Steven S. NOVICK, Plaintiff, v. AXA NETWORK, LLC, and AXA Advisors, LLC, Defendants. AXA Network, LLC, and AXA Advisors, LLC, Counter Claimants, v. Steven S. Novick, Counter Defendant No. 07 Civ. 7767(AKH)(KNF) United States District Court, S.D. New York October 03, 2013 Fox, Kevin N., United States Magistrate Judge MEMORANDUM AND ORDER *1 Before the Court is the plaintiff's motion for sanctions, pursuant to Rule 37(b)(2) of the Federal Rules of Civil Procedure, “consisting of the striking of Defendants' Answer and Counterclaims, allowing negative [spoliation] inferences being made against Defendants, and the imposition of a monetary fine and/or costs incurred by Plaintiff in relation to his repeated attempts to obtain the at-issue discovery.” The defendants oppose the motion. Plaintiff's Contentions The plaintiff contends that, on October 16, 2006, prior to commencing this litigation, his counsel requested that the defendants preserve: “all recorded telephone conversations of Edward H. Dane, Rocco Tomesco, Mike Rynicker and [the plaintiff]”; and “all trading desk voice recordings of Joe Pirrone and/or [the plaintiff].” According to the plaintiff, under the defendants' policy, communications via trading desk telephone lines are recorded and retained for two years. On May 29, 2008, the plaintiff's counsel sent a letter to the defendants' counsel, stating that the defendants failed to respond to the plaintiff's Document Request Nos. 12 and 13, seeking “audio recordings,” and asking that the audio recordings be produced. On November 3, 2011, the plaintiff's counsel sent a letter to the defendants' counsel, contending that the defendants failed to respond to the plaintiff's Document Requests No. 12 and 13. On November 7, 2011, the assigned district judge denied the plaintiff's request for audio recordings. However, he reversed that denial during the June 27, 2012 conference, when the defendants represented to the court that the audio tapes exist. During the June 27, 2012 conference, the court noted that the defendants “have a legitimate concern about the time and money that it would take to learn the contents of the audiotapes,” and directed as follows: The ruling is by July 13 or an earlier date, [the defendants' attorney] will write a letter to [the plaintiff's attorney], telling you how many audiotapes are in the period June 1, 2006 to December 31, 2006, with respect to the 10 individuals, hopefully a few. Then you will make an agreement on what has to be done. You could proceed by sampling particular audiotapes, you can choose a sample, recognizing that people won't know what's inside until they hear it, and that takes a lot of time. Or we can supply a monitor, a neutral monitor to listen, with expenses shared and subject to taxation of costs to the winner of the case eventually. We can do a number of things. I am going to defer the obligation to do more than just identify with regard to the audiotapes. On September 7, 2012, the court directed: On or before September 14, 2012 Plaintiff will provide Defendants with a list of up to five individuals for whom Plaintiff seeks audio recordings with one of the following persons: Jeff Press, Rocco Tomesco, Mike Rynicker and Ned Dane. Defendants will then advise Plaintiff on or before October 5, 2012 how many such recordings might need to be reviewed to provide recordings between the individuals sought. Thereafter the parties shall confer as to a reasonable process for the production of same including costs. *2 On September 14, 2012, the plaintiff identified “five people for which audio tapes are requested”: Steven Novick, Joe Pirrone, Ned Dane, Georgette Geller and Joel Miller. On September 27, 2012, the court denied, without prejudice, the plaintiff's motion to hold the defendants in contempt for failing to provide an accounting as required by the court and noted: “Pursuant to a September 7, 2012 order, Defendants are to produce certain emails and audio recordings to Plaintiff.” On October 5, 2012, the defendants' counsel notified the plaintiff's counsel that AXA has conducted an investigation and has not located any audio recordings containing the trading desk or telephone lines of Jeff Press, Rocco T[o]mesco, Mike Rynicker or Ned Dane from the period June 1, 2006 through December 31, 2006. AXA has one remaining inquiry to complete regarding this issue and we will advise you of the results of that inquiry as soon as possible. On October 12, 2012, the plaintiff sent a letter to the defendants, stating, in pertinent part: With respect to your allegation that Defendant is unable to locate any of the specified audio recordings, Plaintiff finds this allegation difficult to comprehend. AXA's internal policies required the trading desk to tape-record their telephone lines. Moreover, in October 2006, Plaintiff's prior counsel, Robert Herskovits requested that Defendants ensure the preservation of same. Furthermore, in Defendants' original discovery response, same was objected to as being too burdensome. Now, Defendants assert that none exist. Both in writing and in open court, representations have been made that audio