TRUFUND FINANCIAL SERVICES INC v. CITY OF BATON ROUGE PARISH OF EAST BATON ROUGE (2025)

Defendant appeals an order of the trial court granting plaintiff's motion to compel and for sanctions and, as a sanction, striking all of defendant's defenses to plaintiff's claims. After review, we affirm.

FACTS AND PROCEDURAL HISTORY

This case has been before this court several times. For a more complete recitation of the history of the case, see Trufund Financial Services, Inc. v. City of Baton Rouge/Parish of East Baton Rouge, 2024-0082 (La. App. 1st Cir. 12/30/24), --- So.3d ---, 2024 WL 5243961.¹ For purposes of this appeal, it is sufficient to explain that the City of Baton Rouge/Parish of East Baton Rouge received federal funds in 2008, then contracted with Seedco Financial Services, Inc., now TruFund Financial Services, Inc., in November 2011 for TruFund to administer the Small Business Loan Program using a portion of the federal funds. From 2012 through 2015, TruFund issued small business loans and incurred expenses of approximately $1.72 million in administering the Small Business Loan Program. After submitting multiple reimbursement requests to the City/Parish, TruFund was reimbursed in the amount of $515,450.15, leaving approximately $1.2 million in unreimbursed requests. See Trufund, --- So.3d at ---, 2024 WL 5243961 at *1.

TruFund filed this suit against the City/Parish in January 2016 to recover the unreimbursed amount allegedly due under the contract. The City/Parish answered the suit, denying it owed TruFund outstanding amounts, and filed a reconventional demand against TruFund, alleging breach of contract and unjust enrichment.²

TruFund first noticed the City/Parish's deposition, pursuant to La. C.C.P. art. 1442,³ in August 2017. The notice identified twelve topics to be discussed during the deposition and requested the production of seven categories of documents. At the start of the deposition in October 2017, TruFund noted on the record the City/Parish had not “sufficiently produced” documents in response to the notice. During questioning, it also became apparent the witness's search for responsive documents was limited. Consequently, TruFund was unable to question the witness as intended, and the parties agreed to end the deposition and resume at “another time to be scheduled.”

For the majority of 2019, TruFund focused on obtaining complete responses to its written discovery requests from the City/Parish. TruFund's first motion to compel was granted in July 2019, when the trial court ordered the City/Parish to “fully, completely, and individually” respond to specified interrogatories aimed at obtaining information relative to the City/Parish's reconventional demand. Then, in September 2019, the trial court granted TruFund's motion to compel the City/Parish to conduct a proper search for and to produce documents requested in the Article 1442 notice of deposition. The court ordered the City/Parish to conduct various specified electronic and hard file searches.

TruFund next noticed the City/Parish's deposition to resume in December 2019; however, it was postponed because the trial court stayed proceedings pending an appeal. After this, TruFund persistently tried to complete the City/Parish's deposition, to no avail and through no fault of its own.

TruFund contacted the City/Parish in May 2022, asking for deposition dates, and the City/Parish responded by stating it needed to designate a new Article 1442 representative and requesting that TruFund provide a list of topics to be discussed during the deposition. TruFund provided the requested discussion topics in July 2022 and again requested, “[p]lease let us know possible dates as soon as possible.” The City/Parish declined to respond to this request.

Also in July 2022, TruFund propounded a second set of discovery requests upon the City/Parish, containing six requests for production of documents. After receiving no response, TruFund contacted the City/Parish in September 2022. At that time, the City/Parish represented it was “still in the process” of trying to determine if there were any responsive documents in its possession that had not already been produced. By January 2023, the City/Parish still had not responded, forcing TruFund to file a third motion to compel. Again, the trial court granted the motion and ordered the City/Parish to “fully and properly search for and produce all documents and materials” responsive to TruFund's second set of discovery requests by May 4, 2023.

On January 27, 2023, TruFund and the City/Parish participated in a Rule 10.1 ⁴ conference, scheduled by TruFund, to discuss the Article 1442 deposition. The City/Parish agreed to provide TruFund with the name of a designated representative by February 3, 2023, and agreed to a tentative deposition date of February 27, 2023. TruFund advised that, if a representative was not identified by February 3rd, it would notice the deposition to take place on February 27, 2023.

When the City/Parish failed to respond, TruFund noticed the Article 1442 deposition to take place on February 27, 2023. Over the next few days, TruFund contacted the City/Parish multiple times to confirm details for the scheduled deposition. Although the City/Parish read at least one of TruFund's emails days before the deposition, confirmed by a “read receipt,” it declined to respond.

