The opinion
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re:
Chapter 7
TEBA A. GUMBS
Case No. 17-23947 (RDD)
Debtor. Closed
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HONEY DO MEN GUTTERS, INC.
Plaintiff,
vs.
Adv. Pro. No. 18-08237 (SHL)
TEBA A. GUMBS,
Defendant.
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MEMORANDUM OF DECISION AND ORDER
A P P E A R A N C E S:
Counsel for Honey Do Men Gutters, Inc.
By: Carlos J. Cuevas
1250 Central Park Avenue
Yonkers, New York 10704
-and-
Counsel for Teba A. Gumbs
By: Ronald R. Tomlins
40 Garden Street, Suite 303
Poughkeepsie, NY 12601
SEAN H. LANE
UNITED STATES BANKRUPTCY JUDGE
Before the Court is the Plaintiff Honey Do Men Gutters, Inc.’s motion to strike the
Debtor-Defendant Teba A. Gumbs’ answer in this adversary proceeding, enter a default
judgment against Mr. Gumbs, and impose monetary sanctions against Mr. Gumbs in the form of
reasonable attorney’s fees and costs. [ECF No. 56]. The basis for this motion is Mr. Gumbs’
repeated failures to comply with his discovery obligations—and Court orders regarding the
same—in this nondischargeability proceeding under 11 U.S.C. § 523(a)(2)(A). These include his
failure to produce his bank account, credit card, credit report statements, and other requested
documents, and his failure to provide authorization to obtain credit card records despite multiple
requests from Plaintiff and directives from the Court to do so.
BACKGROUND
The motion paints a troubling picture of Mr. Gumbs’ extensive and prolonged failure to
honor his discovery obligations despite many hearings on discovery issues, numerous requests
from Plaintiff’s counsel, and repeated admonishments by the Court.
Following an unsuccessful mediation, the Court held a conference about discovery on
July 8, 2021. Noting Mr. Gumbs’ failure to produce documents requested in discovery before
the mediation, the Court directed Mr. Gumbs to comply with Plaintiff’s outstanding discovery
requests within two weeks. See Hr'g Tr. 16:11-21, Jul. 8, 2021 [ECF No. 44]. A month later, the
Court held another hearing on discovery. At the hearing, the Plaintiff’s counsel once again noted
Mr. Gumbs’ continued failure to comply with his discovery obligation. See Hr’g Tr. 8:22-9:6,
Aug. 12, 2021 [ECF No. 46]. The Court noted to Mr. Gumbs that complying with discovery
requests is a requirement. See id. at 6:4-7. The Court warned it could sanction a party who does
not comply with discovery obligations. See id. at 6:25-7:1. At the hearing, Mr. Gumbs objected
to providing the requested credit card statements, bank statements, and credit reports. See id. at
8:24-9:1. The Court explained to Mr. Gumbs that the requested documents were central to the
Plaintiff’s argument about “the appropriateness . . . of [Mr. Gumbs’] bankruptcy filing [and his]
spending . . . and patterns leading up to the bankruptcy filing.” See id. at 13:9-24. After some
further discussion, the Court ordered Mr. Gumbs to sign and submit the bank account records,
credit card records, and credit card authorization forms so that Plaintiff’s counsel could obtain
records directly from the relevant bank and credit card companies. See id. at 16:21-17:8, 23:16-
19, 24:7-22.
Some two months later, the Court held yet another conference. At that time, Mr. Gumbs
still had not complied with the Plaintiff’s discovery requests. See Hr’g Tr. 4:2-8, Oct. 7, 2021
[ECF No. 52]. The Court warned Mr. Gumbs that the Plaintiff was considering filing a motion
to hold Mr. Gumbs in default in the case and noted the Court’s own concern and frustration with
Mr. Gumbs. See id. at 4:8-17. The Court also noted that Mr. Gumbs’ actions could be seen as a
lack of good faith. See id. at 4:21-24. After explaining why the credit card authorization forms
requested by Plaintiff were appropriate, the Court overruled Mr. Gumbs’ objection and ordered
him—once again—to sign the credit card authorization forms and provide all requested
documents within two weeks. See id. at 12:25-13:3. After the two weeks had passed, Plaintiff’s
counsel filed a letter apprising the Court that Mr. Gumbs still had not complied with the
discovery obligations discussed at the October 7th hearing. See Letter of Carlos Cuevas dated
Oct. 25, 2021 [ECF No. 53]. The twenty-page letter and attachments set forth Mr. Gumbs’
discovery failures in extensive detail. The Court memorandum endorsed the letter, noting that it
set forth a “disturbing picture of . . . non-compliance.” See Order dated Nov. 23, 2021 [ECF No.
