BROWN v. CERTAIN UNDERWRITERS AT LLOYDS, LONDON et al
MEMORANDUM AND ORDER THAT THAT PLAINTIFF'S OBJECTION IS OVERRULED. DEFENDANTS' MOTION FOR SPOLIATION SANCTIONS IS GRANTED IN PART AND DENIED IN PART; ETC.. SIGNED BY HONORABLE J. CURTIS JOYNER ON 6/9/17. 6/12/17 ENTERED AND E-MAILED.(jl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
CERTAIN UNDERWRITERS AT
LLOYDS, LONDON, ET AL.
June 9, 2017
Before the Court are Plaintiff’s Objection to Request to
Produce Cell Phone for Examination by Expert (Doc. No. 27),
Defendants’ Response to Plaintiff’s Objection to Request to
Produce Cell Phone for Examination by Expert, and Defendants’
Resulting Motion for Spoliation Sanctions (Doc. No. 29),
Defendants’ Supplemental Memorandum in Support of Defendants’
Motion for Spoliation Sanctions (Doc. No. 36), Plaintiff’s
opposition thereto (Doc. No. 39), and Defendants’ reply in
further support thereof (Doc. No. 41).
For the reasons below,
Plaintiff’s Objection is overruled and Defendants’ Motion is
granted in part and denied in part.
Facts and Procedural Background
This case arises out of an incendiary fire that occurred on
May 1, 2015 at Plaintiff’s property located at 1220 South 50th
Street in Philadelphia.
(Complaint (“Compl.”), Doc. No. 1-1, at
The Plaintiff, Corey Brown (“Mr. Brown”), filed a lawsuit
in state court alleging that his insurers, Defendants Certain
Underwriters at Lloyds, London and Underwriters at Lloyds, failed
and refused to compensate him for losses incurred as result of
that fire in breach of his insurance policy.
the case to federal court and
promptly filed their Answer to
Plaintiff’s Complaint in June 2016.
After several months of
discovery, Defendants moved for leave to amend its answer to
assert various counterclaims.
Defendants sought leave to allege,
inter alia, that Plaintiff breached the terms of his insurance
policy contract and violated the Pennsylvania Insurance Fraud
(Doc. No. 23).
The Court granted leave over
Plaintiff’s objection, and Defendants filed its amended answer on
March 24, 2017.
(Doc. No. 30; Doc. No. 31).
Meanwhile, on March 9, 2017, Defendants requested that Mr.
Brown produce on March 21, 2017 the cell phone used by him at the
time of the May 1, 2015 fire.
Defendants suspect that Mr. Brown
was involved in setting the fire to his property himself, (Doc.
No. 29, at ¶ 14), and so they are interested in examining his
cell phone to determine whether it contains any evidence that
would tend to corroborate their suspicion.
This request for
production should not have come as a surprise to Mr. Brown, as
the Defendants had previously announced their interest in that
cell phone as far back as August 12, 2015.
On that date, before
the filing of any court proceedings, counsel for Defendants took
the testimony of Mr. Brown under oath, in order to preliminarily
investigate Mr. Brown’s insurance claim, and requested on the
record that Mr. Brown preserve any evidence existing on his cell
phone for potential future discovery.1
(Doc. No. 29-3; Doc. No.
On March 20, 2017, the day before Mr. Brown was scheduled to
produce his cell phone, Mr. Brown filed an Objection stating that
he lost the cell phone “months ago.”
(Doc. No. 27).
thereafter moved for spoliation sanctions.
(Doc. No. 29).
Plaintiff failed to respond within the time provided by the Local
Rules, the Court ordered Plaintiff to file a brief in opposition
According to a transcript of that proceeding, Mr. Brown and
counsel for the Defendants had the following exchanges regarding Mr.
Brown’s cell phone:
Q. . . . I’ll just ask that you not delete anything or
erase anything with respect to your phone.
A: No problem. . . .
Q: . . . [M]y point is that what I don’t want you to do
between now and the time this thing is resolved –- I don’t
want you to delete or erase anything. You can be guided by
your attorney’s instructions in that regard, but I’m just
making a specific formal request that this information and
documents in your phone data be preserved. Fair enough?
