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Aiken Hospitality Group LLC v. HD Supply Facilities Maintenance, Ltd.

United States District Court, D. South Carolina, Aiken Division

May 3, 2018

Aiken Hospitality Group, LLC, Plaintiff,
v.
HD Supply Facilities Maintenance, Ltd., Defendant. HD Supply Facilities Maintenance, Ltd., Third-Party Plaintiff,
v.
N3A Manufacturing Inc., d/b/a Hotelure, Inc., Third-Party Defendant.

          ORDER AND OPINION

         Before the court is Defendant HD Supply Facilities Maintenance, Ltd.'s (“HD Supply”) Motion for Sanctions (ECF No. 142) against Third-Party Defendant N3A Manufacturing Inc. (hereinafter “Hotelure”) for Failure to Attend Deposition. For the reasons stated below, the court GRANTS IN PART AND DENIES IN PART HD Supply's Motion for Sanctions (ECF No. 142).

         I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

         On multiple occasions HD Supply has tried to depose Hotelure's employees, including its CEO, Niall Alli (“Alli”), but has been unable to do so, even after giving them adequate notice. (See ECF No. 142-1 at 3-5, 7-8, 17, 28-29; ECF No. 142-2; ECF No. 142-4, ECF No. 142-6.) At issue in this matter is Hotelure's failure to attend its deposition, noticed pursuant to Fed.R.Civ.P. 30(b)(6)[1].

         On December 21, 2017, HD Supply served Alli via e-mail, and on December 26, 2017, Alli accepted service via e-mail. (ECF No. 142-1 at 17.) On December 27, 2017, the parties confirmed that Alli would be deposed on February 9, 2018 in New York City. (Id. at 17, 22; see also ECF No. 142-4 at 1.) On January 3, 2018, HD Supply served Hotelure at its corporate headquarters with notice regarding the February 9, 2018 deposition. (ECF No. 142-5; see also ECF No. 142-4.)

         On February 8, 2018, Alli e-mailed HD Supply's Counsel, stating that he would be unable to attend the February 9, 2018 deposition due to his flight being severely delayed and eventually cancelled. (ECF No. 142-1 at 28-29.) HD Supply's Counsel offered to move the deposition to February 10, 2018, but Alli stated that he did not have enough time to rebook a flight from China to make it by then. (Id. at 26-27.) Counsel for HD Supply and Aiken Hospitality convened the deposition on February 9, 2018, and Alli was not present. (ECF No. 142-6.)

         On April 5, 2018, HD Supply moved for sanctions against Hotelure for Hotelure's failure to attend its deposition, noticed pursuant to Rule 30(b)(6). (ECF No. 142.) On April 9, 2018, Plaintiff Aiken Hospitality Group, LLC (“Aiken Hospitality”) responded. (ECF No. 146.) Hotelure did not respond to HD Supply's Motion.

         II. JURISDICTION

         The court has jurisdiction over this case pursuant to 28 U.S.C. § 1332, as Aiken Hospitality and HD Supply are diverse parties, and the amount in controversy is greater than $ 75, 000, exclusive of interest and costs. (ECF No. 1 at 1-2 ¶¶ 2, 4.) Moreover, this court also has jurisdiction over HD Supply's Third-Party action against Hotelure pursuant to 28 U.S.C. § 1332 for the same reasons. (ECF No. 1 at 1-2 ¶ 2; ECF No. 21 at 7-8 ¶¶ 45-48.)

         III. LEGAL STANDARD

         Rule 37(d)(1)(A)(i) provides that the court may “. . . on motion, order sanctions if: (i) a party or a 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.” Sanctions for a party's failure to appear for its deposition “. . . 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 failure was substantially justified or other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(d)(3).

         IV. ANALYSIS

         HD Supply moves the court for the following relief; (1) imposition of a monetary sanction against Hotelure, (2) strike Hotelure's responsive pleadings and render a default judgment against it, (3) treat Alli's actions as contempt of court for failure to appear and issue a bench warrant for his arrest, and (4) stay the proceedings until Hotelure provides a designee for the duly noticed deposition. (ECF No. 142 at 5-6.)

         Aiken Hospitality does not object to the imposition of sanctions against Hotelure, and does not take a position as to whether Alli should be arrested. (ECF No. 146 at 3.) However, Aiken Hospitality opposes the entry of a default judgment against Hotelure and also opposes a stay of the proceedings until Hotelure presents a designee. (Id. at 3-4.)

         Alli is Hotelure's Rule 30(b)(6) witness, therefore, his answers would be binding on Hotelure.[2] The parties tried to schedule a Rule 30(b)(6) deposition for different times during late 2017, and ultimately, the parties were able to settle on the date of February 9, 2018. (ECF No. 142-1 at 17.) HD Supply gave Alli notice of ...


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