*1 Plaintiff AXIS Insurance Company (“AXIS”) has moved for sanctions against Defendant Sharanda Terry (“Ms. Terry”) and nonparty Sherard Terry (“Mr. Terry”) for destruction of evidence. (Doc. 96). Ms. Terry opposes the motion. (Doc. 100). Due to numerous intervening motions, the undersigned has declined to address the motion for sanctions until now. As discussed further below, the motion is GRANTED IN PART and DENIED IN PART.

I. Background

This case relates to Ms. Terry’s insurance claim after her house was destroyed by fire in January 2016. AXIS seeks a declaratory judgment that it is not required to pay Ms. Terry’s claim, as it contends Ms. Terry intentionally set the fire or arranged to have it set, then made material misrepresentations to it and concealed material facts from it as it and its agents investigated the claim. (See generally doc. 1).

Throughout the course of this lawsuit, Ms. Terry has referenced recordings of her interactions with various individuals involved in this case, including AXIS’s counsel, insurance adjusters and investigators looking into the fire, and various public officials. (See, e.g., docs. 20, 27, 35 & 38). On February 16, 2017, AXIS served discovery, including requests for production, on Ms. Terry. (Doc. 102 at 3). One request required Ms. Terry to “[p]roduce a copy of each and every audio recording of any communication you, or others on your behalf, have made for any purpose in the course of the investigation of your subject insurance claim and this lawsuit.” (Id.). Ms. Terry responded on March 31, 2017, by stating: “Sherard Terry holds those recordings. A diligent search and a reasonable inquiry have been made in an effort to comply with this demand.” (Doc. 79 at 49). AXIS sent a letter to Ms. Terry detailing its complaints with this response. (Doc. 79 at 36-42). When Ms. Terry still did not produce the recordings, AXIS moved to compel their production. (Doc. 79).

In the meantime, AXIS served a subpoena duces tecum on Mr. Terry (who is Ms. Terry’s brother) requiring him to produce, inter alia, “a copy of each and every audio recording of any communication you, or others on your behalf, have made for any purpose in the course of the investigation of Sharanda Terry's insurance claim and this lawsuit relating to the fire occurring at the property located at 6730 Second Avenue South, Birmingham, AL 35212, on January 28, 2016.” (Doc. 88 at 8-13). On September 15, 2017, Mr. Terry moved to quash the subpoena, stating in part:

*2 (Doc. 83 at 2).

Shortly afterwards, AXIS moved for sanctions against the Terrys. (Doc. 96). The undersigned heard the motion on October 3, 2017, at a hearing previously scheduled for a different motion. Following that hearing, the undersigned entered an order stating the following:

*3 (Doc. 102 at 9-10).

AXIS timely submitted its proposed order. (Doc. 110). The proposed order contemplates that the undersigned will sanction Ms. Terry through a number of adverse presumptions, an evidentiary prohibition, and attorney’s fees for what it terms “the admitted destruction of evidence with the specific intent to deprive another party of that evidence.” (Doc. 110 at 4, 10-11). Opposing this, Ms. Terry argues recordings in AXIS’s possession of her conversations with its representatives could replace some of the destroyed recordings. (Doc. 119 at 2). She also contends the relief AXIS seeks is disconnected from the recordings (going instead to the merits of the declaratory action) and that she had no idea that her brother Sherard would destroy the recordings. (Id. at 2-5).

On November 13, 2017, the undersigned held a hearing on several unrelated motions. At that hearing, Ms. Terry attempted to disprove AXIS’s claims it had no recordings responsive to a request for production by submitting to the court a CD which she alleged contained a recording made prior to August 15, 2017—in other words, one of the recordings that had supposedly been destroyed. Ms. Terry and her brother stated this CD was a copy of one of the destroyed recordings, but that they did not know how many other copies remained outstanding in the possession of friends or relatives. Therefore, the undersigned ordered the Terrys to determine whether other copies of the recordings existed and file a joint status report describing their efforts to do so and the results of their efforts. (Doc. 125 at 12-13).

