Pittsfield Development, LLC et al., Plaintiffs, v. City of Chicago, an Illinois Municipal Corporation, Defendant No. 17 CV 1951 United States District Court, N.D. Illinois, Eastern Division Filed: November 15, 2021 Counsel Adrian M. Vuckovich, Christopher Robert Bargione, Collins Bargione & Vuckovich, Chicago, IL, for Plaintiffs. Andrew S. Mine, Jordan Alexander Rosen, Peter Hardt Cavanaugh, William Macy Aguiar, Jennifer Zlotow, City of Chicago, Department of Law, Chicago, IL, for Defendant. McShain, Heather K., United States Magistrate Judge Report and Recommendation *1 To: The Honorable Charles P. Kocoras The District Court has referred this matter to issue a Report and Recommendation on Defendant City of Chicago's Rule 37(c) Motion to Bar Evidence of Damages as Discovery Sanction, in which the City asks the Court to bar evidence of damages that Plaintiffs Pittsfield Development, LLC and Pittsfield Residential II, LLC disclosed after the close of fact discovery. [132, 134].[1] The motion has been briefed, and the Court heard oral argument on October 5, 2021. [140]. For the reasons set forth below, we respectfully recommend that the District Court grant the City's motion. Background I. Allegations of the First Amended Complaint This case stems from the rezoning of a building from mixed use to residential, which Plaintiffs Pittsfield Hotel Holdings, LLC (“Hotel”), Pittsfield Development, LLC (“Development”), and Pittsfield Residential II, LLC (“Residential”) (collectively, “Plaintiffs”) claim forced them to abandon their plan for a combination hotel-residential property at the Pittsfield Building in downtown Chicago. [29]. Through their various related entities, Plaintiffs’ ostensible goal was to convert floors 2–9 into a hotel and develop the upper floors or “Tower” (parts of floor 22 and all of 23–40) into high-end residential units. [Id.]. Floors 13–21 had previously been sold to a third party in 2007. [Id.] 4, ¶ 17. Additionally, Plaintiffs planned to develop the ground floor to be leased as retail space. [Id.] 5, ¶ 23. Plaintiffs’ First Amended Complaint (“Complaint”) further alleges that, in March 2016, the City of Chicago approved a zoning change that no longer permitted mixed use at the property—only residential. See generally [Id.]. Plaintiffs allege that this zoning change caused Hotel to incur damages “in excess of $39,000,000.00,” Development “in excess of $17,500,000.00,” and Residential “in excess of $1,000,000.00.” [Id.] 13, 15–18, 20, 22. The City of Chicago has moved to bar Development's and Residential's damages evidence under Rule 37(c) of the Federal Rules of Civil Procedure, claiming it received the evidence for the first time after the close of fact discovery. [132] 1, 3, 6. II. Plaintiffs’ Damages Evidence On May 3, 2019, Plaintiffs served their initial disclosures pursuant to Rule 26(a)(1). [Id.] 2. Plaintiffs provided the following “computation” of damages: Plaintiffs are claiming lost income as a result of the revocation of the permit. Plaintiffs are also seeking damages for lost sales of the building as a result of the downzoning of the property. Plaintiffs are also seeking damages for the demolition costs they incurred. Plaintiffs are also seeking damages for the effective revocation of the permit to build a hotel on floors 2–9. Plaintiffs are also seeking damages for loss of the permit which are loss of all value of the Permit as a result of the confiscation thereof. *2 [132-1] 5–6. Plaintiffs also identified Robert Danial, the Plaintiffs’ manager, as an individual with knowledge of “the damages sustained by the Plaintiffs as a result of the re-zoning ... the attempts to sell the building, the development of the building as a hotel, the emptying out of the building and lost income.” [Id.] 2–3. Six days later, on May 9, 2019, the City served its first sets of interrogatories to Development and Residential, in which the City requested that each plaintiff “identify and provide a computation of any lost profits [claimed], including a description of the Documents or other evidentiary material on which your lost profits are based.”[2] [138-1] 11, 17 (Interrogatory No. 7 to Residential & Interrogatory No. 7 to Development). Development and Residential responded as follows: Residential's Response to Interrogatory No. 7: Plaintiff's future rights to maintain and operate residential units were impaired by the subject Downzoning. Plaintiff was unable to obtain permits for the upgrade or modification to units owned by Plaintiffs since the property was now non-conforming. Residential received approximately 40% less than it would have received from the proceeds of sale if the property had not been downzoned. Development's Response to Interrogatory No. 7: Plaintiff directs Defendant to documents which are available for inspection pursuant to the provision of Fed. R. Civ. Pro. 33(d). Documents include leases with tenants who were removed from the Tower along with appraisal procured by Plaintiff which may be produced separately in response to expert discovery.[3] Plaintiff reserves the right to supplement its response to this interrogatory as additional information comes to the attention of Plaintiff. [Id.] 24, 33. In addition, the City requested that, as to each property interest allegedly taken by the City without just compensation, each plaintiff “state the just compensation to which Plaintiff believes it is entitled under the United States constitution, and identify and detail any methodology, appraisals, assessments, expert reports, studies, analyses, or any other factual bases ... relie[d] upon to reach each such valuation.” [Id.] 11, 17 (Interrogatory No. 15 to Residential & Interrogatory No. 15 to Development). Development and Residential responded as follows: Residential's Response to Interrogatory No. 15: Plaintiff is entitled to at least $4,000,000.00 in compensation from the City as a result of the complained of taking. Plaintiff's future rights to maintain and operate residential units were impaired by the subject Downzoning. Plaintiff was unable to obtain permits for the upgrade or modification to units owned by Plaintiff since the property was now non-conforming. Residential received approximately 40% less than it would have received from the proceeds of sale if the property had not been downzoned. Development's Response to Interrogatory No. 15: Plaintiff directs Defendant to the First Amended