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Prairie River Home Care, Inc. v. Procura, LLC

United States District Court, D. Minnesota

August 5, 2019

Prairie River Home Care, Inc., Plaintiff,
Procura, LLC, Defendant, Third-Party Plaintiff,
Salo Solutions, Inc., Third-Party Defendant.



          HILDY BOWBEER, United States Magistrate Judge

         This matter is before the Court on two motions for sanctions brought by Plaintiff Prairie River Home Care, Inc., against Defendant and Third-Party Plaintiff Procura, LLC [Doc. Nos. 225, 271]; Third-Party Defendant Salo Solutions, Inc.'s motion for sanctions against Procura [Doc. No. 240], and Procura's motion to amend the scheduling order [Doc. No. 279].[2] This matter has been referred for the resolution of pretrial matters pursuant to 28 U.S.C § 636(b)(1) and District of Minnesota Local Rule 72.1. For the reasons stated below, the Court will grant in part and deny in part Prairie River's first motion for sanctions. To the extent the Court believes that appropriate sanctions include limitations on the evidence to be admitted on summary judgment or at trial, the Court makes recommendations for consideration by the Honorable John R. Tunheim, United States Chief District Judge. In addition, the Court will grant Prairie River's second motion for sanctions and will grant that part of Salo's motion for sanctions that relates to Procura's unilateral cancellation of a private mediation that had been scheduled in accordance with the Court's scheduling order.[3] The Court will also grant Salo's motion for sanctions insofar as it is relevant to Salo's counterclaims against Procura. The Court will deny the remainder of Salo's motion for sanctions to the extent it is moot as a result of Judge Tunheim's recent order dismissing Procura's third-party complaint against Salo in its entirety. (Mem. Op. & Order [Doc. No. 441].) Finally, the Court will deny Procura's motion to amend the scheduling order for the purpose of taking additional discovery, the Court will extend the discovery deadline to the extent reasonably necessary for the limited purpose of effectuating its rulings on Prairie River's and Salo's motions.

         I. BACKGROUND

         Prairie River's allegations against Procura, and Procura's against Salo, are set forth in detail in Judge Tunheim's recent order. (Mem. Op. & Order at 3-14.) In addition, that order describes the procedural history of this case with regard to the pleadings. (Id. at 14-15.) For the sake of brevity that history will not be repeated here, so the Court turns directly to the discovery disputes that underlie the instant motions.

         A. Prairie River's Discovery Disputes with Procura

         In its first motion for sanctions, Prairie River contends that Procura failed to adequately prepare the corporate witnesses that it designated to testify in response to Prairie River's notice of Rule 30(b)(6) deposition. See generally (Prairie River's Mem. in Supp. of First Mot. for Sanctions [Doc. No. 227].) In supplemental briefing in support of the same motion, Prairie River also argues that Procura should be sanctioned for not producing until April 5, 2019-after the deadline for the close of discovery-information that the Court had ordered it to produce in response to previous motions to compel.[4] See generally (Prairie River's Suppl. Mem. in Supp. [Doc. No. 317].)

         The Court has held multiple hearings, conducted conferences with the parties, and written extensively on the prior discovery disputes that have plagued this case. See, e.g., (Doc. Nos. 53, 56, 181, 194, 195, 204, 205, 219.) The Court recounts here the salient history to the extent necessary to provide context for the instant motions.

         1. Procura's Responses to Prairie River's Written Discovery Requests Regarding Customers with Similar Issues

         Prairie River served its First Set of Interrogatories and Requests for Production of Documents to Procura on February 8, 2018. (Abbate-Dattilo Decl. Ex. D [Doc. No. 143-1 at 19][5]; Abbate-Dattilo Decl. [Doc. No. 318 ¶ 3].) On April 10, 2018, Prairie River sent Procura a deficiency letter outlining the interrogatories and document requests it believed needed supplementation. (Abbate-Dattilo Decl. Ex. F [Doc. No. 143-1 at 56- 59]; Abbate-Dattilo Decl. [Doc. No. 318 ¶ 3].) Among these was Interrogatory No. 7, [6]which sought identification of customers that “terminated a license agreement with Procura due to dissatisfaction with the software.” Abbate-Dattilo Decl. Ex. E [Doc. No. 143-1 at 39].) Prairie River and Procura conducted a meet-and-confer via telephone on April 23, 2018, see Abbate-Dattilo Decl. Ex. H [Doc. No. 143-1 at 64-65], during which Prairie River identified At Home Healthcare, Inc. (“At Home”) as an example of a Procura customer that Prairie River believed had experienced “similar issues with the Software as Prairie River, and who had not been disclosed in Procura's Interrogatory Answers.” (Abbate-Dattilo Decl. [Doc. No. 318 ¶ 3].) On May 15, 2018, Procura served Amended Answers identifying At Home in response to Interrogatory No. 7, but did not identify any other such customers. (Id.)

