*1 Plaintiff Maureen Reiff worked as a records clerk for the City of Calumet City from 2003 until her discharge in October 2009 for allegedly residing outside Calumet City in violation of a residency ordinance. She brings various claims against Defendants Calumet City, Michelle Qualkinbush (Mayor), George Vallis (Director of Human Resources), and Edward L. Gilmore (Chief of Police), stemming from her termination. Now before the Court is Defendants= Amended Second Motion for Sanctions. The motion seeks dismissal of the lawsuit and an award of attorneys' fees and costs as a sanction for Plaintiff's alleged false statements in pleadings, discovery responses, and deposition testimony concerning where she resided and for other alleged discovery abuses. For the reasons set forth below, the Court recommends that the district judge defer ruling on the sanctions motion until after trial so a jury is able to decide the disputed facts concerning where Plaintiff was living during the relevant period. However, since deferral of the motion will necessitate Defendants incurring significant additional legal expenses, this Court also recommends that the district judge inquire of Plaintiff as to measures she is willing to take at this time to ensure her ability to satisfy a post-trial monetary sanction if one were to be imposed. Otherwise, deferral of the motion may effectively deprive Defendants of any remedy.

FACTS

A. Plaintiff's Termination and Hearing before the Board

On October 8, 2009, Plaintiff received notification of a City Council hearing to consider whether she should be suspended or terminated for violating the residency requirement. (Doc. 13-4, at 2). Plaintiff appeared at the October 13, 2009 hearing with the same attorney who filed this lawsuit on her behalf, Luke Casson. (Doc. 69-10). Mr. Casson argued at the hearing that Plaintiff was a resident of Calumet City at all relevant times prior to her termination. Following the hearing, the City Council unanimously voted to terminate Plaintiff for residing outside Calumet City in violation of both the ordinance and the Collective Bargaining Agreement (“CBA”). (Doc. 13-15; Doc. 69-10).

B. Legal Claims

On August 3, 2010, Plaintiff filed a lawsuit against Defendants in state court. Defendants caused the case to be removed to federal court where it was assigned to Judge Manning. (Doc. 1). On April 21, 2011, Plaintiff filed a first amended complaint (“FAC”). (Doc. 55).[1] In a preliminary section of the FAC, Plaintiff alleged the “Facts Upon Which Claims Are Based” which included (in part):

*2 • “At all times relevant to this Complaint, Plaintiff['s] permanent residence was in Calumet City, Illinois.” (Id. ¶ 28). She was registered to vote in Calumet City, and was issued a valid driver's license by the Secretary of State of Illinois. (Id. ¶ 29).

• “Defendants Vallis, Gilmore and Qualkinbush engaged in and performed an investigation regarding the Plaintiff without cause or justification and falsely reported that the Plaintiff was in violation of Chapter 2, Article IV, Division 2, Section 2-261 of the Municipal Code of Calumet City.” These defendants “had specific knowledge that the allegations were false in that each one received a personnel form with the Plaintiff's actual residential address on it.” (Id. ¶ 34).

Plaintiff alleged that the real reason for terminating her was not the supposed violation of the residency ordinance but rather her union organizing and her filing of harassment complaints. She alleged in this regard:

Plaintiff also alleged in the FAC that the residency requirement was not applied equally to all employees since female employees were terminated for violating this ordinance but male employees were not. Specifically, she alleged:

Based on these allegations, Plaintiff sued the City for indemnification (Count I) and for a declaration that the residency requirement in Section 2-261 of the Municipal Ordinance is unconstitutional since it “has been applied only to females and does not apply to male employees.” (Id. ¶¶ 72-73) (Count V). She also brought the following claims against all defendants:

• Wrongful termination for discharging her in retaliation for “complaining against harassment of female employees and for her attempts to oppose illegal and discriminatory policies in the Calumet City Police Department” (Count II);

*3 • Denial of Equal Protection for subjecting Plaintiff “and other female employees to unequal and discriminatory treatment by applying a residency ordinance only on female employees and exempting male employees in application of the ordinance” (Id. ¶ 55) (Count III);[2]

• Denial of Due Process during the termination hearing by depriving her of “the opportunity to speak, to present additional evidence or to rebut the charges against her” (Id. ¶ 69) (Count IV); and

• Violation of her First Amendment rights by terminating Plaintiff as punishment for complaining about “ongoing harassment” for the past two years and “resisting the City's illegal campaign to injure Plaintiff's right to organize” and advocate for union representation. (Id. ¶¶ 77-78, 80) (Count VI).

C. Motion to Dismiss

On May 16, 2011, Defendants filed a motion to dismiss or strike the FAC. (Doc. 64). In seeking to defeat the motion, Plaintiff repeatedly relied on allegations in the FAC that she resided in Calumet City at all relevant times and was falsely accused of violating the residency requirement. (See Doc. 79, at 4, 10-11, 16). For example, Defendants argued that the First Amendment claim should be dismissed (in part) because there was no “but for” causation between the alleged speech and the termination. They argued that public records showed Plaintiff had violated the CBA by residing in Indiana and so her termination would have occurred regardless of the alleged speech. (Doc. 69, at 10). Plaintiff responded that this argument rested on the “infirm foundation that the Plaintiff's permanent residence was somewhere other than in Calumet City. They are wrong and the Plaintiff has plead facts to the contrary.” (Doc. 79, at 16).

On October 30, 2011, Judge Manning granted the motion to dismiss the wrongful termination (aka retaliatory discharge) claim in Count II as to all the individual defendants since Plaintiff agreed that “only an employer, here, the City, can be liable for retaliatory discharge.” (Doc. 91, at 10). The Court denied the remainder of the motion to dismiss, including Defendants' arguments premised on the Court finding from public records that Plaintiff resided in Indiana. Judge Manning said she could not decide residency at the pleading stage since it involved a question of intent. (Id.).

