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Coyne v. Los Alamos National Security, LLC

United States District Court, D. New Mexico

May 1, 2017

SUZANNE D. COYNE, Plaintiffs,



         The ultimate goal of our civil justice system is to determine what is true and then apply law to that truth to obtain a just resolution of the conflict at issue. Recognizing that factual disputes exist, the system presumes that the honest exchange of information, combined with the adversarial process, will allow truth to reveal itself to the factfinder. Thus, the system's foundation is built on the idea that parties to a dispute will honestly exchange information.

         Given the importance of this honest exchange, the system demands harsh sanctions against those who seek to defeat its truth-seeking function by engaging in willful, bad faith conduct designed to deprive the opposing party of relevant information related to the claims at issue. The Court, unfortunately, is presented with an instance in which a party has engaged in such willful and bad faith conduct. In her Proposed Findings and Recommended Disposition (PFRD), Chief Magistrate Judge Karen B. Molzen recommends that the Court dismiss with prejudice Plaintiff's lawsuit as a sanction for this conduct. Doc. 146. The Court has considered the written submissions of the parties, the record in this case, the applicable law, and the PFRD. The Court has further conducted a de novo review of those portions of the PFRD to which objections have been made. The Court rejects Plaintiff's Objections to Proposed Findings and Recommended Disposition (Doc. 147) and, pursuant to 28 U.S.C. § 636(b)(1), adopts the PFRD, incorporating it in full. Thus, for the reasons stated below and in the PFRD, the Court grants Defendants' Motion for Dismissal with Prejudice as Sanction for Plaintiff's Willful Destruction of Evidence. Doc. 136.[1]

         I. Background

         Plaintiff Suzanne Coyne alleges that she began working for Defendant Los Alamos National Security, LLC (“LANS”) in 2003. Doc. 1, Ex. A ¶ 9. Plaintiff claims that in December 2011, one of her co-workers, Jackie Little, entered her office “advanced on Ms. Coyne backing her against her desk and started screaming at her . . . raised her arms and began jabbing her fingers close to Ms. Coyne's face while continuing to scream at her.” Id. ¶ 12. Ms. Coyne asserts that she immediately reported this incident to the Human Resources Department and to her supervisor, Defendant Gail McGuire. Id. ¶¶ 13-15. According to Plaintiff, however, Defendant McGuire took no action to address Ms. Coyne's concerns about Ms. Little. Id. ¶ 20. In January 2012, Ms. Coyne sought medical treatment for her workplace-induced anxiety and eventually took time off work under the Family Medical Leave Act (“FMLA”). Id. ¶¶ 28-29. When she returned to work in February 2012, Plaintiff states Defendant McGuire and Defendant Nicholas Degidio informed her that she was being removed from her prior position and transferred to a new office. Id. ¶¶ 34-35. Later, in March 2013, Ms. Coyne was fired. Id. ¶ 58.

         On December 11, 2014, Ms. Coyne and her husband brought suit against Defendants for their alleged mistreatment of Ms. Coyne as an employee. Plaintiffs' complaint contains ten counts (some of which are not asserted against all Defendants): breach of contract, breach of the implied covenant of good faith and fair dealing, an FMLA claim, a state law retaliation claim, an all-purpose negligence claim, a tortious interference with contract claim, a state law wrongful termination claim, an intentional infliction of emotional distress claim, an assault claim, and a claim for loss of consortium. See generally id.

         On April 20, 2015, the Court dismissed Count VII of the Complaint with prejudice and, with regard to the individual Defendants only, Count IV of the Complaint. Doc. 24. On February 20, 2016, Defendants filed a motion to amend their answer to assert the affirmative defense of after-acquired evidence. Doc. 60 at 3. This affirmative defense is predicated on evidence that Plaintiff repeatedly used her Laboratory work space and computer, while at work for Defendant LANS, to do work for her husband's private counseling business, which included disclosing private, protected health information about her husband's counseling patients. Doc. 60 at 2-3. The Court granted Defendants' motion on June 24, 2016 and Defendants filed their amended answer on June 27, 2016. Docs. 89, 91.

         With regard to discovery disputes, on February 29, 2016, the Court granted in part Plaintiffs'[2] Motion to Compel and ordered Defendant LANS to provide certain information in response to various interrogatories. Doc. 64 at 12. Having denied other aspects of the Motion, however, the Court required the parties to pay their own respective attorney's fees. Aside from this instance, the remaining discovery disputes in this case involved Plaintiffs' repeated failures to comply with their discovery obligations. These failures ultimately resulted in the award of attorney's fees and other sanctions imposed against Plaintiffs.

