DEVON INDUSTRIAL GROUP, LLC, Plaintiff/Counter-Defendant, v. DEMREX INDUSTRIAL SERVICES, INC. and FIRST SEALORD SURETY, INC., Defendants/Counter-Plaintiffs; DEMREX INDUSTRIAL SERVICES, INC., Third-Party Plaintiff/Counter-Defendant, v. FORD MOTOR COMPANY, Third-Party Defendant/Counter-Plaintiff; FORD MOTOR COMPANY, Third-Party Plaintiff, v. FIRST SEALORD SURETY, INC. Third-Party Defendant Case No. 2:11-cv-10313 United States District Court, E.D. Michigan, Southern Division Filed November 22, 2011 Michelson, Laurie J., United States Magistrate Judge REPORT AND RECOMMENDATION ON FORD'S MOTION TO DISCHARGE DEMREX'S CONSTRUCTION LIEN [62] AND FORD'S MOTION FOR DEFAULT JUDGMENT AGAINST DEMREX AND FIRST SEALORD [63] AND ORDER ON DEMREX'S MOTION TO STRIKE JOINDER [79] *1 This is a breach of contract case. Plaintiff Devon Industrial Group, Inc. (“Devon”) and Defendant Demrex Industrial Services, Inc. (“Demrex”) agreed that Demrex would perform demolition work at an automotive-assembly plant owned by Third-Party Ford Motor Company (“Ford”). Devon believes that Demrex breached their agreement and that Defendant First Sealord Surety, Inc. (“First Sealord”) has not performed under bonds backing Demrex's work. Demrex responds that it was Devon and Ford that breached. Ford seeks, among other things, the removal of a construction lien that Demrex has filed against the plant. Now before the Court are two motions seeking severe sanctions against Demrex and First Sealord for alleged discovery abuses: Ford's Motion to Discharge Construction Lien of Demrex and for Sanctions (Dkt. 62, Ford's Mot. to Discharge Lien), and Ford's Motion for Entry of Default Judgment and for Sanctions against Demrex and First Sealord for Violation of Order to Compel (Dkt. 63, Ford's Mot. for Default). Devon has joined Ford's motions, concurs in the relief Ford seeks, and alternatively seeks lesser sanctions. (Dkts. 65, 76.)[1] On November 21, 2011 this Court heard oral argument on the pending motions. For the following reasons, the Court RECOMMENDS that the District Court GRANT IN PART AND DENY IN PART Ford's motions and award lesser discovery sanctions akin to those proposed by Devon.[2] I. BACKGROUND A. Events Giving Rise to the Claims in this Suit *2 In 2009, Ford announced that it hoped to convert its inactive, automotive-assembly plant in Wixom, Michigan into a “green energy production plant.” (Dkt. 37, Ford's Am. 3d-Party Counterclaim ¶ 2; see also Dkt. 14, Demrex's Counterclaim ¶ 10.) To accomplish this goal, Ford needed to “demolish and remove several hundred tons of scrap metal, clean the plant, and put it into shape for new owners/lessees to utilize.” (Ford's Am. 3d-Party Counterclaim ¶ 2.) Ford contracted with Devon to act as the construction manager for this project. (Dkt. 11, Devon's Am. Compl. ¶ 10; Dkt. 14, Demrex's Counterclaim ¶ 11.) On or around February 26, 2010, Plaintiff Devon and Defendant Demrex entered into a “Subcontract” for Demrex to perform demolition work at the plant for a “Subcontract Price” of $5,604,700. (Dkt. 77, Demrex's Resp. to Ford's Mot. to Discharge Lien, Ex. 1 (Subcontract); Devon's Am. Compl. ¶ 11.) 1. Devon's Claims Devon asserts that Devon, Demrex, and Ford agreed that Demrex would accept as payment for its services “credits for scrap metal removed by Demrex from the plant,” and once Demrex had removed “$5,490,000.00 worth of scrap metal [,] ... the value of all remaining scrap would be split 30% to Demrex and 70% to Devon/Ford.” (Devon's Am. Compl. ¶¶ 22-23; see also Dkt. 81, Devon's Reply in Support of Ford's Mot. for Default at 1-2, Ex. B (Aug. 12, 2009 Addendum), Ex. C (Sept. 14, 2009 Addendum), Ex. D (Ford Wixom Scrap/Recovery Streams Handling Protocol).) Contending that Demrex failed to perform under the Subcontract, Devon terminated the agreement on January 17, 2011, and, a little more than a week later, filed this action. (Dkt. 1, Devon's Compl.; Dkt 11, Devon's Am. Compl. ¶ 19.) Devon maintains that Demrex breached the Subcontract by failing to timely complete the demolition work. (Id. ¶¶ 12, 14-15.) Further, says Devon, the Subcontract obliged Demrex “at all times to promptly pay all of its subcontractors, laborers and suppliers and to not permit any liens or claims to be filed or asserted against the project.” (Id. ¶ 13.) Yet, Devon avers, “Demrex owes its subcontractors/suppliers and other project related expenses in an amount in excess of $4,500,000.00.” (Id. ¶ 17.) Both Devon and Ford assert that multiple (as least nine) liens have been placed against the plant by Demrex's subcontractors and suppliers. (Devon's Am. Compl. ¶ 15; Dkt. 63, Ford's Mot. for Default at 3.) Devon further asserts that Demrex has removed well over $5,490,000 in scrap from the plant but has failed to pay Devon its 70% share of the excess. (Devon's Am. Compl. ¶¶ 23-27.) Devon has also filed a claim against Defendant First Sealord. (Devon's Am. Compl. ¶¶ 28-38.) Devon asserts that First Sealord issued two performance bonds to ensure completion of Demrex's services at the plant. (Id. ¶ 29.) But, Devon says, First Sealord has “failed to take the required actions to complete the project, or otherwise satisfy its obligations under the performance bonds.” (Id. ¶ 34.) Accordingly, Devon has sued First Sealord for breach of its obligations under the bonds. (See id. ¶¶ 28-38.) 2. Demrex's Claims According to Demrex, on January 10, 2010, it proposed the following arrangement to Devon: (1) Demrex would have the right to sell the scrap and equipment removed from the plant during the demolition and would keep the first $5,490,000 (plus bonding costs) to cover Demrex's costs, and (2) “Demrex and Ford would divide any remaining income from the commodity and scrap revenue equally among them.” (Dkt. 14, Demrex's Counterclaim ¶ 13; but see Dkt. 15, Demrex's Third-Party Compl. ¶ 45 (“Ford agreed that Demrex would be entitled to the first $5,604,700, the cost of any bonding, and unit price costs expended, cost of change orders plus thirty percent of all other revenue thereafter”).) Demrex asserts that Devon did not reject Demrex's proposal. (Id.) And while Demrex admits that it subsequently executed the Subcontract with Devon, it asserts that the written agreement did not reflect the parties' actual agreement and that the parties never acted in accordance with the terms of the