JAMES O. GOFF v. JERRY L. ROGERS
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RENDERED:
DECEMBER 28, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-000390-MR
JAMES O. GOFF
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE STEPHEN K. MERSHON, JUDGE
ACTION NO. 97-CI-004299 & 99-CI-001840
JERRY L. ROGERS
AND
APPELLEE
NO. 2000-CA-000482-MR
JERRY L. ROGERS
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE STEPHEN K. MERSHON, JUDGE
ACTION NO. 97-CI-004299 & 99-CI-001840
JAMES O. GOFF
AND
APPELLEE
NO. 2000-CA-001210-MR
JAMES O. GOFF
AND WORLDWIDE GRAPHICS CORPORATION
APPELLANTS
v.
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE STEPHEN K. MERSHON, JUDGE
ACTION NOS. 97-CI-004299 & 99-CI-001840
JERRY L. ROGERS
AND WORLDWIDE, INC.
APPELLEES
OPINION
AFFIRMING IN PART, REVERSING AND REMANDING IN PART
** ** ** ** **
BEFORE:
BARBER, EMBERTON, AND KNOPF, JUDGES.
BARBER, JUDGE:
Appellant, James Goff (“Goff”), and Appellee,
Jerry Rogers (“Rogers”), were partners and co-owners of Worldwide
Graphics for fourteen years.
Goff and Rogers were the sole
members of the Board of Directors.
Goff alleges that in 1997,
while he was ill and unable to work, Rogers called a board
meeting without notifying Goff and unilaterally removed Goff as
President of Worldwide Graphics and as a member of the Board of
Directors.
At the meeting, Rogers appointed himself President of
the company and the sole director of Worldwide Graphics.
Goff alleges that, at the same time, Rogers formed a
separate company, Worldwide, Inc., which would compete directly
with Worldwide Graphics.
Goff asserts that Worldwide, Inc. used
Worldwide Graphics’ customer list, proprietary methods,
prospective customer contacts, and other privileged information
in starting up.
Goff states that Rogers informed the customers
of Worldwide Graphics that the company was going out of business
and that Worldwide, Inc. would satisfy their business needs.
After Worldwide, Inc. was incorporated, Rogers resigned as
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President of Worldwide Graphics and went into business as
Worldwide, Inc., taking many of Worldwide Graphics’ customers
with him.
Upon his return to work, Goff discovered what had taken
place.
Goff filed a complaint in circuit court, alleging unfair
competition, breach of fiduciary duty, misappropriation of trade
secrets and trade name.
Goff asserted that Worldwide Graphics
had suffered substantial financial loss as a result of Rogers’
wrongful action.
The trial court bifurcated the action, dividing the
tort and breach of contract claims from the issues regarding
ownership of Worldwide Graphics.
The trial court ordered the
dissolution of the corporate entity Worldwide Graphics and held
that the company’s assets be divided between Goff and Rogers.
Goff objects to the valuation of the assets of Worldwide Graphics
made by the trial court, which required Goff to pay Rogers the
sum of $109,839.00.
The trial court found that the Worldwide Graphics
inventory was worth $42,145.00.
Goff argues that the inventory
of Worldwide Graphics was properly valued at $12,767.00 as it was
old or obsolete.
Goff also asserts that Worldwide Graphics had
no work in progress at the date when the action was filed.
trial court found a work in progress value of $37,942.00.
The
The
trial court held that there was no future warranty expense for
the company.
Goff testified that the anticipated warranty
expense was $28,000.00.
Goff claims that the trial court also
overvalued the worth of the office furniture by $12,500.00 and
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the deposit to be returned to Goff by almost $2,000.00.
The
trial court also stated that Worldwide Graphics had prepaid
$1,241.00 in taxes.
Goff objected and stated that no taxes had
been prepaid by the company.
Goff asserts that the trial court’s
errors resulted in the overvaluing of the business by
$115,446.00.
It is the province of the trial court to determine the
credibility of the witnesses before it.
The reviewing court must
give great latitude to the trier with regard to deciding which
witness to believe.
Bowling v. Nat. Resources & Environ.
Protection Cabinet, Ky. App., 891 S.W.2d 406, 410 (1994).
Similarly, the trier of fact must determine the credibility of
conflicting evidence placed before it.
S.W.3d 662, 671 (2000).
Gorman v. Hunt, Ky., 19
We find no reversible error in the trial
court’s determination of the credibility of the witnesses and
valuation evidence; therefore, we affirm the trial court’s
determination in that matter.
Goff was deposed twice during the early stages of the
litigation.
On November 4, 1999, the second deposition of Goff
was discontinued due to inappropriate statements made by Goff to
Rogers and his attorney.
