Metropolitan Cooperative Association and Metropolitan Cooperative Association, Reorganized

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
METROPOLITAN COOPERATIVE
ASSOCIATION,
Debtor.
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Case No. 08-00527
(Chapter 11)
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER RE MOTION FOR SANCTIONS
M Y New Hampshire, LLC (“MYNH”) seeks sanctions under Fed.
R. Civ. P. 37(d)(3) against the debtor (“Metropolitan”) and its
counsel, William C. Johnson, Jr. for failure of Metropolitan to
appear for deposition through the individual it designated under
Fed. R. Civ. P. 36(b)(2) to testify on its behalf. 	Specifically,
MYNH seeks an award against Metropolitan and Johnson of its
expenses arising from the failure. 	The motion will be granted in
large part.
I
Johnson and Metropolitan have not disputed the basic facts
set forth in MYNH’s motion, and those facts are taken as admitted
for purposes of this decision. 	In addition, Johnson and
Metropolitan have set forth specific facts that are pertinent to
The document below is hereby signed.
Signed: June 30, 2009.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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this decision.
After consultation with Johnson, on April 28, 2009, MYNH
properly served Metropolitan with MYNH’s Notice of Deposition
relating to the litigation of a pending contested matter.
Thereafter, on April 29, 2009, MYNH properly served Metropolitan
with MYNH’s Amended Notice of Deposition, scheduling the
deposition of Metropolitan’s Rule 30(b)(6) designee for May 14,
2009, at 10:00 a.m.
On May 11, 2009, Johnson confirmed to MYNH’s counsel via
email correspondence that Metropolitan’s designee would be Lawana
Brown and that Brown would appear for the deposition on May 14,
2009, at 10:00 a.m. 	In reliance upon the agreement for
scheduling, and the representations made by Metropolitan’s
counsel that Metropolitan’s designee would appear for deposition
on May 14, 2009, at 10:00 a.m., MYNH and its counsel undertook
preparation for the deposition. 	Similarly, MYNH and its counsel
made appropriate arrangements for coordinating the deposition to
take place in Washington D.C. and for a court reporter to
transcribe the testimony of Metropolitan’s Rule 30(b)(6) designee
witness.
Johnson and Metropolitan state:
On the eve of the deposition, debtor’s counsel was
informed by the 30(b)(6) designee that she may not be
able to attend the deposition due to her employment.
Debtor’s counsel informed her that she was obligated to
attend and to inform her employer of this obligation.
Ms. Brown informed debtor’s counsel that she would call
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1 	In MYNH’s reply to the opposition to its motion, MYNH
attaches a portion of Brown’s later deposition in which she
concedes that on May 11, 2009, four days before the deposition,
she told Johnson that she might not be able to attend the
deposition. 	But Johnson and Metropolitan have not had an
opportunity to respond to the reply, and I am not relying on
Brown’s deposition in deciding this matter because MYNH is
entitled to sanctions, and the extent of sanctions awarded would
not be different even if Brown’s deposition testimony were taken
into account.
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him later that evening with a definitive answer as to
her attendance.
Debtor’s counsel informed Reginald Richter to be
certain that he was in attendance in the event Ms. Brown did
not attend the deposition because it would serve as a basis
for a sanctions violations and that creditor’s counsel will
go to untold lengths to make this appear as if debtor’s
counsel purposefully violated the rules.
Opposition to Motion at 2. 	Despite Johnson being aware that
Brown might be unable to attend, depending on the outcome of
discussions with her employer, and having alerted Richter to be
sure to attend the deposition because Johnson (mistakenly)
thought that Richter’s appearing would prevent an award of
sanctions if Brown did not attend the deposition, Johnson did not
communicate to MYNH’s counsel by telephone or e-mail that Brown
might not appear. 1
Once Brown told Johnson on the evening of May 13, 2009, that
she would not attend the deposition the next day, Johnson
neglected to e-mail MYNH’s attorneys (or otherwise attempt to
contact them) to alert them that Brown would not appear.
Johnson has claimed that he did not contact MYNH’s counsel on May
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13, 2009, because he does not “believe in calling opposing
counsel after hours, particularly after 10:00 p.m.” 	See Motion
Exhibit E. 	This attempt to justify not contacting MYNH’s counsel
prior to the scheduled start time of the deposition is unfounded
and is belied by the circumstances and prior communications by
Johnson in this case. 	Johnson’s last communication to Nussbaum
on these matters prior to the deposition was sent by Johnson via
e-mail at midnight, Sunday, May 10, 2009.
