White Cap, LP v. Heyden Enters., LLC
White Cap, LP v. Heyden Enters., LLC
2024 WL 5455557 (S.D. Fla. 2024)
December 30, 2024

Maynard, Shaniek M.,  United States Magistrate Judge

Failure to Preserve
Failure to Produce
Sanctions
Bad Faith
Possession Custody Control
Protective Order
Cloud Computing
Cost Recovery
Exclusion of Pleading
Spoliation
Text Messages
Dismissal
Forensic Examination
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Summary
The defendant, Kavney, was found to have acted willfully and in bad faith by intentionally deleting relevant emails and submitting false statements under oath. As a result, the court imposed a case-terminating sanction, striking Kavney's answer and dismissing the case, to penalize his misconduct and deter others from engaging in similar behavior.
Additional Decisions
WHITE CAP, L.P., Plaintiff,
v.
HEYDEN ENTERPRISES, LLC, d/b/a Heyden Supply, BRIAN WELSH, MIGUEL RIVAN, WAYNE ROSENBLUM, TIMOTHY KAVNEY, and GOMER BLACK, JR., Defendants
CASE NO. 23-14248-CIV-MARTINEZ/MAYNARD
United States District Court, S.D. Florida
Entered on FLSD Docket December 30, 2024

Counsel

Katherine Graham Poirot, Pro Hac Vice, Robert C. Stevens, Pro Hac Vice, Seyfarth Shaw LLP, Atlanta, GA, Luis Eduardo Suarez, Heise Suarez Melville PA, Coral Gables, FL, Alexander Charles Meier, Lee Meier, Atlanta, GA, for Plaintiff.
Justin B. Levine, Lizza C. Maldonado, Samantha Shallani Jairam, Tre'Ana Lynnae Thompson, Cole, Scott, Kissane, P.A. West Palm Beach, FL, for Defendant Heyden Enterprises, LLC.
Justin B. Levine, Lizza C. Maldonado, Tre'Ana Lynnae Thompson, Cole, Scott, Kissane, P.A., West Palm Beach, FL, Patrick Michael DeLong, Marshall Dennehey Warner Coleman & Goggin, Fort Lauderdale, FL, Abbye Erika Alexander, Kaufman Dolowich, Voluck, Orlando, FL, Samuel Benjamin Menaged, Kaufman Dolowich & Voluck, Fort Lauderdale, FL, for Defendant Brian Welsh.
Julie Beth Schwartz, Law Offices of Patricia E. Garagozlo, Plantation, FL, Justin B. Levine, Lizza C. Maldonado, Tre'Ana Lynnae Thompson, Cole, Scott, Kissane, P.A., West Palm Beach, FL, Abbye Erika Alexander, Kaufman Dolowich, Voluck, Orlando, FL, Joseph R. Marzilli, Freeman Mathis & Gary, LLP, Boston, MA, Samuel Benjamin Menaged, Kaufman Dolowich & Voluck, Fort Lauderdale, FL, for Defendant Miguel Rivan.
Justin B. Levine, Lizza C. Maldonado, Tre'Ana Lynnae Thompson, Cole, Scott, Kissane, P.A., West Palm Beach, FL, Abbye Erika Alexander, Kaufman Dolowich, Voluck, Orlando, FL, Kimare S. Dyer, Markenson Pierre, Quintairos, Prieto, Wood & Boyer P.A., Miami, FL, Samuel Benjamin Menaged, Kaufman Dolowich & Voluck, Fort Lauderdale, FL, for Defendant Wayne Rosenblum.
Justin B. Levine, Lizza C. Maldonado, Tre'Ana Lynnae Thompson, Cole, Scott, Kissane, P.A., West Palm Beach, FL, Abbye Erika Alexander, Kaufman Dolowich, Voluck, Orlando, FL, Christine Marie Tomasello, Royal Palm Beach, FL, Samuel Benjamin Menaged, Kaufman Dolowich & Voluck, Fort Lauderdale, FL, for Defendant Timothy Kavney.
John M. Miller III, Katherine Cook, Boy Agnew Potanovic Miller, PLLC, Fort Myers, FL, for Defendant Gomer Black Jr.
Maynard, Shaniek M., United States Magistrate Judge

REPORT AND RECOMMENDATION ON MOTION FOR SANCTIONS AGAINST DEFENDANT TIMOTHY KAVNEY

*1 This is a trade secrets and restrictive covenant dispute between Plaintiff White Cap, L.P. (“Plaintiff”) and Defendants Heyden Enterprises, LLC (“Heyden Supply”), Brian Welsh, Miguel Rivan, Wayne Rosenblum, Timothy Kavney (“Individual Defendants,” and together with Heyden Supply, the “Heyden Defendants”), and Gomer Black.
On September 30, 2024, Plaintiff filed a Motion for Sanctions, for a Hearing, and for a Show-Cause Order (“Motion”). DE 329. The Motion is fully briefed, DE 347, DE 354, and has been referred to me for appropriate disposition, DE 356.