Subcontract. (Id. ¶¶ 15-16, 22.) Alternatively, Demrex alleges, “Devon's active interference with Demrex's [p]roject performance would constitute a material breach of the [Subcontract].” (Id. ¶ 22.) In particular, Demrex asserts that Devon impeded its performance by, among other things, arbitrarily imposing site access requirements, interfering with Demrex's laborers, and delaying Demrex's access to parts of the plant. (Id. ¶ 28.) Accordingly, Demrex asserts that Devon breached an oral agreement or an implied-in-fact contract, or, alternatively, the written Subcontract. (See id. ¶¶ 42-48 (Count I), ¶¶ 49-59 (Count II), ¶¶ 70-79 (Count IV).) *3 Demrex has also filed a Third-Party Complaint against Ford. (Dkt. 15, Demrex's 3d-Party Compl.) Demrex avers that sometime around “October 2010, Ford learned of delays in, and a possible denial of, the federal loan guarantees that were required to fund the conversion of the Wixom [p]lant into an alternative energy park. Accordingly, Ford no longer was motivated to continue with the demolition [p]roject.” (Demrex's 3d-Party Compl. ¶ 33.) Demrex further asserts that Ford “express[ly] or tacit[ly]” approved of Devon's wrongful conduct and that Ford prevented Demrex from receiving the “benefit of its bargain” by, among other things, denying “Demrex's access to the scrap and commodities remaining at the [p]roject.” (Id. ¶¶ 41, 47-49.) In April 2011, during the pendency of this suit, Demrex filed a Claim of Lien against the Wixom plant (“Demrex Lien”). (Dkt. 63, Ford's Mot. for Default, Ex. 1.) The Demrex Lien, recorded with the Oakland County Register of Deeds, provides that the “contract amount, including extras, is $23,310,355.” (Id.) It further states that Demrex “has received payment in the total amount of $7,430,230.25 and therefore claims a construction lien upon the [Wixom plant] in the amount of $15,880,125.” (Id.) On October 11, 2011, the same day Demrex responded to Ford's Motion to Discharge Lien, Demrex filed an action in the Oakland County Circuit Court seeking to enforce the Demrex Lien. (Dkt. 88, Ford's Reply to Demrex's Resp. to Ford's Mot. to Discharge Lien, Ex. 1 (Oakland County Circuit Court complaint).) 3. Ford's Claims Ford's claims against Demrex essentially center around three issues. First, like Devon, Ford asserts that under the Subcontract, Demrex agreed to share “scrap proceeds above the [S]ubcontract demolition price, with Demrex to retain 30% and 70% to flow through [Devon] to be paid to Ford.” (Dkt. 37, Ford's Am. 3d-Party Counterclaim ¶ 3.) But, according to Ford, Demrex has “removed and sold” scrap metal from the plant in excess of “the full stated contract amount of $5,490,000 plus the bond premiums of $164,700” but “has failed ... to remit the 70% share of the excess scrap proceeds to [Devon] or Ford.” (Id. ¶¶ 79-80; see also id. ¶¶ 75-92.) Second, Ford asserts that Demrex's failure to complete the project and wrongful scrap retention tortiously interfered with Ford's contract with Devon. (See id.¶¶ 93-101.) Third, Ford asserts that the $15,880,125 Demrex Lien is “greatly exaggerated” and “diminishes Ford's rights and interest in the property, including the marketability of the Wixom plant,” which constitutes slander of title and violates Michigan's Construction Lien Act. (Id. ¶¶ 104, 106; see also id. ¶¶ 102-08 (slander of title claim), ¶¶ 109-17 (Lien Act claim).) Like Devon, Ford has brought claims against First Sealord for “Action on the Bonds.” (Ford.'s Am. 3d-Party Counterclaim ¶¶ 118-27.) B. The Present Motions Ford's Motion for Default Judgment and for Sanctions Against Demrex and First Sealord (“Ford's Motion for Default”) is premised on Demrex's alleged failure to comply with two stipulated orders entered by this Court compelling Demrex and First Sealord to respond to certain discovery served by Ford. (See Dkt. 63, Ford's Mot. for Default at 5-6; Dkt. 67, Ford's Supp. Brief to Ford's Mot. For Default at 1.) Pursuant to Fed. R. Civ. P. 37, Ford seeks a default judgment on its claims against Demrex and First Sealord, dismissal of Demrex's claims against Ford, and costs and attorney's fees. (Ford's Mot. for Default at 18.) Devon has joined Ford's Motion for Default Judgment: it asserts that Demrex has failed to comply with a third stipulated order compelling Demrex to respond to discovery that Devon served. (Dkt. 65, Devon's Joinder to Ford's Mot. for Default at 2-3.) Devon concurs in the relief sought by Ford but alternatively seeks an order directing Demrex to fully comply with this Court's prior discovery orders, extending all dates in the Scheduling Order (Dkt. 31) for at least 90 days, and awarding monetary sanctions. (Devon's Joinder to Ford's Mot. for Default at 3-4.) *4 Ford's Motion to Discharge Construction Lien of Demrex (“Ford's Motion to Discharge Lien”) was originally filed pursuant to both the Michigan Construction Lien Act and Rule 37. (Dkt. 62, Ford's Mot. Discharge Lien at 1.) Since the motion in part relied on the Lien Act, and argued the merits of the lien amount and nature of its filing, Demrex reasonably construed Ford's Motion to Discharge Lien as one seeking summary judgment on Count V of Ford's Amended Third-Party Counterclaim. (See Dkt. 37, Ford's Am. 3d-Party Counterclaim ¶¶ 109-17 (asserting violation of the Lien Act); Dkt. 77, Demrex's Resp. to Ford's Mot. Discharge Lien at 13-14.) At the hearing, Ford was equivocal as to whether its motion was one for summary judgment or pursuant to Rule 37 and further requested that if this Court were to treat the motion as one pursuant to Rule 56, that the Court do so without prejudice to a second such motion. Ford's Reply in support of its Motion to Discharge Lien is unequivocal, however: it provides that “Ford's Motion to Discharge is a Rule 37 motion,” that “Demrex's argument that this is a motion for summary judgment is without merit and an attempted distraction from Ford's Motion,” and states that “this is not a Rule 56 motion, but rather a Rule 37 motion.” (Dkt. 88, Ford's Reply to Demrex's Resp. to Ford's Mot. Discharge Lien at 1, 6 n.4.)