D. Evidence Relating to Residency

By agreement, the parties deferred discovery until after a ruling on the above motion to dismiss. On September 14, 2011, a discovery schedule was entered. (Doc. 93). Not surprisingly, Defendants focused much of their discovery on where Plaintiff was living prior to her termination. In addition to issuing third party subpoenas, Defendants hired a private investigator and conducted depositions to focus on this issue. The following facts are undisputed except where otherwise noted.

1. Purchase of House in Merrillville, Indiana (March 2007)

*4 When Plaintiff began working for Calumet City as a records clerk in early 2003, she resided in a house at 1 Forestdale Park in Calumet City. (Doc. 198-3). She moved out in March 2007 after selling that house and buying a house in Merrillville, Indiana (“the Indiana house”). (Reiff Dep., Doc. 198-1, at 38). Plaintiff obtained a bank mortgage to buy the Indiana house and one of the loan terms required her to occupy the house as her principal place of residence within 60 days of signing the security instrument, and to remain there for at least a year. (Id. at 89-98; Dep. Ex. 6, Doc. 197-5, at 28-39; Dep. Ex. 10, Doc. 197-6; Dep. Ex. 7, Doc. 197-4; Dep. Ex. 11, Doc. 197-7). Plaintiff nonetheless testified at her deposition that she did not begin residing in the Indiana house until right after her job with Calumet City was terminated in October 2009. (Reiff Dep., at 88).

2. Plaintiff's “cover my butt” testimony

In January 2008, Plaintiff's name (actually her maiden name) appeared on a Com Ed bill for a house at 510 S. Gordon Avenue in Calumet City in which Angie Mears resided. (Doc. 198-12, at 2). During her deposition, Plaintiff gave the following explanation for why her name appeared on this Com Ed bill:

(Reiff Dep., at 144-45).

3. Application for Indiana Homestead Credit and Indiana state identification card (March 2009)

On March 3, 2009, which was about two years after buying the Indiana house and seven months before her termination, Plaintiff applied for an Indiana state identification card. When she did so, Plaintiff signed her name on the application beneath the following statement:

(Doc. 198-6). During her deposition, Plaintiff testified that while she was not residing in the Indiana house when she made this affirmation, she intended to reside there whenever the Calumet City residency ordinance was changed to allow this. (Reiff Dep., at 93). She also testified that she checked the “no” box in response to the question “Are you holding a valid permit, license or identification card from another state” even though she possessed both a driver's license and state identification card issued by the state of Illinois. (Id. at 89-92).

The day after she received the Indiana state identification card bearing the address of the Indiana house, Plaintiff showed this card when applying for a Homestead Property Tax Credit for the Indiana house. (Id. at 97). In this application, Plaintiff affirmed that “I (We) Reiff, Maureen Anne certify that on the 1st day of March, 20__ I (We) occupied as our principal place of residence the following described real property for which a Homestead Property Tax Credit is hereby claimed: 8401 Marshall Merr. Ind 46410.” Plaintiff signed her name next to the statement “I hereby certify the above statements are true, correct and complete.” On the next line, she listed her address as 8401 Marshall St. Merrillville, IN. (Doc. 198-7).

Also in March 2009, Plaintiff paid for homeowners insurance on the Indiana house, both for the dwelling and personal property. (Doc. 198-8). Plaintiff also sometimes provided the address of the Indiana house when ordering clothing and prescription drugs prior to her termination. (Reiff Dep., at 108-10).

4. Residency Update Information Sheets

*5 Plaintiff was required to complete, sign and submit a “Residency Update Information Sheet” to Calumet City whenever she changed her place of residency. The form stated (in part):

On January 6, 2003, Plaintiff listed her current address on this form as 1 Forestdale Park in Calumet City. (Doc. 198-10, at 2). After selling this house and buying the Indiana house, Plaintiff completed a residency update form on March 3, 2007 that identified her current address as 1069 Burnham in Calumet City with P.O. Box 285. (Doc. 198-10, at 3).

Approximately a year later, in March 2008, Plaintiff completed the update form again and identified her current address as 289 Oglesby in Calumet City. She also wrote on the form “This address is not for common knowledge. Need to know basis only!” (Doc. 198-10, at 4; Reiff Dep., at 133). Also in March 2008, Plaintiff completed a “Report of Personal Injury” after she tripped at work and sought treatment. In the space provided for “Home Address,” Plaintiff wrote “P.O. Box 285.” She also wrote next to this: “can't remember street address.” (Doc. 198-11, at 7 of 10; Reiff Dep., at 140). Another version of this document has the same handwritten note but the address “289 Oglesby” written next to the P.O. box. (Doc. 198-11, at 8 of 10). As discussed in more detail later, the house at 289 Oglesby was owned by Plaintiff's friend, Barbara Raske, until Raske sold it and moved out in September 2008. Plaintiff testified at her deposition that she then ceased living with Ms. Raske and began residing at 376 Crandon Street in Calumet City, though she did not know if she completed a residency update information sheet to document this. (Reiff Dep., at 136).

5. Plaintiff's Interrogatory answers

Defendants served an interrogatory asking that Plaintiff “[p]rovide the address of all locations where Plaintiff resided” between 2004 and the present, and as to each location state “whether the property was owned, leased or rented by Plaintiff” and if leased or rented, “the name and address of the lessor and/or owner”. (Doc 198-5, at 5 of 41, Interrogatory 4). In response, Plaintiff provided the following information (in part):

(Doc 198-5, at 5-6, 33; Doc. 198-3, at 3; Doc. 198-2, at 3).[5]

6. Deposition of Barbara Raske

After receiving the above responses to interrogatories, Defendants deposed Barbara Raske on July 2, 2012 concerning the house at 289 Oglesby where Plaintiff claimed to have resided in 2007 through some time in 2009. (Raske Dep., Doc. 198-15). Ms. Raske testified that she sold this house on September 9, 2008 at which point she moved out and transferred possession to John Jones. (Id. at 10-11). Prior to this, Ms. Raske testified that for at least a year Plaintiff would stay at the house four to five times a week to sleep, using a mattress in a room that was vacant except for two mattresses. (Id. at 23, 25-26). Ms. Raske said she had “strict rules” that Plaintiff did not break. (Id. at 26). Plaintiff was not allowed to bring clothes, belongings or groceries to the house or to cook meals. Nor was she allowed to park her car in the driveway or even in front of the house. (Id. at 25-27). Ms. Raske said she had no idea where Plaintiff washed her clothes. (Id. at 26). When asked if she knew where Plaintiff would eat her meals, Ms. Raske responded: “No. I have no idea, as long as it wasn't at my house.” (Id.).

