘was directed to the defendants’ failure to comply with [the discovery] orders previously entered in 2017 and restated what was outstanding, so that the [EJD] . . . would be productive.’’ Additional facts will be set forth as necessary.
The defendants claim that the trial court’s July 23, 2018 order of sanctions was improper because it constituted an abuse of discretion. In support of this claim, the defendants argue that the order of sanctions failed to meet the three requirements that a trial court must deem satisfied before imposing sanctions and that this court must analyze to determine whether the trial court’s order constituted an abuse of discretion. See Ridgaway v. Mount Vernon Fire Ins. Co., supra, 328 Conn. 71 (citing Millbrook Owners Assn., Inc. v. Hamilton Standard, supra, 257 Conn. 17–18). We disagree with the defendants.
We begin our analysis of the defendant’s claim by setting forth our standard review of a court’s order of sanctions for a party’s failure to comply with that court’s discovery order. Our Supreme Court has stated that, ‘‘a court may, either under its inherent power to impose sanctions in order to compel observance of its rules and orders, or under the provisions of [Practice Book] § 13-14, impose sanctions . . . . The decision to enter sanctions . . . and, if so, what sanction or sanctions to impose, is a matter within the sound discretion of the trial court. . . . In reviewing a claim that this discretion has been abused the unquestioned rule is that great weight is due to the action of the trial court and every reasonable presumption should be given in favor
I
CLARITY OF THE DISCOVERY ORDER
The defendants first argue that the court’s order of sanctions constituted an abuse of discretion because ‘‘there [was] neither a clear order nor [did the defendants violate] any such order.’’ Specifically, the defendants assert that the court’s order, which stated, in relevant part, that ‘‘Schepis and . . . Canelas . . . are to appear . . . to be examined as [j]udgment debtors’’ did not expressly ‘‘requir[e] [Schepis and Canelas] to answer any of the EJD questions differently than they had answered them.’’ In essence, the defendants contend that the court’s ultimate finding that Schepis and Canelas ‘‘conducted themselves . . . with obvious dishonesty’’ during the EJD could not serve as the basis for imposing sanctions, because the court’s order compelling Schepis and Canelas to be examined as judgment debtors was unclear as to whether they were required to provide truthful testimony during the EJD. We are not persuaded.15
In order for a court to impose sanctions based on a party’s failure to comply with the court’s discovery order, ‘‘the [discovery] order to be complied with must be reasonably clear.’’ Millbrook Owners Assn., Inc. v. Hamilton Standard, supra, 257 Conn. 17. Moreover, ‘‘even an order that does not meet this standard may form the basis of a sanction if the record establishes that, notwithstanding the lack of such clarity, the party sanctioned in fact understood the trial court’s intended meaning. This requirement poses a legal question that we . . . review de novo.’’ Id.
Here, Schepis and Canelas were under oath when testifying during the EJD, as required by
II
FINDING THAT THE DEFENDANTS VIOLATED THE DISCOVERY ORDER
The defendants next argue that, even if the court’s order compelling Schepis and Canelas to be examined as judgment debtors required them to provide truthful testimony during the EJD, the order of sanctions nevertheless constituted an abuse of discretion because the trial court improperly found that Schepis and Canelas had violated this order. In support of their argument that this finding was improper, the defendants assert that the court’s underlying factual finding—that Schepis and Canelas ‘‘conducted themselves . . . with obvious dishonesty’’ during the EJD—was clearly erroneous. The defendants assert that ‘‘while the trial court certainly was within its discretion to discredit and disbelieve the defendants’ EJD testimony, it could not use that disbelief to conclude that the opposite of their testimony had been established.’’
In so asserting, the defendants cite to cases in which our courts have stated that a finder of fact may not make a finding that is the opposite of what is stated in one’s testimony if that finding is based solely on the fact finder’s disbelief of that testimony. See, e.g., Essex Ins. Co. v. William Kramer & Associates, LLC, 331 Conn. 493, 519–20, 205 A.3d 534 (2019) (‘‘the jury was not free to conclude from [the] rejection [of the testimony] that the opposite of the testimony [was] true’’ in absence of evidentiary basis in record for arriving at such conclusion); State v. Alfonso, 195 Conn. 624, 634–35, 490 A.2d 75 (1985) (jury could not conclude that defendant possessed marijuana from his denial of possessing it ‘‘without . . . evidence supporting . . . a conclusion’’ that he possessed it); State v. Coleman, 14 Conn. App. 657, 671, 544 A.2d 194 (‘‘the jury is barred from directly inferring that a defendant was present at the scene of a crime from its finding that he was lying
In order for a court to impose sanctions based on a party’s failure to comply with the court’s discovery order, ‘‘the record must establish that the [discovery] order was in fact violated.’’ Millbrook Owners Assn., Inc. v. Hamilton Standard, supra, 257 Conn. 17. Our determination of whether an order for sanctions satisfies ‘‘[t]his requirement poses a question of fact . . . .’’ Id., 17–18. Thus, to determine whether an order for sanctions satisfies this requirement, we review the court’s finding to determine whether it is clearly erroneous. Id., 18.
