Hawkins v. Gresham
Hawkins v. Gresham
2015 WL 11122118 (N.D. Tex. 2015)
January 16, 2015
Solis, Jorge A., United States District Judge
Summary
The court did not make any specific rulings regarding ESI, as the issue was not relevant to the case. MHA failed to prove that Gresham knew or should have known that updating his operating system would delete files, and that MHA failed to prove that the laptop belonged to Gresham or that Bowden sold his phone to destroy evidence. Additionally, the Court found that Defendants failed to prove that MHA intentionally destroyed evidence in bad faith by overwriting and redeploying Gresham's work computer.
Merritt Hawkins & Associates, LLC, Plaintiff,
v.
Larry Scott Gresham, Billy Bowden, and Consilium Staffing, LLC, Defendants
v.
Larry Scott Gresham, Billy Bowden, and Consilium Staffing, LLC, Defendants
3:13-cv-00312-P
Signed January 16, 2015
Counsel
Brian A. Colao, Zachary Quentin Hoard, Dykema Cox Smith, Amber T. Welock, Welock Law, P.C., Christine A. Nowak, James Matthew Sikes, Jason M. Ross, Kevin Alan Teters, Dykema Gossett PLLC, Dallas, TX, for Plaintiff.Jeffrey M. Tillotson, John D. Volney, Katherine Helen Bennett, Michelle Youn Ku, Lynn Tillotson Pinker & Cox LLP, Jonathan Patton, Tillotson Law, Dallas, TX, for Defendants.
Solis, Jorge A., United States District Judge
ORDER
*1 Now before the Court is Plaintiff's Request for Adverse Inference Instruction, filed January 2, 2015. Doc. 108. Defendants filed their Response in Opposition and Cross-Motion for Adverse Inference Instruction and Sanctions on January 13, 2015. Doc. 131. Plaintiff filed a response and reply on January 14, 2015. Doc. 143. Defendants filed their reply on January 15, 2015. Doc. 144.
After reviewing the briefing, the evidence, and the applicable law, the Court DENIES Plaintiff's Request for Adverse Inference Instruction and DENIES Defendants' Cross-Motion for Adverse Inference Instruction and Sanctions.
I. Background
This case is about two employees who left a company to work for a competitor. Defendants Larry Gresham (“Gresham”) and Billy Bowden (“Bowden”) are both former employees of Plaintiff Merritt Hawkins & Associates, LLC (“MHA”). Doc. 58 at 10. As employees of MHA, both Bowden and Gresham signed agreements containing non-competition, non-disclosure, and non-interference provisions. Doc. 58 at 5-8. On September 7, 2010, Bowden ended his Bowden ended his employment with MHA. Doc 58 at 10. During the fall of 2012, MHA claims that Bowden, in direct violation of a non-interference provision still valid within his employment contract with MHA, recruited Gresham to come work with Bowden for Defendant Consilium Staffing, LLC (“Consilium”), a direct competitor of MHA. Doc. 58 at 11. Gresham apparently decided to join Bowden, and, as he left MHA's employment, MHA claims that Gresham accessed MHA's offices using his security badge and utilized his employee password to download over four-hundred files from MHA's computer network. Doc. 58 at 14. Defendants deny these allegations. Doc. 66; 67.
Now, both parties allege that evidence in this case was altered or destroyed. Specifically, Defendants claim that MHA destroyed relevant information by overwriting Gresham's MHA work computer after he terminated his employment and redeploying it to a new employee. On the other side, MHA claims that on January 27, 2013, after this suit was commenced and two days after Gresham was served, Gresham destroyed evidence by installing a new operating system on his personal computer. MHA believes this action deleted relevant information from the computer. Additionally, MHA takes issue with Gresham's failure to disclose the existence of a second computer (the “laptop”) that Gresham had purchased on February 25, 2012 and disposed of before it was discovered through litigation. Doc. 110 at 6-16 (Gresham's email records noting the purchase). Gresham insists that he did not disclose the existence or disposal of the laptop because it was purchased for his spouse, Tiffany Gresham. Doc. 131 at 4. Finally, MHA contests Bowden's disposal of his cell phone after commencement of this suit. Doc. 131 at 4-5.
II. Legal Standard & Analysis
a. Standard of Review
Federal courts have the inherent power to impose sanctions against those who abuse the judicial process. Chambers v. NASCO, 501 U.S. 32, 44 (1991). “The spoliation of evidence is one such abuse.” Ashton v. Knight Transp., Inc., 772 F. Supp. 2d 772, 799 (N.D. Tex. 2011). Spoliation is broadly defined as the “destruction or material alteration of evidence or ... the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” Id. (quoting Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001) and citing Black's Law Dictionary 1531 (9th ed.2009)). A party alleging sanction-worthy spoliation bears the burden of proving the existence of “a duty to preserve the information, a culpable breach of that duty, and resulting prejudice to the innocent party.” Id. at 800.
