Smith et al v. Norcold, Inc. et al

Filing 60

ORDER DENYING 43 Motion for Sanctions. Signed by District Judge Terrence G. Berg. (Chubb, A)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LONNIE SMITH, et al.,
v.

Plaintiffs,

Case No. 13-10841

NORCOLD, INC., et al.
Defendants.

HON. TERRENCE G. BERG
/

ORDER DENYING DEFENDANTS’ MOTION FOR
SANCTIONS DUE TO SPOLIATION OF EVIDENCE (DKT. 43)
This case involves a product liability claim by Plaintiffs Lonnie and Cheryl
Smith (“Plaintiffs”) against the manufacturer of a refrigerator that allegedly caught
fire inside a motorhome stored in Plaintiffs’ barn, destroying the barn and property
stored in it. Defendants Norcold, Inc., Alcoa, Inc. and Alcoa Energy Services, Inc.
(“Defendants”) deny that their product was responsible for the fire.
Currently before the Court is the Defendants’ March 13, 2014 motion seeking to
dismiss Plaintiffs’ case as a sanction for causing the spoliation of evidence. (Dkt. 43,
p. 3.) Defendants argue that dismissal is appropriate because: (1) Plaintiffs’ case
rests entirely on the theory that a defective Sourdillion gas valve (the “Valve”) in a
Norcold refrigerator caused a fire that resulted in the loss of Plaintiffs’ personal
property; (2) Plaintiffs failed to document or preserve the Valve or “the control panel
that houses it” after the fire; thus (3) Defendants are prejudiced because they
cannot examine the Valve “or its housing.” (Id. at 1-2.)

Plaintiffs counter that the Valve and any related components were destroyed in
the fire. Plaintiffs further maintain that what Defendants characterize as the
Valve’s control panel is actually the refrigerator’s bottom pan that contained the
Valve and its “housing.” (Dkt. 50, p. 1) According to Plaintiffs, this bottom pan was
in fact documented but is irrelevant to this case. (Id. at 13). Moreover, Plaintiffs
assert that even if the Valve and its related components had survived the fire,
Plaintiffs were not in control of the fire scene or the evidence collected there. (Id. at
2.) Plaintiffs argue, therefore, that they had no opportunity to spoil evidence with
the culpable mental state required to merit spoliation sanctions. (Id.)
Defendants requested an evidentiary hearing during the March 19, 2014
telephonic status conference convened by the Court. Plaintiffs requested that the
Court hold a motion hearing without allowing the presentation of evidence.
Consequently, the Court ordered supplemental briefing on whether an evidentiary
hearing was necessary. (Dkt. 51, p. 3.) Having carefully reviewed the parties’ briefs
concerning Defendants’ motion for sanctions and the request for an evidentiary
hearing, the Court finds that oral argument will not significantly aid the decision
making process and an evidentiary hearing is unnecessary. Thus, under E.D.Mich.
LR 7.1(f)(2), no evidentiary or motion hearing will be held.
Because Defendants failed to show that Plaintiffs were ever in control of the fire
scene or that the Valve and any related components even survived the fire, they
have not established that Plaintiffs were negligent in failing to collect or document
these refrigerator components. Moreover, even if Plaintiffs had been negligent, the

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extreme sanction of dismissal is not warranted here. Defendants’ spoliation motion
(Dkt. 43) will therefore be DENIED. The parties agreed on March 24, 2014 to
“attend a private mediation in good faith within 30 days of the Court’s order” should
the Court deny Defendants’ spoliation motion. (Dkt. 47, p. 2.) Accordingly, the
parties are ORDERED to attend private mediation under the terms of their
stipulated agreement. (Dkt. 47.)
I.

FACTUAL BACKGROUND

Plaintiffs, residents of Croswell, Michigan, stored a 1992 Gulfstream Conquest
motorhome in a barn on their property. (Dkt. 1, ¶¶ 1-2, 10, 13; Dkt. 50, p. 2.)
Visiting guests occasionally stayed in the motorhome. (Dkt. 43, Ex. A, p. 10.) The
actual owners of the motorhome were S. Renee Steiner-Vore and Jeff Vore, who are
not parties in this case. (Dkt. 50, p. 2.) Mr. and Mrs. Vore insured the motorhome
through Farm Bureau Insurance, a third-party insurer. (Dkt. 50, Ex. A.) The
motorhome was equipped with a Norcold Model 462 refrigerator. (Dkt. 1, ¶ 10.)
On March 2, 2010, the motorhome caught fire, resulting in the complete loss of
the motorhome along with Plaintiffs’ barn and its contents. (Dkt. 50, p. 2.) Three
fire investigators subsequently became involved in this case. Plaintiffs hired fire
investigator Thomas Bailey directly. (Dkt. 57, Ex. A at 20:12-22.) Fire investigator
Michael Waite was hired by Farm Bureau Insurance to investigate the “[t]he
[motorhome] portion of the fire” only.1 (Dkt. 57, Ex. D at 10:10-17.) On March 8,