In their joint status report, the Terrys stated they had located forty-nine audio recordings, dating from February 12, 2016 to November 22, 2017. (See doc. 132). Eleven postdate the August 15, 2017 destruction of audio recordings. Of the thirty-eight recordings made during the relevant time period, thirty-five can be grouped into three broad categories: (1) six recordings of Ms. Terry’s interactions with public officials (police, fire department, and ATF); (2) twenty recordings of Terry’s interactions with AXIS and/or its non-counsel agents; and (3) nine recordings of Ms. Terry’s interactions with AXIS’s counsel. The remaining three are recordings of Ms. Terry’s interactions with third parties (a roofing company representative and Ms. Terry’s former attorney) and a recording of an August 11, 2016 telephone conference in this case. In addition, the Terrys noted that they had been unable to locate three other recordings, all recorded between January and March 2016 (during AXIS’s investigation of Ms. Terry’s claim): a telephone interview with AXIS investigators Hal and Gary McDonald, a voicemail left by Gary McDonald (the “McDonald Recording”), and audio recordings of “Ronald Blankenship of Rimkus Consultant Grop [sic]”[1] (the “Blankenship Recording”). (Id. at 2). From the allegations in Ms. Terry’s voluntarily dismissed counterclaim, Blankenship appears to be another AXIS investigator. (See doc. 27 at 9).

*4 On January 4, 2018, AXIS filed another motion to compel. (Doc. 145). In part, AXIS sought three recordings the Terrys had identified at their depositions that were “still out there.” (Id. at 8). In their responses to the motion to compel, both Terrys stated they had been unable to locate the additional recordings after a diligent search. (See doc. 146 at 3; doc. 147 at 1). The undersigned granted the motion to compel in part, and ordered the Terrys to file a status report detailing their further efforts to find the outstanding recordings. (Doc. 150 at 5-7). The Terrys’ status reports reflect that they have been unable to locate them, but that AXIS itself has produced one of the missing recordings to Ms. Terry: the telephone interview with Gary McDonald. (See docs. 151 & 152).

II. Analysis

Spoliation is “the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” Oil Equip. Co. Inc. v. Modern Welding Co. Inc., 661 F. App'x 646, 652 (11th Cir. 2016) (quoting West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)). As an evidentiary matter, sanctions for spoliation in a diversity case are controlled by federal law. Flury v. Daimler Chrysler Corp., 427 F.3d 939, 944 (11th Cir. 2005). The aim of discovery sanctions for spoliation is “to prevent unfair prejudice to litigants and to insure the integrity of the discovery process.” Id. at 944.

Two potential sources of authority for spoliation sanctions exist. First, Courts have traditionally relied on their “inherent power to manage [their] own affairs and to achieve the orderly and expeditious disposition of cases,” which provides broad discretion to sanction a party for spoliation. Oil Equip. Co., 661 F. App’x at 652 (quoting Flury, 427 F.3d at 944). Second, a 2015 amendment to Federal Rule of Civil Procedure 37(e) provides the authority for remedial sanctions when a party has failed to preserve electronically stored information (“ESI”). See FED. R. CIV. P. 37(e). According to the Advisory Committee notes to the amendment, the Rule’s current form “forecloses reliance on inherent authority or state law to determine when certain measures should be used” to sanction a party for the loss of ESI. FED R. CIV. P. 37(e), Advisory Committee’s notes to 2015 amendment. Following the amendment, courts in this circuit have generally interpreted the Rule as supplanting inherent-authority sanctions when spoliation of ESI is at issue. See, e.g., Alabama Aircraft Indus., Inc. v. Boeing Co., 319 F.R.D. 730, 740 (N.D. Ala. 2017), motion to certify appeal denied, No. 2:11-CV-03577-RDP, 2017 WL 4572484 (N.D. Ala. Apr. 3, 2017); Title Capital Mgmt., LLC v. Progress Residential, LLC, No. 16-21882-CV, 2017 WL 5953428, at *3 (S.D. Fla. Sept. 29, 2017); Wooden v. Barringer, No. 3:16-CV-446-MCR-GRJ, 2017 WL 5140518, at *4 (N.D. Fla. Nov. 6, 2017). Recently, however, the Eleventh Circuit noted it has “not yet had the opportunity to determine whether, given the [2015] amendment, the multi-factor test relied upon in Flury is still applicable when a party seeks sanctions based on the spoliation of electronically stored evidence.” ML Healthcare Servs., LLC v. Publix Super Markets, Inc., 881 F.3d 1293, 1308 (11th Cir. 2018). Therefore, the undersigned will consider whether sanctions are warranted under either source of authority.[2]