On October 22, 2024, I issued an Order partially granting the Motion “only insofar as Defendant Kavney and his counsel shall appear before me in person for a show cause hearing to explain why appropriate sanctions should not be imposed based upon Defendant Kavney's conduct in this case, including his admitted deletion of relevant emails and his inconsistent representations in discovery.” DE 357. On November 8, 2024, I held a show cause hearing at which time I heard Kavney's testimony and argument of counsel. DE 383.
Being fully advised, I respectfully recommend that the Motion, DE 329, be GRANTED IN PART AND DENIED IN PART. Specifically, I recommend (1) that Kavney's Answer to the Complaint be stricken and (2) that Kavney be required to pay Plaintiff $50,000.00 as reimbursement for the expenses incurred by Plaintiff to address Kavney's misconduct and as a sanction against Kavney for his willful misrepresentations and false statements throughout this litigation and in connection with these show cause proceedings.[1]
BACKGROUND
The factual background for this dispute is detailed in my prior unobjected-to report on Plaintiff's motion for preliminary injunction. DE 287 (adopted at DE 303). The facts underlying the instant Motion, DE 329, are largely undisputed. Kavney has admitted to his intentional destruction of relevant evidence in this case both at his deposition and at the show cause hearing before me. Additionally, throughout this case, Kavney knowingly made numerous key representations under penalty of perjury that he now admits are false. Kavney's false representations fall into three general categories: (1) his answers to discovery responses; (2) his statements about information contained on his personal desktop computer; and (3) his email deletion practices. I will address each category in turn below.
*2 On October 31, 2023, Kavney served his initial answers to Plaintiff's first set of discovery requests. DE 329-1. Kavney's unverified answers contained incomplete responses, including the following:
  • Kavney identified only four customers that he claimed he contacted regarding his impending transition to Heyden Supply (Interrogatory No. 1);
  • Kavney claimed the only current or former White Cap employees he contacted regarding his move to Heyden Supply were Gregg Moore and Miguel Rivan (Interrogatory No. 4);
  • Kavney stated that, since his departure from White Cap, he had not used or referenced any White Cap documents (Interrogatory No. 8);
  • Kavney stated that he had not deleted any White Cap information or emailed any White Cap information to his personal email (Interrogatory No. 11);
  • Kavney stated that he did not relay, or ask another current or former White Cap employee, to relay information about White Cap's business, operations, or customers to Heyden Supply (Interrogatory No. 13); and
  • Kavney stated that he did not complete any work on behalf of Heyden Supply while still employed at White Cap (Interrogatory No. 14).
On November 10, 2023, Plaintiff filed a motion to compel regarding the Individual Defendants’ responses to Plaintiff's first set of discovery requests. DE 55. Soon after Plaintiff filed that motion, previous counsel of record for Heyden Supply and the Individual Defendants moved to withdraw on an emergency basis due to an alleged irreconcilable conflict. DE 82. Judge Martinez granted that motion and stayed this case for 45 days to allow for the appearance of new counsel. DE 86.
On January 18, 2024, after new counsel appeared, I entered an order authorizing limited discovery in advance of a scheduled preliminary injunction hearing. DE 100. In relevant part, my Order stated: “[b]y Friday, January 26, 2024, all five individual Defendants shall provide to Plaintiff all emails from their personal accounts or text messages from their phone during the two weeks prior to their departures from Plaintiff containing communications with any customers identified by Plaintiff and Defendants as being subject to the TRO.” Id. at 7.
On February 2, 2024, I denied without prejudice Plaintiff's prior motion to compel better responses from the Individual Defendants and authorized the motion to be refiled following a renewed good-faith conferral. DE 117. The second set of counsel for the Individual Defendants soon after filed an emergency motion seeking to withdraw as counsel and to again stay the case due to an alleged conflict of interest. On April 2, 2024, Judge Martinez granted this emergency motion to stay, DE 167, and thereafter authorized counsel for Heyden Supply to jointly represent the same group of Individual Defendants.
On May 28, 2024, Plaintiff renewed its motion to compel better discovery responses from Heyden Supply and the Individual Defendants (including Kavney) and identified specific responses as allegedly being indisputably false based on information provided by, or positions taken by, the Heyden Defendants. DE 256. Plaintiff's motion attached an extensive discovery chart and highlighted in yellow the answers or responses Plaintiff contended were false. Id. at 4 n.4, DE 256-1. The attached chart included the following:
*3 

DE 256-1 at 36-37. On June 4, 2024, I granted Plaintiff's renewed motion to compel and ordered Heyden Supply and the Individual Defendants to provide “full, complete, and verified answers to Plaintiff's first set of discovery requests with particular attention to the deficiency chart attached to the Motion” by June 24, 2024. DE 262. It is undisputed that Kavney failed to correct any of the above deficient responses identified by Plaintiff.
On June 21, 2024, Kavney served amended answers and objections with a statement that he would “not produce documents from the email address diablo24t@gmail.com as Mr. Kavney generally deletes all emails and does not have emails responsive to this Interrogatory.” DE 332-1 at 10. Kavney's amended answers included the following signed declaration:

DE 332-1 at 22. Over two months later, at 8:26 p.m. on September 11, 2024, the night before Kavney's scheduled deposition, Kavney unexpectedly served a redlined version of amended interrogatory answers where he removed his previously verified answer that he “generally deletes all emails.” DE 332-2 at 10. In an attached signed declaration, Kavney averred that “[u]pon further consideration, [he is] withdrawing” this prior representation that he generally deletes his emails from his personal email account. DE 329-5.
