Opinion
No. 4-837 / 04-0009
Filed February 9, 2005
Appeal from the Iowa District Court for Polk County, Arthur E. Gamble, Judge.
Plaintiffs in a medical malpractice action appeal the order imposing sanctions on them. REVERSED AND REMANDED WITH DIRECTIONS.
Jeffrey S. Carter, Des Moines, for appellants.
Michael H. Figenshaw, Matthew J. Haindfield, and William J. Miller of Bradshaw, Fowler, Proctor Fairgrave, P.C., Des Moines, for appelle Mansour Jadali.
John Hilmes and Kami Lang, of Finley, Alt, Smith, Scharnberg, Craig, Hilmes Gaffney, P.C. Des Moines, for appellees Central Iowa Hospital Corporation and Samuel Bundz.
Heard by Sackett, C.J., and Vogel, Zimmer, Hecht, and Eisenhauer, JJ.
David and Cindy Raye filed a medical malpractice action on May 25, 1999, naming as defendants, among others, Central Iowa Hospital Corporation d/b/a Iowa Methodist Medical Center, Dr. Mansour Jadali, and Dr. Samuel Bundz. As a result of the plaintiffs' deception during discovery, the trial court sanctioned them by dismissing the case. On appeal, this court reversed, concluding the sanction of dismissal was too extreme. Raye v. Central Iowa Hosp. Corp., No. 01-1511 (Iowa Ct.App. Dec. 11, 2002). We remanded to the district court "for the imposition of appropriate sanctions, and the setting of a new trial date." Id. The district court then ordered the plaintiffs to pay the defendants' attorney fees totaling $20,481.00 and stayed further proceedings until the plaintiffs complied with the order and paid the sanctions.
The plaintiffs thereafter filed an application for interlocutory appeal, which our supreme court granted. Now on appeal, they maintain the district court abused its discretion by imposing an excessive sanction largely unrelated to the misconduct. They also claim the stay of proceedings until the sanction is paid effectively dismisses the case. Finally, the plaintiffs maintain the district court should have investigated the responsibility of their original attorney when assessing the fees.
Our review is for correction of errors at law. Iowa R. App. P. 6.4. A discovery sanction will be upheld absent a demonstrated abuse of discretion by the district court. Kendall/Hunt Publishing Co. v. Rowe, 424 N.W.2d 235, 240 (Iowa 1988). Abuse exists if the court exercised its discretion on clearly unreasonable grounds or to a clearly untenable extent. Wagner v. Miller, 555 N.W.2d 246, 249 (Iowa Ct.App. 1996). The court's discretion was not abused if there was substantial evidence in support of its decision. Id. The evidence supporting the district court's decision was substantial if it was adequate for a reasonable mind to reach the same conclusion as the court. Strong v. Rothamel, 523 N.W.2d 597, 600 (Iowa Ct.App. 1994).
Amount of sanctions.
We first address the plaintiffs' contention regarding the excessiveness of the sanction. Following remand and a hearing on the defendant's application for sanctions, the district court ordered defense counsel to provide:
detailed itemized statements of the time and hourly rates for fees incurred as a result of the failure of Plaintiff to disclose his prior diagnosis and treatment by Dr. Tesdall. Specifically, the Court is interested in itemized statements for the following services:
· Interrogatories and requests for production of documents related to pre-existing conditions;
· Deposition of David Raye;
· Deposition of Dr. Donald Tesdall;
· Trial preparation for the March 5, 2001 trial;
· Resistance to plaintiffs' motion for continuance;
· Resistance to plaintiffs' motion for extension of time to prepare for trial;
· Joint application for sanctions post-appeal.
In arriving at the $20,481.00 figure, which was the exact amount claimed by defense counsel, the court noted "[t]he impact of Plaintiffs' willful failure to disclose his pre-existing medical condition on the underlying medical malpractice litigation was the time and expense incurred by the defendants represented by the cost of attorney fees listed above."
As concluded in our previous opinion, we do believe the deceit practiced by plaintiffs warranted some amount of sanctions. However, we noted in that opinion that the record made of the willful concealment of David Raye's prior diagnosis did not indicate more than "marginal relevance" to the current case. In considering the minimal prejudice to the defendants, we stated, "severity of the sanction should bear a relationship not only to the action it is meant to penalize, but also the impact of that action on the underlying litigation." Raye 1. The "impact" on the underlying litigation tracks with the follow-up directive of the district court, which required affidavits detailing "fees incurred as a result of failure of Plaintiff to disclose". (Emphasis added).
As we noted in Raye 1:
The only evidence relating the preexisting condition to the alleged surgical complications was an affidavit from Dr. Chris Wagner, one of Raye's surgeons whom the plantiffs initially sued then dismissed out of the case. Far from asserting that knowledge of the prior hernia diagnosis would have affected or altered Raye's medical treatment, Dr. Wagner claimed only that Dr. Tesdall's opinion would have been sought when setting the course of treatment.
Keeping in mind these guidelines, we conclude certain of the fees submitted by defense counsel and included in the sanction imposed by the district court were not caused by the plaintiffs' conduct and are therefore excessive as a sanction. In fact, the sanction imposed by the district court would require the plaintiffs to pay for routine trial preparation (e.g., interrogatories, depositions of the parties, development of defendants' expert testimony, etc.) that would have been undertaken by the defendants even if Raye had not concealed evidence of his pre-existing condition. Attorney fees incurred by the defendants for services rendered prior to February 28, 2001, the date on which Dr. Tesdall's prior hernia diagnosis came to light, were not incurred as a consequence of Raye's willful deceit and dishonesty and should not be included in the sanction. We conclude the sanction should be more closely tailored to Raye's improper conduct in the litigation, that is, the fees and expenses directly caused by concealment of the medical history. An appropriate sanction could include the fees and expenses incurred by the defendants for discovery requests, if any, repeated as a necessary consequence of the concealment. We therefore reverse the sanction imposed and remand for a further hearing, after which the district court shall enter an award of sanctions tailored to the specific fees incurred by the defendants that were caused by the plaintiffs' concealed information and in accord with the considerations noted in this opinion. Prior Counsel's Conduct.
No fees occasioned by this appeal should be allowed.
We next address the plaintiffs' contention the district court abused its discretion when it imposed the monetary sanction without "addressing or investigating the responsibility of [their] attorney." The plaintiffs have failed to identify how this contention was preserved for our review. Upon our review of the record, we conclude it has not been. It does not appear that, prior to this appeal, the plaintiffs have raised the contention that their former attorney was somehow at fault for the failure to disclose Raye's prior injury. Thus we do not address it. See Meier v. Senecaut, 691 N.W.2d 532, 537 (Iowa 2002).
Stay.
Finally, the plaintiffs claim the stay effectively operates as a dismissal of the case as they are not in a financial position to pay such fees as a prerequisite to a trial. In our previous opinion in this case, we remanded "for the imposition of appropriate sanctions, and the setting of a new trial date." We believe the stay entered upon remand is inconsistent with our previous order and is excessive in effect. Furthermore, we do not believe that Iowa Rule of Civil Procedure 1.517(2)( b)(3), under which the court ordered the stay, was appropriately invoked under the circumstances and procedural posture of this case. That rule provides a court the authority to impose a stay for a party's failure to obey a court order regarding discovery. Here, the record contains no discovery order which was violated by plaintiffs.
We therefore reverse the portion of the district court order staying the matter until the payment of the sanction is made. We remand for further proceedings consistent with this opinion, including a hearing on the appropriate amount of sanctions, and for the setting of a trial date.