7. Interview/Affidavit of Michael Bulich

Defendants hired a private investigator to determine the ownership of the house at 376 Crandon Street. This is where Plaintiff claimed to have lived after moving out of Ms. Raske's house (sold in September 2008) and then remained until her termination in October 2009 when she moved to the Indiana house. (Doc. 155-2, at 12). The investigator tracked down and interviewed Michael Bulich and then obtained an affidavit from him on August 17, 2012. Mr. Bulich stated that he has known Plaintiff since 1980 and considers her a friend. (Bulich Aff., Doc. 155-2, at 15). His parents owned the house at 376 Crandon Street; however, no one has lived in the house since July 17, 2006. His father passed away in May 2008 while residing in Michigan. His mother was alive but residing in a nursing home and suffering from severe dementia. (Id.). Mr. Bulich stated that he has had a power of attorney over his mother's financial affairs, including the house, since July 2006. He maintains the property and pays the taxes. Mr. Bulich stated that Plaintiff never rented or leased the house and never roomed or boarded there. (Id.).

8. No water usage at 376 Crandon Street since January 2007

*7 Through a third party subpoena, Defendants obtained water records for the house at 376 Crandon. These show that there have been no charges for water usage in the house since January 31, 2007. (Doc. 155-3, at 4). As discussed in detail below, Plaintiff testified at her deposition that, while she lived in this house for over a year (September 2008 until October 2009), she never turned on the water or used the toilet.

F. Cross-Motions for Sanctions in August 2012

On August 23, 2012, defense counsel sent a letter to attorney Casson describing the above evidence and asking whether Plaintiff would continue to pursue the lawsuit in the face of this evidence. The letter stated:

(Doc. 155-3). Attorney Casson responded with his own letter, charging opposing counsel with an ethical violation by allegedly demanding dismissal of the lawsuit upon threat of criminal prosecution. He demanded a retraction. (Doc. 155-4). Defense counsel declined to do so but clarified that she was not demanding dismissal or threatening criminal prosecution but merely attempting to contain costs before preparing to take Plaintiff's deposition set for August 29, 2012. (Id.).

In a separate communication on August 28, 2012, attorney Casson wrote to opposing counsel that, in light of the “threat,” Plaintiff would appear for her deposition only on the condition that Defendants enter into a protective order restricting the use of her testimony and other evidence in the case. He said he would seek such an order from the Court if Defendants would not agree. (Doc. 155-5).

On August 29, 2012, Defendants filed a motion for sanctions (Doc. 155) since Plaintiff neither appeared for her deposition nor sought a protective order. Defendants also argued that dismissal of the lawsuit was appropriate and that they should receive an award of costs and fees since Plaintiff had committed perjury in sworn answers to interrogatories and the entire lawsuit was “based upon a lie.” (Id. at 6). Defendants further observed:

(Doc. 155, at 6).

Later on August 29, 2012, Plaintiff filed a motion for a protective order and sanctions. (Doc. 157). The motion argued that opposing counsel had committed an ethical violation by sending the August 23rd letter, and was “elevat[ing] impeachment evidence to the level of crime.” (Id. at 4). At the same time, the motion sought a protective order “preventing the use of any deponents [sic] testimony, including the Plaintiff's, for any purpose not related to hearing or trial in this matter without leave of court.” (Id. at 3). Plaintiff said that without the protective order and on the basis of the threat of criminal action, “Plaintiff will be advised not to answer questions related to her residency and will assert her rights under the 5th Amendment to the U.S. Constitution.” (Id.).

After hearing argument on September 4, 2012, this Court denied Plaintiff's motion for a protective order and entered and continued Defendants' motion for sanctions. (Doc. 161, 190).

G. Plaintiff's Motion for Leave to File Second Amended Complaint

On September 5, 2012, Plaintiff filed a motion for leave to file a second amended complaint (“SAC”). (Doc. 163). The motion noted that Defendants had “presented certain documents relating to the purported residency of the Plaintiff in 2008 and 2009[,]” and “[a]fter consideration of those issues ...[Plaintiff] seeks to amend and clarify her challenge to the residency ordinance as one proscribed by the Constitution as applied unequally, arbitrarily and selectively.” (Id. ¶¶ 2-3). According to the motion, the SAC “pleads additional facts addressing the issues raised by the Defendants but adds no new claims or parties[,]” and “provide[s] the additional factual details demanded by the Defendant[s] and will assist in streamlining and limiting the discovery process.” (Id. ¶¶ 4, 6).[6]

Comparison of the FAC and SAC reveal the following changes in the proposed SAC among others:

• Paragraph 5 omits the words “and at all times relevant to this complaint Plaintiff REIFF was a resident of Cook County, Illinois,” and Paragraph 28 is omitted entirely (alleging that Plaintiff's “permanent residence was in Calumet City, Illinois”).

• Paragraph 11 omits the word “wrongfully” before terminated.

• Paragraph 34 is modified in that the FAC alleged that Defendants “had specific knowledge that the allegations [of residing outside Calumet City] were false in that each one received a personnel form with the Plaintiff's actual residential address on it.” The corresponding paragraph in the SAC (now paragraph 33) instead alleges that Defendants “had specific knowledge that other employees, including Gilmore and Qualkinbush themselves, owned property outside of the City of Calumet City and resided there on a permanent basis, and failed and refused to enforce the residency ordinance in force in Calumet City.” Oddly, paragraph 29 of the SAC continues to allege that Defendants conducted an investigation of Plaintiff and “falsely reported” that she was in violation of the residency ordinance.