*5 As a preliminary matter, AXIS’s motion nominally seeks spoliation sanctions against both Mr. and Ms. Terry. However, the motion does not indicate what form these sanctions would take against Mr. Terry, nor does AXIS offer any argument for why Mr. Terry would be subject to sanctions for spoliation.[3] Mr. Terry is a nonparty. To the extent Alabama law informs inherent-authority sanctions,[4] the Alabama Supreme Court has noted that “[j]ury charges that presume missing evidence weighs against the spoliator, and discovery sanctions, both of which are available when spoliation is charged against an opposing party, are not available to remedy the injustice caused by spoliation when the spoliator is a third party.” Smith v. Atkinson, 771 So. 2d 429, 438 (Ala. 2000) (emphasis added). Instead, the remedy under Alabama law when a third party engages in spoliation is an independent tort claim for negligent spoliation. Id. at 432. And Rule 37(e) is premised on “a party” failing to take reasonable steps to preserve evidence it had a duty to preserve. FED. R. CIV. P. 37(e). This implies Mr. Terry’s actions are only relevant in the Rule 37(e) analysis to the extent they can be imputed to Ms. Terry. Therefore, the motion is DENIED as to relief against Mr. Terry, and this order addresses only whether spoliation sanctions should be granted against Ms. Terry.

A. Rule 37(e)

Federal Rule of Civil Procedure 37(e) applies when a party has destroyed ESI, such as the recordings at issue here.[5] The rule provides as follows:

FED. R. CIV. P. 37(e). The court must address three preliminary questions before determining whether sanctions should be imposed under the Rule’s subsections. Alabama Aircraft, 319 F.R.D. at 740-46. First: did the party have a duty to preserve the ESI at issue? Id. at 740-42. Second: was the ESI lost because a party failed to take reasonable steps taken to avoid its loss? Id. at 742. And third: is the ESI evidence that cannot be restored or replaced through additional discovery? Id. If the answer to any of these questions is “no,” the analysis stops: sanctions under the Rule are not warranted, and the motion must be denied. Id. at 743. If the answer to each question is “yes,” however, the analysis proceeds to the Rule’s subsections to determine whether there is prejudice and/or an intent to deprive. Id.

1. Did Ms. Terry have a duty to preserve the recordings?

*6 Although the Advisory Committee notes state that “[t]he rule does not apply when information is lost before a duty to preserve arises,” the Rule does not set out a standard for preservation. Alabama Aircraft, 319 F.R.D. at 740 (quoting Advisory Committee notes). However, it “does not alter existing federal law which controls (1) whether evidence should have been preserved and (2) when the duty to preserve attaches.” Id. In the Eleventh Circuit, the duty to preserve evidence arises when litigation is “pending or reasonably foreseeable.” Graff v. Baja Marine Corp., 310 F. App'x 298, 301 (11th Cir. 2009). “The duty to preserve relevant evidence must be viewed from the perspective of the party with control of the evidence ....” Alabama Aircraft, 319 F.R.D. at 740.

