Spoilation of Evidence Case Reference

McCracken – 1
SPOLIATION OF EVIDENCE
Robert L. McCracken
Nash, Spindler, Dean & Grimstad
201 East Waldo Boulevard
Manitowoc, WI 54220
I. What Is Spoliation of Evidence?
Spoliation of evidence is Athe destruction, or the significant and meaningful
alteration of a document or instrument@ which might be evidence in another
party=s pending or future litigation.
Black=s Law Dictionary, Abridged Fifth Edition, (1983)
II. Causes of Action for Spoliation of Evidence.
A. Action for Negligent Spoliation: Six states have recognized negligent
spoliation of evidence as an action that can be stated under existing
negligence law without creating a new tort: Florida, Illinois, Kansas,
Pennsylvania, California and Michigan.
Continental Insurance Company v. Herman, 576 So.2d 313, (Fla.
App. 1991)
Boyd v. Travelers Insurance Company, 166 Ill. 2d 188, 652 N.E. 2d
276 (1995)
Foster v. Lawrence Memorial Hospital, 809 F. Supp. 831 (D. Kan.
1992)
Pirocchi v. Liberty Mutual Insurance Company, 365 F. Supp. 277,
(E.D. PA. 1973)
Velasco v. Commercial Building Maintenance Co., 215 Cal. Rptr.
504, (Ct. App. 1985)
McCracken – 2
Jackovich v. General Adjustment Bureau Inc., 119 Mich. App. 221,
326 N.W. 2d 458, (1982).
B. Elements of the Cause of Action for Negligent Spoliation:
1. Existence of a potential civil action;
2. A legal or contractual duty to preserve evidence which is relevant to
the potential civil action;
3. Destruction of that evidence;
4. Significant impairment in the ability to prove the lawsuit;
5. A causal relationship between the evidence destruction and the
inability to prove the lawsuit; and
6. Damages.
C. Action for Intentional Spoliation: Five states have recognized spoliation
of evidence as an independent intentional tort: Ohio, Kentucky,
California, New Jersey, and Alaska.
Reed v. Westinghouse Electric Corp., No. 93-CA-2125MR, (KY.
App. 1995)
Hazen v. Municipality of Anchorage, 718 P. 2d 456 (Alaska 1986)
Smith v. Superior Court, 198 Cal. Rptr. 829 (Ct. App. 1984)
Viviano v. CBS Inc., 597 A. 2d 543, (NJ Super. Ct. App. Div. 1991)
Smith v. Howard Johnson Co., 615 N.E. 2d 1037 (Ohio 1993)
This cause of action was first created in 1984 in the California case of
Smith v. Superior Court, 151 Cal. App. 3d 491, 198 Cal. Rptr. 829
(1984). In Smith an oncoming truck=s left rear wheel detached and
smashed the plaintiff=s windshield causing her permanent blindness.
The truck and wheel were taken to a dealer who had previously
customized the truck with special mag wheels. The dealer agreed with
the plaintiff=s attorney to preserve the wheel and related parts as
McCracken – 3
physical evidence. Thereafter, the dealer disposed of the wheel and
parts before they could be inspected by the plaintiff=s experts making it
impossible for the plaintiff to pursue her claim. The California Court of
Appeal analogized spoliation to the tort of interference with prospective
business relationships or expectations. The Court held that damages in
a prospective civil action were a valuable probable expectancy that had
to be protected from interference by the destruction of evidence.
D. Elements of the Cause of Action for Intentional Spoliation:
1. Pending or probable litigation involving the plaintiff;
2. Knowledge by the defendant of the existence or likelihood of the
litigation;
3. Intentional acts of spoliation by the defendant designed to disrupt
the plaintiff=s case;
4. Disruption of the plaintiff=s case;
5. Damages proximately caused by the defendant=s acts.
III. Wisconsin Has Recognized the Tort of Interference With Prospective
Business Relations Upon Which Other States Have Created the Tort of
Intentional Spoliation.
A. Elements of the Tort of Interference With Prospective Business
Relations. An individual improperly interferes with a prospective
contract by A(a) inducing or otherwise causing a third person not to enter
into or continue a prospective relation or (b) preventing the other from
acquiring or continuing a prospective relation.@ Such interference is
actionable, however, only if it is both Aintentional@ and improper. ATo
have the requisite intent, the defendant must act with a purpose to
interfere with the prospective contract.@ If an actor lacks the Apurpose to
interfere@ then his or her Aconduct does not subject him or her to liability
even if it has the unintended effect of deterring a third party from dealing
with the plaintiff.@
Foseid v. Bank of Cross Plains, 197 Wis. 2d 772, 541 N.W. 2d 203
(1995)
McCracken – 4
Cudd v. Crownhart, 122 Wis 2d 656, 364 N.W. 2d 158 (1984)
Pure Milk Products Cooperative v. National Farmers Organization,
90 Wis. 2d 781, 280 N.W. 2d 691 (1979)
W.I.J.C. 2780, Intentional Interference with Contractual
Relationship.
