Heartwood v. Harrington

23CA1621 Heartwood v Harrington 10-17-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1621
El Paso County District Court No. 21CV31903
Honorable David Shakes, Judge

Heartwood Custom Cabinetry, LLLP, a Colorado limited liability limited
partnership,

Plaintiff-Appellant,

v.

Charles Kent Harrington and Lynn Harrington f/k/a Lynn Lemay,

Defendants-Appellees,

v.

Tracy Victor Martinez,

Third-Party Defendant-Appellant.

JUDGMENT AND ORDER AFFIRMED

Division IV
Opinion by JUDGE YUN
Harris and Kuhn, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced October 17, 2024

Kane Law Firm, P.C., Mark H. Kane, Colorado Springs, Colorado, for Plaintiff-
Appellant and Third-Party Defendant-Appellant

Sparks Willson, P.C., Matthew A. Niznik, Colorado Springs, Colorado, for
Defendants-Appellees
¶1 This case arises from a contract dispute that plaintiff,

Heartwood Custom Cabinetry, LLLP, and third-party defendant,

Tracy Victor Martinez (collectively, Heartwood), had with

defendants, Charles Kent Harrington and Lynn Harrington f/k/a

Lynn Lemay (collectively, the Harringtons).

¶2 After Heartwood failed to respond to the Harringtons’ discovery

requests, the district court entered an order compelling discovery,

imposed attorney fees and costs, and ordered Martinez to appear in

person at a court hearing. When Heartwood still failed to respond

to the discovery and Martinez failed to appear in court, the district

court dismissed Heartwood’s claims and entered default judgment

on the Harringtons’ counterclaims against Heartwood as discovery

sanctions under C.R.C.P. 37(c).

¶3 Heartwood appeals these sanctions, arguing that they were

unduly harsh and that the court should have imposed less severe

penalties. Heartwood also appeals the court’s order denying its

motion to reconsider the sanctions due to the negligence of its prior

attorney. Because we conclude that the district court did not abuse

its discretion by imposing the sanctions and because Heartwood did

1
not demonstrate gross negligence in its motion for reconsideration,

we affirm the judgment and order.

I. Background

¶4 In 2021, the Harringtons entered into a contract with

Heartwood Custom Cabinetry to build and install custom cabinetry

and a butcher block in their kitchen. But, according to the

Harringtons, the company failed to comply with many of the

agreed-upon specifications for the installation. The Harringtons

eventually replaced the company on the project and refused to

make the final payment required by the contract upon completion

of the work.

¶5 Thereafter, Martinez — a general partner of Heartwood

Custom Cabinetry — allegedly threatened to disseminate to the

Harringtons’ neighbors news articles about a deferred prosecution

agreement that Charles Harrington entered into a decade earlier

unless the Harringtons made the final payment. When the

Harringtons did not capitulate, Heartwood filed a mechanic’s lien

against their home and commenced this lawsuit asserting claims for

2
breach of contract, unjust enrichment, and foreclosure of a

mechanic’s lien.1

¶6 The Harringtons asserted counterclaims for breach of contract,

fraudulent misrepresentation, violation of the Colorado Consumer

Protection Act, and conversion against Heartwood Custom

Cabinetry, and they asserted claims for outrageous conduct and

violation of the Colorado Organized Crime Control Act against both

the company and Martinez. Martinez responded by asserting a

claim for libel per se against the Harringtons based on their

allegations against him.

¶7 The Harringtons served discovery requests on Heartwood.

After granting the Harringtons’ anti-SLAPP2 motion to dismiss

Martinez’s libel claim that had automatically stayed discovery, the

district court set a specific deadline for Heartwood to respond to the

Harringtons’ discovery requests. But Heartwood did not meet this

deadline. Instead, four days after the deadline had passed,

1 Heartwood also asserted these claims against Aletha Ann

Harrington, but she was ultimately dismissed from the case and her
involvement is not relevant to this appeal.
2 “SLAPP” is an acronym for “strategic lawsuits against public

participation.”

3
Heartwood’s counsel reached out to the Harringtons’ attorney and

was given an additional four days to respond. Ten days later, the

Harringtons still had not received any discovery responses and filed

a motion to compel.

¶8 Thirteen days after the motion to compel was filed (and

twenty-seven days after the original discovery deadline), the district

court held a status conference on the discovery dispute.

