Okla. Farm Bureau Mut. Ins. Co. v. Omega Flex, Inc.
| Docket Number | CIV-22-18-D |
| Decision Date | 03 November 2023 |
| Parties | OKLAHOMA FARM BUREAU MUTUAL INSURANCE COMPANY, AS SUBROGEE OF MICHAEL DIEL, Plaintiff, v. OMEGA FLEX, INC., Defendant. |
| Court | U.S. District Court — Western District of Oklahoma |
Before the Court is Defendant Omega Flex, Inc.'s Motion and Memorandum of Law in Support of Sanctions Against Plaintiff due to Plaintiff's Intentional Spoliation of Evidence [Doc. No. 30]. Plaintiff Oklahoma Farm Bureau Mutual Insurance Company, as Subrogee of Michael Diel, has responded [Doc. No. 50]. The matter is fully briefed and at issue.
On July 11, 2020, lightning struck the home of Michael and Sondra Diel, and an attic fire ensued. The Diels filed an insurance claim, and their insurance company, Oklahoma Farm Bureau Mutual Insurance Company (“Farm Bureau”), covered the loss and paid for the Diels to build a new home. Subsequently, Farm Bureau, as subrogee of Michael Diel, filed this lawsuit against Omega Flex. This case involves a dispute over whether one of Omega Flex's products-TracPipe Corrugated Stainless Steel Tubing (“CSST”)-was defectively designed and caused the attic fire in the Diels' home.
Shortly after the fire, but before Farm Bureau filed this action Farm Bureau retained its counsel of record and fire cause and origin experts to inspect the Diels' home in connection with what was at the time a potential subrogation claim against Omega Flex. Farm Bureau's counsel informed Omega Flex's in-house counsel, Tim Scanlan, that Farm Bureau had retained counsel and that a preliminary investigation of the fire indicated that it could have been caused by Omega Flex's CSST. Farm Bureau's counsel also stated that the Diels' home was being preserved so that Omega Flex's representatives could examine the scene and participate in the conclusion of the investigation. Importantly, Farm Bureau's counsel informed Mr. Scanlan that the investigation needed to be completed in the coming weeks, because the Diels planned to demolish the home in order to rebuild.
Omega Flex retained fire cause and origin experts, and the parties conducted a joint inspection of the Diels' home on July 30, 2020. Approximately one month after the joint inspection the Diels, as noted in Farm Bureau's counsel's communication with Mr. Scanlan, demolished their home and began construction on a new home.
Omega Flex argues that Farm Bureau should be sanctioned for spoliation of the Diels' home, and, as an appropriate sanction, asks the Court to cap Farm Bureau's damages at $4,500-i.e., the amount Omega Flex claims was necessary to repair the attic. See Def.'s Mot. at 21. Omega Flex's contention is premised on the assertion that “Farm Bureau never told Omega Flex that anyone was contemplating demolishing the entire house so that a brand new home could be built.” See id. at 2. Failing to inform Omega Flex of the impending demolition the argument goes, did not allow Omega Flex to “determine for itself whether ProClean's mitigation efforts were adequate, whether a tailored repair was feasible, whether any lingering health concern was reasonable, or what the costs of repair compared to the costs of a demolition and rebuild might have been.” Id. at 3.
Farm Bureau, on the other hand, argues that Omega Flex did know that the Diels intended to demolish and rebuild their home. Pl.'s Resp. at 2. Therefore, Farm Bureau complied with its duty to preserve the scene and provide Omega Flex with the opportunity to inspect. Id. After the parties' joint inspection on July 30, 2020, Farm Bureau states that it “confirmed with Omega Flex that the joint exam took place as scheduled and the scene was released for repairs.” Id. at 2-3.
The Court finds Farm Bureau's counsel's July 14, 2020 letter to Mr. Scanlan dispositive of this Motion. The letter, in relevant part, reads as follows:
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