The record does not disclose precisely when Mr. Bailey or Mr. Waite was retained. Given that Mr.
Bailey contacted Farm Bureau Insurance, Mr. Waite, and Defendants on March 8, 2010 regarding
the fire scene, both Mr. Bailey and Mr. Waite must have been hired soon after the fire which
occurred on March 2, 2010. (See Dkt. 50, Ex. E.)
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2010, Mr. Bailey sent Defendants and Farm Bureau Insurance a request for an
expedited inspection because of “the potential for disturbance of the scene” due to
weather or other factors. (Dkt. 43, Ex. B-2, pp. 3-4.) Defendants subsequently hired
fire investigator Chris Bloom on March 10, 2010. (Dkt. 43, Ex. B-1 at 48:2-5.)
In his March 8, 2010 letter, Mr. Bailey asserted that “any items removed [from
the scene] will be tested on site if possible” and if not, Mr. Bailey’s company, RV and
Marine Investigations of America, L.L.C., would “retain those items until such time
as testing is available.” (Dkt. 43, Ex. B-2, pp. 3-4.) However, Farm Bureau
Insurance claims adjuster Jackie Bligh responded to Mr. Bailey’s letter via email on
March 10, 2010 stating that, as the motorhome’s insurer, Farm Bureau Insurance
“will not allow [Mr. Bailey] to take possession of any part of the trailer that cannot
be tested on site.” (Dkt. 50, Ex. F.) Moreover, any such parts “would have to be put
in the custody of Kirby, Bailey & Assoc. [sic],” an investigation firm representing
Farm Bureau Insurance that is not involved in this case, for storage. (Id.) Any
necessary destructive testing of evidence would have to first be discussed with Farm
Bureau Insurance. (Id.)
On March 25, 2010, Mr. Bailey (for Plaintiffs) and Mr. Waite (for Farm Bureau
Insurance, the carrier for the owners of the motorhome) conducted the initial
multiparty inspection of the fire scene. (Dkt. 43, Ex. B-1 at 187:15-20.) Farm
Bureau Insurance Adjuster Bligh was also present. (Dkt. 50, Ex. G, p. 12.) Mr.
Bloom, Defendants’ fire investigator, was unable to participate because of “another
scheduled inspection.” (Dkt. 43, Ex. B-1 at 187:21-24.) Mr. Bailey and Mr. Waite

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both took photographs of the scene and located evidence jointly. (Dkt. 57, Ex. A at
29:10-31:5, 48:6-21; Dkt. 57, Ex. D at 1:14-25.) According to Mr. Bailey,
approximately 300 to 500 photographs were taken at the scene during the initial
multiparty inspection. (Dkt. 57, Ex. A at 47:20-22, 69:8-9.)
At the scene, the motorhome’s electrical wiring as well as the Norcold
refrigerator’s coil were tested and excluded as causes of the fire. (Dkt. 43, Ex. A, p.
12.) The coil, cooling unit and burner assembly were collected. (Dkt. 57, Ex. A at
47:3-7; Dkt. 43, Ex. B-1 at 74:14-16.) According to Mr. Waite, the refrigerator’s
bottom pan was not collected but loose debris from that area of the fire scene was.
(Dkt. 57, Ex. D at 39:22-40:8.) Mr. Waite retained and stored that evidence on
behalf of Farm Bureau Insurance. (Dkt. 57, Ex. A at 29:10-18; Dkt. 51, Ex. D at
51:10-25). In contrast, Mr. Bailey testified that the “pan debris” was “gone through”
and “there was nothing in the pan debris that would necessitate retaining, wood,
some wiring, screws, that would be all that I recall.” (Dkt. 47, Ex. A at 47:8-17.)
According to Mr. Bailey and Mr. Waite, whatever was not collected from the
scene during the initial inspection was preserved there for future inspections. (Dkt.
57, Ex. A at 98:23-99:2; Dkt. 57, Ex. D at 57:19-23.) There was a second multiparty
scene investigation on May 12, 2011, where Mr. Bailey for the Plaintiffs and Mr.
Waite for Farm Bureau Insurance tested the cooling unit collected on March 25,
2010 and disqualified it as the cause of the fire. (Dkt. 43, Ex. B-1 at 193:9-195:11;
Dkt. 43, Ex. B-3, p. 15.) The Defendants’ fire investigator, Mr. Bloom, was unable to
attend this second inspection due to inclement weather. (Dkt. 43, Ex. B-1 at 134:5-