Complaint that was filed in this case. Prior to the downzoning, Plaintiff was allowed to develop 27 residential units within the Tower. After the downzoning, no additional residential units were allowed in the Pittsfield Building. Plaintiff further directs Defendant to the appraisal that Plaintiff has procured. [Id.] 26, 35. *3 The City also served its first sets of document requests to Development and Residential on May 9, 2019. [Id.] 38–43, 45–50. The City requested, among other things, any documents related to “the amounts of money that [each plaintiff] claims they lost by not being able to develop the property pursuant to DX-16 zoning.” [Id.] 42, 49 (Production Request No. 15 to Residential & Production Request No. 15 to Development). Despite asserting various objections, including “object[ing] to the extent that the requested documents are a matter of public record or are already in the possession of Defendant,” Development and Residential represented that they would produce any such documents in their possession. [Id.] 58–59, 69. Neither Development nor Residential provided a supplemental or amended damages disclosure during the remainder of the fact discovery period. [132] 2. Nor did they disclose a damages expert.[4] On March 23, 2021, approximately seven months after fact discovery closed, the City served Plaintiffs with contention interrogatories.[5] [138] 4; [138-1] 74–78, 80–84. Development and Residential each provided responses to the City's contention interrogatories on April 23, 2021 and later amended some of those responses. [138] 4; [138-1] 86–113; [132-1] 8–22; [132-3] 2–13.[6] The City's contention interrogatory No. 25 to Development asked it to provide all the facts supporting Development's contention in the Complaint that, as a result of the City's wrongful acts, it had sustained damages “in excess of $17,500,000.00.” [138-1] 78. In its response, Development identified three categories of damages the City claims had not been previously disclosed or produced in Plaintiffs’ Rule 26(a)(1) disclosures, discovery responses, or otherwise. [132] 3. These are: the development of residential units in the Tower, the lost rental value and lost sales price for the basement of the building, and the lost rental income from the ground floor of the property. [Id.]; [132-1] 19–20. Development provided the following computations as to each of these categories: The Tower contained approximately 80,000 square feet. Costs to develop the Tower were projected to be $150 per square foot or $12,000,000.00. As developed into 27 condominium apartments, the sales price was projected to be $365 per square foot for a total of $29,200,000.00. This resulted in the first element of Development's damages projected to be $17,200,000.00. There were also permit fees of $5,124.50 expended by Development. *4 The One Basement parcel contained approximately 20,000 square feet. This space could have been rented for $15 per square foot per annum for gross revenues of $300,000 per annum and sold for $150 square foot for a gross sales price of $3,000,000.00. However, following the Zoning Change, this space was worthless as it could not be leased out for any profitable use, and no buyer was interested in this space. The lost rental value and lost sales price is an element of Development's damages. The ground floor of the Development Property contained retail space which the Zoning Change prevented Development from re-letting. There was space vacated by a bank with respect to which Development received two letters of intent. Projected rental value was $760 per square foot per annum and the square footage was 4,000 square feet. This projected into lost rental income of $3,040,000 per annum along with associated loss of value. [132-1] 20. According to Development, “[t]he combined injuries and total damages” it sustained based on the foregoing computations was “considerably in excess of $17,500,000.00.” [Id.]. Development also referenced the following documents: plans for floors 23–38 of the building (the Tower), city-issued building permits and related documentation of fees incurred for the Tower, plans for development of retail space on the ground floor of the building, demolition permits for floors 23–38 of the building, and letters of intent from 7-Eleven and Bluestone. [Id.] 19. The City's contention interrogatory No. 24 to Residential also asked for all facts supporting Residential's contention in the Complaint that, as a result of the City's wrongful acts, it had sustained damages “in excess of $1,000,000.00.” [138-1] 84. In response, Residential stated: DR-10 prevented Residential from renovating its space because it became overbuilt following the Zoning Change. Also, because the Pittsfield Properties were largely vacant due to the Zoning Change, more costs for upkeep of the Pittsfield Properties fell on Residential. This also resulted in lower rental value for the units within the Residential Property. Additionally, as no hotel could be built on the Hotel Property, or other uses of value to the residents of the Residential Property, there was no access to hotel services or other services now prohibited under DR-10. This collectively prevented Residential from renting units and also lowered the value of such units within the Residential Property that could be rented out. Collectively, this resulted in injuries and damages to Residential in excess of $1,000,000,00. [132-3] 13. On July 9, 2021, the parties held a telephone conference, during which they discussed the damages described in Development's and Residential's contention interrogatory responses. [132] 4. According to the City,[7] when asked to provide the basis for Development's new damages computations, Plaintiffs’ counsel “represented that the information came directly from Robert Danial, Development's Owner, and that there are no documents to support any of these contentions.” [Id.]