*9 • Paragraphs 24, 25, 26 in the background section of the SAC, and paragraphs 54 through 61 under Count III (Equal Protection Claim) are modified to reframe the Equal Protection claim to remove the gender component. For example, whereas the FAC (Doc. 55 ¶ 25) alleged that the only employees who are subject to the residency requirement are female Clerks in the police department, the SAC simply alleges that the residency requirement is “selectively and discriminatorily enforced” (without reference to gender). As before, the SAC also alleges that Defendants have applied the ordinance “to punish and retaliate against those who speak out against City policies and practices.” (Doc. 163 ¶ 25). Paragraph 26 is changed so that it no longer alleges that Plaintiff and “other female employees, have been terminated based on the residency ordinance where male employees also subject to the ordinance were not.” Instead, it merely states that Plaintiff “was terminated based on the residency ordinance where other similarly situated employees were not.” Similar changes were made in paragraphs 54 through 61.

• In Count V (declaration of unconstitutionality of the residency ordinance), the SAC continues to allege that Section 2-261 “impermissibly discriminates in its application against female employees of the City of Calumet City.” (Id. ¶ 69). However, Plaintiff has modified the next paragraph: it previously alleged that the ordinance “has been applied only to females and does not apply to male employees.” (Id. ¶ 72). The proposed SAC instead alleges that the ordinance “as applied, is arbitrary and capricious and does not advance a reasonably objective purpose of the City.” (Id. ¶ 71). Similarly, the paragraph that follows that one has been modified so that it no longer alleges that the ordinance is applied “against women and in favor of males known to be employed in violation of ordinance” and instead alleges that the City “selectively, and punitively, applied the Ordinance against the Plaintiff and not against other employees known to be employed by the City of Calumet City and residing outside of the City in violation of the ordinance.” (Compare Par. 74 in FAC with Par. 72 in SAC).

• Although Count II (Wrongful Termination) was dismissed by Judge Manning, the SAC includes Count II with a modification: paragraph 49 (formerly paragraph 50) states that Plaintiff was discharged in retaliation for her activities in complaining against “discrimination against female employees” rather than for “harassment of female employees.” Plaintiff made a similar change in Count VI (First Amendment claim) where she alleges that she was terminated as punishment for complaining about ongoing “discrimination” rather than ongoing “harassment.” (Compare Par. 77 in FAC with Par. 75 in SAC).

Defendants have requested an opportunity to file a written opposition to Plaintiff's motion to file the SAC prior to any ruling. They argue that it is too late for Plaintiff to attempt to change her theory of the case. Since Plaintiff's counsel indicated at the last status hearing that he desires to further modify the proposed SAC to take out the wrongful termination (given that Judge Manning dismissed it) and to make some other corrections, this Court recommends that the district judge deny the pending motion to amend without prejudice and allow Plaintiff to re-file it with a revised proposed SAC. It would be helpful for counsel to submit both a clean copy of the newly proposed SAC and a redlined copy that highlights the changes from the FAC.

H. Deposition of John Reiff

About a week after Plaintiff sought leave to file the SAC, Defendants deposed Plaintiff's son, John Reiff, on September 12, 2012. (Doc. 197-9). He testified that he knew his mother had stayed for a while with his nephew Michael Howes (1069 Burnham) and then with her friend Barb Raske (289 Oglesby) but did not know when she resided at these locations and never visited her there. (Id. at 25-26). He said he did not know if she ever lived at 376 Crandon (the residence where she purportedly was residing for the year prior to her termination in October 2009) and never visited her at that address. (Id. at 28). He testified that he knows Michael Bulich from growing up with him but was not sure if he lived on Crandon Street back then. (Id. at 29). He said his mother also knew Michael Bulich but he did not recall any discussions with Mr. Bulich about his mother and where she would stay. John Reiff said Mr. Bulich lived in Michigan and Mr. Reiff hardly ever connected with him. (Id. at 29, 48). But when asked by Plaintiff's counsel whether he ever spoke with Mr. Bulich about a key, John Reiff recalled that at a party some three to four years earlier, Mr. Bulich had asked him what Plaintiff needed a key for. John Reiff responded that wherever his mother was staying, they were moving on and she needed to find a place to stay in Calumet City. (Id. 48-49, 51-52). John Reiff said he never discussed the key with Plaintiff and never saw the key. He did not know if Mr. Bulich ever gave his mother a key to the Bulich house on Crandon street. (Id. at 49, 52). He said his mother did not like to tell “her personal stuff like that.” (Id. at 52).

I. Plaintiff's Deposition

*10 Approximately three weeks after her son's deposition, Plaintiff was herself deposed on October 5, 2012. She testified that she obtained a key to the front door of the Crandon street house from Michael Bulich, and gave it to her son, John, when she moved out. (Reiff Dep., Doc. 198-1, at 29-32, 35-37, 72-75). Plaintiff said she resided at 376 Crandon from at least November 2008 until October 12, 2009. (Id. at 18-20). She said the dates reflected in her interrogatory answers (that she resided there only in 2009) were mistaken. Plaintiff said she spoke with her son's friend, Michael Bulich, at Christmas time in 2007 and again during the summer of 2008 and told him of her “situation.” The situation was that she needed to reside in Calumet City and Barbara Raske (who she was living with at 289 Oglesby) was moving out of Calumet City. (Id. at 34-35). She and Mr. Bulich did not make any specific arrangements at that time but Mr. Bulich said “anything you need, any time you want.” (Id. at 36).

For the almost year (or longer) that Plaintiff was living at the Crandon street house owned by Mr. Bulich, she would stay overnight five (sometimes four) nights in a row. (Id. at 20, 38-39). But the water was turned off and she never used the toilet, and never showered, bathed, or brushed her teeth in the house. There was minimal heat and Plaintiff never adjusted the thermostat because she did not want to drive the bill up. (Id. at 35, 42, 43, 52-53, 57, 124). She did not know what the thermostat was set at. The house on Crandon street had no bed, television, alarm clock or kitchen utensils, just a couch; the only belongings she kept there were two suitcases with clothes, toiletries and cosmetics, plus some sheets and two blankets. (Id. at 35, 37, 50-54, 56-58, 100-07). Plaintiff never ate at the Crandon street house and no one ever visited her there. She did not park in the garage and seldom even parked in the driveway but instead would find a parking spot on the street. (Id. at 54-55).

