Bragg v. Southwest Health System, Inc.

Filing 166

ORDER DENYING PLAINTIFF'S MOTION FOR SPOLIATION SANCTIONS 133 by Magistrate Judge N. Reid Neureiter on 13 July 2020.(cmadr, )

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 18-cv-00763-MSK-NRN
ROBYN BRAGG,
Plaintiff,
v.
SOUTHWEST HEALTH SYSTEM, INC. d/b/a Southwest Memorial Primary Care,
Defendant.

ORDER DENYING
PLAINTIFF’S MOTION FOR SPOLIATION SANCTIONS (Dkt. #133)

N. REID NEUREITER
United States Magistrate Judge
This case is before the Court on Plaintiff Robin Bragg’s Motion for Spoliation
Sanctions (Dkt. #133), which was referred to the undersigned by Judge Marcia S.
Krieger on April 22, 2020. (Dkt. #134.) Defendant Southwest Health System, Inc.
(“SHS”) filed a response (Dkt. #135), and Plaintiff filed a reply. (Dkt. #138.)
On June 26, 2020, the Court held an evidentiary hearing on the subject motion.
(See Dkt. #158.) The Court heard testimony from Karen Pasquin, Patricia Thomas,
David Penrod, Francis Brackin, Charles Dennis, Charles Krupa, and Travis Parker.1 The

1

In the interests of time, the Court ordered that except for expert witnesses on the issue
of spoliation, all other direct live witness testimony would be presented via declaration,
with the witness made available live for cross-examination, redirect examination, and
questions by the Court. The Court also ordered the parties to designate and counterdesignate portions of any deposition testimony they wished to present to the Court.
(Dkt. #144.)

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Court admitted Plaintiff’s Exhibits 1–6, 17, 19– 21, 23–25, 28, 31 (except for paragraphs
17 and 18), 35, and 36; and Defendant’s Exhibits A–I, and M–R.
Now, being fully informed and for the reasons discussed below, it is hereby
ORDERED that the motion is DENIED.
Background
Plaintiff alleges that SHS terminated her employment2 as the hospital’s Health
Information Manager in retaliation for Plaintiff raising concerns about SHS’s billing
practices, which she believes constituted Medicaid and Medicare fraud. (See generally
Dkt. #1.) As relevant here, Plaintiff believed that IV start/stop times had to be entered by
the administering nurse, and that it was fraud if times were entered by anyone. (Id. at 5–
7; ¶¶ 14–19.) Plaintiff claims that she “documented the results of her investigation [into
the alleged fraud] in a computer folder called ‘Angela[.]’” (Id. at 14, ¶ 58.) This folder
contained e-mails sent to SHS CFO Angela Kobel. (See id. at 7, ¶ 23) (“In attempts to
stop the violations of unlawful CMS billing, [Plaintiff] provided some screen shots emails [reflecting improper IV insertions] to CFO Kobel and preserved them on her
Hospital-designated computer in a folder named ‘Angela’”)). The issue now before the
Court revolves around that file folder.
Plaintiff contends that after SHS received a litigation hold letter from Plaintiff’s
counsel on September 25, 2017, it altered or destroyed electronically stored information
(“ESI”) on Plaintiff’s computer, including the “Angela” folder. Plaintiff argues that her
expert, David Penrod, has proved within a reasonable degree of certainty that SHS did

2

Technically, Plaintiff resigned. However, it is undisputed that she was permitted to
resign in lieu of being fired.
2