As a result of Johnson’s failure to alert MYNH’s counsel
that Brown would not appear, representatives from MYNH, MYNH’s
counsel and a court reporter assembled prior to the scheduled
deposition time of 10:00 a.m. on May 14, 2009, awaiting Brown’s
appearance to commence the deposition. 	At 9:55 a.m., five
minutes prior to the scheduled start of the deposition, Richter,
who was on his way to the deposition, telephoned MYNH’s counsel,
Paul Nussbaum, and in that conversation advised Nussbaum that
Metropolitan’s designated witness, Brown, would not be appearing
for the deposition. 	Richter subsequently appeared in the office
of MYNH’s counsel, and the court reporter proceeded to record a
discussion between Richter and Nussbaum. 	Richter is an attorney
but was not at that juncture counsel for Metropolitan in this
case (and he confirmed on the record that he continued not to be
counsel for Metropolitan). 	Richter advised that he was appearing
on behalf of Johnson to advise that Brown would not be appearing
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and to offer an alternative deposition date of May 20, 2009.
Following the deposition, MYNH’s counsel, Nussbaum, wrote to
Johnson to advise that the failure of Metropolitan, through its
Rule 30(b)(6) designee, to appear for the duly scheduled and
confirmed deposition without any prior notice was a violation of
the Federal Rules of Civil Procedure and that it was appropriate
and necessary for Metropolitan and Johnson to defray the fees and
costs of MYNH for the sanctionable event. 	Nussbaum also sought
to resolve this dispute pursuant to the Rules in order to avoid
further fees and costs that would arise from having to file an
appropriate motion for sanctions under the Rules. 	Johnson
rejected MYNH’s offer to resolve the dispute.
II
MYNH is entitled to sanctions pursuant to Fed. R. Civ. P.
37, made applicable by Fed. R. Bankr. P. 7037. 	Fed R. Civ. P.
37(d) provides that a court may, on motion, order sanctions if “a
party or party’s officer, director, or managing agent – or a
person designated under Rule 30(b)(6) or 31(a)(4) – fails, after
being served with proper notice, to appear for that person’s
deposition.” 	Fed. R. Civ. P. 37(d)(1)(A). Fed. R. Civ. P.
37(d)(3) further provides:
Sanctions may include any of the orders listed in Rule
37(b)(2)(A)(i)-(vi). 	Instead of or in addition to
these sanctions, the court must require the party
failing to act, the attorney advising that party, or
both to pay the reasonable expenses, including
attorney’s fees, caused by the failure, unless the
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failure was substantially justified or other
circumstances make an award of expenses unjust.
Fed. R. Civ. P. 37(d)(3). 	The failure to appear was not
substantially justified, and thus an award of reasonable expenses
caused by the failure is mandatory.
Brown was aware that she might not be able to attend the
deposition on May 14, 2009, and communicated that to Johnson,
who, acting as Metropolitan’s counsel, neglected to advise MYNH’s
counsel that Brown might not be able to attend even though he
alerted Richter that Brown might not attend. 	Then, despite
learning the evening before that Brown definitely would not be
appearing for the deposition on May 14, 2009, Johnson failed to
call, e-mail or make any effort whatsoever to notify MYNH’s
counsel that Metropolitan’s Rule 30(b)(6) designee would not be
appearing for the scheduled deposition. 	Only five minutes before
the scheduled deposition time did MYNH’s attorneys learn from
Richter, who was on his way to the deposition, that Brown would
not be appearing for deposition. 	Johnson and Metropolitan have
offered nothing that would make the failure to appear
“substantially justified” within the meaning of Rule 37(d)(3).
Indeed, even if, as Johnson and Metropolitan erroneously
contend, egregiousness is required before Rule 37(d)(3) sanctions
may be imposed, this is an egregious case. 	As aptly stated by
MYNH:
There is no excuse for the failure of an attorney to
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immediately notify opposing counsel that a previously
scheduled and confirmed deposition will not be taking
place, especially when the attorney is well-aware that
opposing counsel will be traveling a considerable
distance to attend the deposition and that a court
reporter will be in attendance. 	It is this unexcused
“failure-to-notify” even more so than Ms. Brown’s
“failure-to-appear,” that caused harm to MYNH.