         Additional meet and confer efforts and telephone conferences with the Court were conducted during May and June of 2018. See (Abbate-Dattilo Decl. Ex. I [Doc. No. 143-1 at 67-68]; Ex. K [Doc. No. 143-1 at 77-81]; Ex. M [Doc. No. 143-1 at 86-88].) This process eventually resulted in two Informal Dispute Resolution (“IDR”) conferences before the Court. See (June 4, 2018, IDR Conference Minute Entry [Doc. No. 53]; June 26, 2018, IDR Conference Minute Entry [Doc. No. 56].) In the June 4 IDR conference, the Court concluded that the “disputes were not yet ripe for resolution, ” and provided additional guidance in an attempt to narrow the issues. (June 4, 2018, IDR Conference Minute Entry at 1.) Specifically, the Court instructed the parties to “meet and confer about the appropriate scope of discovery, including, inter alia, the types of complaints raised by other customers that may be relevant to the allegations made in the Complaint, the relevant software versions, and the timeframe for discovery.” (Id.) Further, the Court instructed Procura to “clearly indicate in any supplemental responses the specific parameters of the discovery it is producing, as well as whether and to what extent documents are being withheld on the basis of objections, so that the scope of production is clear.” (Id. at 2.)

         In the June 26 IDR conference, the Court ordered Procura to supplement its responses in several respects, including to “provide to Plaintiff on or before July 17, 2018, a list of customers for whom problems or issues of the same type as those identified in the list provided by Plaintiff's counsel were reported during implementation.” (June 26, 2018, IDR Conference Minute Entry at 1.)

         On August 2, 2018, Prairie River sent Procura another e-mail inquiry requesting an update about the status of its efforts to supplement its responses in compliance with the Court's order. (Abbate-Dattilo Decl. Ex. O [Doc. No. 143-1 at 92-93].) On August 3, 2018, Procura responded that it was busy collecting information that it expected to produce the week of August 10 and that it believed would resolve “most if not all of the . . . issues.” (Abbate-Dattilo Decl. Ex. O [Doc. No. 143-1 at 92].) When the promised supplementation did not materialize, Prairie River emailed Procura yet again on September 5. (Abbate-Dattilo Decl. Ex. P [Doc. No. 143-1 at 95-96].) Procura stated it was still collecting information and that its supplementation would occur the week of September 10. (Id. at 95.)

         On September 17, 2018, Prairie River emailed Procura reminding it of its promise to supplement and stated that, under the circumstances, the deadline by which to add claims for punitive damages should be amended. (Abbate-Dattilo Decl. Ex. Q [Doc. No. 143-1 at 100].) The parties entered into a stipulation pursuant to which Procura promised to supplement its responses by September 20, 2018, and the deadline for Prairie River to move to amend its complaint to add a claim for punitive damages was extended to November 5, 2018. See (Stipulation [Doc. No. 80 at 2]; Order [Doc. No. 82].)

         Also at about this time, Prairie River had “learned of another Procura customer who had not been identified by Procura that experienced the same or similar defects or deficiencies with Procura's Software-Small Hands, Big Hearts Pediatric Therapy Management, LLC (‘Small Hands').”[7] (Abbate-Dattilo Decl. [Doc. No. 318 ¶ 4].)