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so. She states that “SHS’s defense should be dismissed due to its intentional and willful
conduct which defied Court Orders” or, at a minimum, that the Court presume the
deleted and altered data or files favored Plaintiff. She also requests attorneys’ fees and
costs.
In response, SHS asserts that Plaintiff’s motion is untimely and fails to establish
that SHS destroyed or otherwise failed to preserve any relevant evidence. SHS
requests its reasonable attorneys’ fees and costs associated with responding to
Plaintiff’s motion.
Legal Standard
“Spoliation” is “the destruction or significant alteration of evidence, or the failure
to preserve property for another’s use as evidence in pending or reasonably
foreseeable litigation.” Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., 244 F.R.D.
614, 620 (D. Colo. 2007). As Judge Krieger has stated,
Spoliation occurs when: (I) a party has a duty to preserve evidence,
usually because the party knows or should know that the evidence is
relevant to imminent or existing litigation; (ii) that party destroys the
evidence intentionally or in bad faith; and (iii) the destruction of the
evidence works to the opponent’s prejudice.
Partminer Worldwide Inc. v. Siliconexpert Techs. Inc., No. 09-cv-00586-MSK-MJW,
2011 WL 587971, at *6 (D. Colo. Feb. 9, 2011) (unpublished) (citing Oldenkamp v.
United Am. Ins. Co., 619 F.3d 1243, 1250–51 (10th Cir. 2010)).
A moving party has the burden of proving, by a preponderance of the evidence,
that the opposing party failed to preserve evidence or destroyed it. Zbylski v. Douglas
Cty. Sch. Dist., 154 F. Supp. 3d 1146, 1160 (D. Colo. 2015). If the aggrieved party
seeks an adverse inference to remedy the spoliation, it must also prove bad faith.
Turner v. Pub. Serv. Co. of Colo., 563 F.3d 1136, 1149 (10th Cir. 2009). “Mere
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negligence in losing or destroying records is not enough because it does not support an
inference of consciousness of a weak case.” Aramburu v. Boeing Co., 112 F.3d 1398,
1407 (10th Cir.1997).
“District courts have ‘substantial weaponry’ in their arsenal to shape the
appropriate relief for a party’s spoliation of evidence.” Helget v. City of Hays, Kansas,
844 F.3d 1216, 1225–26 (10th Cir. 2017) (citations omitted). Among the options, a court
may strike witnesses, 103 Inv’rs I, L.P. v. Square D Co., 470 F.3d 985, 988 (10th Cir.
2006); issue an adverse inference, Henning v. Union Pac. R.R. Co., 530 F.3d 1206,
1219–20 (10th Cir. 2008); exclude evidence, see Jordan F. Miller Corp. v. Mid–
Continent Aircraft Serv., Inc., 139 F.3d 912 (10th Cir. 1998) (unpublished); or, in
extreme circumstances, dismiss a party’s claims, id. When deciding the appropriate
sanction for a party’s spoliation of evidence, “courts have considered a variety of
factors, two of which generally carry the most weight: (1) the degree of culpability of the
party who lost or destroyed the evidence, and (2) the degree of actual prejudice to the
other party.” Jordan F. Miller, 139 F.3d 912 (citing Schmid v. Milwaukee Elec. Tool
Corp., 13 F.3d 76, 79 (3d Cir. 1994)). “[A] court should impose the least onerous
sanction that will remedy the prejudice and, where applicable, punish the past
wrongdoing and deter future wrongdoing.” Id.
Finally, the Federal Rules of Civil Procedure provide specific guidelines relating
to the failure to preserve ESI:
Failure to Preserve Electronically Stored Information. If electronically
stored information that should have been preserved in the anticipation or
conduct of litigation is lost because a party failed to take reasonable steps
to preserve it, and it cannot be restored or replaced through additional
discovery, the court:

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(1) upon finding prejudice to another party from loss of the information,
may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another
party of the information’s use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was
unfavorable to the party; or
(C) dismiss the action or enter a default judgment.
Fed. R. Civ. P. 37(e).
The Hearing Testimony
The Court will summarize the relevant testimony presented by deposition
designations,3 declarations, and at the June 26, 2020 evidentiary hearing.
Karen Pasquin
Ms. Pasquin was Chief Nursing Officer at SHS and worked with Plaintiff.
Independently of Plaintiff, in the summer of 2017, Ms. Pasquin began complaining to
SHS CEO Kent Rogers that she was concerned that SHS was engaged in Medicaid and
Medicare fraud. After SHS ended Plaintiff’s employment, Ms. Pasquin states that Mr.
Rogers instructed her to destroy documents relating to Plaintiff’s termination. Ms.
Pasquin refused to do so, in part, it seems, because she did not have any such
documents. Ms. Pasquin did not have access to Plaintiff’s computer and did not delete
anything from it. Ms. Pasquin’s employment was terminated in 2018, and she filed a
lawsuit against SHS for wrongful termination (which has since settled).