The City/Parish did not present a witness for the February 27, 2023 deposition. Instead, the City/Parish filed a motion for protective order the same day, seeking to prevent TruFund from taking the continued Article 1442 deposition. The motion was denied in an order signed on April 24, 2023, wherein the trial court ordered that the City/Parish “must present a witness to testify on all matters” in TruFund's February 2023 notice of deposition. The order concludes, “This deposition is required to occur by June 1, 2023.” Nevertheless, due to scheduling conflicts, the parties agreed to set the deposition after June 1, 2023.

TruFund continued to contact the City/Parish to reset the deposition; however, the City/Parish was unable to “pin down” a representative to testify or to confirm proposed dates. TruFund eventually noticed the City/Parish's deposition to take place in October 2023, after receiving no objection to the proposed date. However, as the date approached, the City/Parish advised TruFund that its representative was no longer available.

TruFund next noticed the City/Parish's deposition to occur in November 2023. Although counsel for the City/Parish was present, no representative appeared to testify on behalf of the City/Parish and no explanation for the witness's absence was ever provided to TruFund. TruFund tried to reset the deposition in late 2023; however, the City/Parish advised that neither counsel nor its witness was available until January 31, 2024. Finally, the parties agreed to resume the City/Parish's deposition on January 31, 2024, over six years after the deposition commenced.

On January 11, 2024, TruFund filed the subject motion for contempt and for sanctions against the City/Parish, asking the trial court to strike all defenses available to the City/Parish as a sanction for its failure to abide by the court's discovery orders and the rules of discovery. See La. C.C.P. art. 1471. The motion primarily focused on the City/Parish's repeated failure to produce a witness in response to TruFund's efforts to complete its Article 1442 deposition. TruFund argued the City/Parish's “offer of January 31, 2024 as a deposition date [should not] be accepted as legitimate[,]” considering the history of the case. TruFund maintained it was prepared to take the deposition as scheduled; however, the City/Parish's “belated deposition appearance [would] not rectify the harm it has caused TruFund in preparing for trial.” TruFund urged this was particularly true considering the January deposition date was after the deadline to submit pretrial inserts and witness and exhibit lists for the upcoming May 2024 trial. Finally, TruFund noted that, over the course of this protracted litigation, the trial court has granted multiple motions to compel against the City/Parish due to its failure to timely and fully respond to TruFund's discovery requests.

As the contradictory hearing approached, TruFund filed a supplemental memorandum in support of its motion, confirming the City/Parish's representative did not appear for the deposition on January 31, 2024. In the deposition procès verbal, TruFund's counsel stated he was present and ready to proceed with the deposition. However, the City/Parish explained that requests for stay were pending in the trial court and this court in connection with an anticipated writ application; thus, counsel exercised the City/Parish's “right to suspend the deposition[ ] or not go forward with the deposition” pending the stay request. TruFund's supplemental memorandum also pointed out the City/Parish failed to provide its pretrial inserts on January 19, 2024, as required by the case management schedule for the new August 2024 trial date.

TruFund introduced substantial evidence at the contradictory hearing on its motion for contempt and for sanctions, which established the timeline set forth above. The City/Parish did not file a written opposition to TruFund's motion and offered only argument of counsel. In response to questioning by the trial court, counsel for the City/Parish admitted neither he nor the City/Parish made any attempt to seek a deposition date that would be good for both parties. Counsel felt there was no “obligation to schedule or try to set a deposition” TruFund wanted to take.

The trial court orally granted TruFund's motion, finding the evidence established the City/Parish was ordered, at least twice, to comply with its discovery obligations. Over six years later, the City/Parish's deposition, which “is central to the case,” is still incomplete. The trial court's ruling was memorialized in an order signed on March 20, 2024, and “as a sanction, all of the City/Parish's defenses to TruFund's claims [were] stricken.” The City/Parish was ordered to pay all of TruFund's attorney fees and costs incurred in relation to the motion for contempt and for sanctions to be determined at a future date. See La. C.C.P. art. 2088(A)(10). The City/Parish timely filed this suspensive appeal.⁵

APPLICABLE LAW & STANDARD OF REVIEW

Louisiana Code of Civil Procedure article 1471 pertinently states that if a party fails to obey an order to provide or permit discovery, including an order made under La. C.C.P art. 1469,⁶ the trial court “may make such orders in regard to the failure as are just, including․ [a]n order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence.” La. C.C.P art. 1471(A)(2).⁷ A trial court has much discretion in imposing sanctions for failure to comply with discovery orders, and its ruling should not be reversed absent an abuse of discretion. Lathan Company v. Department of Education, Recovery School District, 2023-0309 (La. App. 1st Cir. 2/21/24), 384 So.3d 399, 412.

