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Travelers Property Casualty Co. of America v. Mountaineer Gas Co.

United States District Court, S.D. West Virginia, Charleston Division

March 16, 2018

MOUNTAINEER GAS COMPANY, et al., Defendants.


          Josh R. Goodwin, Judge

         Pending before the court is Mountaineer Gas Company's Motion for Sanctions for Spoliation of Evidence [ECF No. 287] and Travelers Property Casualty Company of America's Motion in Limine for Sanctions against Defendant Mountaineer Gas Company for Spoliation of Evidence [ECF No. 307]. For the reasons stated herein, these Motions [ECF Nos. 287, 307] are DENIED.

         I. Background

         This case arises from a boiler explosion that occurred at St. Mary's Medical Center (“St. Mary's”), in Huntington, West Virginia, on June 25, 2013. In April 2013, St. Mary's commissioned the services of Combustion Service & Equipment Company (“CS&E”) to supply three boilers for a new boiler system at St. Mary's. Mem. Law Supp. Mot. Sanctions Spoliation Evid. 2 (“Def.'s Mem.”) [ECF. 288]. St. Mary's installed the boiler system as part of an expansion project that involved the construction of a new building known as the “boiler house.” Id. at 3. Next to the boiler house, Mountaineer Gas Company (“Mountaineer”) maintained a small building, known as the “gashouse, ” which supplied Mountaineer's gas to the three boilers in the boiler house. Id.

         Immediately after installation, St. Mary's began experiencing technical problems with the boilers including incidents related to low gas pressure from Mountaineer's supply line, which was causing a safety sensor to operate and shutdown the boilers. Pl.'s Resp. to Mountaineer Gas Co.'s Mot. Sanctions 2 (“Pl.'s Resp.”) [ECF No. 293]. St. Mary's reported these issues to Mountaineer and, in response, Greg Morris, a Mountaineer technician, visited St. Mary's on June 25, 2013. Id. Mr. Morris, along with CS&E technician, Tim Rider, and St. Mary's facility manager, Everett Chapman, attempted to troubleshoot the low gas pressure. Def.'s Mem. 4. Mr. Rider attempted to run all three boilers simultaneously at the maximum operating rate. Id. Despite Mr. Rider's efforts, the gas pressure fell below the desired level. Id. Mr. Morris attempted to troubleshoot the low gas pressure by opening a bypass valve in the gashouse, and Mr. Rider again attempted to operate the boilers at the maximum operating rate. Id. at 5. Approximately eight to ten minutes into the operation, one of the boilers-referred to herein as Boiler 1-exploded. Id. Boilers 2 and 3 did not malfunction. Pl.'s Resp. 5.

         While some of the facts regarding the aftermath of the explosion are disputed, the parties agree that representatives from St. Mary's, Mountaineer, and CS&E were onsite immediately after the explosion. Id. at 2-5; Def.'s Mem. 3-7. Greg Morris was on site before, during, and after the explosion. Pl.'s Resp. 4. Lance Herbert, Mountaineer's Gas Operations Manager, joined Mr. Morris along with several other Mountaineer employees. Id. Representatives from Mountaineer and St. Mary's took photographs of the condition of the gashouse and the boiler room post-explosion. Id.; Def.'s Mem. 6-7.

         Boiler 1 expelled fireproofing and debris during the explosion, covering the boiler room with debris. Pl.'s Resp. 3. St. Mary's employees immediately cleared the debris for fear that they would get “sucked into” the remaining, functioning boilers. Id. at 4. As part of their post-explosion inspection, Mountaineer employees checked the regulators downstream from the bypass valve and discovered that the regulators were contaminated with “a significant level of dirt and debris.” Id. The employees discarded the debris once they completed their inspection. Id.

         St. Mary's employees checked the gas piping and the gas trains leading to each of the three boilers upon learning that Mountaineer found debris in the regulators. Id. at 4-5. Dirt and debris had contaminated all three boilers, but Boiler 1 contained more dirt and debris than Boilers 2 and 3. Id. at 5. Mr. Chapman photographed the dirt and debris discovered in Boiler 1 and sealed the open ends of the gas piping and gas train, preserving the debris inside the piping. Id.; Def.'s Mem 6. Mr. Chapman took photographs of the dirt and debris discovered in Boilers 2 and 3, and discarded the debris upon completion of his inspection. Pl.'s Resp. 5.

         Multiple inspections and meetings occurred over the weeks and months following the explosion. Mountaineer's retained expert, Walter Rothfuss, visited the explosion site on July 11, 2013[1] and September 18, 2013[2] “to inspect the boilers, their components, and the evidence.” Id. Ex. 8, at 6 [ECF No. 293-8].