‘‘A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’’ (Internal quotation marks omitted.) Powell-Ferri v. Ferri, 326 Conn. 457, 464, 165 A.3d 1124 (2017). In applying the clearly erroneous standard of review, we also are mindful that, ‘‘[b]ecause factual findings . . . are squarely within the trial court’s purview, [they are] afford[ed] . . . great deference. . . . In short, the court, as fact finder, may draw whatever inferences from the evidence or facts established by the evidence it deems to be reasonable and logical.’’ (Citation omitted; internal quotation marks omitted.) Keeley v. Ayala, 328 Conn. 393, 419–20, 179 A.3d 1249 (2018).
First, we note that the defendants failed to preserve this portion of their claim for appellate review. See
Nevertheless, even if we assume that the defendants properly preserved this portion of their claim for appellate review, we conclude that it is meritless. Indeed, contrary to the defendants’ assertion, there was ample evidence in the record from which the trial court could reasonably have inferred that Schepis and Canelas ‘‘conducted themselves . . . with obvious dishonesty’’ during the EJD.
The following additional facts are relevant to this portion of the defendants’ claim. During the EJD, Schepis and Canelas made representations, the veracity
In addition, the plaintiff’s counsel attached exhibits to his June 14, 2018 affidavit that undermined the veracity of Schepis’ representation that he did not know which accountant he used to prepare his tax returns. First, the plaintiff’s counsel submitted the deposition of Richard Bangs, who stated that the accounting firm with which he was employed had performed Schepis’ accounting and tax preparation work for at least fifteen or sixteen years. Second, the plaintiff’s counsel attached an e-mail exchange between Bangs and Schepis that occurred two months before the EJD and contained ‘‘Pursuit Partners’’ as the subject heading. In one e-mail, Schepis sent Bangs the K-1 form for Pursuit Partners, LLC. Then, in a subsequent e-mail, Schepis asked Bangs, ‘‘we will not owe anything for 2016, correct?’’ Finally, the plaintiff submitted to the court a letter from Bangs’ accounting firm addressed to Schepis and his wife. The letter stated that their 2016 Connecticut income tax return was attached to the letter and that the firm ‘‘prepared the return from the information [Schepis and his wife] furnished [to the accounting firm] . . . .’’ (Emphasis added.)
In light of these exhibits, the contents of which purportedly contradict the testimony that Schepis and Canelas provided during the EJD, we conclude that the principle in our case law relied on by the defendants that a finding of fact cannot be based solely on the disbelief of testimony is inapplicable to the present case. Indeed, there was ample evidence in the record from which the court could reasonably have inferred that Schepis and Canelas ‘‘conducted themselves . . . with obvious dishonesty’’ during the EJD. Accordingly, we conclude that the court’s finding that they violated its order was not clearly erroneous.
PROPORTIONALITY OF THE SANCTIONS TO THE VIOLATIONS
The defendants’ final argument in support of their claim is that the trial court’s order of sanctions was disproportionate to the defendants’ violations of the court’s discovery orders that occurred after the December 13, 2017 EJD. In support of this argument, the defendants assert that the three factors used by our Supreme Court in Yeager v. Alvarez, 302 Conn. 772, 787, 31 A.3d 794 (2011), to determine whether an order of sanctions is proportionate to a party’s violation of a court’s discovery order weigh against concluding that the court’s July 23, 2018 order of sanctions was proportionate to the defendants’ failure to comply with the court’s December 13, 2017 discovery order. We are not persuaded.20
Our Supreme Court has stated that ‘‘the sanction imposed [for violation of a court’s discovery order] must be proportional to the violation.’’ Millbrook Owners Assn., Inc. v. Hamilton Standard, supra, 257 Conn. 18. We review the proportionality of a sanction to the sanctioned party’s violation for an abuse of discretion. Id.