ISSUES ON APPEAL

In its first assignment of error, the City/Parish maintains there was no basis to impose sanctions under Article 1471 because there was no order compelling discovery pursuant to La. C.C.P. art. 1469. This argument is contrary to the plain wording of Article 1471, which applies where a party fails to obey an order to provide or permit discovery, including an order made under Article 1469. Use of the word “including” demonstrates that Article 1471’s application is not limited to instances where a party fails to comply with an order made under Article 1469.⁸ The words of a law must be given their generally prevailing meaning, and “[t]he participle including typically indicates a partial list.” La. C.C. art. 11; Black's Law Dictionary (12th ed. 2024). See La. C.C. art. 9;⁹ Sonja Larsen, J.D.; Karl Oakes, J.D.; and Barbara J. Van Arsdale, J.D., § 118 Limitation of general words by specific terms. 73 Am. Jur. 2d Statutes (Jan. 2025 update) (Typically, statutory terms such as “including,” when they precede a list of statutory examples, convey an intent that an accompanying list of examples be read in a nonexclusive sense.)¹⁰

The trial court ordered the City/Parish to present an Article 1442 witness in its April 2023 order, wherein the court denied the City/Parish's motion for protective order on the same issue.¹¹ The City/Parish's failure to comply with the April 2023 discovery order properly formed the basis of the imposition of sanctions under La. C.C.P. art. 1471. See McWilliams v. Exxon Mobil Corp., 2012-1288 (La. App. 3d Cir. 4/3/13), 111 So.3d 564, 572-3, writ denied, 2013-1402 (La. 11/8/13), 125 So.3d 451 (finding the trial court did not abuse its discretion by striking all defenses to the plaintiff's claims, under similar facts, as a sanction under La. C.C.P. art. 1471; while there was no order to compel in place when the trial court issued sanctions, the trial court had previously made certain verbal orders pertaining to discovery.)

The City/Parish further argues that sanctions were not warranted, because it “actively and voluntarily” participated in the efforts to schedule the Article 1442 deposition set for January 31, 2024. However, the City/Parish offered no evidence to support its contention.¹² Additionally, any effort made by the City/Parish to set the deposition in January 2024 was too little too late and did not excuse the City/Parish's years-long failure to “actively and voluntarily” work with TruFund to complete the Article 1442 deposition. Since 2019, the City/Parish has thwarted TruFund's efforts to set the deposition by failing to respond to TruFund altogether, refusing to commit to a proposed deposition date, or claiming it had not yet identified a witness. Counsel for the City/Parish appeared at the scheduled deposition several times, either without a witness or without prior notice to TruFund that the deposition would not go forward as scheduled. Thus, the evidence establishes the City/Parish “actively and voluntarily” sought to prevent the deposition from going forward.

In its second assignment of error, the City/Parish asserts the trial court failed to consider the factors set forth in Horton v. McCary, 63 5 So.2d 199 (La. 1994), before imposing sanctions. Before taking the drastic action of dismissal for a discovery violation, a court should consider the “Horton factors” – (1) whether the violation was willful or resulted from inability to comply; (2) whether less drastic sanctions would be effective; (3) whether the violations prejudiced the opposing party's trial preparation; and (4) whether the client participated in the violation or simply misunderstood a court order or innocently hired a derelict attorney. Horton, 63 5 So.2d at 203; Lathan Company, 3 84 So.3d at 416.

Dismissal is justified only if the record contains sufficient evidence of a party's (as opposed to counsel's) willful disobedience, bad faith, or fault. Lathan Company, 384 So.3d at 416. Thus, we first consider whether the client, the City/Parish, participated in the violation. At all times, the City/Parish was represented by the Parish Attorney, a City/Parish employee appointed by the local governing body. See Roper v. East Baton Rouge Metropolitan Council, 2015-0178 (La. App. 1st Cir. 11/6/15), 183 So.3d 550, 554, writ denied, 2015-2231 (La. 2/5/16), 186 So.3d 1166. As a self-represented party, the City/Parish is responsible for the discovery violations, satisfying the fourth Horton factor. See Hutchinson v. Westport Ins. Corp., 2004-1592 (La. 11/8/04), 886 So.2d 438, 440 (per curiam) (affirming discovery sanctions imposed on a self-represented litigant).

