OCTOBER 2015 BAD FAITH CASES: COURT PRECLUDES TRIAL EVIDENCE ON CAUSATION AND DAMAGES WHERE INSUREDS FAILED TO MAKE ADEQUATE RULE 26 DISCLOSURES AND DISCOVERY RESPONSES ON SPECIFIC CLAIM, AND DEFENDANT INSURER WOULD BE PREJUDICED (Middle District)
In Sabol v. Allstate Property & Casualty Insurance Company, the insurance carrier brought a motion in limine to preclude evidence of causation and damages, in this breach of contract and bad faith case, because the plaintiff insureds failed to identify evidence of damage or causation in their initial Rule 26 disclosures or in discovery.
Under Rule 26, “a party must, without awaiting a discovery request, provide to the other parties . . . a copy—or a description by category and location—of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses” as well as “a computation of each category of damages claimed by the disclosing party.” (Court’s emphasis). The Court also observed a party’s duty to supplement its disclosures, and that the Rule 37 sanctions for failing to provide the disclosures include not allowing the party “to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” (Court’s emphasis).
In this case, the plaintiffs failed to identify and include information in their initial disclosures about causation and damages on the particular harm at issue (mold and mildew). Nor was this information ever provided through supplementing the disclosures or via responses to discovery requests.
After applying the test for whether such failures were substantially justified or harmless, the court concluded that “given the substantial prejudice facing the defendants and the numerous opportunities that the plaintiffs had to cure such prejudice and provide the necessary evidence, this court finds that the balance tips in favor of the defendant. Thus, the court will preclude the plaintiffs from offering evidence or testimony relative to the mold and mildew claims.”