*1 In this breach of contract action, Plaintiff Cogan Imports, Inc. has filed a Renewed Motion for Sanctions, seeking that Defendant Sunil Dharod be precluded from introducing certain documentary or testimonial evidence. (DN 74). Defendant Sunil Dharod has responded in opposition (DN 76), and Plaintiff has replied (DN 77). For the following reasons, Plaintiff's Motion is granted in part.

Cogan Imports, Inc. (“Cogan Imports”) is a Kentucky corporation which collects and deals in rare and expensive automobiles. In March of 2016, Defendant Sunil Dharod (“Dharod”), through his representative John Fox (“Fox”), allegedly made an offer by e-mail to purchase a 2003 Ferrari Enzo automobile from Cogan Imports for $2.7 million dollars. (DN 16, at ¶ 6). This litigation centers on whether the e-mails exchanged between Cogan Imports and Fox established a binding contract for the vehicle.

Fox's initial e-mail from March 11, 2016, on behalf of Dharod, stated: “[w]e would like to offer you $2.7 million for the Enzo.” (DN 59-10, at p. 4). In response, Cogan Imports inquired whether “this is a formal offer.” (Id. at p. 3). Fox replied “yes, that is a formal offer.” (Id.). Cogan wrote back: “I am accepting the offer. We have a deal.” (Id. at p. 2). Fox and Cogan then discussed meeting in Louisville, Kentucky on March 29, 2016. (Id.).

On March 15, 2016, Fox e-mailed Cogan Imports to explain that he ran a Carfax report on the Enzo and due to a misunderstanding on the vehicle's actual mileage they would “have to pass on this opportunity for the 2003 Enzo.” (DN 59-11). Fox indicated that he and Dharod had initially believed the Enzo had 444 miles on it, but the Carfax report revealed it had 4400. (Id.). Later, it appears that Fox and Dharod offered a reduced price of $2.3 million for the Enzo. (DN 59-14; DN 59-15).

Shortly after these communications, Cogan Imports initiated this action in Jefferson Circuit Court alleging breach of contract against Dharod. (DN 1-1). Dharod timely removed the case to this Court. (DN 1). Cogan Imports alleges that Dharod's initial offer, via Fox, constitutes a binding sales contract because it contained no contingencies and was referred to as a “formal offer.” (DN 74, at p. 2). Dharod counters that no binding sales contract was formed solely through Cogan Imports' exchange of four e-mails with Fox, where price was the only term discussed. (DN 76, at p. 2).

In September of 2016, Cogan Imports amended its Complaint to add a claim of “post-lawsuit breach of settlement agreement.” (DN 11). Cogan Imports alleges that after initiating this lawsuit, Dharod and Fox approached Cogan Imports about settling the matter and an agreement was reached that Dharod would purchase the Enzo for $2.5 million. (Id. at ¶¶ 10-11). Allegedly Dharod breached and terminated the settlement agreement after an issue arose during the vehicle's inspection. (Id. at ¶¶ 13-17).

*2 Discovery between the parties has been acrimonious. On February 13, 2018, the Court held a telephonic conference to address a discovery dispute involving the relevancy, reasonableness, and time frame for requests for production of documents by both parties. (DN 46). The Court determined each party should produce to the other “those communications (internal or external) that relate to negotiations for the purchase or sale of any exotic/vintage automobile by the party, purchase or sales agreements of the party involving such automobiles, insurance declaration pages related to each of the affected automobiles sold or purchased” for five years prior to the current date. (Id.).

