Community Association Underwriters of America, Inc. et al v. Queensboro Flooring Corp.
Filing
225
MEMORANDUM (Order to follow as separate docket entry) re 194 Fourth MOTION for Sanctions Against The Village at Camelback Property Owners Association and Kathleen Simoncic for their continued violations of the Court's discovery Orders and their pattern of discovery abuses filed by Agnieszka Zofia Pozarlik, Arkadiusz Piotr Pozarlik. Signed by Magistrate Judge Karoline Mehalchick on 4/6/2015. (cw)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
COMMUNITY ASSOCIATION
UNDERWRITERS OF AMERICA, INC.,
a/s/o VILLAGE AT CAMELBACK
PROPERTY OWNER ASSOCIATION,
et al.,
CIVIL ACTION NO. 3:10-CV-1559
(MEHALCHICK, M.J.)
Plaintiffs,
v.
QUEENSBORO FLOORING CORP.,
Defendants.
MEMORANDUM OPINION
This is a consolidated action concerning property damage and personal injury claims
arising out of an explosion and fire in July 2009 that occurred during construction work at a
townhouse located in Tannersville, Pennsylvania. Several cases have been consolidated into
this one action. The present dispute concerns the parties originally named in Pozarlik v.
Camelback Associates, Inc., No. 3:11-CV-1349, which was joined into this consolidated action on
March 15, 2012. (Doc. 31). Arkadiusz Piotr Pozarlik and Agnieszka Zofia Pozarlik (the
“Plaintiffs”), assert negligence and loss of consortium claims against several defendants,
including the Village at Camelback Property Owners Association, Inc., and its property
manager, Kathleen Simoncic (together, the “Defendants”).
Now before the Court is Plaintiffs’ motion for Rule 37 sanctions (Doc. 194). The motion
has been fully briefed, and oral argument on both motions was held on March 24, 2015.
In their motion, Plaintiffs request the imposition of sanctions in the form of a default
judgment against the Defendants for a variety of transgressions that have violated a total of five
discovery orders and have purportedly continued to transpire even after the Court’s July 3,
2014, Order, including failure to timely disclose or produce certain discoverable information or
documents, failure to preserve audio and tape recordings, concealment of various discoverable
documents, sanitization of various files, and general dilatoriness, lack of candor, and lack of
good faith in responding to discovery and in discovery-related motions practice before the
Court. See 28 U.S.C. § 1927; Fed. R. Civ. P. 26(g)(3); Fed. R. Civ. P. 30(d)(2); Fed. R. Civ. P.
37(a); Fed. R. Civ. P. 37(b)(2); Fed. R. Civ. P. 37(c)(1).
This motion addresses several different categories of alleged improper behavior on the
part of the Defendants.
I.
CATEGORIES OF DISCOVERY
A. KATHLEEN SIMONCIC’S PERSONNEL AND HOME FILE
Plaintiffs recently discovered through the August 12, 2014, deposition of the newly
installed President of the Board of Directors John Chironna, and through the October 28, 2014,
re-deposition of Kathleen Simoncic, that Simoncic was terminated in 2008 and rehired in 2009
as a result of “misconduct.” (Doc. 194, at 10). At this deposition, Chironna revealed that the
topic of Simoncic’s firing was discussed at a June 14, 2009, board meeting. (Doc. 194-10, at 2).
Both Chironna and Simoncic testified at their depositions that any documentation pertaining to
Simoncic’s firing should be located in her personnel file. (Doc. 194-16, at 6). Simoncic also
testified that she maintained a “home” file that contained information pertaining to her
unemployment appeals, including certain email correspondence between Simoncic and the
Board. (Doc. 194-14, at 3).