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13.) A third inspection was scheduled for July 18, 2011 but cancelled because Mr.
Bloom was unable to attend. (Dkt. 50, Ex. K.)
In the end, Mr. Bloom never did inspect the scene or interview any eyewitnesses
in this case. However, on August 16, 2011, Mr. Bloom traveled to Michigan on
behalf of Defendants where he inspected and photographed all the evidence Mr.
Bailey and Mr. Waite collected and stored during the initial investigation.2 (Dkt. 43,
Ex. B-1 at 145:17-146:10, 150:10-19, 210:1-2.) This examination of evidence did not
take place at the fire scene, but at a storage facility in Michigan. (Dkt. 43, Ex. A at
74:7-25.)
Mr. Bailey released his report of the investigation on May 14, 2010. (Dkt. 57, Ex.
A at 64:3-8; Dkt. 50, Ex. G, p. 17.) In it, Mr. Bailey attributed the fire to “a failure of
the Sourdillion LP gas valve” in the refrigerator that “allowed highly volatile
liquefied petroleum gas to escape, puddle and be ignited by the operating burner.”
(Dkt. 50, Ex. G, p. 16.) At some point prior to the release of Mr. Bailey’s report,
Defendants had announced a voluntary recall that included Norcold Model 462
refrigerators.3 (See Dkt. 43, Ex. A, pp. 15-16.) These refrigerators were recalled to
replace their gas valves in order to avoid a risk of fire. (See id.) Mr. Bailey did not

Ms. Bligh, Mr. Bailey, Mr. Waite, and Mr. Bloom were present at this examination. (Dkt. 57, Ex. D
at 30:15-21.) Evidence was removed from shrink wrap and Mr. Bloom photographed what had been
collected. (Dkt. 43, Ex. A at 146:3-12.) According to Mr. Waite, neither Mr. Bloom nor anyone else
suggested returning to the scene to try to locate and retrieve the Valve or any other potentially
missing evidence. (Dkt. 57, Ex. D at 64:18-25.) Mr. Bailey concurs, stating that had Mr. Bloom
requested to visit the scene to locate and inspect remaining evidence, “it would have been done.”
(Dkt. 57, Ex. A at 101:1-102:11.)
3 The record does not reveal when the recall was first announced but Mr. Bailey includes it in his
May 14, 2010 report as supporting evidence for his theory of causation. (Dkt. 50, Ex. G, p. 16-23.)
The voluntary recall is apparently ongoing. Norcold, Product Recalls, http://www.norcoldrecall.com/
(last visited Nov. 10, 2014.) 
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locate or identify the Valve when he first inspected the scene, but was aware of the
Valve’s potential defect.4 (Dkt. 57, Ex. A at 44:6-10; 89:13-16.)
From the evidence presented in the record, the investigators were unable to
locate either the Valve itself or any of its related componentry. Not having been
found, these items were not documented or removed from the scene. No fire
investigator mentions having observed the Valve either at the scene, in photographs
taken of the scene, or at the subsequent examination of collected evidence. (See Dkt.
57, Ex. A at 93:4-9; Dkt. 57, Ex. D at 66:18-22; Dkt. 43, Ex. B-1 at 215:2-14.) While
acknowledging that “we don’t know what survived the fire,” Mr. Bloom nevertheless
states that the Valve and approximately 28 related components “could have and
should have survived the fire” and “would have fallen in the [bottom] pan”
documented in photographs taken at the scene by Mr. Bailey or Mr. Waite (Dkt. 43,
Ex. B-1 at 178:25-179:14, 213:3-216:23.) Mr. Bloom has not examined the interior of
the bottom pan but he postulates that these components including the Valve
probably survived the fire and are in the pan because the pan survived.5 (Id. at
248:15-18.)
Mr. Bailey states that the Valve was not present in the pan on March 25, 2010
and that it did not survive the fire because it was made of aluminum and would

According to Mr. Bailey, a fire occurs when there is “a failure in the valve where the LP gas is
leaking and the LP gas makes contact with the vapors with the flame…” (Dkt. 57, Ex. A at 38:2339:2.)
5 Mr. Bloom maintains that because “the bottom pan exists and that the electrical is still there and
that we have some gas fittings that are still there” it can be assumed that “there are other things
that are still there.” (Dkt. 43, Ex. B-1 at 213:7-10.) The bottom pan was not collected during the
initial investigation because neither Mr. Bailey nor Mr. Waite thought it was relevant to the case
given the lack of burn marks on it. (Dkt. 57, Ex. A at 33:1-23, 41:2-15, 45:3-24; Dkt. 57, Ex. D at
66:23-67:2.) As mentioned, Mr. Bailey states that the debris inside the pan “was gone through and
there was nothing in the pan debris that would necessitate retaining.” (Dkt. 57, Ex. A at 47:8-17.)
4

