United States District Court, D. Nevada
ORDER AND REPORT AND RECOMMENDATION
FOLEY, JR. UNITED STATES MAGISTRATE JUDGE
matter is before the Court on Plaintiffs Motion for Sanctions
of Default Judgment for Plaintiff (ECF No. 52), filed on
August 8, 2017. Defendant Bank of America filed an Opposition
and a Countermotion for Sanctions for Failure to Participate
in Discovery (ECF No. 60) on August 22, 2017. Plaintiff did
not file a reply or response to Defendants'
countermotion. The Court conducted a hearing in this matter
on September 5, 2017. Plaintiff did not appear at the
purchased property located at 2204 Night Parrot Avenue, North
Las Vegas, Nevada 89148 in August 2007. Amended
Complaint (ECF No. 42), ¶ 7. This property
was obtained through a mortgage loan, and secured through a
deed of trust. ¶ 8. Plaintiff asserts that he
paid his mortgage loan in full at an accelerated rate and
owns the property free and clear. ¶ 9.
Defendant, however, argues that the loan is currently in
default because Plaintiff stopped making his monthly payments
in July 2010, and the unpaid principal balance owed on the
loan is currently $273, 3913.46. Amended Motion for
Summary Judgment (ECF No. 57), pg. 2. Defendant filed
its first notice of default on September 18, 2013.
Id. Thereafter, the parties participated in
mediation pursuant to Nevada's foreclosure mediation
program. The mediator did not issue a certificate of
foreclosure due to Defendant's failure to bring the
required documents. Id. Following the mediation,
Defendant filed a second notice of default and election to
sell on March 16, 2016. Id.
April 1, 2016, Plaintiff initiated this lawsuit by filing a
complaint against Defendants alleging claims for specific
performance, temporary injunctive relief, intentional
infliction of emotional distress, declaratory relief, quiet
title, and breach of covenant of good faith and fair dealing.
See Petition for Removal (ECF No. 1), Exhibit A;
see also Amended Complaint (ECF No. 42). Plaintiff
alleges that Defendant's intention to proceed with the
foreclosure is in violation of Nevada's foreclosure
mediation rules because the mediator declined to issue a
certificate of foreclosure. Amended Complaint (ECF
No. 42), ¶ 23. Moreover, Plaintiff maintains
that he owns the property free and clear.
August 8, 2017, Plaintiff filed his instant motion for
sanctions requesting the Court to enter default judgment
against Defendant Bank of America for spoilation of evidence.
Specifically, Plaintiff asserts that Defendant was in
possession of Plaintiff's corporate bank records that
would have shown that he paid the subject mortgage loan in
full, but Defendant has a policy to only retain records for a
period of seven years. Motion for Sanctions (ECF No.
52), pg. 3. Because of this policy, Defendant no longer
maintains the records that would support Plaintiff's
claims. Plaintiff asserts that Defendant should not have
destroyed his records because they were on notice of
Plaintiff's claims since 2013. Id. Defendant
argues that there is no basis for Plaintiff's request and
countermoves for sanctions for Plaintiff's failure to
engage in discovery. Opposition and Countermotion
(ECF No. 60). Defendant asserts that Plaintiff has not
provided any initial disclosures, failed to respond to
Defendant's written discovery requests, failed to
propound written discovery on Defendant and failed to appear
for two properly noticed depositions. Id. at pg. 2.
For these reasons, Defendant requests an order from the Court
that precludes Plaintiff from offering any evidence to
support his claims. Id. at pgs 5-6.
has a duty to preserve evidence that it knows or should know
is relevant to a claim or defense of any party in the
litigation. The duty to preserve evidence arises prior to
litigation when the person knows that litigation is probable.
In re Napster Inc. Copyright Litigation, 462
F.Supp.2d 1060, 1068 (N.D.Cal. 2006) (citing Zubulake v.
UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003)).
“Spoliation is the destruction or significant
alteration of evidence, or the failure to preserve property
for another's use as evidence in pending or reasonably
foreseeable litigation.” LaJocies v. City of North
Las Vegas, 2011 WL 1630331, *1 (D.Nev. 2011).