Plaintiffs contest that this discoverable information should have been disclosed prior to
this Court’s July 3, 2014 Order. (Doc. 194, at 9). Specifically, Plaintiffs rely on Simoncic’s
October 28, 2014, deposition in which she reveals that there was no justification for her failure
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to disclose her termination at her December 11, 2013, deposition, Simoncic’s affidavit swearing
that she made an exhaustive search of all documents requested by Plaintiffs and at all times
produced what she had, as well as the board meeting minutes initially produced, which were
extensively redacted to omit any reference to the circumstances of Simoncic’s termination, as
evidence of a pattern of purposeful concealment of documents that support the theory of their
case. (Doc. 194, at 9-12). Moreover, Plaintiffs advance the argument that Defendants are
presently withholding documents pertaining to Simoncic’s firing in 2008 that are referenced in
the Board meeting minutes, including “her claim, hearing, denial, and appeal regarding
unemployment benefits.” (Doc. 194, at 11). Plaintiffs argue that the personnel file produced on
August 6, 2013, does not contain said documentation despite Chironna’s and Simoncic’s
assurances that the documents would be located in her file. Moreover, Plaintiffs currently
contest that the “home” file produced is an exact copy of the personnel file but with different
Bates numbers. (Doc. 224, at 8). Plaintiffs conclude that they were deprived of utilizing these
documents in their deposition of Carl Karchner, the maintenance supervisor, which has caused
them significant prejudice. (Doc. 224, at 7).
Defendants offer a number of responses to Plaintiffs’ arguments. Defendants argue that
Simoncic’s termination is not relevant and would not lead to the discovery of more admissible
evidence, as other testimony has revealed that she was not terminated for “misconduct,” but
rather for “political” reasons. (Doc. 201, at 11; Doc. 224, at 11). Nevertheless, Defendants
maintain that they have fully complied with this Court’s July 3, 2014, Order by producing an
additional thousand documents, including unredacted copies of the board minutes for
November and December of 2008, and January, February, and March of 2009, and by
declaring to Plaintiffs that they produced the entire personnel file on August 6, 2013. (Doc. 224,
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at 13). As for the purportedly missing documents, Defendants argue that Chironna and
Simoncic merely testified that any documentation relating to Simoncic’s termination should be
located in Simoncic’s employment file, and moreover, that Simoncic could not oversee the
filing system during that period that her file would have been supplemented with these
documents as she was no longer employed with The Village. (Doc. 201, at 12). With respect to
Simoncic’s “home” file, Defendants cannot explain the disappearance of the e-mail
correspondence from the home file, but they assure the Court that if these documents existed
they would produce them, given this Court’s “substantial” sanction on July 3, 2014. (Doc. 224,
at 12).
B. BOARD MEETING MINUTES WITH ATTACHED DOCUMENTS
On August 1, 2013, this Court entered an Order denying Plaintiffs’ motion to compel
Defendants to produce all board meeting minutes and attached documentation from August,
2005, to the present, based on Defendants’ representation to this court that everything within
their possession was produced in response to the initial discovery request. (Doc. 116). However,
on September 11, 2014, after prompting from Plaintiffs’ counsel, and after this Court’s
imposition of sanctions on July 3, 2014, Defendants produced Board meeting minutes for
November and December of 2008, as well as from January, February, and March 2009. (Doc.
194, at 13).
Plaintiffs now argue that the various documents referenced in the board meeting minutes
should be attached to those board meeting minutes, and that the same have been withheld. In
response, Defendants submit that all documents in their possession have been produced.
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C. EMPLOYMENT/PERSONNEL MANUALS, SECURITY PERSONNEL MANUALS AND JOB
DESCRIPTIONS
During the July 28, 2014, depositions of Dave Kalucki and Christopher Travis,
maintenance employees for The Village, Plaintiffs discovered that Defendants possessed
employment manuals that were distributed to employees upon hire. (Doc. 194-23, at 3; Doc.
194-24, at 3). In response to this deposition testimony, Plaintiffs requested that Defendants
produce all employment manuals, handbooks or orientation packages. (Doc. 194-7). On
September 2, 2014, Defendants produced the “Administrative Personnel Policies and Practices
Manual revised February 1997.” (Doc. 194, at 20).