Ms. Terry argues the recordings were her brother’s property, and thus that she had no control over them (and, presumably, no duty to preserve them). (Doc. 100 at 3). It is true that a party only has a duty to preserve evidence within its custody, possession, or control, as that is the only sort of evidence a party can preserve. Selectica, Inc. v. Novatus, Inc., No. 6:13-CV-1708-ORL-40, 2015 WL 1125051, at *4 (M.D. Fla. Mar. 12, 2015). However, a party may control information or evidence it neither owns nor possesses when it has the legal right, authority, or practical ability to obtain the evidence. Id. (citing In re NASDAQ Market–Makers Antitrust Litigation, 169 F.R.D. 493, 530 (S.D.N.Y. 1996)). As the undersigned has previously found, Ms. Terry’s claim she lacked control over the recordings is not plausible. The recordings were made at Ms. Terry’s behest, for her benefit in this case. (See, e.g., doc. 50 at 10 (“I put my cell phone on speaker phone and Sherard Terry uses his recording device to record the conversations.”); doc. 100 at 3 (“the recordings Sherard was making was evidence for my case and claim at the time”); doc. 119 at 2 (“docs were referring to 2016 audio recording that were made on my on behalf ... I made those recordings for my defense ....”)). At a minimum, Ms. Terry had a sufficient degree of control over the recordings to offer AXIS the opportunity to review them under the court’s supervision on January 13, 2017, while this litigation was pending, presumably coupled with the ability to obtain the recordings for review. (See, e.g., doc. 37 at 1-2). To the extent Ms. Terry claims that she lost control over them prior to her brother’s actions, this is a question of the reasonableness of the steps she took to preserve the evidence (discussed below), not whether she had a duty to preserve it.

Since Ms. Terry had control over the recordings, the remainder of this question is easily answered. At the very latest, Ms. Terry’s duty to preserve the recordings began on June 27, 2016, when she was served with the complaint. (Doc. 5). The recordings were destroyed on August 15, 2017, more than a year later. Therefore, the undersigned concludes Ms. Terry had a duty to preserve the audio recordings at the time they were destroyed.

2. Was the allegedly spoliated ESI lost because Ms. Terry failed to take reasonable steps to preserve it?

In determining whether the steps a party took to preserve evidence were reasonable, the Advisory Committee’s notes explain:

*7 FED. R. CIV. P. 37(e) Advisory Committee's notes to 2015 amendment.

The record reflects Mr. Terry intentionally destroyed the recordings due to his belief “someone apart of the plaintiffs party would file wiretapping charges.” (Doc. 83 at 2). If Mr. Terry’s intent could be imputed to Ms. Terry, the answer to this second question would be an unequivocal “yes.” But AXIS offers no convincing reason why this would be the case. AXIS points to Mr. Terry’s occasional role as a courier of documents in this case and that Ms. Terry has claimed Mr. Terry as a dependent on her tax returns, (doc. 96 at 8-9), but neither of these establishes that Mr. Terry destroyed the recordings at Ms. Terry’s behest or with her knowledge. AXIS offers no evidence or argument to indicate Ms. Terry knew or suspected Mr. Terry would destroy them, and Ms. Terry explicitly denies participation in or prior knowledge of their destruction, (doc. 100 at 3). AXIS also notes, as the undersigned has already found, Ms. Terry had some degree of control over the recordings. (See doc. 96 at 5-6; doc. 110 at 5). Control over the recordings does not mean Ms. Terry shared Mr. Terry’s intent to destroy the recordings.

