*1 THIS MATTER comes before the Court on Petitioner Loya Insurance Company's Motion for Default Judgment as a Sanction for Failure to Participate in Discovery (Doc. 65), filed December 15, 2022. The Court held a hearing on the matter on April 19, 2023. Respondents did not appear at the hearing. Doc. 73 (clerk's minutes). Having reviewed the facts and the applicable law, the Court grants in part and denies in part the motion.

This case arises out of an automobile insurance dispute. Petitioner Loya Insurance Company allegedly issued a policy with liability limits of $25,000 per person and $50,000 per accident for bodily injury. Doc. 4 at 11. The individual who purchased the policy was Respondent Rutilio Solis. Id. at 2. On July 13, 2018, Mr. Solis listed Respondent Karen Solis as an excluded driver under the policy. Id. at 3. On August 28, 2018, Karen Loya-Gutierrez (believed to be the same person as Karen Solis) got in a car accident while driving a vehicle insured under Mr. Solis’ policy. Id. at 3–4.

Because Karen Loya-Gutierrez, aka Karen Solis, was an excluded driver, Petitioner seeks a declaratory judgment that it has no duty to indemnify Karen Loya-Gutierrez/Karen Solis, or to defend or indemnify Rutilio Solis, for the accident. Id. at 5, 7. Petitioner also seeks a declaration that Mr. Solis validly rejected uninsured/underinsured motorist coverage under his policy and therefore no such coverage is available for damages resulting from the August 28, 2018 accident. Id. at 6.

Here, Pursuant to Federal Rule of Civil Procedure 37(b)(2)(A)(vi)(d), Petitioner moves for default judgment against Respondents for their failure to participate in discovery. Doc. 65 at 1. They allegedly missed discovery deadlines in March 2022. Id. at 2; see Doc. 31 (motion to compel discovery responses). The Court set a deadline of July 15, 2022 for Petitioner to depose Respondents. Doc. 43 (Judge Fashing's order granting in part the motion to compel). In June and July 2022, Respondents’ counsel moved to withdraw after admitting to losing contact with his clients. Docs. 47, 51 (moving to withdraw); see also Doc. 52 (order granting withdrawal). Respondents did not hire new counsel.

Following this withdrawal, the Court held a telephonic status conference on September 16, 2022; Defendants did not appear. Doc. 55 (clerk's minutes). The Court set a new deadline for Plaintiff to depose Defendants by November 15, 2022. Id. The Court also filed an order to show cause (Doc. 57) based on Defendants’ failure to appear.

On October 17, 2022, Plaintiff noticed Defendants’ depositions for October 28, 2022; Defendants did not appear at the deposition. See Docs. 65-1, 65-2 (deposition transcripts). The Court set a telephonic status conference on November 10, 2022, and Defendants again did not appear. Doc. 61 (clerk's minutes). The Court entered another order to show cause ordering Defendants to provide a written explanation as to why they should not be sanctioned. Doc. 62. Respondents have not responded to the order to show cause, and Judge Fashing has warned that continued failure to participate may result in a default judgment against them. Doc. 70. Respondents also have not responded to the motion for default judgment.

*2 The Court held a hearing on the motion for default judgment on April 19, 2023, and Respondents did not appear. Doc. 73 (clerk's minutes).

Federal Rule of Civil Procedure 37(b)(2)(A)(vi) permits the court where the action is pending to render sanctions against a party who disobeys a discovery order. A default judgment is appropriate only when the disobeying party's actions are willful rather than inadvertent. F.D.I.C. v. Daily, 973 F.2d 1525, 1530 (10th Cir. 1992) (citation omitted). “A willful failure is any intentional failure as distinguished from involuntary noncompliance. No wrongful intent need be shown.” Toma v. City of Weatherford, 846 F.2d 58, 60 (10th Cir. 1988) (internal quotations and citation omitted).

EBI Securities Corp., Inc. v. Net Command Tech, Inc., 85 F. App'x 105, 108 (10th Cir. 2003) (unpublished case finding abuse of discretion when district court granted default judgment but did not make any findings about whether defaulting parties were at fault and why lesser sanctions would have been ineffective).

At this stage, no one can get in contact with Respondents, not even their former attorney. There is no indication on the record that their address or communication methods have changed. Counsel for Petitioners stated during the deposition (which Respondents failed to attend) that USPS delivered a letter asking Ms. Loya-Gutierrez for possible deposition dates to her listed residence and that she signed for it. Doc. 65-1 at 3. Further, counsel for Petitioners indicated that USPS attempted to deliver the certified Deposition Notice to the same address after Respondents did not respond to the original letter, but that it was held at the Post Office at customer request, suggesting that Mr. Solis (or Ms. Loya-Gutierrez, since they live at the same address) was aware of the deposition date but chose not to attend. Doc. 65-2 at 4.

The Court finds that Respondents have certainly failed to participate, and all presently available evidence indicates that they are at fault for such failure. The Court will therefore grant Petitioner's motion insofar as it seeks sanctions for failure to participate in discovery under Rule 37. However, in lieu of the default judgment Petitioner requested, the Court will dismiss the case without prejudice—another possible sanction outlined under Rule 37(b)(2)(A). In the Court's view, this lesser sanction is likely to be just as effective as a default judgment in laying to rest the matter at hand.

IT IS SO ORDERED.