54]. Given Mr. Gumbs’ pro se status, however, the Court concluded that any relief against Mr.
Gumbs for noncompliance must be requested by formal motion. Id. The Order was served on
Mr. Gumbs. See Certificate of Service, dated Nov. 24, 2021 [ECF No. 55].
On December 9, 2021, Plaintiff filed this motion seeking a default judgment and
sanctions for Mr. Gumbs’ failure to comply with discovery. [ECF No. 56]. No response to the
motion was filed by Mr. Gumbs. At a hearing on the motion on January 13, 2022, new counsel
appeared on behalf of Mr. Gumbs. See Hr’g Tr. 3:22-24, Jan. 13, 2022 [ECF No. 59]. At the
hearing, new counsel confirmed that Mr. Gumbs had not complied with his discovery
obligations. See id. at 5:22-25. Given the repeated non-compliance on discovery, the Court
suggested that a prompt resolution of the underlying nondischargeability case might be the best
option going forward for all parties. See id. at 10:16-18. The Court provided the attorneys with
time to attempt to negotiate and scheduled another hearing for a week later. See id. at 12:9-18.
The parties were unable to reach an agreement. At a hearing on January 20, 2022 counsel
for Mr. Gumbs acknowledged that he had no proof that Mr. Gumbs had complied with the
outstanding discovery requests. See Hr’g Tr. 5:1-14, Jan. 20, 2022 [ECF No. 60]. Counsel
requested more time to comply. See id. at 6:5-9. The Court disagreed that additional time was
appropriate or that it would be fruitful given the extensive prior proceedings on discovery and
the fact that current counsel is the third counsel retained by Mr. Gumbs over the four years of the
case. See id. at 9:11-15, 9:17-20. After discussing other potential options for moving forward,
the Court took the motion under advisement. The Court informed Debtor’s counsel of the
Court’s intent to rule on the motion in the near future but noted that the time period before the
Court’s ruling would provide the Debtor with yet one more chance to comply. See id. at 16:8-12.
DISCUSSION
There are different legal standards that govern the various relief requested in the motion.
A. Striking Pleadings Pursuant to FRCP 37(b)(2)(A)(iii)
Rule 7037 of the Federal Rules of Bankruptcy Procedure incorporates Rule 37 of the
Federal Rules of Civil Procedure which provides that a Court may “[strike] pleadings in whole or
in part” as part of sanctions for not obeying a discovery order. Fed. R. Civ. P. 37(b)(2)(A)(iii).
In general, “[d]isciplinary sanctions under Rule 37 are intended to serve three purposes.
First, they ensure that a party will not benefit from its own failure to comply. Second, they are
specific deterrents and seek to obtain compliance with the particular order issued. Third, they
are intended to serve a general deterrent effect on the case at hand and on other litigation,
provided that the party against whom they are imposed was in some sense at fault.” S. New
England Tel. Co. v. Glob. NAPs Inc., 624 F.3d 123, 149 (2d Cir. 2010) (quoting Update Art, Inc.
v. Modiin Publ'g, Ltd., 843 F.2d 67, 71 (2d Cir.1988)) (internal quotations omitted). While the
Court has “wide discretion in imposing sanctions under Rule 37, there are two basic
limitations . . . First, the sanctions must be just. Second, the sanctions must relate to the
particular claim to which the discovery order was addressed.” Ali v. Dainese USA, Inc., 2021
WL 5999203, at *9 (S.D.N.Y. Dec. 17, 2021) (internal quotations and citations omitted).
Because striking a party’s pleading is one of the harshest of discovery sanctions, “such
relief is to be granted sparingly, and only in extreme circumstances.” Erie Materials, Inc. v.
