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Coffland v. Coffland (6/30/00) sp-5295
Coffland v. Coffland (6/30/00) sp-5295
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
KENNETH M. COFFLAND, )
) Supreme Court No. S-8976
Appellant, )
) Superior Court No.
v. ) 1SI-98-18 CI
)
SUSAN J. COFFLAND, ) O P I N I O N
)
Appellee. ) [No. 5295 - June 30, 2000]
______________________________)
Appeal from the Superior Court of the State of
Alaska, First Judicial District, Sitka,
Larry C. Zervos, Judge.
Appearances: Colleen A. Kosluchar, Niewohner &
Associates, P.C., Fairbanks, for Appellant. Elizabeth A. Ziegler,
Baxter, Bruce, Brand & Douglas, Juneau, for Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
FABE, Justice.
I. INTRODUCTION
Ken Coffland appeals the trial court's distribution of
marital property in his divorce case. He argues that discovery
sanctions imposed by the court precluded him from proving that
certain promissory notes existed and were marital debts. Although
the superior court's discovery sanctions were appropriate, we
conclude that the trial court erred in not considering two of the
debts, which Susan Coffland admitted were incurred during the
marriage.
II. FACTS AND PROCEEDINGS
Susan and Kenneth Coffland married on April 6, 1983 in
Kodiak. Their daughter, Megan, was born in August of 1985. The
parties separated on October 31, 1996, and Susan filed for divorce
on January 20, 1998.
In 1993 the Cofflands and another couple formed a
corporation, purchased a Subway franchise, and opened a store in
Ketchikan. At the time of the divorce, the Cofflands agreed that
they had eighty percent of the equity in the franchise. The
parties dispute, however, whether debts incurred while attempting
to expand the business were marital.
In 1994 the parties investigated a possible purchase of
two more Subway restaurants located in Juneau. While exploring
this possibility, Ken asserts that they incurred debt in the form
of promissory notes. Ken claims that he signed a total of five
promissory notes amounting to the aggregate sum of $35,000. Susan
signed two of these notes, each for $10,000.
At the time of separation, Susan lived in Sitka with
Megan. She worked both as a full-time emergency medical technician
at the Sitka Fire Department and a part-time nurse at Sitka General
Hospital. Ken, who had retired from the Coast Guard in 1991,
managed the parties' Subway restaurant in Ketchikan and
occasionally taught survival classes.
During discovery Susan had a difficult time gathering
information about how to value the Subway venture. She requested
information about debts incurred in relation to the Subway business
in her interrogatories, requests for admission, and requests for
production. But Ken was uncooperative and did not respond with any
information about these debts until the day of trial.
On April 22, 1998, the court issued a pretrial order,
setting the close of discovery for June 10, 1998 and trial for
August 10, 1998. In this order the trial court warned that a
failure to comply could result in the exclusion of witnesses,
exclusion of evidence, sanctions or other penalties prescribed by
the rules of civil procedure.
But Ken's failure to participate in the discovery process
persisted. In May, Susan sent Ken a second set of interrogatories
and requests for production of documents relating to Ken's income.
Although Ken eventually provided some corporate tax returns, Ken
never answered any of the interrogatories served upon him by Susan.
Furthermore, he did not file his preliminary witness list when it
was due on May 1. When Susan filed a motion on May 15, requesting
the court to order Ken to file the list, Ken did not respond.
Ken's supplemental witness list was due on May 18, and when that
day passed, Susan again moved for a court order requiring Ken to
file the list. Again, Ken failed to respond. Susan filed a motion
to compel discovery responses on May 19; Ken never responded to
that motion.
On June 4 the court ordered Ken to provide "full and
complete discovery responses" to Susan by June 12, 1998 and awarded
Susan her actual attorney's fees on her motion to compel. The
court also ordered Ken to file his preliminary and supplemental
witness lists. Although Ken eventually filed his witness list on
July 2, he failed to comply with the order to compel and did not
pay the court's fee award.
On June 26 Susan's counsel spoke with Ken, and Ken agreed
to send corporate tax returns for the years 1993 to 1997. Ken
insists that he told Susan's counsel that she could inspect the
records in Ketchikan, but Susan's counsel disputes this assertion.
Ken also concedes that he had not cooperated in the discovery
process.
Pursuant to Alaska Rule of Civil Procedure 37, Susan
filed a motion to impose sanctions against Ken for his failure to
provide court-ordered discovery. At a July 17 hearing, which Ken
did not attend, the court addressed the pending sanctions motion.
The court did not enter a default against Ken.
The court held a pretrial conference on August 3, but Ken
did not participate. Susan's counsel informed the court that Ken
had provided no documents other than the corporate tax returns for
years 1993 to 1997. The court again considered the Rule 37
sanctions motion but did not issue an establishment or preclusion
order. Instead, the trial court ruled that "because Mr. Coffland
has not [complied] in any respect with the pretrial order, the only
evidence that he'll be allowed to present are any documents that
he's previously disclosed to [Susan,] and of course his own
testimony."