‘‘In reviewing the proportionality of the trial court’s sanction, we focus our analysis on the [sanctioned party’s] violation . . . . Our analysis of the [sanctioned party’s] violation is guided in turn by the factors we previously have employed when reviewing the reasonableness of a trial court’s imposition of sanctions: (1) the cause of the [sanctioned party’s] failure to [comply with the court’s discovery order], that is, whether it [was] due to inability rather than the [wilfulness], bad faith or fault of the [sanctioned party] . . . (2) the degree of prejudice suffered by the [nonsanctioned] party, which in turn may depend on the importance of the information requested to that party’s case; and (3) which of the available sanctions would, under the particular circumstances, be an appropriate response to the disobedient party’s conduct.’’ (Citations omitted; internal quotation marks omitted.) Yeager v. Alvarez, supra, 302 Conn. 787; see also Krahel v. Czoch, 186 Conn. App. 22, 33–34, 198 A.3d 103, cert. denied, 330 Conn. 958, 198 A.3d 584 (2018). Importantly, when weighing these factors to determine whether the sanction is proportionate to the violation, ‘‘the unquestioned rule is that great weight is due to the action of the trial court and every reasonable presumption should be given in favor of its correctness. . . . [T]he ultimate issue is whether the court could reasonably conclude as it did.’’ (Internal quotation marks omitted.) Krahel v. Czoch, supra, 34.
Before assessing the trial court’s order of sanctions using the factors set forth by our Supreme Court in Yeager, we first address the defendants’ contention that this court, in assessing whether the July 23, 2018 order of sanctions was proportional to the defendants’ practice of habitually failing to comply with the court’s discovery orders, must ignore any improper conduct that they engaged in prior to December 13, 2017. In asserting that this court must cabin its proportionality analysis to conduct in which the defendants engaged
Indeed, in its order of sanctions, the trial court found that, after the December 13, 2017 EJD, the defendants ‘‘then . . . engaged in a continuous practice of disobeying the court’s discovery orders.’’ In its articulation, the court stated that its July 23, 2018 order ‘‘awarded a fee . . . for the effort of [the] plaintiff’s . . . counsel to compel compliance with the November 6, [2017] and December 13, [2017] orders as discussed at the EJDs . . . .’’ (Emphasis added.) Importantly, the court also stated in its articulation that ‘‘[f]urther compliance with the document production ordered by the November 6, 2017 and December 13, 2017 orders required extensive effort on the part of the plaintiff and the court, with mandated meet and confer sessions and status conferences.’’ Thus, the court acknowledged in its findings that the defendants’ failure to comply with the court’s orders before December 13, 2017, required the plaintiff to expend resources after December 13, 2017, to attempt to compel the defendants’ compliance with these orders. Accordingly, the defendants’ failure to comply with the court’s discovery order before December 13, 2017, is relevant in assessing whether the court’s July 23, 2018 order of sanctions was proportional to the defendants’ practice of habitually failing to comply with the court’s discovery orders.
Having resolved this underlying issue in the defendants’ argument, we now assess whether the court’s sanctions were proportionate to the defendants’ failure to comply with the court’s discovery orders in light of the three Yeager factors. Mindful of the significant discretion that the trial court is afforded in crafting an order of sanctions for a party’s violation of its discovery order, we conclude, for the reasons that follow, that the three Yeager factors weigh in favor of concluding that the court’s July 23, 2018 order of sanctions was proportionate to the defendants’ violations of the court’s discovery orders.
A
With respect to the first factor, the defendants assert that their ‘‘discovery efforts constituted a good faith effort to respond to and confront [the] [p]laintiff’s overbroad discovery efforts, rather than a wilful disregard of the court’s orders . . . .’’ In support of this assertion, the defendants point to their March 5, 2018 motion for a protective order and contend that they were attempting to prevent certain information from being revealed that was contained in the documents that the court ordered the defendants to disclose in its December 13, 2017 order. This assertion is unpersuasive for two reasons.21
Second, although the court, on April 4, 2018, denied in part the defendants’ March 5, 2018 motion for a protective order, it did permit some redactions to the documents that the defendants were ordered to provide.22 Despite the court’s in camera review of the documents, and its allowance for some redactions to protect certain information, the defendants still failed to provide all of the required documents, resulting in the court’s decision to schedule a hearing on sanctions on June 6, 2018. The defendants’ failure to provide the plaintiff with the documents that they were required to disclose, even after the court, per their request, reviewed these documents and permitted some redactions, undercuts their assertion that they made a good faith effort to comply with the court’s December 13, 2017 order.