B. Factors to Consider When Determining the Propriety of the Alleged
Tort-feasors Conduct.
1. The nature of the actor=s conduct;
2. The actor=s motive;
3. The interests of the other with which the actor=s conduct interferes;
4. The interest sought to be advanced by the actor;
5. The social interests in protecting the freedom of action of the actor
and the contractual interest of the other;
6. The proximity or remoteness of the actor=s conduct to the
interference; and
7. The relations between the parties.
Restatement (Second) of Torts, Section 767, (1979)
Cudd v. Crownhart, 122 Wis. 2d 656, 364 N.W. 2d 158 (1984)
C. Wisconsin Has Not Recognized a Cause of Action for Negligent
Interference With Contractual Relations. The general rule that
interference with contractual relations must be intentional to be
actionable should be maintained.
Hartridge v. State Farm Mut. Auto. Ins. Co., 86 Wis 2d 1, 271 N.W.
2d 598 (1978)
IV. Spoliation as a Defense.
McCracken – 5
The Loss or Destruction of Evidence Can Also Be Employed Defensively.
A. Need Not Be Plead as an Affirmative Defense.
Donohue v. American Isuzu Motors Inc., 155 F.R.D. 515 (M.D. PA
1994).
B. Can Be Grounds for Motion for Summary Judgment.
Roselli v. General Electric Co., 599 A. 2d 685 (PA Super. Ct. 1991).
C. Can Be Grounds for Precluding Evidence.
Hirsch v. General Motors Corporation, 628 A. 2d 1108 (N.J. Super.
Ct. Law Div. 1993)
Nally v. Volkswagen of America Inc., 405 Mass. 191, 539 N.E. 2d
1017 (1989)
Sentry Insurance v. Royal Insurance, 196 Wis. 2d 907, 539 N.W. 2d
911 (Ct. App. 1995)
Barker v. Bledsoe, 85 F.R.D. 545 (W.D. Ok. 1979).
D. Can Be Basis for Adverse Inference or Presumption.
AIt has always been understood–the inference, indeed, is one of the
simplest in human experience–that a party=s falsehood or other fraud in
the preparation and presentation of his cause, his fabrication or
suppression of evidence by bribery or spoliation, and all similar
conduct is receivable against him as an indication of his consciousness
that his case is a weak or unfounded one; and from that consciousness
may be inferred the fact itself of the cause=s lack of truth and merit. The
inference thus does not necessarily apply to any specific fact in the
cause, but operates, indefinitely though strongly, against the whole
mass of alleged facts constituting his cause.@ Evidence in Trials at
Common Law, Wigmore, section 278 (2), (Chadbourn Rev. 1979).
Jagmin v. Simonds Abrasive Co., 61 Wis. 2d 60, 211 N.W. 2d 810
(1973)
McCracken – 6
Vodusek v. Bayliner Marine Corp., 71 F. 3d 148 (4th Cir. 1995)
Vick v. Texas Employment Commission, 514 F. 2d 734 (1975)
Brown v. Hamid, 856 S.W. 2d 51 (MO. 1993)
Delaughter v. Lawrence County Hospital, 601 So. 2d 818, (1992).
E. Can Be Grounds for Default Judgment on Liability.
Telectron Inc. v. Overhead Door Corporation, 166 F.R.D. 107 (Fla.
1987)
Carlucci v. Piper Aircraft Corporation, 102 F.R.D. 472 (S.D. Fla.
1984).
F. Can Be Grounds for Dismissal of Action as Discovery Sanction.
Iverson v. Xpert Tune, Inc., 553 So. 2d 82 (Ala. 1989).
V. Defending Against a Charge of Spoliation.
A. No Duty to Preserve Evidence.
1. No duty on employer to preserve parts of machine that injured
worker absent some special relationship or duty arising by way of
agreement, contract, statute, or independent tort. Wilson v. Beloit
Corp., 921 F. 2d 765 (8th Cir. Ark. 1990); Murphy v. Target
Products, 580 N.E. 2d 687 (Ind. App. 1991); Edwards v. Louisville
Ladder Company, 796 F. Supp. 966 (1992); Panich v. Iron Wood
Products Corporation, 179 Mich. App. 136, 445 N.W. 2d 795,
(1989).
2. No duty to preserve records destroyed under routine procedures.
Vick v. Texas Employment Commission, 514 F. 2d 734 (1975);
Carlucci v. Piper Aircraft Corporation, 102 F.R.D. 472 (S.D. Fla.
1984).
