VESTA HALAY JOHNSTON, ET AL.
SUSAN HALAY VINCENT, ET AL.
FOR SUPERVISORY WRIT OF REVIEW FROM A JUDGMENT OF THE
FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO.
2015-4153 HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE
Ray Soileau, Jr. Hunter William Lundy Lundy, Lundy, Soileau
& South COUNSEL FOR: Defendants/Respondents - Susan Halay
Vincent and Martin Bryan Vincent.
Michael Veron J. Rock Palermo, III D'Ann R. Penner Veron,
Bice, Palermo & Wilson, LLC COUNSEL FOR:
Plaintiffs/Applicants - Vesta Halay Johnston, Lake Charles
Rubber and Gasket Company, LLC.
David Cain, Jr. Thomas Patrick LeBlanc Loftin, Cain &
LeBlanc, LLC COUNSEL FOR: Defendants/Respondents - Gulf Coast
Rubber & Gasket and Moby Goodwin.
composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R.
Cooks, and Candyce G. Perret, Judges.
ULYSSES GENE THIBODEAUX CHIEF JUDGE.
Halay Johnston and Lake Charles Rubber and Gasket Co., L.L.C.
(LCR&G) filed suit against Susan Halay Vincent, Martin
Bryan Vincent, Moby Goodwin, and Gulf Coast Rubber and
Gasket, L.L.C. (GCR&G) for defamation and unfair trade
practices. Shortly thereafter, the parties entered into a
consent judgment to preserve all of the companies'
electronic and digital data as well as the parties' smart
phones (Preservation Order). Due to the defendants'
unsatisfactory responses to discovery, the plaintiffs'
filed a motion to comply which the trial court granted
(Production Order). The plaintiffs then filed their motion
for sanctions against defendants, alleging violations of the
Production Order. In their supplemental memorandum, the
plaintiffs further alleged that the defendants had violated
the Preservation Order by failing to preserve an iPhone 4
that they claimed belonged to Mr. Vincent and was used by him
at times relevant to their suit. Taking the matter under
advisement, the trial court subsequently denied the motion
for sanctions. After the trial court then denied their motion
for reconsideration, the plaintiffs sought writs from this
court. Finding no manifest error in the trial court's
factual conclusion that the plaintiffs failed to prove that
the defendants violated either discovery order, we deny the
plaintiffs ask this court to decide:
whether the trial court abused its discretion when it denied
sanctions under La.Code Civ.P. art. 1471;
whether the trial court erred when it incorrectly interpreted
the Preservation Order and the Production Order; and
whether the trial court correctly applied the four-factor
test for sanctions under La.Code Civ.P. art. 1471.
AND PROCEDURAL HISTORY
family dispute involves LCR&G, a private, family-held
business started in 1957 by Michael Halay, the father of Mrs.
Vincent, Mrs. Johnston, and Kathryn Halay Heinen. In 1991,
Mr. Halay promoted his son-in-law, Mr. Vincent, to general
manager of LCR&G and subsequently named him vice
Halay died in 2004, and his three daughters inherited his
estate, including LCR&G, in equal one-third shares.
LCR&G was reorganized on June 2, 2005, and the three
sisters became managing members. In November 2013, Mrs.
Vincent filed a shareholder derivative suit against Mrs.
Johnston and Mrs. Heinen, claiming that they were interfering
with Mr. Vincent's management of the company. Mr. Vincent
was later terminated from LCR&G on September 25, 2014.
That same month, Mrs. Vincent filed a petition to dissolve
LCR&G, and the company was put in receivership. The
receivership was shortly dissolved, and the trial court
ordered formal mediation, which took place in October 2014.