Heartwood’s counsel informed the court that he “was having

difficulties with [Martinez]” concerning discovery. He did not object

to an order granting the motion to compel and told the court that

“what is provided to me by [Martinez] will be provided to” the

Harringtons. Accordingly, the court granted the motion, ordered

Heartwood to provide its discovery responses within seven days,

and awarded the Harringtons their attorney fees and costs

associated with the discovery dispute. The district court also

determined that “it would be important to have a status

conference . . . with Mr. Martinez present, so that I can go over

what my expectations are directly with him,” and it ordered

Martinez to appear in person at a conference set a month later.

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¶9 Heartwood again failed to deliver any discovery responses by

the deadline, and the Harringtons filed a motion for sanctions

requesting that the district court dismiss Heartwood’s claims and

enter default judgment on the Harringtons’ counterclaims. The

court did not rule on the motion before the scheduled status

conference.

¶ 10 Martinez did not appear at the conference despite the court

order that he attend in person. Heartwood’s counsel informed the

court that he had spoken with Martinez a couple of weeks earlier

and that it was his “expectation that [Martinez] would be here.”

Heartwood’s counsel also told the court that Martinez had

“informed [him that] he was going to be pulling together the

information for the responses to discovery” but he had “not received

those from him to date.”

¶ 11 The next day — sixty-one days after the original discovery

response deadline — the district court granted the motion for

sanctions, awarded attorney fees and costs associated with the

motion, and dismissed Heartwood’s claims while entering default

judgment on the Harringtons’ counterclaims against Heartwood.

The court found that Heartwood completely “fail[ed] to comply with

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the disclosure and discovery rules and orders” because Heartwood

“ha[d] disclosed nothing.” It also found that Heartwood’s repeated

failure to comply was prejudicial because the Harringtons “cannot

adequately prepare their claims, defenses, or expert disclosures”

without the discovery responses. And the court noted that, whether

at the hearing or in its response to the motion for sanctions,

Heartwood never explained “the absence of . . . Martinez or . . . the

failure to comply with the court’s discovery order.” Because of

these failures, the court determined that Heartwood’s conduct was

willful and deliberate.

¶ 12 Several months later, Heartwood’s counsel filed a motion to

withdraw his representation of Heartwood Custom Cabinetry and

Martinez, and Heartwood retained a new attorney who entered his

appearance shortly thereafter. Heartwood then filed a C.R.C.P.

60(b) motion to reconsider the sanctions order, accompanied by

Martinez’s affidavit asserting that he “was unaware of any problems

with discovery requests and/or responses” and “was unaware of

any motions to compel or any potential sanctions taken against

Heartwood or [him] because of any failure to provide discovery

responses.” The motion “acknowledge[d] that discovery violations

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occurred” but argued that the sanctions the court imposed were

nonetheless too severe and that less drastic measures could have

been appropriate. And the motion asserted that prior counsel “did

not share the significance of the sanctions potentially employed for

failure to comply with discovery requests.”

¶ 13 The district court denied the motion. It noted that, at the time

it granted the motion for sanctions, “all prior efforts to encourage

[Heartwood] to comply with disclosure and discovery rules over the

preceding months had been futile and further efforts by the court to

encourage discovery compliance would be futile.” It thus concluded

that “the sanction imposed in this case was and remains the

appropriate and necessary sanction.” And the court found that

“[b]ased on the evidence available in this case, the suggestion

[Heartwood was] unaware of the seriousness of the discovery

violations is not plausible.”

¶ 14 The court ultimately held a hearing on the Harringtons’

claimed damages where it allowed Heartwood to contest the amount

before entering a monetary award in the Harringtons’ favor.

Heartwood does not challenge that award.

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II. Analysis

¶ 15 Heartwood appeals the district court’s imposition of sanctions

and its denial of Heartwood’s motion for reconsideration. We

address and reject each contention in turn.

A. Dismissal and Default Judgment

¶ 16 Heartwood first contends that the district court abused its

discretion when it dismissed Heartwood’s claims and entered

default judgment against it on the Harringtons’ counterclaims.

Specifically, it argues that the sanctions were unduly harsh and

that the court should have imposed other, less severe sanctions.

We disagree.

1. Standard of Review and Applicable Law

¶ 17 We review the district court’s imposition of sanctions under

C.R.C.P. 37 for an abuse of discretion. Pinkstaff v. Black & Decker

(U.S.) Inc., 211 P.3d 698, 702 (Colo. 2009). The district court “has

considerable discretion to determine whether sanctions should be

imposed for discovery violations and what those sanctions should

be.” Prefer v. PharmNetRx, LLC, 18 P.3d 844, 849 (Colo. App. 2000).