On March 15, 2018, thirty days after the Court's discovery order issued, Dharod contacted Cogan Imports to explain that he expected to get the documents the next day and would “work to get them in [Cogan Imports'] hands early next week.” (DN 51, at p. 3). Six days later and before Dharod had produced any responsive documents, Cogan Imports filed a Motion for Sanctions. (DN 49). Cogan Imports' Motion alleged that Dharod failed to timely produce any documents that would comply with the Court's February 13, 2018 discovery Order. (Id.). On that same day, Dharod hand-delivered responsive documents to Cogan Imports. (See DN 73, at pp. 2-3). This production prompted Cogan Imports to file a “supplement” to its Motion for Sanctions, taking issue with the timing of Dharod's production and his assertions of new “boilerplate objections.” (DN 50). Dharod responded that the Court's February 13, 2018 Order did not establish a specific deadline for providing the requested information and, therefore, its responsive production was timely. (DN 51). Dharod emphasized that he notified Cogan Imports of when it could expect the documents. (Id. at p. 3). Dharod later provided “Second Supplemental Responses for Production,” including 137 documents, to Cogan Imports, on May 3, 2018. (DN 74-7).

The Court issued an Order on June 11, 2018, denying Cogan Imports' Motion for Sanctions without prejudice. (DN 73, at p. 7). The Court clarified that while its earlier Order did not set an explicit deadline for compliance, Dharod's production was still untimely because the Court implicitly relied on the 30-day provision from Federal Rule 34(b)(2)(A). (DN 73, at p. 2). The Court further commented that “it did not expect to see such boilerplate objections [from Dharod] at this late date because Dharod had not previously indicated that [he] would potentially withhold documents based on attorney-client privilege, work product, or confidentiality.” (Id. at p. 6). These late objections, the Court concluded, were waived and Dharod could not withhold relevant documents based on such objections. (Id. at p. 7).

However, because the Court could not determine which documents, if any, were being withheld and for what reason, it ordered the parties to “refine the nature of this dispute.” (Id.). The Court required Cogan Imports to submit to Dharod a comprehensive list of documents it believed were still being improperly withheld within five days; Dharod to respond to this list on a document-by-document basis within five days; and the parties to informally confer to facilitate production within five days. (Id. at ¶ 8). If the parties were unable to resolve their differences, the Court indicated Cogan Imports could then renew its Motion for Sanctions. (Id.).

Because the parties could not resolve their dispute, Cogan Imports filed a Renewed Motion for Sanctions. (DN 74). Cogan Imports alleges that Dharod continues to evade discovery by now claiming that he no longer possesses the requested documents or that his negotiations for the purchase and sale of the vehicles were “conducted orally and therefore no documents exist.” (DN 74, at p. 2). Cogan Imports argues that, despite the Court's explicit Order requiring Dharod to produce documents, Dharod has still failed to produce: (1) a single certificate of title for any automobile; and (2) any documents relating to the sale and purchase of certain automobiles. (Id. at p. 9). Cogan Imports identifies specific documents it believes Dharod is improperly withholding related to his purchase and/or sale of a 2014 Ferrari Spider 458; a different 2003 Ferrari Enzo; a 2013 Ferrari 458; a 2014 Ferrari LaFerrari; and a 2015 Ferrari 458 Speciale. (Id. at pp. 11-17). Dharod's continued objections to the relevancy of such documents, Cogan Imports asserts, contravenes the Court's earlier Orders. (Id. at p. 10). Based on these perceived deficiencies, Cogan Imports seeks Dharod be precluded from introducing any documentary or testimonial evidence relating to the practice and procedures for the sale and purchase of exotic/vintage automobiles within the industry. (Id. at p. 17).

*3 Dharod responds that he has complied with the Court's June 11, 2018 Order in every respect by stating that no documents are being withheld based on privilege, by producing legible documents, and by dealing with “each and every deficiency” that Cogan Imports alleged. (DN 76, at pp. 6-7). Dharod maintains that the documents Cogan Imports now seeks “do not exist or are not within [his] possession, custody, or control.” (Id.). According to Dharod, Cogan Imports is “merely imagining documents into existence” and is grounding its arguments on “baseless suspicion” and speculation. (Id. at pp. 7-8). Because Dharod claims that his negotiations for automobiles are conducted verbally or in face-to-face interactions, he contends that no additional documents exist or are in his possession from such negotiations. (Id. at p. 9). Dharod also clarifies that his untimely production of documents was not willful or prejudicial because Dharod advised Cogan Imports before the deadline that he was getting the documents from his client and would produce them the next week. (Id. at pp. 10-11).

