Trude et. al. v. Glenwood State Bank, et. al., Consolidated Case Nos. A15-0378, A15-1863, A15-1864 (Minn. App., Aug. 15, 2016) arose originally from an action to collect on a defaulted loan and grew into a mess of counterclaims and third party complaints. Parties JBI and Trude were sanctioned by the trial court for discovery violations. Earlier in the case, Trude was ordered to permit Glenwood to take JBI’s business laptop offsite for forensic analysis.
After Glenwood’s expert picked up the laptop, he determined that just hours before pickup, someone used data wiping software to permanently delete more than 20,000 files stored on the laptop. The trial court found that Trude intentionally destroyed evidence to keep it out of Glenwood’s hands and held both Trude and JBI in contempt for destruction of evidence. The court also ordered JBI and Trude to disclose certain projects and warned them that their Answer could be stricken if they failed to comply. They did not, in fact, comply, and the court ordered their Answer stricken and entered a default judgment against them. JBI and Trude appealed.
The appellate court reviewed the trial court’s ruling for abuse of discretion regarding whether terminating sanctions for spoliation would have been proper. Minnesota’s rules of civil procedure are clear that an order striking pleadings or rendering judgment by default against a party for failure to obey court orders or for failing to produce discovery was permitted as long as doing so is just. The appellate court found that the parties had been sufficiently warned on numerous occasions about failure to comply with court orders, and they engaged in repeated willful violations of such orders. The appellate court found that Glenwood was prejudiced by their actions. Therefore, the court affirmed the trial court’s entry of default judgment and the striking of the answer and affirmative claims.