         By October 30, Procura still had not supplemented as promised. Accordingly, Prairie River sent one final letter on October 30, recounting the history of the dispute and stating that if Procura failed to supplement its responses, Prairie River would bring a motion to compel. (Abbate-Dattilo Decl. Ex. R [Doc. No. 143-1 at 102.) Procura provided some additional information on November 2, see (Abbate-Dattilo Decl. No. 143 Ex. S [Doc. No. 143-1 at 109-14]), but Prairie River found the supplementation inadequate and filed a motion to compel on November 7, 2018. (Mot. to Compel [Doc. No. 140].) In that motion, Prairie River contended Procura had not produced responsive information pertaining to six topics: (1) Procura's customers in the United States that had transitioned from Riversoft to Procura's software; (2) Procura's customers that had indicated to Procura dissatisfaction with Procura's software; (3) Procura's customers that use the Procura software to bill Medicare; (4) Procura's customers that have used the software's “Pathways” feature; (5) financial statements and sales goals for the third quarter of 2015 and quarterly and monthly financial statements for 2015 and 2016; and (6) citation to the specific documents among Procura's production that Procura considered to be the “contract documents.”[8] See (Mem. in Supp. of Mot. to Compel [Doc. No. 142 at 8-9].) On the topic of Procura's customers who had experienced similar problems with its software, Prairie River maintained that “[a]s of November 28, 2018, the only customer identified by Procura in its Answers to Prairie River's Interrogatories was At Home, despite Prairie River's demands that Procura identify Small Hands.” (Abbate-Dattilo Decl. No. 318 ¶ 5.) Prairie River also sought its fees and costs incurred in bringing the motion to compel. (Mot. to Compel at 1.)

         The Court granted the motion in part from the bench and in part by subsequent written order. See (Nov. 28, 2018, Minute Entry [Doc. No. 181]; Jan. 9, 2019, Order [Doc. No. 194].) The Court ordered Procura to supplement its responses to Prairie River's requests in a number of respects, including production of all documents in the 2010 to 2016 timeframe reflecting communications with customers about complaints similar to those identified on a list previously provided by Prairie River's counsel[9](Request No. 23), and identification of all customers that had cancelled or terminated their license agreements during the period 2010 to 2017 because of one or more deficiencies in the software similar to those identified on that list (Interrogatory No. 7).[10]See (Nov. 28, 2018, Minute Entry.) In addition the Court granted Prairie River's request for attorneys' fees and costs, noting that it had granted Prairie River's motion in most respects, that “there was no substantial justification for many of the objections made, ” and that “Procura's responses and objections made it difficult if not impossible for Prairie River to determine whether and to what extent it had received complete responses.” (Jan. 9, 2019, Order at 2-3.)

         On December 20, 2018, Procura served amended answers to Prairie River's first set of interrogatories. See (Abbate-Dattilo Decl. Ex. H [Doc. No. 229-1 at 92-103].) In its amended answers-provided in response to the Court's November 28 Order-Procura identified additional customers that allegedly reported issues with its software, namely, Personal Assistance Services of Colorado, LLC (“PASCO”); Small Hands, Big Hearts Pediatric Therapy Management, LLC; and Interim Healthcare Ohio. See (id. at 94, 100- 102); see also (Prairie River's Mem. in Supp. of First Mot. for Sanctions at 14.) On January 15, 2019, Prairie River sent Procura an email expressing concern about the fact that it had taken Procura more than a year and a half to identify PASCO in response to Interrogatory No. 7 when PASCO had raised “the same issues as Prairie River at the same time Prairie River was sending its . . . emails to Procura, ” and therefore could and should have been identified much sooner. In part due to Procura's delinquency in producing this information and in part due to the incompleteness of Procura's prior responses about customers who had voiced similar complaints, Prairie River expressed concern that Procura had still not fully complied with the Court's November 28 order, and queried whether there were still more complaining customers who had not yet been disclosed by Procura. See (Abbate-Dattilo Decl. Ex. A [Doc. No. 318-1 at 2].)

         Indeed, Prairie River through its own investigation discovered additional customers that it contends should have been identified in response to Interrogatory No. 7. For example, on an Excel spreadsheet in a Procura document production, Prairie River found a reference to Wesley Homes that suggested Wesley Homes had experienced issues with “software functionality, ” but the documents provided no other details. (Abbate-Dattilo Decl. [Doc. No. 318 ¶ 6]; see also Abbate-Dattilo Decl. Ex. N [Doc. No. 234 at 5].) On February 4, 2019, Prairie River called the former owner of Wesley Homes, who said that Procura's billing functionalities had been “highly problematic” and that Wesley Homes had written off “‘many hundreds of thousands of dollars'” as a result. (Abbate-Dattilo Decl. [Doc. No. 318 ¶ 6].)