3

The Court does not make specific rulings regarding the Parties’ various objections to
the deposition designations. Instead, because this was a preliminary evidentiary hearing
before only the Court, all objections have been considered in assigning appropriate
weight to the evidence presented.
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Patricia “Patty” Thomas
Ms. Thomas worked as a medical coder at SHS. Immediately prior to her
termination, Plaintiff was Ms. Thomas’s supervisor. Like Plaintiff, Ms. Thomas was
concerned about how SHS was billing IV insertions, and frequently e-mailed department
heads about the issue. She did not report the matter to state or federal authorities.
Ms. Thomas preserved e-mails in Microsoft Outlook folders organized under the
name of the sender or recipient, including e-mails sent to and received from Plaintiff.
Although Ms. Thomas noticed that after Plaintiff left, her e-mail folder for the head of
registration was missing, along with a “couple” other contacts and e-mails, Ms. Thomas
did not testify that e-mails regarding IV billing or those related to Plaintiff were missing
or otherwise altered. Ms. Thomas was told by SHS management to not destroy or
delete any documents relating to Plaintiff, and she did not do so. Ms. Thomas did not
have access to Plaintiff’s computer and did not delete documents or e-mails from her
computer.
Ms. Thomas and other coders were laid off in May 2018 because SHS
outsourced that function.
David Penrod
Mr. Penrod is Plaintiff’s expert in forensic examination. The crux of his expert
opinion (which SHS has challenged in a motion currently pending before Judge
Krieger)4 is that unallocated space on the hard drive of Plaintiff’s desktop computer was
overwritten after her employment was terminated. “Unallocated space” is where inactive

4

Plaintiff’s motion to strike Defendant’s expert’s report and testimony is likewise
pending before Judge Krieger.
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files (for example, deleted files) are stored. A deleted file in unallocated space can be
retrieved if it is not overwritten.
Mr. Penrod opined that simply starting up and/or shutting down a computer writes
over unallocated space. Other actions will also affect unallocated space. For instance,
Mr. Penrod notes that the Chrome web browser was installed on Plaintiff’s desktop in
November 2017. This was a large file (approximately 18.3 megabytes) and by installing
it, unallocated space was overwritten as a matter of course. Similarly, a very large (3.1
gigabyte) hibernate system file (“hiberfil.sys”), which saves all operating systems when
a computer is put into hibernation/sleep mode, was modified on November 17, 2017,
which resulted in allocated space being overwritten. The same day, another large
system file (“pagefile.sys”) was modified that used over four gigabytes of data, which
necessarily overwrote files in unallocated space.
Mr. Penrod was also concerned about the users who accessed Plaintiff’s
computer after she left SHS. Mr. Penrod states that on November 17 and 18, 2017,
Plaintiff’s computer was turned on and two different user accounts, balexander and
cdennis, as well as the Plaintiff’s user account, rbragg, were logged into, and the
“Angela” desktop folder was accessed. USB storage drives were also attached to the
desktop on November 17, 2017 by someone using the rbragg account. Mr. Penrod
observed that documents can be cut and pasted from a desktop folder onto a USB drive
without being “deleted.” Ultimately, Mr. Penrod’s position is that from the moment she
was terminated, Plaintiff’s computer should have been removed from use and its hard
drive removed and imaged.

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Mr. Penrod conceded that no wiping software was found on Plaintiff’s desktop
computer. He also agreed that his analysis did not show that any user-created files
(such as Microsoft Word, Excel, or Outlook files) were deleted. Mr. Penrod was
admitted that he was not aware that on November 14, 2017, Plaintiff’s counsel served
on SHS a subpoena duces tecum, issued in Plaintiff’s unemployment proceeding, which
demanded documents, including certain e-mails from Plaintiff’s account and the
contents of the “Angela” folder.
Angela Kobel
Plaintiff designated brief portions of Ms. Kobel’s deposition testimony. Ms. Kobel
admitted that after SHS received the litigation hold letter she went on Plaintiff’s
computer, with SHS IT staff present, to look for certain reporting information. She stated
that she saw the “Angela” folder but did not open it or delete any information. Ms. Kobel
testified that she kept printed copies of the screen shots Plaintiff created in a filing
cabinet. She estimated that she received less than ten e-mails from Plaintiff and the
coders about improper documentation.
Robyn Bragg
To the Court’s surprise, Plaintiff did not testify at the evidentiary hearing, even
though there was no argument that she was unavailable to do so (Plaintiff called in and
listened to the proceedings). Instead, Plaintiff relies on designations excerpted from her
two depositions. The Court decided to allow this, although Plaintiff was informed that
her decision not to testify would affect the weight given to her deposition testimony.
After an outside consultant determined that SHS was losing a significant amount
of money by not charging for IVs, in March 2017, Plaintiff was chosen to implement

