United States District Court, S.D. Indiana, Indianapolis Division
REPORT AND RECOMMENDATION ON CHICAGO TITLE'S
MOTION TO HOLD JUDGMENT DEFENDANT IN CONTEMPT OF COURT AND
Matthew P. Brookman United States Magistrate Judge.
Creditor, Chicago Title Insurance Company (“Chicago
Title”) seeks an entry holding Judgment Defendant,
Nickolas W. Jekogian, III (“Jekogian”) in
contempt of court and to impose sanctions on Jekogian for his
repeated failure to comply with the rules and orders of this
Court. (Docket No. 156). Jekogian did not respond to the
motion. The Honorable Jane Magnus-Stinson assigned this
matter to the Magistrate Judge pursuant to 28 U.S.C. §
636(b)(1)(B). The undersigned recommends
Chicago Title's request be granted in part and
denied in part for the reasons that follow.
Title obtained a judgment against Jekogian over six (6) years
ago, on June 7, 2013, in the amount of $343, 301.39 (Docket
No. 97) (the “Judgment”). Since that date Chicago
Title has been unsuccessful in satisfying the judgment-which
brings the case before the undersigned today to consider this
motion for sanctions.
Judgment continues to accrue interest at the statutory rate.
In 2015, Jekogian and Chicago Title entered into a written
agreement to satisfy the Judgment. (Docket No. 156 at ECF p.
1). The Agreement provided that Jekogian would make certain
periodic payments to Chicago Title. (Id.). Chicago
Title asserts that Jekogian has breached the Agreement
multiple times, which has forced Chicago Title to seek court
intervention through proceedings supplemental to attempt to
collect on its Judgment and discovery information about
Jekogian's assets that could be used to repay the
Title moves for sanctions against Jekogian for alleged
discovery misconduct. The primary misconduct alleged is that
Jekogian has failed to abide by this Court's November 5,
2018, Order requiring Jekogian to “supplement and
provide answers to, and produce documents responsive to,
discovery requests served upon him by Chicago Title in a
manner consistent with the September 6, 2018, letter sent by
Chicago Title to Jekogian” (Docket No. 153) and by this
Court's January 22, 2019, Order requiring Jekogian to
reimburse Chicago Title for the $3, 640.00 in attorneys'
fees incurred in order to file the motion to compel addressed
in the Court's November 5, 2018 order. (Docket No. 155).
Chicago Title asserts it has not been reimbursed. (Docket No.
156 at ECF p. 3).
Court's record shows that these failures are just
Jekogian's latest in a long line of dismissive behavior
towards this matter, both before and after judgment was
entered. A review of the post-judgment activity is
appropriate. On August 15, 2013, Chicago Title requested a
proceeding supplemental (Docket No. 98), which was originally
scheduled for September 30, 2013, hearing. (Docket No. 100).
The scheduling order warned that disobedience of the order
may be punished as contempt. (Id.). On September 27,
2013, Chicago Title requested that the hearing be continued
as Jekogian was providing answers to written discovery.
(Docket No. 105). Chicago Title also advised that Jekogian
had provided it with an address that the Court may use as a
service address for Jekogian. (Docket No. 105 at ECF p. 2).
On September 30, 2013, the Court vacated the hearing and
noted Jekogian's address for the purposes of service.
(Docket No. 107).
11, 2014, Chicago Title filed a renewed motion for
proceedings supplemental (Docket No. 108) after it was unable
to obtain a full accounting from Jekogian and this court set
a hearing for August 14, 2014. (Docket No. 109). Again, the
Court warned disobedience of the order could be punished by
contempt. (Id.). Jekogian did not appear at the
August 14, 2014, hearing,  despite proper service. (Docket No.
113). On December 9, 2014, this Court ordered Jekogian to
comply with Chicago Title's earlier propounded discovery
requests and warned him that failure to do so could result in
being found in contempt of court and the imposition of
sanctions. (Docket No. 114 at ECF p. 3). Also on December 9,
2014, the Court ordered Jekogian to appear on January 26,
2015, for a show cause hearing after his August 14, 2014,
failure to appear. (Docket No. 115 at ECF p. 3).
January 21, 2015, five days before the show cause hearing,
Jekogian filed an agreed motion to continue the hearing
indicating that he had recently retained counsel and was
working to resolve the issues, which necessitated the
hearing. (Docket No. 118). The Court granted the request and
extended the hearing to March 3, 2015. (Docket No. 119). On
February 27, 2015, the parties reported they were in the
process of finalizing a settled resolution to the matter and
again requested the Court to continue the show cause hearing.
(Docket No. 120). The Court granted that request, indicating
that the hearing could be reset by motion of either party.
