United States District Court, D. South Dakota, Southern Division
ORDER ON MOTION FOR RECONSIDERATION (DOC.
LAWRENCE L. PIERSOL UNITED STATES DISTRICT JUDGE.
by Nachman Bergman was taken from Magistrate Judge
Duffy's Order of August 16, 2016 recommending entry of a
default judgment for Nachman Bergman making minimal effort to
comply with Magistrate Duffy's Order of June 30, 2016.
The June 30, 2016 Order had offered alternate sanctions for
Nachman Bergman's failure to respond to discovery and
being a no show for his May 23, 2016 deposition for which he
had been subpoenaed to appear. To begin with, this Court
agrees that sanctions should be imposed for various failures
to comply with the Order of Magistrate Judge Duffy and the
discovery failings detailed in Judge Duffy's Report and
Recommendation. The question is what sanctions should be
imposed under Fed.R.Civ.P. 37. In making that determination
this Court will also consider events subsequent to Judge
Duffy's Orders and Report and Recommendation.
first question is whether the Objections were timely served
to the Report and Recommendation of August 16, 2016. The
Court finds there was timely service as Nachman Bergman was
pro se and thus entitled to service by mail rather
than electronic service, so additional time is allowed for
mail service and as a result the Objections were timely.
question of Nachman Bergman as an individual and Nachman
Bergman as Trustee of The N Bergman Insurance Trust should be
discussed. The discovery demands and the Report and
Recommendation most often deal with Nachman Bergman as an
individual. The Court has previously ruled that Nachman
Bergman as Trustee of The N Bergman Insurance Trust can only
appear in this case through counsel of record. Nachman
Bergman the individual can, however, appear pro se.
In the cross-claims and counterclaims filed in this case,
both Nachman Bergman and Malka Silberman counterclaimed and
cross-claimed as Trustee and Successor Trustee of The N
Bergman Insurance Trust and also in their individual
discovery was mostly directed at Nachman Bergman as an
individual. It also appears that the two Orders and the
Report and Recommendation deal with Nachman Bergman the
individual as opposed to the Trustee status. The Further
Order and Report and Recommendation, Doc. 347, filed August
16, 2016 states: "RECOMMENDED that default judgment be
entered against Nachman Bergman." The effect of that
recommendation is to dismiss Nachman Bergman's
Cross-Claim and Counterclaim but the Cross-Claims and
Counterclaims of Nachman Bergman as Trustee of The N Bergman
Insurance Trust would stand.
to the June 30, 2016 Report and Recommendation there were
some limited attempts by Nachman Bergman to comply with the
Order of June 30, 2016. As for access to the gmail account,
the statement by Google that it was providing access to the
account pursuant to subpoena, if not objected to within 5
days, it was reasonable for Nachman Bergman to assume that
the email disclosure was complied with. There also were
unsigned interrogatory Answers provided by Nachman Bergman
prior to the August 16, 2016 Order. The unsigned Answers may
have been a good faith belated attempt at compliance despite
the fact that they must be signed.
is no excuse provided for not appearing at the deposition or
asking in advance for a continuance of the first deposition
scheduled for May 23, 2016. Sanctions should be imposed for
that failure to appear in addition to the failure to respond
to earlier discovery requested by SPV.
Bergman's deposition was previously taken on January 5,
2016 in the Sun Life case, but that does not excuse a failure
to appear for the May 23, 2016 deposition in this case. In
addition, Magistrate Judge Duffy ordered on June 30, 2016
that Nachman Bergman was to immediately contact counsel for
SPV and arrange for the taking of his deposition. There was
some contact but Nachman Bergman's deposition was not
taken until October 15 and 16, 2016. The Further Order and
Report and Recommendation was entered on August 16, 2016.
Nachman Bergman was pro se through all of this. That
does not excuse anything but it should be taken into account
in considering the appropriate sanction. A factor that this
Court is considering concerning the deposition not being
taken promptly after the June 30, 2016 Order is that another
lawyer for SPV, not Attorney Foss, in a July 27, 2016 email
to Nachman Bergman said that he had to prepay the $15, 000 of
expenses for his deposition no show before his subsequent
deposition, which had to be taken by August 11, 2016 to be in
compliance with the time schedule set in Judge Duffy's
Order. The Order had specified that the deposition would be
taken at Nachman Bergman's expense. Counsel stated to
Bergman in the July 27 email that the up front expense for
the subsequent deposition would exceed $ 15, 000 but they
would proceed with his prepayment of $ 15, 000. Bergman may
be of limited means but there has been no showing that he
could not pay the $15, 000. He did not pay and the deposition
did not take place until October 15 and 16, by which time
Nachman Bergman was represented for purposes of the
deposition even though that lawyer is not of record in this
case. Bergman represents that on August 16, 2016 he did get
counsel for the limited purpose of his deposition, that being
the same day as Judge Duffy's second Order.
de novo review, the Court does not find that entering default
judgment against Nachman Bergman is an appropriate sanction.