         This led to another meet-and-confer between the parties on February 4, 2019, in which Prairie River raised questions “about how customers were identified in response to Prairie River's Interrogatories.” (Id. ¶ 7.) Prairie River “also specifically asked about Wesley Homes, Nursing Placement Home Healthcare Services, Inc., and Accent on Independence, and whether these entities also should have been disclosed in Procura's Amended Answers pursuant to the Court's November 28, 2018 Order.” (Id.) Prairie River asserts that Procura “represented they would look into these specific customers.” (Id.) However, “[a]t no point following that conversation did Procura identify any of these three additional customers through an Amended Interrogatory Answer or otherwise.” (Id.)

         On March 1, 2019, Prairie River propounded additional interrogatories and requests for production specifically targeting Wesley Homes, Nursing Placement Home Healthcare Services, Inc., and Accent on Independence. (Hr'g Tr. [Doc. No. 311 at 106]; Abbate-Dattilo Decl. Ex. B [Doc. No. 318-1 at 9-17].) Procura responded on April 1, initially objecting that the discovery requests were untimely under the operative scheduling order and Federal Rule of Civil Procedure 6(a)(1)(c). (Hr'g Tr. at 106; Abbate-Dattilo Decl. Ex. B [Doc. No. 318-1 at 9-17].) But after an exchange of emails on that subject, Procura agreed to “supplement our discovery responses and produce corresponding documents by Friday.” (Abbate-Dattilo Decl. Ex. C [Doc. No. 318-1 at 21-27]; Ex. D [Doc. No. 318-1 at 29].)

         Procura did supplement its responses, but Prairie River remained unpersuaded that Procura's response complied with the Court's November 28 Order. (Prairie River's Suppl. Mem. in Supp. at 4-6.) For instance, despite the Court's November 28 Order requiring that Procura produce all “communication[s] by an attorney on behalf of a current or former customer of its software seeking relief or threatening legal action, ” (Nov. 28 Order at 2), Prairie River asserts Procura produced for the first time on April 5, 2019, after the close of discovery, communications from attorneys claiming to represent one of Procura's former customers that allege Procura wrongfully induced it “into signing the license agreement.” (Prairie River's Suppl. Mem. in Supp. at 4; see also Abbate-Dattilo Decl. Ex. G [Doc. No. 319].)

         Furthermore, Prairie River contends Procura “decided to take a narrow approach to Prairie River's Fourth Request for Production of Documents, producing only the actual termination letters and follow-up communications, while excluding most, if not all, correspondences between the customer and Procura's employees which would have necessarily led up to the termination.” (Abbate-Dattilo Decl. [Doc. No. 318 ¶ 16].) Specifically, Prairie River asserts that it is not clear from Procura's April production “why Nursing Placement Home Healthcare Services, Jewish Senior Life, El Paso Nursing Services Home Health, Inc., and Hospice of the Valley cancelled their license agreements with Procura, ” (id.), and that the production as to all identified customers generally “does not provide a complete picture of the issues that led up to their terminations.” (Id.) In short, Prairie River argues, the information Procura produced-belatedly-in April in response to Prairie River's Fourth Request for Production should have been produced months earlier in compliance with the Court's November 28 order, and there is reason to believe it is still incomplete.

         2. Prairie River's 30(b)(6) Deposition of Procura

         a. The Noticed Topics and Procura's Response

         On October 31, 2018, Plaintiff noticed a 30(b)(6) deposition of Procura to be held at the offices of Prairie River's counsel in Minneapolis on December 4, 2018. The notice demanded that Procura designate one or more officers, directors, managing, agents, employees, or other sufficiently knowledgeable persons to testify and provide all responsive documents concerning the following topics:

1. Procura's efforts to collect, search for, identify, and/or retrieve documents in response to Prairie River's Discovery Requests or otherwise in connection with this matter;
2. Procura's document and electronic data destruction and/or retention policies and procedures, if any, and the deposition of any computers, hard drives, and other electronic storage devices or facilities;
3. Any and all actions taken to preserve documents pending litigation or otherwise, the date these actions began, and any variations from Procura's normal document retention and/or destruction practices, procedures or policies in connection with this matter;
4. The history and status of Procura's Software sales in the U.S. including all versions of the Software that have been sold in the U.S. and identities of all past and present customers in the U.S. and the date of each sale;
5. All disputes, formal or informal, Procura has had with customers in the U.S. regarding its Software;
6. The identities of and circumstances surrounding any customers in the U.S. who have terminated or cancelled their license agreement with Procura;
7. All representations made to Prairie River regarding the Software prior to the sale;
8. All efforts made to address concerns and complaints raised by Prairie River regarding the Software after the License Agreement was signed;
9. All sales Procura has made in the U.S. to home health care companies since selling the Software to Prairie River;
10. Procura's interpretation of all terms of the License Agreement;
11. A comparison of Procura's Software sales in the U.S. to its sales in other countries;
12. Procura's financial performance, including its revenues and annual monthly profit and loss statements, for 2012 through 2017; [and]
13. The corporate structure of Procura and Complia Health, including ownership, control, and/or financial relationships between those entities.