A district court abuses its discretion when its ruling is manifestly

arbitrary, unreasonable, or unfair or when it misinterprets or

8
misapplies the law. Cath. Health Initiatives Colo. v. Earl Swensson

Assocs., Inc., 2017 CO 94, ¶ 8; see Churchill v. Univ. of Colo., 2012

CO 54, ¶ 74 (“In assessing whether [the district] court’s decision is

manifestly unreasonable, arbitrary, or unfair, we ask not whether

we would have reached a different result but, rather, whether the

[district] court’s decision fell within a range of reasonable options.”

(quoting E-470 Pub. Highway Auth. v. Revenig, 140 P.3d 227,

230-31 (Colo. App. 2006))).

¶ 18 C.R.C.P. 37(b)(2) provides that a district court may sanction a

party that “fails to obey an order to provide or permit discovery.”

Sanctions can range from deeming certain facts as established, to

“dismissing the action or proceeding or any part thereof,” or

entering default judgment against the noncompliant party.

C.R.C.P. 37(b)(2)(A)-(C).

Generally, sanctions under C.R.C.P. 37
“should be applied in a manner that
effectuates proportionality between the
sanction imposed and the culpability of the
disobedient party.” . . . When discovery
abuses are alleged, courts should carefully
examine whether there is any basis for the
allegation and, if sanctions are warranted,
impose the least severe sanction that will
ensure there is full compliance with a court’s

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discovery orders and is commensurate with
the prejudice caused to the opposing party.

Pinkstaff, 211 P.3d at 702 (quoting Kwik Way Stores, Inc. v.

Caldwell, 745 P.2d 672, 677 (Colo. 1987)).

¶ 19 “Dismissal, the severest form of sanction, is generally

appropriate only for willful or deliberate disobedience of discovery

rules, flagrant disregard of a party’s discovery obligations, or a

substantial deviation from reasonable care in complying with those

obligations.” Prefer, 18 P.3d at 850. Thus, dismissal “should be

imposed only in extreme circumstances.” Nagy v. Dist. Ct.,

762 P.2d 158, 161 (Colo. 1988).

2. Discussion

¶ 20 Heartwood does not contest any of the district court’s findings

in the sanctions order, including that Heartwood failed “to comply

with the disclosure and discovery rules and orders,” that it had

“disclosed nothing,” and that the Harringtons could not “adequately

prepare their claims, defenses, or expert disclosures” without the

discovery responses. Nevertheless, Heartwood contends that the

district court abused its discretion by imposing dismissal and

default judgment in lieu of lesser sanctions. We are not persuaded.

10
¶ 21 The district court took steps of escalating severity in an effort

to make Heartwood comply with its discovery obligations. The court

initially set a specific deadline for Heartwood to respond; when that

failed, it entered an order compelling Heartwood to respond and

awarded the Harringtons attorney fees and costs. And as a final

measure, it ordered Martinez to appear in person at the next status

conference so it could impress upon him the importance of

complying with his discovery obligations.

¶ 22 Despite these efforts, Martinez did not appear at the

subsequent hearing and, sixty-one days after the initial response

deadline and well over a year after filing the lawsuit, Heartwood had

not produced any discovery. Heartwood’s repeated failure to

participate in discovery warranted severe sanctions because, as the

district court found, Heartwood was “withholding necessary and

important evidence to every claim in the matter” and “[w]ithout

Heartwood’s and Martinez’s discovery responses, [the Harringtons]

[could not] adequately prepare their claims, defenses, or expert

disclosures.” Cf. Cornelius v. River Ridge Ranch Landowners Ass’n,

202 P.3d 564, 571 (Colo. 2009) (Because “the nondisclosure in this

11
case was so extensive that the parties and the water court had

virtually no specific information,” it merited dismissal of the case.).

¶ 23 In total, Heartwood disregarded three separate court orders.

And, as the district court noted, Heartwood did not make any effort

to “explain the failures to comply with disclosure rules and

discovery orders” or why Martinez did not appear as ordered. Thus,

the district court did not abuse its discretion in dismissing

Heartwood’s claims and entering default judgment against it on the

Harringtons’ counterclaims because Heartwood willfully or

flagrantly disregarded its discovery obligations. See Caldwell,

745 P.2d at 677 (“Where a party . . . engages in a course of conduct

that manifests a flagrant disregard of discovery obligations . . . , a

court may properly impose the sanction of default.”); Newell v.

