This case stems from damage that a condominium complex allegedly suffered during Hurricane Matthew in October 2016. Doc. 7 at ¶ 1. The complex is operated by the Ormond Heritage Condominium Management Association, Inc. (the Insured). Id. at ¶ 2. Plaintiff issued a commercial insurance policy (the Policy) to the Insured that was effective at the time that Hurricane Matthew struck. Id. at ¶ 2. The Insured hired Defendant to repair damage caused by Hurricane Matthew. Id. at ¶ 3. The Insured allegedly assigned its rights under the Policy to Defendant, leading Defendant to file a proof of loss with Plaintiff claiming a multimillion dollar loss, including more than $2 million for “dry-out and temporary repairs.” Id.at ¶¶ 3, 7, 11, 14. Plaintiff has contended that many of the claimed losses are either limited or excluded under the Policy. Id. at ¶¶ 15-32. Thus, Plaintiff filed this declaratory action seeking a declaration concerning the parties’ rights under the Policy. Defendant answered and asserted counterclaims against Plaintiff for breach of contract and statutory bad faith. Doc. 10. In response to Defendant’s counterclaim, Plaintiff filed an answer and affirmative defenses, including an affirmative defense that Defendant’s invoice for “dry-out and temporary repairs” overstates the cost of the services actually performed. Doc. 34 at 14-15.

During the course of this litigation, Plaintiff has attempted to discover information that it claims is relevant to defending against Defendant’s counterclaims and proving Plaintiff’s affirmative defense concerning the amount Defendant billed for dry-out and temporary repairs. Defendant, however, has repeatedly failed to timely and completely respond to Plaintiff’s written discovery in violation of the Federal Rules of Civil Procedure and the Court’s discovery orders.

On November 17, 2017, Plaintiff served Defendant with Plaintiff’s first set of interrogatories and requests for production (collectively, the Written Discovery). Doc. 41-1. Defendant did not timely respond to the Written Discovery. Thus, on January 16, 2018, Plaintiff filed a motion to compel Defendant to respond to the Written Discovery. Doc. 41 (the Motion to Compel). On January 22, 2018, the Court held a hearing on the Motion to Compel. Doc. 43. That same day, the Court entered an order granting the Motion to Compel, directing Defendant to respond to the Written Discovery on or before January 30, 2018, and awarding Plaintiff its reasonable attorney fees and costs for bringing the Motion to Compel. Doc. 44.

Defendant failed to respond to the Written Discovery by January 30, 2018. Thus, on January 31, 2018, Plaintiff filed a motion seeking entry of an order to show cause against Defendant for failure to respond to the Written Discovery in violation of the Court’s January 22, 2018 order. Doc. 45 (the Motion to Show Cause). Defendant did not respond to the Motion to Show Cause. Thus, on February 16, 2018, the Court held a hearing on the Motion to Show Cause. Doc. 51. That same day, the Court entered an order granting the Motion to Show Cause and directing Defendant to respond to the Written Discovery on or before February 19, 2018. Doc. 52. In addition, the Court awarded Plaintiff its reasonable attorney fees and costs for bringing the Motion to Show Cause and admonished Defendant that it will be prohibited from relying upon any materials responsive to the Written Discovery that Defendant failed to produce by February 19, 2018. Id.

*2 The Motion to Strike

Defendant produced some responsive materials in its “possession” prior to the February 19, 2018 deadline. But, according to Plaintiff, Defendant’s answers to interrogatories 1-3 and its responses to requests for production 1, 10(e), 10(g), 12, and 14(g) were incomplete, evasive, and strongly suggested that Defendant is concealing responsive materials. Doc. 55. Thus, on March 14, 2018, Plaintiff filed a motion to strike Defendant’s counterclaims (the Motion to Strike), essentially arguing that Defendant’s repeated failure to comply with the Federal Rules of Civil Procedure and the Court’s discovery orders and apparent concealment of responsive materials establishes that Defendant has engaged in willful or bad faith conduct that warrants dismissal of Defendant’s counterclaims. Id.[1] On April 2, 2018, Defendant filed a response arguing that it produced most of the responsive materials in its “possession” by February 19, 2018, and, to the extent it failed to comply with the order, Defendant argued that the proper remedy is to preclude it from relying on any responsive materials that were not produce by February 19, 2018. Doc. 61.[2]

The Court originally set a hearing on the Motion to Strike for May 9, 2018, Doc. 70, but Defendant’s counsel failed to appear at the hearing, see Doc. 78. Thus, the Court rescheduled the hearing for May 16, 2018. Doc. 80. Counsel for both parties and Mr. Radcliff appeared at the hearing. Doc. 84.

A court has broad authority under Federal Rule of Civil Procedure 37 to control discovery, Gratton v. Great Am. Commc’ns, 178 F.3d 1373, 1374 (11th Cir. 1999), including the imposition of the following sanctions in the event a party disobeys a discovery order:

Fed. R. Civ. P. 37(b)(2)(A). Dismissal with prejudice is the most severe sanction, but it “may be appropriate when a [party’s] recalcitrance is due to wilfulness, bad faith or fault.” Phipps v. Blakeney, 8 F.3d 788, 790 (11th Cir. 1993). Thus, a court should only dismiss a case as a last resort when there is a willful or bad faith failure to obey a discovery order and “less drastic sanctions would not ensure compliance with the court’s orders.” Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1542 (11th Cir. 1993).