In reply, Cogan Imports asserts that Dharod failed to address any of the specific documents that it identified as missing in its Renewed Motion for Sanctions. (DN 77, at p. 1). Cogan Imports further states that Dharod's characterization of a six-day delay in compliance is incorrect and unsupported by the record because Dharod did not submit his Second Supplemental Responses until two months after he was required to comply with the Court's discovery order. (Id. at p. 2). Cogan Imports urges the Court to reject Dharod's statements that he has no additional documents because of the specific inconsistencies identified in its Renewed Motion for Sanctions. (Id. at pp. 7-8).

Federal Rule of Civil Procedure 37 governs sanctions relating to discovery. If a party fails to obey an order “to provide or permit discovery,” the court where the action is taken may issue further just orders. Fed. R. Civ. P. 37(b)(2)(A). Sanctions under this Rule may include:

Fed. R. Civ. P. 37(b)(2)(A)(i)-(vii). This Rule further provides that “the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Id. at (b)(2)(C).

Cogan Imports requests that Dharod be precluded from introducing any documentary or testimonial evidence relating to the practice and procedures for the sale and purchase of exotic/vintage automobiles within the industry because of his non-compliance with this Court's discovery orders. District courts within this Circuit analyze four factors in determining whether to grant sanctions: (1) “whether the party's failure to cooperate in discovery is due to willfulness, bad faith, or fault[;]” (2) “whether the adversary was prejudiced by the party's failure to cooperate in discovery[;]” (3) “whether the party was warned that failure to cooperate could lead to the sanction[;]” and (4) when dismissal is sought, “whether less drastic sanctions were first imposed or considered.” Deere & Co. v. FIMCO Inc., No. 5:15-CV-105-TBR, 2017 WL 927233, at *3 (W.D. Ky. Mar. 8, 2017) (Peltz v. Moretti, 292 F. App'x 475, 479 (6th Cir. 2008) ). As Cogan Imports does not seek dismissal of the case, only the first three factors are relevant to this Court's analysis of whether sanctions are appropriate. The first three factors imply, as a prerequisite to their application, a finding that Dharod “fail[ed] to cooperate in discovery.”

*4 Because this Court previously concluded that Dharod's Court-ordered production was untimely and that Dharod could not belatedly assert boilerplate objections to privilege or confidentiality, it is apparent that Dharod failed to comply with discovery in those respects. Now, in its Renewed Motion for Sanctions, Cogan Imports alleges additional failures by Dharod to cooperate in discovery, including: (1) his failure to produce identified documents; and (2) his claims that responsive documents do not exist or are not in his possession, custody, or control.[1]

The Court finds some merit to Cogan Imports' arguments. Following the Court's Order denying its initial Motion for Sanctions, Cogan Imports provided a list of nine categories of documents it believed Dharod was improperly withholding. (DN 74-8). Dharod responded that the documents identified by Cogan Imports have either already been produced or do not exist/are not in his possession, custody, or control. (DN 74-9). In its Renewed Motion for Sanctions, Cogan Imports again identifies specific documents it believes Dharod is withholding, relating to the purchase or sale of a 2014 Ferrari Spider 458, a different 2003 Ferrari Enzo; a 2013 Ferrari 458; a 2014 Ferrari LaFerrari; and a 2015 Ferrari 458 Speciale. (DN 74, at pp. 11-16). Dharod did not address these specific documents in his Response to Cogan Imports' Motion but discussed them in his Declaration. (See DN 76; DN 76-1).