Moments later, at 8:32 p.m., Kavney's counsel filed a “Notice to Withdraw Prior Statements in the Court's Record” regarding Kavney's personal email account which “reasonably requests withdrawal from the Court's record of any representation by the undersigned made on behalf of Kavney related to the portion of his Answers now withdrawn by amendment.” DE 324. Neither Kavney nor his counsel sent any further message or explanation to opposing counsel for this sudden reversal of position and withdrawal of a prior representation on the eve of Kavney's deposition.
During his deposition the next day, Kavney admitted under oath that many of his discovery responses were false:
  • Kavney admitted to not providing information in his answer to Plaintiff's discovery responses asking whether he deleted any emails because he was “scared and nervous” to tell his counsel and he was “concerned about giving that information” to Plaintiff. DE 332-3 at 8, 21.
  • Kavney acknowledged that his answer to Interrogatory No. 11 was false because he deleted emails and forwarded information from his White Cap email to his personal email. Id. at 39-41.
  • Kavney denied that he completed any work on behalf of Heyden Supply while employed for Plaintiff but also acknowledged that while he still worked for Plaintiff, he transitioned to Heyden Supply “orders that I was given two weeks prior from my customers, because White Cap couldn't get them out.” Id. at 42-43.
  • Kavney admitted that his answer to Interrogatory No. 15 was wrong because it included the wrong date when he began talking to Welsh about employment with Heyden Supply. Id. at 44-45.
  • Kavney initially claimed that he had no conversations with Welsh about Plaintiff's Ft. Pierce branch. Later in the deposition, however, he conceded that his prior testimony was false. Id. at 41-42, 46-48.
  • *4 Kavney testified that he had a number of notebooks where he kept notes for “all of his deliveries.” He testified that he had notebooks covering the last several months but that he had thrown away the notebooks with older order records. Id. at 48-52.
During his deposition, Kavney also admitted to making false statements to the Court regarding his personal desktop computer. On February 8, 2024, the Individual Defendants, including Kavney, filed a Certificate of Device Imaging. DE 208. In that certification, Kavney stated that he would not provide his personal desktop computer for imaging because he did not “have access to any [White Cap] emails or information” and no longer had valid White Cap credentials. Id. at ¶ 3. Kavney also signed and submitted an affidavit on April 18, 2024 where he indicated that “no emails, or any other information, in connection with [his] employment with White Cap remain on [his] desktop.” DE 208-1 at ¶ 7.
Thereafter, on April 23, 2024, the Heyden Defendants filed a motion for protective order seeking to prevent the imaging and review of Kavney's personal desktop computer. In connection with this motion, Kavney submitted another sworn declaration where he again maintained that “no emails, or any other information, in connection with [his] employment with White Cap remain on [his] Desktop.” DE 211-5 at ¶ 7. Kavney further declared that he “did not use [his] Desktop in connection with his employment with Heyden Supply.” Id. ¶ 12.
It has since been discovered that the above representations by Kavney were entirely false. In a September 5, 2024 notice filed with the Court, Kavney's counsel conceded that, contrary to what Kavney swore under oath, Kavney's personal desktop computer had three specific categories of information “responsive to discovery requests by White Cap” including (1) a OneDrive account for White Cap he allegedly could not access after leaving his employment with Plaintiff, (2) “White Cap related documents, including White Cap orders, quotes, bar lists, cross-sale opportunity reports,” and (3) Heyden Supply related documents. DE 319 at 2-3.
Notably, this notice was not filed until after I denied the motion for protective order concerning Kavney's personal computer and ordered the Heyden Defendants to review Kavney's personal computer for responsive documents. DE 305 at 10-11.
Despite these revelations, during his September 12, 2024 deposition, Kavney continued to deny that his personal desktop computer had any relevant White Cap and Heyden Supply documents—in direct contradiction to sworn statements he made to this Court—even after confronted with documents produced by his own counsel and his counsel's own filings. DE 332-3 at 28-38. Ultimately, Kavney conceded that his representation that he did not use his personal desktop computer for work at Heyden Supply was false and that “[f]rom day one to the present” he had used this personal computer in connection with his employment for Heyden Supply. Id. at 38. This squarely contradicted what Kavney stated under oath in connection with a motion seeking a Court order of protection to preclude the review of his personal desktop computer. It bears reiterating that these concessions by Kavney were made only after I denied the motion for protective order regarding Kavney's computer and entered an order requiring a review of Kavney's personal desktop computer for information responsive to Plaintiff's discovery requests. DE 305 at 10-11.
