Federal District Judge Crafts Sanction for Discovery Violations

In the case of Domus BWW Funding, LLC v. Arch Ins. Co., No. 2:23-CV-00094-JDW (E.D. Pa. Aug. 12, 2024 Wolson, J.), the court issued discovery sanctions against the Defendant insurance company related to discovery issues and “sloppy” discovery responses by the carrier. The court declined to impose a monetary sanction and instead decided to create jury instructions regarding the carrier’s actions.

More specifically, the court noted that the deletion of emails during discovery was considered troubling but was also procedural as the insurance company underwent a company wide transition.

In the end, the carrier was hit for sanctions due to his “cavalier attitude” towards its discovery obligations after the carrier was found to have failed to preserve evidence related to the lawsuit.

The judge imposed sanctions under FRCP 37(e)(1) after finding that the Plaintiff was prejudiced by the carrier’s deletion of emails by an underwriter of the policy at issue. As a remedy, the court noted that it was craft appropriate jury instruction regarding evidence of the insurance company’s failure to preserve the emails.

In his decision, the court also faulted the Plaintiff for not bringing the issues to the attention of the court until a summary judgment motion was filed. The court noted that a post-hoc Motion for Sanctions is not the appropriate vehicle to address the prejudice of the insurance company’s negligent approach towards the discovery obligations.

Judge Wolson noted that, although the discovery may, at times, amount to drudgery that lawyers may not enjoy, lawyers have an obligation to take their discovery duties seriously.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE


Source: Article - “Citing ‘Sloppy’ Discovery, Pa. Federal Judge Imposes Sanctions on Insurance Carrier, Calls Out Counsel,” By Marianna Wharry of the Legal Intelligencer (Aug. 15, 2024).