. The City also inquired about discrepancies between new damages numbers included in Development's contention interrogatory response and the numbers reflected in the documents that Development claimed to support its new computations. [Id.] 5. Specifically, the City took issue with Development's reference to two letters of intent that it had produced from 7-Eleven and Bluestone Coffee, which stated that the rental value for those spaces would be approximately $115 per square foot per annum for Bluestone and $98.34 for 7-Eleven, while Development's new calculation related to the ground floor of the property included a projected rental value of $760 per square foot per annum. [Id.] 4–5. According to the City, Plaintiffs’ counsel responded that he would “revisit the issue with his clients,” but after doing so, “decided to stand on this completely unsupported statement that is directly contradicted by the very documents upon which Development purports to rely.” [Id.] 5. As to Residential, the City states that when it asked for the basis or supporting documentation for Residential's contention interrogatory response, Plaintiffs’ counsel again named Mr. Danial as the sole source. [Id.] 6. *5 On August 19, 2021, the City filed the instant motion to bar, seeking to preclude Development and Residential from using damages evidence produced after the close of fact discovery “in support of or in opposition to any motion for summary judgment or for any purpose in any later proceeding, including hearings or trial.” [Id.] 1. The District Court referred the motion to the undersigned to issue a Report and Recommendation, [134, 136], and the plaintiffs filed an opposition brief on September 10, 2021. [138]. This Court held a telephonic motion hearing on October 5, 2021, during which Plaintiffs’ counsel acknowledged that neither Development nor Residential disclosed a damages computation prior to the close of fact discovery—and that Residential also did not provide a computation in its contention interrogatory responses. [140]. Plaintiffs’ counsel maintained, however, that Development provided a damages computation in its contention interrogatory response and that both Development and Residential produced documents supporting their alleged damages during the fact discovery period. Legal Standard Pursuant to Federal Rule of Civil Procedure 26(a)(1)(A)(iii), a party seeking damages “must, without awaiting a discovery request, provide to the other parties ... a computation of each category of damages claimed by the disclosing party” and “must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered.” Fed. R. Civ. P. 26(a)(1)(A)(iii); see also Paramount Media Grp., Inc. v. Village of Bellwood, No. 13 C 3994, 2015 WL 3419831, at *2 (N.D. Ill. May 28, 2015). The disclosing party has an ongoing duty “to supplement or correct its disclosure ... in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.” Fed. R. Civ. P. 26(e)(1). When a party fails to comply with Rule 26(a) or its ongoing disclosure obligations under Rule 26(e), “the party is not allowed to use that information ... to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). “The sanction of exclusion ‘is automatic and mandatory unless the sanctioned party can show that its violation of Rule 26(a) was either justified or harmless.’ ” NeuroGrafix v. Brainlab, Inc., No. 12 C 6075, 2021 WL 1057312, at *5 (N.D. Ill. Mar. 18, 2021) (quoting David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003)). “The determination of whether a Rule 26(a) violation is justified or harmless is entrusted to the broad discretion of the district court.” Caterpillar, 324 F.3d at 857 (quoting Mid-Am. Tablewares, Inc. v. Mogi Trading Co., Ltd., 100 F.3d 1353, 1363 (7th Cir. 1996)). “A district court need not make explicit findings concerning the existence of a substantial justification or the harmlessness of a failure to disclose.” Id. (citation omitted). In making this determination, however, the court “should consider and weigh the following factors: (1) the prejudice or surprise to the party against whom the evidence is offered; (2) the ability of that party to cure the prejudice; (3) the likelihood of disruption to the trial; and (4) the bad faith or willfulness involved in not disclosing the evidence at an earlier date.” Karum Holdings LLC v. Lowe's Cos., Inc., No. 15 C 380, 2017 WL 10311207, at *3 (N.D. Ill. Sept. 8, 2017) (citing Caterpillar, 324 F.3d at 857). Analysis In its motion, the City asks the Court to preclude Development and Residential from using damages evidence first presented in their contention interrogatory responses. The City argues that these damages disclosures run afoul of Rule 26(a), because they were not provided until after the close of fact discovery and the belated disclosure was neither justified nor harmless. [132] 1, 3, 7. The City further contends that (1) while Development provided purported damages computations (albeit late), such computations are unsupported by any evidence; and (2) Residential has never provided an actual damages computation. [Id.] 3–7. In response, Development and Residential concede that they did not provide damages computations prior to the close of fact discovery—and that Residential did not provide a computation even in its contention interrogatory responses. They suggest, however, that their violation was justified or harmless, and even if not, they timely provided documents that support their alleged damages. [138] 5–7. For the reasons stated below, the Court respectfully recommends that the District Court grant the City's motion to bar. I. Pittsfield Development *6 To begin, there is no dispute that Development failed to provide a damages computation prior to the close of discovery. Plaintiffs collectively served their Rule 26(a)(1) disclosures on May 3, 2019, nearly sixteen months after they filed their First Amended Complaint and over two years after this case was filed. [1], [29]. While Development alleged that it sustained “damages in excess of $17,500,000.00” in the Complaint, Plaintiffs’ initial disclosures did not identify “a computation of each category of damages claimed,” as is required under Rule 26(a). Fed. R. Civ. P. 26(a)(1)(A)(iii); see also Karum Holdings, 2017 WL 10311207, at *6 (“[T]he federal rules not only require a plaintiff to give a top-line figure for damages, but also a ‘computation of each category of damages [and the party] must make available for inspection the documents or other evidentiary material on which each computation is based.’ ”) (quoting Fed. R. Civ. P. 26(a)(1)(A)(iii)); Lancelot Invs. Fund, L.P. v. TSM Holdings, Ltd., No. 07 C 4023, 2008 WL 1883435, at *5 (N.D. Ill. Apr. 28, 2008) (“Fidelity to Rule 26 demanded at least a calculation of the $400,000 figure, followed if necessary by timely supplementation pursuant to Rule 26(e)(1).”); Tovar Snow Pros., Inc. v. ACE Am. Ins. Co., No. 20-cv-1060, 2021 WL 4745376, at *4 (N.D. Ill. Oct. 12, 2021) (noting that a party seeking damages “must explain how it arrived at [its damages] number” and that “ ‘[t]he word computation contemplates some analysis beyond merely setting forth a lump sum amount for a claimed element of damages.... A plaintiff should disclose the basic method or formula by which it contends its damages should or will be calculated.’ ”) (quoting Jones v. Wal-Mart Stores, Inc., No. 2:15-cv-1454, 2016 WL 1248707, at *3 (D. Nev. Mar. 28, 2016)). Indeed, Development did not provide a damage amount, a computation, or a method of computation in its initial disclosures. [132-1] 6. Development only identified categories of damages, which is insufficient. See, e.g., Shock v. Aerospace Integration Corp., No. 3:08cv304, 2009 WL 595923, at *5 (N.D. Fla. Mar. 6, 2009) (finding that the plaintiff's initial disclosures “clearly fail[ed] to comply with the requirements of Rule 26” because, “[a]lthough categories of damages [we]re listed, no damage amounts [we]re provided, much less a ‘computation of each category of damages claimed.’ ”) (quoting Fed. R. Civ. P. 26(a)(1)(A)(iii)); Silicon Knights, Inc. v. Epic Games, Inc., No. 5:07-CV-275, 2012 WL 1596722, at *1 (E.D.N.C. May 7, 2012) (“[A] party's Rule 26(a)(1)(A)(iii) disclosure must state the types of damages that the party seeks, must contain a specific computation of each category, and must include documents to support the computations.”). Additionally, in the City's Interrogatory No. 7, which the City issued on the heels of Plaintiffs’ initial disclosures, the City specifically asked for a computation of any lost profits that Development was claiming and the evidence on which the computation was based. [138-1] 17. Development did not provide a damages computation there either. [Id.] 33. Regardless of whether Development's response was responsive to the City's interrogatory, Development did not comply with Rule 26(a). Development did not state that it needed additional information or time to be able to answer the interrogatory; it merely reserved the right to supplement its response as additional information came to its attention. [Id.]. Even if Development was still gathering the necessary information to put forth a damages computation at the time it served its initial disclosures in May 2019, or responded to the City's first set of interrogatories shortly thereafter, Rule 26 still required that it provide a damages computation before the close of discovery. See, e.g., NeuroGrafix, 2021 WL 1057312, at *5 (“Rule 26(a)(1) required plaintiffs to disclose a ‘computation’ of their damages. The Court does not fault plaintiffs for not doing that at or near the outset of the case when they first made their Rule 26(a)(1) disclosures as they needed more information at that point. But when plaintiffs did disclose an actual ‘computation’ of their royalty damages ... they did not formally supplement their Rule 26(a)(1) disclosures.... If one construes plaintiffs’ $180 million figure in their submission for the pretrial order as an attempt to supplement their earlier disclosures, it was not ‘timely’ as required by Rule 26(e)(1)(A).”); Fidlar Techs. v. LPS Real Estate Data Sols., Inc., No. 4:13cv04021, 2015 WL 109835, at *5 (C.D. Ill. Jan. 6, 2015) (holding that “[g]iven Fidlar's failure within the discovery phase of this case to ever provide a computation of its damages, or even attempt to provide a methodology to LPS for doing so in violation of Federal Rule of Civil Procedure 26(a)(1)(A)(iii), it is too late for it to do so now after discovery has closed.”); Gumwood HP Shopping Partners, L.P. v. Simon Prop. Grp., Inc., No. 3:11-CV-268, 2017 WL 3016385, at *2 (N.D. Ind. July 17, 2017) (recognizing that “though parties may be unable to provide a precise computation of their damages at the outset of discovery, when their initial disclosures are first due, they must promptly supplement their computations as they have the opportunity to develop and refine their theories through discovery”) (citing Dynegy Mktg. & Trade v. Multiut Corp., 648 F.3d 506, 514–15 (7th Cir. 2011)). But, as Plaintiffs’ counsel confirmed at the October 5, 2021 hearing, Development did not provide a damages computation prior to the close of fact discovery. Plaintiffs’ counsel also confirmed that Development did not provide a damages computation by way of expert discovery. *7 The first purported damages computation provided by Development came in response to a contention interrogatory over eight months after the close of fact discovery and after expert discovery had come and gone. That computation marked the first time that Development included any figures comprising the specific damage number (“in excess of $17,500,000.00”) alleged in the Complaint. If we construe Development's contention interrogatory response as an attempt to supplement its initial disclosures, it was not “timely” as required by Rule 26(e)(1)(A). The Court next considers whether Development's failure to timely provide a damages computation was “justified” or “harmless” under Rule 37(c)(1). The City argues that Development's failure to provide a purported damages computation until after the close of discovery is neither justified nor harmless and therefore the belated disclosure must be excluded. [132] 6–7 (citing Physicians Healthsource, Inc. v. Alma Lasers, Inc., No. 12 C 4978, 2014 WL 6561781, at *2 (N.D. Ill. Nov. 20, 2014)). The City claims that the belated disclosure was not justified, because the “information necessary to produce the required computations has been in Plaintiffs’ possession since before the beginning of this lawsuit” and Development had ample time to produce the computations. [Id.] 6. Nor is the belated disclosure harmless, the City argues, because it deprived the City of an opportunity to conduct discovery related to the computations and their bases. [Id.]. While Development contends that the factors for assessing substantial justification and harmlessness under Rule 37(c)(1) weigh in its favor, Development does not specify whether its Rule 26 violation was justified, harmless, or both. [138] 6. Development offers no explanation for the delay in providing a damages computation such that the tardiness of the computation was justified, let alone substantially justified. Instead, Development appears to argue that its violation should be excused because it was harmless. Development claims that there is no surprise to the City stemming from its belated damages disclosure. [Id.]