She did not pay for rent, gas, electricity or water at the house on Crandon street while living there; however, she did pay for gas, electric and water at the Indiana house that she owned during this period and her two cats stayed at the Indiana house. After work, she would go to the Indiana house to care for the cats. When asked why the cats did not live in the Crandon street house with her, Plaintiff said it was “not an environment for my cats” and “[i]t wasn't their home.... Their home was the [Indiana] house...” (Id. at 56-57). Two to four times a week, Plaintiff would have dinner and a shower at her daughter's house. (Id. at 39). She would bring her toiletries from the Crandon street house to her daughter's house each time. (Id. at 42-43). On weekends, she would do her laundry at the Indiana house. (Id. at 54). If she ordered medication or clothing, she had it shipped to the Indiana house. (Id. at 35, 37, 50-54, 56-58, 100-07).

With respect to the house at 289 Oglesby (owned by her friend and coworker Barbara Raske), Plaintiff testified that contrary to what she repeatedly stated in certain of her interrogatory answers, she lived at that address in 2008 and not 2009. (Id. at 122-23). Plaintiff testified that she was not allowed to use the shower or kitchen or even to park her car in the driveway or in front of the house. (Id. at 124). She did not move any furniture into the house, and her cats lived at the Indiana house during this period. (Id. at 124, 126). She did not pay for rent, gas, electricity or water. (Id. at 123-24). Plaintiff said she moved out when Ms. Raske sold the house. (Id. at 128).

DISCUSSION

A. Arguments of the Parties

After obtaining transcripts of the depositions of Plaintiff and her family members, Defendants filed an Amended Second Motion for Sanctions and supporting memorandum. (Docs. 198, 199). They argue that “[r]esidency is the central issue to this cause of action because if Plaintiff did not have a bonafide [sic] residence in Calumet City, she was not falsely accused of violating the residency ordinance and the causes of action alleged in this lawsuit would fail.” (Doc. 199, at 3). Defendants contend that Plaintiff “has engaged in discovery and/or pleading abuses so severe they warrant dismissal of the cause of action” as well as an award of attorney fees and costs. (Doc. 198, at 11-12). Specifically, they contend that Plaintiff: (1) lied about her residency in the complaint and then gave false answers about where she was living in either her deposition testimony or interrogatory answers; (2) disclaimed knowledge of certain allegations in the complaint when questioned about them during her deposition; (3) gave deposition testimony revealing the existence of documents and information that never have been produced (i.e., memos that she wrote concerning alleged harassment, medical treatment she sought, and damages calculations); and (4) was sanctioned previously for discovery violations. (Doc. 198).

*11 Plaintiff denies that she gave any false testimony or false discovery responses about her residency. She contends that Defendants' motion in essence asks the Court to grant them summary judgment by resolving factual disputes in their favor. Plaintiff also asserts that her residency is “not central” to any of the remaining claims since Counts III, IV and V of the FAC, “do not depend on, nor are they contingent upon the residency of Plaintiff as an element of proof.” (Doc. 212, at 4). Further, in the proposed SAC, Plaintiff says she “does not allege that the Plaintiff was a permanent resident of Calumet City.” (Id. at 5). Finally, she argues that certain aspects of the sanctions motion really amount to a garden variety discovery motion that should be denied for failure to comply with Local Rule 37 and because the motion lacks merit. (Id. at 1-2, 14-15).

B. Standard

Rule 37 authorizes a district court to impose sanctions against a party who fails to make disclosures or to cooperate in discovery. “Incomplete or evasive responses to interrogatories can lead to dismissal of an action under Rule 37(b).” Watkins v. Nielsen, 405 Fed. Appx. 42, 45 (7th Cir. 2010) (citing Aura Lamp & Lighting Inc. v. International Trading Corp., 325 F.3d 903, 909 (7th Cir. 2003)). See also Greviskes v. Universities Research Ass'n, Inc., 417 F.3d 752, 758 (7th Cir. 2005) (“The district court may dismiss a case for discovery violations or bad faith conduct in litigation under Federal Rule of Civil Procedure 37 or under the inherent authority of the district court.”). In addition, because perjury constitutes a “fraud on the court,” it “may warrant the sanction of dismissal” unless it was “harmless to the litigation, was quickly discovered, or other parties had also perjured themselves.” Jackson v. Murphy, 468 Fed. Appx. 616, 620 (7th Cir. 2012) (quoting Montano v. City of Chicago, 535 F.3d 558, 564 (7th Cir. 2008)). In Jackson, the Seventh Circuit found that the sanction of dismissal was warranted because the plaintiff “both perjured himself and forged a document critical to the prosecution of his case. His fraud was uncovered only after a costly and contested hearing.” Id. at 620. Courts must be mindful, however, that “[d]ismissal with prejudice is an extreme sanction that should be used only as a last resort in situations where the noncomplying party displayed willfulness, bad faith, or fault.” Robinson v. Champaign Unit 4 Sch. Dist., 412 Fed. Appx. 873, 877 (7th Cir. 2011).

C. Plaintiff's residency as a central issue

As a preliminary matter, this Court agrees that Plaintiff's residency is a central issue in this case. Defendants' stated reason for terminating Plaintiff was that she resided in Indiana in violation of the residency ordinance. When Plaintiff challenged the termination by filing the lawsuit, she alleged in her complaint that the stated reason for termination was false and that she in fact had resided in Calumet City throughout her employment. She even alleged that Defendants Vallis, Gilmore and Qualkinbush “falsely reported” that she was in violation of the ordinance when they “had specific knowledge that the allegations were false in that each one received a personnel form with the Plaintiff's actual residential address on it.” (Doc. 55 ¶ 34). Further, Plaintiff repeatedly relied on the above allegations about residency when opposing Defendants' motion to dismiss the lawsuit. See supra at pages 4-5.

