Menu icon Access the Business Officer Magazine menu by clicking or touching here.
Colorado Lawyer Magazine logo, click or touch this logo to return to the homepage Click or touch the Colorado Lawyer Magazine logo to return to the homepage. Search

Stetson v. Edmonds.

No. 22-1285 & 23-1020. 11/15/2023. D.Colo. Judge Carson. Litigant Fraud and Deceit—Sanctions—Dismissal of Claims—Attorney Fees and Costs—Summary Judgment.

November 15, 2023

Stetson and Edmonds were involved in a low-speed, sideswipe vehicle accident. No one reported injuries on the scene, but two weeks later Stetson sought medical treatment for injuries he claimed he sustained in the accident. Stetson then sued Edmonds and Cargill Meat Logistics Solutions, Inc. (defendants). Over the next two years, Stetson intentionally lied and made false representations to doctors, his attorneys, defendants, and the district court to hide his history of constant back pain caused by years of heavy lifting and working with a jackhammer, attesting that he had no prior medical issues involving his neck or back. On defendants’ motion, the district court sanctioned Stetson for his deception by dismissing his claims for non-economic damages and limiting his remaining damages to those that could be verified or corroborated by other evidence. The district court also awarded defendants $81,113.78 for reasonable expenses accrued in making and defending their motion for sanctions. The district court then reviewed, in limine, medical bills that Stetson wanted to introduce at trial. Based on Stetson’s representations to the court that he could provide medical providers’ testimony to lay the foundation to admit certain bills, the district court found that some of Stetson’s bills were likely admissible at trial. But a few days before trial Stetson admitted that no treatment providers would testify, so the district court excluded the bills as inadmissible hearsay. The district court then granted defendants’ summary judgment motion. Defendants filed a motion for a second attorney fees award, and the district court granted them a $398,636.77 post-judgment award.

On appeal, Stetson challenged the district court’s post-judgment award of $398,636.77. District courts have authority to appropriately sanction conduct that abuses the judicial process. Sanctions may include fee shifting when a party acted in bad faith vexatiously, wantonly, or for oppressive reasons. Here, Stetson routinely misrepresented to doctors that his back pain began with the accident; lied to his attorneys, the district court, and defendants; failed to provide complete medical and financial records, in direct violation of the district court’s order; and lied about his lost income to manufacture damages. Stetson thus acted with wanton bad faith, disrupted the litigation, and hampered enforcement of the court’s order. Therefore, the district court properly exercised its discretion in assessing attorney fees against Stetson. Further, because Stetson initiated and perpetuated his suit in complete bad faith, the district court also acted within its discretion in determining the amount of post-judgment fees.

Stetson also argued that the district court abused its discretion by dismissing his non-economic claims as a sanction for discovery violations. Stetson maintained that dismissal was a disproportionately severe sanction compared to his fraud. A district court may use dismissal as a sanction only when a discovery violation arises out of a party’s willfulness, bad faith, or some other fault. In determining whether dismissal is appropriate, the court must consider (1) the degree of actual prejudice to the defendant; (2) the amount of interference with the judicial process; (3) the litigant’s culpability; (4) whether the court gave the party advance warning that dismissal would be a likely sanction for noncompliance; and (5) the efficacy of lesser sanctions. Here, given Stetson’s misrepresentation, deception, and fabrication, the factors favor dismissal. Further, though defendants asked the district court to dismiss the entire action, it chose a lesser sanction and dismissed only the claims that relied on the veracity of Stetson’s statements—for example, emotional distress, loss of enjoyment, and inconvenience. Accordingly, the district court did not abuse its discretion in dismissing the non-economic claims.

Stetson further contended that the district court erred in awarding $81,113.78 in attorney fees incurred in filing and defending the sanctions motion. Here, because the district court granted defendants’ motion to compel, and because Stetson cannot substantially justify his failure to cooperate, Fed. R. Civ. Proc. 37(a)(5)(A) required the district court to award reasonable fees incurred in making and defending the motion. The district court calculated the award using the lodestar amount, and its award represented a 20% reduction from the lodestar calculation. Therefore, the district court acted within its discretion in awarding attorney fees for defendants’ costs incurred in filing and defending the motion to compel and the motion for attorney fees and sanctions.

Lastly, Stetson contended that the district court erred by granting defendants’ motion for summary judgment on Stetson’s remaining claims. However, once the district court determined that Stetson’s bills were not admissible, Stetson had no verifying evidence of economic damages and thus could not establish damages, an essential element of his case. Without evidence of an essential element, there was no genuine issue of material fact, and the district court correctly concluded that defendants were entitled to judgment as a matter of law.

The judgment was affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

Back to the From the Courts Page