Given the more recent history of deposition compliance with
the assistance of counsel, the appropriate sanction is less
than a default. Another consideration is that the testimony
of Nachman Bergman should be available for trial both for his
claims and for the claims of others even though there may be
a commonality of interest between Nachman Bergman and Malka
Silberman as individuals and as successor trustees. The Court
finds that a monetary sanction is appropriate under these
circumstances. The Court can only surmise from the record
that Nachman Bergman is of limited means. SPV and Nachman
Bergman, both or either of them, can submit whatever
information they wish to on Nachman Bergman's financial
condition within twenty (20) days of the date of this Order.
If nothing is submitted, the Court will in any event enter a
monetary sanction. Anything submitted by Nachman Bergman must
be submitted under oath. Whatever the sanction winds up
being, it does not make Nachman Bergman immune from further
sanctions if warranted. The above review is de novo.
further sanctions, if Nachman Bergman does not fully respond
to previous discovery requests, this Court will then consider
further sanctions, including the dismissal of Nachman
Bergman's claims and prohibiting the entry of his
testimony at trial or the consideration of his affidavits. If
someone testifies at trial, the testimony should be subject
to being tested by discovery fully produced.
Federal Magistrates Act provides the "clearly erroneous
or contrary to law" standard of review for magistrate
resolution of nondispositive matters. 28 U.S.C. §
636(b)(1)(A); Fed.R.Civ.P. 72(a). A finding is "contrary
to law" when it fails to apply or misapplies relevant
statutes, case law or rules of procedure."
Transamerica Life Ins. Co. v. Lincoln Nat 7 Life
Ins. Co., 592 F.Supp.2d 1087, 1093 (N.D. Iowa 2008).
Although the Court recognizes the deference to which a
Magistrate Judge's order is entitled, the Court concludes
that the August 16, 2016 Order that "each affidavit
attested to by Nachman Bergman shall be stricken from the
record in this litigation and may not be used by any party
for any purpose[, ]" and "that Nachman Bergman is
prohibited from testifying for or against any claim or
defense in this litigation for any party[, ]" are
contrary to law.
Eighth Circuit has noted that "there is a strong policy
in favor of deciding a case on its merits, and against
depriving a party of his day in Court." Chrysler
Corp. v. Carey, 186 F.3d 1016, 1020 (8th Cir. 1999). As
such, "'the opportunity to be heard is a
litigant's most precious right and should be sparingly
denied.'" Id. (quoting Edgar v.
Slaughter, 548 F.2d 770, 773 (8th Cir. 1977). This Court
in its de novo review did not as its sanction enter a default
against Nachman Bergman. An unintended result that follows
from that presently necessary ruling is that the other
rulings in the Order of August 16, 2016 in effect became a
dispositive ruling. The reason is that this Court anticipates
that summary judgment motions will be filed by SPV against
Nachman Bergman and Nachman Bergman as Trustee. The Order in
question would in effect grant default against Nachman
Bergman in his individual and Trustee capacities because he
would not be able to counter the summary judgment motions
either by affidavit or his deposition testimony.
Bergman is dead and no testimony was taken from her before
her death. There was no reason to take her testimony because
the issues did not arise until after her death in April of
2014 when the policies became payable. Nachman Bergman
appears to be the only person that has knowledge of many of
the facts concerning these claims. The sanction is not for
perjuring himself but for failure to appear for a noticed
deposition, comply with a Court Discovery Order and failure
to fully comply with pre-trial discovery. If his testimony is
claimed to be untrue in some respects, then that credibility
should be tested before a jury when this case is tried.
Plaintiff is entitled to full disclosure of previously
requested discovery as that could among other uses be of aid
in cross-examination. Failure to comply with discovery
requests and an Order concerning discovery should not under
these circumstances preclude Nachman Bergman's testimony
or affidavits. Nachman Bergman will be sanctioned for an
amount to be set by this Court for failure to appear when his
deposition was noticed and also for failure to respond fully
to discovery when ordered to do so by Magistrate Judge Duffy.
Any outstanding discovery request still must be complied
with. Failure to comply can result in future sanctions.
1. The Motion for Reconsideration, Doc. 375, is in effect an
appeal and is granted in part and denied in ...