TruFund's evidence reveals the City/Parish's willful refusal to permit TruFund to complete its deposition. The City/Parish offered no evidence to prove that its failure to schedule, attend, and complete the deposition was anything but willful. TruFund's evidence also establishes that it has tried in vain to move this case forward for many years and has been forced to reset the trial date numerous times due to the City/Parish's deliberate failure to cooperate and fulfill its discovery obligations. As a party to the contract and the party responsible for reimbursing TruFund, it is easy to conclude that TruFund has been prejudiced by its inability to complete the City/Parish's deposition. This was TruFund's only pre-trial opportunity to question the City/Parish's designated representative under oath about the contract at issue, reimbursement requirements, etc. The City/Parish deprived TruFund of this opportunity. Thus, we find the first and third Horton factors are satisfied.

Finally, after considering the facts and history of this case, developed by the evidence introduced by TruFund, we find no abuse of the trial court's discretion in its implied finding that less drastic sanctions would not be effective (second Horton factor). The City/Parish made little effort to comply with the April 2023 discovery order, wasted years by stalling to complete the deposition, and squandered every opportunity to proceed in a proper manner. See McWilliams, 111 So.3d at 573.

Finding all Horton factors were satisfied, we conclude the trial court did not abuse its discretion by striking the City/Parish's defenses to TruFund's claims.

CONCLUSION

For the foregoing reasons, the March 20, 2024 order is affirmed. All costs of this appeal are assessed against the City of Baton Rouge/Parish of East Baton Rouge in the amount of $24,160.

AFFIRMED.

FOOTNOTES

1.   See also Trufund Financial Services, Inc. v. City of Baton Rouge/Parish of East Baton Rouge, 2020-0800 (La. App. 1st Cir. 4/26/21), 2021 WL 160923 8 (unpublished).

2.   The dismissal of the City/Parish's reconventional demand is at issue in docket 2024 CA 1123 currently pending before a different panel of this court.

3.   Louisiana Code of Civil Procedure article 1442 pertinently states that a party may name a governmental agency as a deponent in its notice of deposition and designate with reasonable particularity the matters on which examination is requested. The named organization shall designate one or more officers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which he will testify. The persons so designated shall testify as to matters known or reasonably available to the organization.

4.   Louisiana District Court Rule 10.1 requires a discovery conference prior to filing any discovery motion. Louisiana Department of Transportation and Development v. Oilfield Heavy Haulers, L.L.C., 2011-0912 (La. 12/6/11), 79 So.3d 978, 986.

5.   A judgment granting a motion for sanctions pursuant to La. C.C.P. art. 1471 is appealable pursuant to La. C.C.P. art. 1915(A)(6). See Lathan Company v. Department of Education, Recovery School District, 2023-0309 (La. App. 1st Cir. 2/21/24), 384 So.3d 399, 410-1.

6.   Louisiana Code of Civil Procedure articles 1469 through 1474 govern the procedures for compelling discovery. Pursuant to La. C.C.P. art. 1469, if a party fails to respond to discovery initiated by another party, the remedy available to the party who propounded the discovery is to move the court for an order compelling such discovery. If such an order is granted, the recalcitrant party may be ordered to pay reasonable expenses incurred in obtaining the order. Walley v. Vargas, 2012-0022 (La. App. 1st Cir. 9/21/12), 104 So.3d 93, 102.

7.   In lieu of or in addition to this sanction, the court “shall require the party failing to obey the order or the attorney advising him or both to pay the reasonable expenses, including attorney fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.” La. C.C.P. art. 1471(C). The City/Parish does not challenge the award of attorney fees and costs in favor of TruFund.

8.   Contrary to the City/Parish's assertion, Walley, 104 So.3d 93, did not hold that Article 1471 sanctions may only be imposed when a party violates a discovery order under Article 1469. In Walley, the trial court granted a motion for directed verdict based on the plaintiff's failure to comply with party-initiated discovery; there was no discovery order of any kind in place. For this reason, and additional procedural defects, this court reversed the portion of the judgment granting the motion for directed verdict. Walley, 104 So.3d at 102-3.

9.   Louisiana Civil Code article 9 states, “When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature.”

10.   Conversely, when the legislature specifically enumerates a series of things, the omission of other items, which could have easily been included in the statute, is deemed intentional. Wederstrandt v. Kol, 2022-01570 (La. 6/27/23), 366 So.3d 47, 52.

11.   The trial court's decision to include an order directing the City/Parish to present an Article 1442 witness in the April 2023 order concerning the motion for protective was within the court's inherent authority under La. C.C.P. art 191.

12.   The evidence introduced by TruFund demonstrated the City/Parish offered January 31, 2024 as an available date and responded to an email on January 4, 2024, stating it needed to confirm the witness's continued availability.

PENZATO, J.