Tuesday, April 12, 2011

Summary 2011 WY 59

Summary of Decision April 12, 2011

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Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

Case Name: Wunsch v. Pickering

Citation: 2011 WU 59

Docket Number: S-10-0004

URL: http://wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=461954

Appeal from the District Court of Teton County, Honorable Nancy J. Guthrie, Judge

Representing Appellant (Plaintiff): Matthew Giacomini and Andrew Reid, Springer and Steinberg, Denver, Colorado.

Representing Appellee (Defendant): Lea Kuvinka, Kuvinka & Kuvinka, Jackson, Wyoming.

Date of Decision: April 12, 2011

Facts: The district court resolved a dispute between the parties concerning an amount of money Appellant owed Appellee pursuant to the provisions of their divorce settlement agreement regarding the distribution of fees from the financial services business they had operated and Appellant continued to operate.

Issues: Whether the district court abused its discretion by issuing an order compelling Appellant to produce documents that were irrelevant or not in his possession, custody, or control. After the district court entered default against Appellant as a sanction for failing to produce the documents as ordered, whether the district court erred as a matter of law by restricting Appellant’s participation in the subsequent hearing on damages. Whether the evidence was sufficient to support the trial court’s award of damages.

Holdings: WRE 401 provides that relevant evidence is “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” If the account information sought by Appellee indicated that clients formerly invested in the parties’ joint accounts had moved those investments through Appellant’s individual account, that would tend to make it more probable that those joint accounts had been replaced and pursuant to the settlement agreement Appellee would be owed one half of the fees. To the extent the information related only to Appellant’s individual clients, that would tend to make it less probable that those accounts had been replaced. The district court could reasonably determine that the documents sought by Appellee were relevant. “Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of the party seeking discovery.” W.R.C.P. 26(b)(1). The district court did not abuse its discretion in granting the order to compel the production of these documents.

Appellant’s objection that the documents were not in his possession, custody, or control is unsupported by facts in the record. Although Appellant did not have client commission statements requested, he could have obtained copies from the parent company of his business. As to the tax records, it appears that Appellant did produce all of the requested information except for the tax returns and 1099 Forms for 2008. Appellant repeatedly represented that the 2008 tax returns were still being prepared, and so were not yet in existence. He asserted that his 1099 Forms for 2008 were unavailable for the same reason. From a practical standpoint, the assertion that the 1099 Forms for 2008 were still unavailable as of September 30, 2009, seems untenable. Moreover, in one hearing, Appellant’s counsel stated that “The 1099 for 2008 has been ordered and should be here,” another admission that the document was not beyond Appellant’s control.

After careful review of the record, it was not unreasonable for the district court to conclude that the documents requested by Appellee through discovery were relevant and within Appellant’s possession, custody, or control. It was not an abuse of discretion to issue an order compelling Appellant to produce the disputed documents.

Appellant claims that, during the hearing held on damages, the district court denied his right to participate in the proceedings by improperly prohibiting him from presenting evidence relating to the damages he owed Appellee. He asserts that the district court erred as a matter of law in restricting his participation in the hearing, and because this raises a question of law, it must be reviewed de novo. However, the record reflects that Appellant was afforded an opportunity to participate in the damages hearing, and that he did participate. The real basis of his complaint is that the district court excluded most of the evidence he sought to introduce at that hearing.

Because the effect of the entry of default was to establish that the disputed accounts had been replaced, evidence offered by Appellant to show that the accounts had not been replaced was irrelevant. Because the entry of default decided the issue of whether the accounts had been replaced, and decided it against Appellant, any evidence suggesting that the accounts had not been replaced was irrelevant, and the district court did not err in excluding it.

As with the previous issue, Appellant’s argument that the evidence was insufficient to support the trial court’s award of damages is based on a misconception of the effect of the entry of default against him. The default judgment amounted to a ruling that the inactive accounts had all been replaced by Appellant and Appellee would have been owed a portion of the fees for those accounts. Appellee was no longer required to prove that any of the accounts had been replaced. She merely had to prove what her damages were if all the accounts had been replaced. The calculation of the amount of fees Appellee would have been owed was done by the Administrator/Accountant who had been appointed during mediation to perform the accounting required under the settlement agreement for the purpose of establishing the “projected amount” Appellee would be owed if the accounts were all replaced. After the district court entered default establishing, in effect, that all the accounts were replaced, this evidence was sufficient to prove Appellee’s damages.


J. Burke delivered the opinion for the court.

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