*5 During his deposition, Kavney also admitted for the first time that he deleted several emails relevant to this case. DE 332-3 at 8-11, 55-56. Kavney testified that he provided false information in response to Plaintiff's discovery responses asking whether he deleted any emails because he was “scared” and “concerned about giving that information” to Plaintiff. Id. at 21. Kavney admitted to deleting numerous emails relevant to this lawsuit in October 2023, but he could not recall every email he deleted, how he selected which emails to delete, or whether the deletion occurred on one day or over multiple days. Id. at 17-22. In response to questioning by Plaintiff's counsel, Kavney testified that he did not recall whether he also deleted text messages but he acknowledged the possibility of having done so, including during the critical two-week period prior to his departure from White Cap. Id. at 25-27.
Kavney's deposition testimony represented a marked departure from his prior representations made throughout this litigation. As discussed above, in response to Plaintiff's discovery requests, Kavney initially claimed that he “generally deletes all emails” from his personal email. Kavney proffered this general deletion practice as an explanation for why Kavney failed to produce any emails in response to earlier Court-ordered discovery and even during the Heyden Defendants’ argument at the preliminary injunction hearing in this matter.
SHOW CAUSE HEARING
On November 8, 2024, I held a show cause hearing. Kavney testified and admitted to intentionally deleting relevant emails during the course of this case “[s]ometime, maybe, in the middle of October of 2023” because he “was very nervous and scared about the consequences.” DE 405 at 7-8. Moreover, Kavney admitted to advancing a false position for months regarding his deletion of emails and he conceded that he could not identify all of the emails that he deleted. Id. at 9-10, 14. He admitted, however, that the emails he deleted included emails to customers, detailers, Brian Welsh, and Heyden Supply. Id. at 11, 14. He did not address the texts that he might possibly have deleted. Neither Kavney nor his counsel adequately explained why Kavney's answers to numerous discovery requests remained inaccurate—even after Kavney testified that the answers were wrong. Kavney also did not address why he submitted several false declarations in this matter about his email deletion practice and the relevant information on his personal computer.[2]
DISCUSSION
Plaintiff seeks sanctions under Rule 37 and pursuant to the Court's inherent authority. Under Rule 37(b), if a party fails to comply with an order providing or permitting discovery, the Court may enter appropriate sanctions, including:
(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination.
Fed R. Civ. P. 37(b)(2)(A)(i)-(vii). In addition to or in lieu of these sanctions, 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. Fed. R. Civ. P. 37(b)(2)(C).
*6 In the Eleventh Circuit, under Rule 37, district courts hold broad discretion to impose sanctions against litigants or their counsel, including the imposition of monetary sanctions and, when appropriate, dismissal of a claim or responsive pleading. BankAtlantic v. Blythe Eastman Paine Webber, Inc., 12 F.3d 1045, 1048–49 (11th Cir. 1994). A district court's act of imposing Rule 37 sanctions implicates the Due Process Clause of the Fifth Amendment, and so, to ensure a sanction of fees is “just,” the record must reflect that the sanctioned party was previously on notice of the necessity to produce the discovery in question. Id. at 1050. A finding of bad faith or willfulness on the part of the sanctioned party is necessary only where a court imposes the most severe sanction of default or dismissal. Id. at 1049. Importantly, Rule 37 is designed to protect a court's institutional values and “Rule 37 sanctions are imposed not only to prevent unfair prejudice to the litigants but also to insure the integrity of the discovery process.” Aztec Steel Co. v. Florida Steel Corp., 691 F.2d 480, 482 (11th Cir. 1982). Thus, courts are encouraged to consider whether the sanctioned party's conduct would cause “ ‘other parties to ... feel freer than ... Rule 37 contemplates they should feel to flout other discovery orders of other District Courts.’ ” Id. at 482 (quoting National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643 (1976)).
Separate from its authority under Rule 37, the Court also has the inherent authority to control the proceedings before it, which includes the authority to impose “reasonable and appropriate” sanctions. See Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1545 (11th Cir. 1993). That power includes the ability to conduct independent investigation to determine whether it has been the victim of fraud. See Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991); see also In re E.I. DuPont De Nemours & Co.–Benlate Litig., 99 F.3d 363, 367 (11th Cir. 1996) (concluding that district court had jurisdiction to conduct an independent civil action for sanctions based upon allegations of fraud in another case). Imposing sanctions under the Court's inherent power requires a finding that a party acted in bad faith. Martin v. Automobile Lamborghini Exclusive, Inc., 307 F.3d 1332, 1335 (11th Cir. 2002) (per curiam). Bad faith exists when: (1) when fraud has been committed on the Court; (2) when a party delays or disrupts the litigation, or hampers the enforcement of a court order; or (3) when an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent. Barash v. Kates, 585 F. Supp. 2d 1347, 1362 (S.D. Fla. 2006) (citation omitted).
The Court may impose case-terminating sanctions under its inherent authority or Rule 37 if there “was a willful or bad faith failure to obey a discovery order.” Malautea, 987 F.2d at 1542 (finding bad faith where defendants failed to produce documents following three clear orders by the district judge to do so); see also Aztec Steel Co., 691 F.2d at 481 (finding defendant “willfully flouted court ordered discovery”). Providing false testimony likewise constitutes a sufficient basis to enter case-terminating sanctions. Anz Advanced Techs. v. Bush Hog, LLC, 2011 WL 814663, at *11 (S.D. Ala. Jan. 26, 2011), report adopted, 2011 WL 814612 (S.D. Ala. Mar. 3, 2011); see also Garcia v. Berkshire Life Ins. Co. of Am., 569 F.3d 1174, 1181 (10th Cir. 2009) (“[W]hen a party ... submits false evidence, it imposes substantial burdens not only on the opposing party, but also on the judicial system itself, as the extent and relevance of the fabrication are investigated.”).