Q. . . . Here’s the point, Mr. Brown: I haven’t made
actually a formal request for any of that information or
that data, and I may not. So, my point is just that it not
disappear, so if I would make a request through your
attorney, it would be limited and it would not –- I would
not be interested in any way in your personal information.
A: And I have no problem with that. . . .
See Examination Under Oath (“EUO”) Testimony, August 12, 2015, Page
248, Line 21 though Page 250, Line 24 (Doc. No. 41).
or risk the Court granting Defendants’ Motion as uncontested.
(Doc. No. 38).
Plaintiff thereafter filed a response in
opposition and Defendants filed a reply memorandum in further
(Doc. No. 39; Doc. No. 41).
“[T]here is some authority suggesting that spoliation of
evidence, and the sanctions that such spoliation may give rise
to, are matters appropriately governed by state law.”
Milwaukee Electric Tool Corp., 13 F.3d 76, 78 (3d Cir. 1994).
“On the other hand, there is also authority suggesting that the
possible preclusion of evidence in cases such as this is governed
by federal law as part of the inherent power of a district court
to sanction parties.”
Id.; see also Adkins v. Wolever, 554 F.3d
650, 652 (6th Cir. 2009) (applying federal law for spoliation
sanctions); King v. Illinois Cent. R.R., 337 F.3d 550, 556 (5th
Cir. 2003) (same).
We will follow the Third Circuit’s lead in
considering precedent from both jurisdictions in our discussion
of spoliation and its sanctions.
See Capogrosso v. 30 River
Court E. Urban Renewal Co., 482 F. App’x 677, 682 (3d Cir. 2012).
In any event, the parties have cited no case law—and the Court
has found none—suggesting that there are any material differences
between state and federal law.
Spoliation occurs where “the evidence was in the party's
control; the evidence is relevant to the claims or defenses in
the case; there has been actual suppression or withholding of
evidence; and, the duty to preserve the evidence was reasonably
foreseeable to the party.”
Bull v. United Parcel Serv., Inc.,
665 F.3d 68, 73 (3d Cir. 2012).
Failure to produce evidence can
have the same practical effect as destroying it and so, “under
certain circumstances, nonproduction of evidence is rightfully
characterized as spoliation.”
The determination of an appropriate sanction for spoliation,
if any, rests with the discretion of the trial court.
Fin. Grp. LLC v. Watchdog, No. 12-CV-1247, 2014 WL 1327584, at
*10 (E.D. Pa. Apr. 3, 2014).
The Court has authority to sanction
litigants from the joint power of the Federal Rules of Civil
Procedure and the Court’s inherent powers.
sanctions for spoliation include dismissal of a claim or granting
judgment in favor of the prejudiced party, suppression of
evidence, an adverse inference, fines, and attorneys’ fees and
Dismissal or suppression of evidence are the most
In considering what sanctions to impose,
the trial court should consider “(1) the degree of fault of the
party who altered or destroyed the evidence; (2) the degree of
prejudice suffered by the opposing party; and (3) whether there
is a lesser sanction that will avoid substantial unfairness to
the opposing party and, where the offending party is seriously at
fault, will serve to deter such conduct by others in the future.”
Bull, 665 at 73 n.5; Schmid, 13 F.3d at 79; see also Schroeder v.
Dep’t of Transp., 551 Pa. 243, 250-51 (1998) (adopting the Third
Circuit’s approach to the spoliation of evidence in Schmid).
Whether Spoliation Occurred
Spoliation occurs where (1) the evidence was in the party's
control, (2) the evidence is relevant to the claims or defenses
in the case, (3) there has been actual suppression or withholding
of evidence, and (4) the duty to preserve the evidence was
Bull, 665 F.3d at 73.
We need not linger long on the first, second, and fourth
Mr. Brown obviously had control over his own cell
The Court also finds that the evidence lost is relevant
to this case.
The contents of Mr. Brown’s cell phone, including
location information, the substance of text messages, and search
history would be important evidence as to whether Mr. Brown was
involved in setting the May 1, 2015 fire, which is hugely
relevant to both parties’ claims.
It is also plain that the duty
to preserve his cell phone and its contents was reasonably
foreseeable to Mr. Brown.
