A recent federal court decision is an important reminder to litigants of the need to safeguard physical evidence that may be relevant to a products liability lawsuit. In Fireman’s Fund Insurance Co. v. Bradford-White Corp., U.S. District Judge Gorton rejected the defendant’s argument that the case should be dismissed, but will allow argument that a negative inference should be drawn on account of the plaintiff’s failure to preserve the product at issue.
The subrogation case involved Fireman’s Fund’s efforts to recover damages it paid on account of water damage at an apartment complex in Marlborough. The insurer alleged that the leak was caused by a defect in a water heater manufactured by the defendant, Bradford-White. Fireman’s Fund had requested its insured, Bell Partners, to retained the water heater when it was replaced after the leak. However, other than making this request, it does not appear that Fireman’s Fund make efforts to insure that its instructions were followed, or that the heater was properly identified and segregated to insure its availability for inspection. According to Judge Gorton’s opinion, the insurer compounded its failures by its dilatory response to the defendants’ request to inspect the heater. When the day for the defense inspection finally arrived, the parties discovered that the water heater was not available, its whereabouts and date of disposal unknown.
However, Judge Gordon did not find any bad faith or intentional spoliation on the part of Fireman’s Fund. Rather, the court noted, this was simply a case where the plaintiff insurer could have done more–at most, its actions were negligence. The court then focused on the prejudice to the defendant flowing from its inability to inspect the water heater at issue.
After considering the alternative sources of evidence available to the defendant, including two heaters which, although similar in design to the heater at issue, had been used under different atmospheric conditions, Judge Gorton concluded that dismissal of the claim was not warranted. The judge further declined to bar the plaintiff’s expert, who had examined the water heater before it went missing, from testifying about her findings. However, the defendant will be permitted at trial to offer evidence of the plaintiff’s failure to safeguard the heater, and to argue that the jury might infer from the heater’s disappearance that it would have been damaging to the plaintiff’s case.
While the plaintiff no doubts feels fortunate to have dodged the dismissal or exclusion bullets, even the adverse inference seems harsh in a situation where the insurer had requested that the water heater be preserved, and the third party who had custody of the evidence was responsible for its disappearance. Although not stated, perhaps the fact that the custodian was the insured of the plaintiff may have made the court more willing to attribute Bell Partner’s negligence to its insurer, Fireman’s Fund. Further, although the court criticized the plaintiff for delaying in scheduling the inspection, there was apparently no evidence that the water heater’s disappearance occurred during that period of delay.
The take-home message, though, is that parties who have cases dependent on physical evidence would be well-advised to take multiple affirmative steps to secure the evidence, and, where possible, take charge of the product or other evidence themselves rather than relying on a third party. By failing to insure the continued availability of the water heater, Fireman’s Fund no doubt made its case unnecessarily difficult, when a few simple steps could have avoided the problem altogether.
Read the opinion in Fireman’s Fund Insurance Co. v. Bradford White Corp. here.