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coding for inpatient IV insertions. Plaintiff believed it was “illegal” for anyone but the
administering nurse to enter the IV start/stop times. When there were no stop times
entered, or when the stop time was not entered by the administering nurse, Plaintiff
would document it. Plaintiff stated that Ms. Kobel instructed her to do so. Plaintiff copied
Ms. Kobel, Ms. Pasquin, and other SHS employees on e-mails regarding inaccurate IV
coding. Plaintiff testified to the contents of at least three such e-mails. In one, for
example, she asked, “Can you please have the nurse responsible place the IV start and
stop times.” Plaintiff would then move these files to the “Angela” folder. Plaintiff
estimated she sent between 45–85 relevant e-mails between June and August 2017.
Plaintiff believed that there were more “Angela” folder e-mails than were
produced by SHS in discovery, but she could not say for sure which e-mails were in the
folder and which were not. Plaintiff confirmed that the “Angela” folder was a place where
she collected already-existing documents in one place. Plaintiff also verified that a
number of the e-mails she remembers as having been in the “Angela” folder were
produced by the SHS in discovery. Plaintiff could not identify or describe any specific
missing e-mails. Plaintiff also confirmed that SHS had produced in discovery between
45-85 e-mails authored by the Plaintiff (which was consistent with the number of e-mails
she believed were in the “Angela” folder).
Francis Brackin
Mr. Brackin is SHS’s expert in forensic analysis and examination. He reviewed
Plaintiff’s laptop and desktop computers for any deleted files. Mr. Brackin found two
“Angela” folders on the desktop, as well as “Angela” folders in Plaintiff’s e-mail account.
He searched for evidence that user-created files were altered or deleted during the

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relevant period, and while he found that the “Angela” folder was accessed on two days
on November 17 and 18, 2017, there was no other evidence that it had been otherwise
accessed or that any files were deleted. He found no wiping software on the computers.
He also found no evidence that any files were deleted in connection with the two USB
drives that connected to the desktop computer on November 17 and 18, 2017. In his
expert opinion, there was no evidence that user-created files, including e-mails,
documents, spreadsheets, or pictures, were deleted from Plaintiff’s laptop or desktop
computers. This is consistent with Plaintiff’s expert’s testimony: no user-created files
were deleted from Plaintiff’s computer.
Charles Dennis
Charles Dennis was SHS’s interim IT director from October 10, 2016 through
August 17, 2018. After Plaintiff’s employment at SHS ended, Mr. Dennis believes a
“write block” function was placed on Plaintiff’s computer which prevented users from
altering or deleting information or accessing her e-mails. This was the general practice,
and he has no reason to believe that it did not happen in this instance, but he cannot
positively state if or when it did. SHS did not have an auto delete function on any of its
devices. On October 3, 2017, Mr. Dennis received the notice of a litigation hold, after
which IT put Plaintiff’s e-mail on a hold, which meant it could not be accessed, deleted,
or modified. Between October 5 and October 14, 2017, SHS employees could access
Plaintiff’s computer, but could nothing could be deleted.
After SHS received the subpoena duces tecum described above, Mr. Dennis and
another IT employee, Bill Alexander, searched Plaintiff’s desktop for responsive
documents. As administrators, they were able to log in using Plaintiff’s user login

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credentials. Mr. Dennis found the two “Angela” folders on the desktop, and they
contained only two files each. Mr. Dennis used either one or two USB devices to
transfer information responsive to the subpoena from Plaintiff’s desktop to his own
computer. Neither he nor anyone else at SHS accessed the computer again until
September 2018. Mr. Dennis testified that he did not destroy or delete any relevant
information and has no knowledge of any such destruction or deletion.
Charles Krupa
Mr. Krupa is the current Director of Information Services at SHS. He was not
employed at SHS in 2017, but he knew from Mr. Alexander that a hold was placed on
Plaintiff’s e-mail exchange server on October 5, 2017. No documents could be
physically deleted thereafter. Mr. Krupa testified that, applying search terms, a search
was performed of Plaintiff’s e-mail account that produced numerous e-mails from
Plaintiff to Angela Kobel and others. Moreover, Mr. Krupa testified that Plaintiff had an
Outlook folder labeled “Angela K” that contained e-mails regarding Ms. Kobel. Mr. Krupa
was not aware of any relevant information that had been deleted from Plaintiff’s
desktop.
Travis Parker
Mr. Parker is and was during the relevant period the Chief Human Resources
Officer at SHS. Mr. Parker received notice of the litigation hold in this matter on October
2, 2017, and the next day he sent an e-mail out to 20 SHS custodians, along with Mr.
Dennis and Mr. Rogers, explaining they had a duty to preserve and not delete or
destroy any relevant information. Mr. Rogers never told him to delete or destroy
evidence. In November 2017, Mr. Parker told Mr. Dennis to retrieve from Plaintiff’s

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computer the documents referenced in the subpoena duces tecum discussed above,
which he and Mr. Alexander did on November 17 and 18, 2017. Afterwards, they sent
Mr. Parker those documents in zip drive. Those documents were produced to Plaintiff.
Discussion
As the moving party, Plaintiff bears the burden of proving by a preponderance of
the evidence that SHS failed to preserve or destroyed potentially relevant evidence from
her computer. See Ernest v. Lockheed Martin Corp, No. 07–cv–02038–WYD–KLM,
2008 WL 2945608, *1 (D. Colo. July 28, 2008). Absent any evidence that such
documents existed and were destroyed, the Court need not engage in a substantive
spoliation analysis. See Zbylski, 154 F. Supp. 3d at 1160 (“Courts have found, and this
court agrees, that a party seeking spoliation sanction must offer some evidence that
relevant documents have been destroyed.”). Upon review of the evidence before it, the
Court concludes that Plaintiff has not established that it is more likely than not that
relevant evidence has been destroyed or lost. Because she has failed to meet her
burden, her motion must be denied.
First, the Court finds that there are no facts supporting Plaintiff’s contention that
SHS acted improperly in preserving documents. The evidence indicates that SHS’s
usual practice was that after an individual’s employment ended, a “write block” function
would be placed on his or her computer which prevented users from altering or deleting
information. The Court has no reason to believe that this did not happen after Plaintiff
left SHS on August 17, 2017. In any case, a litigation hold letter was sent by Plaintiff’s
counsel to SHS on September 25, 2017. SHS’s legal counsel notified Mr. Parker of the
hold on October 2, 2017. The litigation hold was implemented the next day. On either

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October 5 or October 9, 2017, an exchange server litigation hold was placed on
Plaintiff’s computer that would not permit any user to delete e-mails. After accessing the
desktop computer in order to respond to Plaintiff’s own subpoena, the evidence
supports SHS’s position that the device was then secured and not reissued or used by
any other SHS employee. The next activity in September 2018 was related to this
litigation. On this evidence, the Court concludes that SHS fully complied with its legal
obligations to preserve relevant electronic evidence.
Next, there is zero evidence that SHS destroyed any relevant evidence or that
any such evidence was lost or deleted. Plaintiff alleges that documents in the “Angela”
folder appear to be missing and therefore must have been destroyed. But Mr. Brackin
testified that no user-created files were deleted from Plaintiff’s computers during the
applicable timeframe. That testimony was confirmed by Plaintiff’s expert. Instead,
Plaintiff’s expert Mr. Penrod focused on whether system files were created and
unallocated space overwritten. The Court does not find this evidence, even accepted as
true, particularly germane to the question before it. The “Angela” folder referenced by
Plaintiff indisputably contained user-created files, not system files. If there is no
evidence that user-created files were deleted, there can be no spoliation as it relates to
the “Angela” folder or related, user-created documents. And Plaintiff’s speculation that
files were copied and pasted from her computer onto a USB drive is just that, pure
speculation.
If the Court were to accept Plaintiff and Mr. Penrod’s position, spoliation would
necessarily occur in almost every lawsuit involving ESI. As Mr. Penrod acknowledges,
mundane acts like turning a computer on and off or putting it in sleep mode will