. In support, Development points to its initial disclosures, which stated that Plaintiffs were claiming lost income as a result of the revocation of the permit. [Id.]. Development also claims that the City was on notice of its claim for damages relating to the downzoning of the property and revocation of the permit. [Id.]. Nonetheless, Development suggests that any prejudice can be cured by allowing the City to re-depose Mr. Danial on the limited issue of his damages calculation. [Id.]. In fact, Development seems to attempt to shift the blame to the City for electing not to ask Mr. Danial questions about Development's damages during his deposition in this case, because, “[a]s disclosed in the initial disclosure, Robert Danial was to testify regarding damages.” [Id.]. Should the City wish to re-depose Mr. Danial regarding the basis for his damages calculations, Development states that it has no objection. [Id.]. Additionally, according to Development, the fact that this case is not yet set for trial also weighs in its favor. [Id.]. The Court finds that Development's belated damages computation and failure to sufficiently identify the purportedly supporting documentation inflict undue prejudice and surprise upon the City. The City has not had a fair opportunity to investigate and attempt to counter, including through expert reports, Development's damages figures as described in its contention interrogatory response. Even if reopening discovery to allow the City to depose Mr. Danial regarding his damages calculations could enable the City to get to the bottom of Development's belated damages computation,[8] the City would need to expend significant resources to defend against these computations, including seeking leave to reopen discovery. *8 The Court also finds that Development would be unable to cure the prejudice to the City. “Rule 26(e) does not give litigants a license to ignore their obligation of timely disclosure of damage theories and to excuse the significant omissions on the ground that a trial date has not been set and thus there is time to have further discovery. That insouciant approach has been rejected time and again.” Paramount Media Grp., 2015 WL 3419831, at *3 (collecting cases); see also Finwall v. City of Chicago, 239 F.R.D. 494, 501 (N.D. Ill. 2006) (“Nor is it the prerogative of the violator to require his victim to accept his largesse in the form of allowing discovery to proceed after the deadline set for the close of discovery by the court. Late disclosure is not harmless within the meaning of Rule 37 simply because there is time to reopen discovery.”); Lancelot Invs. Fund, 2008 WL 1883435, at *6 (finding that “[t]he defendants’ violations are not rendered harmless because no trial date has been set” and explaining, “If that were the test, most violations of Rule 26 would be outside the reach of Rule 37. If the drafters of the Rule wanted it to be linked to the existence of the trial schedule, they would have said so.”); Fidlar Techs., 2015 WL 109835, at *4 (also rejecting argument that any harm to the defendant could be cured by reopening discovery). Moreover, to the extent that Development suggests that the belated damages disclosure was harmless (or justified) because the City could or should have questioned Mr. Danial regarding its damages, this argument fails. The onus was not on the City to seek out a damages computation. Rule 26(a) requires a party to provide a computation of any category of damages sought “without awaiting a discovery request.” Fed. R. Civ. P. 26(a)(1)(A). Even still, in its Interrogatory No. 7 to Development, the City specifically asked for “a computation of any lost profits that Development is claiming, including a description of the Documents or other evidentiary material on which [those] lost profits are based.” [138-1] 17; see Design Strategy, Inc. v. Davis, 469 F.3d 284, 295 (2d Cir. 2006) (noting that “Rule 26(a) requires a party to provide a computation of any category of damages voluntarily, i.e., ‘without awaiting a discovery request’ ” and that the plaintiff's failure to comply with this requirement was “especially troubling” because the defendants had “specifically requested a calculation of damages”). It was not the City's burden to pursue a damages computation via deposition testimony. See, e.g., Silicon Knights, 2012 WL 1596722, at *5 (explaining that “making witnesses available is not a substitute for the computation and analysis that Rule 26(a)(1)(A)(iii) requires”); Clayman v. Starwood Hotels & Resorts Worldwide, 343 F. Supp. 2d 1037, 1047 (D. Kan. 2004) (rejecting plaintiff's argument that plaintiff's non-compliance with Rule 26 was harmless because defendant had the opportunity to discover information about plaintiff's damages through a deposition and explaining that the defendant was “entitled to a specific computation of plaintiff's damages, and [wa]s entitled to have made available for inspection and copying the documents and other evidentiary material on which such [a] computation is based”). Finally, Development disputes any bad faith or willfulness involved in not disclosing the damages evidence at an earlier date, because it “did provide documents supporting the computation during fact discovery.” [138] 6. While the record before the Court is insufficient to support a finding that Development acted in bad faith in failing to timely provide a damages computation and specify the documentation on which it was based, Development has offered no explanation for its failure to comply with Rules 26(a) and (e). Nor does Development dispute the City's contention that Development and Residential have possessed the information necessary to provide a computation since before the beginning of this case. [132] 6. Instead, Development appears to suggest that, because it produced unspecified documents during the fact discovery period, it was exempt from Rule 26(a)(1)’s explicit requirement that it provide a computation. This is incorrect. *9 Although Development does not expressly reference Rule 26(e)(1)(A), it seems to seek refuge in that provision's exception to the duty to supplement or correct a Rule 26(a) disclosure that applies when information has “otherwise been made known” to the opposing party “during the discovery process or in writing.” Fed. R. Civ. P. 26(e)(1)(A). According to Development, the documents that it produced during the discovery period that support its damages computations include: the condominium conversion study plans, the City issued permits for the Tower (floors 23–38) and related documentation of fees incurred for the Tower, the plans for development of retail space on the ground floor of the Building, the Building permits issued for floors 23–38, the plans for development of retail space on the ground floor of the Building, the letters of intent from 7/11 and Bluestone [and] the plans for the Tower and ... the information regarding the Permit fees expended by Development. [138] 5.