(Abbate-Dattilo Decl. Ex. A [Doc. No. 229-1 at 2-9].)

         Notwithstanding follow-up inquiries by Prairie River's counsel, Procura did not respond to the notice until November 26, 2018, when it offered dates in January 2019 and contended the deposition should be held near its corporate headquarters in Schaumberg, Illinois. See, e.g., (Abbate-Dattilo Decl. Ex. C [Doc. No. 229-1 at 15-19]; Ex. D [Doc. No. 229-1 at 22].) After meet and confer efforts failed to yield an agreement on when and where the depositions would occur, the dispute was submitted through the Court's IDR process. (Jan. 9, 2019, Minute Entry [Doc. No. 195].) At the IDR conference, only the location and timing of the noticed 30(b)(6) deposition was discussed; the minutes reflect no mention by Procura of objections or concerns about the deposition topics themselves, nor does the record reflect that such objections or concerns were raised in the parties' correspondence with each other prior to the IDR conference. After considering the parties' arguments, the Court agreed with Procura that Prairie River's 30(b)(6) deposition of Procura should be conducted in Schaumberg, in part because the location would provide the corporate representatives with more convenient access to the people and documents required to prepare for the requested topics. The Court further ordered that the deposition be completed on or before February 8, 2019. (Id.)

         On January 14, 2019, Prairie River served a new 30(b)(6) notice that identified the identical topics as the October 2018 notice, but scheduled the depositions of the two previously identified Procura corporate designees (Chris Junker and John Walles[11]) for January 24 and 25, 2019, in Schaumberg, Illinois. (Abbate-Dattilo Decl. Ex. G [Doc. No. 229-1 at 54, 57-59].)

         On January 16, 2019, two and a half months after the October 2018 notice, Procura served first-time objections and responses to Prairie River's 30(b)(6) topics, and sought to limit the scope of several of them. (Abbate-Dattilo Decl. Ex. J [Doc. No. 229-1 at 159-63].) With respect to topic 4, which called for a witness to answer questions about the “history and status of Procura's Software sales in the U.S. including all versions of the Software that have been sold in the U.S. and identities of all past and present customers in the U.S., ” Procura promised only that “Chris Junker will be prepared to discuss the history and status of Procura's licenses and projects with U.S. customers (former or current) who have experienced alleged functionality issues with the Procura Software similar to those alleged by Prairie River in this case.” (Id. at 161.) Similarly, for topic 5, which sought testimony about all disputes Procura had with U.S. customers about the subject software, Procura stated that Junker would only “be prepared to discuss formal and/or informal disputes that Procura has had with its U.S. customers (former or current) regarding alleged functionality issues with the Procura Software similar to those alleged by Prairie River in this case, from 2009 - present.” (Id.)

         Topic 6 addressed customers who had terminated their licenses for the Procura software, and the circumstances of those terminations, to which Procura responded that Junker “will be prepared to discuss the identities and circumstances surrounding Procura's U.S. customers who have terminated or cancelled license agreements in connection with alleged functionality issues with the Procura Software similar to those alleged by Prairie River in the above-captioned case.” (Id.)

         Procura's response to topic 7 did not seem to impose any limitations: Procura stated Junker would be prepared to testify “regarding representations that Procura made to Prairie River regarding the Procura Software, including any features, functionalities, capabilities, enhancements, and/or go-live deadlines related to the Software, prior to the license of the Procura Software to Prairie River.” (Id.) Procura did limit Junker's promised preparation on topic 9, however, to licenses and projects between Procura and a U.S. home health care company subsequent to the license to Prairie River “wherein the home health care company alleged functionality issues with the Procura Software similar to those alleged by Prairie River.” (Id. at 162.)