In the proposed SAC, Plaintiff has removed certain of these residency allegations and perhaps will remove the remaining such allegations if allowed to file a new version of the SAC. Even if Plaintiff is granted leave to amend in this manner, the removal of these allegations will not eliminate residency as a central issue. Violation of the residency requirement will remain the stated reason for the termination and Defendants of course will offer evidence at trial supporting their contention that Plaintiff resided in Indiana rather than in Calumet City. They will also offer this evidence to attack Plaintiff's truthfulness, arguing that she repeatedly lied under oath and in her sworn statements concerning where she was living. Moreover, Plaintiff certainly will testify at trial about her residency, claiming that she did not violate the residency ordinance since she lived at various locations in Calumet City throughout her employment. As a result, there is no question that much of the evidence and argument that the jury will hear at trial will focus on Plaintiff's residency.

*12 That said, Plaintiff is correct that none of the remaining claims depend on the jury actually finding that Plaintiff resided in Calumet City. For example, the jury theoretically could find that Plaintiff resided in Indiana in violation of the residency ordinance; however, they could also find that Defendants would have ignored this violation and allowed her to remain an employee had she been male instead of female or had she not engaged in union organizing. As a practical matter, though, if the jury finds that Plaintiff repeatedly lied under oath about where she was living in an effort to cover up her residency violation and prevail in the lawsuit – and even lied directly to the jury about this when on the witness stand – it seems highly unlikely that the jury would credit Plaintiff's other testimony and find in her favor.

D. Did Plaintiff lie about living in Calumet City?

This Court would not hesitate to recommend dismissal of the lawsuit as a sanction if Plaintiff repeatedly lied in her complaint allegations, sworn discovery responses, and deposition testimony about key facts in an effort to deceive and prevail in this litigation. But Plaintiff has not admitted that she lied about where she was living prior to her termination and, while the evidence of false statements and perjury is quite strong, it is not irrefutable. It is at least possible that Plaintiff really did obtain a key to the empty Bulich house on Crandon Street and sleep on a couch there every night after work during the year preceding her termination. That said, if this Court were the finder of fact, it would have great difficulty crediting Plaintiff's testimony on this point given the contradictory evidence, most notably:

Since this Court is not the trier of fact, it cannot resolve this key disputed factual issue prior to trial in the context of a sanctions motion. Instead Plaintiff must be allowed to testify before the jury at trial and present other evidence to support her claims, including (perhaps) testimony of Michael Bulich.[7] The jury can then assess Plaintiff's credibility and weigh all the evidence. Since none of the elements of the legal claims require a finding that Plaintiff lived at 376 Crandon Street (or anywhere else in Calumet City for that matter), this Court recommends that the district judge require the jury to answer special interrogatories necessary to resolve the disputed factual questions germane to the sanctions motion. If the jury finds that Plaintiff lied about where she was living prior to her termination, then sanctions should be imposed. Because it will be too late to dismiss the lawsuit as a sanction, this Court recommends a monetary sanction designed to reimburse Defendants for some portion of their attorneys' fees and costs. As noted previously, this Court also recommends that Plaintiff be directed to take measures now to ensure that she is able satisfy a monetary sanction if one is imposed after trial.

E. Changing and inconsistent dates

*13 Perhaps recognizing that there is a factual dispute as to whether Plaintiff lied about where she was living, Defendants point to a myriad of other bases for sanctions that do not appear to rely on disputed facts. While the Court will discuss each of these justifications for sanctions, they do not – either individually or collectively – warrant dismissal of the lawsuit.

Defendants first argue that Plaintiff provided false answers in either her answers to interrogatories or deposition testimony about the time periods when she resided at various locations in Calumet City. (Doc. 199, at 4). They observe that Plaintiff's answers about when she resided at each location has “continuously changed” in an effort to conceal information. (Doc. 214, at 10). For example, in her sworn interrogatory answers, Plaintiff stated that she began residing at 376 Crandon Street (the Bulich house) in 2009, but at her deposition she said she resided there from November 2008 to October 12, 2009. In response to a different interrogatory, Plaintiff stated that she moved her belongings to the Crandon Street house “in July or August 2008 or 2009.” (Id.; Doc. 198-4 at 3). Similarly, Plaintiff gave inconsistent dates for when she lived with Barbara Raske at 289 Oglesby (where she claimed to have lived before moving to the Crandon Street house). In response to interrogatory 4, Plaintiff stated that she began residing there in 2007 and ceased residing there in later 2009. (Doc. 198-2). Yet Plaintiff stated in response to another interrogatory that she moved her belongings to 289 Oglesby Street in 2009. (Doc. 198-4). Still later, in her deposition, Plaintiff testified that she moved out of the house at 289 Oglesby when Mrs. Raske sold it (September 2008).

Plaintiff acknowledges that she was “imprecise” in providing dates and blames the inconsistencies on her advanced age (73) and health issues. (Doc. 212, at 12). She also asserts that, while “there is little question that [she] was confused and unsure of the exact dates of her residence, she testified that she did not realize the error in the dates until her deposition in October 2012 and immediately corrected the error on the record.” (Id. at 10).

This Court is unable to conclude from Plaintiff's inconsistent discovery responses and testimony that she necessarily committed perjury and was attempting to deceive. It is possible that Plaintiff instead was careless or confused or unable to recall the dates in question. Defendants of course are free to cross-examine Plaintiff at trial concerning the inconsistencies and to argue to the jury that these stem from fabricated testimony about whether she truly was residing in Calumet City prior to her termination.