“Bad faith exists when the court finds that a fraud has been practiced upon it, or that the very temple of justice has been defiled, ...or where a party or attorney knowingly or recklessly raises a frivolous argument, delays or disrupts the litigation, or hampers the enforcement of a court order.” Allapattah Servs., Inc. v. Exxon Corp., 372 F. Supp. 2d 1344, 1373 (S.D. Fla. 2005) (citing Chambers, 501 U.S. at 45-46); Barash v. Kates, 585 F. Supp. 2d 1347, 1362 (S.D. Fla. 2006) (same). “In determining whether sanctions should be awarded under the bad faith standard, ‘the inquiry will focus primarily on the conduct and motive of a party, rather than on the validity of the case.’ ” Barash, 585 F. Supp. 2d at 1362 (quoting Rothenberg v. Sec. Mgmt. Co., Inc., 736 F.2d 1470, 1472 (11th Cir. 1984)).
*7 Before a case-terminating sanction may be entered, a court must find: (1) that Defendant acted willfully or in bad faith; (2) that Plaintiff was prejudiced by Defendant's conduct; and (3) that lesser sanctions would not serve the goals of punishment and deterrence. Telectron, Inc. v. Overhead Door Corp., 116 F.R.D. 107, 131 (S.D. Fla. 1987). Here, as discussed below, I find that Plaintiff has established these three conditions by clear and convincing evidence.
Kavney admitted in his deposition and at the show cause hearing before me that he intentionally destroyed relevant evidence while this lawsuit was pending. This intentional destruction of evidence was compounded by his repeated, knowing false statements under oath. Courts nationwide recognize that providing false testimony—whether in a deposition or in other sworn submissions to the Court—constitute bad faith conduct that warrants severe sanctions. See, e.g., Combs v. Rockwell Int'l Corp., 927 F.2d 486, 488 (9th Cir. 1991) (“Dismissal is an appropriate sanction for falsifying a deposition.”); see also Brown v. Oil States Skagit Smatco, LLC, 664 F.3d 71, 78 (5th Cir. 2011) (affirming dismissal of an employment discrimination case where the plaintiff lied at deposition about the reason he quit his job); Martin v. DaimlerChrysler Corp., 251 F.3d 691, 695 (8th Cir. 2001) (affirming dismissal of an employment discrimination case based on the plaintiff's false statement at deposition that she had never been a party to another lawsuit against a past employer and based on her failure to identify all of her health care providers); Nichols v. Klein Tools, Inc., 949 F.2d 1047, 1049 (8th Cir.1991) (affirming dismissal where the plaintiff fabricated deposition testimony in order to prevent the defendant from presenting its case); Arnold v. Cnty. of El Dorado, 2012 WL 3276979, at *4 (E.D. Cal. Aug. 9, 2012) (plaintiff acted in bad faith by lying at her deposition); Lowry v. Heritage Sec., 2011 WL 7769329, at *10, *14 (S.D. Cal. July 7, 2011), report adopted, 2012 WL 1439078 (S.D. Cal. Apr. 26, 2012) (plaintiff acted with willful disobedience in refusing to answer an interrogatory requesting his residence address, even though plaintiff refused to provide such information to protect his privacy).
The undisputed evidence before me is that Kavney knowingly made false statements to opposing counsel and under oath to the Court because he was “scared” and “concerned about giving that information” to his counsel and Plaintiff in discovery. This is not a situation involving the negligent submission of false statements or negligent failure to preserve relevant evidence. On the contrary, Kavney knowingly made false statements to the Court and Plaintiff about his intentional deletion of an unknown quantity of relevant emails in October 2023 for nearly the entirety of the extensive discovery period. Moreover, Kavney indisputably submitted false statements under oath in support of a motion seeking an order of protection against the review of his personal desktop computer which was ultimately found to contain several categories of responsive and relevant information. Kavney's own testimony at his deposition and at the show cause hearing plainly demonstrate that his actions were willful and not inadvertent or negligent.
In response to Plaintiff's request for sanctions, Kavney nonetheless claims his actions were negligent. In support, he primarily relies on Living Color Enterprises, Inc. v. New Era Aquaculture, Ltd., 2016 WL 1105297 (S.D. Fla. Mar. 22, 2016). However, this reliance is misplaced. In Living Color, the defendant had an auto-delete setting on his phone that removed text messages after a certain period of time.[3] Id. at *2-3. The defendant failed to change that setting during litigation, which may have resulted in the loss of relevant text messages. Id. The court there found that, while defendant “clearly had an obligation to retain the relevant text messages after this lawsuit was initiated,” defendant “simply acted negligently in erasing the text messages either actively or passively. Defendant is an individual who appears to be a relatively unsophisticated litigant. At worst, his actions were negligent.” Id. at *6. Accordingly, the court declined to impose Rule 37 sanctions based on the defendant's failure to preserve ESI. Id. at *7.