         Procura designated John Walles for topics 1, 2, 3, 8, 10, 12, and 13. (Id. at 160- 163.) Among those, the only topic to which Procura objected was topic 12, as to which it objected to overbreadth and vagueness, and stated that Walles would only be “prepared to discuss Procura's ‘quarterly and monthly financial statements for the calendar year 2015' and Procura's ‘third quarter [2015] sales goals,' including any modification related thereto.”[12] (Id. at 162.)

         Finally, as to topic 11, Procura objected that sales of the Procura software outside the U.S. were irrelevant, and it designated no witness at all for that topic. (Id.)

         Prairie River contested both the timeliness and adequacy of Procura's objections and limitations, arguing that they came too late and that, in any event, Procura was required to move for a protective order if it wished to maintain its objections or limit the scope of the inquiry. Neither party came to the Court with the dispute, however, and so the depositions proceeded in late January.

         b. The Junker Deposition

          Early in the deposition of Chris Junker, signs of trouble were on the horizon. As Prairie River counsel went through the topics, using as a reference the document that contained Procura's responses and objections, Junker denied he was prepared to testify about several of the topics for which he had been designated, even within the limited scope as to which Procura's counsel had promised Junker would be prepared:

Q. Do you understand that you have been designated as the corporate representative as to Topic 4?
A. I do.
Q. And are you prepared to testify today regarding that topic?
A. Yes, I am.
Q. All right. Same question as to 5.
A. Yes. I understand that.
Q. Okay. And you're prepared to testify to that topic?
A. I am.
Q. How about 6?
A. I do not know or have a total - I don't know if this is something specific that you would want me to address relative to customers terminated. I'm happy to take a look at that, but I couldn't name all or identify all.
Q. Well, let's set that aside. We'll get into the subject matter of each of these. How about No. 7?
A. No. I couldn't - I'm not prepared to answer that. I was not involved in the sales process. The majority of that was done by Salo.
Q. Okay. How about Topic 9?
A. I would again not know all. I would be happy to respond to anything that you could show me that you need me to answer to.

(Junker Dep. Tr. at 13:18-14:19.)

         Even greater cause for concern arose when Prairie River counsel inquired about how Junker had prepared for the deposition. When asked what he had done to prepare to testify as to topic 4, Junker responded “Nothing.” (Id. at 67:14-16.) When asked what he had done “to prepare for your deposition generally today, ” Junker responded that on his own, he had “looked at the agreement that was signed between Procura and Prairie River, ” and that he “also kind of glanced through the one with Salo” but that was “[p]retty much . . . it” other than a short conversation with Walles about a single email. (Id. at 67:17-69:16.) In addition, he had one meeting with Walles and Procura counsel which took place two days before the deposition and lasted about an hour and a half, and a 15 to 20-minute telephone call with the same individuals the day before the deposition. (Id. at 69:17-71:7.) He met with no one else in person or by phone to prepare for the deposition. As for reviewing documents to prepare to testify about the topics for which he was designated, he recalled only that “we may have looked at the complaint.” (Id. at 71:14-21.)

         As the discussion moved into the substance of topic 4, the first of the topics on which Junker was designated to testify, Junker testified he did not know what version of the software Procura was on when he joined the company in 2015, what version it was on at the time of his deposition, or how many versions or updates it had been through in the intervening years. (Id. at 73:11-22.) He did not know how many U.S. customers Procura had when he joined the company, or what approximate percentage of its total customers or total revenues at that time were in the U.S. (Id. at 73:23-74:20.) He could not identify Procura's largest customers in the U.S. at the time he joined the company in 2015 (Id. at 74:21-25), and although, in his role as president and CEO of Procura, he had met with several U.S. customers, he could not name a single one of them. (Id. at 75:6-19.) Junker was unable to name any “large” U.S. customers of Procura other than Salo, and was unable to name any “mid-sized customers” other than PASCO. (Id. at 82:9-83:7.) Furthermore, he could not identify any other Procura customers that were similar in size to PASCO or Prairie River. (Id. at 83:8-23.)

         As for Procura's software sales in the U.S. after the Prairie River sale, Junker did not know how many U.S. customers had bought the Procura software since he joined the company, although he thought it was less than five, and he could not name any of those customers other than Prairie River. (Id. at 76:21-77:16.) He did not know how many of them remained customers of the company, nor could he testify to how many U.S. customers had left Procura for any reason since he had become president and CEO. (Id. at 77:25-78:23.) He could not answer whether the software sale to Prairie River was the last such sale in the U.S., although he did testify that Procura is “not really promoting [the software] in the U.S. [anymore]” because other software offerings are now Procura's “go-to-market platform.” (Id. at 84:3-20.)