*3 The arguments presented in the briefs and during the hearing establish that while Defendant produced some responsive materials by February 19, 2018, it failed to produce all responsive materials in its possession, custody, or control by that date, in violation of Federal Rule of Civil Procedure 34(a)(1) and the Court’s prior discovery orders (Docs. 44; 52). Specifically, Defendant conceded that its answers to interrogatories 1-3 were insufficient and that it produced responsive materials after February 19, 2018. SeeDoc. 61 at 2, 5. Defendant also conceded that it only produced documents in its possession, and it took little action to obtain responsive documents over which it had custody or control from third parties, such as Defendant’s public adjuster, Noble Public Accounting. See id. at 4. Further, as discussed on the record at the hearing, Plaintiff provided some evidence demonstrating that Defendant did not provide all responsive materials by February 19, 2018 and that Defendant may have destroyed responsive materials, such as emails.[3] Thus, in light of the briefing and the arguments at the hearing, the Court finds that Defendant violated the Court’s February 16, 2018 discovery order. Therefore, the Court must consider what sanctions should be imposed against Defendant pursuant to Federal Rule of Civil Procedure 37.

As stated on the record, Plaintiff has not sufficiently demonstrated that dismissal of Defendant’s counterclaims is warranted. It seems that many of the issues with Defendant’s production stem from an erroneous belief that it was only required to produce materials in its possession. While Defendant’s belief is incompatible with the plain language of Rule 34, it does not necessarily establish that Defendant willfully disregarded the Court’s order. See Malautea, 987 F.2d at 1542 (“Violation of a discovery order caused by simple negligence, misunderstanding, or inability to comply will not justify a Rule 37 default judgment or dismissal.”). Further, it is unclear whether Defendant had possession, custody, or control of all the materials Plaintiff points to in the Motion to Strike and reply. This lack of clarity stems largely from Plaintiff’s explicit failure to disclose from whom it obtained the materials that were allegedly not produced by Defendant. Without knowing that information, the Court cannot discern whether the records were obtained from a party that Defendant should have contacted and, ultimately, whether the records were within Defendant’s custody or control. Moreover, Plaintiff conceded that Defendant’s allegedly deficient production either demonstrates that Defendant is concealing the responsive materials or that the materials do not exist. Doc. 55 at 6. This concession encapsulates the uncertainty about whether Defendant has disclosed all responsive materials in its possession, custody, or control. Thus, as stated on the record at the hearing, the Court finds that Plaintiff has not established a willful or bad faith failure to obey the Court’s February 16, 2018 discovery order.

Next, as stated on the record, Plaintiff has not sufficiently explained why lesser sanctions would not bring Defendant into compliance. Thus far, the Court has imposed primarily monetary sanctions against Defendant. Docs. 44; 52. Plaintiff argued that precluding Defendant from relying on any materials not produced by February 19, 2018 will not cure the prejudice caused by Defendant’s incomplete and evasive disclosures. Plaintiff, however, provided little explanation in support of this argument. In the absence of such argument, the Court finds (and Defendant has agreed (Doc. 61 at 9)) that precluding Defendant from relying on any responsive materials produced after February 19, 2018 is an appropriate sanction. First, this sanction does not obviate Defendant’s ongoing duty to produce responsive materials; Defendant remains obliged to produce responsive materials, and its failure to do so may lead to additional sanctions in the future. Second, Plaintiff is not precluded from relying on the responsive materials Defendant will produce. Third, considering the alleged dearth of materials that Defendant produced by February 19, 2018, it appears that preclusion of materials that should have been produced by that deadline will impact Defendant’s ability to prove its counterclaims. Fourth, it appears that Plaintiff has and continues to obtain the information it seeks by other means, such as third party subpoenas. While the Court recognizes that Plaintiff should not have to go through such steps to obtain information that is in Defendant’s possession, custody, or control, Plaintiff’s efforts nevertheless reduce the prejudice it claims to suffer. Thus, in light of the foregoing, the Court finds that Plaintiff has failed to establish that lesser sanctions would not suffice in this case.

*4 While the Court finds that dismissal of the counterclaim is not warranted, the Court is nevertheless troubled by Defendant’s repeated failure to comply with the Federal Rules of Civil Procedure and the Court’s discovery orders. Specifically, the Court finds the following facts and evidence warrant the sanctions imposed in this order:

In light of these and other issues discussed at the hearing, the Court will permit Plaintiff to conduct additional discovery in an effort to determine whether Defendant has produced all responsive materials in its possession, custody, or control. Further, the Court will award Plaintiff its reasonable attorney fees and costs for bringing the Motion to Strike and performing some of the aforementioned discovery, since such actions would not be necessary but for Defendant’s failure to comply with the Court’s prior discovery orders. In addition, as stated in the Court’s February 16, 2018 order, Defendant will be precluded from relying on any materials responsive to the Written Discovery that Defendant should have produced by February 19, 2018, but did not so produce. The Court finds that the additional discovery and sanctions should bring about Defendant’s compliance.

Accordingly, as stated on the record at the hearing, it is ORDERED that:

1. The Motion to Strike (Doc. 55) is GRANTED as follows:

2. The Motion to Strike (Doc. 55) is DENIED in all other respects.

DONE and ORDERED in Orlando, Florida on May 18, 2018.