*8 Here, by contrast, Kavney did not simply fail to preserve relevant information as part of a regular practice of deleting emails or texts. Rather, he falsely claimed under oath that regular deletion was his general practice, when in fact—and as he later admitted—this was a lie. The truth is that emails pertaining to the case are missing—not due to any general practice of deleting emails—but because Kavney intentionally deleted the emails to avoid producing them in this litigation. Kavney also knowingly submitted false testimony about documents and information contained on his personal desktop computer, wholly aside from and in addition to his false testimony regarding his deletion of emails. Kavney's knowing submission of false information is not merely an ESI violation (even if the underlying misrepresentation relates to ESI). His actions have substantially burdened opposing counsel and the Court by perpetuating lies that were discovered only after significant time and energy were spent by counsel and the Court to unearth the truth. Anz Advanced Techs. v. Bush Hog, LLC, 2011 WL 814663, at *11 (S.D. Ala. Jan. 26, 2011), report adopted, 2011 WL 814612 (S.D. Ala. Mar. 3, 2011); see also Garcia v. Berkshire Life Ins. Co. of Am., 569 F.3d 1174, 1181 (10th Cir. 2009) (“[W]hen a party ... submits false evidence, it imposes substantial burdens not only on the opposing party, but also on the judicial system itself, as the extent and relevance of the fabrication are investigated.”).[4]
Kavney's destruction of relevant evidence and false testimony clearly prejudiced Plaintiff. While Kavney attempts to confine Plaintiff's request for sanctions as limited to the destruction of ESI evidence, the basis for the request is far more extensive. Kavney intentionally and repeatedly submitted false declarations and discovery to conceal his wrongful conduct. Kavney's actions caused both Plaintiff and this Court to expend immense time and resources to get to the truth of the matter. While Kavney now maintains that Plaintiff has obtained most of the emails that he deleted through other sources, there is little more than his word to support this position, and I decline to find him credible due to his prior false sworn statements to the Court.[5] Kavney's misconduct and false statements throughout this case have made “a game of discovery” and deprived Plaintiff “of the truth-finding judicial process to which it is entitled” through litigation. See Sprint Sols., Inc. v. Fils-Amie, 83 F. Supp. 3d 1290, 1298 (S.D. Fla. 2015). His conduct has “caused Plaintiff's legal fees to skyrocket” and I “simply cannot trust that [Kavney has] produced, or will ever produce, all discoverable evidence.” Bernal v. All Am. Inv. Realty, Inc., 479 F. Supp. 2d 1291, 1339 (S.D. Fla. 2007). The undisputed evidence is more than sufficient to demonstrate prejudice.
I am unpersuaded by Kavney's efforts to limit the at-issue misconduct to the destruction of ESI evidence. In its original motion, Plaintiff bases its request for relief on Rule 37(b) and the Court's inherent authority. DE 329 at 12-17. If Kavney had, in a moment of poor judgment, deleted emails but then disclosed that he had done so in response to Plaintiff's discovery requests rather than repeatedly submit false declarations to obscure his misconduct, I might have reached a different outcome regarding the appropriate recommended sanction. But he did not. Instead, over a period of several months, Kavney affirmatively misrepresented under oath why he did not have relevant documents and submitted false testimony regarding the existence of other relevant information. Kavney's conduct included going so far as to cause his counsel to file a motion seeking Court-sanctioned protection from having to submit Kavney's personal desktop computer for review and submitting a false declaration that his computer contained no relevant information. The knowing submission of a false declaration is not merely an ESI violation and instead amounts to a larger pattern of inexcusable disregard for the authority of this Court and the overall civil discovery process. Moreover, prejudice “can consist of having to ‘vigorously attempt [ ] to pry ... information’ from the deceitful party ....” Forsberg v. Pefanis, 634 F. App'x 676, 680 (11th Cir. 2015) (quoting Jaffe v. Grant, 793 F.2d 1182, 1190 (11th Cir.1986)). As the foregoing history demonstrates, such vigorous attempts undoubtedly occurred here.
*9 Finally, I have considered whether lesser sanctions are appropriate and find that, given the extent of Kavney's misconduct, the striking of his Answer is warranted and lesser sanctions will not suffice. I base this conclusion on Kavney's repeated false statements to the Court, which stretch across multiple filings and were revealed only on the eve of his deposition and even then, only in part. Such severe sanctions are particularly appropriate here not only to “penalize those whose conduct may be deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in the absence of such a deterrent.” Mathews v. Moss, 2011 WL 13134350, at *3 (S.D. Fla. Sept. 13, 2011), aff'd, 506 F. App'x 981 (11th Cir. 2013). Absent severe sanctions, litigants like Kavney would be incentivized to submit false statements under oath to the reviewing court in an attempt to escape or minimize their liability. The penalty for such conduct must exceed simply restoring the harmed party to the same position it would be in had the false information not been offered in the first place. Put simply, the fact that the truth eventually came out cannot spare Kavney from appropriate consequences of promulgating and standing by false testimony for months. Such conduct warrants the entry of severe sanctions. See, e.g., Mathews, 2011 WL 13134350, at *3 (entering case-terminating sanctions based on affirmative actions to submit false evidence).