[9] Development also claims that it provided: (1) “the floor plans of the Building and the rent rolls of the property” to support its basement damages; and (2) “the letters of intent from 7/11 and Bluestone for potential rental” to support its ground floor damages. [Id.] 5–6. At the October 5, 2021 motion hearing, Plaintiffs’ counsel reiterated that Development's damages calculation in its contention interrogatory response is based on documents that were provided during fact discovery. According to the City, Development has never identified the documents that support the purported damages computation in its contention interrogatory response. The City notes that Development has never identified by Bates number the specific documents it has relied upon. [132] 5 n.1.[10] Thus, the City states that it was “completed surprised” by Development's calculations in its contention interrogatory response, because “it had never seen any documents supporting any of this.” [Id.] 4. The City further claims that, when it asked Plaintiffs’ counsel to provide the basis for Development's new calculations during a July 9, 2021 telephone conference, Plaintiffs’ counsel “represented that the information came directly from Robert Danial, Development's Owner, and that there are no documents to support any of these contentions.” [Id.]. *10 Moreover, the City claims that some of the purportedly supporting documents do not support the damages figures provided in Development's contention interrogatory response. For example, in support of its damages related to lost rental income from the ground floor of the property, Development cites two letters of intent from 7-Eleven and Bluestone Coffee. According to Development's purported computation, the “[p]rojected rental value was $760 per square foot per annum.” [132-1] 20. The City states that the letter of intent from Bluestone included a rental value of approximately $115 per square foot per annum; and, as to 7-Eleven, the City was unable to locate a signed letter of intent within Plaintiffs’ production, but the latest draft version included a rental value of $98.34. [132] 5 & n.1. According to the City, no version of the 7-Eleven letter of intent produced by Development “comes close to stating a $760/square foot value.” [Id.] 5 n.1. The City claims that, when asked about this discrepancy, Plaintiffs’ counsel stated that he would “revisit the issue with his clients,” but ultimately opted to stand on this statement. [Id.] 5. Beyond Development's failure to provide a damages computation during discovery, the City claims that its unwillingness to address such errors is sanctionable. [Id.]. Rule 26(a)(1) required Development to provide a “computation” of its damages in addition to—not in lieu of—the documents from which it was derived. See, e.g., Design Strategy, 469 F.3d at 295 (“[B]y its very terms Rule 26(a) requires more than providing—without any explanation—undifferentiated financial statements; it requires a ‘computation,’ supported by documents.”); Baca v. State of California, No. 13 C 2968, 2016 WL 234399, at *5 (N.D. Cal. Jan. 20, 2016) (rejecting plaintiff's argument that failure to provide damages computation was harmless because the information was contained within records already in defendants’ possession, because “a party cannot avoid its obligation to provide a damage calculation merely by producing records ostensibly containing such information”); Tovar Snow Pros., 2021 WL 4745376, at *4 (“Regardless of what documents [the plaintiff] has disclosed, it ‘must provide a computation synthesizing these documents in a timely manner so that the defendant has the opportunity to conduct discovery on that point.’ ”) (quoting Long v. Copart of Conn., Inc., No. 2:04 CV 298, 2005 WL 8170013, at *2 (N.D. Ind. Apr. 25, 2005)); Pilitz v. Inc. Village of Freeport, 12-CV-5655, 2020 WL 6945927, at *4 (E.D.N.Y. Nov. 25, 2020) (explaining that “documents alone do not constitute a ‘computation’ as required under Rule 26(a)” and, “even considering the documents Plaintiffs produced, they still provide an insufficient basis to compute damages”); Silicon Knights, 2012 WL 1596722, at *4 (“Disclosing damages-related documents alone, without disclosing a computation based on such documents, does not satisfy a party's Rule 26(a)(1)(A)(iii) obligation.”); Gould Paper Corp. v. Madisen Corp., 614 F. Supp. 2d 485, 490 (S.D.N.Y. 2009) (defendants’ disclosure of 629 pages of documents that “document[ed] and detail[ed] the basis for [defendants’] damage claim” did not satisfy Rule 26). The burden to provide a damages computation belonged to Development, and Development cannot shift that burden to the City by pointing generally to documents that were produced during discovery. According to defense counsel's statements at the October 5 motion hearing, Plaintiffs produced over 100,000 pages of materials in this case. Requiring the City to comb through that production to try to locate the documents Development claims to rely upon but never specifically identified (by Bates number or otherwise) does not satisfy Development's obligations under Rule 26. Lancelot Invs. Fund, 2008 WL 1883435, at *6 (“Rule 26 requires that the calculation be done by the party claiming damages, not its opponent, who under the defendants’ unsupportable theory is left to sift through extensive records of the defendants and guess at what the damage claim is.”); NeuroGrafix, 2021 WL 1057312, at *5 (explaining that “[p]laintiffs may have identified where the bits and pieces that they are relying upon came from, but what's significant is how those bits and pieces are put together—the ‘computation’ expressly required by Rule 26(a), which plaintiffs made no attempt to provide for their nine-figure royalty claim until far too late. It is not