Plaintiffs argue that Defendants misrepresented to the Court in 2013 that they did not
possess any employment manuals, handbooks, orientation packages, or job descriptions, only
producing some of these documents after Plaintiffs’ counsel prompted Defendants to do so in a
letter dated August 2014, and after maintenance personnel testified that they received an
employment manual. (Doc. 194, at 19). Plaintiffs also argue that Simoncic revealed in her
December 11, 2013, deposition that she was in receipt of a job description along with signed
acknowledgement form that has not been produced. (Doc. 194, at 22). Plaintiffs assert that they
have been subjected to prejudice, as they were “deprived of using these documents [during] the
depositions of Simoncic, Karcher, Board members, and [m]aintenance workers.” (Doc 194, at
22).
Defendants respond that they first learned of the existence of these manuals when the
depositions of Kalucki and Travis were taken on July 28, 2014. (Doc. 224, at 40). Prior to those
depositions, Defendants were under the impression that these documents did not exist, as
evidenced by the depositions of Chironna, Lewitzky and Glazer, who all testified that they were
unaware of the existence of a handbook or employee manual. (Doc. 224, at 40). Defendants
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assert that when they learned of the existence of these documents, they produced them,
including the revised 1997 employment manual, which they maintain is arguably the only
employment manual that existed in 2009, as well as a “new” employee handbook that was
revised in November of 2013. (Doc 194, at 20). They also concede that all other documents
cannot be located.
D. UNIT OWNER COMPLAINTS
Plaintiffs assert that both Simoncic and Karchner testified in their depositions that
various unit owners submitted complaints regarding the unapproved construction work at Unit
298 prior to the explosion on July 22, 2009. (Doc. 194, at 23). Furthermore, Simoncic assured
Plaintiffs that she would provide the names and addresses of each of those unit owners who
complained. (Doc. 194, at 24). In response to that deposition testimony, Plaintiffs requested
copies of those complaints on numerous occasions. However, to date, Plaintiffs have not
received these unit-owner complaints, and as such, argue that this amounts to purposeful
concealment.
Defendants maintain that the are unable to locate these unit owner complaints. They
have produced, however, a work order complaint form labelled “Document 3373.” (Doc. 224,
at 64).
E. JULY 12, 2007 E-MAIL
Plaintiffs claim that Defendants were instructed to produce the original, individual email correspondence between Simoncic and Lewitzky within ten days of this Court’s Order
dated November 25, 2014. (Doc. 194, at 24).However, Plaintiffs assert that Defendants only
produced the third page of the document on the tenth day in violation of the Order. (Doc. 194,
at 27). Upon prompting from Plaintiffs, Defendants produced the first two pages of the
document twenty-one days after this Court’s Order. Attached to the three pages of e-mail
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correspondence was a photograph that Plaintiffs claim was previously disguised as attorney
work product submitted for in camera review. (Doc. 194, at 27-28).
Defendants assert that they were unsure if the photograph submitted for in camera
review was actually the photograph originally attached to the e-mail. (Doc. 194-33, at 2).
Nevertheless, they argue in response that this Court has previously resolved these disputes with
respect to the e-mail and photograph. (Doc. 201, at 15).
F. TAPE RECORDING
In their present motion, Plaintiffs reiterate the argument made in their third motion for
sanctions with respect to a lost audio tape recording audio recording which contained the
interviews of several employees of the property owners association describing the incident the
day after the explosion. (Doc. 162). This Court addressed the missing audiotape in its July 3,
2014 Order, noting that “[w]hatever the present disposition of the tape, it is clear to the Court
that the Defendants violated their fundamental duty to preserve relevant evidence when they
failed to retain the tape,” and granting Plaintiff’s motion with respect to the missing tape
recording. (Doc. 175). Plaintiffs now argue in the instant motion that they have acquired
evidence of prejudice stemming from the lost audio tape recording; namely testimony from the
employees interviewed that their memories have faded with respect to the contents of the audio
recording. (Doc. 194, at 31).