Moreover, I have previously entered lesser sanctions and those have failed to secure Kavney's provision of truthful information in discovery. I previously entered a clear and unambiguous order granting Plaintiff's motion to compel, which included an award of fees to Plaintiff. DE 262. Despite that order and my express warning to Kavney that “we are now clearly within Rule 37(b) which talks about sanctions as a response for violating a court order,” Kavney failed to correct discovery responses that Plaintiff directly identified as allegedly false and caused his counsel to file a motion for protective order regarding his personal computer premised on a false declaration regarding the contents of that computer. DE 329-7. Accordingly, lesser sanctions have been insufficient to procure Kavney's honest participation in this litigation.
Kavney proposes that, as an alternative, the Court should enter an adverse inference that Kavney sent work-related orders directly from his personal email address to Brian Welsh, another Heyden Supply employee, while Kavney was employed by Plaintiff. However, this fact is undisputed. At the preliminary injunction hearing, Plaintiff introduced several emails between Kavney and Welsh regarding customer orders during the time that Kavney was still employed by Plaintiff. See 148-5. Thus, the adverse inference Kavney proposes would not remedy his misstatements or restore Plaintiff to the position it would be in had Kavney not destroyed relevant evidence and provided false testimony regarding his deletion of emails and the contents of his personal desktop computer. At a minimum, any appropriate adverse inference should provide that Kavney deleted relevant information during this case, that he submitted false sworn statements to the Court regarding his actions, and that the jury should presume that this information would have been unfavorable to Kavney and favorable to Plaintiff had it not been destroyed by Kavney.
Ultimately, however, I find that even an enhanced adverse presumption would be an inadequate remedy here. Kavney's months-long, intentional deception extends from the destruction of evidence and failures to comply with prior orders regarding his discovery responses to the much more serious affirmative submission of false sworn statements to the Court. This level of severe misconduct fundamentally compromises the “truth-finding” function of the overall discovery process and any result short of striking Kavney's answer would not be sufficient to adequately remediate the serious ramifications of Kavney's misconduct. See Sprint Sols., Inc., 83 F. Supp. 3d at 1298.[6] Moreover, as a practical matter, instructing the jury on what it would need to infer solely as to Kavney would likely cause juror confusion and prejudice the other, non-violating Defendants. See BluestarExpo, Inc. v. Enis, 2022 WL 2341168, at *12 (S.D. Fla. May 16, 2022).
RECOMMENDED SANCTIONS
*10 Plaintiff has neither requested nor do I find the entry of final default judgment against Kavney to be an appropriate sanction. Although the requirements for entry of default judgment are met here and a court is permitted to enter a default judgment against a party as a sanction for failure to obey a pretrial order, default judgments may not be appropriate if they have the potential to result in inconsistent judgments in a case with multiple defendants. See BluestarExpo, Inc., 2022 WL 2341168 at *12 (collecting cases). Here, Plaintiff's claims against Defendants are intertwined such that the issuance of a default judgment against Kavney has the potential to result in inconsistent judgments. Accordingly, I ultimately find the appropriate sanctions for Kavney's misconduct are to strike his Answer and require Kavney to compensate Plaintiff for its fees and costs expended in connection with such misconduct.
First, Rule 37(b)(2)(A)(iii) specifically provides that the Court may strike a party's answer in whole or in part for failing to obey a discovery order. See Luna-Marquez v. Laviosa, No. 14-62334-CIV, 2016 WL 4369967, at *3 (S.D. Fla. Feb. 17, 2016); U.S. v. One 1999 Forty Seven Foot Fountain Motor Vessel, 240 F.R.D. 695, 698 (S.D. Fla. 2007); see also Mathews, 2011 WL 13134350, at *3, aff'd, 506 F. App'x 981 (11th Cir. 2013). Similarly, the Court also has the inherent authority to strike a party's answer. Forsberg v. Pefanis, 634 F. App'x 676, 679 (11th Cir. 2015) (affirming district court's striking of answer based on submission of false evidence). “[T]he decision to strike a claim or answer ‘ought to be a last resort–ordered only if noncompliance with discovery orders is due to willful or bad faith disregard for those orders.’ ” BluestarExpo, Inc., 2022 WL 2341168 at *12 (citing Wyndham Vacation Ownership, Inc., v. Slattery, Sobel & Decamp, LLP, 2021 WL 5275700, at *3 (M.D. Fla. Nov. 10, 2021) (quoting U.S. v. Certain Real Prop. Located at Route 1, Bryant, Ala., 126 F. 3d 1314, 1317 (11th Cir. 1997)). Here, Kavney's demonstrated pattern of deception and false representations to this Court and opposing counsel during discovery constitutes misconduct warranting a forfeiture of his opportunity to affirmatively dispute his liability, i.e. the striking of his Answer.[7]
Second, I find that Kavney shall be required to pay Plaintiff's reasonable attorneys’ fees and costs incurred in connection with the misconduct described in this order. Chambers v. NASCO, Inc., 501 U.S. at 44; see also In re E.I. DuPont De Nemours & Co.–Benlate Litig., 99 F.3d at 367; Sprint Sols., Inc., 83 F. Supp. 3d at 1298-99. Upon consideration, I conclude that the amount of $50,000.00 serves as a fair amount to reimburse Plaintiff for expenses reasonably incurred by Plaintiff in pursuit of sanctions and the production of relevant information in discovery.[8] I recognize that this amount may not suffice to cover all expenses incurred by Plaintiff. My reasoning is that an award of fees and costs in the amount of $50,000.00 together with the strong sanction of striking of Kavney's Answer is sufficient to address the at-issue misconduct by Kavney.