Engel, 899 P.2d 273, 277 (Colo. App. 1994) (“[A] sufficient level of

culpability for default will generally be present in cases in which an

order compelling discovery was entered and the party failed to

comply.”). And because Heartwood ignored the court’s previous

attempts to enforce discovery compliance, including a lesser

sanction awarding attorney fees and costs and an order requiring

Martinez to appear in court to discuss the importance of complying

12
with his discovery obligations, it was reasonable for the district

court to conclude that no less severe sanctions were appropriate.

Cf. Sheid v. Hewlett Packard, 826 P.2d 396, 399 (Colo. App. 1991)

(dismissal appropriate where the plaintiff refused to comply with

three orders directing the plaintiff to sign medical releases despite

the tribunal’s efforts to stay the proceedings pending compliance).

¶ 24 In sum, while dismissal is only appropriate in rare cases for

“willful or deliberate disobedience of discovery rules, flagrant

disregard of a party’s discovery obligations, or a substantial

deviation from reasonable care in complying with those obligations,”

Prefer, 18 P.3d at 850, this is that rare case where dismissal and

the entry of default judgment was a reasonable exercise of the

district court’s discretion because Heartwood willfully or flagrantly

disobeyed its discovery obligations and multiple court orders.

¶ 25 We are not persuaded otherwise by Heartwood’s contention

that the sanctions were too severe given “evidence of attorney

misconduct” — failing to respond to requests for admission and to

explain Martinez’s absence at the status conference — by

Heartwood’s prior counsel. Heartwood did not raise this argument

with the district court, so we will not consider it. See Gestner v.

13
Gestner, 2024 COA 55, ¶ 18 (“In civil cases, issues not raised in or

decided by the district court generally will not be addressed for the

first time on appeal.”).

B. Motion for Reconsideration

¶ 26 Heartwood next contends that the district court abused its

discretion by denying Heartwood’s C.R.C.P. 60(b) motion for

reconsideration premised on the “gross negligence” of its prior

attorney. We again disagree.

1. Standard of Review and Applicable Law

¶ 27 We review a district court’s denial of a C.R.C.P. 60(b) motion

for an abuse of discretion. Gold Hill Dev. Co., L.P. v. TSG Ski & Golf,

LLC, 2015 COA 177, ¶ 65. “To constitute an abuse of discretion,

the [district] court’s ruling must be manifestly arbitrary,

unreasonable, or unfair, or be based on a misunderstanding of the

law.” Id. The district court’s findings of fact and credibility

determinations may not be disturbed on appeal unless they are

clearly erroneous and lack support in the record, and we may not

substitute our own findings of fact for those of the district court.

See M.D.C./Wood, Inc. v. Mortimer, 866 P.2d 1380, 1383-84 (Colo.

1994).

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¶ 28 As relevant in this case, a judgment or order may be set aside

for “[m]istake, inadvertence, surprise, or excusable neglect.”

C.R.C.P. 60(b)(1). “A party’s conduct constitutes excusable neglect

when the surrounding circumstances would cause a reasonably

careful person similarly to neglect a duty. Common carelessness

and negligence do not amount to excusable neglect.” In re

Weisbard, 25 P.3d 24, 26 (Colo. 2001) (citation omitted). “When

determining whether a [litigant]’s failure to act is excusable under

C.R.C.P. 60(b), courts ‘should not impute the gross negligence of an

attorney to the client.’” Plaza del Lago Townhomes Ass’n v.

Highwood Builders, LLC, 148 P.3d 367, 374 (Colo. App. 2006)

(quoting Buckmiller v. Safeway Stores, Inc., 727 P.2d 1112, 1116

(Colo. 1986)).

¶ 29 The movant bears the burden of establishing grounds for relief

by clear and convincing evidence. Goodman Assocs., LLC v. WP

Mountain Props., LLC, 222 P.3d 310, 315 (Colo. 2010); see Borer v.

Lewis, 91 P.3d 375, 379 (Colo. 2004).

2. Discussion

¶ 30 As a threshold matter, Heartwood did not preserve the

argument that its prior counsel was grossly negligent for our review.