3. No duty on owner, operator and crew members of tanker which sunk
fishing boat, to preserve evidence from subsequent Coast Guard
investigation. Favaloro v. S.S. Golden Gate, 687 F. Supp. 475
(N.D. Cal. 1987)
McCracken – 7
4. No duty on insurance company to preserve automobile involved in
collision. Reid v. State Farm Mut. Auto. Ins. Co., 218 Cal. Rptr. 913
(Ct. App. 1985).
B. Not Foreseeable That Destruction of Evidence Would Cause Harm.
1. Reasonable maintenance employee would not foresee that
disposing of broken bottle was destroying evidence. Velasco v.
Commercial Building Maintenance Company, 169 Cal. App. 3d 874,
215 Cal. Rptr. 504 (Ct. App. 1985).
A >Foreseeability is not to be measured by what is more probable
than not, but includes whatever is likely enough in the setting of
modern life that a reasonably thoughtful person would take account
of it in guiding practical conduct.= One may be held accountable for
creating even the risk of a slight possibility of injury if a reasonably
prudent person would not do so.@ Velasco, Ibid.
2. An independent third party spoliator must have actual knowledge of
harm, not mere constructive knowledge like an adverse party.
County of Solano v. DeLancy, 264 Cal. Rptr. 721 (Ct. App. 1989).
C. Immunity: A lay or expert witness has testimonial immunity, from a
spoliation tort, which encompasses the failure to preserve work product
prepared for the witness= testimony, other than the destruction of pivotal
physical evidence. Gootee vs. Lightner, 274 Cal. Rptr. 697 (Ct. App.
1990).
VI. What Creates a Duty to Preserve Potential Evidence?
A legal duty may arise in a relationship between two parties after
considering the nature of the relationship, a party=s knowledge, and the
circumstances surrounding the relationship. Lawson v. Howmet Aluminum
Corporation, 449 N.E. 2d 1172 (Ind. App. 1983).
A. Assumption of Duty by Taking Possession of Evidence: The plaintiff
was injured when a chair collapsed. An insurance claims adjuster took
possession of the chair for the express purpose of investigating a third
party action. The chair was later returned to its owner and disappeared.
Pirocchi v. Liberty Mutual Ins. Co., 365 F. Supp. 277 (E.D. PA. 1973).
McCracken – 8
B. Contract Between Parties: The plaintiff and Allstate Insurance
Company had an oral contract for Allstate to preserve a car and make it
available for inspection by the plaintiff=s expert in contemplation of a
product liability action against the auto manufacturer. Allstate salvaged
the car and it was destroyed before the expert inspected it. Miller v.
Allstate Ins. Co., 573 So. 2d 24, (Fla. App. 1990).
C. Statutory Obligation to Preserve Evidence.
1. A hospital had a statutory duty to preserve records. Bondu v.
Gurvich, 473 So. 2d 1307 (Fla. App. 1984).
Wis. Stat. 146.83(4)(c): No person may . . . intentionally destroy or
damage records in order to prevent or obstruct an investigation or
prosecution.
2. Wis. Stat. 946.60, Destruction of Documents Subject to Subpoena.
3. Wis. Stat. 943.38, Forgery.
4. Wis. Stat. 943.37, Alteration of Property Identification Marks.
5. Wis. Stat. 943.40 Fraudulent Destruction of Certain Writings.
D. Factors Which Have Been Considered by the California Courts in
Determining Whether a Spoliating Party Had a Duty to Preserve
Evidence Include:
A . . . (1) the extent to which the transaction was intended to affect
the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the
degree of certainty that the plaintiff suffered injury, (4) the closeness
of the connection between the defendant=s conduct and the injury
suffered, (5) the moral blame attached to the defendant=s conduct
and (6) the policy of preventing future harm.@
Velasco v. Commercial Building Maintenance Co., 169 Cal.
App. 3d 874, 215 Cal. Rptr. 504 (Ct. App. 1985)
J=Aire Corp. v. Gregory, 24 Cal. 3d 799, 157 Cal. Rptr. 407
(1979)
McCracken – 9
Biakanja v. Irving, 49 Cal. 2d 647, 320 P.2d 16 (1958).
In County of Solano v. Delancy, 264 Cal. Rptr. 721 (Cal. App. 1989), the
California Appellate Court noted that the most important factor in
establishing a duty to preserve evidence is the foreseeability of harm to
the plaintiff if the evidence is lost. County of Solano explained that
where the evidence is relevant solely to a third party suit, we agree . . .
that there is no duty absent actual notice of the plaintiff=s need for the
evidence. But where spoliation of evidence enables a spoliator to, in
effect, Aprofit from his own wrong,@ we conclude that a duty to preserve
evidence arises solely from foreseeability of the harm to the plaintiff.
VII. Worker=s Compensation Exclusive Remedy Statute Does Not Apply to
Negligent or Intentional Spoliation Action.