         On September 24, 2013, Bill Noyes, a consultant for Travelers Property Casualty Company of America (“Travelers”), St. Mary's insurer, informed the parties by email that St. Mary's intended to remove and replace Boiler 1 and its electrical components, and explained the procedure for Boiler 1's removal. Def.'s Mem. Ex. 16, at App. B [ECF 288-16]. Several of the parties requested to perform additional testing of the electrical components before Boiler 1 was removed. Pl.'s Resp. 7. Traveler's acquiesced to these requests and on September 30 and October 1, 2013, Rich Martin, an employee of Rothfuss Engineering Company (“REC”), and Mr. Noyes performed electrical wire marking on Boiler 1. Def.'s Mem. 8.

         Between October 28 and 30, 2013, Boiler 1 was removed from St. Mary's and transported to a storage facility. Pl.'s Resp. 8. On September 18, 2014, Mr. Rothfuss conducted his last pre-suit examination of Boiler 1, at a facility in Nicholasville, Kentucky where Boiler 1 was being preserved in anticipation of future litigation. Id. Ex. 8, at 6.

         On June 19, 2015, Travelers filed this subrogation lawsuit on behalf of its insured against Mountaineer. Compl. [ECF No. 1]. Discovery commenced shortly thereafter. The court entered multiple scheduling orders over the course of this case to facilitate the parties' discovery needs. See Sched. Orders [ECF Nos. 46, 75, 110, 158, 241, 278, 320, 327, 339, 345]. The parties also submitted multiple stipulations extending time to participate in discovery, including deadlines pertaining to the disclosure of experts, the deadlines for briefing, and deadlines to take depositions. See Stipulations [ECF Nos. 15, 162, 163, 195, 244, 263, 280, 291, 292].

         As discovery progressed in this case, the parties engaged in additional examination and inspection of Boiler 1 and substantial written discovery. On July 28, 2016, Mr. Rothfuss, along with several other consultants, participated in a laboratory examination and analysis of debris found in Boiler 1's gas train. Pl.'s Resp. Ex. 8, at 6. On July 19, 2016, REC conducted flow testing of the gashouse inlet strainer as well as the gas train inlet strainer of Boiler 1 at REC's facility in Jessup, Maryland. Id. On September 7, 2016, Mr. Rothfuss conducted another examination of Boiler 1. Id. On September 19, 2016, he produced his expert report and conclusions with respect to the potential causes of the boiler explosion. Id.

         Mountaineer was required, pursuant to the then-current scheduling order addressing expert disclosures, to submit its expert disclosures by September 19, 2016. Am. Sched. Order 1 [ECF No. 158].[3] In his report, Mr. Rothfuss articulated nineteen different causes for Boiler 1's explosion. Pl.'s Resp. Ex. 8, at 6. Mr. Rothfuss's initial report did not indicate that he was unable to perform a thorough investigation of the evidence, nor did he allege that his conclusions regarding causation were affected by the absence of any pertinent information or evidence. Id.

         The deadline for depositions and the close of discovery was October 17, 2016, which was amended by stipulation of the parties to November 18, 2016. Stipulation Enlargement Time 1 [ECF No. 195]. A subsequent Amended Scheduling Order, dated January 18, 2017, set the deadline for dispositive motions for April 10, 2017. Sched. Order 1 [ECF No. 241]. This Amended Scheduling Order did not extend any of the discovery deadlines. Id.

         On April 7, 2017, three days prior to the deadline to file dispositive motions set forth by the court's Amended Scheduling Order, all parties, except Mountaineer, moved again to extend the remaining deadlines. Joint Mot. Amend Sched. Order [ECF No. 272]. In their motions, the parties represented that all fact discovery and fact depositions were complete, all expert reports were exchanged, and all of the parties' experts had been deposed, except for Mr. Rothfuss. Id. at ¶¶ 12-13.

         On April 27, 2017, six months after the close of discovery, Mr. Rothfuss submitted a new, “preliminary” report. See Pl.'s Resp. Ex. 10 [ECF No. 293-10]. Therein, nearly four years after the boiler explosion, Mr. Rothfuss raised the specter of spoliation of evidence, claiming that Travelers did not maintain certain evidence to the detriment of Mountaineer. Id. at 9, 12-13. Specifically, Mr. Rothfuss stated, for the first time, that he had requested the opportunity to perform testing of the control and safety devices on the boiler system during his July 11, 2013 inspection, and that Travelers and St. Mary's representatives refused such testing. Id. at 9. He also stated that St. Mary's did not retain the control panels to Boiler 1, making any further evaluation of Boiler 1's electrical wiring impossible. Id. at 12-13.

         On May 19, 2017, the parties deposed Mr. Rothfuss. See Pl.'s Resp. Ex. 11 [ECF No. 293-11]. Counsel for Travelers, noting Mr. Rothfuss's supplemental opinions, asked Mr. Rothfuss to explain the basis for his amendments:

Q: As of September 2016, you were aware at that point that some of the evidence you just described was no longer in place; correct?
A: Yes.
Q: You also were aware that at least some of the evidence, including the flame sensor, was, in your estimation, unable to be tested; correct?
A: Yes.
Q: It's also your testimony that by September 2016 you're aware that the boiler had been removed from its location and placed in storage in ...

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