Barnholdt (In re Barnholdt), 74 B.R. 760, 764 (Bankr. N.D.N.Y. 1987) (citing Israel Aircraft
Industries Ltd. v. Standard Precision, 559 F.2d 203, 208 (2d Cir.1977); Flaks v. Koegel, 504
F.2d at 702, 707 (2d Cir. 1974); Negron v. Peninsular Navigation Corp., 279 F.2d 859, 860, (2d
Cir.1960)). “Because of constitutional due process concerns, arising from a strong policy
favoring trial on the merits, the sanction . . . should be utilized only where a party has evidenced
bad faith, willfulness, or gross negligence with respect to a discovery request, or where there has
been a total failure to answer.” Id. (internal citations and quotations omitted). “Consequently,
the Court should first consider less severe sanctions which may be appropriate under the
circumstances.” Id. (internal citations and quotations omitted).
“Noncompliance with discovery orders is considered willful when the court's orders have
been clear, when the party has understood them, and when the party's noncompliance is not due
to factors beyond the party's control. Willful non-compliance is routinely found where a party
has repeatedly failed to produce documents in violation of the [trial] court's orders.” Ali, 2021
WL 5999203, at *11 (internal quotations and citations omitted).
Despite the limitations listed above, “the decision to impose such sanctions is committed
to the sound discretion of the district court and may not be reversed absent an abuse of that
discretion.” Luft v. Crown Publishers, Inc., 906 F.2d 862, 865 (2d Cir. 1990).
B. Default Judgment Pursuant to FRCP 37(b)(2)(A)(vi)
Rule 37 of the Federal Rules also provides that the Court may “[render] a default
judgment against the disobedient party.” Fed. R. Civ. P. 37(b)(2)(A)(vi). A sanction as “severe”
as entering a default judgment “may be appropriate in extreme situations, as when a court finds
willfulness, bad faith, or any fault on part of the noncompliant party.” Guggenheim Cap., LLC v.
Birnbaum, 722 F.3d 444, 451 (2d Cir. 2013) (quoting Bobal v. Rensselaer Polytechnic Inst., 916
F.2d 759, 764 (2d Cir.1990)) (internal quotations omitted). But a court is “not required to
exhaust possible lesser sanctions before imposing . . . default if such a sanction is appropriate on
the overall record.” S. New England Tel. Co., 624 F.3d at 148.
Factors to be considered when entering a default judgment include: “(1) the willfulness of
the non-compliant party or the reason for noncompliance; (2) the efficacy of lesser sanctions; (3)
the duration of the period of noncompliance; and (4) whether the non-compliant party had been
warned of the consequences of noncompliance.” Id. at 144 (quoting Agiwal v. Mid Island Mortg.
Corp., 555 F.3d 298, 302 (2d Cir. 2009)) (internal quotations omitted).
C. Monetary Sanctions and Attorney’s Fees
Local Bankruptcy Rule 9020-1 authorizes the Court to impose monetary sanctions when
a party has failed to appear or prepare for a hearing.1 Federal Rule 37(d) states, “[i]nstead of or
in addition to [the other discovery sanctions], the court must require the party failing to act . . . to
pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure
was substantially justified or other circumstances make an award of expenses unjust.” Fed. R.
Civ. P. 37(d)(3). “When a court grants a motion to compel in part, a court may award attorneys’
fees in addition to costs in its discretion.” Brown v. Barnes & Noble, Inc., 474 F. Supp. 3d 637,
653 (S.D.N.Y. 2019). “An award of expenses is mandatory unless the movant filed the motion
before attempting in good faith to obtain the disclosure, the nondisclosure or objection was
substantially justified, or other circumstances make an award of expenses unjust.” Id. (citing
Fed. R. Civ. P. 37(a)(5)(A)).
“Substantial justification may be demonstrated where there is justification to a degree that
could satisfy a reasonable person that parties could differ as to whether the party was required to
comply with the disclosure request, or if there exists a genuine dispute concerning compliance.”