“[I]f relevant evidence has been shown to exist, and if
the possessor of that evidence was on notice that the
evidence was potentially relevant to litigation which was
reasonably foreseeable, and if that party failed to take
reasonable steps to preserve it, sanctions may be imposed
upon that party.” Fernandez v. Centric, 2014
WL 2042148, at *4 (D. Nev. May 16, 2014).
party seeking sanctions for spoliation of evidence must prove
the following elements: (1) the party having control over the
evidence had an obligation to preserve it when it was
destroyed or altered; (2) the destruction or loss was
accompanied by a ‘culpable state of mind;' and (3)
the evidence that was destroyed or altered was
‘relevant' to the claims or defenses of the party
that sought the discovery of the spoliated evidence
[.]” Surowiec v. Capital Title Agency, Inc.,
790 F.Supp.2d 997, 1005 (D. Ariz. 2011). The moving party has
the burden “to establish a reasonable possibility,
based on concrete evidence rather than a fertile imagination,
that access to the lost material would have produced evidence
favorable to its cause.” United States v. Town of
Colorado City, Ariz., 2014 WL 3724232, at *7 (D. Ariz.
July 28, 2014). The absence of evidence must be prejudicial
to the party alleging spoliation of evidence. Reinsdorf
v. Skechers U.S.A., Inc., 296 F.R.D. 604, 627 (C.D. Cal.
spoliation remedy requires some degree of culpability. In
re Napster, 462 F.Supp.2d 1060, 1067 (N.D.Cal.2006). Yet
“Courts have not been uniform in defining the level of
culpability-be it negligence, gross negligence, willfulness,
or bad faith-that is required before sanctions are
appropriate for evidence destruction.”
Reinsdorf, 296 F.R.D. at 627 (citing Ashton v.
Knight Transp., Inc., 772 F.Supp.2d 772, 800
(N.D.Tex.2011)). In the Ninth Circuit, bad faith is not
required to warrant an imposition of sanctions.
Reinsdorf, 296 F.R.D. at 627. A party's motive
or degree of fault is, however, relevant to what sanction, if
any, is imposed. Id. For example, the Ninth Circuit
has held that “[o]nly willfulness, bad faith, and
fault” justify terminating sanctions and courts in this
circuit have found that an adverse inference instruction may
be warranted where evidence destruction was willful or
grossly negligent. Id. Further, many courts in this
circuit have instructed that “the culpable state of
mind includes negligence.” Id. at 628. See
also FTC v. Lights of America Inc., 2012 WL 695008 at *2
(C.D.Cal. Jan. 20, 2012); Housing Rights Center v.
Sterling, 2005 WL 3320739 at *8 (C.D.Cal. Mar. 2, 2005);
Cottle-Banks v. Cox Communications, Inc., 2013 WL
2244333 at *14 (S.D.Cal. May 21, 2013); Aguirre v. Home
Depot U.S.A., Inc., 2012 WL 3639074 at *3 (E.D.Cal. Aug.
has not met his burden to warrant spoilation sanctions.
Plaintiff's motion does not present the Court with any
evidence to support his assertion that Defendant failed to
preserve the bank records he alleges once existed. Plaintiff
does not provide an account number for this alleged bank
account or the name of the corporation who would have been
listed on the account. Moreover, Plaintiff does not (because
he cannot) state that he has requested these records from
Defendant during discovery, only that he allegedly went into
a branch and requested them in person. For these reasons, the
Court finds that Plaintiff's motion has no merit.
of the Federal Rules of Civil Procedure provides the court
with a wide range of sanctions for a party's failure to
adequately engage in discovery. “The Rule provides a
panoply of sanctions, from the imposition of costs to entry
of default.” United States v. Taylor, 166
F.R.D. 356, 363 (M.D. N.C. ), aff'd, 166 F.R.D. 367 (M.D.
N.C. 1996). “Discovery sanctions serve the
objectives of discovery by correcting for the adverse effects
of discovery violations and deterring future discovery
violations from occurring.” Taylor v.
Illinois, 484 U.S. 400, 425 (1988). The Ninth Circuit
reviews a district court's sanction order under an abuse
of discretion standard. Sigliano v. Mendoza, 642
F.2d 309 (9th Cir. 1981); See also United States v.
Sumitomo Marine & Fire Ins. Co., 617 F.2d 1365, 1369
(9th Cir. 1980); David v. Hooker, Ltd., 560 ...