tapes exist, why now, for the first time after six years, has this changed? In support of the motion, the plaintiff submitted an affidavit by Christopher Aguele (“Aguele”), “a registered representative, licenced by the Financial Industry Regulatory Authority.” Aguele stated that he was associated with the defendants from September 2002 though June 2005, as a compliance officer for the Stanford, Connecticut branch, where the plaintiff was working. Aguele was also the plaintiff's direct supervisor. He explained that it was his duty to ensure that the written supervisory procedures and the internal rules and policies of the defendants were followed, and that, during his time with the defendants, the defendants had a rule “that all telephone calls with the trading desk and certain other members of the broker dealer including but not limited to, members in operations and management were tape-recorded,” and that “these tape recordings were to be maintained for a period of no less than two years, and then deleted or taped over.” According to Aguele, the written supervisory procedures mandated that in case of any alleged wrongdoing, “all materials must be preserved.” The plaintiff contends that the defendants had a duty to preserve “the tapes from [the defendants'] trading desk (or the other requested employees),” based on the October 16, 2006 request for preservation, as well as the plaintiff's “original discovery request” to which the defendants did not object, both of which “were sent to [the defendants] well within the two years after [the plaintiff's] termination.” According to the plaintiff, no excuse exists for the defendants' failure to preserve the audio recordings, and it can only be deduced that “their destruction was intentional.” The plaintiff contends he is prejudiced by the destruction of the audio recordings because, while he “could testify as to what these and other conversations between himself and those people at the trading desk were about, having recordings of these conversations would corroborate his testimony, and be potentially very powerful evidence for a jury.” The plaintiff seeks sanctions against the defendants consisting of striking the defendants' answer and counterclaims, providing a negative spoliation inference jury instruction against the defendants and imposing “a monetary fine and/or costs incurred by Plaintiff in relation to his repeated attempts to obtain the at-issue discovery.” Defendants' Contentions *3 The defendants contend that they objected to the plaintiff's discovery request for audio recordings from “early 2008,” and the issue of audio recordings was not raised with the court until more than four years after commencing the litigation. They assert that the plaintiff's motion is moot because “after an exhaustive search” described in the supporting declaration of AXA Equitable Life Insurance Company's associate general counsel, Paul Yacyshyn (“Yacyshyn”), “recordings from the requested time period have been found and are in the possession of defendants.” According to the defendants, the motion should be denied because: (a) “defendants have no obligation to preserve the recordings”; (b) the defendants “acted at all times in good faith and without a ‘culpable state of mind’ “; (c) the plaintiff “made no showing that the recordings are relevant or are likely to contain any material that could be beneficial to his claims” and (d) the plaintiff “suffered no prejudice.” The defendants contend that, “[a]lthough it may have appeared in October 2012 that the telephone recordings could not be found, ... in March 2013, after an exhaustive search, AXA was able to locate approximately 20 two-sided, multi-track DVDs that appear to contain recordings of telephone lines of the trading desk (on which Tomesco and Press were located) from the relevant period.” The defendants maintain that the plaintiff's motion should be denied on that basis, “without engaging in any further analysis.” The defendants assert that, even if the plaintiff can demonstrate that the audio recordings were lost or destroyed, his motion should be denied because the plaintiff cannot show that they had a duty to preserve the audio recordings, despite the October 16, 2006 letter of the plaintiff's counsel, since “it was never apparent or satisfactorily explained why such recordings might be relevant to [the plaintiff']s claims in this action,” and “[a]s soon as the June and September 2012 orders were issued, defendants acted to comply.” Moreover, the defendants did not act in bad faith or with gross negligence, because “[t]hey made an extensive search for the audio recordings of the trading desk and customer service desk, and found approximately 20 DVDs that appear to be from the time period requested by [the plaintiff.]” “At worst, defendants could not find the audio recordings for some period of time in 2012–13, but that does not entitle [the plaintiff] to sanctions.” The defendants contend that, even assuming they had a duty to preserve, the plaintiff's motion does not demonstrate that the audio recordings would have any relevance to this action “either through