Kentucky Supreme Court Reverses and Remands Order Holding Non-Party Responsible for Attorney’s Fees Due to Non-Compliance with Subpoena

David Megronigle D/B/A Accident Injury Chiropractic; and E-Town Injury Center Inc., D/B/A Metro Pain Relief Center vs. Allstate Property & Casualty Insurance Company

This case involves an automobile collision where Jean-Luc Henry and Dwayne Smith sued the drivers involved in the crash for bodily injury and their insurer, Allstate, for failing to provide required benefits. Allstate disputed charges from Dr. Megronigle, who provided chiropractic treatment, and served subpoenas for documents and deposition. After multiple rescheduling issues, the court ordered Dr. Megronigle to comply with the subpoenas. Dr. Megronigle appealed, but the appeal was denied. In response to the notice of voluntary dismissal filed by the Plaintiffs, Allstate filed a memorandum supporting its motion for attorney’s fees under CR 37.02(3). Following a hearing, the court ordered Dr. Megronigle to pay the reasonable fees associated with Allstate’s pursuit of the subpoenaed information. Dr. Megronigle appealed again, arguing lack of jurisdiction and abuse of discretion. The Court of Appeals affirmed, except for a dissenting opinion on the use of sanctions against a non-party. Dr. Megronigle sought discretionary review from the Supreme Court, which was granted.

Dr. Megronigle presented two main arguments before the Court. Firstly, he argued that the trial court lacked jurisdiction to impose sanctions on him because the Plaintiffs had voluntarily dismissed the case before the sanctions order was issued. Secondly, Dr. Megronigle asserted that the trial court abused its discretion by penalizing him for attempting to safeguard information that he believes was not subject to discovery.

I. The trial court maintained jurisdiction over Dr. Megronigle despite the notice of voluntary dismissal.

Dr. Megronigle argued that once he zeroed out Plaintiffs’ accounts and a notice of voluntary dismissal was filed, the trial court no longer had jurisdiction over him. However, the Court of Appeals’ analysis on this issue was deemed sufficient. According to CR 41.01, a plaintiff can unilaterally dismiss a case without court approval only if the opposing party has not answered or moved for summary judgment. In this case, Allstate had served its answer, making a unilateral dismissal invalid without court approval. The notice of voluntary dismissal filed by Dr. Megronigle, signed only by his counsel, lacked the necessary signatures of all parties and could be interpreted only as a motion to dismiss under CR 41.02(2). The trial court took no action on the notice and did not enter an order of dismissal. Therefore, the trial court retained jurisdiction when ruling on Allstate’s motion for costs.

II. Civil Rule 37.02(3) does not permit ordering a non-party to pay attorney’s fees.

Dr. Megronigle’s second argument is addressed, which claims that the trial court abused its discretion in awarding fees to Allstate under CR 37.02(3) because his opposition to the subpoenaed information was substantially justified. However, the court determined that the award was improper because the plain language of CR 37.02(3) does not allow the trial court to sanction a non-party. The term “party” in the rule refers only to entities that are parties of record in the proceedings, and Dr. Megronigle’s involvement in the case was solely due to the subpoenas served upon him. The court clarifies that while CR 37.02(3) does not apply to non-parties like Dr. Megronigle, there are other provisions in the rules that provide for sanctions against non-parties who disrupt the discovery process, such as CR 37.02(1)-(2). These include assessing costs for motions to compel and punishing disobedience of subpoenas as contempt of court.

The Supreme Court reversed the Court of Appeals decision and remanded to the Jefferson Circuit Court.

Digested by: Kendall Box, Esq.

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