7

have been consumed. (See Dkt. 57, Ex. A at 44:8-10, 46:10-25, 89:24; 92:23-93:14.)
Mr. Bloom agrees that the Valve was made of aluminum, but asserts that the fire
was not sufficiently hot to consume the Valve’s brass fittings, copper tubing, and
steel spring components.6 (Dkt. 43, Ex. B-1 at 160:9-11, 175:21-176:9.) Therefore,
the Valve and “the screws for the mounts, all of that would have survived the fire,
they would have fallen in the [bottom] pan” documented in photographs taken at
the fire scene. (Id. at 179:5-14.) According to Mr. Bloom, the parties cannot know
with certainty what survived the fire because the scene was not documented
properly; specifically that the interior of the pan was not photographed. (Id. at
213:3-10; 248: 15-18.) Mr. Bailey counters in his affidavit that the bottom pan was
searched and did not “contain any components of the refrigerator at issue in this
case.” (Dkt. 50, Ex. M ¶ 13.) Mr. Bloom offers no explanation as to why neither he,
nor any other inspector employed by Defendants, made an effort to examine,
photograph, or document the steel pan or any of its possible contents.
Although Mr. Waite noted that the fire’s “most probable cause would be the
refrigerator,” he ultimately did not make a final determination because neither a
mechanical nor electrical engineer was available during the inspection to eliminate
other possible causes. (Dkt. 57, Ex. D at 32:20-25, 59:8-11.) Mr. Waite was

Defendants do not specify which of the Valve’s approximately 28 related components should have
been retained or documented. Defendants do not explain what any of the related components, or the
steel pan that held them, could have shown regarding whether the Valve was defective. When asked
directly about the evidentiary value of the “bottom pan or control assembly,” Mr. Bloom asserts that
examining the Valve itself would reveal whether it or “the steel next to it” was damaged. (Dkt. 43,
Ex. B-1 at 200:4-23.) As for the components, Mr. Bloom merely states that “[t]here’s a lot of burn
patterns that can be interpreted from this area with these 28 to 27 components.” (Id.) Whatever the
alleged importance of the related componentry, Defendants maintain that it is the Valve that is “the
key evidence in this case” without which Defendants cannot put on their defenses. (Dkt. 52, p. 2.)
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unfamiliar with the refrigerator’s valve component at the time of the initial
inspection and states that he relied on Mr. Bailey’s expertise with regard to the
refrigerator. (Id. at 15:14-18, 33:4-35:7, 70:8-12.) Mr. Bloom has not made a
determination regarding the cause of the fire in this case. (Dkt. 43, Ex. B-1 at 84:121.)
II.

ANALYSIS

Defendants seek to have Plaintiffs’ case dismissed because they allege that
Plaintiffs failed in their duty to identify, document or preserve the Valve or its
related components.7 (Dkt. 43, p. 3.) Plaintiffs took hundreds of photographs of the
fire scene. (Dkt. 57, Ex. A at 47:20-22, 69:8-9.) Moreover, Plaintiffs counter that
they did not have control of the scene and, even if they had, the Valve could not be
documented or preserved because it did not survive the fire. (Dkt. 50, p. 2.) Finally,
the bottom pan and surrounding area were searched and some loose debris was
collected, but none of the related components were found. (Dkt. 50, Ex. M ¶13; Dkt.
57, Ex. D at 39:22-40:8.) Plaintiffs further contend that they had no mal-intent, and
their conduct does not merit the extreme sanction of dismissal. (Id.)

Defendants rely in part on a Michigan Court of Appeals case, Citizens Ins. Co. of America v. Juno
Lighting, Inc., 635 N.W.2d 379 (Mich. Ct. App. 2001), in support of their assertion that dismissal is
appropriate in this case. (Dkt. 43, p. 8.) While federal law controls here, this case is easily
distinguishable. In Juno Lighting, Plaintiff’s fire investigator did not inform Defendant of the fire
investigation and the scene was not preserved because the damaged house was soon repaired. 635
N.W.2d at 238. Here, not only were Defendants informed of the multiparty fire investigation and
given ample opportunity to hire their own expert beforehand, the scene was apparently preserved
indefinitely after the fire to allow for subsequent inspections. (Dkt. 43, Ex. B-2, pp. 3-4; Dkt. 57, Ex.
A at 98:23-99:2.)

