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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Benjamin McClure, 

Plaintiff, 

v. 

Country Life Insurance Company, et al., 

Defendants. 

No. CV-15-02597-PHX-DLR

ORDER 

 In this insurance bad faith case, the insurance carrier Defendants have asked the 

Court on the day before trial to allow untimely disclosed medical records to be added to 

the claims file for use as a trial exhibit. For two years, Plaintiff has been arguing that 

Defendants should have obtained these records when they processed his disability 

benefits claim. Plaintiff objects to the admission of the newly discovered records 

pursuant to Rules 26 and 37 of the Federal Rules of Civil Procedure. The parties have 

briefed the issues and the Court heard oral argument on August 23, 2017. For the 

following reasons, the Court will exclude the untimely disclosed medical records from 

evidence at trial. 

I. Background 

 Plaintiff purchased a disability insurance policy from Defendants in 1995. 

Plaintiff submitted a claim for disability benefits after sustaining a disabling head injury, 

which Defendants initially approved. In April 2014, however, Defendants terminated 
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benefits after concluding that Plaintiff’s records no longer supported disability. Plaintiff 

brought this action against Defendants in December 2015, alleging that they breached the 

insurance contract and administered his claim in bad faith. Plaintiff contends, inter alia, 

that Defendants failed to obtain relevant medical records when evaluating his claim. 

 The parties have completed extensive discovery, including depositions of Plaintiff, 

the claim adjusters, adjuster supervisors, medical providers, and experts. The deadline 

for expert depositions was March 1, 2017. Summary judgment motions filed by all 

parties were denied, and the case is set for a jury trial to commence on August 24, 2017. 

In preparation for trial, the parties lodged a Joint Proposed Final Pretrial Order on August 

9, 2017, and an amended pretrial order and “Notice of Errata” on August 15, 2017. The 

Joint Proposed Pretrial Order and Notice of Errata contain a list of exhibits, including 

Plaintiff’s Exhibit No. 1, “Claim File (COUNTRY MCCLURE 001-381),” to which 

Defendants did not object. 

 On August 16, 2017, however, counsel for Defendants, Thomas Burke, sent an 

email to Plaintiff’s counsel, Steven Dawson, informing him that he discovered during 

trial preparation that, due to a copying error, “some of Dr. Turner’s and Dr. Foltz’s 

records in the claim file were not included in the produced copy,” and attaching a copy of 

the missing records. Dr. Turner is Plaintiff’s primary care physician and Dr. Foltz is his 

neurologist. Of importance, Dr. Turner’s records include portions of Plaintiff’s 

hospitalization records regarding a psychiatric hospitalization. These records do not 

appear anywhere else in the claims file that Defendants initially disclosed to Plaintiff. 

Accordingly, Plaintiff alleged and his experts opined that Defendants made coverage 

determinations without obtaining or considering the records of his psychiatric 

hospitalization. Mr. Burke nonetheless requested that Mr. Dawson agree to add the 

records attached to his email as a trial exhibit. Mr. Dawson declined Mr. Burke’s request 

in an email sent the next day. 

 On August 21, 2017, Plaintiff filed a “Request for Emergency Telephonic 

Hearing” raising the issue with the Court. Plaintiff argues that the newly discovered 
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records should be excluded from trial because they were not timely disclosed, and the 

untimely disclosure was neither substantially justified nor harmless. 

II. Legal Standard 

Federal Rule of Civil Procedure 26(a) requires parties to disclose certain 

information pertinent to the case. A party is obligated to supplement a Rule 26(a) 

disclosure “in a timely manner if the party learns that in some material respect the 

disclosure or response is incomplete[.]” Fed. R. Civ. P. 26 (e)(1)(A). “If a party fails to 

provide information . . . as required by Rule 26(a) or (e), the party is not allowed to use 

that information . . . to supply evidence . . . at trial, unless the failure was substantially 

justified or is harmless.” Fed. R. Civ. P. 37(c)(1). Where appropriate, the Court has 

discretion to impose alternative sanctions. Id.

III. Discussion

In an insurance bad faith case, the insurance claims file “constitutes the only 

source of information relevant to whether the insurer has a good faith basis for its 

decision.” Steven Plitt et al., 17A Couch on Insurance, § 251:27 (3d ed. 2017). Indeed, 

Defendants produced the claims file with the understanding and intent that Plaintiff 

would rely on the contents of that file when investigating and litigating his bad faith 

claim, and Plaintiff’s bad faith claim and Defendants’ defenses are substantially based on 

the claims file produced by Defendants. The Court therefore finds that the claims file is a 

“Required Disclosure” under Rule 26(a)(1). Accordingly, to allow Defendants to use this 

newly discovered claims file information at trial, the Court must find either that Mr. 