In the course of examining Mr. Brown
under oath before this litigation commenced, counsel for
Plaintiff’s objection to Defendants’ Request for Production
(Doc. No. 27) is wholly without merit and is overruled. Plaintiff
objects to producing his new phone, which he acquired in October 2016,
but he is objecting to a request not made. Defendants’ RFP is on its
face limited to those devices used by Plaintiff “at the time of the
subject incident (May 1, 2015).” (Doc. No. 29-4).
Defendants requested on the record that Mr. Brown preserve his
cell phone and the data included in it for potential future
(Doc. No. 29-3).
to that request.
Mr. Brown acknowledged and acceded
See supra, n.1.
Whether there has been actual suppression or withholding of
evidence is harder to say.
“Withholding requires intent,” Bull,
665 F.3d at 79, and Mr. Brown has submitted a signed affidavit
swearing that he “lost” the phone in October 2016 and “did not
intentionally dispose of it.”
(Doc. No. 39).
See also Orologio
of Short Hills Inc v. The Swatch Grp. (U.S.) Inc., 653 F. App’x
134, 145 (3d Cir. 2016) (“Spoliation of evidence requires ‘bad
faith,’ not mere negligence . . .”); Pyeritz v. Commonwealth, 613
Pa. 80, 89, 32 A.3d 687, 692 (2011) (negligent spoliation of
evidence is not a viable cause of action in Pennsylvania).
The Court finds, however, that Mr. Brown’s undetailed
account of losing his phone is not credible and that, rather than
innocently losing his phone, Mr. Brown made a deliberate choice
to withhold it from production.
In making that finding we note
that Mr. Brown and his attorney did not notify Defendants of the
loss of relevant evidence that he had a known duty to preserve
until hours before the requested time of production, even though
its loss had supposedly been known for at least four months.
(Doc. No. 29).
We are also cognizant of the sworn deposition
testimony of Judy Cooks, a witness in this case.
(Doc. No. 36-
In the course of Ms. Cooks’ testimony, she revealed that Mr.
Brown used his now-missing cell phone to communicate with her
about the fire and this litigation.
Ms. Cooks permitted defense
counsel to take screenshots of purported communications with Mr.
Those screenshots indicate that Ms. Cooks sent the
following messages to Mr. Brown, on August 1, 2016:
• “How do you think I feel with you threatening with
being subpoenaed if I don’t call your lawyer when in
actuality where I come into play was not true”
• “You care because it’s benefiting [sic] you but I
have my own issues to deal with you don’t really care
about what happens to me because if you did me getting
a subpoena wouldn’t be even in the equation of this
whole situation when we both know the truth”
(Doc. No. 36-2, at 69-72).
Ms. Cooks testified that, contrary to
Mr. Brown’s representations to the contrary, including those made
in his examination under oath, she never signed a lease to reside
at 1220 South 50th Street, never paid Mr. Brown any money toward
a tenancy, and indeed never intended to move into Mr. Brown’s
rental property at all.
(Doc. No. 36-2, at 26-27).
existence of a lease demonstrating occupancy was a prerequisite
to the issuance of Mr. Brown’s insurance policy.
(Doc. No. 36).
The Court finds Ms. Cooks’ testimony instructive for two
First, it evidences a motive for Mr. Brown to conceal
the evidence on his phone.
And, second, it evidences a
proclivity on Mr. Brown’s part to lie under oath and fabricate
On the other side of the ledger, Plaintiff has declined to
present much of a defense.
Plaintiff’s opposition to Defendants’
Motion was filed only after Plaintiff was prodded to do so by the
Despite the fact that this eventual response was filed
after the deposition of Ms. Cooks and more than one week after
Defendants’ Supplemental Memorandum citing heavily from Ms.
Cooks’ testimony, Plaintiff chose not to respond to Defendants’
arguments about the implications of Ms. Cooks’ testimony at all.
Instead, Plaintiff asserts that he lost the phone in October
(Doc. No. 39, at ¶ 5).
Plaintiff further states that
“[i]t is not the Plaintiff’s fault that he lost his phone” and
that “he had a right to continue using it and, as occurs with
many people, he eventually lost it . . .”
Id. at ¶ 10.
Brown has offered zero explanation as to how he came to lose his
He has also offered no indication that he took even
rudimentary steps to preserve the evidence that existed on his
phone, as was his obligation, or to take any measures to find the
phone after it was somehow lost.