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A. Legal Standard
Federal law of spoliation governs in this case. See Adkins v. Wolever, 554 F.3d
650, 652 (6th 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.” Forest Labs., Inc. v. Caraco Pharm. Labs.,
Ltd., 06-13143, 2009 WL 998402 at *1 (E.D. Mich. Apr. 14, 2009) (quoting West v.
Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)). A federal court has
“broad discretion to craft proper sanctions for spoliated evidence.” Adkins, 554 F.3d
at 651. Such sanctions include “dismissing a case, granting summary judgment, or
instructing a jury that it may infer a fact based on lost or destroyed evidence.” Id. at
653.
Rather than impose bright-line rules, the Sixth Circuit allows for “a case-by-case
determination whether sanctions are necessary, and if so, what form they must
take.” Automated Solutions Corp. v. Paragon Data Sys., Inc., 756 F.3d 504, 516 (6th
Cir. 2014). In Beaven v. U.S. Dep’t of Justice, 622 F.3d 540 (6th Cir. 2010), the Sixth
Circuit adopted a fact-specific inquiry guided by a conjunctive three-factor test that
must be satisfied before a district court can sanction a litigant for spoliation of
evidence:
First, the party with control over the evidence must have had an obligation to
preserve it at the time it was destroyed. Second, the accused party must have
destroyed the evidence with a culpable state of mind. And third, the
destroyed evidence must be relevant to the other side’s claim or defense.
Byrd v. Alpha Alliance Ins. Corp., 518 F. App’x 380, 383-84 (6th Cir. 2013) (citing
Beaven, 622 F.3d at 553). While the Sixth Circuit has not explicitly articulated the
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required standard of proof for the party seeking sanctions, other courts have made
it clear that these factors must be established by a preponderance of the evidence.
E.g., Byrd, 518 F. App’x at 383-84; Dilworth v. Goldberg, No. 10-2224, 2014 WL
998422 at *1 (S.D.N.Y. Mar. 17, 2014); Town & Country Bank, Inc. v. State Auto
Prop. & Cas. Ins. Co., No. 12-957, 2014 WL 495168 at *2 (D. Utah Feb. 6, 2014);
Linnebur v. United Tel. Ass’n, Inc., No. 10-1379, 2012 WL 2370110 at *1 (D. Kan.
June 21, 2012); Tetsuo Akaosugi v. Benihana Nat. Corp., No. 11-01272, 2012 WL
929672 at *3 (N.D. Cal. Mar. 19, 2012).
As discussed in greater detail below, it is clear that Defendants are unable to
meet the first and second Beaven factors. As to the third Beaven factor, there is no
dispute that Plaintiffs’ claim rests on the failure of the Valve and that its alleged
loss or destruction is relevant to the defense. (Dkt. 1, ¶ 10.) As to the first and
second factors, Defendants’ primary argument is that Plaintiffs were negligent in
their failure to preserve the Valve or its related components and are thus
responsible for its loss. Although Defendants have produced some evidence
regarding the collection of evidence at the fire scene, this proof is not sufficient to
establish that the Valve or any of its components survived the fire or that Plaintiffs
ever had custody and control of the fire scene or the evidence collected at the initial
multiparty inspection. Moreover, because there is no evidence that the Valve or its
components survived the fire, there is also no evidence showing that Plaintiffs lost,
failed to preserve, or destroyed any of these items with any “culpable state of mind.”
Finally, even if Plaintiffs were negligent failing to collect or document the Valve or

11

its components at the fire scene, such a degree of fault would not merit the severe
sanction of dismissal.
B. Application of the Beaven Spoliation Factors
1. Plaintiffs’ Control of the Evidence
The parties dispute whether Plaintiffs had control of the scene in the wake of the
fire and thus should have secured the Valve and its related components. To satisfy
this factor, Defendants must first show that Plaintiffs “had an obligation to
preserve [the spoliated evidence] at the time it was destroyed” because “[i]t goes
without saying that a party can only be sanctioned for destroying evidence if it had
a duty to preserve it.” Coach, Inc. v. Dequindre Plaza, L.L.C., No. 11-14032, 2013
WL 2152038 at *7 (E.D. Mich. May 16, 2013). At the same time, however, “the duty
to preserve evidence does not extend to evidence which is not in a litigant’s
possession or custody and over which the litigant has no control.” Id. at *8 (quoting
MacSteel Inc. v. Eramet N. Am., No. 05-74566, 2006 WL 3334019 at *4 (E.D. Mich.
Nov. 16, 2006)).
While it may be true that Plaintiffs had some input in determining which
components of the refrigerator were collected and stored by Farm Bureau
Insurance, the record demonstrates that Plaintiffs were not in control of the fire
scene. Farm Bureau Insurance was the motorhome’s insurer. (Dkt. 50, Ex. A.) As
the insurer, upon receipt of Mr. Bailey’s request for a multiparty inspection, Farm
Bureau immediately asserted its authority over the motorhome portion of the fire
scene, sent its own representative to collect and store evidence from the motorhome,

12

and exercised custody and control over that evidence. It retains such control over
the collected evidence to this day.8
Mr. Waite acknowledges that he collected and documented the evidence on
behalf of Farm Bureau Insurance, who controlled the fire scene as the insurer. (Dkt.
57, Ex. D at 46:8-49:21.) Ms. Bligh informed Mr. Bailey and Defendants via email
on March 10, 2010 that Mr. Bailey would not be allowed “to take possession of any
part of the trailer that cannot be tested on site” and Farm Bureau Insurance would
collect, take possession of and store any such evidence. (Dkt. 50, Ex. F.) Any
destructive testing of evidence would have to be approved by Farm Bureau
Insurance. (Id.) Other than Mr. Waite, all inspectors needed to obtain permission
from Farm Bureau Insurance prior to inspecting the fire scene. (Dkt. 43, Ex. B-1 at
116:10-117:22; Dkt. 57, Ex. D at 46:2-7.) Moreover, any subsequent inspection of the
evidence collected from the fire scene had to be arranged through Mr. Waite, and
must still be so arranged. (See Dkt. 43, Ex. B-1 at 74:7-16; Dkt. 57, Ex. A at 100:1116; Dkt. 57, Ex. D at 30:19-25.)
Defendants argue that Plaintiffs alone dictated what evidence was retained and
therefore exercised sufficient control to create a duty to preserve the Valve and its
related components. (Dkt. 52, p. 2.) While Mr. Bailey acknowledges that he was not
prevented from selecting evidence to be collected, he also states that he was not