(Docket No. 121).
parties appeared to be working towards a resolution, at least
until October 27, 2015, when Chicago Title reported that
Jekogian had failed to make a payment, as agreed, by
September 1, 2015; thus, Chicago Title asked for a proceeding
supplemental hearing to be set. (Docket No. 122). The Court
granted that request, but made clear that it was only
rescheduling the previously continued proceedings
supplemental and show cause hearing and that it would not
enforce the scope of the settlement agreement executed by the
parties as such a request was beyond the scope of this
litigation. (Docket No. 123). A hearing was set for March 3,
2016 (Docket No. 124), but again Chicago Title filed an
agreed motion to continue the hearing indicating that the
parties had reached an agreement. (Docket No. 125). The Court
granted that request, indicating that the hearing could be
reset by motion of either party. (Docket No. 126).
again, the parties appeared to be working towards a
resolution until, perhaps predictably, October 7, 2016, when
Chicago Title reported that Jekogian had failed to make a
payment, as agreed, by September 1, 2016; thus, Chicago Title
again asked for a proceeding supplemental hearing to be set.
(Docket No. 128). The Court set a hearing for November 29,
2016, warning that disobedience of that order may be punished
by contempt. (Docket No. 130). On October 25, 2016,
Jekogian's counsel indicated that Mr. Jekogian sought to
terminate him as counsel (Docket No. 129) and the Court
permitted counsel to withdraw by order on October 27, 2016.
(Docket No. 131). Since October 27, 2016, Jekogian has
proceeded in this matter pro se.
failed to appear at the November 29, 2016, hearing, and a
show cause hearing was scheduled for December 29, 2016.
(Docket No. 134; Docket No. 135).
January 18, 2017, the parties reported that Jekogian would
voluntarily update his asset information and that they would
work out discovery without further Court involvement. (Docket
No. 139). Nonetheless, approximately ten (10) months later,
and after Jekogian had failed to make a payment pursuant to
the settlement agreement, Chicago Title again requested a
proceeding supplemental hearing. (Docket No. 140). The Court
set the hearing for December 15, 2017 and warned that
disobedience of the Order may be punished as contempt.
(Docket No. 142). Despite proper service (Docket No. 143),
Jekogian again failed to appear. (Docket No. 144). A
show cause hearing was set for January 31, 2018. (Docket No.
145). By agreement of the parties this hearing was continued
to March 8, 2018, as they had again been in discussions
concerning Defendants' assets and liabilities. (Docket
No. 147 at ECF p. 2; Docket No. 149). Again, despite proper
service (Docket No. 150), Jekogian failed to appear at the
March 8, 2018 hearing. (Docket No. 151).
September 25, 2018, Chicago Title filed the above-mentioned
motion to compel after it received inadequate answers to a
Second Set of Interrogatories and Requests for Production of
Documents served to Jekogian on June 22, 2018. (Docket No.
152). Of interest, this round of written discovery sought to
obtain information regarding two trusts that Chicago Title
argued “are potentially sources of assets that should
properly be subject to execution [to satisfy the
judgment].” (Docket No. 152 at ECF p. 4). Prior to
serving the motion, Chicago Title provided a letter to
Jekogian detailing the supplementations it sought
(“September 6, 2018 letter”), but Jekogian's
paltry one-page response was unsatisfactory. (Docket No.
Court ordered Jekogian to supplement in a manner consistent
with the September 6, 2018, letter, as discussed above by
November 19, 2018. (Docket No. 153). While Jekogian did
produce some responses on November 19, 2018, Chicago Title
argues that they were not verified or under oath and
Jekogian's responses to paragraphs 5, 7, 8, and 9 of the
September 6, 2018 letter were woefully deficient. (Docket No.
156-1; Docket No. 156-2). On December 28, 2018, Chicago Title
sent another follow-up letter to Jekogian
summarizing additional and remaining issues with discovery
and warning that additional court proceedings may be
necessary should Jekogian fail to supplement his discovery by
January 15, 2019. (Docket No. 156 at ECF pp. 4-5; Docket No.
156-4; Docket No. 156-5). Chicago Title indicates that
Jekogian has failed to provide full and complete discovery
responses. (Docket No. 156 at ECF p. 5). Thus, Chicago Title
requests that this Court impose further sanctions and find
that Jekogian be held in contempt.
Court has the inherent power to protect the integrity of the
judicial system and punish those who abuse it by fashioning a
sanction proportional to the abusive conduct. Chambers v.
NASCO, Inc., 501 U.S. 32, 44-45 (1991); Allen v.