However, Ms. Terry is not absolved simply because Mr. Terry’s actions are not attributable to her. As discussed in a previous order, AXIS served requests for production on Ms. Terry on February 16, 2017, specifically requesting Ms. Terry “[p]roduce a copy of each and every audio recording of any communication you, or others on your behalf, have made for any purpose in the course of the investigation of your subject insurance claim and this lawsuit.” (See doc. 102 at 3). With the knowledge she had an obligation to produce the recordings, Ms. Terry apparently did nothing to ensure that she would be able to do so; instead, she left them in Mr. Terry’s possession for six more months. Even taking into account Ms. Terry is a pro se party with little experience in litigation, the risk that leaving the recordings in Mr. Terry’s possession could result in their loss or destruction was obvious. As she took no steps at all to preserve the recordings in the face of this risk, the undersigned concludes Ms. Terry did not take reasonable steps to preserve them.

3. Are the recordings evidence that cannot be replaced through additional discovery?

The third and final Rule 37(e) requirement before sanctions may be imposed is a finding that the allegedly spoliated evidence “cannot be restored or replaced through additional discovery.” FED. R. CIV. P. 37(e). The Advisory Committee Notes observe that “[b]ecause electronically stored information often exists in multiple locations, loss from one source may be harmless when substitute information can be found elsewhere.” FED. R. CIV. P. 37(e), Advisory Committee's notes to 2015 amendment. Consequently, when the evidence is available through additional discovery, sanctions and/or curative measures are precluded. Alabama Aircraft, 319 F.R.D. at 742.

Neither party has specifically quantified how many recordings ever existed, but AXIS’s latest statement on the matter indicates, based on deposition testimony from the Terrys, that three unidentified recordings remained outstanding as of January 4, 2018. (Doc. 145 at 8). Ms. Terry has apparently located all of the other recordings. Further narrowing the dispute, Ms. Terry’s status report reflects that one of these missing recordings has now been replaced after AXIS produced to her its own copy. That leaves only two recordings that are actually missing: the McDonald Recording and the Blankenship Recording. Even though a substantial number of the destroyed recordings have now been replaced, the answer to this third question, at least as to these two recordings, is “yes”; the Terrys have searched for them for months with no luck. And since the answer to all three Rule 37(e) questions is “yes” as to these missing recordings, the analysis proceeds to curative measures under subsections (1) and (2).

4. Is there prejudice under Rule 37(e)(1)?

*8 Prior to the 2015 amendment, the spoliation standard in the Eleventh Circuit (discussed further below) factored prejudice into the analysis. Alabama Aircraft, 319 F.R.D. at 741 (citing McLeod v. Wal–Mart Stores, Inc., 515 F. App’x. 806, 808 (11th Cir. 2013)). As to the party whose burden it is to show prejudice, the Advisory Committee noted:

FED. R. CIV. P. 37(e) Advisory Committee's notes to 2015 amendment. Even when it is appropriate for the moving party to prove it has been prejudiced, pre-amendment caselaw counsels that “[i]n spoliation cases, courts must not hold the prejudiced party to too strict a standard of proof regarding the likely contents of the destroyed evidence because doing so allows the spoliators to profit from the destruction of evidence.” Southeastern Mechanical Services, Inc. v. Brody, 657 F. Supp. 2d 1293, 1300 (M.D. Fla. 2009) (citation omitted).

AXIS states that “[i]t is unknown the degree of prejudice that the Plaintiff will suffer, because no one will ever know what the recordings actually disclose” and that “[a]ny prejudice that was caused cannot be cured at this time, because the evidence has been destroyed.” (Doc. 96 at 10, 18). However, AXIS posits the recordings can be presumed to prejudice it because they might “show that Terry breached the insurance contract ... did not cooperate in the investigation of her claim ... made misrepresentations on her application ... was involved in the arson that destroyed the subject property ... presented a false or fraudulent claim ... failed to provide AXIS with records and documents requested by AXIS ... made false statements, engaged in fraudulent conduct, and intentionally concealed or misrepresented any material fact or circumstance relating to the claim.” (Doc. 110 at 6).