reference to pertinent deposition testimony or to other documents,” and his general statement that “he had in-person telephonic conversations with a host of people regarding ‘Mr. Passaretti's wrongdoing, ... and the issue with him being paid according to his agreement’[, the plaintiff] has not explained how the audio recordings he seeks are relevant to, or are likely to benefit him in, this breach of contract action.” *4 According to the defendants, the plaintiff does not face an unfair evidentiary balance because he has conducted discovery for over five years and “had plentiful opportunities to compile evidence to support his claims,” including to conduct depositions of “Rynicker, Tomesco, Press, Pirrone, or Miller regarding any relevant conversations they may have had during the applicable time period.” The plaintiff failed to show prejudice and his assertions that the audio recordings would corroborate his testimony “are empty mantras without any factual basis.” The defendants contend that a monetary fine or costs should not be awarded because the defendants' “conduct in this matter has been positive and cooperative,” even taking into account the defendants' “inability to find the recordings for a period of time.” The defendants assert that, in addition to denying the plaintiff's motion, “the Court should direct that [the defendants] need not make any production of the audio recordings” because “it took an extensive and exhaustive search for defendants to find the approximately 20 double-sided DVDs on which there appear to be stored audio recordings from the period of June 2006 through December 2006,” but “[t]hat effort, however, pales in comparison to the burden, time and expense that it would take for [the defendants] to restore, evaluate and review the DVDs for recordings that might be responsive to [the plaintiff's] request.” The defendants maintain that it would be difficult or impossible to determine whether conversations are responsive if the caller did not identify himself or herself, or if the listener does not recognize the voices.... It is not even a simple matter for anyone to listen to the recordings, as specialized machines are required to read the DVDs.... A vendor contacted by [the defendants] provided an estimate of nearly $21,000 to read the DVDs and provide information about the number of hours of recordings that appear to exist for each of the identified individuals: Dane, Rynicker, Tomesco and Press (believed to be only Tomesco and Press in reality).... Accordingly, even determining the number of hours of recordings that exist for the time period would be unduly expensive and burdensome. Even if [the defendants] spent another $21,000 to read the DVDs, an estimate of the number of hours of recordings is the most that would result. Someone would still need to spend at least that number of hours, probably more, listening to the recordings to try to identify those calls that might be with the designated individuals A conservative estimate for a review of the DVDs is over a thousand hours of listening.... In these circumstances, production of audio recordings ... is without question unduly burdensome. Yacyshyn stated in his affidavit that he was responsible “for figuring out the extent to which [the defendants] have made and kept certain voice recordings.” He explained that during his investigation of the defendants' telephone recording practices in 2006, he learned that the only telephone lines that were recorded were the dependants' “broker-dealer business” telephones “on the trading desk, the sales support desk, and the customer service desk, as well as a few employees who processed new accounts and account transfers paperwork.” He asserted that: (1) he “uncovered no indication that Ned Dane's telephone calls were recorded,” since he “did not sit on the trading desk or customer service desk,” and he “was the president of AXA Advisors, LLC”; (2) “Mike Rynicker's telephone calls were not recorded,” since he was not on a trading desk, and “his line would not have been, and was not, recorded”; and (3) “Rocco Tomesco and Jeff Press did sit on the trading desk during the relevant period.” Yacyshyn stated that he tried to locate audio recordings “through September and October 2012,” but he “was advised that they could not be located.” However, he contends *5 On or about March 12, 2013, after we received plaintiff's motion for spoliation regarding the recordings, I was advised by Frank Massa that two boxes of DVDs, that appeared to contain recordings of the trading desk, sales support desk, and customer service desk, had been located. They were found on the top shelf in the back of a very long storage closet at AXA. The closet contains a hodge podge of stored items some in file cabinets, some on shelves, belonging to several different departments at AXA. For example, a bunch of AXA logo umbrellas are there, as are signed books and hats from promotional events. AXA personnel, including my deceased former colleague, had actually looked for the DVDs in that same closet on at least one previous occasion in July or August 2012, but had not