Archive: June 5, 2008

1
Client and Counsel Jointly and Severally Liable for Monetary Sanctions Based on Inadequate Search for and Untimely Production of ESI; Evidentiary Sanctions Also Recommended
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Plaintiff’s Reformatting of Hard Drives Sought in Discovery Warrants Adverse Inference Instruction, Not Dismissal

Client and Counsel Jointly and Severally Liable for Monetary Sanctions Based on Inadequate Search for and Untimely Production of ESI; Evidentiary Sanctions Also Recommended

R & R Sails Inc. v. Ins. Co. of Pa., 251 F.R.D. 520 (S.D. Cal. 2008)

After a fire destroyed plaintiff’s manufacturing facility, defendant paid plaintiff for loss of property, but plaintiff claimed that the value of all lost property exceeded the amount paid.  Plaintiff also sought further payment under the insurance contract for loss of income, business interruption and extra expenses.  Plaintiff sued to enforce the contract, and also alleged bad faith in the handling of the claim.

In discovery, plaintiff noted that "conspicuously absent" from defendant’s production of documents were "electronic or handwritten daily activity records/logs which are generally kept with an adjuster’s notes and telephone call records.”   Defendant insisted that the documents did not exist.  During a discovery conference on the matter, the court expressed doubt as to the records’ nonexistence and ordered defendant either to produce the requested documents or submit a sworn declaration that the records did not exist.  Defendant thereafter submitted a sworn declaration from its senior property claims examiner (Lombardo) stating that "[t]here were no daily activity logs or telephone record logs that were created or maintained in connection with plaintiff’s claim."

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Plaintiff’s Reformatting of Hard Drives Sought in Discovery Warrants Adverse Inference Instruction, Not Dismissal

Johnson v. Wells Fargo Home Mortgage, Inc., 2008 WL 2142219 (D. Nev. May 16, 2008)

In this case, plaintiff alleged that defendant erroneously reported two of his real property mortgage loans delinquent to credit reporting agencies.  Plaintiff claimed that defendant foreclosed on one loan and continued to erroneously report both loans delinquent after plaintiff spent nine months making multiple phone calls and sending correspondence, including cancelled checks and loan documents, verifying the loans were current.

Defendant contended that plaintiff’s Fair Credit Reporting Act claim was supported with various letters he drafted on his two laptops and were “the very foundation of his claim.”  Defendant further contended that computer evidence revealed plaintiff may have manufactured the documents to support his claim and then flagrantly reformatted the hard drives on the laptops shortly after defendant informed him that they had been formally requested and were relevant to the case.

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