Ritchie Risk-Linked Strategies Trading (Ireland), Ltd. v. Coventry First LLC, 280 F.R.D. 147,
1 Local Bankruptcy Rule 9020-1 states:
DEFAULT SANCTIONS; IMPOSITION OF COSTS
(a) Default Sanctions. Failure of a party or counsel for a party to appear before the Court at a conference,
complete the necessary preparations, or be prepared to proceed at the time set for trial or hearing may be
considered an abandonment of the adversary proceeding or contested matter or a failure to prosecute or
defend diligently, and an appropriate order of the Court may be entered against the defaulting party with
respect to either a specific issue or the entire adversary proceeding or contested matter.
(b) Imposition of Costs. If the Judge finds that the sanctions in subdivision (a) of this rule are either inadequate
or unjust to the parties, the Judge may assess reasonable costs directly against the party or counsel whose
action has obstructed the effective administration of the Court's business.
S.D.N.Y. Loc. Bankr. R. 9020-1.
159 (S.D.N.Y. 2012) (quoting AIG Global Asset Management Holdings v. Branch, 2005 WL
425494, at *l (S.D.N.Y. Feb. 18, 2005)) (internal quotation marks omitted).
D. The Record After the Hearing On the Motion
Since the hearing on January 20, 2022, the Court has received three additional
submissions from the parties. [See ECF Nos. 61-63]. These submissions chronicle additional
discovery responses made by Mr. Gumbs after the hearing and discuss whether these responses
satisfy his obligations. Id.
The first of these submissions is a letter from Plaintiff’s counsel dated February 3, 2022,
with extensive attachments, that details additional discovery responses of Mr. Gumbs provided
after the hearing and assesses the adequacy of these responses. See Letter to the Hon. Sean H.
Lane Filed by Carlos J. Cuevas on behalf of Honey Do Men Gutters, Inc. [ECF No. 61] (the
“February 3rd Letter”). When the Letter is viewed against the entire record, the Court agrees
with Plaintiff’s assessment that Mr. Gumbs’ additional responses discussed in the February 3rd
Letter clearly do not cure Mr. Gumbs’ deficiencies in discovery.2
2 For example, the February 3rd Letter explains that Mr. Gumbs only provided information for three of his
bank accounts despite having represented that he had eleven bank accounts during the hearing held on August 12,
2021. See February 3rd Letter at 2.; see also August 12, 2021 Hr’g Tr. 12:5-9. Mr. Gumbs’ Chapter 7 petition also
reflects the existence of many bank accounts for which Mr. Gumbs has not provided information. See Chapter 7
Voluntary Petition for Individuals at 19-29 [Case No. 17-23947, ECF No. 1] (the “Petition”). The February 3rd
Letter also correctly notes that Mr. Gumbs’ responses to Plaintiff’s first and second set of interrogatories are
“deficient because they are not signed under oath.” See February 3rd Letter at 2. The exhibits attached to the
February 3rd Letter also show that Mr. Gumbs did not get his responses to the interrogatories notarized. See id. at
22-29, attached as Exhibits D and E to the February 3rd Letter. It is also correct that Mr. Gumbs’ responses to
interrogatories 3, 4, 7, and 8 were non-responsive. See id. at 3-4. These interrogatories ask for information
regarding Mr. Gumbs’ casino and hotel visits and the dates Mr. Gumbs conferred with his attorney regarding his
Chapter 7 case. See id. Mr. Gumbs’ latest responses to each of these interrogatories was to represent that the
requested information could be found on his Petition. See id. But that is flatly incorrect. The requested information
cannot be found anywhere on the Petition. See generally Petition.
The February 3rd Letter also notes that Mr. Gumbs’ latest responses to the Second Set of Interrogatories are
“identical to his prior answers” to the same interrogatories that were served in 2021. See February 3rd Letter at 5.
The exhibits attached to the February 3rd Letter show that this is indeed the case—that Mr. Gumbs filed the exact
same response to the interrogatories on August 20, 2021 and on January 21, 2022 and simply affixed a new date on
the later response. See id. at 26-33, attached as Exhibits E and F to the February 3rd Letter.
