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Mead v. Travelers Indemnity Co. of Conn., Inc., Spoliation Sanction Denied for Failure to Demonstrate Bad Faith Destruction of Evidence

In this case, Plaintiff sued to recover for fire damage sustained at their condominium on December 4, 2012, for which the Defendant, Travelers Insurance Company denied coverage. Travelers asserted that the policy was cancelled on October 28, 2012, for failure to pay the premiums. Plaintiffs filed a motion for spoliation sanctions stemming from Travelers’ failure to produce a copy of the “Notice of Intent to Cancel” the policy. If Travelers had failed to send a Notice of Intent to Cancel the insurance policy would not have lapsed.

While the Plaintiffs did not deny receiving the Notice of Intent to Cancel, they claimed that during discovery, Travelers failed to produce the Notice which, under both the terms of the policy and the laws of the District of Columbia, must be sent to the Plaintiffs’ insurance broker at least five days prior to the actual notice of cancellation.

Travelers stated that the Notice of Intent to Cancel was automatically generated by its electronic system and could be accessed by the broker via an electronic agency portal. In accordance with their records retention policy the Notice was destroyed 90 days after it was generated which occurred four days after the Plaintiffs filed their claim for damages resulting from the fire. Travelers subsequently supplemented its discovery response to reflect that the Notice of Intent to Cancel was sent via hard copy mail but did not indicate if that copy was retained for any period of time.

Plaintiffs argued that Travelers committed spoliation by destroying its copy of the Notice of Intent to Cancel after their claim was filed as litigation was reasonably foreseeable at that point in time. The Plaintiff contended that Travelers was judicially estopped from relying on its supplemental explanation of how the Notice of Intent to Cancel was transmitted and also sought a spoliation sanction precluding Travelers from offering any secondary evidence to prove that it sent the required Notice to the broker.

The Court observed that the Plaintiffs failed to present any evidence of bad faith which is required for a determination of both federal judicial estoppel and spoliation. The Court found that Travelers explanation that the agent could access the Notice of Intent to Cancel via its electronic agency portal was not inconsistent with its amended response that it sent written notice. The Court further found that Travelers supplemental response simply demonstrated their compliance with the continuing duty to update discovery related information. The Court observed that documents are sometimes not retained or destroyed in good faith.

The Court found that the fact that the Plaintiffs filed their insurance claim four days prior to the Notice of Intent to Cancel being purged from the electronic system in accordance with the records retention policy was an insufficient basis for a finding of spoliation. The Court therefore held that the Plaintiffs failed to present evidence of bad faith that would “preclude Travelers from introducing evidence concerning the existence, transmittal, or destruction of the notice” and denied Plaintiffs’ motion for sanctions. The Court also observed that Plaintiffs’ contention that the Notice of Intent to Cancel alert never existed was inconsistent with their request for spoliation sanctions.

Mead v. Travelers Indemnity Co. of Conn., Inc., No. 14-2695, 2014 U.S. Dist. LEXIS 167912 (E.D. Pa. Dec. 4, 2014)

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