F. Implied statement that Plaintiff paid rent

Defendants next argue that Plaintiff provided false discovery responses about renting property in Calumet City. Interrogatory 4 requested Plaintiff to provide the address of all locations where she had resided from 2004 to the present and for each address “state whether the property was owned, leased or rented by Plaintiff.” (Doc. 198-5, at 5). For the location at 376 Crandon Street, Plaintiff answered under oath that she “rented/roomed” there. (Id. at 6). For the location at 289 Oglesby Street, Plaintiff said she “Rented/boarded” there. (Id. at 5). Yet Plaintiff testified at her deposition that she did not pay any rent to stay at either location.

*14 Plaintiff argues that the discovery responses were not false. She points out that the interrogatory gave three “inartful options” – own, lease or rent – and none applied here. Hence Plaintiff clarified that she “boarded” with Ms. Raske at 289 Oglesby and “roomed” at 376 Crandon. (Doc. 212, at 11). Again, this Court cannot conclude from the evidence presented that Plaintiff made a false statement or that she falsely implied that she paid rent to live at either location. It would be a different matter if the interrogatory had specifically asked whether rent was paid and Plaintiff had answered affirmatively.

Interrogatory 4 also requested Plaintiff to provide, for any property that was “leased or rented, the address of the property and the name and address of the lessor and/or owner.” (Doc. 198-5, at 5). For the Crandon Street location, Plaintiff responded: “Mr. & Mrs. Bulich, 376 Crandon, Calumet City.” Defendants contend that this was a false answer since Plaintiff testified at her deposition that she did not make any arrangements with Mr. & Mrs. Bulich and they did not live at 376 Crandon Street. Instead she testified that she obtained a key from their son, Michael Bulich, who was not mentioned in the interrogatory answer. Plaintiff disagrees that this was a false answer since she testified at her deposition that she understood that Mr. & Mrs. Bulich were the property owners of the house and the interrogatory requested the name and address of the owner.

Given the imprecision of the questions together with Plaintiff's testimony about what she understood the question to ask, this Court is unable to conclude that Plaintiff made a false statement that is deserving of sanctions. These sorts of inconsistencies are best explored during cross-examination at trial in an effort to show that Plaintiff never resided in the Crandon Street house and the discovery responses were an effort to create the false impression that she was. If the jury ultimately finds that Plaintiff really lived in the Crandon Street house, then inaccurate discovery responses about when she lived there and where the property owners lived will be inconsequential. If, on the other hand, the jury finds that Plaintiff never lived in the Crandon Street house, then these subsidiary lies take on more significance and should be considered by the district judge when deciding an appropriate sanction.

G. False certification to State of Indiana

Defendants argue that Plaintiff should also be sanctioned for undermining the “integrity of the judicial process” by providing sworn answers in written and oral discovery “that contradict sworn and certified documents indicating her permanent residence was in Indiana.” (Doc. 199, at 7). They further contend that Plaintiff is guilty of a felony under Indiana law for falsely certifying a state document to further her own pecuniary interest. (Id.).

Specifically, Defendants assert that Plaintiff testified that “she lied when signing the affidavit for the Indiana Identification Card” and by her own testimony “is guilty of two felonies and is an admitted perjurer pertaining to where she has resided.” (Id.). It is true that Plaintiff testified that when applying for an identification card from the State of Indiana she was required to state whether she was then holding a valid permit, license, or identification card from another state and responded “no.” (Reiff Dep., at 92). She further acknowledged that this was not correct since she then possessed an identification card from the State of Illinois. (Id.).

To the extent that Plaintiff made a false statement under oath to the State of Indiana in 2009 prior to the filing of this lawsuit, Defendants are free to elicit this during cross-examination in order to attack Plaintiff's truthfulness. Such a false statement does not, however, provide a basis for sanctioning Plaintiff for discovery abuses since the false statement was made to a third party prior to the litigation. This makes it quite different from a situation where a litigant provides a false answer to a discovery request or creates and produces a fictitious document in an effort to deceive opposing counsel, the jury or the court.

*15 Defendants also argue for sanctions based on Plaintiff's deposition testimony in which she acknowledged that the Indiana state identification card application required her to swear under penalty of perjury that she was a resident of Indiana or intended to make Indiana her primary place of residence. But Plaintiff testified that this was not inaccurate since she did intend to make Indiana her primary place of residence whenever the residency ordinance in Calumet City was changed and allowed this. (Id. at 92-93). Moreover, Defendants' position in this litigation is that Plaintiff really was residing in Indiana when she signed the Indiana application. In other words, they contend that she did not lie to Indiana authorities back in March 2009 but instead lied to opposing counsel after this lawsuit was filed by falsely stating in her sworn discovery responses and deposition testimony that she lived at various locations in Calumet City prior to her termination. If Defendants are right, then Plaintiff deserves to be sanctioned; however, the jury must first resolve the disputed factual questions about where Plaintiff was living.

H. False statement about permanent residency

Defendants argue that dismissal of the lawsuit is appropriate because Plaintiff “filed suit under false premises and in bad faith”: she alleged that she was a permanent resident of Calumet City who was falsely accused of violating the residency ordinance. (Doc. 199, at 7-8). They contend that Plaintiff's own deposition testimony reveals that she was not a resident of Calumet City since she did not pay for utilities or insurance at the Crandon Street house, the water was turned off, she could not use the toilet, shower, do laundry or cook and did not move furniture there. In addition, her cats lived at the Indiana house where she paid utilities and maintained insurance. (Id. at 8). Plaintiff disagrees, asserting that the evidence demonstrates that Plaintiff never abandoned her residency in Calumet City after selling her home there and buying the Indiana house. This is because she intended to maintain her residency in Calumet City as shown by the fact that she made arrangements to continue living in Calumet City with Barbara Raske and then in the vacant Bulich house. She also registered to vote in Calumet City and had an Illinois driver's license. (Doc. 212, at 7-8).

Both sides focus heavily in their briefs on the law surrounding residency and how it supports their respective positions. This Court declines to resolve the question of whether – assuming Plaintiff truly lived in the Crandon Street house (or the Raske house for that matter) – she qualified as a “resident” of Calumet City. What matters for purposes of the pending sanctions motion is whether Plaintiff lied about the facts in the pleadings, discovery responses and deposition testimony. Plaintiff certainly knows whether she did or did not sleep in the vacant Crandon Street house four or five nights a week for the year preceding her termination. If she repeatedly lied about this during the course of this litigation to cover up the fact that Defendants had cause for her termination and to bolster her claims against them, then sanctions are warranted.