Admittedly, AXIS’s motion predates the Terrys’ production of replacement recordings, but it is difficult to see how AXIS could be prejudiced to the degree it speculates by the destruction of the specific recordings that remain missing. If the recordings actually support any of the facts AXIS claims, they are the best evidence of them. However, because it is a voicemail, the McDonald Recording would presumably reveal nothing about Ms. Terry’s conduct other than McDonald’s own account of it, which is available through his testimony. And AXIS can offer evidence about Ms. Terry’s interactions with Blankenship even without the Blankenship Recording, as it can presumably call upon Blankenship to testify as well. AXIS’s ability to obtain this testimony blunts its claims of dire consequences from the recordings’ destruction. Cf. In re Delta/AirTran Baggage Fee Antitrust Litig., 770 F. Supp. 2d 1299, 1311 (N.D. Ga. 2011) (prejudice mitigated by party’s ability to depose witnesses about the contents of destroyed emails).[6] That said, there is still at least some apparent prejudice to AXIS such that limited sanctions are appropriate even though AXIS has not offered any proof about the content of the recordings. The recordings might have been helpful to show either McDonald’s contemporaneous account of Ms. Terry’s statements to him or that Ms. Terry made misrepresentations to Blankenship; AXIS will have to show those through a less effective means. Additionally, the recordings were neutral, unlike the testimony AXIS will now have to procure if it wants to introduce evidence related to the voicemail or Ms. Terry’s interactions with Blankenship.

*9 Even though AXIS’s motion is due to be granted in part to the extent it can be read to request sanctions as a general matter under Rule 37(e)(1), sanctions under the Rule are limited to “measures no greater than necessary to cure the prejudice.” FED. R. CIV. P. 37(e)(1). Here, the measures necessary to cure whatever prejudice AXIS has suffered from the absence of the missing recordings are not great, because the prejudice itself is not great. To that end, Ms. Terry will not be permitted to offer evidence that her version of events is corroborated by any recording made by her or by Sherard Terry prior to August 15, 2017 and not produced to AXIS.[7]

5. Was there an “intent to deprive” under Rule 37(e)(2)?

Rule 37(e)(2) permits more severe sanctions on a finding the spoliating party intended to deprive another party of evidence. Specifically, a court that concludes a party failed to preserve ESI “with the intent to deprive another party of the information’s use in the litigation may: (A) presume that the lost information was unfavorable to the party; (B) instruct the jury that it may or must presume the information was unfavorable to the party; or (C) dismiss the action or enter a default judgment.” FED. R. CIV. P. 37(e)(2). According to the advisory committee notes:

FED. R. CIV. P. 37(e), Advisory Committee's notes to 2015 amendment.

Prior to the adoption of the 2015 amendment, courts in the Eleventh Circuit used a “bad faith” standard for severe sanctions like the ones permitted by Rule 37(e)(2). Under this standard, circumstantial evidence of bad faith may be shown when:

Managed Care Solutions, Inc. v. Essent Healthcare, Inc., 736 F. Supp. 2d 1317, 1323 (S.D. Fla. 2010) (citation omitted). Some courts have suggested this standard may be consistent with the Rules “intent to deprive” standard. Alabama Aircraft, 319 F.R.D. at 747. The Eleventh Circuit’s holding in ML Healthcare Services lends some support to this reasoning. While it declined to delve into the interplay between inherent-authority sanctions and sanctions under the Rule, the Eleventh Circuit equated the two standards in its discussion of whether the district court erred by declining to permit an adverse inference, premising the majority of its analysis on bad faith. ML Healthcare Services, 881 F.3d at 1308.