         On March 10, 2016, the Court granted in part a motion to compel filed by Defendant LANS. Plaintiff's husband, who was a party at the time, had refused to provide discoverable documents or answer certain questions during his deposition. Doc. 70. In addition to granting the Motion with regard to Mr. Coyne, the Court ordered a second deposition at his expense so that he could answer relevant questions he had previously refused to answer. Doc. 70 at 3-7. With regard to Plaintiff, the Court ordered that she produce certain “LANS system email communications and complete privilege log accounting for all other communications between herself and her counsel while she was employed by LANS . . ..” Doc. 70 at 6-7. Finally, the Court determined that “Plaintiffs [had] refused to comply with Defendant LANS' discovery requests even after extensive good-faith efforts were made to secure them and none of Plaintiffs' objections were substantially justified.” Doc. 70 at 15. As a result, the Court ordered Plaintiffs to pay Defendant's reasonable attorney's fees and costs incurred in bringing the Motion. Doc. 70 at 16.

         On June 29, 2016, the Court issued an Order on Defendants' Motion to Strike Expert Witness and for Sanctions (Doc. 79). Doc. 94. In the Motion, Defendants represented that Plaintiff (but not her attorney) had informed her mental health counselor, who she had declared as an expert witness, that she would not actually have to testify. Doc. 94 at 2-3. Defendants, unaware of Plaintiff's communication, paid to depose the expert only to discover that the expert was unable to provide any opinion as to Plaintiff's current emotional or psychological state. Nor could the expert use her treatment notes to provide an opinion as to Plaintiff's emotional and psychological state at the time of treatment. Doc. 94 at 3. As a result, Defendants asked the Court to bar the witness from giving expert testimony and to award attorney's fees and costs incurred as a result of Plaintiffs' “inaccurate and misleading” disclosure of the counselor as an expert witness. Doc. 94 at 3. The Court sympathized with Defendants' legitimate frustration but ultimately denied Defendants' Motion largely because the counselor's treatment notes contained information that could potentially be admitted despite the witness's lack of memory. Doc. 94 at 5.

         Less than two weeks later, on July 7, 2016, Defendants filed their Motion for Sanctions for Failure to Obey Discovery Order based on Plaintiffs' failure to pay the previously ordered sanctions or to provide documents as the Court ordered on March 10, 2016. Doc. 97. Defendants also complained about the difficulty they were having obtaining appointment calendars and billing records related to Mr. Coyne's business. Doc. 97 at 3-10. They noted that Plaintiffs failed to produce this information in response to their discovery request, required them to file a motion to compel, failed to then produce the information by March 24, 2016 as the Court ordered, and still had not produced it before Mr. Coyne's second deposition. Doc. 97 at 3-8. Further, Defendants noted that Plaintiff Suzanne Coyne testified during her deposition that she handles her husband's billing records. Doc. 97 at 3-8. The records she brought to her June 14, 2016 deposition, however, did not cover all relevant years. Doc. 97 at 3-8. In their Reply filed on August 2, 2016, Defendants argued that Plaintiffs' failure to produce appointment books for 2014 and 2015 on the basis that they “cannot find” them constituted spoliation. Doc. 103 at 2. Defendants also asserted that “Plaintiffs' recent production of additional pages from Mr. Coyne's 2013 appointment book have only compounded the problem and raise serious questions about the authenticity of these documents, as many of the pages from the most recent set of 2013 entries are markedly different from the entries for the exact same dates in 2013 that Plaintiffs previously produced.” Doc. 108 at 2 (emphasis in original). During an August 12, 2016 hearing on the matter, the Court expressed concern about the discrepancies in the appointment calendars produced, agreed that Defendants deserved an explanation that would now require a third deposition of Plaintiffs, and found it “very troubling” that Plaintiffs claimed that could not find otherwise discoverable appointment books. Doc. 112 at 3.