[3] Accordingly, at the heart of Ford's motions and Devon's joinders, and the extensive briefing surrounding each,[4] is the following argument and request for relief: because Demrex and First Sealord failed to provide adequate responses to Ford and Devon's discovery requests – despite this Court's orders compelling responses – default judgment in favor of Devon and Ford against Demrex and First Sealord is warranted (along with dismissal of Demrex's claims against Devon and Ford); or, in the first alternative, default judgment on Count V of Ford's Amended Third-Party Counterclaim is warranted; or, in the second alternative, some lesser discovery sanction is justified (e.g., an award of fees and an extension of the discovery deadline). The procedural history that follows outlines the basis for this argument and these demands. C. Events Giving Rise to Ford's Motions 1. Ford and Devon's Motions to Compel and Resulting Court Orders Soon after Devon filed this suit in January 2011, it served document requests on Demrex and First Sealord (“Devon's Discovery Requests”). (See Dkt. 65, Devon's Joinder to Ford's Mot. for Default, Ex. A.) These requests sought, for example, Demrex's submittals to Devon for credit for scrap removed from the Wixom plant and a copy of Demrex's general ledger. (See id., Ex. A (Devon's Discovery Requests, Doc. Req. Nos. 3, 8).) Because Devon's Discovery Requests were made prior to the Fed. R. Civ. P. 26(f) conference, however, Demrex sought a protective order. (Dkt. 19.) This Court then entered a stipulated order providing that Demrex was not required to respond to Devon's Discovery Requests prior to the Rule 26(f)conference. (Dkt. 25.) *5 On May 6, 2011, the District Court issued a Notice to Appear encouraging the parties to engage in discovery prior to a then-upcoming scheduling conference. (Dkt. 26.) That same day, Devon re-served its Discovery Requests. (Devon's Joinder to Ford's Mot. for Default, Ex. B.) About three weeks later, on May 27, 2011, Ford served its First Requests for Production of Documents on Demrex and First Sealord (“Ford's First Discovery Requests”). (Dkt. 67, Ford's Supp. Brief to Mot. for Default at 1, Ex. 2.) These requests sought records primarily relating to Demrex's work at the plant and on the project, including, “contracts, pay applications and pay records, documents relating to scrap proceeds, accounting records, financial records and documents relating to the amounts that Demrex and/or First Sealord claim are due and owing to Demrex, its suppliers and subcontractors.” (Ford's Supp. Brief to Mot. for Default at 1.) On June 1, 2011, Ford served its First Set of Interrogatories and Second Requests for Documents on Demrex and First Sealord (“Ford's Second Discovery Requests”). (See Ford's Mot. for Default, Ex. 2.) Ford's Second Discovery Requests focused more on the basis for the amounts stated in the Demrex Lien. (See e.g., Ford's Mot. for Default, Ex. 2, (Ford's Second Discovery Requests, Interrog. and Doc. Req. Nos. 1, 4).) Both Ford and Devon were dissatisfied with Demrex and First Sealord's responses to their discovery requests. On June 29, 2011, Devon filed a motion to compel asserting that it was “clear that [Demrex made] no attempt whatsoever” to respond to Devon's Discovery Requests. (Dkt. 33, Devon's Mot. to Compel at 2.) That same day, in regards to Demrex and First Sealord's responses to Ford's First Discovery Requests, Ford also moved to compel responses. (Dkt. 35.) It asserted that Defendants “failed to provide any information[ ] and instead used the same rote objection to every single request.” (Dkt. 35, Ford's 1st Mot. to Compel at 3.) On July 8, 2011, Ford filed a second motion to compel regarding Demrex's responses to Ford's Second Discovery Requests asserting that Demrex “failed to respond to even one [discovery] request ... and has avoided providing ... any information about its lien ....” (Dkt. 40, Ford's 2d Mot. to Compel at 9.) On August 29, 2011, this Court entered three stipulated orders resolving Ford and Devon's motions to compel. (Dkts. 53, 54, 55.) The Order resolving Devon's Motion to Compel provided: IT IS HEREBY ORDERED that Demrex Industrial Services, Inc. (“Demrex”) shall produce for inspection and copying all of the documents requested in the First Document Requests of Devon Industrial Group, LLC (“Devon”) on or before August 29, 2011 at either the offices of counsel for Demrex or the offices of counsel for Devon. (Dkt. 53, Stip. Order on Devon's Mot. to Compel at 1.) The Order on Ford's First Motion to Compel directed: IT IS HEREBY ORDERED that Demrex Industrial Services, Inc. (“Demrex”) and First Sealord Surety, Inc. (“First Sealord”) (collectively “Defendants”) shall produce all of the documents requested in the First Document Requests of Ford Motor Company, on or before August 29, 2011. In addition, Defendants, shall, at the request of either of the other parties, provide all of its responsive documents, electronically, via cd or cds in a searchable, downloadable format, and organized or labeled in a manner so as to identify the categories of documents being produced on each cd. The party requesting the electronic copy will provide the formatting instructions to Defendants. If the documents are provided electronically, Defendants will certify that the documents being produced are all of the responsive documents in its possession. *6 (Dkt 54, Stip. Order on Ford's 1st Mot. to Compel at 1-2.) And, in resolving Ford's Second Motion to Compel, this Court ordered that Defendants shall provide responses to the interrogatories Nos. 1-8, 10, 12, 13, 14, 16, 19, and provide amended answers to the document requests, no later than August 29, 2011, including a full itemization of the amounts set forth in the Demrex Claim of Lien filed against the Wixom Plant at Liber 43036, Page 797, and any amendment to that Lien, (“Demrex Lien”) and shall produce all of the documents requested in the Second Document Requests of Devon Industrial Group, LLC and Ford Motor Company, on or before August 29, 2011 in Michigan. Documents supporting, and reflecting the amounts set forth in the Demrex Lien (responsive to Interrogatory No. 1 and No. 4) filed against the Wixom Plant, at Liber 43036, Page 797, shall be copied and provided to Ford, with the amended responses. Defendants shall also identify, in their response, the documents responsive to each of the Interrogatories as required by the federal rules. (Dkt. 55, Stip. Order on Ford's 2d Mot. to Compel at 1-2.) 