United States District Court, W.D. Oklahoma
MILES-LAGRANGE, UNITED STATES DISTRICT JUDGE
matter is on the Court's March 2017 trial docket.
the Court is Defendant's Motion for Summary Judgment with
Regards to Plaintiff's Bad Faith Claim and Brief in
Support, filed December 30, 2016. On January 6, 2017,
plaintiff responded, and on January 13, 2017, defendant
replied. Also before the Court is Defendant's, Church
Mutual Insurance Company, Motion for Spoliation and Sanctions
Against Plaintiff, Calvary Baptist Church, for Willful
Destruction of Evidence and Brief in Support, filed January
10, 2017. On January 11, 2017, plaintiff responded, and on
January 18, 2017, defendant replied. Based on the
parties' submissions, the Court makes its determination.
Calvary Baptist Church (“Calvary”) carried its
property insurance with defendant Church Mutual Insurance
Company (“CMIC”) for thirty-three (33) years,
originally contracting with CMIC in March of 1980. In the
late spring of 2013, Calvary contacted CMIC regarding two
claims of loss. Initially, in May of 2013, Calvary made a
claim to CMIC after its four HVAC units were vandalized. Two
different HVAC companies evaluated the vandalized units.
Slater Mechanical, a company Calvary alleges was sent by CMIC
to evaluate the damage to the HVAC units, submitted a bid for
replacement of the four HVAC units at a cost of $12, 000.
See Resp. Exhibit 5, Slater Mechanical's bid for
replacing four HVAC units. Stevens Refrig. and Heating, Inc.
(“Stevens Refrig.”), a company Calvary contacted,
submitted a bid with two options: (1) to replace one HVAC
unit and repair the remaining three at a cost of $5, 491,
which Stevens Refrig. documented it did not recommend; or (2)
to replace all four units at a cost of $17, 087.00.
See Resp. Exhibit 6, Stevens Refrig.'s bid for
replacing or repairing four HVAC units. Based on the Stevens
Refrig.'s estimate for replacing one HVAC unit and
repairing the remaining three units, CMIC paid Calvary $4,
491.00 on its vandalism claim. However, based on the
recommendations of both Slater Mechanical and Stevens
Refrig., Calvary used the $4, 491.00, paid by CMIC, as a down
payment to have all four HVAC units replaced and paid the
remaining $13, 000 for the HVAC units on its own.
6, 2013, Calvary contacted CMIC after a wind and hail storm
allegedly damaged its roof, causing rainwater to leak in the
interior building. Calvary alleges that CMIC instructed it to
contact Service Master to assist with removing the rainwater
from its interior building; however, Service Master declined
to do the job since it was too small for them. After Service
Master declined the job, CMIC told Calvary to hire a local
business to remove the water. As instructed, Calvary hired a
local business to remove the rainwater and presented the bill
20, 2013, CMIC sent independent adjuster, Trey Roberts
(“Roberts”), to inspect Calvary's property
damages resulting from the storm, including the roof, and on
June 24, 2013, CMIC sent Mark Stein (“Stein”), a
Building Envelope Expert from the Guardian Group, Inc., to
inspect Calvary's roof to determine if any reported
damage was associated with high wind or other storm related
conditions and subsequent internal damage due to water
infiltration. Calvary had several roofing companies come and
inspect the roof as well. All roofing companies, sent by
Calvary and CMIC to inspect Calvary's roof, concluded
that the source of the leaking was due to edge separations on
the roof. Based on Roberts' inspection and a report
issued by Stein, CMIC determined that the damage was caused
by negligent installation of the roofing products and offered
Calvary $21, 106.60 for the damage to the roof and denied
Calvary's claim as to the interior water damage since the
damage was not caused by weather elements. Calvary disputes
that the damage was due to negligent installation of the roof
and maintains that the roof was damaged from a hail and wind
storm that occurred on or around June 4 or 5,
filed this action on November 18, 2015, initially alleging a
breach of contract claim against CMIC. On August 22, 2016,
Calvary filed its Amended Complaint alleging a bad faith
claim as well against CMIC. CMIC now moves this Court for
summary judgment, pursuant to Federal Rule of Civil Procedure
56, as to Calvary's bad faith claim. Further, CMIC
requests this Court impose sanctions on Calvary for not
preserving the vandalized HVAC units after they were replaced
with the new units, in anticipation of this litigation.
Motion for Sanctions
asserts this Court should enter judgment in favor of it on
Calvary's bad faith claim regarding the vandalized HVAC
units, since Calvary failed to produce the vandalized HVAC
units when requested for examination during this litigation.
CMIC specifically contends that Calvary intentionally,
willfully, and maliciously destroyed the vandalized HVAC
units. Calvary contends that the vandalized HVAC units were
not intentionally destroyed but were taken to the dump by the
HVAC repairman after they were replaced with new units back
in 2013, two years prior to this litigation being filed.
district court has inherent equitable powers to impose the
sanction of dismissal with prejudice because of abusive
litigation practices during discovery.” Garcia v.
Berkshire Life Ins.
of Am., 569 F.3d 1174, 1179 (10th Cir. 2009).
“Because of the harshness of dismissal, however, due
process requires that the violation be predicated upon
willfulness, bad faith, or [some] fault of petitioner rather
than inability to comply.” Id. (citing
Archibeque v. Atchison, Topeka & Santa Fe
Ry. Co., 70 F.3d 1172, 1174 (10th Cir. 1995)). Further,
While . . . there is no rigid test for determining when such
a sanction is appropriate, . . . a district court ought to
evaluate five factors before imposing a dismissal sanction:
(1) the degree of actual prejudice to the defendant; (2) the
amount of interference with the judicial process; (3) the
culpability of the litigant; (4) whether the court warned the
party in advance that dismissal of the ...