         Defendants further noted that Plaintiff failed to supplement her initial disclosures by providing text message communications with her psychiatrist. Doc. 97 at 10. Defendants noted that Plaintiff failed to produce or identify this information in discovery and, when her cellular telephone was examined during her June 14, 2016 deposition, it appeared that those messages had been deleted. Doc. 97 at 10. Defendants further noted that, inconsistent with her deposition testimony that she and her husband were experiencing financial stress and struggling to make ends meet, Plaintiffs were able to come up with a $10, 000 cash only bond to get Mr. Coyne out of jail (although Mr. Coyne swore that his son paid the bond with money the son borrowed) and purchase a new Harley Davidson motorcycle. Doc. 97 at 9, 14, 97-8 at 3. On August 12, 2016, the Court granted most of Defendants' requested relief, including ordering Plaintiff and her husband to pay the costs and fees associated with their second deposition as well as the cost and fees associated with a third deposition for each of them. Doc. 111 at 2.

         Asserting that they had been unable to obtain sufficient evidence to quantify Mr. Coyne's loss of consortium damages, Plaintiffs filed a motion to amend their Complaint to dismiss Mr. Coyne's loss of consortium claims (Count X). Doc. 116 at 4-5. Although Defendants did not oppose the dismissal of Count X, they argued that the dismissal should come with consequences. They argued that Mr. Coyne knew his claim was meritless when he filed it, that Defendants spent “thousands of dollars chasing down the evidence”, and that Plaintiffs should have to pay the fees and costs Defendants expended in defending against Mr. Coyne's claim. Doc. 120 at 1. The Court dismissed Count X of the Complaint and granted Plaintiffs' motion to file an amended complaint. Doc. 134 (filed 1/5/17).[3] In so doing, the Court summarized Mr. Coyne's repeated failures to comply with his discovery obligations and agreed with Judge Molzen's decision to impose sanctions in response to those repeated violations. Doc. 134 at 3-5. Because Judge Molzen had already issued sanctions for these discovery violations, however, the Court declined to issue additional sanctions for these same violations. Doc. 134 at 6. Further, while acknowledging that Defendants had a legitimate basis for frustration, the Court also declined to take the “extreme” action of imposing sanctions under 28 U.S.C. § 1927, which allows a court to sanction a party who unreasonably and vexatiously multiplies the proceedings in a case. Doc. 134 at 4-6.

         On November 9, 2016, Defendants filed their Second Motion to Compel Discovery in an effort to have the Court compel Plaintiff to submit her phone for forensic testing. Doc. 127. Defendants noted that Plaintiff had acknowledged exchanging text messages with her husband and psychiatrist but that she allowed those messages to be deleted from her phone. Doc. 127 at 3-4. Plaintiff claimed that she did not realize she had a duty to preserve those text messages and that her phone was set to delete text messages every thirty days. Doc. 127 at 4.[4] The text messages at issue were subject to disclosure pursuant to Defendants' discovery request that Plaintiff provide all text messages that “relate in any way to any of the allegations contained in the complaint.” Doc. 127 at 2 (internal citations and quotations omitted). During a December 16, 2016 hearing on the Motion, Defendants noted that they were looking for text message communications Plaintiff had with her husband and with her psychiatrist from December 2011 forward. Doc. 132 at 2. Defendants agreed that Plaintiff had cooperated with other attempts to retrieve her text messages. Doc. 132 at 2. Plaintiffs, who had not (and still have not) paid the previous Court-imposed sanctions, argued that they did not have the financial resources to pay for the forensic examination. Doc 132 at 3. They conceded, however, that neither had they sold the recently purchased Harley Davidson motorcycle. Doc. 132 at 3.

         In the Court's Order on Defendants' second motion to compel, the Court noted that the recovery of text messages “could have a significant impact on the pending emotional distress and loss of consortium damages claims” and opined, “[c]learly that is why Defendant LANS continues to seek their production.” Doc. 133 at 4. In acknowledging one clear reason Defendants sought the text messages, however, the Court in no way limited the use or discovery of text messages to that purpose. Further, with regard to who would be required to pay for the forensic examination, the Court noted, “[t]here is no indication that Mrs. Coyne deliberately erased the messages because they will likely benefit Defendants' case[.]” Doc. 133 at 5, n.4. Nonetheless, the Court required Plaintiff to split the cost of the forensic examination because she “was on notice of their importance but failed to preserve them by simply changing the setting on her phone to prevent automatic deletions over time.” Doc. 133 at 5. Importantly, at the time the Court Dated this Order it had no indication that Plaintiff deliberately erased the messages. As set forth below, however, Plaintiff's most recent actions now provide such an indication.

         II. Con ...

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