MYNH’s Reply Memorandum at 4.
This failure unnecessarily put MYNH to expenses, including
both attorney’s fees for attending the deposition (including
traveling to and setting up for the deposition) and the cost of a
court reporter. 	In addition, MYNH’s attorneys prepared for the
deposition, and to the extent that such preparation time turned
out to be wasted because it had to be repeated later, reasonable
fees for such time should be recoverable. 	The deposition, with
Brown in attendance, was finally held six days later on May 20,
2009, and because of the short passage of time, much of the
original preparation time was undoubtedly not wasted, and
attorney’s fees for such time ought not be recoverable. 	But
there would be some reasonable amount of time required to prepare
anew. 	Reasonable attorney’s fees for time spent preparing for
the May 14, 2009, deposition that reasonably had to be repeated
anew is another item of expense that should be recoverable.
Despite a request by Nussbaum that Johnson and Metropolitan
pay the expenses recoverable under Rule 30(b)(6) without the
necessity of the expense of a motion being filed, Johnson and
Metropolitan refused that request, thus necessitating the
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sanctions motion. 	MYNH is thus additionally entitled to recover
the attorney’s fees and expenses associated with the pursuit of
the motion.
III
MYNH contends that courts may award costs and fees
associated with a party’s failure to appear at a deposition, as
well as costs associated with any future rescheduled deposition,
citing Myrdal v. District of Columbia, 248 F.R.D. 315 (D.D.C.
2008). 	But Myrdal is readily distinguished.
There, the court had entered an order compelling the
defendant to appear for deposition under Rule 30(b)(6), followed
by the defendant’s failure to designate a Rule 30(b)(6) witness
other than a witness who had no knowledge regarding nineteen of
the twenty topics that were to be covered at the deposition. 	The
sanction of requiring the defendant to pay for the costs and fees
associated with subsequent Rule 30(b)(6) depositions was imposed
as a sanction for violating the court’s order compelling the
defendant to submit to deposition under Rule 30(b)(6) as well as
for its failure to comply with its Rule 30(b)(6) obligations, and
in lieu of the more draconian sanction of decreeing certain
designated facts to be taken as established.
In this case, MYNH does not point to any prior order
compelling discovery, and Brown appeared on May 20, 2009, for
deposition, only six days after the originally scheduled date.
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This is not an appropriate case for imposing the costs associated
with the deposition held on May 20, 2009. 	As already noted,
however, reasonable attorney’s fees for time spent preparing for
the May 14, 2009, deposition that reasonably had to be repeated
anew in preparing for the May 20, 2009, deposition is another
item of expense that should be recoverable.
IV
In light of the foregoing, it is
ORDERED that MYNH shall recover from Metropolitan and its
counsel, Johnson, the reasonable expenses incurred by reason of
the failure of the debtor through its designee to attend the
properly noticed deposition on May 14, 2009, including reasonable
attorney’s fees incurred, such as fees for (1) attending the
deposition, (2) preparing for the deposition (to the extent that
such preparation reasonably had to be repeated for the deposition
when held later on May 20, 2009), and (3) the pursuit of the
motion for sanctions. 	It is further
ORDERED that MYNH’s request to recover the expenses incurred
in connection with the subsequent Rule 30(b)(6) deposition held
on May 20, 2009, is DENIED. 	It is further
ORDERED that MYNH file a Statement of Expenses within 21
days after the date of entry of this order, setting forth the
reasonable expenses it asserts are recoverable, and that the
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10	O:\TEEL\Judge Temp Docs\Metropolitan Coop Assocn - Mtn of MYNH for Sanctions v4.wpd
Statement shall provide sufficient detail to establish the
reasonableness of the expenses. 	It is further
ORDERED that within 21 days after the filing of the
Statement of Expenses, Metropolitan and Johnson may file an
objection to the Statement of Expenses, and if no objection is
filed, the court may elect to grant the requested recovery of
expenses without a hearing. 	It is further
ORDERED that the parties shall confer to attempt to resolve
without a hearing the matter of the amount of reasonable expenses
to be awarded, with MYNH to initiate discussions with Johnson no
later than 7 days after filing its Statement of Expenses.
[Signed and dated above.]
Copies to: Debtor; Debtor’s attorney; Office of United States
Trustee; Paul M. Nussbaum, Esq.; Brent C. Strickland, Esq.; Aryeh
E. Stein, Esq.
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