Chicago Transit Auth., 317 F.3d 696, 703 (7th Cir. 2003)
(sanction under court's inherent power “should be
proportioned to the gravity of the offense”).
gives the court authority to sanction a party for discovery
misconduct, in particular. A party's failure to comply
with discovery orders is misconduct subject to sanctions
under Rule 37(b). Making evasive or incomplete disclosures in
response to document requests or interrogatories, or in
answer deposition questions is another type of discovery
misconduct. R. Civ. P. Rule 37(a)(4). That behavior is
treated as a failure “to disclose, answer, or respond,
” id., and Rule 37(d) permits sanctions under
Rule 37(b) to be imposed for that conduct. Discovery
misconduct may be sanctioned in any “just”
manner, including imposition of various types of sanctions
listed in Rule 37(b)(2)(A). Of relevance to this motion, Rule
37(b)(2)(A)(i) and (ii) provides that sanctions may include:
“(i) directing that the matters embraced in the order
or other designated facts be taken as established for
purposes of the action, as the prevailing party claims”
and “(ii) prohibiting the disobedient party from
supporting or opposing designated claims or defenses, or from
introducing designated matters into evidence.”
an award of attorneys' fees incurred in bringing or
responding to a discovery motion must be made in favor of the
winning party unless the other's conduct or position
“was substantially justified or other circumstances
make an award of expenses unjust.” See Fed. R.
Civ. P. Rule 37(b)(2)(C) and 37(d)(3).
sanctions are appropriate where a party displays willfulness,
bad faith, or fault in violating his discovery
obligations. Marrocco v. General Motors Corp., 966
F.2d 220, 224 (7th Cir. 1992) (citing National Hockey
League v. Metropolitan Hockey Club, Inc., 427 U.S. 639,
640 (1976)). Willfulness or bad faith may be inferred through
a party's “pattern of contumacious conduct or
dilatory tactics, ” and that conduct can lead to the
harshest of sanctions. Crown Life Ins. Co. v. Craig,
995 F.2d 1376, 1383 (7th Cir. 1993). See also
Newman v. Metropolitan Pier & Exposition Auth.,
962 F.2d 589, 591 (7th Cir. 1992) (affirming sanction of
default where, although district court had not made a finding
of bad faith, the party's failure to comply with
discovery obligations was part of a pattern of noncompliance
rather than inadvertent, isolated, or merely careless);
Downs v. Westphal, 78 F.3d 1252, 1257 (7th Cir.
1996) (affirming default judgment against pro se
defendants where evidence of their bad faith conduct was
overwhelming; they rivaled only each other in their level of
as a ground for imposing Rule 37 sanctions considers whether
the party's discovery conduct demonstrates objectively a
lack of reasonableness. Marrocco, 966 F.2d at 224. A
party's “extraordinarily” poor judgment or
“gross” negligence as opposed to a mere mistake
or carelessness may warrant harsh Rule 37 sanctions.
Id. (directing verdict in favor of plaintiff where
defendant flagrantly disregarded its duty “to preserve
and monitor the condition of evidence which could be pivotal
in a lawsuit”).
serve two purposes: to penalize parties who do not follow the
rules and to deter others tempted that abusive conduct has no
consequence. Greviskes v. Univs. Research Ass'n,
Inc., 417 F.3d 752, 758-59 (7th Cir. 2005); Phillips
Medical Sys. Intl'l, B.V. v. Bruetman, 982 F.2d 211,
214 (7th Cir. 1992). Whether the court is exercising its
inherent power or invoking Rule 37, the sanction must be
proportional to the abusive conduct. Allen v. Chicago
Transit Auth., 317 F.3d 696, 703 (7th Cir. 2003)
(stating sanction under court's inherent power
“should be proportioned to the gravity of the
offense”); Maynard v. Nygren, 372 F.3d 890,
893 (7th Cir. 2004) (stating for Rule 37 sanctions, the
punishment should fit the crime). The court should consider
“the egregiousness of the conduct in question in
relation to all aspects of the judicial process.”
Dotson v. Bravo, 321 F.3d 663, 667-68 (7th Cir.
2003) (internal quotation omitted).
Findings of Fact
Title specifically avers that Jekogian has still
insufficiently responded to paragraphs 5, 7, 8, and 9 of the
September 6, 2018 letter, despite this Court's order to
do so. Those paragraphs and Jekogian's responses are as
Interrogatories 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,
17, 18, 31, 32, 33, 34: These Interrogatories concerned the
Jekogian Family Trust and the BBJ Family Irrevocable Trust,
which you admitted in response to Interrogatories 15 and 16
have “substantial real estate assets” or
“holdings” and, as you conceded in response to
Interrogatory 13, “have made various investments in
real estate and debt instruments including some partnerships
that I was once a partner in and guaranteed some of the
debt.” On this basis alone, information about the
trusts is germane to the issues in this collection matter. We
are entitled to discover information regarding what holdings
and assets each trust has, any transfers of money or assets
between and among the trusts and you or your family and
businesses, and the various other issues addressed in the
Discovery Requests. For these reasons, your objections that
the trusts “operate outside of [you], ” are
“not . . . part[ies] to this action, ” that
“[t]he business decisions of the trusts have nothing to
do with Chicago Titles [sic] claims, ” or that you
“cannot answer for them” lack merit or any legal
basis. Additionally, the term “You” is defined in
the Discovery Requests to include you, “your present
and former partners, employees, agents, attorneys, and all
other persons acting on [you] behalf or under [your]