It would be reasonable to conclude Mr. Terry intended to destroy the recordings in order to deprive AXIS of their evidentiary use in this case. Although Mr. Terry argues he destroyed the recordings in order to prevent AXIS from using them to bring wiretapping charges against him, Mr. Terry continued to make similar recordings afterwards. For example, on October 10, 2017, Mr. Terry moved to submit to the court recordings made at AXIS’s counsel’s office on September 15, 2017, and September 18, 2017. (See doc. 107). Presumably, by Mr. Terry’s logic, these recordings would have been just as problematic from a criminal perspective as the destroyed May 23, 2016 recording of an in-person interaction between Mr. Terry and Sue Copeland,[8] (see doc. 132 at 6). Mr. Terry’s claim that he destroyed recordings out of fear he would be subjected to criminal charges is not credible when, a month later, he made recordings under virtually identical circumstances and attempted to place them into the public record, potentially subjecting himself (in his stated understanding of the matter) to the same criminal charges. However, as discussed above, it is not Mr. Terry’s intent that matters, as there is no basis to impute Mr. Terry’s intent to destroy the recordings—whatever motivated it—to Ms. Terry. And AXIS points to no evidence to justify a finding of Ms. Terry’s intent, separate from Mr. Terry’s.

If the bad faith standard is a guidepost, it leads to the same place. First, the destroyed recordings are arguably not material, even considered in the aggregate. Courts have generally found evidence to be “material” under this standard when the evidence is critical to a party’s ability to prove its claim. In Matter of Complaint of Boston Boat III, L.L.C., 310 F.R.D. 510, 522 (S.D. Fla. 2015). See also ML Healthcare Services, 881 F.3d at 1308 (no bad faith when the unpreserved evidence was not the type that “clearly would have resolved a critical issue in the case.”); Flury, 427 F.3d at 946 (imputing bad faith when the evidence was solely in the control of the spoliating party and was “critically important” to the case). The crux of this case is whether Ms. Terry committed arson and misrepresented that fact to AXIS’s agents; none of the recordings would prove or disprove the arson component, and AXIS is perfectly able to prove its claims of misrepresentations to its agents in the absence of the recordings. And, regardless of its ability to support the other three elements, AXIS cannot satisfy the second element at all because the evidence does not support that Ms. Terry engaged in an affirmative act to destroy the recordings.

*11 With neither a showing of Ms. Terry’s intent to deprive AXIS of evidence nor that the destruction of the recordings supports Ms. Terry’s bad faith, there is no basis for sanctions under Rule 37(e)(2). Therefore, AXIS’s motion is due to be denied to the extent it requests remedies under Rule 37(e) beyond the Rule 37(e)(1) evidentiary prohibition identified above.

B. Inherent authority

The bulk of AXIS’s motion for sanctions relates to the court’s inherent-authority ability to sanction Ms. Terry. In the motion, AXIS sought a default judgment against Terry, as it argued no sanction short of that would be effective—the evidence had been destroyed and a jury instruction would be ineffective, since this is not a jury case.[9] (Doc. 96 at 13). In the proposed order, AXIS changes the relief it seeks substantially, eliminating the default judgment request and adding several others. The proposed order contemplates a presumption that “the Defendant did not cooperate in the investigation of her claim by AXIS ... that she was involved in the arson that destroyed the subject property ... that she presented a false or fraudulent claim ... that she failed to provide AXIS with records and documents requested by AXIS ... that she made false statements to AXIS and/or its representatives ... that she engaged in fraudulent conduct in regard to her claim and the subsequent investigation of the claim ... and ... that she intentionally concealed or misrepresented material facts and circumstances relating to the claim.” (Doc. 110 at 10-11). It also requested the exclusion from evidence of all audio recordings offered by Terry. (Id. at 11). Finally, it sought attorney’s fees and expenses “that arise from any actions taken by AXIS in attempting to acquire recordings, to rebut any charge or allegation allegedly based upon the recordings or any other fees and expenses AXIS can show that directly relate to Sharanda Terry’s reference to the recordings.” (Id.).