But it is a different matter if we are dealing solely with an alleged false allegation in the complaint and false statement during a deposition about whether Plaintiff was a “permanent resident” of Calumet City. To determine whether Plaintiff was a permanent resident, one must apply the facts to the law. Even if Defendants are correct that Plaintiff did not qualify as a resident of Calumet City under her own version of the facts, this Court is unwilling to recommend sanctions against her for drawing an incorrect legal conclusion. It is possible that Plaintiff, if she really brought some of her belongings to the Crandon Street house and slept there on work nights, believed this was sufficient to remain a resident of Calumet City. Indeed, this is the position that her attorney has taken in this litigation.

I. Allegations based on “false premises”

Defendants next argue that Plaintiff made certain factual allegations in the FAC that are “based upon false premises” because she disclaimed any knowledge of these facts during her deposition. For example, the FAC alleges that Defendants Vallis, Gilmore and Qualkinbush were made aware of her efforts to oppose certain discriminatory and illegal practices through a memo that they received written by Captain Wojcik. (Doc. 199, at 9). But during her deposition Plaintiff said she had no knowledge of this allegation and never saw a memo authored by Captain Wojcik. (Id.). Similarly, the FAC alleges that the individual defendants were given a personnel form with her address on it, yet Plaintiff testified at her deposition that she had no idea why this was alleged since she had no information about this fact. (Doc. 199-9). Finally, the FAC alleges that the termination was not based upon a collectively bargained for term, and that she was not given notice that the termination was based upon the residency requirement in the CBA; however, she admitted in her deposition that her termination was based on a term of the CBA. (Doc. 199, at 9).

*16 Plaintiff responds that the allegation that she was not terminated based upon a collectively bargained term of condition of employment is based on the City's own documents which say she was terminated based on the residency ordinance. (Doc. 212, at 14). As for the allegation about the personnel form, Plaintiff cites evidence of the Residency Update sheets that Plaintiff completed and “which would have to be reviewed by the individual defendants for approval.” (Id.). Plaintiff does not address the memo written by Captain Wojcik. Nonetheless this Court is unable to conclude from Plaintiff's deposition testimony alone that the allegations in the FAC are false – only that Plaintiff herself lacked personal knowledge of the truth or falsity of these particular allegations at the time of her deposition. At this juncture and without further information, the Court declines to recommend any sanction.

J. Failure to disclose information requested during discovery

Defendants lastly argue that sanctions are appropriate because Plaintiff “continues to engage in discovery abuses by failing to disclose information” requested during discovery. In support, they point to three examples. First, Plaintiff testified during her deposition that she kept copies of all the memos that she sent to her supervisor describing the harassment that she experienced, and gave these copies to her attorney. (Reiff Dep., at 200-01). Defendants never received these memos, yet Plaintiff and her attorney signed a verification that all responsive documents had been produced. (Doc. 199, at 9). Plaintiff responds that, while she testified about other memos, “all documents available have been produced.” (Doc. 212, at 14). There would seem to be no reason for Plaintiff's counsel to withhold such memos if Plaintiff gave them to him as she recalled during her deposition. Rather than impose a sanction for Plaintiff's failure to produce memos that her attorney says he does not have, the Court recommends that the district judge simply preclude Plaintiff from offering any undisclosed memos into evidence at trial.

Defendants next point to Plaintiff's failure to identify one of the hospitals where she was treated. During her deposition, Plaintiff testified that she sought treatment at Methodist Hospital for atrial fibrillation yet never identified this hospital in her written discovery responses. When asked why she had not included Methodist as one of her many “treatment providers,” Plaintiff testified that she gave the names of all the physicians and figured Defendants would look through the medical records. (Reiff Dep., at 230). In response to the sanctions motion, Plaintiff now also observes that her discovery responses identified the doctor who treated her for atrial fibrillation and one of the hospitals. She further argues that she was not required to disclose hospitals since the interrogatory asked for the “treatment provider” not the hospital. (Doc. 212, at 15). While this Court does not condone an incomplete discovery response such as this one, it does not appear that Plaintiff intentionally concealed the information since she volunteered the name of Methodist Hospital during her deposition. Moreover, there does not appear to be any prejudice flowing from the late disclosure. This Court declines to recommend sanctions at this juncture.

The final example relied upon by Defendants is the failure to disclose lost income calculations in response to written discovery even though Plaintiff testified at her deposition that she made such calculations with her attorney. (Doc. 199, at 9). In opposing the motion, Plaintiff observes that she testified that the calculations were based on the number of days, weeks and months of income lost, thereby providing the calculation that Defendants seek. (Doc. 212, at 15). While this Court does not recommend sanctions for the failure to provide the specific calculations, Plaintiff is ordered to provide these calculations within 14 days of this Opinion.

CONCLUSION

*17 For the reasons stated here, this Court recommends that Plaintiff's Motion for Leave to File Second Amended Complaint [163] be denied without prejudice, and that Plaintiff be required to submit two versions of a revised Second Amended Complaint: one clean copy, and one redlined copy that highlights the changes from the First Amended Complaint. The Court also recommends that the district judge defer ruling on Defendants' Second Motion for Sanctions [155] until after trial so that a jury is able to decide the disputed facts relating to Plaintiff's residency. Finally, the Court recommends that the district judge bar Plaintiff from offering any undisclosed memos into evidence at trial, and order Plaintiff to provide lost income calculations within 14 days of this Opinion.

Pursuant to Fed. R. Civ. P. 72(b), specific written objections to this Report and Recommendation may be served and filed within fourteen (14) days from the date that this order is served. Failure to file objections with the Honorable John J. Tharp, Jr. within the specified time will result in a waiver of the right to appeal all findings, factual and legal, made by this Court in the Report and Recommendation.

ENTER: