JODY A. HILL AND DEAN OWEN THORSEN, APPELLEES,
MARK TEVOGT, APPELLANT
from the District Court for Douglas County: J. MICHAEL
D. Sherrets and Jared C. Olson, of Sherrets, Bruno & Vogt,
L.L.C., for appellant.
J. Muench for appellees.
C.J., WRIGHT, CONNOLLY, MILLER-LERMAN, CASSEL, STACY, and
Neb. 430] Connolly, J.
2012, Mark Tevogt purchased the interests of Jody A. Hill and
Dean Owen Thorsen in a business formed as JGP, LLC. Tevogt
financed the purchase by executing a promissory note under
which Hill and Thorsen are the payees. Tevogt soon defaulted,
and Hill and Thorsen (collectively the plaintiffs) sued him
for damages under the promissory note. Tevogt alleged in his
answer that the plaintiffs had made misrepresentations and
fraud. The court overruled the plaintiffs' first motion
for summary judgment because of statements Tevogt made in his
affidavit about the plaintiffs' failure to inform him of
plaintiffs moved for summary judgment again after Tevogt
twice failed to attend his deposition. At a hearing on the
motion, the plaintiffs asked the court to sanction Tevogt
because he had not given them an opportunity to depose him
about the statements in his affidavit. The court sanctioned
Tevogt by excluding the statements Tevogt made in his
affidavit, and ultimately entered summary judgment for the
plaintiffs. Tevogt appeals and argues that the court imposed
an unduly harsh discovery sanction. We conclude that the
severity of the sanction was an abuse of discretion. We
therefore reverse the summary judgment and remand the cause
for further proceedings.
2013, the plaintiffs sued Tevogt, alleging that he had
defaulted on a promissory note payable to them. The
plaintiffs claimed that the unpaid principal was about
$120,000. They asked the court to award them damages for the
unpaid principal, with interest accruing from the date of
listed 12 affirmative defenses in his answer, including
" fraud and/or fraud in the inducement." He also
included a [293 Neb. 431] " Counterclaim" which set
out four causes of action: fraudulent misrepresentation,
negligent misrepresentation, fraudulent concealment, and
breach of contract. He alleged that the plaintiffs had
misrepresented or concealed the financial status of JGP.
plaintiffs moved for summary judgment and offered an
affidavit that Hill signed in February 2014. Hill averred
that Tevogt had defaulted on a promissory note with an unpaid
principal of about $120,000 and a default interest rate of 6
percent per year. Hill stated that she and Thorsen did not
misrepresent JGP's finances or withhold information from
Tevogt. She acknowledged that " there was $65,000.00
due" to an underwriter, but stated that JGP's
manager told Tevogt about the shortfall.
offered his own affidavit. He claimed that the plaintiffs
told him that " all bills/expenses/accounts were
current." He alleged that after he executed the
promissory note, he learned that the " account used for
holding premiums collected to be paid to the
insurer/underwriter" was " approximately $60,000.00
short." Tevogt further stated that the plaintiffs gave
JGP's employees large raises and failed to pay income
taxes, which he learned " at the 11th hour before the
court overruled the plaintiffs' motion for summary
judgment. It stated that Tevogt's allegation in his
affidavit that the plaintiffs failed to pay income taxes did
not create a genuine issue of material fact, because Tevogt
knew about the problem before he signed the promissory note.
The court was also not impressed by Tevogt's allegation
that the plaintiffs gave JGP's employees large raises,
because it reasoned that Tevogt could simply reverse the
raises. But the court concluded that Tevogt's statements
about a shortfall in the underwriting account created a
genuine issue of material fact preventing a summary judgment.
February 2015, the plaintiffs again moved for summary
judgment. They claimed that they had " attempted twice
to take [Tevogt's] deposition and [Tevogt] twice failed
to appear for said deposition."
Neb. 432] At the hearing on their motion, the plaintiffs
offered an affidavit signed by Hill in February 2015. The
largely the same as Hill's February 2014 affidavit, but
it included more details about Tevogt's relationship with
JGP's business manager. Hill stated that Tevogt learned
of the underwriting account shortfall before he executed the
court also received a notice that the plaintiffs sent to
Tevogt stating that they intended to depose him on November
4, 2014. The plaintiffs' attorney signed the notice and
mailed it to Tevogt's attorney on October 24.
November 4, 2014, deposition shows that Tevogt's attorney
was present, but not Tevogt himself. The plaintiffs'
attorney said that the plaintiffs had tried to contact
Tevogt's attorney twice before mailing the notice on
October 24. On October 29, the plaintiffs' attorney
received a postal notification that the notice of deposition
sent to Tevogt's attorney had been forwarded to another
address. On November 3, Tevogt's attorney left a message
for the plaintiffs' attorney stating that Tevogt was
" 'out of the country all week.'"
Tevogt's attorney claimed that he had tried to
December 11, 2014, the plaintiffs tried to depose Tevogt
again. Their attorney mailed a notice of deposition to
Tevogt's attorney on December 1. Neither Tevogt ...