Because spoliation is an infringement of property interests, spoliation claims
against a worker=s compensation carrier are not barred by the exclusive
remedy statute. Coca-Cola Bottling Co. v. Superior Court, 286 Cal. Rptr.
855 (Ct. App. 1991).
VIII.Wisconsin Decisions on Spoliation.
A. Adverse Inference. Jagmin v. Simonds Abrasive Co., 61 Wis. 2d 60,
211 N.W. 2d 810 (1973).
A workman received mouth injuries when an abrasive wheel on a
portable cup grinder he was operating broke and struck him in the face.
The grinding wheel became lost after a worker=s compensation hearing
and was not available in the plaintiff=s product liability action against the
wheel=s manufacturer.
The plaintiff requested that the trial court instruct the jury that they could
infer the wheel was defective due to its destruction. The trial court
refused to give the instruction because in Wisconsin spoliation Ais
reserved for deliberate, intentional actions and not mere negligence.@
B. Sanction of Dismissal. Milwaukee Constructors II v. Milwaukee
Metropolitan Sewer District, 177 Wis. 2d 523, 502 N.W. 2d 881 (1993).
McCracken – 10
Milwaukee Constructors brought an action to recover $32.5 million in
damages from the Milwaukee Metropolitan Sewer District=s breach of
three contracts. Two years after suit was commenced the plaintiff
destroyed 700 boxes of its archived records as a cost saving measure.
The Sewer District filed a motion for sanctions due to the document
destruction. The trial court granted the motion and dismissed the
plaintiff=s action.
The Court of Appeals reversed the order of dismissal and ruled:
1. Dismissal is a sanction that should rarely be granted and is
appropriate only in cases of bad faith or egregious conduct.
2. Bad faith or egregious conduct involves more than negligence;
rather it consists of a conscious attempt to affect the outcome of
litigation or a flagrant, knowing disregard of the judicial process.
The Court of Appeals found that the Sewer District had failed
to establish the plaintiff purposefully sought to impair its ability
to discover information.
C. Exclusion of Evidence. Sentry Insurance v. Royal Ins. Co. of America,
196 Wis. 2d 907, 539 N.W. 2d 911 (1995).
A fire significantly damaged a home insured by Sentry. After paying its
insured=s loss, Sentry presented a subrogation claim against Royal
Insurance and its insured, General Motors which had manufactured a
refrigerator Sentry believed caused the fire.
More than three years after presenting the claim, Sentry filed suit.
Sometime during the three year interval between presentment of the
claim and the commencement of the action, the refrigerator was
discarded in a landfill by a warehouse operator who claimed Sentry
authorized the disposal. Sentry claimed that the disposal was done
without authorization and contrary to its instructions to the warehouse
operator.
In addition, while the refrigerator had been in storage, an expert
retained by Sentry had examined it and removed several of its parts.
Royal filed a motion for discovery sanctions based on Sentry=s
destructive testing (removal of parts) and disposal of the refrigerator.
McCracken – 11
The Court of Appeals held:
1. There is a duty on a party to preserve evidence essential to the
claim being litigated.
2. The failure to take adequate steps to preserve evidence that
was totally within Sentry=s control is sufficient to justify a
sanction of precluding any evidence of the condition of the
refrigerator. This preclusion led to the trial court granting
summary judgment dismissing Sentry=s claim because it could
not maintain it without evidence of the condition of the
refrigerator.
McCracken – 12
IX. Damages.
A. Same Jury Decides Underlying Action and Spoliation Claim: To
ascertain the plaintiff=s damages in a negligent or intentional spoliation
action, the same jury must decide:
1. Whether the plaintiff would have won the underlying lawsuit if the
evidence had not been spoliated.
2. How much compensation the jury in the underlying action would
have awarded if the spoliated evidence had been available.
Miller v. Allstate, 573 So. 2d 24 (Fla. App. 1990)
Boyd v. Travelers Ins. Co., 166 Ill. 2d 188, 652 N.E. 2d 267 (1995)
Smith v. Howard Johnson Co., 67 Ohio St. 3d 28, 615 N.E. 2d 1037
(1993)
Smith v. Superior Court, 151 Cal. App. 3d 491, 198 Cal. Rptr. 829
(1984)
B. Burden of Proof: In Smith v. Superior Court, supra, the California Court
of Appeal held that the plaintiff must only establish spoliation damages
Awith reasonable certainty.@
C. Punitive Damages: In Viviano v. CBS Inc., 597 A. 2d 543, N.J. Super.
Ct. App. Div., (1991), the plaintiff=s employer willfully withheld a
memorandum that contained highly incriminating information about a
defective machine that injured the plaintiff. This memorandum would
have been decisive in the woman=s product liability action against the
machine=s manufacturer. The court held that the intentional wrongdoing
of the employer warranted the imposition of punitive damages on the
spoliation claim.

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