The trial court ordered the deposition
to continue in front of the court administrator.
was continued on November 17, 1999.
The deposition
The deposition was not
concluded on that date due to counsel’s scheduling conflicts.
After Goff failed to attend the continuation of his deposition,
the trial court granted Rogers’ motion to dismiss the action.
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In the order dismissing Goff’s tort and contract
claims, the trial court stated that:
Although Mr. Goff’s original complaint was
filed in August of 1997 a bench trial was had
on Mr. Goff’s initial complaint in September
of 1998 and a jury trial scheduled on all
remaining claims for March 21st, 2000, it
appears that Goff has pursued little, if any,
discovery, and has developed no proof to
support his claims. Furthermore, Mr. Goff
has resisted giving his deposition, has made
the process as difficult as possible
necessitating the Court’s intervention and
ultimately, despite a specific court order
(entered December 8th, 1999), refused to
appear for the conclusion of his deposition.
Dismissal of his complaints pursuant to CR
37.04(1) is appropriate.
Goff’s attorney withdrew from the action with the trial
court’s consent on December 8, 1999.
At that time, the trial
court informed Goff that he would be required to appear at the
conclusion of his deposition whether or not he had retained new
counsel.
Goff was unable to reach an agreement with new counsel
prior to January 13, 2000, the date unilaterally set by Rogers’
counsel for completion of Goff’s deposition.
The attorneys he
had met with advised Goff not to attend the deposition without
counsel.
Goff provided his affidavit stating that the attorneys
had advised him that they would attempt to continue the
deposition date.
date.
Goff did not attend the scheduled deposition
As a result of his failure to appear, the trial court
dismissed the entire action.
Goff asserts that the dismissal of the action was an
abuse of discretion and should be reversed.
Although CR
37.02(2)(c) authorizes dismissal of an action as a sanction for
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discovery abuse, dismissal should only be applied as a last
resort.
Bridewell v. City of Dayton ex. rel. Urban Renewal &
Community Development Agency, Ky. App., 763 S.W.2d 151, 152
(1988).
The sanction imposed must bear some reasonable
relationship to the seriousness of the defect.
Id. at 153.
Goff
cites Searock v. Stripling, 736 F.2d 650, 653 (11th Cir. 1984) as
holding that misunderstanding of a discovery order is not grounds
for dismissal of an action.
Rogers argues that Goff had acted in
an improper fashion during the course of the action, requiring
the trial court to warn him repeatedly that his behavior would
not be tolerated and providing grounds for the imposition of the
sanction.
Kentucky law holds that dismissal of a party’s claims
is warranted only where the party has a history of discovery
abuses and the evidence indicates a wilful failure to comply with
the discovery procedure.
Nowicke v. Central Bank & Trust Co.,
Ky. App., 551 S.W.2d 809, 811 (1977).
The court must consider
three factors in determining whether dismissal of an action is an
appropriate sanction.
The trial court must evaluate:
“(1) whether the adversary was prejudiced by the dismissed
party’s failure to cooperate in discovery; (2) whether the
dismissed party was warned that failure to cooperate could lead
to dismissal; and (3) whether less drastic sanctions were
considered before dismissal was ordered.”
Greathouse v. American
National Bank & Trust Co., Ky. App., 796 S.W.2d 868, 870 (1990).
The trial court found the dismissal warranted because
Goff had conducted very little discovery and had violated the
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court’s order by failing to appear for the conclusion of his
deposition.
The record contains no showing that Goff had failed
to cooperate in the discovery process other than with regard to
the final scheduled deposition.
Goff had responded to discovery
requests and complied with the orders of the trial court
regarding readiness for trial.
Goff’s behavior with regard to
preparation of his case for trial did not constitute grounds for
dismissal of the action.
Rogers argues that the trial court did try less drastic
methods of curtailing improper action in that it had previously
ordered that Goff not provide information regarding this action
to business clients and had ordered that Goff’s adult son cease
contacting Rogers.
The prior orders of the court, however, were
unrelated to the discovery process.
The record does not show
that the trial court considered or attempted less drastic
sanctions for abuse of the discovery process prior to dismissal
of the action.
Counsel for Goff withdrew from the action two months
prior to trial with the consent of the court.
Goff was left
without representation in complex litigation.
It is
understandable that it might take time to find an attorney
willing and able to assume representation.
It was unreasonable
for the trial court to insist that he attend his own discovery
deposition without a lawyer.
Dismissal of the action due to his
failure to attend the deposition was too drastic a sanction and
must be reversed and remanded for further proceedings consistent
with this opinion.
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ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEFS FOR APPELLEE:
Scott P. Zoppoth
Louisville, Kentucky
W. David Kiser
Ackerson, Mosley & Yann
Louisville, Kentucky
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