2. Demrex's Attempts to Comply with this Court's Orders to Compel On September 9, 2011, Demrex and First Sealord made their first attempt to comply with the Court's orders to compel: they provided “First Supplemental Responses” to Ford's Second Discovery Requests. (Dkt. 78, Demrex's Resp. to Ford's Mot. for Default at 2.)[5] On that date, Demrex also produced documents, apparently on a data CD and a flashdrive. (Id. at 2.) Demrex explains that it “produced documents in two formats: one set where all pages were bates labeled, and another set organized in various folders and subfolders in the manner in which they were maintained by Demrex. The documents, folders, and sub-folders are easily searchable using Microsoft Windows and the ‘Ctrl + F’ function, which provides an easy-to-use search.” (Id.) Demrex admits, however, that it “lacks sufficient funds to hire a vendor to produce documents in the format that Ford and Devon prefer.” (Id. at 2.) Demrex further concedes that it has had difficulty exporting data (either electronically or via printing) from “Master Builder” – the accounting software Demrex uses to maintain its accounts payable, accounts receivable, and general ledger. (Id. at 2-3.) The next day, September 10, 2011, Ford sent Demrex an email outlining deficiencies in Demrex and First Sealord's responses. (Ford's Mot. for Default, Ex. 6.) Ford also warned, “[u]nless you provide responses and the documents you were required to provide, by the end of business today, we will move for default and sanctions.” (Id.) Ford asserts that the CD and flashdrive produced by Demrex did not include certain financial records and contain many unsearchable and/or un-unitized documents (i.e., the documents run together without start or end delineation). (Dkt. 67, Ford's Supp. Brief to Mot. for Default at 3.) Ford further claims that many documents were not produced in their native format and therefore do not include associated metadata. (Id.) *7 In response, on September 13, 2011, Demrex provided “Second Supplemental Responses” to Ford's Second Discovery Requests. (Ford's Mot. for Default, Ex. 4 (Second Supp. Responses).) According to Ford, Demrex's responses continued to be deficient; for example, Demrex purportedly “failed ... to provide ... a copy of the specific documents responsive to interrogatories 1 and 4” –interrogatories seeking to uncover the basis for the allegedly high amounts in the Demrex Lien. (Ford.'s Mot. for Default at 6.) Accordingly, on September 14, 2011, Ford sent Demrex another email pointing out deficiencies in Demrex's responses. (Id. at 6, Ex. 7; see also id., Ex. 8.) The next day, having received no response from Demrex, Ford filed the now pending Motion for Default. (Ford.'s Mot. for Default at 6.) Ford's Motion to Discharge Lien was filed two days earlier. On October 11, 2011, the date that Demrex and First Sealord filed their Response to Ford's Motion for Default, Defendants also served Ford with “Third Supplemental Responses” to Ford's Second Discovery Requests. (Dkt. 78, Demrex's Resp. to Ford's Mot. for Default at 6; Dkt. 85, Ford's Reply to Demrex's Resp. to Ford's Mot. for Default, Ex. 7 (Third Supp. Responses).) Demrex and First Sealord assert that their Third Supplemental Responses “provide answers to all of Ford's interrogatories and discovery requests and explain why certain answers are impossible to provide at this time.” (Demrex's Resp. to Ford's Mot. for Default at 6.) On October 26, 2011, Ford filed its reply briefs in support of the pending motions. (Dkts. 85, 88.) There, Ford asserts that Demrex's Third Supplemental Responses remain deficient. (Dkt. 85, Ford's Reply to Demrex's Resp. to Ford's Mot. for Default at 3.) Ford also asserts that Demrex has not produced “the electronic records, and financial records, in the format requested by Ford”; in particular, Ford asserts that Demrex's production does not allow it to analyze the metadata (e.g., creation date) connected with the documents. (Id.) Ford also points out that Demrex attached documents to their Response that should have been previously produced in discovery, that Demrex laptops were destroyed (after their contents were copied onto Demrex servers), and that Demrex has recently produced six boxes of documents after months of repeated requests. (Id. 2-4; see also Ford's Reply to Demrex's Resp. to Ford's Mot. to Discharge Lien at 3-4.) II. ANALYSIS For the following reasons, the Court recommends denying Ford and Devon's requested sanctions of (1) dismissal of Demrex's claims and (2) default judgment in favor of Ford and Devon and against Demrex and First Sealord. Because discharging the Demrex Lien is equivalent to a default judgment on Count V of Ford's Amended Counterclaim, the Court also recommends denial of that sanction for the same reasons. Among the variety of discovery sanctions available in a district court's “arsenal,” the entry of a default judgment against a defendant or an order of dismissal against a plaintiff are the court's “strongest weapon[s].” Grange Mut. Cas. Co. v. Mack, 270 F. App'x 372, 376 (6th Cir. 2008) (“A district judge holds a variety of sanctions in his arsenal, the most severe of which is the power to issue a default judgment.”); Regional Refuse Sys., Inc. v. Inland Reclamation Co., 842 F.2d 150, 154 (6th Cir. 1988) (“Dismissal of an action for failure to cooperate in discovery is a sanction of last resort.”). The Supreme Court has justified these harsh sanctions by acknowledging their value as both a specific and general deterrent: [A]s in other areas of the law, the most severe in the spectrum of sanctions provided by statute or rule must be available to the district court in appropriate cases, not merely 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. *8 National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643 (1976). In Regional Refuse, the Sixth Circuit articulated four factors for this Court to consider when evaluating a motion for dismissal or default judgment under Rule 37, namely: (1) whether the party's failure to cooperate in discovery is due to wilfulness, bad faith, or fault; (2) whether the adversary was prejudiced by the dismissed party's failure to cooperate in discovery; (3) whether the dismissed party was warned that failure to cooperate could lead to dismissal; and (4) whether less dramatic sanctions were imposed or considered before dismissal was ordered. 842 F.2d at 155.