When a Court enters sanctions against a party, it is usually the result of the opposing party filing a Motion for Sanctions or the Court becoming so outraged at one party’s conduct that it delivers a punishment. But in Davis v. Davis Funeral Service, Inc., 2024 NCBC 20, Judge Conrad sanctioned both the Plaintiff and the Defendants sua sponte.

What led to this Order by the Business Court? Well, it was a repeated disregard by both sides for deadlines established by the Court. First, the parties did not submit their proposed pretrial order on time. Then, when the Court ordered them to cure their failure immediately or possibly have their claims dismissed, they missed another deadline, for a proposed jury verdict form and jury instructions.

Judge Conrad was obviously annoyed by this. He said:

This second violation was one too many. The Court canceled the pretrial hearing, canceled the trial, and directed both sides to appear and show cause why they should not be sanctioned for disregarding its orders. The Court also advised that it was ‘considering severe sanctions, including the dismissal of Plaintiff’s claims and Defendants’ counterclaims,’ and gave these parties a chance to explain their conduct in writing.

Op.  ¶6

Continuing their agnosticism towards the deadlines imposed by the Court, the Plaintiffs did not submit the written statement, or offer any explanation for missing the deadlines.

Judge Conrad then turned to the importance of court-set deadlines. He said:

Disobedience to court orders is no small matter. That is why the Rules of Civil Procedure authorize trial courts to dismiss a claim or action when a party fails to comply with ‘any order of court.’ N.C. R. Civ. P. 41(b). Op.  ¶ 8.

As federal courts have stressed, ‘[t]his principle applies with undiminished force to scheduling orders.’ Op.  ¶9.

‘A scheduling order is not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril.’ (quoting Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 610 (9th Cir. 1992)). Op.  ¶9.

Think of the disruption to the Business Court’s internal procedures:

Jury trials are demanding: they take time, tax judicial resources, and crowd out other cases on the docket. One purpose of a pretrial scheduling order is to conserve resources by ensuring that a case set for trial is ready to proceed without delay. The parties’ repeated failures to comply with the pretrial scheduling order in this case thwarted that purpose, necessitating the cancellation of a trial that had been scheduled for months and forcing the Court to spend its time policing their compliance instead of attending to other matters.

Op.  ¶10. Lurking in the background of this delayed trial was a third party’s claim for damages against the Plaintiffs. The Business Court had deferred trying those matters pending the jury trial that was cancelled. The Court noted that “[t]hrough no fault of [the third party defendant], her right to resolve her claims expeditiously has been frustrated.” Op.  ¶11.

In the end, the Business Court decided that “the dismissal of the delaying parties’ claims with prejudice would be too harsh.” Op.  ¶14. Judge Conrad dismissed the parties’ claims without prejudice. If these parties decide to restart their lawsuit, I doubt that they will ever miss another deadline set by the Business Court.