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Ottoson v. SMBC Leasing And Finance, Inc.

United States District Court, S.D. New York

July 13, 2017


          COREY STARK PLLC By: Corey Stark, Esq. Attorneys for Plaintiff

          PROSKAUER ROSE LLP By: Andrew E. Rice, Esq. Lloyd B. Chinn, Esq. Attorneys for Defendants


          ROBERT W. SWEET U.S.D.J.

         Defendants SMBC Leasing and Finance, Inc. ("SMBCLF"), David Ward ("Ward"), and Lisa Savinon ("Savinon") (collectively, the "Defendants") have moved pursuant to Rule 37 of the Federal Rules of Civil Procedure for sanctions to be imposed upon plaintiff Maureen Ottoson ("Ottoson" or the "Plaintiff") for spoliation of evidence, specifically seeking an adverse inference instruction, and fees and costs.

         For the reasons set forth below, the motion of the Defendants for an adverse inference is granted, and their application for fees and costs is adjourned to the settlement of final judgment.

         I. Prior Proceedings

         Plaintiff filed this action accusing Defendants of discrimination based on a perception of disability arising from a report allegedly in SMBCLF's possession on March 2, 2013. Plaintiff was employed by SMBCLF as an Assistant Vice President performing contract administration from April 30, 2012 through August 1, 2012. Plaintiff's Complaint ("Compl.") ¶¶ 25, 26.

         On July 9, 2012, Plaintiff's then-counsel Jesse Rose ("Rose") sent a demand letter to Defendants' Human Resources Department threatening litigation and requesting Plaintiff's personnel file. Declaration of Andrew E. Rice [hereinafter, "Rice Decl."], Ex. X (Rose Letter to Smith). Plaintiff alleges that on or around August 31, 2012, she filed a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission ("EEOC"), and that she received a Notice of Right to Sue dated January 31, 2013. Compl. ¶¶ 4-5.

         The Complaint alleges that subsequent to her hire, SMBCLF performed a background check on Plaintiff, the results of which included a "government/insurance report" (the "Report") that contained "inaccurate and defamatory information about Ottoson, her home, and her state of mind." Compl. ¶¶ 20; 29. Plaintiff testified during her deposition that she first learned of the existence of this Report in the 1980s. Rice Decl., Ex. C (Relevant Excerpts of Plaintiff's May 2014 and September 2015 Depositions) [hereinafter, "Tr."], at 538:7-9. Plaintiff alleges that Defendants "formed the inaccurate belief that Ottoson suffers from a mental impairment and disability" based on the contents of the alleged Report. Compl. ¶¶ 30, 48. Plaintiff further alleges that she was terminated based on SMBCLF's misperception that she was disabled, and in retaliation for complaining about discrimination based on perceived disability. Id. ¶¶ 47, 49.

         Plaintiff stated at her deposition that, as of November 2013, eight months after she filed this lawsuit, she had no proof that the Report existed. Tr. at 596:17-19. Despite issuing more than a dozen subpoenas to past employers and others, Plaintiff failed to receive the Report. Rice Decl. ¶ 23; see Tr. 596:8-11 ("Q ... So as of November 2013, you had not obtained the report from any source, correct? A. No, I didn't."). Defendants have repeatedly denied having ever seen or received the Report, and have stated under penalty of perjury that they did not, and do not, possess the Report. See, e.g., ECF No. 33; Rice Decl., Ex. V (Excerpts of Deposition of Defendant David Ward) at 82, 88-91; Rice Decl., Ex. W (Excerpts of Deposition of Defendant Lisa Savinon) at 86-87, 107-09.

         In light of Plaintiff's allegations, on November 21, 2013, Defendants propounded requests in their First Request for the Production of Documents that either specifically or generally called for the production of documents concerning the Report and/or Plaintiff's communications concerning the Report, including:

"documents memorializing communications with any individual, including but not limited to any current or former employees of SMBCLF, concerning the Complaint or any of [Plaintiff's] allegations in this action" (Request No. 14);
"documents, including, but not limited to, emails, instant messages, text messages or other messages on any social media or networking website in [Plaintiff's] possession, custody or control concerning SMBCLF or the allegations in this Complaint" (Request No. 15);
"documents that contain [Plaintiff's] records, notes, descriptions, conversations, discussion or thoughts concerning the allegations in the Complaint" (Request No. 16);
"documents concerning the 'Report' identified in Paragraph 18 of the Complaint" (Request No. 19); "documents concerning the allegation in Paragraph 18 of the Complaint that Ma]fter Ms. Ottoson's employment ended, JOHN D0E2 disclosed to Ms. Ottoson the existence of a government/insurance report . . . given the JP Morgan's Human Resource department containing a background check of Ms. Ottoson along with a comprehensive employment summary & many negative personal references" (Request No. 20); "documents written or prepared by, to, from, concerning, or concerning any communications with any potential witnesses in this action and/or any persons mentioned in the Complaint" (Request No. 63);
"written or recorded statements, opinions, and reports, the information for which has been obtained from any individual or entity contacted or interviewed in connection with this action (including drafts of such statements, opinions, and/or reports) ..." (Request No. 64);
"statements, in whatever form, from third parties concerning [Plaintiff's] allegations in this action" (Request No. 71); and
"documents concerning, referring or relating to the subject matter of this action, the allegations in the Complaint, and/or the damages or other relief sought in the Complaint, that have not been produced in response to the above requests" (Request No. 73).

Rice Decl., Ex. A. These requests unquestionably encompassed written communications Plaintiff may have had with witnesses concerning the alleged Report.

         Plaintiff produced documents concerning the Report in response to Defendants' First Request for the Production of Documents. In particular, on December 23, 2013, Plaintiff produced signed statements from three former co-workers, not from SMBCLF, who purported in such statements to have viewed the Report years before her employment at SMBCLF: Ralph Berger ("Mr. Berger"), Philip Weinstock ("Mr. Weinstock"), and Francesca Aversa ("Ms. Aversa"). Rice Decl., Ex. D (Berger Statement executed January 9, 2013); Ex. E (Aversa Statement dated November 24, 2012); Ex. F (Weinstock Statement dated January 31, 2013). On March 31, 2014, Plaintiff produced, via email from Rose, "addenda" from Mr. Berger and Ms. Aversa. Rice Decl., Ex. H (Rose Email to Rice); Ex. I (Addendum to Berger Statement dated March 18, 2014); Ex. J (Addendum to Aversa Statement dated March 11, 2014).

         One of the three individuals, Mr. Berger, later directly provided Defendants with numerous email communications that he had with Plaintiff concerning the written statements that he provided to her. Rice Decl. ¶ 8; Exs. K-S. In one email, Plaintiff directs Mr. Berger to "JUST COPY & PASTE & PLEASE TYPE THE WORK "ADDENDUM" ON TOP AS FOLLOWS." Rice Decl., Ex. Q (Ottoson-Berger email dated March 14, 2014). In another email to Mr. Berger, Plaintiff tells him to "[p]lease write the following statement below in the following format." Rice Decl., Ex. P (Ottoson-Berger email dated March 10, 2014); see also Rice Decl., Ex. 0 (Ottoson-Berger email dated February 1, 2014) ("In case Jesse [Rose] speaks to him again, please tell him Bonding Insurance because that is what your notarized letter to him stated.").

         Even after she was on notice that Defendants had received documents from Mr. Berger, Plaintiff did not produce any communications with the three witnesses or drafts of their statements. Rice Decl. ¶¶ 6, 21; Exs. T-U. Further, to the extent that Plaintiff was no longer in possession or control of such documents, Plaintiff failed to provide any explanation or information about such documents or the circumstances of their loss, as required by Defendants' instructions to their Request for Production. Rice Decl. ¶ 6; Ex. A.

         Defendants informed the Court by letter dated April 24, 2015, ECF Nos. 34-35, about the serious questions concerning Plaintiff's conduct in this matter, as was then relevant to Plaintiff's motion to compel a Rule 30(b)(6) deposition. Defendants also wrote to Plaintiff's counsel, on April 27, 2015, to demand supplemental responses to Defendants' First Request for the Production of Documents concerning Plaintiff s communications about the Report. Rice Decl., Ex. T. Plaintiff did not formally respond to the April 27 letter for several weeks, and the parties met and conferred by telephone concerning a potential motion to compel by Defendants on May 18, 2015. Rice Decl. ¶¶ 19-20. During that call, Plaintiff's counsel agreed to produce Plaintiff for further deposition. Id. ¶ 20. Later that day, Plaintiff s counsel served a letter stating that Plaintiff had "not identified any responsive documents within her possession or control, " and that Plaintiff's counsel was "not aware of evidence that suggests that Plaintiff destroyed any documents whatsoever on or after the date that she commenced this action." Rice Decl., Ex. U.

         On September 10, 2015, the parties submitted a Stipulation and Proposed Order that was so-ordered by the Court. ECF No. 38. This Stipulation, inter alia, extended the end date of discovery, extended other relevant deadlines, and provided that Defendants reserve their rights to take further discovery or engage in motion practice arising out of Plaintiff's continued deposition. Id.

         Plaintiff appeared for a continued deposition on September 29, 2015. During her deposition, defense counsel asked Plaintiff about her email practices and she admitted to having a "habit" to "automatically" delete her email. Tr. 632:18-22. The following exchange established Plaintiff's ongoing deletion of her email:

Q. ... And so, with respect to e-mail, e-mails that you sent to and from other people, perhaps Mr. Berger, Ms. Aversa, Mr. Weinstock, and others, about your claims, did you make any attempt to preserve, to keep those e-mails, prior to commencing your lawsuit against SMBC?
A. I don't recall so.
Q. You don't recall doing so?
A. No.
Q. And so, then it's possible that you had e-mail exchanges prior to December of 2013 relating to your claims that you deleted because you didn't think that there was any necessity that you keep them for this lawsuit?
A. I don't recall that.
Q. Well, let me ask you this: Was it your practice to delete e-mail?
A. It's a habit to do that if it's -- you know, I do that automatically. I'm pretty particular about that.
Q. So prior to December of 2013, did you take any steps to change your habits in that regard and keep e-mails that related to your claims against SMBC?
A. Prior to December, I don't recall specifically.
Q. You don't recall making any effort to keep e-mails prior to December of 2013?
MR. STARK: Objection to form. You can ...

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