Mr. Waite and Mr. Bailey both state in their depositions that, to the best of their knowledge, the
fire scene was preserved indefinitely for future inspections. (See Dkt. 57, Ex. A at 98:17-99:2, 105:8107:13; Dkt. 57, Ex. D at 52:16-53:13.) Mr. Waite asserts that as far as he is aware, “nothing had
been removed from the trailer or the barn since the fire” and whatever was not collected or preserved
“was covered and left at the scene.” (Dkt. 57, Ex. D at 53:3-13.) The question of who is currently in
control of the motorhome fire scene is not clear. Mr. Waite suggests in his deposition that the fire
scene “was turned back over to the Vores and the Smiths” but “it would be appropriate for anyone
that’s going to go back out there to contact the other investigators.” (Id. at 53:17-54:4.)
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“calling the shots.” (Dkt. 57, Ex. A at 43:14-44:7, 48:6-16.) Mr. Waite characterizes
the inspection as a joint effort. (Dkt. 57, Ex. D at 15:14-15.)
In support of their contention, Defendants rely solely on Mr. Bloom’s deposition.
(Id.) Mr. Bloom asserts that Mr. Bailey was “running the show,” but also
acknowledges that Mr. Bailey was “not allowed to maintain the custody” of any
evidence. (Dkt. 43, Ex. B-1 at 138:4-16.) However, Mr. Bloom was not present at any
of the onsite inspections and acknowledges that his version of events is only what
he was told. (Id.) Without more, the Court cannot give significant weight to
Defendants’ argument.
Defendants also maintain that when the offending party does not have custody
of the evidence, control alone is sufficient to establish a duty to preserve. (Dkt. 52,
pp. 3-4.) In this Circuit, a duty to preserve evidence has been found where the
evidence was destroyed while in the custody of a third party, but under
distinguishable circumstances. In Arch Ins. Co. v. Broan-NuTone, LLC, 509 F. App’x
453 (6th Cir. 2012), a fire was attributed to a defective fan/light assembly. The
assembly was collected during a formal site investigation and examined later by all
parties. Id. at 456. The assembly was then stored with a third-party administrator
who, in an effort to avoid incurring storage fees, deliberately discarded the evidence
without consulting the parties. Id. The district court held that Plaintiffs were
negligent and, although Defendants requested a series of spoliation sanctions,
imposed only a permissive adverse-inference instruction. Id. at 458-59. On appeal,

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Plaintiffs did not contest that they were negligent but did dispute whether the
sanction imposed was appropriate. Id. at 458. The Sixth Circuit affirmed. Id.
The circumstances of this case are not analogous. In Arch, the defective
assembly clearly survived the fire, and it was collected and eventually destroyed. Id.
at 456. Here, as discussed below, there is no evidence that the Valve or its related
components survived the fire – no one who has examined the fire scene claims that
they did – and thus there is no evidence that the Valve or its related components
was ever present in an identifiable condition at the fire scene at all, let alone
collected and stored by Farm Bureau Insurance.9 In addition, there are no
allegations here that any identified and stored evidence was purposely discarded or
destroyed. Finally, in Arch, the defendants explained what tests could have been
performed on the discarded evidence and how the results would have affected the
ongoing litigation. Id. Defendants in this case have offered no such detail.10

Mr. Waite asserts that some “loose debris” was collected in the area of the bottom pan where the
Valve and its related components were apparently housed, but does not know if any of the Valve’s
components were among this debris. (Dkt. 57, Ex. D at 39:22-40:8.) This debris was available for
inspection by Mr. Bloom who did not identify either the Valve or any of its components during his
examination. (See Dkt. 43, Ex. B-1 at 145:17-146:10, 150:10-19, 210:1-2.) Mr. Bailey testified that the
“pan debris” was “gone through” and “there was nothing in the pan debris that would necessitate
retaining, wood, some wiring, screws, that would be all that I recall.” (Dkt. 47, Ex. A at 47:8-17.)
Only Mr. Bloom, who never inspected the fire scene, claims that the Valve and its components
probably survived the fire and would have fallen into the bottom pan, but he is not certain. (See Dkt.
43, Ex. B-1 at 175:2-8, 213:3-10.) Mr. Bloom bases his opinion on photographs of the refrigerator’s
bottom pan taken at the fire scene by Mr. Bailey and Mr. Waite, neither of whom claims to have seen
the Valve or its related components. (Id. at 179:5-24.) There are no photographs depicting the Valve
or its related components; there are photographs of the exterior of the bottom pan that, according to
Mr. Bloom, would contain any components that survived the fire. (Dkt. 43, Ex. B-1 at 197:11-24.)
For reasons that are unclear, Mr. Bloom had never visited the site to retrieve the bottom pan and
look inside it.
10 Defendants assert that without the remains of the Valve or “the related componentry,” they cannot
“ascertain burn patterns.” (Dkt. 52, pp. 7-8.) It is not clear, however, why such burn patterns would
constitute conclusive evidence or what examining “the related componentry” would reveal. (See Dkt.
43, Ex. B-1 at 200:4-23.) 
9