[6] “Although no one factor is dispositive, dismissal is proper if the record demonstrates delay or contumacious conduct,” United States v. Reyes, 307 F.3d 451, 458 (6th Cir. 2002), i.e., conduct that is “ ‘perverse in resisting authority’ and ‘stubbornly disobedient,’ ” Schafer v. City of Defiance Police Dept., 529 F.3d 731, 737 (6th Cir. 2008) (quoting Webster's Third New International Dictionary 497 (1986)). In this case, Demrex and First Sealord's conduct treads precariously close to willful noncompliance with this Court's orders to compel. First, a number of Demrex and First Sealord's responses to Ford's Second Discovery Requests – supplemented three times after this Court's orders to compel – remain deficient. For instance, Interrogatory No. 7 of Ford's Second Discovery Requests seeks “a detailed summary of all efforts by Demrex and/or First Sealord to respond to any” of the other entities (e.g., suppliers) that placed liens upon the Wixom plant, including any communications Demrex or First Sealord made with these lienors regarding the sums the lienors claimed were due. (Dkt. 85, Ford's Reply to Demrex's Resp. to Ford's Mot. for Default, Ex. 7 (Third Supp. Response at 10).) The whole of Demrex and First Sealord's First Supplemental Response to this interrogatory is a list of case names and numbers for suits brought by lienors against Demrex. (Id. at 11.) Defendants' Second Supplemental Response then lists 15 companies that have filed claims against Demrex or First Sealord. (Id. at 11-12.) Neither of these two supplemental responses detail Demrex or First Sealord's efforts to respond to the lienors nor do they describe any communications between Demrex or First Sealord and the lienors. But this is precisely what the interrogatory seeks and what Defendants agreed, by Court order, to provide. As for Demrex and First Sealord's Third Supplemental Response, it was not served until after Ford and Devon filed the present motions for sanctions. And even then, this most recent supplement says little more than “Demrex has not resolved any of the outstanding claims” and that Demrex will make an accounting available after it “determines how it will produce the cumbersome Master Builder Documents.” (Id. at 12.) The Court does not view Demrex and First Sealord's responses to Interrogatory No. 7 as a good faith effort to comply with this Court's orders to compel.[7] *9 Second, while Demrex and First Sealord have arguably adequately responded to some of Ford and Devon's discovery requests, Defendants' responses were not readily forthcoming. For example, Interrogatory No. 1 of Ford's Second Discovery Request – a request for information that Ford views as “basic and crucial” to its claims in this suit – asked Demrex and First Sealord to provide a “detailed summary, including itemization” of “all costs, fees[, and] expenses comprising the total claimed contract amount of $23,310,355” in the Demrex Lien. (Ford's Reply to Demrex's Resp. to Ford's Mot. for Default at 3, Ex. 7 (Third Supp. Response at 2).) In essence, Devon and Ford want to know how that number was calculated and the underlying documentation used in support. In their First Supplemental Response, Defendants provided a detailed accounting totaling $5,668,057. (Id. at 3-4.) But Defendants then conclusorily provided that “[t]he anticipated revenue from scrap and equipment sales (less revenue sharing) equals $17,642,298, for a total lien amount (including extras) of $23,310,355.” (Id.at 4.) It was not until Defendant's Third Supplemental Responses and their Response to Ford's Motion to Discharge Lien – served contemporaneously – that Defendants explained that the $23 million figure was comprised in part by $6 million in potential equipment sales, $1.24 million for Devon's contract termination, $1.75 million “as a result of early termination and delay of equipment,” and $5.3 million from scrap still remaining at the plant. (Id. at 4-5; see also Demrex's Resp. to Ford's Mot. to Discharge Lien at 9-10.) But this is the very type of “detailed summary, including itemization” that the interrogatory seeks and should have been provided in Defendant's First Supplemental Response (if not earlier). Moreover, even now, it does not appear that Demrex and First Sealord have responded to subpart c of Interrogatory No. 1, which asks for a detailed summary of “the total loan payment which Demrex alleges to have received in the amount of $7,430,230.55” as provided for in the Demrex Lien.[8] Additionally, Demrex has recently filed an affidavit of its CEO pertaining to the calculation of the Lien amount that contains slightly different numbers from those in its most recent discovery responses. Given the discrepancies, the Court has directed Demrex to provide one final and comprehensive response detailing the calculation of its Lien as well as all documents utilized to calculate these amounts. As another example, Document Request No. 3 of Devon's Discovery Requests seeks “the complete general ledger of Demrex.” (Devon's Joinder to Ford's Mot. for Default, Ex. A.) As of October 18, 2011 – more than six weeks after this Court's order resolving Devon's motion to compel – Demrex had not produced the complete ledger. (Dkt. 81, Devon's Reply in Support of Ford's Mot. for Default at 1.) Although Demrex explains that it has since produced a hard copy of the ledger, (Dkt. 89, Demrex's Opposition to Demrex's Concurrence at 4), Devon disputes this and Demrex admits that it has still not produced an electronic, searchable version of the ledger in compliance with the Court's orders to compel. Further, Ford asserts that despite Demrex's representations that it has fully complied with the Court's stipulated orders, (1) several exhibits attached to Demrex and First Sealord's response brief were not previously produced in discovery (Ford's Reply to Demrex's Resp. to Ford's Mot. for Default at 4); (2) on October 20, 2011, again, more than six weeks after its First Supplemental Responses, Demrex produced six boxes of documents that include “many” new documents (Id. at 2); and (3) still later, on October 28, 2011, Demrex produced four discs of documents from its servers, the “vast majority” of which are new (Dkt. 92, Ford's Notice of Supp. Exs. to Mot. for Default at ECF 2). Demrex has not explained when these documents came into its possession and why it did not produce these documents soon after this Court's orders to compel. See Bryant v. U.S., ex rel. U.S. Postal Serv., 166 F. App'x 207, 210 (6th Cir. 2006) (“[T]his court [has] held that a party seeking to avoid the sanction of dismissal ‘has the burden of showing that his failure to comply was due to inability, not willfulness or bad faith.’ ” (quoting U.S. v. Reyes, 307 F.3d 451, 458 (6th Cir. 2002)). While the Court certainly does not condone Demrex's tardiness, it is not yet prepared to preclude consideration of this case on the merits when discovery has not even closed, some documents have been produced and the trial date is over one year away. Additionally, the Court recognizes that Demrex has professed difficulty in producing information from its accounting software. The parties have engaged in email communications that suggest a willingness on Demrex's part to produce the requested financial information from its Master Builder program, but a lack of technical and/or financial ability to do so. For example, prior to its First Supplemental Responses, Demrex explained that *10 [a]t this time, I am sorry to say, our client is unable to pay for a vendor to produce documents. We are able to produce two sets of documents: one that is bates labeled, and one that contains all of the meta-data in its original form. If opposing counsel will pay for a vendor we have no problem working with one, but our client is unable to pay for it. Please let me know how you would like to proceed. (Dkt. 78, Demrex's Resp. to Ford's Mot. for Default, Ex. 4.) Devon uncooperatively responded, “[we] would like Demrex and First Sealord to comply with the existing orders. If they cannot by tomorrow, I will assume that ... a renewed motion for entry of default is required.” (Id.) Yet, Demrex's technical and financial inability to produce documents, and Ford and Devon's disinclination to ease this burden, does not wholly excuse Demrex's failure to produce documents responsive to Ford and Devon's requests – Demrex and First Sealord stipulated to produce those documents. Defendants should have considered the potential financial and technical obstacles prior to entering into such a stipulation. Although the issue of bad-faith conduct is close, the same cannot be said about the remaining Regional Refuse factors: these factors disfavor the extreme discovery sanctions of dismissal and default judgment at this time. As to the second factor, prejudice, the Court notes that discovery is still ongoing. Under the present Scheduling Order (Dkt. 31), the parties have until January 31, 2012 to complete fact discovery – at the time Ford filed the presently pending motions, this deadline was still over four months away. Even now, the discovery deadline remains over two months away and Devon has requested a 90-day extension. Dispositive motion cut-off is not until June 2012 and the parties have a January 2013 trial date. Thus, any prejudice to Devon or Ford on the merits is not incurable.[9] Moreover, the quantity of Ford's briefing regarding the Demrex Lien, along with the arguments Ford made at the hearing, suggests that Ford has some of the necessary discovery to pursue Count IV (slander of title) and Count V (violation of the Lien Act) of its Amended Counterclaim. The Court recognizes that Devon and Ford incurred expense and delay due to Demrex and First Sealord's failure to fully comply with this Court's orders to compel. See Harmon v. CSX Transp., Inc., 110 F.3d 364, 368 (6th Cir. 1997)(explaining that prejudice results “[n]ot only [when the aggrieved party is] unable to secure the information requested, but ... also [when it is] required to waste time, money, and effort in pursuit of cooperation which [the other party] was legally obligated to provide.”). But in this case, that prejudice can be largely mitigated. As detailed below, the Court will recommend a fee award to Devon and Ford in the form of requiring Demrex to pay for a vendor to help produce discovery and recommend an extension of the discovery deadlines to compensate for Demrex and First Sealord's delay. As to the third factor, this Court has not warned Demrex or First Sealord that a failure to cooperate in discovery or comply with this Court's orders would lead to dismissal or default judgment. Indeed, until today, this Court has not even found Demrex or First Sealord in violation of its orders. Prior to these Motions, the parties appeared to be able to resolve their discovery disputes. And, regarding the fourth Regional Refuse factor, no less severe sanctions have been imposed on Defendants, and – critically – the effectiveness of lesser sanctions has not been evaluated. *11 The facts related to these three Regional Refuse factors also serve to distinguish the facts of this case from those cited by Ford. Cf. National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 640-41 (1976) (holding that district court did not abuse its discretion in dismissing case where interrogatories had remained unanswered after seventeen months and “several admonitions by the Court,” and where district court concluded, “[i]f the sanction of dismissal is not warranted by the circumstances of this case, then the Court can envisage no set of facts whereby that sanction should ever be applied”); Smith v. Nationwide Mut. Fire Ins. Co., 410 F. App'x 891, 892, 896 (6th Cir. 2010) (finding that district court did not abuse its discretion in dismissing plaintiffs' case as Rule 37sanction where, inter alia, district court had previously sanctioned plaintiffs $1,000 and provided, in bold, “NOTICE AND WARNING TO PLAINTIFFS[:] If Plaintiffs do not fulfill their discovery obligations, including complying with the present Order, this Court will consider granting Defendant's request that Plaintiffs' case be dismissed with prejudice”); Bryant v. U.S. Postal Serv., 166 F. App'x 207, 209 (6th Cir. 2006) (finding district court did not abuse its discretion in dismissing plaintiffs' suit where discovery responses continued to be deficient despite that (1) district court stayed case for over two-months for plaintiffs to produce documents and, (2) in a subsequent order, warned of dismissal as a Rule 37 sanction); Southern Wabash Commc'ns, Ltd. v. Union County Broadcasting Co., Inc., 69 F. App'x 285, 291-92 (6th Cir. 2003) (finding that, while “some judges may well have selected a sanction other than dismissal,” district