I. Background

Plaintiffs/Counterclaim-Defendants are Warren Diamond (“Warren”) and Faith Diamond (“Faith”) as Trustee of the Diamond Trust (“Trust”). Defendant/Counterclaimant is Scott Diamond (“Scott”). Warren is Scott's father; Faith is Scott's step-mother.

On October 28, 2005, Warren and Scott executed the Trust, which appointed Scott as sole trustee. The Trust gave Warren the right to amend or revoke the Trust without the consent of the trustee. Ultimately, on August 7, 2015, Warren and Faith executed an amendment to the Trust which appointed Faith as sole trustee.

On October 10, 2016, Warren filed suit in the Fifteenth Judicial Circuit in and for Palm Beach County, Florida against Scott for breach of fiduciary duty as trustee, among other allegations related to the Trust. Subsequently, Scott removed the action to this District under the Court's diversity jurisdiction.

Warren's operative complaint includes the following claims against Scott: (1) breach of fiduciary duty; (2) demand for accounting; (3) unjust enrichment; (4) conversion; (5) fraud; and 6) violation of § 934.03, Florida, Statute (Interception and disclosure of wire, oral, or electronic communications prohibited). [DE 126]. Specifically, Warren alleges that in November 2015, after Scott had been removed as trustee, Scott unilaterally entered into a refinancing agreement for property held by the Trust, and on behalf of the Trust, and personally received approximately $500,000 as a result of the transaction. Scott asserts six affirmative defenses, and counterclaims for unjust enrichment and entitlement to trustee's fees. [DE 133].

During the course of discovery, it was revealed that Scott recorded the audio of numerous conversations of Warren and others involved in the refinancing agreement for property held by the Trust. [DE 100]. These recorded conversations contain subject matter relevant to this case, and the existence of these recordings forms the basis of a count in the complaint against Scott. Additionally, these recordings potentially implicate Scott in a criminal activity for having recorded conversations without the requisite consent in a dual consent state. Scott's failure to timely produce these recordings, and the possibility that he failed to produce other unknown recordings, form the basis of the instant Motion.

Warren seeks sanctions against Scott, asserting that Scott concealed relevant evidence, repeatedly submitted false discovery responses, failed to produce relevant materials, and disregarded multiple Court orders. Warren contends that Scott's actions were willful, made in bad faith, and have severely prejudiced his ability to prepare for trial. Warren asks the Court to strike Scott's counterclaim, enter a default against Scott for Warren's claims against Scott, and for Warren's attorney's fees and costs. Warren also asks for reasonable expenses incurred by Scott's failure to comply with Court orders.

*2 Scott admits to multiple violations but contends that these violations were not willful or done in bad faith. Therefore, he argues, the relief sought in the Motion is not appropriate on these facts.

II. Scott's Discovery Abuses and Violations of Court Orders

Warren served requests for production on Scott, seeking, inter alia, Scott's recordings of Warren, John Del Monaco, Mitchell Rutter, Jacob Frydman, and Sal Canizarro. On January 25, 2018, Scott served his initial responses to discovery, objecting that the request was unduly burdensome but stating that if any audio recordings existed, he would produce them. [DE 114-2]. Following the Court's order requiring amended responses [DE 57], on April 5, 2018, Scott again claimed that such audio recordings did not exist, but if such did exist, he would produce them [DE 200-1].

According to Warren's counsel, despite Scott claiming that no recordings existed, Warren's counsel became aware such recordings existed because recordings were produced in another case in another jurisdiction with a different attorney representing Warren. [DE 240]. Scott now admits to, and has since produced, 112 recordings of Warren.

On September 24, 2018, the Court ordered Scott to produce all recordings of Warren and then confirm whether his previous answers as to recordings of Monaco, Rutter, Frydman, and Canizarro were accurate. [DE 96]. The Court ordered that if there were any of these recordings, he should produce them within five days of the September 24th Order. The Court also ordered that if any of these recordings were no longer existing or in Scott's possession, he must provide a report to be filed under seal identifying the participants, stating who made the recordings, the location of the participants, the location where the recording was made, which participants, if any, had knowledge of the recording, and the date and time of the recording.

