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AMICA Mutual Insurance Co. v. Brasscraft Manufacturing Co.

United States District Court, D. Rhode Island

May 29, 2018



          John J. McConnell, Jr. United States District Judge

         The above captioned case is a subrogation action. Amica has sued BrassCraft for reimbursement of a claim Amica paid its insured, alleging that BrassCraft's faulty product caused the damages to the insured's home. The problem here is that Amica no longer has the BrassCraft product; Amica lost it before BrassCraft had the opportunity to examine the allegedly failed product. Sophisticated parties who sue-or who expect to sue in the future-are expected to retain relevant evidence. Failure to preserve crucial evidence subjects the party to a variety of sanctions including exclusion of the evidence and the expert's testimony or report based on it, a jury instruction describing the adverse inference a juror can draw from the absence of that evidence, or, in extreme cases, dismissal of the case. Brasscraft seeks dismissal here, arguing that it is unfairly prejudiced by the fact that it faces claims involving one of its products that Amica, through its negligence, failed to turn over and permit BrassCraft to examine. There is no dispute that Amica spoliated the product; the only issue before the Court is what level of sanction the Court should impose.


         Amica Mutual Insurance Company paid its insured on her insurance policy after a flood damaged her home in West Warwick, Rhode Island in August 2013. Amica alleges that a BrassCraft flexible water connector disconnected from a toilet fitting in the second floor bathroom, releasing water into the insured's home. Amica's experts, Thomas Zarek and John Certruse, examined the connector and concluded in a September 2013 report that the connector's coupling nut failed because it was under "loading stress" from bending, and that its material contained "void spaces" that "may have reduced the strength under loading on the nut." The experts concluded, "It is likely that the cause of the failure is a combination of the material deficiencies in the plastics, combined with excess stress from the installation conditions." They recommended further testing of the nut.

         Two years later in 2015, Amica sent a settlement demand to BrassCraft. BrassCraft responded by asking for proof that the connector was the cause of the damage. Amica did not respond. Instead, a year later, Amica sent another demand with a series of photographs of the connector. BrassCraft again asked for the connector and any expert reports Amica had. Amica responded that it would not ship the connector and did not have an expert report. Both of these statements now appear to be less than truthful. In July of 2016, Amica admitted that it did not have the connector, which it appears to have lost or destroyed.

         BrassCraft denied Amica's claim for subrogation so Amica filed this complaint in state court in early 2017; BrassCraft removed it here. In April 2017, Amica's experts, Messrs. Zarek and Certruse, issued a joint affidavit opining, allegedly based solely on their review of the series of photographs, that BrassCraffc defectively manufactured the connector. They did not mention that they had previously rendered the same opinion after examining the actual connector.

         BrassCraft now moves to dismiss the complaint, arguing that because Amica spoliated the product it claims was defective before it had a chance to examine it, BrassCraft is prejudiced such that it cannot defend against Amica's subrogation claim. Amica admits that it lost or misplaced the connector, but counters that dismissal is a drastic remedy for spoliation where there is no evidence of malicious destruction, especially since BrassCraft is not prejudiced because its expert can use the pictures and/or get an exemplar connector to examine.[1] Because the Court finds that BrassCraft is left with no way adequately to defend itself against Amica's claims, even though Amica's actions were not malicious, BrassCraft's motion is GRANTED and Amica's case is DISMISSED.


         Rule 37

         At the outset, Amica raises a procedural objection to BrassCraft's motion, arguing that BrassCraft cannot rely on Rule 37 to advocate dismissal for spoliation. The Court disagrees.

         This Court's authority to impose the sanction of dismissal derives from multiple sources in the Federal Rules of Civil Procedure. Amica's failure to produce the connector, evidence that is required to be disclosed to BrassCraft under Rule 26(a)(1), violates Rule 37(c)(1), warranting any of the potential sanctions provided in Rule 37(b)(2)(A)(i)-(vi), which includes dismissal. See Fed. R. Civ. P. 26(a)(1)(A)(ii); Fed.R.Civ.P. 37(c)(1)(C); Fed.R.Civ.P. 37(b)(2)(A)(v). A party's failure to produce a product in response to an opposing party's request may violate Rule 37(d), which grants a district court "broad power" to impose sanctions on a party that resists discovery. See Wolters Kluwer Fin. Servs., Inc. v. Scivantage, 564 F.3d 110, 118 (2d Cir. 2009); see also E. W. Int'l Corp. v. Welch Foods, Inc., 937 F.2d 11, 18 n. 7 (1st Cir. 1991) (discussing the availability of sanctions under Rule 37(d) where the written response given is so lacking as to be no response at all). Ultimately, the determination of the appropriate sanction for spoliation is within the Court's discretion, for it to assess based on the facts of the case. See Fujitsu Ltd. v. Fed. Exp. Corp., 247 F.3d 423, 436 (2d Cir. 2001). The Court finds no procedural hurdle to applying the rule under which BrassCraft chose to bring its motion.

         Spoliation and the Sanction Therefor

         Amica spoliated evidence in this case; it had notice of the claim or the potential for the claim, the evidence is relevant to the claim, and the evidence was lost and/or destroyed. The only real debate here is over what the Court should do about Amica's loss of crucial evidence.

         "While a district court has broad discretion in choosing an appropriate sanction for spoliation, 'the applicable sanction should be molded to serve the prophylactic, punitive, and remedial rationales underlying the spoliation doctrine."' Silvestri v. General Motors Corp.,271 F.3d 583, 590 (4th Cir. 2001) (quoting West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)). The Court considers a few factors in determining the appropriate sanction for Amica's spoliation of evidence: (1) whether the defendant was prejudiced because of the loss of the evidence, " (2) whether the prejudice can be cured; (3) the practical importance of the evidence; (4) whether the plaintiff was in good faith or bad faith; and (5) the potential for abuse if the evidence is not excluded. Allstate Ins. Co. v. Creative Env't Corp., Civ. No. 92-0467T, 1994 WL 499760, (D. R.I. Apr. 1, 1994) (relying on a five-factor test set forth in Lewis v. Darce Towing Co., Inc., 94 F.R.D. 262, 266-267 (W.D. La. 1982)). "Fairness to the opposing party D plays ...

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