On February 10, 2022, Mr. Gumbs filed a letter with an update on his discovery
responses. See Letter of Ronald R. Tomlins, dated Feb. 10, 2022 [ECF No. 62]. Plaintiff’s
counsel responded the same day. See Letter of Carlos J. Cuevas, dated Feb. 10, 2022 [ECF No.
63]. Given the summary nature of Mr. Tomlins’ letter—which did not include the new responses
or set forth what additional information was provided—it is impossible to find that Mr. Gumbs
has complied with his discovery obligations. Indeed, based on Mr. Cuevas’ response, it appears
that Mr. Gumbs’ responses remain deficient. Id. (stating that Mr. Gumbs latest responses are not
executed under oath and do not provide full disclosure of his banking information).
E. The Appropriate Relief Here
Given Mr. Gumbs’ record of noncompliance despite ample time, numerous warnings, the
extensive due process afforded to him, and the entire record established at the numerous hearings
and in numerous filings, the Court finds that Mr. Gumbs’ discovery failures are willful, not the
fault of any other party, and reflect his bad faith. Applying the applicable legal principles to the
record, the Court concludes that the record here supports all of the relief requested by the
Plaintiff. But consistent with the moderation reflected in the case law, the Court will look first to
the least severe sanction of attorney’s fees and costs. It is clear that such fees and costs should
be assessed against Mr. Gumbs. Mr. Gumbs has squandered the many opportunities provided to
him to comply with his discovery obligations. Plaintiff’s counsel has been reasonable and
patient in his approach to Mr. Gumbs’ recalcitrant behavior. After exhausting all his other
options, Plaintiff’s counsel had no choice but to file this motion. Furthermore, the Debtor has
not contested the Plaintiff’s requested fees and costs of $19,520.00, the 48.8 hours spent by
Plaintiff’s counsel at a rate of $400.00 an hour in connection with Mr. Gumbs’ continued
defiance of his discovery obligations, including preparing this motion. See Decl. of Carlos J.
Cuevas, Esq. in Supp. of Mtn. to Strike the Answer of Def. Teba Gumbs; to Enter a Default J.
Against Def. Teba Gumbs; and to Impose Sanctions Against Def. Teba Gumbs at 16-18 [ECF
No. 56]. These fees and costs are more than reasonable under the circumstances of this case.3
For now, the Court will take under advisement the additional relief requested by Plaintiff
of striking Mr. Gumbs’ answer and granting default judgment against Mr. Gumbs. The Court
will issue such a decision on Plaintiff’s request for the additional relief at a future date. In the
meantime, the Court urges Mr. Gumbs to fully comply with his discovery obligations and related
Court orders, a course of action that is in his best interest.
3 Even if Mr. Gumbs’ latest discovery responses cured all the deficiencies—which does not appear to be the
case—costs and fees would still be appropriate because the Plaintiff was forced to file the motion to achieve
compliance. Rule 37(a)(5)(A) of the Federal Rules provides that the party that necessitated a motion to compel
discovery or a motion for appropriate sanctions should “pay the movant's reasonable expenses incurred in making
the motion, including attorney's fees.” Fed. R. Civ. P. 37(a)(5)(A). An award of such expenses is mandatory
“unless one of the two exceptions—substantial justification or some other circumstance—applies.” Novak v.
Wolpoff & Abramson LLP, 536 F.3d 175, 178 (2d Cir. 2008). The “burden [is placed] on the disobedient party to
avoid expenses by showing that his failure is justified or that special circumstances make an award of expenses
unjust.” Id. (quoting Advisory Committee Note to 1970 Amendments to Fed R. Civ. P. 37). Given the record
discussed at length above, Mr. Gumbs has failed to meet his burden to establish an exception.
CONCLUSION
For all the reasons discussed above, the Court grants the motion in part to award the fees
and costs requested by Plaintiff in the sum of $19,520.00. The Court reserves decision on the
additional relief requested by Plaintiff of striking Mr. Gumbs’ answer and entering a default
judgment against Mr. Gumbs. The Court will refrain from issuing its ruling on the remaining
requested relief for a period of 14 days after the entry of this Decision on the docket.
IT IS SO ORDERED.
Date: New York, New York
February 15, 2022
/s/ Sean H. Lane
UNITED STATES BANKRUPTCY JUDGE