         Furthermore, even though Procura had agreed that Junker would at least be able to testify about “the history and status of Procura's licenses and projects with U.S. customers (former or current) who have experienced alleged functionality issues with the Procura Software similar to those alleged by Prairie River in this case, ” Junker could not answer how many customers had left for the same reasons Prairie River left, and he did not even know what categories the company used to track why customers chose to leave, although he testified that “we do track that. You should be able to get that.” (Id. at 79:3- 12.) He had no other information responsive to topic 4. (Id. at 96:16-20.)

         Moving on to topic 5, as to which Procura had promised Junker would be “prepared to discuss formal and/or informal disputes that Procura has had with its U.S. customers (former or current) regarding alleged functionality issues with the Procura Software similar to those alleged by Prairie River in this case, from 2009 - present, ” Junker stated he did nothing “to prepare for this topic in particular.” (Id. at 97:10-13.) He testified, however, that in addition to Prairie River, he was “aware of At Home having a level of dissatisfaction, ” and that he was “aware of Small Hands” but not “intimately” so. (Id. at 97:18-21.) As to the latter, he testified that he “couldn't tell you what their issue was, ” and did not know what specific functionalities were at issue. (Id. at 97:22- 98:21.) He had a “recollection” that the system was a “mismatch” and that Procura discussed and ultimately decided to “let them out of their agreement, ” although he did not know what Procura did to investigate the issues raised by Small Hands and he did not remember how the dispute was ultimately resolved. (Id. at 97:22-98:21, 99:14-24.) “I don't recall that there was specific technical issues. I don't recall. There may have been.” (Id. at 113:25-114:3.)

         Junker testified he was not aware of any other customers responsive to topic 5 (id. at 98:2-4), even though supplemental interrogatory responses from Procura a month earlier had identified two others, PASCO[13] and Interim Healthcare (Abbate-Dattilo Decl. Ex. H [Doc. No. 229-1 at 92-103]). In addition, Prairie River asserts that analysis of Procura's more recent document productions reveals still more customers who have complained of functionality issues with the Procura software, including the billing function, several of whom ultimately terminated their relationship with Procura because of those issues. See (Prairie River's Mem. in Supp. of First Mot. for Sanctions at 15 and exhibits cited therein.) When asked how he went about identifying the three customers (counting Prairie River) that he did name in response to counsel's questions, it was clear from Junker's response that his testimony was based entirely on what he was personally aware of and happened to remember, not on any attempt to gather information known to others in the company or that might be available in company records. See, e.g., (Junker Dep. Tr. at 98:24-99:13 (“I'm not sure how my recollection was, you know, it was - I'm not sure why I remember Small Hands.”))

         It was similarly clear in Junker's testimony about the specifics of the issues complained of by At Home that he was relying entirely on his personal recollection of his own limited direct involvement with the customer. See generally (id. at 100:4-111:2.) He recalled meeting with At Home, but could only remember one functionality issue of which that customer complained, which related to secondary billing. “I can't say that that was their only issue. It's the only issue that I recall.” (Id. at 103:18-19.) He did not remember what the At Home representatives told him about the impact of the issues on At Home's business, nor did he remember what was done to address the issues that were raised. “The general impression I have-it's a long time ago-they were dissatisfied.” (Id. at 104:11-12.) “I just remember that they were having difficulties.” (Id. at 105:7-8.)

         The tenor of the testimony with regard to Junker's preparation, or lack thereof, was similar when the deposition moved on to topic 6, relating to the circumstances surrounding U.S. customers who had terminated or cancelled their license agreements with Procura. Junker testified he did nothing to prepare for that topic and “just was aware of At Home and Prairie River and Small Hands.” (Id. at 119:8-16.)