For document production requests, responding parties must produce documents which are in their possession, custody, or control. Fed. R. Civ. P. 34(a)(1). Rule 34 requires a party “to produce documents that already exist” but does not require a party “to create a document in response to a request for production.” Harris v. Advance Am Cash Advance, 288 F.R.D. 170, 174 (S.D. Ohio 2012) (citing In re Porsche Cars, N.A., Inc., No. 2:11-md-2233, 2012 WL 4361430, at *9 (S.D. Ohio Sept. 25, 2012) ). Put otherwise, a responding party's obligations under Rule 34 do not extend to non-existent materials. See Cartel Asset Management v. Ocwen Fin. Corp., No. 01-cv-1644, 2010 WL 502721, at *14 (D. Colo. Feb. 8, 2010); see also Commins v. NES Rentals Holdings, Inc., No. 3:16cv-00608-GNS, 2018 WL 3186983, at *10 (W.D. Ky. June 28, 2018).

“Courts supervising discovery are often confronted by the claim that the production made is so paltry that there must be more that has not been produced or that was destroyed.” Hubbard v. Potter, 247 F.R.D. 27, 29 (D.D.C. 2008). Speculation that more discovery exists will not suffice. In re Porsche, 2012 WL 4361430, at *9; see also Kendle v. Whig Enterprises, LLC, 2016 WL 898569, at *4 (S.D. Ohio Mar. 9, 2016). “[I]f the theoretical possibility that more documents exist sufficed to justify additional discovery, discovery would never end.” Hubbard, 247 F.R.D. at 29. Instead, a moving party must demonstrate that the documents previously produced “permit a reasonable deduction that other documents may exist or did exist and have been destroyed.” Id. (citing Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 313 (S.D.N.Y. 2003) ).

*5 Cogan Imports' speculation that Dharod could not conduct multi-million-dollar vehicle purchases and sales solely through verbal negotiations or that “it is impossible” to believe that Dharod does not have additional documentation concerning the price negotiations of his vehicles is insufficient to compel judicial involvement. In re Porsche Cars N. Am., Inc., No. 2:11-md-2233, 2012 WL 4361430, at *9 (S.D. Ohio Sept. 25, 2012). The Court further recognizes that Dharod cannot produce something he says doesn't exist, such as insurance information or certificates of title for the identified vehicles.

However, Cogan Imports has provided evidence demonstrating that Dharod has withheld at least some relevant documents in discovery. See id. (citing Hubbard, 247 F.R.D. at 29; Bailey Indus., Inc. v. CLJP, Inc., 270 F.R.D. 662, 671 (N.D. Fl. 2010) ). Most glaring is Dharod's failure to produce attachments to e-mails that it previously produced involving his purchase and later sale of a 2014 Ferrari Spider 458. (DN 74, at pp. 11-13). Dharod produced two e-mail communications with Enver Kaba, a General Sales Manager at Boardwalk Ferrari in Texas, that should have included attachments. The first e-mail from Mr. Kaba had a subject line “458 Spider Options” and includes an attachment icon labeled “spider.458.pdf.” (DN 50-1, at pp. 14-15, “SD 0401-0402”). Cogan Imports claims the attached document was never produced. Similarly, Mr. Kaba stated in a July 23, 2013 e-mail that “[A]ttached is the latest price we have. This is just a guide and prices are subject to change at any time ...” (Id. at p. 18, “SD 0405”). Again, this “attached price” was not included in Dharod's production. Evidence of these attachments in Dharod's previously produced discovery permits a reasonable deduction that these documents may exist or did exist but have been destroyed.