found them. Yacyshyn explained that listening to the recordings would not be simple because “[t]hey cannot be read on ordinary DVD players, but require specialized machines,” and “AXA has not maintained the machines used in 2006.” According to Yacyshyn: As part of its search for recordings ... [the defendants] enlisted the help of a vendor to restore the only such machine in AXA's New York headquarters, at a cost of nearly $2,400, just to see if it contained recordings. It did not contain recordings from the relevant period, and could not play the later recordings the machine did appear to contain. The machine is so complicated that it has its own room. When AXA IT personnel attempted to have the machine in New York read one of the DVDs, it could not do so due to an unknown machine error.... In order to learn anything about what was on the DVDs, I had to personally transport some of them to one of AXA's facilities in New Jersey. With the help of a specialized IT person, we were able to load some of the DVDs (one at a time) into a machine that read some information such as the number of tracks and the assigned telephone lines. Yacyshyn stated that “[e]ven if each individual's recordings could be isolated from the others, the math reflects it is likely that over a thousand hours of listening would be required to have a chance of identifying the responsive calls.” Plaintiffs Reply In reply, the plaintiff submitted his attorney's affirmation, which contains, improperly, arguments. The plaintiff's counsel contends that, “[a]fter years of asserting that they have recordings, and then saying they don't have any recordings, Defendants find the allegedly-missing recordings immediately after Plaintiff filed the instant motion,” and “now assert that though the recordings ‘exist,’ they do not have the ability to listen to them, thus attempting to sidestep both sanctions and production,” despite the previous order to produce the audio recordings. The plaintiff contends that the defendants “should be compelled to produce the recordings they have already been ordered to produce,” and “[i]f they are unable to do so, they should be sanctioned and Plaintiff should be allowed to take further depositions to ascertain what would be contained therein.” According to the plaintiff, “[w]hile Defendants assert that the fact the recordings technically exist should be sufficient to avoid sanctions, Defendants also assert there is no feasible method to actually provide the requested recordings, rendering the fact that they may ‘exist’ utterly worthless.” Thus, the plaintiff asserts, “[i]f Defendants are unable to actually provide the recordings after the efforts they describe [in their opposition to the motion], for all intents and purposes, they do not ‘exist.’ Defendants must be sanctioned since it was their own actions that caused this to occur.” *6 The plaintiff contends that the defendants “try to play judge of what is relevant and what is not by their argument that they had no duty to preserve the recordings,” and the defendants' objection to the production of the audio recordings “does not obviate their duty to maintain such recordings, as they are not the final arbiter of what is to be provided in discovery.” On July 30, 2008, the defendants' counsel sent a letter to the plaintiff's counsel, objecting to the plaintiff's Document Request Nos. 12 and 13, as follows: You indicate that “we believe that Plaintiff's telephone communications with Mr. Dane, Mr. Tomesco, Mr. Rynicker, Mr. Press, and Mr. Anazagasty were in fact recorded by AXA.” You also state that “we further believe that there were numerous recorded telephone conversations during October 2006, which are highly relevant to the claims in this matter.” Defendants maintain their objections that these tape recordings have no relevance to the claims in this lawsuit and this is nothing more than a fishing expedition into the trading desk activities. Even if there was some marginal relevance, the retrieval, review, copying and production of thousands of hours of tapes, which are maintained in chronological order, would involve the expenditure of extreme amounts of time and money. However, now that Plaintiff has provided further information as to specific individuals whose telephone calls he believes were recorded and narrowed the request to September and October 2006, Defendants will look into whether it is possible to determine if any such tape recordings exist. If it is reasonably feasible, not unduly burdensome and not extremely costly to do so, Defendants will undertake such a determination and then revisit the issue of production once we have ascertained whether we can reasonably perform a search for any available recordings. The plaintiff asserts that the defendants fail to make citation to any authority for the proposition “that a thorough explanation is necessary as to why certain discovery should be preserved, merely notice or knowledge that it is relevant is required,” and the plaintiff put the defendants on adequate notice that the material is potentially relevant. Moreover, Yacyshyn's contention that the audio recordings would not result in relevant information, “without having any indication of what is contained in the recordings,” is difficult to take seriously, given that “the Court has already determined the recordings in question to be relevant, as Judge Hellerstein has ordered them to be produced.” The plaintiff contends that the audio recordings are relevant, given that the court limited the number of depositions the plaintiff was permitted to take, and, even if the plaintiff could depose the individuals whose recordings are sought, questioning them would not be efficient without the recordings. Moreover, the defendants contend that “the only reason plaintiff gives for needed [sic] these telephone conversations is to ‘corroborate’ his own testimony,” as if that “is an improper reason to seek evidence.” According to the plaintiff, the defendants are disingenuous when they contend that he could have deposed the persons whose telephone conversation recordings are sought, because the court limited the number of depositions the plaintiff can take, and he never had an opportunity to question these persons. The plaintiff asserts that the defendants should be compelled to produce the audio recordings ordered to be produced previously, and, if they are unable to do so, they should be sanctioned and the plaintiff permitted to take depositions of Mike Rynicker, Rocco Tomesco, Jeff Press, Joe Pirrone, and Joel Miller. LEGAL STANDARD *7 “If a party ... fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may issue further just orders. They may include ... striking pleadings in whole or in part.” Fed.R.Civ.P. 37(b)(2)(A). “Instead of or in addition to the orders above, the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(b)(2)(C). “A party who flouts [discovery] orders does so at his peril.” Update Art, Inc. v. Modiin Publ'g, Ltd., 843 F.2d 67, 73 (2d Cir.1988). A district court has wide discretion in imposing sanctions, including severe sanctions, under Rule 37(b)(2).... The discovery provisions of the Federal Rules of Civil Procedure are designed to achieve disclosure of all the evidence relevant to the merits of a controversy. It is intended that this disclosure of evidence proceed at the initiative of the parties, free from the time-consuming and costly process of court intervention. When a party seeks to frustrate this design by disobeying discovery orders, thereby preventing disclosure of facts essential to an adjudication on the merits, severe sanctions are appropriate. Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1365 (2d Cir.1991) (internal quotation marks and citations omitted). “Although one purpose of Rule 37 sanctions may in some cases be to protect other parties to the litigation from prejudice resulting from a party's noncompliance with discovery obligations, Rule 37 sanctions serve other functions unrelated to the prejudice suffered by individual litigants[.]” S. New England Tel. Co. v. Global Naps Inc.,624 F.3d 123, 148–49 (2d Cir.2010) (citations omitted). The purposes intended to be served by Rule 37 sanctions are threefold: First, they insure that a party will not benefit from its own failure to comply. Second, they are specific deterrents and seek to obtain compliance with the particular order issued. Third, they are intended to serve a general deterrent effect on the case at hand and on other litigation, provided that the party against whom they are imposed was in some sense at fault. Update Art, Inc., 843 F.2d at 71. “[D]ismissal or default imposed pursuant to Rule 37 is a drastic remedy generally to be used only when the district judge has considered lesser alternatives. Despite the harshness of these measures, however, discovery orders are meant to be followed, and dismissal or default is justified if the district court finds that the failure to comply with discovery orders was due to willfulness, bad faith, or any fault of the party sanctioned. The district court is free to consider the full record in the case in order to select the appropriate sanction. *8 S. New England Tel. Co., 624 F.3d at 144 (internal quotation marks and citations omitted). “Whether a litigant was at fault or acted willfully or in bad faith are questions of fact.” Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302 (2d Cir.2009). “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.” West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999). “A federal district court may impose sanctions under Fed.R.Civ.P. 37(b) when a party spoliates evidence in violation of a court order.” Id. The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation. Once a court has concluded that a party was under an obligation to preserve the evidence that it destroyed, it must then consider whether the evidence was intentionally destroyed, and the likely contents of that evidence. The determination of an appropriate sanction for spoliation, if any, is confined to the sound discretion of the trial judge, and is assessed on a case-by-case basis. Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 436 (2d Cir.2001) (internal citations omitted). APPLICATION OF LEGAL STANDARD Failure to Obey Discovery Orders The June 27, 2012 and the September 7, 2012 discovery orders concerning audio recordings were clear, unambiguous and limited in scope and time. The Court finds that the defendants failed to obey the June 27, 2012 order to identify, by July 13, 2012, or earlier, “how many audiotapes are in the period June 1, 2006 to December 31, 2006, with respect to the 10 individuals.” The Court finds further that the defendants failed to obey the September 7, 2012 order, directing them to advise the plaintiff, “on or before October 5, 2012 how many [audio] recordings might need to be reviewed to provide recordings between the individuals sought,” because they advised the plaintiff, on October 5, 2012, that: (a) “AXA has conducted an investigation and has not located any audio recordings containing the trading desk or telephone lines of Jeff Press, Rocco T[o]mesco, Mike Rynicker or Ned Dane from the period June 1, 2006 through December 31, 2006”; and (b) “AXA has one remaining inquiry to complete regarding this issue and will advise you of the results of that inquiry as soon as possible.” The defendants neither sought nor received permission from the court to extend the time to comply with the September 7, 2012 order, namely to conduct “one remaining inquiry” beyond October 5, 2012, the deadline given to them via the September 7, 2012 order. Moreover, the defendants never advised the plaintiff about the results of the “one remaining inquiry to complete regarding [the audio recordings],” and only “[a]fter receiving plaintiff's motion for sanctions, however, an additional search was made, and eventually two boxes of DVDs that appeared to contain recordings of the trading desk, sales support desk and customer service desk were found on the top shelf at the back of a very long storage closet that had actually previously been searched without success,” as the defendants explain. Despite representing to the court, during the June 27, 2012 conference that the audio recordings at issue exist, the defendants represented to the plaintiff, on October 5, 2012, that they do not exist. The defendants' contention, that they located two boxes of DVDs containing audio recordings “on the top shelf at the back of a very long storage closet that had actually previously been searched without success,” strains credulity, especially in light of the defendants': (i) representation to the plaintiff, on October 5, 2012 that their “inquiry” concerning the audio recordings was incomplete; and (ii) failure to complete that “inquiry” despite the promise to do so. Had the plaintiff not made his motion for sanctions, the defendants would not have conducted “an additional search,” which resulted in locating the material that was the subject of the June 27, 2012 and September 7, 2012 discovery orders. *9 The plaintiff has been prejudiced substantially by the defendants' failure to comply with the court's orders because he was prevented from discovering facts material to adjudicating his action, and the defendants caused him to waste resources in making an unnecessary motion, as well as prolonged the instant litigation. Based on the record respecting the discovery of the audio recordings, the Court finds that the defendants' explanation is not credible and rejects it. The Court finds that the defendants acted willfully when they disobeyed the June 27, 2012 and September 7, 2012 discovery orders and that imposing sanctions for their failure to obey the discovery orders is warranted. Sanctions Striking the Defendants' Pleadings Since striking the defendants' answer and counterclaims is one of the harshest sanctions that can only be imposed under Rule 37, but only after the Court has considered lesser sanctions, the Court will first consider lesser sanctions, including those sought by the plaintiff. Adverse Inference Based on Spoliation The defendants' argument, that they had no duty to preserve the audio recordings and that the plaintiff failed to show that any audio recordings he sought to have preserved by his counsel's pre-litigation October 16, 2006 letter are relevant, is rejected as meritless. The defendants' duty to preserve evidence arose when the plaintiff's counsel notified the defendants, in the October 16, 2006 letter, that the audio recordings should be preserved because they may be relevant to future litigation. See Fujitsu Ltd., 247 F.3d at 436. The defendants fail to make citation to any binding authority for the proposition that, in addition to the notice seeking preservation, the plaintiff had an affirmative obligation to establish relevance to trigger the defendants' preservation duty, and the Court finds none. Based on the defendants' representation to the Court that “the evidence that is the subject of [the plaintiff's] motion—the telephone recordings—has not been destroyed,” it would appear that no spoliation by destruction of evidence occurred. Assuming that to be the case, an adverse inference jury instruction, based on the destruction of evidence, would not seem to be an appropriate sanction at this time and under these circumstances. However, spoliation