         As for topic 7, Junker claimed he was not aware of any representations made in connection with selling the Procura software to Prairie River because “[w]e did not do the selling. The selling was done by Salo. Salo may have made representations that we're not party to.” (Id. at 124:14-16.) But he did nothing to prepare for the topic other than consult his own “general recollection of the process that took place, ” see (id. at 124:13- 125:7), and ask Scott Overhill, in a brief conversation about another subject, if Procura had ever done any “demos.” (Id. at 125:17-126:4.) And although Overhill told him Procura had participated in a demo with Prairie River, Junker did not know (and apparently did not bother to ask) which demo it was, what it pertained to, or whether it involved billing, because Junker “wasn't involved in any of the product aspects of the deal.” (Id. at 126:5-19.) Indeed, Junker did not know, and had not asked anyone in preparation for his deposition, whether it was Salo or Procura that had set up or demonstrated the billing functionalities of the software Prairie River purchased. (Id. at 127:2-128:1, 128:23-129:2.)

         c. The Walles Deposition

          John Walles was also asked about his preparation for the topics on which he was designated. He testified that he was prepared to testify regarding topics 1, 2, 3, 10, and 13, but that he was not prepared to discuss topics 11 or 12. (Walles Dep. Tr. at 15:6- 16:22.) In response to questions about his preparation, he testified that his own participation in the preparation meeting with Junker and counsel lasted “two and a half to three hours.” (Id. at 13:14-15.) He also participated in a conference call with Junker and counsel that he estimated lasted about 45 minutes. (Id. at 14:23-15:2.) As for documents, he recalled reviewing documents provided to him by counsel, including the deposition notice and Procura's responses and objections thereto, and some of the “other suit filings.” (Id. at 14:1-20.) He testified that he did not talk to any other employees of the company and did nothing else to prepare for his deposition. (Id. at 13:19-25, 15:3- 5.)

         Turning to the substance of topic 1, which pertained to Procura's efforts to gather documents in response to discovery (a topic to which Procura did not object and the scope of which it did not limit), Walles stated that he did not do anything to prepare specifically for this topic. (Id. at 47:8-11.) He testified that he personally sent an email to all the individuals that were currently employed and had been involved with the Prairie River matter. He described the email as saying “please go back through your emails and identify anything related to the Prairie River situation, ” and Walles expected that “people would be responsible.” (Id. at 48:6-10, 58:21-25.) Once Walles had sent that email, Procura's general counsel Kirk Isaacson “handled the capturing of all of the information that was forwarded back from each individual.” (Id. at 48:11-13.) But although Isaacson attended the deposition preparation meeting and subsequent phone call, it appears he did not provide Walles with any additional details about what the company had done to meet its discovery obligations. (Id. at 53:20-23.) Walles did not know, for example, whether any effort was made to copy or collect or get access to individual employees' entire email accounts so that Isaacson or a vendor could run their own searches (as opposed to simply having each employee search his or her own emails). (Id. at 51:11-17 (“I don't know. As I told you, I forwarded that information and [Isaacson] took it from there.”); see also Id. at 51:19-52:12 (“[T]he legal end of the organization took care of that.”).) The same was true for the collection of non-email documents responsive to discovery. (Id. at 53:24-54:21 (“Q. Are you aware of any other specific efforts that Mr. Isaacson took. A. That was his responsibility.”).) He also did not know- and had not asked-what efforts had been made to search the corporate database used by some of the individuals involved with the Prairie River project. (Id. at 56:21-57:14.) He did not know what steps had been taken to search for emails or other documents of individuals who had left the company. (Id. at 60:4-8.) In short, other than that: (1) he sent an email to current employees who had been involved with Prairie River instructing them to search for “anything related to the Prairie River situation”; (2) he delegated responsibility for compliance to his general counsel; and (3) he expected employees to “be responsible, ” Walles could provide no other information about Procura's efforts to gather documents in response to discovery. (Id. at 57:19-23.)

         As for topic 2, the company's document retention and disposition policies, Walles also stated he had done nothing specific to prepare for the deposition. (Id. at 47:8-11.) He did testify that the company has no email retention policy, see (id. at 47:15-16), and has no document destruction policy, see (id. at 61:17-18), but he did not know whether there was an automatic delete function in operation on any of the individual users' computers, although he did not have such a function on his own. (Id. at 50:20-51:10.)

         Topic 3 addressed what efforts had been made to preserve documents that might be relevant to the instant litigation. Walles testified that a request was sent to specific individuals who had been involved in the Prairie River matter instructing them clearly not to destroy anything at all. (Id. at 57:24-58:25.) He did not, however, have a list of the individuals to whom the request was sent. (Id. at 59:1-3.) He also did not know the date the request was sent, although he knew it was after the lawsuit was filed. (Id. at 62:19- 23.) He did not know if anything was done to preserve documents after the company was on notice of a potential legal claim but before the lawsuit was filed. (Id. at 62:19-64:14.) Furthermore, he could not ...

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