Dharod also produced e-mail communications from December 10, 2013, regarding the consignment or trade of a 2013 Ferrari 458, where a broker inquired to an agent of Dharod “[C]an I get a number he wants for it?” (Id. at p. 31, “SD 0418”). Then Dharod's agent e-mailed Dharod asking, “What number would you like for me to give Larry?” (Id.). But Dharod did not produce a responsive e-mail to his agent's question. Dharod could have explained why these attachments and responsive e-mails were not included in his production, but he declined to address these specific document requests in his Response to Cogan Imports' Renewed Motion for Sanctions or in his Declaration.[2] (See DN 76; DN 76-1, at pp. 2-3). Because Cogan Imports has sufficiently identified documents that may exist or did exist and have been destroyed, the Court finds Dharod failed to cooperate in discovery in withholding such documents or in not further explaining why these documents can no longer be accessed or do not exist. The Court, however, declines to find Dharod's explanation that any other documents sought by Cogan Imports do not exist or are not within his possession is disingenuous.

*6 Cogan Imports has, therefore, established the prerequisite that Dharod has failed to cooperate in discovery through his untimely production of documents, his late assertion of boilerplate objections as to privilege and confidentiality, and his failure to produce specific documents mentioned in his earlier production. With this prerequisite established, the Court will evaluate the factors from Peltz v. Moretti to decide whether Rule 37 sanctions are warranted.

The first factor is whether Dharod's failures to cooperate in discovery are due to willfulness, bad faith, or fault. Cogan Imports argues that Dharod's actions constitute a “clear pattern of willful failure to comply with the discovery rules and the Orders of this Court” which proves Dharod's intent to obstruct judicial proceedings. (DN 74, at p. 16). Dharod counters that its brief delay in producing responsive documents was not willful because he warned Cogan Imports of the delayed production “in an attempt to foster collegiality.” (DN 76, at pp. 10-11). Dharod also asserts that his response that no additional documents exist or are in his possession, custody, and control was made in good faith. (Id. at pp. 7-10).

The Court agrees with Cogan Imports that resolution of this discovery dispute has lasted for the better part of a year, largely due to Dharod's initial failure to timely comply with the Court's discovery Order from February 13, 2018. The Court further agrees that Dharod's most recent production contains several inconsistencies or omissions that require more explanation than Dharod's statements that the documents do not exist. As Dharod notes, however, Cogan Imports did not mention these specific documents or inconsistencies in its June 15, 2018 letter outlining the purported issues with Dharod's production. (DN 76, at p. 9, n. 10). Instead, Cogan Imports waited to identify these omissions in its Renewed Motion for Sanctions. Had Dharod been given earlier notice of these inconsistencies/omissions, the dispute may have been resolved without further motion practice. Regardless, Dharod fails to substantively address these specific deficiencies relating to the 2014 Ferrari Spider 458 and 2013 Ferrari 458 productions in either his Response or Declaration.

Moreover, while it certainly appears that Dharod's disclosures were belatedly produced and needed to be supplemented, the Court is not persuaded that Dharod disobeyed its Orders willfully or in bad faith. Dharod's initial delay in producing responsive documents was brief, and he provided Cogan Imports with notice that the production may be delayed. Despite this warning and without attempting to confer with Dharod, Cogan Imports filed their first Motion for Sanctions. Dharod, voluntarily produced a supplemental set of responsive documents before the Court ruled on Cogan Imports' first Motion for Sanctions. In considering these circumstances, the Court finds this factor weighs against imposing sanctions.

The second factor requires Cogan Imports demonstrate it was prejudiced by Dharod's failure to cooperate in discovery. The Sixth Circuit recognizes that a party is prejudiced by another party's failure to comply with discovery where the un-cooperating party's actions prevent the other party “from obtaining evidence essential to the preparation of its defense.” Deere, 2017 WL 927233, at *5 (quoting Universal Health Grp. v. Allstate Ins. Co., 703 F.3d 953, 956 (6th Cir. 2013) ). Cogan Imports argues that Dharod's discovery violations are prejudicial because it had to waste time, money, and effort to pursue information that Dharod was legally obligated to provide. Cogan Imports also explains that the requested and outstanding discovery would allow it to explore Mr. Dharod's assertions that it is his customary practice to negotiate the purchase price before entering into a binding purchase agreement. (DN 74, at p. 1). Dharod responds that Cogan Imports' premature filing of its initial Motion for Sanctions caused the only prejudice it claims to have suffered. (DN 76, at p. 11).