sufficient that, as plaintiffs seem to contend, defendants must have been able to figure it out from traces left at various points in the extensive record in this case.”); see generally Morris v. BNSF Ry. Co., 969 F.3d 753, 766 (7th Cir. 2020) (“Complying [with Rule 26's disclosure requirements] should be a priority—not something brushed off as tedious or unimportant so long as the information disclosed late can somehow be unearthed like a needle in a haystack within a prior discovery production.”); Norman v. CP Rail Sys., No. 99 C 2823, 2000 WL 1700137, at *1 (N.D. Ill. Nov. 13, 2000) (noting that Rule 26(a)(1) is “a fairness rule, not a technicality” and “[t]he point is to avoid having to slog through heaps of discovery material”). *11 Even if Development could identify documents that support its late damages computation, it has not done so. In its motion, the City raises a discrepancy between the rental value stated in Development's damages computation in its contention interrogatory response ($760 per square foot per annum) and the rental value stated in the letters of intent from Bluestone and 7-Eleven cited in support ($115 per square foot per annum and $98.34, respectively). [132] 5. The City notes that, as to 7-Eleven, it was unable to locate a signed letter of intent within Plaintiffs’ production, and so it had derived that number from the latest draft it was able to find. Development offered no response to this point in its opposition (or on the record during the October 5 hearing). Beyond being able to determine whether it had the correct version of documents, the City noted at the October 5 hearing that it did not know whether certain documents referenced by Development, such as plans and permits for the Tower floors, even exist. Development offered no clarification on this point. Development's suggestion that the City could have discerned its damages computations based on Development's production of unspecified documents strains credulity: if Development could not provide the computation in a timely manner based on the purportedly supporting documents that Development itself produced, it cannot expect the City to have done so. See Lancelot Invs. Fund, 2008 WL 1883435, at *6 (“If the defendants, whose records they were, could not make the computations in a timely way based on the documents that the defendants say they produced, Lancelot cannot be expected to have done so.”). At bottom, it remains unclear—to the City and this Court—how Development has arrived at its late damages calculations. At best, Development left a trail of breadcrumbs scattered among thousands of documents produced during the course of fact discovery that provide support for some or all of the damages figures described in Development's contention interrogatory response. At worst, the documents provide no such support, and Development's calculations are based instead on Mr. Danial's cursory, back-of-the-envelope figures. Both are insufficient. Development's failure to timely provide a damages computation, as well as its failure to identify the specific documents substantiating such a computation—neither of which was justified or harmless—warrant the sanction sought in the City's motion. II. Pittsfield Residential The City's motion to bar is more straightforward in Residential's case. The City maintains that Residential has never provided a damages computation at any point in this case. [132] 5. At the October 5, 2021 motion hearing, despite initially contending that Residential provided a damages computation in its contention interrogatory response, Plaintiffs’ counsel ultimately corrected that response and agreed that Residential has not provided a damages computation. As with Development, Rule 26(a) required Residential to provide a damages “computation,” and it has not done so. To the extent that Residential also contends that its document production during the course of fact discovery sufficed in lieu of an actual computation, it is incorrect for the reasons explained above. Finally, the Court notes that the significance of the sanction sought by the City is not lost on this Court. However, Development and Residential have not provided this Court with any justification for their failure to timely provide damages computations and identify the specific documents or other evidentiary material on which such computations are based. Those failures are not harmless. Exclusion is, therefore, automatic and mandatory under Rule 37(c)(1). Caterpillar, 324 F.3d at 857. Moreover, the source(s) and method of the damages computations that Development ultimately provided remain unclear. Development and Residential's refusal or inability (or both) to comply with Rule 26—despite requirements, requests, and opportunities to do so—operates to bar the use of such information “to supply evidence on a motion, at a hearing, or at a trial.” Fed. R. Civ. P. 37(c)(1). “All too often plaintiffs do not comply with Fed. R. Civ. P. 26(a)(1)(A)(iii) .... Instead, they treat damage computations as though they were an insignificant part of discovery, even though they are as critical a component of a case as is proof of liability. Noncompliance with the disclosure requirements relating to damages can have serious preclusive effects on a plaintiff's ability to prove its case.” Kramer v. Am. Bank & Tr. Co., No. 11 C 8758, 2015 WL 13735745, at *2 (N.D. Ill. Aug. 17, 2015); see also generally NeuroGrafix, 2021 WL 1057312, at *5–6 (granting motion to exclude and barring plaintiffs from using at trial certain damages figures or computations described in a final pretrial order submission and stating, “The Court acknowledges the importance of the damages calculation in this case, but that simply reinforces the proposition that [it] was incumbent upon plaintiffs to disclose their computation in a timely fashion as required by the Rules and not to come in at the eleventh hour, point to a number of strands of inference, and say the conclusion was somehow there for the finding.”); Pagoda Enters. v. DHL Express, No. 04 C 6497, 2006 WL 8461427, at *3 (N.D. Ill. Nov. 20, 2006) (granting motion in limine as to damages evidence that plaintiff failed to produce or disclose during discovery, including plaintiff's newly disclosed damages calculation); Morris, 969 F.3d at 766 (cautioning that “[p]arties who do not attend diligently to their obligation to supplement initial disclosures proceed