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In Coach, Inc. v. Dequindre Plaza, a manufacturer of designer goods sued the
owners of a Flea Market where alleged counterfeit merchandise was being sold.
During a raid, several items were seized by local police but retained by the
plaintiff’s private security firm. Id. at *3-6. The defendants sought to examine some
of the seized items, but the security firm had shredded the products. Id. at *5.
Although sanctions were ultimately not imposed, the court found that the plaintiff
had a duty to preserve the evidence because of the plaintiff’s relationship with the
security firm gave it control over the evidence despite not being in possession of it at
the time of its destruction. Id. at *9, 15.
The relationship between Plaintiffs and Farm Bureau Insurance is
distinguishable. Mr. Waite retains control and custody of all the evidence collected
during the initial multiparty investigation on behalf of Farm Bureau Insurance.
(Dkt. 57, Ex. D at 24:22-25:13.) The fire scene is apparently still preserved,
although the motorhome is apparently under the control of Farm Bureau Insurance
or its owners, Mr. and Mrs. Vores. (See Dkt. 57, Ex. D at 52:16-53:4.) Farm Bureau
Insurance does not represent Plaintiffs. Plaintiffs have no control over the
preservation of any evidence in possession of Farm Bureau Insurance or over any of
the motorhome debris which is still preserved at the fire scene. Plaintiffs do not
have sufficient control over the refrigerator fire scene and the collected evidence to
warrant a finding that Plaintiffs have a duty to preserve that evidence. Thus,
Defendants have not satisfied the first Beaven spoliation factor.

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2. Plaintiffs’ Culpability
Defendants argue that Plaintiffs’ case merits dismissal because Plaintiffs
were negligent in their failure to identify, collect or preserve the Valve and its
related components. (Dkt. 52, p. 5.) In this Circuit, Defendants “must show that the
evidence was destroyed with a culpable state of mind.” Adkins, 692 F.3d at 504.
Defendants can establish a “culpable state of mind” by showing that “the evidence
was destroyed knowingly even if without intent to breach a duty to preserve it, or
negligently.” Beaven, 622 F.3d at 554. While spoliation sanctions have been imposed
in cases of ordinary negligence,11 the Court must strike a balance between a
spoliation sanction’s functions of fairness and punishment. Byrd, 518 F. App’x at
385. Thus the choice of an appropriate sanction should correspond to the offending
party’s degree of culpability, with more severe sanctions reserved for parties who
exhibit bad faith. Id.
Because Defendants have not established, beyond mere speculation, that the
Valve and its related components survived the fire and were lost or destroyed
through Plaintiff’s actions, they have not shown that Plaintiffs were negligent.

In the Sixth Circuit, courts have imposed an adverse inference or rebuttable presumption as a
sanction for negligent conduct, and also sometimes in cases of bad faith. E.g., Beaven, 622 F.2d at
553-556 (affirming a non-rebuttable adverse inference for negligent spoliation of a folder); Arch, 509
F. App’x at 458-59 (“a permissive adverse-inference instruction is adequate punishment for
Plaintiffs’ negligent conduct.”); In re Black Diamond Min. Co., LLC, 514 B.R. 230, 242 (E.D. Ky.
2014) (“Generally, a permissive or rebuttable adverse inference instruction is adequate punishment
for negligent spoliation.”); McCarty v. Covol Fuels No. 2, LLC, 978 F.Supp.2d 799, 814 (W.D. Ky. Oct.
16, 2013) (“The usual sanction for spoliation of evidence is an adverse inference instruction to the
jury which generally requires bad faith.”); Flagg v. City of Detroit, No. 05-74253, 2011 WL 4634249
at *19-20 (E.D. Mich. Aug. 3, 2011) (a permissive adverse inference instruction is necessary because
of “the severity of the City’s malfeasance.”)