On this record, we find that Defendants have satisfied their
burden of showing that Plaintiff has suppressed or withheld
Having found that Plaintiff engaged in
spoliation by failing to preserve his cell phone and the evidence
contained therein, we must now consider what sanction, if any, is
Defendants request appropriate sanctions against Plaintiff,
including dismissal of this action.
“There is no rule of law
mandating a particular sanction upon a finding of improper
destruction or loss of evidence; rather, such a decision is left
to the discretion of the Court.”
Paramount Pictures Corp. v.
Davis, 234 F.R.D. 102, 111 (E.D. Pa. 2005).
In exercising that
discretion, we consider (1) the degree of fault of the party who
altered or destroyed evidence, (2) the degree of prejudice
suffered by the opposing party, and (3) the availability of a
lesser sanction that will avoid substantial unfairness to the
opposing party and deter future similar conduct.
at 79; Schroeder, 551 Pa. at 250.
Schmid, 13 F.3d
We are mindful that dismissal
“is a drastic measure, and should be used only as a last resort.”
Bowman v. Am. Med. Sys., Inc., No. CIV. A. 96-7871, 1998 WL
721079, at *6 (E.D. Pa. Oct. 9, 1998) (internal quotations
Indeed, “courts should ‘select the least onerous
sanction corresponding to the willfulness of the destructive act
and the prejudice suffered by the victim.’”
234 F.R.D. at 111 (quoting Schmid, 14 F.3d at 79).
Courts sometimes analyze spoliation together with an analysis
on the proper spoliation sanction. There is something to be said for
that practice, as there is some overlap between the two. Following
the Third Circuit in Bull, 665 F.3d at 73 n.5, however, we will
analyze the sanctions issue separately, referring back to the
spoliation analysis where appropriate.
(A) Degree of Fault
“In the spoliation analysis, fault has two components:
responsibility, and the presence of bad faith.”
Underwriters of Am., Inc. v. Rhodes Dev. Grp., Inc., No.
1:09-CV-0257, 2013 WL 818596, at *5 (M.D. Pa. Mar. 5, 2013)
“When determining the degree of fault and
personal responsibility attributable to the party that destroyed
the evidence, the court must consider whether that party intended
to impair the ability of the other side to effectively litigate
Paramount Pictures, 234 F.R.D. at 111.
reasons discussed above, the Court finds that Plaintiff was
personally responsible for preserving the evidence contained in
his cell phone and acted in bad faith by failing to do so.
Paluch v. Dawson, No. CIV. 1:CV-06-01751, 2009 WL 3287395, at *3
(M.D. Pa. Oct. 13, 2009) (finding party at fault for failing to
take reasonable precautions in preserving videotape evidence);
Paramount Pictures, 234 F.R.D. at 111 (finding party at fault for
failure to preserve memory on computer’s hard drive when he
either knew or should have known that computer’s memory was
relevant to the lawsuit).
Plaintiff’s degree of fault is
unmitigated and weighs heavily in favor of imposing sanctions.
Defendants argue that they are significantly prejudiced by
the loss of location information, as well as information
regarding calls and/or the substance of any text messages
received at or about the time of the fire contained in
Plaintiff’s cell phone.
Given that the fire appears to have been
intentionally set, the spoliated evidence would have been highly
relevant to determining the merits of Plaintiff’s claim for
insurance benefits and the merits of Defendants’ counterclaim for
See Rhodes, 2013 WL 818596, at *8 (“The legal
theory a plaintiff advances is relevant to determining the degree
of prejudice to the defendant.”).
Plaintiff argues that Defendant suffered no prejudice at all
because it obtained a copy of Plaintiff’s phone records through
discovery and is aware of what numbers Plaintiff called at the
As to the text messages, Plaintiff argues that
Defendants are not prejudiced because “[t]here may be no text
(Doc. No. 39).
But this is precisely the
Defendants were entitled to examine what relevant
evidence, if any, the phone contained, and they are prejudiced by
their inability to determine whether any relevant text messages
existed or not.4
Plaintiff, moreover, offers no response at all
Defendants concede that they have the ability to obtain limited
information about text messages sent or received from Mr. Brown’s cell
phone through a record subpoena to his cellular carrier. (Doc. No.