Scott amended his responses to discovery, claiming that he produced all recordings of Warren and that no recordings of Monaco, Rutter, Frydman, and Canizarro existed, and that if they did exist, there were on an inaccessible iPhone.[1] In fact, however, the recordings of these non-parties and other non-produced recordings of Warren did exist. On October 18, 2019—a year after the September 24th Order and a few days before Scott's deposition—Scott produced six recordings of Rutter, two of Frydman, and two of Cannizarro, all from 2014. Then, on November 8, 2019—after Scott's deposition—Scott produced ten recordings of De Monaco from 2014. Warren filed the transcripts of these recordings under seal with the Court [DE 227 & 229]. Upon review, these recordings are not innocuous. Scott's reason for failing to produce these recordings is that he “did not look for these....” [DE 226-6].

Moreover, upon receiving and reviewing the 112 recordings, Warren, not Scott, provided a call log to the Court of the recorded conversations between Scott and Warren. [DE 147]. It was not until November 22, 2019 that Scott submitted the report in response to the September 24, 2018 order, which was after the hearing on the subject Motion and a subsequent order requiring compliance. [DE 243].

*3 On January 28, 2019, the Court ordered that Scott turn over “the subject cellular phones, hard drives, and storage or backup facilities or devices” to Warren's expert for inspection. [DE 136]. Scott failed to fully comply. Scott testified on March 11, 2019 that he has two computers in Red Bank, New Jersey that were not turned over pursuant to the January 28th Order. Scott also testified that he had backups of his locked iPhone, which were not turned over pursuant to the January 28th Order.

Finally, after Scott turned over certain devices to Warren pursuant to the January 28th Order, Warren discovered other recordings on the devices that were neither produced nor detailed in a timely report pursuant to the Court's September 24th Order.

III. Analysis

Because of these violations and discovery abuses, the Court turns to the issue of what sanction is appropriate. Warren asks the Court to strike Scott's counterclaim and enter a default judgment in his favor.

Federal Rule of Civil Procedure 37(b)(2) provides that if a party fails to obey an order to provide or permit discovery, “the court ... may make such orders in regard to the failure as are just,” and one order listed as permissible is “an order striking out pleadings ... or rendering a judgment by default against the disobedient party.” Fed. R. Civ. P. 37(b)(2)(C). However, unlike lesser sanctions, imposition of a default judgment sanction requires the Court to first find (1) that the party exhibited a willful or bad faith failure to obey a discovery order; (2) that the moving party was prejudiced by that violation; and (3) that a lesser sanction would fail to punish the violation adequately and would not ensure future compliance with court orders. Inmuno Vital, Inc. v. Telemundo Grp., Inc., 203 F.R.D. 561, 571 (S.D. Fla. 2001) (citing Malautea v. Suzuki Motor Company, Ltd., 987 F.2d 1536, 1542 (11th Cir. 1993)).

“Once the moving party makes a prima facie showing that the other party violated the court's discovery order, the non-moving party must prove that it was impossible to comply in order to avoid sanctions.” U.S. v. One 1999 Forty Seven Foot Fountain Motor Vessel, 240 F.R.D. 695, 698 (S.D. Fla. 2007) (citing In re Chase & Sanborn Corp. et al, 872 F.2d 397 (11th Cir. 1989)). “Moreover, the non-moving party must show that all reasonable efforts were made to comply with the court's order.” Id. (citing U.S. v. Rizzo, 539 F.2d 458, 465 (5th Cir. 1976)). “The non-moving party cannot prove impossibility to comply with the discovery order through mere assertions.” Id. (citing U.S. v. Hayes, 722 F.2d 723, 725 (11th Cir.1984)).