*2 “A duty to preserve arises when a party knows or should know that certain evidence is relevant to pending or future litigation.” Id. Where a party destroys evidence after the duty has arisen, “the circumstances of the act must manifest bad faith” to warrant an adverse inference instruction. Vick v. Tex. Emp't Comm'n, 514 F.2d 734, 737 (5th Cir. 1975). Courts have found bad faith where conduct involves “fraudulent intent and a desire to suppress the truth.” Ashton, 772 F, Supp. 2d at 800 (quoting Consol. Aluminum Corp. v. Alcoa, Inc., 244 F.R.D. 335, 344 (M.D. La. 2006)). Accordingly, an adverse inference instruction is appropriate where “a party who intentionally destroys important evidence in bad faith did so because the contents of those documents were unfavorable to that party.” Whitt v. Stephens County, 529 F.3d 278, 284 (5th Cir. 2008) (quoting Russel v. Univ. of Tex., Fed.Appx. 195, 207 (5th Cir. 2007)). Finally, to satisfy the prejudice requirement, the spoliated evidence must have been relevant to the movant's case. Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010).
b. MHA's Spoliation Claims
MHA seeks an adverse inference instruction based on the installation of a new operating system on Gresham's personal computer, the failure to disclose the existence of Gresham's laptop, and the sale of Bowden's cell phone. Id.
i. Gresham's Installation of the New Operating System
MHA's motion for an adverse inference instruction regarding Gresham's installation of a new operating system fails for lack of proof. MHA bears the burden of proving spoliation. See Ashton, 772 F. Supp. 2d at 800. Accordingly, to show that Gresham breached his duty to preserve evidence by updating the operating system on his personal computer from Windows 7 to Windows 8, MHA relies on the testimony of Defendants' witness, Lance Sloves. Doc. 109; Doc. 143. MHA repeatedly references Sloves's deposition testimony that the ghosting process used by MHA to install a new operating system on Gresham's work computer overwrote the old operating system and could cause information to be lost. Doc. 109 at 3-4; Doc. 143 at 3. However, the context of the cited testimony makes it clear that Sloves was specifically addressing the ghosting process used by MHA, not the operating system upgrade used by Gresham. See Doc. 143 at 3 (quoting Sloves's testimony). Moreover, MHA offers no evidence or testimony that indicates MHA's ghosting process was functionally equivalent to Gresham's upgrade from Windows 7 to Windows 8. See Doc. 109; Doc. 143. MHA also fails to reference any testimony from its own expert on the issue. After independently examining the record, the Court has located a portion of Sloves's deposition supporting MHA's claim. See Doc. 102-3 at 36. At one point, Sloves was asked, “[d]o you know whether upgrading from Windows 7 to Windows 8 can overwrite portions of the Windows registry?” Id. He answered, “I don't know. I didn't test it, but I'm sure it could.” Doc. 102-3 at 36 (emphasis added). While this excerpt suggests that the process of updating Gresham's operating system may have deleted files, it also shows that even Sloves, an expert in the field, is unsure about the effect of Gresham's upgrade.
Even assuming the update of Gresham's operating system did delete files, MHA has not proven that Gresham intentionally destroyed evidence in bad faith. MHA argues that Gresham “knew or should have known that installing a new operating system would damage the data on his computer,” because he “is computer savvy enough to construct his own personal computer.” See Doc. 109 at 12. However, MHA fails to cite the record or explain how Gresham's ability to assemble a personal computer indicates that he should know updating his operating system would delete files. MHA's unsupported assertion is especially weakened by Sloves's expert testimony that even he is unsure that the update would delete files.
*3 In sum, MHA brings insufficient evidence to show that updating the operating system caused files to be deleted. Even assuming the update did delete files, MHA has failed to prove that Gresham knew or should have known the act would destroy evidence. Therefore, the Court is unconvinced that Gresham intentionally destroyed evidence in bad faith by updating his operating system.
ii. Gresham's Failure to Disclose the Laptop
MHA's spoliation argument regarding Gresham's failure to disclose the laptop also fails for lack of proof. Based on emails showing that Gresham purchased a laptop on February 25, 2012, MHA argues that Gresham breached his duty to preserve evidence by failing to disclose the existence of the laptop and subsequently disposing of it. Doc. 109 at 5-6, 13; Doc. 143 at 7-9. Defendants argue that Gresham did not breach any duty because the laptop belonged to his spouse Tiffany Gresham and is unrelated to this case. Doc. 131.
MHA offers insufficient evidence to support its motion. First, MHA offers no evidence linking the laptop to Gresham's work. See Doc. 109 at 5-6, 13; Doc. 143 at 7-9. Additionally, the only evidence linking Gresham to the laptop is his admission that he “us[ed] it occasionally for personal reasons such as surfing the internet,” and the receipt emails showing he purchased the laptop. Doc. 131 at 17; see also Doc. 143 at 7-9. This scarce evidence does not prove that the laptop was Gresham's personal computer. In fact, nothing indicates that the laptop was in Gresham's possession during this litigation because neither Gresham nor his spouse recalls whether they disposed of the laptop before or after the lawsuit was filed. See Doc. 131 at 11. MHA only brings evidence that, “Gresham had the computer as late as November 14, 2012 after purchasing it in February 2012.” Doc. 143 at 9. Therefore, Gresham did not violate the discovery order to provide his personal computer to MHA because the testimony indicates that the laptop was Tiffany Gresham's personal computer.
Ultimately, MHA has failed to prove that Gresham committed spoliation by failing to disclose and disposing of the laptop. MHA's request for an adverse inference instruction is denied.
iii. The Sale of Bowden's Cell Phone
Defendants claim Bowden destroyed evidence in bad faith by selling his phone. It is undisputed that Bowden sold his phone after he was notified of this suit. This constitutes a breach of the duty to preserve evidence because it should have been obvious that MHA would seek to inspect his phone. Bowden claims he sold the phone because he upgraded to a new one, not to destroy any relevant evidence in this suit. Doc. 131 at 12. MHA disagrees and argues that the phone contained relevant evidence that is now lost.
Even assuming bad faith, MHA has failed to establish that the sale of Bowden's phone has had a prejudicial effect because Gresham produced the text messages between Bowden and Gresham for the relevant time period. Despite receiving the text message records, MHA argues that Bowden's phone potentially contained text messages absent from those in Gresham's phone. Doc. 109 at 8, 16; 143 at 9-12. In support, MHA points to Bowden's inconsistent testimony regarding the existence of text messages before Gresham's text messages were disclosed. Doc. 143 at 9-10. However, while Bowden's inconsistency may call his testimony on the matter into doubt, it does not indicate that Gresham produced less than all of the text messages between him and Bowden. Thus, Bowden's inconsistency does not suggest that relevant evidence is missing. MHA also argues that the text messages produced by Gresham contain several discrepancies indicating that they were tampered with or altered. Doc. 143 at 11-12. MHA merely states, without citing the record, that, “[t]hese discrepancies include inconsistent numbering and content that appears to be missing. Defendants do not deny these discrepancies. Instead, Defendants offer explanations for the discrepancies.” Doc. 143 at 12. It is unclear from MHA's briefing what discrepancies call the recorded text messages into doubt. Accordingly, MHA's unsupported assertion does not satisfy its burden of proving that evidence relevant to its case was lost. Therefore, MHA's request for an adverse inference instruction is denied.
c. Defendants' Spoliation Claim
*4 Defendants seek an adverse inference instruction against MHA for overwriting and redeploying Gresham's work computer. Doc. 131 at 20-21. However, Defendants'request fails to allege any facts indicating bad faith. See id.; Doc. 144 at 5-6. Defendants' only evidence of bad faith is MHA's senior vice president Tom Florence's knowledge that Gresham might go work for Consilium before Gresham's work computer was overwritten and redeployed. Doc. 144 at 5-6. On its own, this does not prove MHA intentionally deleted documents “because the contents of those documents were unfavorable to that party.” See Whitt v. Stephens County, 529 F.3d 278, 284 (5th Cir. 2008). Defendants offer no other evidence of bad faith. Additionally, nothing indicates that MHA, the plaintiff in this case, had any motivation to destroy the evidence on the computer. Therefore, Defendants' cross-motion for an adverse inference instruction is denied.
d. Defendants' Request for Sanctions
Finally, Defendants seek sanctions against MHA for misrepresenting Sloves's testimony and thereby violating Federal Rule of Civil Procedure 11. Doc. 131 at 21. Defendants also argue that MHA misrepresented information in its summary judgment briefing before filing an errata and correction. See Doc. 90 (MHA's Errata and Correction to Briefing). However, the record does not indicate that MHA's misstatement in its summary judgment briefing was intentional or malicious. See id. (“Counsel for MHA has since determined that no suit was filed, no injunction was entered [against Gresham], but rather that MHA served a cease and desist letter upon Gresham and thereafter obtained relief against Defendnat Gresham via a settlement agreement that was reached without the necessity for filing suit.”). Likewise, MHA's interpretation of Sloves's testimony is not malicious. MHA cites Sloves's testimony to support its contention that Gresham destroyed information by updating his operating system. Doc. 109 at 3. The Court acknowledges that MHA incorrectly cites a portion of Sloves's testimony that only addresses MHA's ghosting process for installing an operating system, not the process Gresham used to update his system. See Doc. 143 at 3. However, in a separate section of Sloves's deposition, he suggested that “upgrading from Windows 7 to Windows 8 can overwrite portions of the Windows registry.” Doc. 102-3 at 36 (specifically answering, “I don't know. I didn't test it, but I'm sure it could.”). Based on this, the Court is unconvinced that MHA mischaracterized Sloves's testimony in bad faith. It appears to be a mere oversight, not a willful attempt to deceive the Court. Accordingly, Defendants' request for sanctions is denied.
III. Conclusion
For the foregoing reasons, the Court DENIES MHA's Motion for Adverse Inference Instruction and DENIES Defendants' Cross-Motion for Adverse Inference Instruction and Sanctions.
IT IS SO ORDERED.
Signed this 16th day of January, 2015.