court did not abuse its discretion in dismissing plaintiff's case for failure to comply with scheduling order where discovery was closed and the alternative of reopening discovery was viewed as untenable because “the additional discovery time is not sought merely to gather evidence known to exist ... [but] to ascertain whether the evidence exists”); Reyes, 307 F.3d at 458 (finding district court did not abuse its discretion in entering judgment in favor of plaintiff where plaintiff was prejudiced by defendant's incomplete discovery responses because plaintiff could not comply with discovery deadline and where – despite a phone call from the district court –defendant did not file a response on the plaintiff's motion to strike defendant's claim as a discovery sanction); Brown v. Gojcaj Foods, Inc., No. 09-14537, 2011 WL 1980533, at *1, 3-4 (E.D. Mich. May 20, 2011) (entering default as Rule 37 sanction where defendant had first failed to answer resulting in default and $3,900 monetary sanction when default was set aside, and then failed to respond to discovery until before the discovery deadline). In sum then, upon careful consideration of the factors outlined in Regional Refuse as applied to the facts of this case, the extreme sanctions of dismissal of Demrex's claims and default judgment against Demrex and First Sealord are not presently warranted. This is not a case where there has been no effort to respond to discovery requests or no useful responses forthcoming. Further, the prejudice to Ford and Devon may be mitigated, and the deterrence effect of lesser sanctions has not been determined. III. CONCLUSION AND RECOMMENDATION For the foregoing reasons, this Court RECOMMENDS that the District Court DENY Ford's Motion to Discharge Construction Lien of Demrex and for Sanctions (Dkt. 62), and Ford's Motion for Entry of Default Judgment and for Sanctions against Demrex and First Sealord for Violation of Order to Compel (Dkt. 63) to the extent they seek dismissal and default judgment. It remains, however, that Demrex and First Sealord did not fully comply with this Court's orders to compel. Accordingly, the Court further RECOMMENDS that: (1) Demrex and First Sealord strictly comply with this Court's orders to compel by December 13, 2011, including providing full and complete responses to (a) Devon's First Document Requests to Defendant Demrex Industrial Services, Inc. (Dkt. 65, Ex. A), (b) Ford's First Requests for Production of Documents on Demrex and First Sealord (Dkt. 67, Ex. 2), and (c) Ford's Second Requests for Documents to Demrex and First Sealord (Dkt. 63, Ex. 2); (2) Demrex and First Sealord, by November 30, 2011, retain a vendor recommended by Ford and Devon to image every computer (including any server) containing documents pertaining to the Wixom plant project, including the Master Builder database and associated files. Any data from Master Builder pertaining to projects other than the one at issue in this litigation will be viewed only by counsel of record and their experts. Leave of Court must be obtained prior to disclosing any such documents to Ford or Devon personnel. The parties are to share the cost of the vendor as follows: two-thirds cost to Demrex, not to exceed $4,000, and remaining costs to be shared among Ford and Devon; and (3) The January 30, 2012 “fact discovery” deadline provided in the District Court's Scheduling Order (Dkt. 31) be extended by about 90 days to April 30, 2012, with the parties to agree on revising the dates for experts and mediation as they deem appropriate, so long as it does not impact the current dispositive motion cut-off or pre-trial and trial dates. *12 Further, Demrex and First Sealord are warned that further noncompliance with the Federal Rules pertaining to discovery or the Court's orders to compel (Dkts. 53, 54, 55) may result in dismissal of all claims with prejudice and the entry of default judgment in favor of Ford and Devon. The Court will tolerate no further unjustified delays for items subject to the Court's orders to compel. IV. FILING OBJECTIONS The parties to this action may object to and seek review of this Report and Recommendation within fourteen (14) days of service of a copy hereof as provided for in 28 U.S.C. § 636(b)(1). Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140 (1985); Frontier Ins. Co. v. Blaty, 454 F.3d 590, 596 (6th Cir. 2006); United States v. Sullivan, 431 F.3d 976, 984 (6th Cir. 2005). The parties are advised that making some objections, but failing to raise others, will not preserve all the objections a party may have to this Report and Recommendation. McClanahan v. Comm'r Soc. Sec., 474 F.3d 830 (6th Cir. 2006) (internal quotation marks omitted); Frontier, 454 F.3d at 596-97. Objections are to be filed through the Case Management/Electronic Case Filing (CM/ECF) system or, if an appropriate exception applies, through the Clerk's Office. See E.D. Mich. LR 5.1. A copy of any objections is to be served upon this magistrate judge but this does not constitute filing. SeeE.D. Mich. LR 72.1(d)(2). Once an objection is filed, a response is due within fourteen (14) days of service, and a reply brief may be filed within seven (7) days of service of the response. E.D. Mich. LR 72.1(d)(3), (4). Footnotes [1] Also before the Court is Demrex's Motion to Strike Devon's Joinder to Ford's Motion to Discharge Lien. (Dkt. 79.) Demrex argues that had Devon instead filed its own motion, Demrex would have been afforded an opportunity to file a response, and, alternatively, Devon lacks standing to challenge Demrex's construction lien. (Id. at 2-3.) The Court DENIES Demrex's Motion to Strike as MOOT. The Court has granted Demrex leave to respond to Devon's Joinder (Dkt. 84), and, regarding Demrex's standing argument, the Court does not recommend discharging the Demrex Lien at this time. [2] There appears to be a split in authority on whether a magistrate judge should provide a report and recommendation to a district judge on a Fed. R. Civ. P. 37 motion for sanctions where, as here, the relief sought is dispositive (e.g., default judgment). See Bell-Flowers v. Progressive Ins. Co., No. 04-3026, 2005 WL 3434818, at *1, 2 n.1 (W.D. Tenn. Dec. 13, 2005) (Pham, M.J.) (“The majority of courts to consider the issue have concluded that when a party brings a motion for discovery sanctions, the