Trial commenced on August 11, 1998 in Sitka. Ken
appeared and attempted to file a pretrial brief and three proposed
property distribution tables. He did not file an exhibit list or
any exhibits. The court rejected the brief and property
distribution tables because they were untimely. The court
explained to Ken that, because of his failure to cooperate in
discovery, his presentation would be limited to his own testimony
and documents previously disclosed to Susan. In his opening
statement, Ken explained that he did not have the money to hire an
attorney and that his business commitments prevented him from
complying with the discovery requests.
In her proposed property distribution table, Susan listed
two $10,000 promissory notes, but characterized them as Ken's
separate debts. Yet the record on appeal reveals that Susan
actually signed these two particular notes. And Susan testified
that the promissory notes of which she was aware were "business
related."
At trial Ken attempted to testify about the promissory
notes, but Susan's counsel objected. The trial court sustained the
objection because this testimony could not be substantiated by the
materials which Ken had disclosed to Susan. Ken also attempted to
mention the notes in his closing argument, but Susan's counsel
again objected. In its decision, the court found that Ken failed
to prove the existence of the debts. Consequently, the court
valued the Subway franchise without deducting the amount owed on
the promissory notes.
Ken appeals the trial court's decision to impose
sanctions, which prevented him from presenting evidence of these
debts at trial, the classification of these debts as non-marital,
and the valuation of the Subway franchise.
III. STANDARD OF REVIEW
This court reviews a trial court's imposition of Rule
37(b) sanctions for failure to comply with a discovery order for an
abuse of discretion. [Fn. 1] This court reviews a trial court's
factual findings under the clearly erroneous standard. [Fn. 2]
IV. DISCUSSION
A. The Trial Court's Sanction Was Appropriate.
The trial court limited the evidence that Ken could
present at trial to his own testimony and any documentation
previously disclosed to Susan. In doing so, the trial court did
not issue a preclusion order, but rather prohibited Ken from
"introducing designated matters into evidence." [Fn. 3] Because
this ruling qualifies as a sanction under Rule 37(b)(2)(B), the
civil rules required the trial judge to consider the
appropriateness of the sanction before entering the order. [Fn. 4]
Here, the trial judge crafted an appropriate and narrowly tailored
sanction that penalized Ken for his failure to participate in the
discovery process but did not constitute "mere punishment." [Fn. 5]
Ken's actions justified a discovery sanction. Susan made
repeated discovery requests, all of which Ken ignored. In doing
so, she asked specifically for information on marital debts.
Interrogatory 9 stated:
With regard to marital debts, identify each
and every creditor to whom you, individually and/or through any
business entity, the plaintiff, or both of you and your spouse owe
any monies equal to or exceeding the sum of $100.00; the address
and phone number of said creditor, the amount owing, any
collateral, reason debt was incurred, and who should pay for it.
In Susan's requests for production, served contemporaneously with
the complaint, she asked Ken to
produce copies of all debt instruments, loan
instruments, mortgage instruments, executed or incurred by
plaintiff, or by you, since January 1, 1993, to present, whether
held individually, jointly with another, in the name of a business,
or as surety for another.
Despite these direct demands, Ken did not produce the requested
information until the day of trial and never answered Susan's
interrogatories.
The trial judge entered the sanctions only after Ken had
demonstrated an unwillingness to cooperate. Ken failed to respond
to motions, failed to file documents with the court in a timely
manner, and failed to appear at pretrial proceedings. Susan filed
a motion to compel discovery, but Ken did not comply with the
motion. When the court ordered Ken to provide "full and complete
discovery responses" and awarded Susan her actual attorney's fees,
Ken ignored the order and did not pay the fee award. The court
considered the Rule 37 motion only after Ken's repeated refusals to
cooperate with Susan or the court. Moreover, the trial court
afforded Ken ample opportunity to provide the requested
information.
Ken contends that his failure to comply with the
discovery order can be explained by his pro se status and the fact
that he was too busy running the Subway business and teaching
survival classes. But while "a trial judge has an obligation to
'inform a pro se litigant of the proper procedure for the action he
or she is obviously attempting to accomplish,'" [Fn. 6] in this
case Ken made no effort to cooperate with the trial court or to
request assistance in complying with its orders. A pro se litigant
must make some attempt to comply with the court's procedures before
receiving the benefit of the court's leniency. [Fn. 7] Moreover,
the pretrial order put Ken on notice that a failure to cooperate in
discovery could result in sanctions.
Ken also suggests that the trial court's sanction
amounted to an establishment or preclusion order. Ken argues that
this order was too broad and constituted impermissible punishment
because "the established issue must be an . . . 'element of the
dispute that cannot be determined on the merits without disclosure
of the evidence the court has ordered the party to produce.'" [Fn.
8] But we disagree with Ken's contention that the trial court's
sanction established any facts or resolved any issues before the
court. The sanction merely limited the evidence that Ken could
present to the information that he had previously provided to
Susan. Other evidence of the promissory notes, including Susan's
property table, was presented at trial. We conclude that the trial
court struck an appropriate balance between sanctioning
recalcitrant discovery behavior and allowing Ken the opportunity to
present his case.