15
In its motion for reconsideration, Heartwood argued that “[p]revious

counsel . . . did not share the significance of the sanctions

potentially employed for failure to comply with discovery requests”

and that “Heartwood and Martinez were not aware of the discovery

disputes or the pending sanctions.” Even if we assume that these

assertions preserved the argument that Heartwood’s counsel was

negligent, they did not preserve the argument that the attorney was

grossly negligent. See Gebert v. Sears, Roebuck & Co., 2023 COA

107, ¶ 25 (“To properly preserve an argument for appeal, the party

asserting the argument must present ‘the sum and substance of the

argument’ to the district court.” (quoting Madalena v. Zurich Am.

Ins. Co., 2023 COA 32, ¶ 50)). Gross negligence requires “conduct

[that] is so aggravated as to be all but intentional. . . . [It]

describe[s] a form of aggravated negligence that differs in quality

rather than degree from ordinary lack of care.” White v. Hansen,

837 P.2d 1229, 1233 (Colo. 1992); see Pfantz v. Kmart Corp.,

85 P.3d 564, 568 (Colo. App. 2003). Heartwood’s contention that

its prior attorney “did not share the significance of the sanctions

potentially employed for failure to comply with discovery requests”

does not allege conduct rising to this level. See In re Weisbard,

16
25 P.3d at 26. And Martinez’s affidavit does not contain a single

reference to his prior attorney or the attorney’s conduct. Instead, it

simply states that Martinez was “unaware of any problems with

discovery requests and/or responses” and “unaware of any motions

to compel or any potential sanctions . . . because of any failure to

provide discovery responses” without any further explanation. See

Goodman Assocs., LLC, 222 P.3d at 315. Accordingly, we conclude

that Heartwood’s motion for reconsideration did not preserve its

argument of gross negligence.

¶ 31 But even if Heartwood’s gross negligence argument were

preserved, the district court considered and rejected the evidence

underpinning the argument when it found that “the suggestion that

[Heartwood was] unaware of the seriousness of the discovery

violations is not plausible.” This finding enjoys record support

through the statements of Heartwood’s prior counsel demonstrating

that he was communicating with his clients about discovery. Most

notably, at the status conference that Martinez was ordered to

attend, Martinez’s counsel told the court that he had spoken with

Martinez about the conference and expected him to appear in

person and that, during their conversation, Martinez “informed me

17
he was going to be pulling together the information for the

Responses to the discovery.” Heartwood does not dispute that this

conversation took place. Instead, it contends that “one call

made . . . two-and-a-half weeks before the hearing was inadequate,”

and it stresses that the record reflects other supposedly negligent

conduct by its prior counsel that undercuts the credibility of the

attorney’s statements. But even if true, it is the role of the district

court to weigh conflicting evidence; the court’s finding is supported

by the record, and we cannot substitute it with our own. See

Mortimer, 866 P.2d at 1383-84.

¶ 32 The district court also rejected Heartwood’s argument that it

was entitled to C.R.C.P. 60(b) relief because it was inadequately

advised when prior counsel “did not share the significance of the

sanctions potentially employed for failure to comply with discovery

requests.” The court ruled that “[i]f the excuse offered by

[Heartwood] is that its attorney failed to properly advise and

represent it, then that issue is more appropriately addressed in a

forum in which that attorney can be heard and respond.” We

discern no abuse of discretion in this ruling because, as we

previously mentioned, the alleged misconduct of prior counsel does

18
not rise to the level of gross negligence warranting relief under

C.R.C.P. 60(b)(1). See In re Weisbard, 25 P.3d at 26.

¶ 33 Accordingly, we perceive no abuse of discretion in the district

court’s denial of Heartwood’s motion for reconsideration.

C. Attorney Fees

¶ 34 The Harringtons request an award of their appellate attorney

fees pursuant to “Rule 37”3 and under the district court’s order

entering a monetary award. Because the Harringtons do not

explain how the rule or the order entitles them to appellate attorney

fees, we deny their request. See C.A.R. 39.1 (requiring that the

party requesting attorney fees explain the legal and factual basis to

support the request); Sos v. Roaring Fork Transp. Auth., 2017 COA

142, ¶ 59 (declining to consider an “undeveloped request” for

attorney fees where the requesting party failed to state any legal or

factual basis for an award).

3 We assume that the Harringtons are referring to C.R.C.P. 37

(“Failure to Make Disclosure or Cooperate in Discovery: Sanctions”)
and not C.A.R. 37 (“Interest on Judgments”).

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III. Disposition

¶ 35 The judgment and order are affirmed.

JUDGE HARRIS and JUDGE KUHN concur.

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