The Defendants have consistently responded that they did not possess the tape. (Doc.
145-17; Doc. 145-18; Doc. 145-21, at 62; Doc. 145-23, at 2; Doc. 145-34; Doc. 145-36; Doc.
160-24; Doc. 164-9; Doc. 164-13). At oral argument, counsel for the Defendants reiterated their
representation that the tape was not presently in their possession, custody or control.
Defendants also argue that Plaintiffs have not suffered prejudice because all employees who
7
made statements on the audiotape have been deposed by Plaintiffs. (Doc. 201, at 15-16).
Moreover, Defendants claim that “[t]here is nothing else on the tape that would reflect anything
about what the Association did, did not do, or should have done with reference to avoiding the
accident, which is the crux of Plaintiffs’ case.” (Doc. 224, at 24).
G. SECURITY FOOTAGE
Through Simoncic’s October 28, 2014 deposition, Plaintiffs discovered the existence of a
video camera at the entry gate of The Village. Plaintiffs argue that the security camera captured
footage of Defendants entering and leaving the premises the day of the explosion. (Doc. 194, at
32). Plaintiffs further argue that Defendants failed to preserve the security tape footage after the
explosion, which is “an extremely important piece of discovery which the Village . . . and
property manager should have kept and preserved, because it would have identified these
unsafe and unqualified workers . . . coming on and off of the property.” (Doc. 224, at 67).
Defendants argue that the security tape overrides itself every thirty days (Doc. 224, at
68), and that representatives for the Plaintiffs, arriving immediately after the explosion, could
have requested the preservation of the video within that time before the video was taped over.
(Doc. 224, at 68). Defendants also argue that there is no dispute as to who would have gone
through the security entrance because only certain designated contractors were given keycards
by unit owners themselves. (Doc. 224, at 70).
H. 298 OVERLOOK WAY FILE
Plaintiffs argue that the 298 Overlook Way file has been sanitized. (Doc. 194, at 32).
Plaintiffs arrive at that conclusion by comparing the 298 Overlook Way file with John
Lewitzky’s homeowner file that was produced on October 22, 2014. (Doc. 194, at 33).
Lewitsky’s file purportedly contains various original e-mails, complaints, and motions to the
Board, which are not found in the 298 Overlook Way File. At oral argument, counsel for the
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Plaintiffs acknowledged that there was a discrepancy between the contents of the 298 Overlook
Way file produced as a separate production in accordance with this Court’s July 3, 2014 Order,
and the contents reviewed when counsel for the Plaintiffs inspected the 298 Overlook Way file
at the office of counsel for the Defendants. (Doc. 224, at 18).
Defendants maintain that they produced the entire file in accordance with his Court’s
July 3, 2014, Order.
II.
DEFAULT JUDGMENT
As a sanction for the alleged misconduct of the Defendants and their counsel, Plaintiffs
request that this Court enter a default judgment against Defendants. Under Rule 37 of the
Federal Rules of Civil Procedure, a district court may impose sanctions on a party that fails to
comply with an order compelling discovery. Fed.R.Civ.P. 37(b)(2). “Dismissal under
Fed.R.Civ.P. 27 is a matter for the discretion of the district court.” Curtis T. Bedwell & Sons, Inc.,
v. Int’l Fidelity Ins. Co., 843 F.2d 683, 691 (3d Cir. 1988)(citing Nat’l Hockey League v. Metro.
Hockey Club, Inc., 427 U.S. 639, 642 (1976)(per curium)). The sanction of dismissal, however,
“is disfavored absent the most egregious circumstances.” U.S. v. $8,221,877.16 in U.S. Currency,
330 F.3d 141, 161 (3d Cir. 2003)(citing Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 867-68
(3d Cir. 1984).Where the proposed sanctions include dismissal with prejudice, entry of default
judgment, or the preclusion of claims or defenses, the exercise of that discretion is governed by
six factors originally enumerated by the Third Circuit Court of Appeals in Poulis v. State Farm
Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984). Knoll v. City of Allentown, 707 F.3d 406, 409-10 (3d
Cir. 2013). These factors include:
(1) the extent of the party’s personal responsibility; (2) the prejudice to the adversary
caused by the failure to meet scheduling orders and respond to discovery; (3)
a history of dilatoriness; (4) whether the conduct of the party or the attorney
was willful or in bad faith; (5) the effectiveness of sanctions other than
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dismissal[, default judgment, or preclusion or claims or defenses], which
entails an analysis of alternative sanctions; and (6) the meritoriousness of the
claim or defense.