Contrary to the defendants’ characterization of their effort to comply with the court’s discovery orders, the defendants, in fact, habitually failed to comply with these orders. In its order of sanctions, the trial court found that the defendants’ practice of disobeying its discovery orders was ‘‘continuous . . . .’’ Indeed, the defendants admit that, despite being ordered to produce certain tax returns in the court’s December 13, 2017 order and in three prior orders dating back to April 12, 2017, the defendants, as of June 14, 2018, still had not disclosed all of the tax returns that the court had required them to make available.
Moreover, despite the court’s April 4, 2018 order compelling the defendants to provide the plaintiff with certain supplemental disclosures by April 20, 2018, the plaintiff’s counsel averred on June 14, 2018, that the defendants had failed to provide any documents to satisfy this order. The defendants do not contest this averment on appeal, nor did they dispute it in their objection to the plaintiff’s application for attorney’s fees. Having considered the defendants’ continuous practice of failing to comply with the court’s discovery orders, we conclude that the first factor weighs in favor of concluding that the court’s July 23, 2018 order of sanctions was proportionate to the defendants’ violations of the court’s discovery orders.
B
Regarding the second factor, the defendants assert
Before addressing the harm that the plaintiff suffered as a result of the defendants’ conduct, we first address the defendants’ assertion that they substantially complied with the court’s discovery orders. Indeed, in stating that they ‘‘complied in large part with the [court’s discovery] orders,’’ the defendants grossly misstate the extent to which they, in fact, complied with these orders. Although the defendants may have provided the plaintiff with most of the documents that the court’s December 13, 2017 order required them to disclose, the defendants completely ignore—and, indeed, do not contest—that they failed to comply fully with the court’s April 4, 2018 order, which required the defendants to provide the plaintiff with certain supplemental disclosures by April 20, 2018. Thus, contrary to their assertion, the defendants did not substantially comply with the court’s discovery orders.
Having addressed the extent to which the defendants complied with the court’s discovery orders, we now assess the harm that the plaintiff suffered as a result of the defendants’ conduct. Relevant to this assessment is the harm that the plaintiff suffered as a result of the defendants’ failure to comply with the court’s discovery orders and, in the face of these violations, the cost that the plaintiff incurred in order to attempt to obtain the defendants’ compliance with these orders. With respect to the harm that the plaintiff suffered as a result of the defendants’ failure to provide it with certain documents that the court had ordered them to disclose, the plaintiff’s counsel averred in his June 14, 2018 affidavit that these documents were pertinent to the plaintiff’s ability to identify assets that could be used to satisfy the judgment, $947,731 of which had not been secured by a prejudgment remedy. The defendants do not contest this averment in their appellate brief. Thus, the defendants’ failure to produce certain documents that the court had ordered them to disclose deprived the plaintiff of information that it needed to collect on the judgment.
The defendants’ failure to comply with the court’s discovery orders made it necessary for the plaintiff to move for the court to compel the defendants to comply with these orders so that the plaintiff could obtain the documents that it needed to identify assets that could be used to satisfy the judgment, $947,731 of which had not been secured by a prejudgment remedy. Indeed, in its order of sanctions, the court found that the defen
To attempt to compel the defendants’ compliance, the plaintiff accumulated attorney’s fees and other litigation costs. Thus, as a result of the defendants’ failure to comply with the court’s discovery orders, the plaintiff expended financial resources so that it could obtain the documents to which it was entitled and that it needed to identify assets that could be used to satisfy the judgment, $947,731 of which had not been secured by a prejudgment remedy. Having weighed the harm that the plaintiff suffered due to the defendants’ failure to produce certain documents that they were ordered to disclose and the financial burden that the plaintiff shouldered in order to compel the defendants’ compliance, we conclude that the second Yeager factor weighs in favor of concluding that the court’s July 23, 2018 order of sanctions was proportionate to the defendants’ failure to comply with the court’s discovery orders.
C
Finally, with respect to the third factor—whether the sanction imposed is appropriate in the context of the case—’’we bear in mind that [t]he primary purpose of a sanction for violation of a discovery order is to ensure that the [nonsanctioned party’s] rights are protected, not to exact punishment on the [sanctioned party] for its allegedly improper conduct.’’ (Internal quotation marks omitted.) Yeager v. Alvarez, supra, 302 Conn. 790. In light of this principle and the financial burden that the plaintiff suffered in order to attempt to compel the defendants’ compliance with the court’s discovery orders, we conclude that the court’s order of sanctions was appropriate.