sanction chosen by the magistrate judge, rather than the sanction sought by the moving party, governs the magistrate judge's authority over the motion.” (citing cases)). Because several judges in this district have viewed a report and recommendation proper in this scenario, and because this Court sees no need to depart from this practice, this Court will make a recommendation to the District Court regarding the pending motions. Flagg v. City of Detroit, No. 05-74253, 2011 WL 4634249, at *1 (E.D. Mich. Aug. 3, 2011) (Whalen, M.J.) (“Before the Court is Plaintiffs' Request for Entry of Default and Other Sanctions Based Upon Spoliation of Evidence. Because the request for default is a dispositive motion, I will proceed by Report and Recommendation ....” (internal citation omitted)); Laethem Equipment Co. v. Deere & Co., No. 05-10113, 2009 WL 3064663, at *1, n.1 (E.D. Mich. Sept. 21, 2009) (Komives, M.J.) (“Although [the defendant's] motion is entitled a motion for sanctions and is filed pursuant to Fed. Rules Civ. P. 26 and 37, its request for relief [seeks dismissal]. Therefore, I address this motion as a dispositive one pursuant to 28 U.S.C. § 636(b)(1)(B)” (internal citation omitted)); Burket v. Hyman Lippitt, P.C., No. 05-72110, 2007 WL 891891, at *1 (E.D. Mich. Mar. 21, 2007) (Majzoub, M.J.) (“Because the motion seeks an involuntary dismissal [as a discovery sanction], the Court will recommend a disposition to the district court.”); Citizens Ins. Co. of Am. v. Moyer, No. 04-CV-73909, 2006 WL 3289771, at *1 (E.D. Mich. Nov. 13, 2006) (Friedman, J.) (“If defendants wish to seek dismissal of the complaint as a sanction for discovery abuses, or for any other reason, they must file a motion clearly indicating as much in the caption and in that event the court would either hear the motion itself or refer it to the magistrate judge for report and recommendation, rather than for hearing and determination.”). [3] The Court also prefers to deal with this issue under Rule 37because it has some question about the propriety of affirmatively discharging the construction lien pursuant to Michigan's Construction Lien Act (“Act”). Demrex has argued that while the Act creates a cause of action for enforcing a construction lien, it does not create a cause of action for the owner of a property to discharge an overstated lien. At the hearing, the Court indicated to Ford that the cases it cited were procedurally distinct from this case: in Ford's cases, the lienor sought to enforce the construction lien and, as a defense to that enforcement, the owner argued that the lien was overstated and filed in bad faith and thus, should be discharged. In response, Ford relied on R.E. Dailey & Co. v. John Madden Co., Ltd., 1 F.3d 1242 (6th Cir. 1993). While the district court in R.E. Dailey did in fact discharge a construction lien, the discharge was not pursuant to the Act. Rather, as part of a settlement agreement, the plaintiff, Dailey, agreed that it would “not file nor permit to be filed any construction lien against the Project based on work performed or to be performed by Dailey or any subcontractor of Dailey hereunder or under the Construction Contract.” Id. at 2. The district court discharged the lien based on the language in this agreement and the appellate court affirmed. Id. at 3, 5. [4] The Court has considered 16 briefs (Dkts. 62, 63, 65, 67, 75, 76, 77, 78, 79, 81, 82, 85, 86, 88, 89, 92) – some with hundreds of pages of exhibits, some seeking affirmative relief in a response, some raising new issues (with accompanying exhibits) on reply, and some longer than the standard page limits – on issues that might have been presented in three: a joint motion for sanctions by Devon and Ford (with brief in support), a response from Demrex and First Sealord, and, if necessary, a joint reply. [5] At Demrex and First Sealord's request, the parties agreed to change the August 29, 2011 deadline provided in this Court's orders to compel to September 5, 2011. (Ford.'s Mot. for Default at 5.) Demrex and First Sealord explain that there was further delay due to Hurricane Irene. (Dkt. 78, Demrex's Resp. to Ford's Mot. for Default at 2.) [6] As explained in Vance, by and Through Hammons v. U.S., 182 F.3d 920 (table), 1999 WL 455435, at *5 (6th Cir. 1999) Regional Refuse was superseded in part by Rule 37(c)(1) in 1993. That Rule “mandates that a trial court punish a party for discovery violations in connection with Rule 26 unless the violation was harmless or is substantially justified.” Id. at *3. Ford's motions are premised on Rule 37(b), however; thus, the Regional Refusefactors remain applicable here. See id. at *6. [7] Defendants' current responses to several other requests – for example, Interrogatory No. 4 – are also deficient. At the hearing, the Court went through many of Demrex and First Sealords's Third Supplemental Responses specifically pointing out to Defendants particular deficiencies and how they should have responded, and now must respond to Ford's Second Discovery Requests. [8] The Court recognizes that Ford and Devon take issue with the lien figures in the Demrex Lien. But the basis for this argument, at least in part, is contractual and therefore not the subject of this motion. (See Dkt. 81, Devon's Reply for Ford's Mot. for Default at 1-2; Dkt. 77, Demrex's Resp. to Ford's Mot. to Discharge Lien at 4-5.) The issue now before the Court is whether Demrex and First Sealord provided adequate responses to Ford's discovery requests – not whether Demrex and First Sealord provided responses congruent with the correct interpretation of the agreements. [9] The Court acknowledges Ford's claim that Demrex's process of copying data from its laptops to its servers and then recycling its laptops deprives Ford of the ability to verify the accuracy of Demrex's data reproduction. The Court notes, however, that its orders to compel did not govern electronic discovery issues, including metadata. Nor did the parties deal with electronic discovery in their Discovery Plan. Further, to the extent data was destroyed, that is an issue of spoliation raised for the first time in Ford's reply briefs and is therefore not properly before the Court. See United States v. Perkins, 994 F.2d 1184, 1191 (6th Cir. 1993) (“Issues raised for the first time in a reply brief are not properly before this court”).