Poulis, 747 F.2d at 868 (emphasis added). “In balancing the Poulis factors, there is no
‘magic formula’ or ‘mechanical calculation’ to determine how they are considered.” Miles v.
Elliot, No. 94-4669, 2011 WL 857320, at *4 (E.D. Pa. Mar. 10, 2011) (citing Briscoe v. Klaus, 538
F.3d 252, 263 (3d Cir. 2008). “Although each factor need not be satisfied for the trial court to
dismiss a claim [or entry of default], any and all doubts should be resolved in favor of reaching
a decision on the merits.” Wirerope Works, Inc. v. Travelers Excess & Surplus Lines Co., No. 07-169,
2008 WL 2073375, at *3 (E.D. Pa. May 12, 2008) (citing Ware v. Rodale Press, Inc., 322 F.3d
218, 221 (3d Cir. 2003); Hicks v. Feeney, 850 F.2d 152, 156 (3d Cir.1988); Emerson v. Thiel College,
296 F.3d 184, 190 (3d Cir.2002), Adams v. Trustees of the N.J. Brewery Emps. Pension Trust Fund,
29 F.3d 863, 870 (3d Cir.1994)). Examples of cases where default judgement was entered
include: National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643 (1976)
(reversing the Third Circuit in holding that the district court did not abuse its discretion in
dismissing a complaint under Rule 37 where the district court found that plaintiff demonstrated
“flagrant bad faith” amounting to a “callous disregard” of his responsibilities); Mindek v. Rigatti,
964 F.2d 1369 (3d. Cir. 1992)(upholding the district court’s entry of default judgment where
litigant “flagrantly” violated court orders); and Curtis T. Bedwell & Sons, Inc. v. Int’l Fidelity Ins.
Co. 843 F.2d 683 (1988) (holding that the district court did not abuse its discretion in excluding
damages evidence at trial where plaintiff repeatedly failed to comply with discovery orders and
produced unsupported damages evidence one week before trial).
The Court has considered each of the six Poulis factors, but finds the second, fourth, and
sixth factors to be dispositive. Due to the limited prejudice caused by the Defendants’ conduct,
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the failure to establish that Defendants engaged in contumacious behavior, the exhibited effort
on the part of the Defendants to comply with this Court’s July 3, 2014, Order, and the
meritoriousness of the claims and defenses in this case, this Court will decline to enter default
judgment against Defendants.
A. PREJUDICE
Under the second Poulis factor, “the Court examines the prejudice to other parties caused
by the delay, including considering whether the party’s conduct has resulted in ‘extra costs,
repeated delays, and the need to file additional motions in response to the abusive behavior of
the responsible party.’” Chiarulli v. Taylor, No. CIV 08-4400 JBS/AMD, 2010 WL 1371944, at
*3 (D.N.J. Mar. 31, 2010) report and recommendation adopted, No. CIV08-4400 JBS/AMD, 2010
WL 1566316 (D.N.J. Apr. 16, 2010) (quoting Huertas v. City of Philadelphia, No. Civ. A. 027955, 2005 WL 226149, at *3 (E.D. Pa. Jan. 26, 2005), aff'd,139 Fed. Appx. 444 (3d Cir.), cert.
denied, 546 U.S. 1076 (2005)). “The Third Circuit has given the following examples of prejudice
to the opposing party: ‘the irretrievable loss of evidence, the inevitable dimming of witnesses’
memories, or the excessive and possibly irremediable burdens or costs imposed on the opposing
party.” Bortex Indus. Co. Ltd. V. Fiber Optic Designs, Inc., 296 F.R.D. 373, 385 (E.D. Pa.