*7 On the one hand, Cogan Imports has exerted time, money, and effort in attempting to resolve this dispute for almost a year and have been thwarted at times by Dharod's delays and changing explanations for non-production. The information Cogan Imports seeks also reaches to the heart of the dispute in the case – whether a binding contract was created from the e-mails of Cogan Imports and Dharod's agent. The posture of the case further suggests prejudice to Cogan Imports because discovery has long been closed, with only this issue remaining, and both parties having filed motions for summary judgment that are fully briefed. On the other hand, if Cogan Imports had been willing to consult with Dharod before filing its initial motion to compel or had identified the specific missing documents in its June 15, 2018 letter, much of the claimed prejudice could have been averted. The Court, therefore, finds this factor is neutral.

The third factor, whether the party was warned that failure to cooperate may lead to sanctions, weighs in favor of sanctions against Dharod. In applying this factor, the Sixth Circuit has stated that “[c]lear notice is required” about the potential imposition of sanctions. Peltz, 292 F. App'x at 480. The Court's June 11, 2018 Order warned Dharod that if the parties could not reach an agreement as to the document production that Cogan Imports would be authorized to file a Renewed Motion for Sanctions. Further, the sanctions that Cogan Imports' presently seeks, that Dharod be precluded from introducing certain documentary and testimonial evidence, are the same as those Cogan Imports sought in its original Motion for Sanctions. Dharod, therefore, had clear notice about the potential imposition of sanctions that Cogan Imports presently seeks.

After fully considering the issues presented and the split of the above factors, the Court will not impose Cogan Imports' requested sanction of precluding Dharod from entering certain documentary and testimonial evidence. Because Dharod's failures to cooperate were not willful or in bad faith, the Court declines to impose such a harsh sanction. Instead, the Court finds that monetary sanctions against Dharod in the form of attorney's fees and costs are more appropriate.

Dharod failed to comply with the Court's February 13, 2018 Order by not producing any responsive documents until after the thirty-day deadline and by submitting a supplemental production almost two months late. Dharod also belatedly asserted boilerplate objections of privilege and confidentiality to producing the Court-ordered discovery. Most recently, inconsistencies or omissions in Dharod's production permit a reasonable deduction that specific attachments or responsive e-mails may exist or did exist and have been destroyed. Sanctions are warranted for these reasons. The Court, however, is cognizant that Cogan Imports could have avoided certain costs by conferring with Dharod prior to filing its first Motion for Sanctions or by identifying the specific inconsistencies/omissions in its June 15, 2018 letter to Dharod.

To that end, the Court will award Cogan Imports attorney's fees and costs related to filing only its Renewed Motion to Compel. The Court will also require Dharod either produce the specific attachments relating to the 2014 Ferrari Spider 458 and responsive e-mail relating to the 2013 Ferrari 458 or explain in detail reasons why they cannot be produced.

IT IS THEREFORE ORDERED that Cogan Imports' Renewed Motion for Sanctions (DN 74) is GRANTED IN PART and DENIED IN PART. Cogan Imports is GRANTED reasonable attorney's fees and costs related to filing its Renewed Motion for Sanctions. Cogan Imports' request for evidentiary sanctions is DENIED.

IT IS FURTHER ORDERED that Cogan Imports is directed to file a bill of costs within fourteen (14) days entry of this Order. If necessary, Dharod will then have seven (7) days to respond to Cogan Imports' bill of costs.

*8 IT IS FURTHER ORDERED that Dharod must fully comply with the Court's prior discovery Orders from February 13, 2018, and June 11, 2018 and produce the specific attachments or responsive e-mails discussed in this Order. If Dharod still maintains that these documents “do not exist” or “are not within his possession, custody, or control,” Dharod will be required to explain its reasoning in detail. Dharod has fourteen (14) days within entry of this Order to comply.