A. Willful Conduct by Scott

It is well-established that violation of a discovery order by simple negligence, misunderstanding, or inability to comply will not justify the sanction of default. See Malautea, 987 F.2d at 1542. Rather, “a default judgment sanction requires a willful or bad faith failure to obey a discovery order.” Id.; see also U.S. v. Certain Real Property Located at Route 1, Bryant, Alabama, 126 F.3d 1314, 1317 (11th Cir. 1997) (“We consistently have found Rule 37 sanctions such as dismissal or entry of default judgment to be appropriate, however, only ‘where the party's conduct amounts to flagrant disregard and willful disobedience of discovery orders.’ ”) (quoting Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987)). “Repeated failures to comply with discovery orders, without any explanation, demonstrates a willful disregard to comply.” Mitchel v. VegasSportsConsultants.com, No. 18-CIV-61404-RAR, 2019 WL 3426038, at *3 (S.D. Fla. May 23, 2019) (citing Atmos Nation, LLC v. All Rise Records Inc., No. 16-60032, 2017 WL 3635115, at *5 (S.D. Fla. Feb. 15, 2017)). The Court finds that there is sufficient evidence on the record to show that Scott's failure to comply was willful.

*4 First, Scott knew he possessed recordings of Warren because he produced them in another case. Despite this knowledge, Scott said that he did not have any recordings of Warren twice—in his initial discovery responses and in his amended responses. After turning over 112 recordings of Warren, Scott amended his discovery responses, stating that these 112 recordings were all that existed, when in reality, other recordings of Warren did exist and were only discovered by Warren after inspecting Scott's devices pursuant to Court order.

Second, Scott repeatedly asserted that he did not have recordings of certain non-parties who were involved in the refinancing and who were expressly named in the discovery requests. Scott testified that he did not look for these recordings, despite express discovery requests to do so and repeated orders from the Court. Moreover, the discussions on these recordings were not innocuous and directly related to the refinancing at issue.

Third, Scott failed to comply with the Court's order to turn over his devices to Warren's expert for inspection. The devices not produced were clearly encompassed within the discovery orders, and Scott has not provided any credible explanation of how he could have interpreted the discovery orders differently.

Because of the repeated false claims that recordings and devices did not exist, and because of the subject matter and legality of the recordings, a finding of willfulness on the part of Scott is supported by the record.

B. Prejudice to Warren

The recordings at issue contain evidence that is relevant to Warren's case. The recordings contain discussion of the 2015 refinancing, the structure of the same, and Scott's role as trustee and his role as manager of entities with the ability to consent to the refinancing. Moreover, the existence of the recordings forms the basis for a count in the complaint against Scott. If this evidence had been timely disclosed, Warren would have conducted further discovery on these issues. This case was originally set with trial to commence on July 24, 2017. Pretrial discovery deadlines and the trial date have been pushed back numerous times. Now, discovery is closed, and the trial is set to take place in approximately one month, on January 21, 2020. These repeated violations have “seriously impacted [Warren's] ability to prepare effectively for trial.” Inmuno Vital, Inc., 203 F.R.D. at 573-74. Moreover, as discussed below, it is unlikely that Scott will fully comply with discovery and the Court's orders, and a continuance would only cause unnecessary delay and additional costs.

C. Availability of Lesser Sanctions

The Court finds that lesser sanctions would not serve the interests of justice. The Court is not inclined to further delay this case when, as evidenced by the prior orders in this case, any attempts would be futile. There is no other reasonable sanction that would result in the full production of Scott's devices and recordings, and no sanction short of dismissal would adequately punish Scott for his disregard for the Court's multiple orders.

IV. Conclusion

There is a clear pattern of repeated, willful disobedience of Court orders requiring Scott to produce all recordings and devices. Scott has not provided any reasonable, credible explanation for his non-compliance. The Court concludes that the appropriate sanction is to strike Scott's pleadings and enter default as a sanction.

According, it is hereby ORDERED AND ADJUDGED as follows:

DONE and ORDERED in Chambers at West Palm Beach in the Southern District of Florida, this 16th day of December, 2019.

The iPhone became inaccessible when Scott, a computer science major and former IT consultant, inputted the wrong passcode multiple times and despite the manufacturer's popup warnings that users would be locked out if repeated incorrect attempts are made. There is reason to question whether this lock out is accidental.