Heggen v. Maxim Healthcare Services, Inc.

Filing 52

OPINION AND ORDER: Maxim's motion for sanctions 35 is GRANTED IN PART in that Heggen is ORDERED to pay the reasonable expenses, including attorney's fees, that Maxim incurred in filing the motion for sanctions, pending Maxim's submis sion of a supporting affidavit. The motion for sanctions is OTHERWISE DENIED. Heggen is duly WARNED that any additional discovery transgressions may result in further sanctions against her, up to and including dismissal of this case. Signed by Magistrate Judge Susan L Collins on 4/27/2018. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
THERESA HEGGEN,
Plaintiff,
v.
MAXIM HEALTHCARE SERVICES,
INC.,
Defendant.

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CAUSE NO. 1:16-cv-00440-TLS-SLC

OPINION AND ORDER
Before the Court in this employment-related case is a motion for sanctions filed by
Defendant Maxim Healthcare Services, Inc. (“Maxim”), asking that the Court dismiss Plaintiff
Theresa Heggen’s (“Heggen”) complaint as a sanction due to Heggen’s alleged dishonesty under
oath and destruction of evidence. (DE 35). The motion is ripe for ruling. (DE 44; DE 45; DE
47).
For the following reasons, Maxim’s motion for sanctions will be granted to the extent
that a lesser sanction in the form of a monetary penalty will be imposed; Maxim’s request for the
sanction of dismissal, however, will be denied.
A. Factual and Procedural Background
Heggen filed this case against her former employer, Maxim, on December 29, 2016,
advancing claims of sexual harassment and retaliation in violation of Title VII of the 1964 Civil
Rights Act, 42 U.S.C. § 2000e et seq. (DE 1). Maxim is a provider of temporary medical
staffing, home health care, and wellness services, and Heggen was employed by Maxim as a
home health care aide. (DE 36 at 1).

The Court held a preliminary pretrial conference on March 9, 2017, setting a discovery
deadline of September 29, 2017, and discovery then commenced. (DE 15). On May 26, 2017,
Heggen responded to Maxim’s First Set of Interrogatories (DE 36-9) and First Request for
Production (DE 36-1), and on August 11, 2017, Maxim conducted Heggen’s deposition (DE 362).
On October 25, 2017, Heggen’s prior counsel filed a motion to withdraw, which the
Court granted after a hearing on the motion. (DE 27-DE 29). New counsel appeared on
Heggen’s behalf on November 22, 2017. (DE 30).
On December 12, 2017, Maxim filed the instant motion for sanctions, seeking the
sanction of dismissal due to Heggen’s alleged dishonesty under oath and destruction of certain
cell phone recordings that are material evidence in this case. (DE 35).
B. Applicable Legal Standard
The Seventh Circuit Court of Appeals has “construed the sanctioning power conveyed by
[Federal Rule of Civil Procedure] 37 to extend to instances of a party hiding evidence and lying
in [her] deposition.” Ramirez v. T&H Lemont, Inc., 845 F.3d 772, 776 (7th Cir. 2016) (citation
omitted). “Apart from the discovery rule, a court has the inherent authority to manage judicial
proceedings and to regulate the conduct of those appearing before it, and pursuant to that
authority may impose appropriate sanctions to penalize and discourage misconduct.” Id. (citing
Chambers v. NASCO, Inc., 501 U.S. 32, 46-50 (1991)). “Dismissal can be appropriate when the
plaintiff has abused the judicial process by seeking relief based on information that the plaintiff
knows is false.” Secrease v. W. & S. Life Ins. Co., 800 F.3d 397, 401 (7th Cir. 2015) (citations
omitted); see also Greviskes v. Univs. Research Ass’n, Inc., 417 F.3d 752, 759 (7th Cir. 2005).
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“A court also has the inherent power to assess sanctions for the failure to preserve or
produce [evidence.]” United States v. Dish Network, L.L.C., 292 F.R.D 593, 599-600 (C.D. Ill.
Apr. 24, 2013) (citation omitted); see Bryant v. Gardner, 587 F. Supp. 2d 951, 967-68 (N.D. Ill.
Nov. 21, 2008) (“The Court has discretion to sanction a party for spoliation of evidence.”
(citation omitted)). “A party has a duty to preserve evidence over which it has control and
reasonably knows or could foresee would be material to a potential legal action.” Bryant, 587 F.
Supp. 2d at 967-68 (citations omitted); see also ChampionsWorld, LLC v. U.S. Soccer Fed’n,
276 F.R.D 577, 582 (N.D. Ill. Aug. 17, 2011) (citation omitted). “Sanctions [for spoliation of
evidence] include awarding reasonable expenses, attorney fees, barring evidence or arguments,
permitting adverse inferences, and dismissing claims or entering default judgment.” Bryant, 587
F. Supp. 2d at 968 (citations omitted); see Norman-Nunnery v. Madison Area Tech. Coll., 625
F.3d 422, 428 (7th Cir. 2010) (“In order to draw an inference that the missing documents
contained information adverse to the defendants, [the plaintiff] must demonstrate that the
defendants intentionally destroyed the documents in bad faith.” (citations omitted)).
“[A]n award of sanctions must be proportionate to the circumstances surrounding the
failure to comply with discovery.” Crown Life Ins. Co. v. Craig, 995 F.2d 1376, 1382 (7th Cir.
1993). When a court enters a dismissal as a discovery sanction, “the court must find that the
party against whom sanctions are imposed displayed willfulness, bad faith or fault.” In re
Golant, 239 F.3d 931, 936 (7th Cir. 2001) (citations omitted); see Secrease, 800 F.3d at 401 (“A
district court has inherent power to sanction a party who has willfully abused the judicial process
or otherwise conducted litigation in bad faith.” (citations and internal quotation marks omitted));
see also Collins v. Illinois, 554 F.3d 693, 696 (7th Cir. 2009). The Seventh Circuit has cautioned
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that a court must use its dismissal power sparingly, as it is a “harsh sanction” which should “be
employed only as a last resort.” Rice v. City of Chicago, 333 F.3d 780, 786 (7th Cir. 2003)
(citation omitted).
C. Analysis
Maxim requests that this case be dismissed as a sanction for Heggen’s purported
dishonesty under oath and destruction of recordings from her cell phone. Maxim contends that
Heggen lied under oath about three topics: her employers prior to Maxim, the circumstances of
her departures from employers after Maxim, and her litigation history. Heggen responds that
sanctions are not warranted because any issues concerning her credibility can be challenged at
trial, and because some of the missing recordings have since been located at the Fort Wayne
Metropolitan Human Relations Commission (“METRO”). The Court will address each of
Maxim’s reasons for requesting sanctions in turn.
1. Heggen’s Employers Prior to Maxim
In response to Maxim’s First Request for Production, Heggen identified her employers
prior to Maxim as “Brightstar and Lutheran Hospital.” (DE 36-1 at 7). Then at her deposition,
Heggen testified under oath that she worked for “Rescare” prior to Maxim. (DE 36-2 at 5).
Maxim, however, has since learned through a discovery request to the Indiana
Department of Workforce Development that Heggen worked for Interim Health Care (“Interim”)
immediately prior to joining Maxim. After reviewing records it obtained from Interim, Maxim
contends that the circumstances of Heggen’s departure from Interim are “strikingly similar” to
Heggen’s tumultuous tenure at Maxim, including that a patient’s medications went missing,
Heggen then tested positive for the missing medications on a drug test, and Heggen failed to
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return to work after the complaint. (DE 36 at 4-5). Maxim argues that Heggen was obviously
attempting to hide her employment at Interim by lying under oath about her prior employers.
In an affidavit submitted with her response brief, Heggen admits that she also worked at
Interim prior to her employment with Maxim. (DE 45-4 ¶ 1). She contends, however, that she
did not intentionally omit naming Interim as one of her prior employers, but that she worked for
several home health care providers and sometimes more than one at a time. (DE 45-4 ¶ 2). She
also disputes that she failed any drug test at Interim. (DE 45-4 ¶ 2).
The Court views Heggen’s explanation, to the extent she offered one, lacking in
credibility. Interim was Heggen’s most recent employer prior to Maxim, and thus, it seems
unlikely that she would simply forget to include Interim when identifying her prior employers,
particularly where the circumstances of her departure from Interim bore similarity to her
departure from Maxim. Rather, Heggen’s omission appears intentional. Therefore, sanctions in
some form are warranted against Heggen for her failure under oath to name Interim when asked
to identify her employers prior to Maxim.
2. The Circumstances of Heggen’s Departures from Employers After Maxim
At her deposition, Heggen identified Help at Home, Inc. (“HHI”), and “Ms. Patricia” as
her employers after Maxim. Heggen stated under oath that she chose to leave these employers
“voluntarily” because the two clients with whom she worked were going into a nursing home.
(DE 36-2 at 16, 18).
Maxim points out, however, that HHI’s records show that HHI terminated Heggen after
she refused to go back to HHI’s office to discuss a complaint by a client in Heggen’s care that
Heggen stole $300 from her. (DE 36 at 5; DE 36-6 at 3-12). Maxim also states that a legal
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representative for Ms. Patricia notified Maxim that Heggen was terminated for her
mismanagement of Ms. Patricia’s financial assets. (DE 36 at 6).
Heggen disputes the allegations that she was terminated by HHI or Ms. Patricia, as well
as the allegations that she committed theft while at HHI. (DE 45-4 ¶ 2). As to HHI, its records
show that after Heggen was terminated after she refused to come in to issue a statement
responding to the client’s complaint. (DE 36-6 at 4). Maxim has not submitted any records from
Ms. Patricia.
The Court considers it possible, perhaps, that Heggen’s testimony at her deposition that
her departure from HHI was “voluntary” could be based on Heggen’s view that she voluntarily
left HHI when she failed to come back to HHI and issue a statement about the client’s complaint.
That is, Heggen may take the view that she quit HHI before it could fire her. Because there are
no records submitted from Ms. Patricia, the terms of Heggen’s departure from that position are
subject to dispute. As such, the Court finds that sanctions are not warranted based on Heggen’s
testimony about the circumstances of her departures from her employers after Maxim.
3. Prior Litigation
Maxim also contends that Heggen lied under oath about her litigation history. During her
deposition, Heggen was asked whether her lawsuit against Lutheran Hospital was the only case
she had been involved in before the instant case, and Heggen responded, “Yes. That’s my
recollection.” (DE 36-2 at 4).
Maxim points out, however, that a search of the online court docket for the State of
Indiana reveals at least 32 actions in which Heggen was a plaintiff or a defendant, including a
case in which Heggen was charged with conversion. (DE 37-7). Maxim argues that Heggen
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sought to hide her litigation history in order to prevent Maxim from investigating it. (DE 36 at
7).
Heggen responds in her affidavit that she thought the question posed to her during her
deposition concerned whether she had been involved in any other employment litigation. (DE
45-4 ¶ 2). She stated that she did not try to intentionally hide any other matters that she had been
involved in. (DE 45-4 ¶ 2).
The Court observes that Heggen’s litigation history involves primarily small claims,
mortgage foreclosure, and ordinance infractions. While Maxim makes much of the fact that
Heggen was unlikely to forget a conversion charge, it is certainly feasible that Heggen did not
view Maxim’s question at her deposition to pertain to criminal charges that were later dismissed,
or these other small claims matters. Therefore, the Court finds Heggen’s explanation—that she
viewed the question to pertain to employment-related litigation—reasonable. Accordingly,
sanctions are not warranted based on Heggen’s response under oath to Maxim’s question about
her litigation history.
4. Destruction of the Cell Phone Recordings
Maxim also contends that Heggen destroyed key evidence in at least three different ways
and that this, too, provides grounds for dismissal of this action as a sanction. In that regard,
Heggen testified at her deposition that she made about seven recordings of unidentified Maxim
employees. (DE 36-2 at 6-8). She cited these recordings as evidence supporting her claims
against Maxim, both at her deposition and in her written discovery responses. (DE 36-2 at 6-8,
10-11, 20, 24; DE 36-9 at 4).
Heggen testified at her deposition that the Equal Employment Opportunity Commission
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(“EEOC”) has the recordings. (DE 36-2 at 6-7; see also DE 45-4 ¶ 3). She testified that she
deleted the recordings from her cell phone only after she played them for her attorneys and sent
them to the EEOC, because she “didn’t want them to have [her] phone lost and have them be out
there.” (DE 36-2 at 7). She testified that she had emailed the recordings to the EEOC, but that
she could not find any copy of the email transmitting the recordings. (DE 36-2 at 13-14). Then
at some point, Heggen performed a factory reset of her phone that apparently deleted all of the
data stored on it, including the recordings. (DE 36-2 at 26-27).
Heggen admitted during her deposition that she understood that she should not destroy an
original record that could be evidence in this lawsuit. (DE 36-2 at 26). Maxim argues, then, that
there is no doubt Heggen’s destruction of the recordings was intentional. Maxim states that it
has tried to obtain the recordings from the EEOC and METRO, but “neither . . . had any such
recordings.” (DE 36 at 7).
Heggen responds in her affidavit that she did not destroy the recordings, but rather she
preserved the recordings by sending them to the EEOC/METRO. (DE 45-4 ¶ 3). She states that
she was worried about having the recordings on her phone, and thus, that she delivered them to
her prior attorneys and to the EEOC/METRO. (DE 45-4 ¶ 3). She explains that after preserving
the recordings in that manner, she “thought it was okay to get rid of them[.]” (DE 45-4 ¶ 3). She
also stated that her phone was an older Apple model that basically had “broke[n] down,” and that
she performed a factory reset in an effort to get it working again. (DE 45-4 ¶ 3). As such,
Heggen argues that sanctions are not warranted, and certainly not the harsh sanction of dismissal
of her case.
Heggen further emphasizes that her current counsel located three of the missing
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recordings at METRO within one month of her counsel’s appearing in this action, and thus, she
does not understand why Maxim was unable to obtain them too. (DE 45-4 ¶ 3; DE 45-6; DE 451 ¶ 6-8; DE 45 at 4). Heggen submitted transcripts of these recordings with her response brief,
and she also provided a copy of the recordings and transcripts to Maxim. (DE 45-5; DE 45 at 4).
In reply, Maxim points out that only three of the seven missing recordings have been
located, and Heggen offers no explanation for the other missing recordings. (DE 47 at 1-2).
Maxim emphasizes that it sought the recordings from Heggen for months through traditional
discovery and that it did not have the recordings when it deposed Heggen, resulting in prejudice
to Maxim. (DE 47 at 3). Maxim argues that there is a significant difference between original
recordings and copies of recordings. (DE 47 at 2); see McWilliams v. McWilliams, No. 06 C
3060, 2006 WL 3332879, at *2 (N.D. Ill. Nov. 15, 2006) (“[T]he ‘best evidence’ . . . is the
original recording.” (citation omitted)). Maxim articulates that what Heggen submitted appears
to be at least two different layers of recorded conversations: “an ongoing face-to-face interaction
between individuals who are supposedly simultaneously listening to and participating in a
different interaction by telephone, all recorded on top of each other.” (DE 47 at 2).
Maxim further emphasizes that the located recordings are copies, which deprives it of an
opportunity to delve into the original metadata of the recordings. (DE 47 at 2). Maxim further
observes that while the original recordings were made on an iPhone, the files Heggen produced
are in 3GP format, which is a format generally used by Android phones, raising further
questions. (DE 47 at 3). Maxim argues that given all of the foregoing factors, Heggen’s
intentional destruction of the recordings, and the resulting prejudice to Maxim, the serious
sanction of dismissal is warranted in this instance.
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Having considered the parties’ positions, there is no dispute that Heggen had a duty to
preserve the recordings, as she knew the recordings’ relevancy to this legal action when she
deleted them. See Banks v. Enova Fin., No. 10 C 4060, 2012 WL 12539830, at *4 (N.D. Ill. July
10, 2012) (“[A] person or entity has an ongoing duty to preserve evidence over which it has
control and reasonably knows or can foresee would be material—and thus relevant—to a
potential legal action.” (citation omitted)). To determine whether sanctions are appropriate, the
Court must determine whether Heggen “acted willfully, in bad faith, or if [she was] merely at
fault.” Id. (citation omitted).
“To find bad faith, a court must determine that the party intended to withhold unfavorable
information.” Id. (citations omitted); see Mathis v. John Morden Buick, Inc., 136 F.3d 1153,
1155 (7th Cir. 1998). Heggen admits that she intentionally deleted the recordings, but
emphasizes that she did so only after she thought she had preserved them by playing them for her
lawyers and sending them to the EEOC. As such, there is no evidence that Heggen deleted the
original recordings with the intent “to withhold unfavorable information.” Banks, 2012 WL
12539830, at *4 (citations omitted). In fact, according to Heggen, the recordings contain
information favorable to her, rather than Maxim. See Norman-Nunnery, 625 F.3d at 428 (“The
crucial element in a spoliation claim is not the fact that the documents were destroyed but that
they were destroyed for the purpose of hiding adverse information.” (citations omitted)); Faas v.
Sears, Roebuck & Co., 532 F.3d 633, 644 (7th Cir. 2008) (same).
Nevertheless, “[f]ault may be evidenced by negligent actions or a flagrant disregard of
the duty to preserve potentially relevant evidence.” Banks, 2012 WL 12539830, at *4 (citations
omitted). “A party fulfills its duty to preserve evidence if it acts reasonably.” Id. (citation
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omitted). The Court finds that Heggen acted negligently when she deleted the original
recordings from her cell phone, performed a factory reset of her phone, and then either lost or
deleted the email trasmitting the recordings—all during the pendency of this suit. Accordingly,
sanctions in some form are warranted against Heggen for her negligence in failing to preserve all
of the original recordings.
5. Type of Sanctions to be Imposed
As concluded above, some form of sanctions are warranted against Heggen for her failure
under oath to disclose Interim as a prior employer and for her destruction of the original cell
phone recordings. A sanction for discovery abuse must be “a proportionate response to the
circumstances.” Watkins v. Nielsen, 405 F. App’x 42, 44 (7th Cir. 2010) (citations omitted).
The draconian sanction of dismissal is not presently warranted here.1 Rather, the present
circumstances warrant the imposition of lesser sanctions in the form of a monetary penalty—that
is, ordering Heggen to pay the reasonable expenses, including attorney’s fees, that Maxim
incurred in filing the motion to compel. See Fed. R. Civ. P. 37(b)(2)(C). The Court has no
reason, at least at this juncture, to conclude that the imposition of this monetary penalty would be
fruitless. See Watkins, 405 F. App’x at 46 (stating that the court should first explore the
effectiveness of lesser sanctions before imposing the harsh penalty of dismissal). Additionally, a
spoliation charge to the jury concerning the recordings may be appropriate should this case
proceed to trial. See Banks, 2012 WL 12539830, at *7 (explaining that a spoliation charge

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Because of the harsh nature of the sanction of dismissal, it is most prudent not to dismiss a case unless the
non-complying party has been sufficiently warned that further intransigence warrants dismissal. See Fischer v.
Cingular Wireless, LLC, 446 F.3d 663, 665 (7th Cir. 2006). To date, Heggen has not received such a warning from
this Court.

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permits, but does not require, a jury to presume that the lost evidence is both relevant and
favorable to the innocent party). That possible sanction, however, should be raised by Maxim in
pretrial motions, as the Court finds it premature to impose such a sanction at this juncture.
In sum, Maxim’s motion for sanctions will be granted in part in that Heggen will be
ordered to pay the reasonable expenses, including attorney’s fees, that Maxim incurred in filing
the motion to compel, pending Maxim’s submission of a supporting affidavit. Heggen is warned
that any additional discovery transgressions may result in further sanctions against her, up to and
including dismissal of this action.
D. Conclusion
For the foregoing reasons, Maxim’s motion for sanctions (DE 35) is GRANTED IN
PART in that Heggen is ORDERED to pay the reasonable expenses, including attorney’s fees,
that Maxim incurred in filing the motion for sanctions, pending Maxim’s submission of a
supporting affidavit. The Court will also consider a spoliation instruction upon a pretrial motion
by counsel should this case go to trial. The motion for sanctions (DE 35) is OTHERWISE
DENIED. Heggen is duly WARNED that any additional discovery transgressions may result in
further sanctions against her, up to and including dismissal of this case.
SO ORDERED.
Entered this 27th day of April 2018.
/s/ Susan Collins
Susan Collins
United States Magistrate Judge

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