Ken also argues that Susan should have undertaken other
efforts to secure the financial information she needed, including
taking Ken's deposition or exercising her rights as a shareholder
in the Subway franchise to inspect the corporate documents. But we
do not require a complying party to devise creative ways to obtain
information that the noncomplying party controls and refuses to
produce. Accordingly, we conclude that the sanction was
appropriate.
B. Susan Conceded the Existence of Two Business-Related
Promissory Notes.
In this case it was error to conclude that the two
promissory notes signed by Susan did not exist. Susan admitted the
existence of these debts and their amounts in her property table.
Susan also testified that she knew of the debts. As noted above,
Susan signed the two notes that she included in her property table.
In light of this evidence, it was clearly erroneous to conclude
that Ken failed to prove the existence of these two debts.
Moreover, the court should have presumed that the two
notes signed by Susan were marital debts. We presume that property
acquired during the marriage is marital. [Fn. 9] Susan testified
that the notes were business related and the business was marital
property. And we acknowledge that debts may be an important factor
in valuing the marital estate. [Fn. 10] Absent any showing that
the parties intended a debt to be separate, the trial court must
presume that a debt incurred during the marriage is marital and
should consider it when dividing the marital estate.
Although we conclude that it was error to find that there
was insufficient evidence to prove the existence of the two
promissory notes signed by Susan, it was not error for the court to
find that Ken had not shown sufficient evidence to prove the
existence of the other promissory notes. Ken presented no
documentary evidence of the other promissory notes, and the trial
court observed that "Mr. Coffland inappropriately and somewhat
irritatingly just asked us to accept his word without any backup,
and that I'm not willing to do." We have commented that with
respect to the valuation of marital assets, "[i]t is the duty of
the parties, not the court, to ensure that all necessary evidence
is presented at trial." [Fn. 11] Because Ken made accurate
valuation of the Subway store almost impossible, it was not clearly
erroneous for the trial court, in the absence of concrete evidence
of the debts, to exclude them in its valuation of the Subway
business.
V. CONCLUSION
Although the trial court properly exercised its
discretion to sanction Ken for his failure to comply with the
motion to compel discovery, it was error to fail to consider the
two debts that Susan included in her property table and admitted
were incurred during the marriage. We therefore AFFIRM in part and
REMAND to the trial court to redetermine the allocation of marital
property, taking into account the two promissory notes signed by
Susan.
FOOTNOTES
Footnote 1:
See Underwriters at Lloyd's London v. The Narrows, 846 P.2d
118, 119 (Alaska 1993).
Footnote 2:
See Jones v. Jones, 942 P.2d 1133, 1136 (Alaska 1997).
Footnote 3:
Alaska R. Civ. P. 37(b)(2)(B).
Footnote 4:
Alaska R. Civ. P. 37(b)(3) states:
Standard for Imposition of Sanctions. Prior
to making an order under sections (A), (B), or (C) of subparagraph
(b)(2) the court shall consider
(A) the nature of the violation, including
the willfulness of the conduct and the materiality of the
information that the party failed to disclose;
(B) the prejudice to the opposing party;
(C) the relationship between the information
the party failed to disclose and the proposed sanction;
(D) whether a lesser sanction would
adequately protect the opposing party and deter other discovery
violations; and
(E) other factors deemed appropriate by the
court or required by law.
The court shall not make an order that has the
effect of establishing or dismissing a claim or defense or
determining a central issue in the litigation unless the court
finds that the party acted willfully.
Footnote 5:
Honda Motor Co., Ltd. v. Salzman, 751 P.2d 489, 493 (Alaska
1988) (citations omitted).
Footnote 6:
Keating v. Traynor, 833 P.2d 695, 696 (Alaska 1992) (quoting
Breck v. Ulmer, 745 P.2d 66, 75 (Alaska 1987)).
Footnote 7:
See Wright v. Black, 856 P.2d 477, 480 (Alaska 1993).
Footnote 8:
Underwriters at Lloyd's London v. The Narrows, 846 P.2d 118,
122 (Alaska 1993) (quoting Honda Motor, 751 P.2d at 493).
Footnote 9:
See Johns v. Johns, 945 P.2d 1222, 1225 (Alaska 1997) ("With
a few exceptions, all assets acquired by the parties during their
marriage are marital property."); Jones v. Jones, 942 P.2d 1133,
1136 (Alaska 1997); see also McGee v. McGee, 974 P.2d 983, 988-89
(Alaska 1999).
Footnote 10:
See McDaniel v. McDaniel, 829 P.2d 303, 308 (Alaska 1992) ("As
a general rule Alaska courts consider marital debt in valuing the
marital estate."); see also Jones, 942 P.2d at 1137 ("Doctor's
fees, incurred during the marriage, are marital debts which must be
included in the marital estate and divided like any other marital
property.").
Footnote 11:
Zimin v. Zimin, 837 P.2d 118, 122 (Alaska 1992).
