May 23, 2018

Court Determines Timeliness of Defendant’s Spoliation Sanctions Motion

by Alan Brooks

In Travelers Prop. Cas. Ins. Co. of America v. Mountaineer Gas Co., No. 2:15-cv-0959 (S.D. West Virginia March 16, 2018), the Court is requested to consider a spoliation sanctions motion filed in a litigation arising from a boiler explosion at a medical center.  The explosion led to a lawsuit between the insurance carrier and the gas company that supplied gas service to the medical center.

On June 25, 2013, a boiler exploded at St. Mary’s Medical Center (“St. Mary’s”), in Huntington, West Virginia. Not long before the explosion, in April 2013, St. Mary’s had hired Combustion Service & Equipment Company (“CS&E”) to install a new boiler system as part of an expansion project.

Immediately after the installation work in April 2013 by CS&E, St. Mary’s began experiencing technical problems with the boilers. St. Mary’s reported these issues to Mountaineer Gas Co., its gas service provider (“Mountaineer”). During the time that Mountaineer was trying to determine the source of the problem, one of the boilers exploded. Representatives from Mountaineer and St. Mary’s took photographs of the condition of the gashouse and the boiler room post-explosion. Debris had been scattered when the explosion occurred and had covered the boiler room. St. Mary’s employees immediately cleared the debris. As part of their post-explosion inspection, Mountaineer employees checked the regulators downstream from the bypass valve and discovered that the regulators were contaminated with “a significant level of dirt and debris.” The employees discarded the debris once they completed their inspection.

On September 24, 2013, Bill Noyes, a consultant for Travelers Property Casualty Company of America (“Travelers”), St. Mary’s insurer, informed the parties by email that St. Mary’s intended to remove and replace the boiler and its electrical components. On June 19, 2015, Travelers filed this lawsuit on behalf of its insured against Mountaineer.

Nearly four years after the boiler explosion, one of Mountaineer’s experts raised the specter of spoliation of evidence, claiming that Travelers did not maintain certain evidence to the detriment of Mountaineer. On June 12, 2017, Mountaineer filed its Motion for Sanctions for Spoliation of Evidence. As a result of the alleged spoliation of evidence, Mountaineer requests that the Court grant summary judgment in its favor or, in the alternative, submit an adverse inference instruction to the jury.

The duty to preserve evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. Mountaineer did not raise spoliation concerns during the discovery phase, nor did it bring a proper motion to compel or a motion for sanctions. No correspondence regarding the preservation of relevant evidence or objection to Travelers’ proposed procedure for preserving evidence was submitted to the Court. Rather, the only evidence of a dispute regarding the handling of certain evidence came in the form of Mountaineer’s expert’s supplemental report, two months before pre-trial disclosures were due and four months prior to the commencement of trial.

The Court began its ruling emphasizing the tenet that spoliation motions must be made in a timely manner, and then elaborated that even where evidence was allegedly destroyed, the importance of a timely spoliation motion cannot be understated. The Court then stated that if Mountaineer had timely presented the issues, the Court may have been in the position to fashion a suitable solution.

In concluding its findings, the Court stated that Mountaineer provided no reasonable explanation or justification for the time lapse between the dispute becoming ripe and the spoliation motion being filed. The Court also found that Mountaineer made no attempts to meet and confer with Travelers regarding its concerns about spoliation. The Court denied Mountaineer’s Motion for being untimely filed.