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American Radiosurgery Inc. v. Rakes

The trial court should have given the defendants the opportunity to fully explain their extreme tardiness in responding to discovery before imposing the harsh sanction of striking their answers.

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Bruce Rakes sued American Radiosurgery, Inc. ARI and its chairman and chief executive officer, John Clark, seeking damages under various theories in connection with a contract of employment executed by Rakes and ARI. Because the defendants thereafter failed to timely file responsive pleadings and respond to discovery requests, the trial court granted an initial default judgment, which default was subsequently opened; granted partial summary judgment against ARI, which ruling rested at least partly upon an unanswered request for admissions; and struck the defendants’ answer as a sanction for discovery abuse, entering a default judgment regarding liability as to both defendants. After a hearing on damages, the court entered final judgment against ARI and Clark jointly and severally. Contested in this appeal are the partial summary judgment, the sanction of striking the answer, and the final judgment. For reasons that follow, we affirm in part and vacate in part, and remand the case.

On March 21, 2008, Rakes filed a verified complaint that alleged the following. ARI was engaged in the business of marketing and selling a neurosurgical device used to treat brain tumors known as the “Rotating Gamma System.” A key component of the device was a software application that aided in the targeting and radiation prescription used by the device. Rakes was a physicist and software engineer, who previously had helped develop a software application for a device similar to the Rotating Gamma System. For that prior work, Rakes had become well known and highly regarded in his field.

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