is not only the destruction of evidence, but is also the “significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” West, 167 F.3d at 779. Accordingly, the Court finds that ruling on whether spoliation occurred, at this time, is premature. Compelling Discovery and Ordering Depositions Having learned for the first time from the defendants' opposition to his motion that the audio recordings subject to the court's previous orders exist, the plaintiff, in his reply, seeks an order: (a) compelling the defendants to produce the audio recordings ordered previously; and (b) if the defendants are unable to do so, sanctioning them and permitting the plaintiff to take the depositions of Mike Rynicker, Rocco Tomesco, Jeff Press, Joe Pirrone and Joel Miller. Guided by the preference in this circuit for resolving disputes on the merits, see Cody v. Mello, 59 F.3d 13, 15 (2d Cir.1995), the Court finds that compelling the defendants to produce the audio recordings at issue, at their expense, and permitting the plaintiff to take additional depositions constitute appropriate sanctions, which are less harsh than striking the defendants' pleadings. Compelling discovery that was ordered previously, at the defendants' expense, will ensure that the defendants will comply with the court's previous discovery orders and not benefit from their failure to comply with those orders, and it will serve as a strong deterrent to the defendants as well as others who may contemplate flouting discovery orders in the future. Moreover, given the prejudice suffered by the plaintiff from the defendants' failure to obey discovery orders, which prevented him from learning facts material to the prosecution of his action and caused unnecessary expenses and delay in the action, it is only just that he be permitted to depose the above-named individuals. Therefore, the plaintiff's request to compel the defendants to produce the audio recordings at issue, at their own expense, and to permit additional depositions is granted. Costs *10 In light of the Court's finding that the defendants failure to obey the court's orders was willful and that sanctions less severe than striking the pleadings are warranted, the Court finds that it is appropriate, as part of such lesser sanctions, to impose on the defendants the costs of the additional depositions, including reasonable attorney's fees. As explained above, the defendants have frustrated the purposes of discovery by disobeying the court's discovery orders, causing prejudice and the unnecessary expenditure of resources by the parties and the judiciary, and they cannot be allowed to benefit from their failure to obey the court's discovery orders and must comply with same. See Update Art, Inc., 843 F.2d at 71. Thus, imposing on the defendants costs, including reasonable attorney's fees, in connection with the additional depositions, is warranted. See Daval Steel Prods., 951 F.2d at 1365. The plaintiff's request for costs is granted. Attorney's Fees Incurred on This Motion In light of the Court's determination that the defendants' failure to obey the court's discovery orders was willful, the Court finds that their failure was not substantially justified. The Court finds further that no circumstances exist which make an award of expenses, in connection with the instant motion, unjust. The Court also finds that not only the defendants, but also the defendants' counsel, by advising the defendants to proceed as they did, flouted the court's orders at their peril, thereby frustrating the purpose of discovery orders and wasting the parties' time and judicial resources, unnecessarily. Accordingly, the plaintiff is entitled to the reasonable attorney's fees he incurred in connection with this motion, to be borne by the defendants and their counsel in equal proportion. See Fed.R.Civ.P. 37(b)(2)(C). CONCLUSION For the foregoing reasons, the plaintiff's motion for sanctions, Docket Entry No. 174, is granted. It is ORDERED that: (1) on or before October 17, 2013, the defendants shall produce to the plaintiff the audio recordings, as directed by the September 7, 2012 order, at their expense; (2) between October 31 and November 14, 2013, the following individuals shall be deposed: Mike Rynicker, Rocco Tomesco, Jeff Press, Joe Pirrone and Joel Miller; (3) the defendants shall bear the costs associated with the above-noted depositions, including the plaintiff's reasonable attorney's fees; (4) the plaintiff is entitled to recover the reasonable attorney's fees he incurred in connection with this motion, to be borne by the defendants and their counsel in equal proportion; (5) on or before November 21, 2013, the plaintiff shall submit, via affidavit or other competent evidence, his request for: (i) costs associated with the above-noted depositions, including reasonable attorney's fees; and (ii) reasonable attorney's fees in connection with this motion; (6) on or before November 28, 2013, the defendants shall submit any challenge to the reasonableness of the plaintiff's request; and *11 (7) on or before December 3, 2013, the plaintiff may submit any reply. SO ORDERED.