2013)(quoting Adams, 29 F.3d at 873-74 (internal citations and quotations omitted)). “[T]here
are varying degrees of prejudice, and courts should consider the degree of prejudice that the
defendants suffered accordingly when conducting the balancing of the Poulis factors.” Briscoe,
538 F.3d at 260 n.3.
Plaintiffs present several arguments in support of their position that they have suffered
irreparable harm warranting a default judgment in their favor. Among those arguments are that:
Plaintiffs have incurred significant costs in obtaining court orders to compel Defendants to
11
comply with discovery requests; Plaintiffs have been deprived of utilizing certain withheld
documentation at depositions, which has hindered their ability to prepare for trial; Plaintiffs
have been prevented from viewing the destroyed security tape, which could have contained
footage supporting the theory of their case; and Plaintiffs have obtained evidence of dimming
witness memories from the testimony of employee witnesses who cannot recall with detail the
contents of the recorded witness statements taken immediately after the explosion.
Although the conduct of Defendants throughout discovery has prejudiced Plaintiffs to
some degree, “[P]laintiff[s] ha[ve] not shown that [Defendants’ conduct] deprived [them] of
evidence necessary to make [their] case against defendants” such that default judgment should
be entered against Defendants. Miles, 2011 WL 857320, at *4. Specifically, this Court has
previously addressed the additional time and money consumed in developing the case for trial it
in its July 3, 2014, Order, awarding up to $1500 in reasonable expenses and attorney fees
incurred in connection with the oral argument on Plaintiffs’ third motion for sanctions, and
awarding reasonable expenses and attorney fees incurred from redeposing Simoncic and
deposing Klucki, Travis, Cruz and Hilbert. (Doc. 175). Moreover, Plaintiffs’ alleged inability to
utilize certain documentation during its depositions is an unavailing argument, as Plaintiffs
acknowledged that they could have redeposed certain individuals after obtaining the requested
documentation. (Doc. 224, at 14). While the potential for prejudice is more tangible with
respect to the destroyed security footage, Plaintiffs have failed to establish to the Court’s
satisfaction how the preservation of this security footage would ultimately impact the
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presentation of their case, especially if they pursue the available discovery tools provided to
them by the federal rules. 1
The Court also has difficulty accepting the argument of Plaintiffs that they have been
caused any additional, significant prejudice with respect to the lost audio recording beyond that
which this Court already resolved in its July 3, 2014, Order; namely, that “these recorded
witness statements may have assisted the [Plaintiffs] in impeaching later contradictory
testimony or refreshing the recollection of witnesses whose memories had dimmed in the
intervening five years that this litigation has been pending.” (Doc. 175). This Court is also hard
pressed to find prejudice where Defendants have produced over three thousand documents to
Plaintiffs, including an additional thousand documents since this Court’s July 3, 2014 Order.
(Doc. 224, at 103). Therefore, this Court finds that this Poulis factor weighs against entry of
default judgment.
B. WILLFUL OR BAD FAITH CONDUCT
“In assessing whether a party’s conduct was willful, courts often look for evidence of
intentional or self-serving behavior that indicates flagrant bad faith.” Bortex, 296 F.R.D. at 387.
The “[a]bsence of reasonable excuses may suggest that the conduct was willful or in bad faith.”
Roman v. City of Reading, 121 Fed.Appx. 955, 960 (3d. Cir. 2005). “If the conduct is merely
negligent or inadvertent,” the conduct will not be deemed contumacious. Briscoe, 538 F.3d at
262.
1
The Court is also persuaded by the testimony of Defendants’ counsel at oral argument
that the security footage was automatically erased by Vector, a third-party security company.
While Defendants were obligated to preserve potential evidence in light of anticipated litigation,
it appears to this Court that the destruction of this evidence was not within the control of
Defendants.