Indeed, the court’s order of sanctions reimbursed the plaintiff for the attorney’s fees and other litigation costs that it incurred in order to compel the defendants to provide it with certain documents that the court had ordered they disclose and that the plaintiff needed to obtain a remedy to which it was entitled. In the absence of the court’s order of sanctions, the plaintiff unfairly would have borne this cost. Thus, the third Yeager factor weighs in favor of concluding that the court’s July 23, 2018 order of sanctions was proportional to the defendants’ violations of the court’s discovery orders.
IV
CONCLUSION
Having reviewed the court’s order of sanctions and
The judgment is affirmed.
In this opinion the other judges concurred.
Notes
Generally, discovery orders, which include orders of sanctions based on a party’s failure to comply with discovery, are not appealable final judgments. See, e.g., Incardona v. Roer, 309 Conn. 754, 760, 73 A.3d 686 (2013) (‘‘prior to final judgment, we have jurisdiction to hear a challenge to an interlocutory order sanctioning a party for failure to comply with a discovery order only upon a finding of contempt for failure to comply with the order’’). This appeal, however, was filed as an amendment to an existing appeal in accordance with
If an appeal from a final judgment already exists over which this court properly has jurisdiction, any subsequent rulings by the trial court in the underlying matter typically are reviewable by way of an amended appeal; see
‘‘The Court: What I understand [the plaintiff’s counsel] is saying is that all that has been produced are the redacted income tax returns. Is that right?
‘‘[The Defendants’ Counsel]: That is, Your Honor.
‘‘[The Plaintiff’s Counsel]: There are K-1s, so we do have some K-1s. I don’t want to mislead you.’’ (Emphasis added.)
‘‘[The Plaintiff’s Counsel]: Well, I mean . . . is it fair to say that you wouldn’t be walking around with hundreds of thousands of dollars of cash in your pocket, right?
‘‘[Schepis]: Possibly not.
‘‘[The Plaintiff’s Counsel]: Well, if you weren’t going to walk around with the cash in your pocket, where did it go?
‘‘[Schepis]: I don’t remember.
‘‘[The Plaintiff’s Counsel]: Do you have any records anywhere that would refresh your recollection as to where moneys went?
‘‘[Schepis]: No.’’
‘‘The Court: I think that would help us focus the inquiry a little bit here. So let’s—so, Mr. Schepis, I assume your lawyer has explained to you what’s going on here and what the rules are and why you’re sitting here under oath and people are asking these questions that are uncomfortable questions and they are.
‘‘But it’s a situation where, you know, there are these judgments and these orders and the laws of Connecticut allow for this. I mean, they’re not doing anything they’re not permitted to do. And it is—and you are required to answer questions.
‘‘[Schepis]: I understand.
‘‘The Court: And if it appears that you’re not answering truthfully, you know, just saying I don’t recall doesn’t end it because that may not seem credible.
‘‘And you know you don’t want to [be] found in contempt. I mean, I just want to say—and I’m not saying that’s what’s going to happen today. But
‘‘So it is somehow important to get through this and you know—let me put it this way, if you can’t remember, you better find out, okay. That’s what I’m saying. It really—you’re under a big obligation here and there is an obligation to find out. Okay.’’
‘‘(b) Such orders may include the following . . .
‘‘(2) The award to the discovering party of the costs of the motion, including a reasonable attorney’s fee . . . .
* * *
‘‘(c) The failure to comply as described in this section may not be excused on the ground that the discovery is objectionable unless written objection as authorized by
These motions, however, offer no support to the defendants’ assertion that they were engaged in ‘‘litigating bona fide discovery disputes’’ in response to the court’s December 13, 2017 order. (Emphasis omitted.) Indeed, the motions to quash a subpoena, the April 24, 2018 motion to reconsider concerning postjudgment discovery being shared with Reed Smith, and the May 16, 2018 motion for a protective order, unlike the March 5, 2018 motion for a protective order, do not challenge the obligation of Schepis and Canelas to produce the three categories of documents that the court described in its December 13, 2017 order. Moreover, the April 24, 2018 motion to reargue merely asked the court to reconsider its untimely March 5, 2018 motion for a protective order. Thus, we are not persuaded by the defendants’ contention that these motions demonstrate that they were, in good faith, challenging the court’s December 13, 2017 order.