In this case, the plaintiffs, Warren and Deb Heit, are seeking a default judgment against the defendants, Scott and Shari Livingston, due to alleged misconduct during the discovery process. The dispute involves neighboring properties in Coeur d'Alene, Idaho, where a tram was constructed on the plaintiffs’ property to provide access to both properties. The plaintiffs claim the defendants breached a Joint Use and Maintenance Agreement by ceasing to fulfill their obligations and starting construction of a new tram. They also accuse the Livingstons of failing to comply with discovery obligations, including submitting false declarations, deleting text messages, and failing to produce relevant documents.

The defendants, the Livingstons, provided declarations affirming that they had complied with all discovery requests, stating they had produced all relevant documents and did not delete or hide any messages. However, it was later revealed that Mr. Livingston had deleted text messages between himself and a third party, Jeff Wells, and Ms. Livingston had failed to produce certain emails. The plaintiffs argue that this constitutes spoliation of evidence and request terminating sanctions, including a default judgment, based on the defendants' conduct.

The court considers two potential sources for imposing sanctions: Rule 37 of the Federal Rules of Civil Procedure and the court's inherent authority. Rule 37 allows for sanctions in cases of spoliation of evidence or failure to comply with discovery orders, while the court's inherent authority can be used to sanction bad faith conduct. The court examines the specific misconduct alleged by the plaintiffs, including the deletion of text messages and the failure to produce documents. It notes that Rule 37 imposes strict standards for terminating sanctions and that the plaintiffs must show the defendants intentionally deleted evidence with the purpose of depriving the plaintiffs of its use in litigation.

Upon reviewing the facts, the court finds that while Mr. Livingston's deletion of text messages was negligent, there is no evidence to suggest he acted with the intent to deprive the plaintiffs of the information. Similarly, Ms. Livingston's failure to produce certain emails was due to her belief that they were not necessary, not bad faith. Therefore, the court concludes that the conduct did not rise to the level required to justify terminating sanctions under Rule 37 or the court's inherent authority.

Ultimately, the court denies the plaintiffs' motion for default judgment. It finds that the misconduct, while concerning, does not justify such a severe sanction. The plaintiffs have not shown that the violations were willful or in bad faith, and there are other remedies available to address the issues raised. The court also denies the Livingstons' request for attorney's fees, as the plaintiffs' motion was found to be substantially justified. The case will proceed, with the opportunity for the plaintiffs to address any remaining discovery disputes through other channels.

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