A federal appeals court has affirmed a dismissal of a medical group’s reimbursement case against an insurer because of repeated discovery violations. Those violations included delays in responding to document and deposition requests and incomplete document submissions.
On January 3, a unanimous panel of the U.S. Court of Appeals for the Sixth Circuit affirmed dismissal of Universal Health Group’s complaint against Allstate Insurance Co. as a sanction for willful and repeated violations of discovery orders.
The dispute underlying the case began in 2009, when Universal, a Michigan pain management medical office, demanded that Allstate pay for services it provided to 36 people who claimed coverage under Allstate insurance policies. Allstate countered that Universal had not provided services to those people.
Universal sued Allstate in Michigan state court for reimbursement for services rendered, as well as defamation and tortious interference with Universal’s business relationships. In June 2009, Allstate removed the case to federal court.
Universal missed several court deadlines for interrogatories and document requests and finally provided incomplete responses.
In May 2011, Magistrate Judge Michael Hluchaniuk of the Eastern District of Michigan sanctioned Universal by ruling that it would be limited at trial to the documents, evidence, and witnesses that it had already given Allstate. Hluchaniuk also extended discovery for 45 days so Allstate could depose some Universal employees.
Universal also did not comply with Allstate’s requests to schedule depositions.
In February 2012, Judge Victoria Roberts of the Eastern District of Michigan dismissed the complaint because of the discovery violations. Universal appealed.
Judge Raymond Kethledge wrote the opinion, joined by Chief Judge Alice Batchelder and Senior Judge Gilbert Merritt.
Kethledge wrote that the Sixth Circuit weighed four factors, outlined in its case law, in deciding whether to uphold the lower court’s dismissal: whether the violation was due to willfulness, bad faith, or fault; whether the sanctioned party’s conduct prejudiced its adversary; whether the court warned the dismissed party it could face dismissal; and whether less drastic sanctions were imposed or weighed before dismissal.
Kethledge wrote, “Every one of these factors is present here,” adding “even Allstate’s repeated motions, and the court’s own orders, were not enough to compel Universal to do what the Rules required. Universal’s conduct violated the rules of civil procedure and common courtesy alike.”
Neither Universal nor its lawyer, Christina Ginter, a partner at Detroit’s Kitch Drutchas Wagner Valitutti & Sherbrook, responded to requests for comment.
Craig Romanzi, a Waterford, Mich., attorney who represented Universal at the district court, did not immediately respond to a request for comment.
Neither Allstate nor Karen Magdich, a Novi, Mich., partner at Livonia-based Magdich & Associates who represented the company at the district and appellate cases, responded to requests for comment.
Sheri Qualters can be contacted at firstname.lastname@example.org.