An insured's repairs to its damaged roof while its lawsuit against its insurer was pending did not prejudice the insurer and, as a result, the insured's lawsuit was not dismissed.
The Case
In March 2015, the roof of a building owned by Ranchers Pipe & Steel Corporation allegedly was damaged by a storm. After Ranchers filed a claim with its insurer, Ohio Security Insurance Company, the property was inspected by an Ohio Security employee.
The property was inspected twice more, in May and June 2015, by Ohio Security's retained engineer, William Ford. Mr. Ford took photographs and generated two reports detailing his opinion about the condition of the roof.
Ranchers sued Ohio Security in March 2017.
Then, in June 2017, Ranchers began re-roofing the building.
Ohio Security asserted that the re-roofing constituted spoliation of evidence, and it asked that Ranchers' suit be dismissed.
The Court's Decision
The court denied the motion.
In its decision, the court explained that spoliation sanctions for the destruction of evidence were proper when:
(1) A party had a duty to preserve evidence because it knew, or should have known, that litigation was imminent; and
(2) The adverse party was prejudiced by the destruction of the evidence.
Here, the court ruled, in light of the several inspections conducted on the roof on Ohio Security's behalf, Ranchers' re-roofing of the building had “not impaired Ohio Security's ability to defend the claims against it.”
The court concluded that representatives of Ohio Security had “inspected, photographed, and generated reports about the condition of the subject roof before it was replaced” and, as a consequence, Ohio Security had not suffered any prejudice from the re-roofing.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].