11

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According to Defendants’ investigator, Mr. Bloom, the Valve and at least some of its
related components must have survived because the bottom ban that housed them
was photographed at the fire scene. (Dkt. 43, Ex. B-1 at 212:9-21.)
Mr. Bailey asserts that he did not identify the Valve or request its collection during
the initial investigation because it was “consumed in the fire” (Dkt. 57, Ex. A at
44:8-10.) Furthermore, Mr. Bailey states that the bottom pan and the surrounding
area were searched but neither the Valve nor any of its related components were
found. (Dkt. 50, Ex. M at ¶ 13.) Mr. Waite notes that “several parts” were destroyed
by fire and could not be collected. (Dkt. 57, Ex. D at 67:3-11.)
Defendants rely on the testimony of Mr. Bloom, their fire inspector, despite
the fact that he has never inspected the apparently still-preserved fire scene.
According to Mr. Bloom, the Valve and its related components “would have been at
the bottom of the refrigerator” and any surviving componentry including the Valve
“would have fallen in the [bottom] pan.” (Id. at 179:9-14, 212:9-21.) Between 20 and
25 photographs exist of the exterior of the refrigerator’s bottom pan. (Id. at 212:1314.) Mr. Bloom has not seen the interior of the pan where he claims the remains of
the Valve and any related components would be. (Id. at 248:15-18.) Mr. Bloom,
however, argues that because the bottom pan survived, “you have to assume that
there are other things that are still there.” (Id. 213:3-10.) Furthermore, Mr. Bloom
states that “some logical deductions can be made” that the Valve was “at least
slightly damaged” even though “there’s no documentation of whether it’s still
partially intact or completely destroyed” after the fire. (Id. at 205:10-17.)

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Mr. Bailey and Mr. Waite searched the trailer debris including the
refrigerator’s bottom pan and the surrounding area without recognizing the Valve
or any of its related components. (See Dkt. 57, Ex. A at 46:6-25, 74:5-15; Dkt. 57, Ex.
D at 16:16-24, 18:8-13, 39:22-40:8.) In fact, no witnesses claim to have seen the
Valve or its debris and no photographs, even those taken of the area where the
Valve and these components would have been, show the Valve, related components
or recognizable pieces of them. (See Dkt. 43, Ex. B-1 at 171:5-8, 220:14-221:7; Dkt.
57, Ex. A at 60:10-25; Dkt. 57, Ex. D at 66:18-22.) The extant photographs
apparently only show the exterior of the bottom pan. (Dkt. 212:15-21.) While
Defendants would be free to explore this issue with Mr. Bloom, Mr. Bailey and Mr.
Waite at trial, their suspicion that the Valve and any related components survived
the fire based on Mr. Bloom’s speculation about what might have fallen into the
bottom pan is not sufficient to justify outright dismissal of this lawsuit.
Furthermore, even if there was evidence of the Valve or any of its related
components being found at the scene – and Plaintiffs were negligent for not
documenting or collecting this componentry – dismissal is not warranted in this
case. Defendants assert that “the only appropriate remedy [in this case] is dismissal
of Plaintiffs’ claims” and suggest no alternative sanctions. (Dkt. 43, p. 2.) Dismissal,
however, is a severe and extreme sanction. Defendants do not cite, nor could the
Court find, a single case in the Sixth Circuit where dismissal was imposed as a
spoliation sanction for ordinary negligence. Cf, e.g., Byrd, 518 F. App’x at 385
(overturning grant of summary judgment as too severe where Plaintiffs negligently

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destroyed evidence). Under the law of this Circuit, dismissal is typically justified
only in circumstances of bad faith. E.g., id.at 386. When the conduct at issue is less
culpable, dismissal may still be appropriate but only to avoid circumstances where
“significant prejudice results from the evidence’s destruction.” Id. (emphasis added.)
Defendants claim that they are significantly prejudiced without the Valve
because they cannot show that it was not the cause of the fire. (Dkt. 43, p. 1.) In
considering relative prejudice arising from the lack of this evidence, it should be
remembered that the Valve and its related componentry are equally important
evidence to all parties, yet no party has been able to examine any of these parts.
Plaintiffs, therefore, do not benefit significantly from the absence of the Valve and
its componentry at the Defendants’ expense because no party has been able to test
or examine these parts in an effort to determine their role, if any, in causing the
fire. Finally, Defendants have not been blindsided by Plaintiffs’ theory of causation;
they became aware of Plaintiffs’ theory of causation in May 2010, and Defendants’
own ongoing voluntary recall targeting these valves was launched prior to the
release of Plaintiffs’ report.12
III.

CONCLUSION

For the reasons stated above, Defendants’ motion for sanctions due to spoliation
of evidence (Dkt. 43) is DENIED. The parties are hereby ORDERED to attend

Defendants state that they “closed their file” on this case after receiving an email dated April 28,
2010 from Mr. Bailey stating that Mr. Bailey was not considering Defendants as possible negligent
parties. (Dkt. 59, pp. 5-6.) As a result, Defendants claim that they had no notice that they were
possibly responsible for the fire until Plaintiffs’ counsel called them in January 2011. (Id. at 6.) Even
if Defendants trusted the assertions of Mr. Bailey, who was not Plaintiffs’ legal representative,
Defendants were notified anew when they received Mr. Bailey’s report stating Plaintiffs’ theory of
causation clearly implicating Defendants less than one month after the April 28 email.
12

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private mediation within 30 days of this order under the terms of their March 24,
2014 stipulated agreement.
SO ORDERED.
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE

Dated: November 10, 2014

Certificate of Service
I hereby certify that this Order was electronically submitted on November 10, 2014,
using the CM/ECF system, which will send notification to each party.
By: s/A. Chubb
Case Manager

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