Nartron Corp. v. Gen. Motors Corp., 2003 WL 1985261 (Mich. Ct. App. Apr. 29, 2003)
In contract breach action, plaintiff claimed that GMC prematurely discontinued use of component part, which plaintiff had developed based on GMC’s projections of large volume purchases over an extended period of time. Plaintiff sought damages for research and development costs associated with the component part; consequently, evidence of plaintiff’s R & D payroll was a primary focus of discovery.
Defendants claimed that the hard copy timesheets used by plaintiff’s experts were unreliable and that there was evidence that they were backdated. Defendants alleged that plaintiff decided to use the fabricated timesheets and then hid, altered or destroyed any corroborating or contradictory evidence such as computer data, engineering logs and budgets. Defendants further complained that plaintiff had failed to comply with discovery requests for an “original” FoxPro backup tape.
After defendant’s motion for summary judgment was granted as to certain claims, the court held four-day evidentiary hearing on plaintiff’s alleged discovery abuses. The first two days consisted of testimony and an in-court computer demonstration from defendant’s accounting and computer expert who made three points: (1) that the computer data produced did not match the hard copy timesheets, (2) that important data had been intentionally altered or removed from the backup tape, and (3) that the missing data and or alteration could not be attributed to computer crashes. A court-appointed expert arrived at similar conclusions. And, although plaintiff had ample opportunity to do so, plaintiff did not call any witnesses to provide a legitimate explanation for the missing data.
Ultimately, the trial court granted defendant’s motion for dismissal of plaintiff’s remaining claims as a sanction for plaintiff’s violations of discovery orders. On appeal, the court found that the lower court’s factual findings were supported by the record and were not clearly erroneous, and held that it was within the trial court’s discretion to impose the sanction of dismissal for plaintiff’s various discovery abuses. 2003 WL 1985261 at *7.