Plaintiff Accused of Insurance Fraud Found to have Spoliated Cell Phone Evidence
In Brown v. Certain Underwriters at Lloyds, London, et. al., Case No. 16-02737 (E.D. P.A., June 9, 2017), Plaintiff sued Defendants, his insurers, after they refused to pay a claim for a fire at his property in Philadelphia. The case was removed to federal court, and Defendants asserted counterclaims for breach of insurance policy and violations of the Pennsylvania Insurance Fraud Statute.
Prior to the filing of Defendants’ Counterclaims, on March 9, 2017, Defendants requested production of Plaintiff’s cell phone in use at the time of the fire. Defendants’ request for the cell phone records for the date of the occurrence, May 1, 2015, arose from Defendants’ suspicions that Plaintiff set the fire himself. Prior to the litigation, Defendants had taken Plaintiff’s sworn testimony and at that time had requested he preserve cell phone evidence.
Later, during the litigation, on the day before Plaintiff was scheduled to produce his cell phone, he filed an objection to the production request. The basis of the objection was that he had lost the phone months earlier and therefore could not produce the device. Defendants then filed a motion for spoliation sanctions.
The court’s initial findings were (1) that Plaintiff had control over the phone, and (2) that the evidence lost was relevant to the case, since location information, text messages, and search history could reveal information as to whether Plaintiff was involved in setting the fire. The court then determined that Plaintiff had a duty to preserve the phone, evidenced by the record at the non-judicial hearing where he had been requested to preserve the device. The court noted that intent was generally less simple to prove. However, here, the court found Plaintiff’s conduct deliberate in that he he failed to notify Defendants that the phone was gone until mere hours before the scheduled production, despite Plaintiff purportedly knowing for four months that the phone was missing. The court also considered testimony from a witness, Judy Cooks, that called into question Plaintiff’s veracity regarding the incident. In order to obtain the insurance policy from Defendants, Plaintiff had attested that Cooks was his tenant at the property. However, after the incident, Cooks testified that she was never Plaintiff’s tenant, never lived at the property and never signed a lease. Cooks also testified that Plaintiff had used the subject cell phone to communicate with her about the fire and about the lawsuit. Cooks allowed Defendants to take screenshots of her phone, which showed exchanges of her arguing with him about where she “come[s] into play”. The screenshots, according to the court, showed that Plaintiff had a motive to hide his cell phone and also evidenced a tendency by him to lie. Plaintiff also offered no real defense to having lost his phone, and failed to provide an account of how the phone was lost.
The court found that Plaintiff had spoliated cell phone evidence and that he had done so in bad faith. As a result, the court ordered Plaintiff to pay Defendants’ fees and costs associated with filing the spoliation motion as well as any fees and costs associated with obtaining the records from the cellular carrier. The court also ordered an adverse inference instruction, stating it would hear specific proposals at a later date.