CONCLUSION
*11 Accordingly, for the reasons stated above and following my conscientious review of the record—including the testimony at the show cause hearing and the parties’ written and oral arguments—I respectfully recommend that Plaintiff's Motion for Sanctions Against Kavney, DE 329, be DENIED IN PART AND GRANTED IN PART. I recommend that (1) Kavney's Answer be STRICKEN; and (2) Plaintiff be AWARDED $50,000.00 to be paid by Kavney as reimbursement for Plaintiff's reasonable fees and costs incurred in connection with the misconduct described in this order.
NOTICE OF RIGHT TO OBJECT
The parties shall have fourteen (14) days from the date of being served with a copy of this Report and Recommendation within which to file written objections, if any, with U.S. District Judge Jose E. Martinez. Failure to file objections timely shall bar the parties from a de novo determination by the District Judge of an issue covered in the Report and Recommendation and shall bar the parties from attacking on appeal unobjected-to factual and legal conclusions contained in this Report and Recommendation. See 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 149 (1985); Henley v. Johnson, 885 F.2d 790, 794 (11th Cir. 1989); 11th Cir. R. 3-1 (2016). Conversely, if a party does not intend to object to this Report and Recommendation, then that party shall file a Notice of such within five (5) days of the date of this Report and Recommendation.
DONE AND RECOMMENDED in Chambers at Fort Pierce, Florida, this 30th day of December, 2024.


Footnotes

Plaintiff also seeks to impose sanctions on current defense counsel of record, Cole Scott & Kissane, including a finding to hold counsel jointly and severally liable for payment of a fee award. Courts have the discretion to sanction conduct that abuses the judicial process even if procedural rules exist that govern the same conduct. Chambers v. NASCO, Inc., 501 U.S. 32, 44-45, 48-49 (1991). In determining appropriate sanctions, courts have the inherent power to impose sanctions on parties, lawyers, or both. In re Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1304 (11th Cir. 2006). Although courts are afforded broad discretion in imposing sanctions, a sanction which impugns the character of counsel, imposes significant financial penalties, and subjects counsel to potential liability to clients should be judiciously imposed on only clear showings of bad faith or violation of express orders of the Court. Bray & Gillespie Mgmt., LLC v. Lexington Ins. Co., 2009 WL 5606058, at *2 (M.D. Fla. Nov. 16, 2009). Upon careful consideration of the circumstances related to Kavney's sanctionable conduct, I do not find sufficient evidence establishing bad faith on the part of Kavney's current counsel to warrant the imposition of sanctions against counsel.
During his limited testimony, Kavney continued to incorrectly indicate that relevant information he deleted had since been produced to Plaintiff. For example, Kavney testified that Plaintiff had emails he sent to detailers and customers, which required defense counsel to clarify in open court that Plaintiff had not in fact received that information. DE 405 at 12.
At one point, the individual also claimed that he regularly deleted texts from his phone “to keep his phone running efficiently.” Id. at *6.
Notably, while Kavney asserted a negligence argument in his written response, Kavney did not reassert his negligence argument at the show cause hearing. Rather, he testified at the hearing to his knowing and intentional deletion of emails because he was scared and nervous.
By way of example, Kavney testified that Plaintiff had all of the information that he deleted. That was not true, and his counsel acted to correct his testimony during the show cause hearing. Kavney also testified that he was not sure that he could remember all the categories of emails he deleted.
Kavney suggests that Plaintiff could obtain any lost discovery from other sources. This suggestion is beside the point and serves only to shift additional undue cost and expense to Plaintiff.
Kavney's Answer is included within a consolidated Answer pertaining to him, Heyden Supply, and the other individual Defendants. See DE 29. This Answer includes general denials and affirmative defenses. By striking the Answer solely as it relates to Kavney, Kavney alone will be precluded from affirmatively denying his liability and/or asserting defenses in response to Plaintiff's claims. See Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009) (affirming decision to strike answers and counterclaims based on defendant's pattern of delay and refusal to obey court orders, and to deter others from flouting discovery orders).
In determining this set amount, I have considered Kavney's ability to pay. In his deposition, Kavney testified to making roughly $25,000 per month, i.e. $300,000 per year, in salary while employed by Plaintiff and he makes roughly the same amount in his current Heyden Supply position. See DE 368-1 at 7-8.