When determining whether sanctions should be imposed pursuant to inherent authority, courts in the Eleventh Circuit have considered “(1) whether the [party seeking sanctions] was prejudiced as a result of the destruction of evidence; (2) whether the prejudice could be cured; (3) the practical importance of the evidence; (4) whether the [spoliating party] acted in good or bad faith; and (5) the potential for abuse [if the evidence is] not excluded.” McLeod, 515 F. App'x at 808 (citing Flury, 427 F.3d at 945). Additionally, state law—to the extent it is consistent with federal spoliation principles—may provide guidance. Flury, 427 F.3d at 944 (examining Georgia law). “Alabama state law frames the relevant factors as follows: ‘(1) the importance of the evidence destroyed; (2) the culpability of the offending party; (3) fundamental fairness; (4) alternative sources of the information obtainable from the evidence destroyed; and (5) the possible effectiveness of other sanctions less severe than dismissal [or default judgment].’ ” Oil Equip. Co., 661 F. App'x at 652 (quoting Story v. RAJ Props., Inc., 909 So.2d 797, 802–03 (Ala. 2005)). A court may sanction a spoliator by dismissing the case, excluding testimony, or issuing a jury instruction on spoliation that raises a presumption against the spoliator. Flury, 427 F.3d at 945.

*12 Nearly all of the Flury criteria have been discussed above in the context of Rule 37(e). Specifically: (1) although, viewed in the aggregate, the destruction of the recordings might support greater prejudice to AXIS, the absence of the truly missing evidence is not likely to prejudice AXIS to a significant degree; (2) the prejudice from the destruction of the evidence has been cured to a large extent through the Terrys’ search for and production of replacement recordings, and the prejudice from the two missing recordings is curable through the testimony of the other parties involved in the recordings and the Rule 37(e)(1) sanction detailed above; (3) the evidence is not particularly important; and (4) Ms. Terry did not act in bad faith. Although the final criterion was not specifically discussed, the Rule 37(e)(1) sanction is an evidentiary sanction that attempts to limit the potential for abuse. Under the relevant Alabama standard: (1) the evidence is not particularly important; (2) Ms. Terry’s culpability is something short of intentionality or bad faith; (3) fundamental fairness does not require sanction beyond the Rule 37(e)(1) sanction above; (4) the destroyed evidence has either been obtained from an alternate source (the additional recordings located by the Terrys) or could be replicated, to some extent, through testimony; and (5) the evidentiary prohibition is an effective, less severe sanction than default judgment.

Further, none of the more draconian sanctions AXIS seeks would be appropriate. To the extent it requests adverse presumptions, “[i]n the Eleventh Circuit, an adverse inference is drawn from a party's failure to preserve evidence only when the absence of that evidence is predicated on bad faith.” Mann v. Taser Int'l, Inc., 588 F.3d 1291, 1310 (11th Cir. 2009) (quoting Bashir v. Amtrak, 119 F.3d 929, 931 (11th Cir.1997) (per curiam)). “While this circuit does not require a showing of malice in order to find bad faith, mere negligence in losing or destroying records is not sufficient to draw an adverse inference.” Id. As stated above, the evidence does not support that Ms. Terry acted in bad faith by leaving the recordings in Mr. Terry’s custody. Therefore, no adverse inference or presumption of wrongdoing is permissible under the law of this circuit. As for default judgment, it is “an extreme remedy [and] ‘should not be imposed if lesser sanctions will suffice.’ ” In Matter of Complaint of Boston Boat III, L.L.C., 310 F.R.D. 510, 517 (S.D. Fla. 2015) (quoting Navarro v. Cohan, 856 F.2d 141, 142 (11th Cir. 1988)). As noted above, lesser sanctions are sufficient. Therefore, no sanctions beyond the Rule 37(e)(1) sanction are warranted under the court’s inherent authority to impose sanctions.

III. Conclusion

Based on the foregoing, the motion for sanctions, (doc. 96), is GRANTED IN PART, and it is ORDERED that Ms. Terry is prohibited from offering evidence that her version of events is corroborated by any recording that was: (1) made by her or by Mr. Terry; (2) prior to August 15, 2017; and (3) not previously produced to AXIS. To the extent the motion requests other relief, it is DENIED.

DONE this 23rd day of April, 2018.