On October 14, 2014, Mrs. Vincent sold her interest in
LCR&G to her sisters for $8, 615, 000. In early November
2014, the Vincents and Mr. Goodwin opened a new, competing
business-GCR&G-and allegedly hired eleven key employees
October 14, 2015, Mrs. Johnston and LCR&G sued the
defendants, alleging that GCR&G and its principals had
engaged in unfair trade practices, breached their contractual
and fiduciary duties, and defamed the plaintiffs by,
inter alia, taking the plaintiffs' proprietary
information, soliciting customers, as well as employees,
while still employed by the plaintiffs, and making false
public statements about the plaintiffs' financial
condition. In part, the plaintiffs sought an expedited
contradictory hearing to consider the issuance of an order to
preserve and quarantine electronic devices until their
computer forensic expert was allowed unimpeded access to copy
all data and metadata. The defendants, however, disagreed
with the quarantine of their electronic devices. Eventually,
the parties agreed upon the Preservation Order at issue
herein, and the trial court signed a consent judgment on
November 18, 2015, consistent with the parties'
Preservation Order required both companies to create and
preserve a digital image of all data in an "accessible,
IT IS ORDERED, ADJUDGED AND DECREED that the
parties have a duty to preserve documents, information, data
and other electronic or digital communications or
compilations of data which are or may be relevant to issues
in this litigation. This includes any and all records, notes,
memos, letters, photographs, logs, e-mails, ledgers (whether
on paper or kept electronically or digitally) pertaining in
any way to the allegations of this lawsuit. This includes but
certainly is not limited to, any and all business records
pertaining the operations of [LCR&G] before October 14,
2015 and to the operations of [GCR&G] from October 15,
IT IS FURTHER ORDERED, ADJUDGED AND DECREED
that all parties agree to cease and desist from any
activities or acts the result of which would inadvertently or
intentionally result in the deletion or destruction of
materials which may be the subject of a discovery request or
may be potentially relevant.
required the parties to preserve all records and content
pertinent to their claims and defenses on their iPhones:
IT IS FURTHER ORDERED, ADJUDGED AND DECREED
that the parties agree to take appropriate measures to
preserve and prevent from deletion, destruction or alteration
any and all records and content pertinent to plaintiffs'
claims or defendants' defenses in or on: (1) any and all
work electronic mail account(s) to which the parties have
access; (2) any and all personal electronic mail account(s)
to which Vesta Halay Johnston, Susan Vincent, Martin Bryan
Vincent, and Moby Goodwin have access; ... (4) any and all
cellular telephones, smart phones, or iPhones used for work
by Vesta Halay Johnston, Susan Vincent, Martin Bryan Vincent,
and Moby Goodwin; (5) any and all personal cellular
telephones, smart phones, or iPhones of Vesta Halay Johnston,
Susan Vincent, Martin Bryan Vincent, and Moby Goodwin[.]
GCR&G subsequently retained Kiersted Systems (Kiersted)
in Houston, Texas, to create and store its digital image
December 10, 2015, plaintiffs filed their first set of
requests for production of documents. Relevant to the issues
herein, the plaintiffs sought the production of "all
correspondence, emails, and texts messages between any and
all of the defendants and any and all employees of LCR&G
between August 2014 to December 2014." In response,
defense counsel sent a correspondence to the plaintiffs'
counsel, dated January 27, 2016, requesting that the
plaintiffs provide a list of former and current employees, as
well as any other search terms that the plaintiffs would like
the defendants to use to search the image database. The
defendants referred to that correspondence in their response
to the plaintiffs' requests. On March 3, 2016, the
plaintiffs filed their first motion to compel, arguing that
they "should not have to produce a list of employees.
Mr. Vincent has the experience and the background to generate
a list of his own."
hearing the matter, the trial court granted the motion and
signed the Production Order on April 6, 2016. Therein, the
trial court ordered "the defendants ... to produce all
correspondence, emails, and text messages between any and all
of the defendants and any and all employees of LCR&G . .
. between August 2014 and October 2014 without LCR&G
producing a list of employees." But, "to the extent
that the plaintiffs want GCR&G to produce correspondence,
emails, and text messages between any and all of the
defendants and any and all employees of LCR&G between
November and December 2014, the plaintiffs must first supply
GCR&G with a list of said employees."
plaintiffs then filed their motion for sanctions on June 30,
2016, arguing that "the defendants have refused to
comply with this Court's judgment." In their
supporting memorandum, the plaintiffs complained (emphasis in
original): "To date, not one single email or
text message has been produced by the defendants in
this litigation." The matter was set for hearing on
September 12, 2016.
August 31, 2016, the plaintiffs conducted the La.Code Civ.P.
art. 1442 deposition of GCR&G for which Mr. Vincent
appeared as representative (the 1442 deposition). During this
deposition, Mr. Vincent was specifically asked about the
preservation of an iPhone 4 that he allegedly purchased in
February 2013. He explained that he "probably had a 4[,
]" but he did not remember when he bought it and did not
know what had become of it. It was an iPhone 5 that he used
in the time period relevant to the motion to compel-August
2014 through December 2014-and had been using since October
2013. That phone was backed up on his home computer, which
was imaged by Kiersted, when he upgraded to an iPhone 6 in
March or April 2015. Prior to this deposition, the