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automatically create system files which will then overwrite unallocated space. Here, that
would mean that by attempting to respond to Plaintiff’s subpoena, SHS engaged in
spoliation of evidence. Such a result would be absurd. There may be a case where
overwriting unallocated space may result in the loss or destruction of potentially relevant
information. This is not such a case.
Significantly, Plaintiff cannot even say with any specificity what information she
believes is being kept from her. Again, she did not testify at the hearing. It is beyond
belief that a party whose lawyers assert she should be granted judgment without any
trial as a sanction for intentional destruction of evidence would not be willing to appear
by telephone or video-conference and swear under oath, subject to cross examination,
as to what evidence she believes was destroyed. Plaintiff presumably knows what was
in the “Angela” folder. She should have testified live about what was supposedly
missing and subjected herself to cross examination. Nothing in her designated
deposition testimony provided any support for the claims of spoliation. To the contrary,
in her deposition, Plaintiff estimated that she sent between 45 and 85 e-mails to Ms.
Kobel regarding IV coding and billing practices. The number of such e-mails collected
by SHS and produced in discovery falls within this range. Plaintiff was also presented
with several of these e-mails during her deposition and was unclear whether they would
have been found in the “Angela” folder. And if they were not located in the “Angela”
folder, given the nature of e-mail, they were still recoverable and discoverable through
the accounts of the sender/recipient or anyone else who was copied on the them. Most
tellingly, an “Angela” folder containing e-mails was found on Plaintiff’s e-mail account.
The Court suspects that simple confusion between the computer’s “desktop” and the

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computer’s e-mail folders is part of the claimed discrepancy. But Plaintiff’s confusion
over saving something on a folder located on a computer’s “desktop” and saving
something in an e-mail folder does not a spoliation case make.
In any event, the undisputed evidence shows that no user-created files were
deleted or destroyed by SHS. Neither the Plaintiff herself nor Plaintiff’s forensic expert
could point to any evidence that any relevant files in this case were destroyed or not
preserved. I further find by a preponderance of the evidence that SHS acted
appropriately and in conformance with its legal obligations in issuing a litigation hold and
taking appropriate steps to ensure that relevant information, including ESI, was properly
preserved.
In sum, I do not find that any ESI that should have been preserved was lost. I do
not find that SHS failed to take reasonable steps to preserve ESI. To the contrary, SHS
took reasonable steps to preserve relevant ESI. I do not find that Plaintiff has been
prejudiced in any way from the loss of ESI. And I do not find that SHS acted with the
intent to deprive Plaintiff of the use of any ESI in the litigation. See Fed. R. Civ. Pro.
37(e).
Finally, SHS seeks its fees and costs for having to defend the spoliation motion
but does does not cite the authority under which fees are sought. Under Rule 11, the
Court may award sanctions when a pleading or motion is for an improper purpose,
contains claims or contentions not “warranted by existing law or by a nonfrivolous
argument for extending, modifying, or reversing existing law,” or contains factual
contentions that lack evidentiary support. Fed. R. Civ. P. 11(b)–(c). However, a motion
for sanctions under Rule 11 “must be made separately from any other motion and must

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describe the specific conduct that allegedly violates Rule 11(b).” Fed. R. Civ. P. 11(c).
Moreover, the opposing party must be given a reasonable opportunity to respond. Fed.
R. Civ. P. 11(b).
Without deciding one way or the other, the Court will consider a suitably
supported sanctions motion. SHS shall have until July 27, 2020 to file such a motion.
Any response shall be filed on or before August 7, 2020. No reply will be accepted
without leave of Court.
For the reasons set forth herein, Plaintiff’s Motion for Spoliation Sanctions (Dkt.
#133) is DENIED.

Dated: July 13, 2020
N. Reid Neureiter
United States Magistrate Judge

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