41). It is unclear from the record whether Defendants have succeeded
in obtaining those records. We understand that the cellular carrier’s
records would not reveal the substance of any text messages, (Doc. No.
41), but we pause to note the possibility that Defendants could not be
prejudiced by the inability to review the substance of text messages
if it were the case that no text messages were sent or received from
Mr. Brown’s phone on or around May 1, 2015, a fact that could be
to Defendants’ argument that Plaintiff’s cell phone would have
contained relevant information about Defendants’ location at the
time of the fire.
Plaintiff also argues that Defendants are not prejudiced
because they had “ample opportunity” to examine the cell phone
and the messages therein but elected not to do so.
It is true that when considering the degree of prejudice
suffered, “the court should take into account whether that party
had a meaningful opportunity to examine the evidence in question
before it was destroyed,” Paramount Pictures, 234 F.R.D. at 112,
but Plaintiff’s argument makes little sense in this case.
Defendants issued a request for production within the time
allowed for discovery.
They are no less prejudiced by the loss
of relevant evidence because they could have chosen to request
Plaintiff’s cell phone at an earlier date.
The Court finds that
Defendants are prejudiced by Plaintiff’s spoliation of evidence
because they “ha[ve] not and will not have any opportunity to
determine whether” information on Plaintiff’s cell phone would
have aided their defense of Plaintiff’s claim or their own
insurance fraud counterclaim.
Id. at 112.
“Of course, when a
party is denied any opportunity to examine evidence, [prejudice]
would automatically be satisfied.”
Id. (quoting In re Wechsler,
121 F. Supp. 2d 404, 421 (D. Del. 2000)).
determined by an examination of the cellular carrier’s records.
The Court finds that Defendants are prejudiced by
Defendants’ spoliation of evidence and that this prejudice is
significant enough to weigh in favor of sanctions.
(C) Substantial Unfairness and Deterrence
Defendants urge us to deploy the harshest sanction available
and dismiss Plaintiff’s claims.
Though they concede an adverse
jury instruction may be sufficient to address the loss of
relevant evidence, Defendants ask that we consider Plaintiff’s
earlier failures to timely respond to written discovery5 and the
ineffectiveness of any lesser sanction to achieve specific and
general deterrence of such conduct in the future in fashioning an
(Doc. No. 29).
Plaintiff opposes any
sanction, but notes that a jury instruction would be “more than
(Doc. No. 39, at ¶ 15).
Although it is a close call, we decline to impose the
drastic sanction of dismissal at this time, because an adverse
jury instruction will likely be sufficient to cure the prejudice
We do, however, retain the right to select a more
severe sanction, up to and including dismissal, should later
evidence lead the Court to conclude that the prejudice to
Defendants is more severe than the record reveals at this
Defendants previously asked the Court to dismiss Plaintiff’s
claims with prejudice for failure to comply with a discovery order.
(Doc. No. 17). We declined to impose any sanctions at that time,
although we noted that the record showed “a history of dilatoriness
for which [Mr. Brown] bears some personal responsibility.” (Doc. No.
See Rhodes, 2013 WL 818596, at *10 n.7.
Under these circumstances, the Court finds it proper to
instruct the members of the jury that they may infer that if
Defendants were permitted to inspect Mr. Brown’s cell phone, any
evidence would have been unfavorable to Plaintiff.
will entertain specific proposals on an adverse jury instruction
and spoliation inference at or around the time of trial.
Given the Court’s finding that Plaintiff acted in bad faith,
we find the following further sanctions to also be appropriate:
Plaintiff shall pay all fees and costs associated with
Defendants’ Motion for Spoliation Sanctions (Doc. No. 29),
Defendants’ Supplemental Memorandum in Support of Defendants’
Motion for Spoliation Sanctions (Doc. No. 36), and Defendants’
reply in further support thereof (Doc. No. 41).
also pay all fees and costs already incurred that are associated
with Defendants’ efforts to obtain records from Plaintiff’s
cellular carrier, including but not necessarily limited to those
fees and costs associated with Defendants’ Motion for Order to
Authorize Release of Plaintiff’s Cellular Telephone Data (Doc.
For the foregoing reasons, Plaintiff’s Objection is
overruled and Defendants’ Motion is granted in part and denied in
An appropriate Order follows.
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