Burke’s August 16, 2017 email was a timely filed supplement under Rule 26(e)(1), or 

that Defendants’ failure to disclose was substantially justified or harmless under Rule 

37(c)(1). 

A. The August 16, 2017 email was not a timely supplement

 Defendants disclosed a mere eight days before trial that the claims file was 

incomplete and approximately sixty pages of relevant medical records had inadvertently 

been omitted. This is not a timely supplement under Rule 26(e)(1). Plaintiff relied on the 
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disclosed claims file during pretrial discovery. Plaintiff disclosed expert opinions and 

pursued a bad faith claim based, in part, on Defendants’ failure to obtain or consider 

these missing records. During the course of discovery, defense witnesses did not 

volunteer that they had these records in the claims file when asked about them. When 

Plaintiff’s expert was deposed in February 2017, she offered opinions based on 

Defendants’ failure to obtain these records. Discovery is complete, and theories and 

expert opinions are locked in by reports and depositions. Disclosure approximate a week 

before trial is untimely. 

B. The untimely disclosure is not substantially justified 

 The Court finds that there is no substantial justification for the nondisclosure of 

the missing records. Defendants claim that their failure to disclose the missing medical 

records was due to a “copying error.” Although Plaintiff has not had the opportunity to 

investigate or explore the reasons for the nondisclosure, for purposes of this order the 

Court credits Defendants’ explanation. Mere inadvertence in copying the single most 

important exhibit in this case, however, is not substantial justification. 

C. The untimely disclosure is not harmless 

 The Court also finds that the untimely disclosure is prejudicial. Defendants 

contend otherwise, arguing that Plaintiff should have gleaned that the missing records 

were contained in the claims file. Specifically, the missing records were in the file of Dr. 

Strupinsky, one of the doctors who examined Plaintiff at Defendants’ request, and 

Defendants contend that Plaintiff should have deduced that these records came from the 

claims file. But Defendants’ argument is unpersuasive for three reasons. First, it places 

the burden on Plaintiff to guess that there are records not in the claims file that he should 

be trying to locate from other files. Rule 26, however, places an affirmative disclosure 

obligation on Defendants, not a guessing obligation on Plaintiff. Second, there is no 

indication that Plaintiff was directly told that the information in Dr. Strupinsky’s file 

came solely from the claims file. Third, Mr. Dawson contends that the records in the 

claims file and in Dr. Strupinsky’s file are inconsistent. The Court cannot conclude that 
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Plaintiff should have deduced that there were records missing from the claims file. 

 The untimely disclosure of these missing records comes after the close of 

discovery, and Plaintiff has relied on the produced version of the claims file both in 

crafting his theories of liability and in obtaining expert opinions on the contents of the 

claims file. Under these circumstances, allowing Defendants to use the missing records 

at trial would not be harmless. 

D. Exclusion is the most appropriate sanction 

 Lastly, the Court has considered alternative sanctions to excluding the missing 

records—such as allowing the records to be used at trial but instructing the jury on the 

untimely disclosure—but finds that none adequately mitigate the prejudice to Plaintiff. 

First, Plaintiff does not concede that the missing records were, in fact, contained in the 

claims file all along. To allow, at the eleventh hour, these records to be added as a trial 

exhibit, or to permit a witness to testify about the alleged copying error, would not afford 

Plaintiff an opportunity to conduct discovery into this newly arisen factual issue. Second, 

there is no fair, non-prejudicial method of amending the claims file at trial when Plaintiff 

has litigated this case for two years in reliance on the completeness of the file as 

originally produced. Accordingly, the Court finds that exclusion is the most appropriate 

remedy. 

IV. Conclusion 

 For the foregoing reasons, the Court finds that the newly discovered medical 

records were not timely supplemented under Rule 26(e)(1), nor is the untimely disclosure 

substantially justified or harmless under Rule 37(c)(1). Moreover, under the 

circumstances, exclusion of the untimely disclosed evidence is the only remedy that 

adequately mitigates the prejudice to Plaintiff. 

// 

// 

// 

// 
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 IT IS ORDERED that, pursuant to Fed. R. Civ. P. 37(c)(1), Exhibit No. 1 shall 

not be supplemented to add missing claims file records that were not timely disclosed, 

and there shall be no mention of records allegedly contained in the claims file that were 

not contained in the claims file timely produced by Defendants. 

 Dated this 28th day of August, 2017. 

Douglas L. Rayes 

United States District Judge