at their own peril”). Conclusion *12 For the foregoing reasons, the Court respectfully recommends that the District Court grant the City's motion and bar Plaintiffs Development and Residential from using on a motion, at a hearing, or at trial the belated damages calculations and purportedly supporting evidence described in Development's and Residential's contention interrogatory responses. Specific written objections to this Report and Recommendation may be served and filed within 14 days from the date that this recommendation is issued. Fed. R. Civ. P. 72. Failure to file objections with the District Court within the specified time will result in a waiver of the right to appeal all findings, factual and legal, made by this Court in the Report and Recommendation. Lorentzen v. Anderson Pest Control, 64 F.3d 327, 330 (7th Cir. 1995). Footnotes [1] Bracketed numbers refer to entries on the district court docket. Referenced page numbers are taken from the CM/ECF header placed at the top of filings. [2] The interrogatory also asked each plaintiff to provide the legal basis for its claim of lost profits. [138-1] 11, 17. The Court has omitted the portions of the interrogatories and responses dealing with that request. [3] At the October 5, 2021 motion hearing, defense counsel indicated that Development and Residential had led the City to believe that they would be disclosing an expert report to support their damages claims. Defense counsel noted in particular that the plaintiffs’ responses to the City's discovery requests indicated that they would be relying upon expert testimony to support their damages claims. It is unclear to the Court whether the allegedly forthcoming expert report to which defense counsel referred was the “appraisal” mentioned in Development's response to Interrogatory No. 7. See [138-1] 33 (“Documents include ... [the] appraisal procured by Plaintiff which may be produced separately in response to expert discovery.”). Regardless, Plaintiffs’ counsel confirmed at the October 5 hearing that neither Development nor Residential disclosed an expert report on damages, and counsel for the City further stated that no appraisal was ever provided to the City. [4] According to the expert discovery schedule set by the District Court on July 17, 2020, the plaintiffs were to disclose their experts by August 29, 2020 and depositions of the plaintiffs’ experts were to be completed by September 29, 2020. [107]. At the October 5, 2021 motion hearing, the parties confirmed that, of the plaintiffs, only Hotel disclosed a damages expert. Based on Plaintiffs’ representations in other filings in this case, Hotel disclosed its expert and the City took the expert's deposition in compliance with the deadlines set by the District Court in July 2020. [110] 2–3. Defense counsel also confirmed at the October 5, 2021 hearing that the City disclosed a rebuttal expert in response to Hotel's damages claim. Based on the Court's review of the docket, the parties were to complete the deposition of the City's rebuttal expert by February 12, 2021. [117, 119]. [5] The City's contention interrogatories to each plaintiff were styled as a “second set of interrogatories.” [138-1] 74–78, 80–84. [6] Neither the briefing nor Development's and Residential's amended responses to the City's contention interrogatories state when the amended responses were provided. The verifications provided with Development's amended contention interrogatory responses are dated July 20, 2021 [132-1] 21–22. The copy of Residential's amended responses attached to the City's motion has no date on it. [132-3] 2–13. [7] In their opposition brief, Development and Residential do not dispute the City's representations regarding what was said during or after the parties’ July 9, 2021 telephone conference. [8] The City further contends that re-deposing Mr. Danial would not be a feasible solution, because as a lay witness, Mr. Danial's testimony regarding damages would not support a damages claim. The City states that the damages calculations “relate to lost sales value, lost rental income, cost of potential redevelopment, and other speculative impacts of the zoning ordinance on the properties at issue,” and determining such values requires “scientific, technical, or other specialized knowledge within the scope of Rule 702.” [132] 7 (citing Fed. R. Evid. 701). In response, Development and Residential argue that “[l]ost sales and lost rental income do not require scientific, technical or other specialized knowledge within the scope of Rule 702.” [138] 7. Neither party cites any case law in support of these arguments. While the Court questions whether any party could use lay witness testimony to support a damages computation for the conversion of a multi-use real estate development to residential in downtown Chicago, the Court need not address this issue because it finds that the belated computation (and lack of any computation for Residential) is a sufficient basis to grant the motion. [9] In its opposition brief, Development states that it “did provide the calculation for the damages to Pittsfield Development with regard to the Tower.” [138] 5. It is unclear if Development means that it provided a damages calculation related to the Tower (floors 23–38 of the building) during the fact discovery period. To the extent that it does, Development has not pointed the Court to where such a calculation is contained within the record, and the Court does not see such a calculation. Moreover, any such claim is contrary to Development's concession on the record during the October 5, 2021 motion hearing that it did not provide a damages computation prior to the close of fact discovery. [10] At the October 5, 2021 motion hearing, defense counsel indicated that, in response to a request from the City, Development and Residential provided amended responses to the City's first sets of interrogatories and production requests, which included Bates references for documents that the plaintiffs intended to rely upon for various claims, including damages. Copies of those amended discovery responses were not provided to the Court. Nonetheless, the City's counsel stated at the motion hearing that none of those documents identified by Bates number in Development's and Residential's amended discovery responses correspond to the documents referenced generally in the plaintiffs’ contention interrogatory responses.