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Here, Plaintiffs submit an outline of the parties’ overdrawn procedural history in support
of their argument that there is a pattern of bad faith with respect to complying with five Court
orders, adhering to deadlines, and producing complete documents. Plaintiffs argue that this
pattern of behavior evidences active concealment and sanitization. At the outset, this Court
notes that to the extent Plaintiffs seek to reiterate arguments made in previous motions with
respect to this “ongoing” behavior, this Court will not consider these arguments, as it has
already significantly sanctioned Defendants for their discovery conduct prior to this Court’s
July 3, 2014, Order. Accordingly, this Court only considers alleged incidents of bad faith and
willful misconduct since this Court’s most recent Order.
Upon review of the facts alleged in the recent motion, it appears the crux of Plaintiffs’
argument is that Defendants assured Plaintiffs they would produce certain documents in
compliance with their discovery obligations only to later inform Plaintiffs, after receiving
numerous notices of noncompliance from Plaintiffs, that they were either mistaken about the
existence of those documents, or alternatively, that those documents have already been
produced, albeit incompletely. For example, Plaintiffs offer as evidence Defendants’ failure to
produce Simoncic’s job description with the corresponding acknowledgment form despite her
assurances that she was in receipt of such forms as well as the homeowner complaint forms that
Simoncic testified existed. Plaintiffs also point to Defendants’ failure to timely produce the
email correspondence between Simoncic and the Board within ten days of the entry of this
Court’s November 25 , 2014, Order. (Doc. 193).
In considering the arguments presented at oral argument and in the parties’ briefs, this
Court finds that Plaintiff has failed to submit “sufficient evidence to establish that [D]efendants
acted ‘with the purpose to delay the proceedings’ or that they ‘willfully’ failed to comply with
14
their discovery obligations.” Miles, 2011 WL 857320, at *4. Rather, it appears that Defendants’
conduct amounts to no more than negligent behavior, especially given counsel for Defendants’
acknowledgement at oral argument that her clients are a “nonprofit corporation [that] works
through its members. The members changed. . . Who [she] talked to today weren’t the same
people who were involved in the rescue mission after the fire. . . . [T]hese people don’t know
what they have and don’t have.” (Doc. 224, p. 45). While this Court can appreciate the
frustration that accompanies discovery disputes of this nature, the Court reminds Plaintiffs that
inconsistent statements concerning the existence or nonexistence of certain documents can be
used as a mechanism for impeachment at trial. Moreover, this Court is persuaded by the efforts
made by Defendants to produce all requested documents since the imposition of substantial
sanctions and a formal reprimand on July 3, 2014. (Doc. 175). Accordingly, this factor weighs
against imposition of case-dispositive sanctions at this time.
C. THE MERITORIOUSNESS OF THE CLAIM
When assessing the meritoriousness of a claim, the district court “generally appl[ies] the
standard used for a 12(b)(6) motion to dismiss.” Bortex Indus. Co. Ltd., 296 F.R.D. at 388 (citing
Briscoe, 538 F.3d at 263). A claim will be determined meritorious if the allegations in the
pleadings “support recovery by plaintiff or would constitute a complete defense” if presented at
trial. Poulis, 747 F.2d at 869-70. Viewing the facts alleged in the light most favorable to
Defendants, it does not appear that the Defendants’ asserted defenses are without merit.
Moreover, this Court is mindful of the fact that default judgments are disfavored and decisions
on the merits are preferred. See Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir.1984)).
Accordingly, this factor weighs heavily against entry of default judgment.
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III.
CONCLUSION
Guided by the Third Circuit’s admonition that entry of default “must be a sanction of
last, not first resort,” this Court finds the entry of default judgment to be inappropriate in this
case. Poulis, 747 F.2d at 869.
An appropriate Order will follow.
s/ Karoline Mehalchick
Dated: April 6, 2015
KAROLINE MEHALCHICK
United States Magistrate Judge
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