HOT TOPIC ISSUE: SPOILATION. General Liability Track, Session 3 Fifth Annual General Liability & Workers Compensation Seminar

Transcription

1 HOT TOPIC ISSUE: SPOILATION General Liability Track, Session 3 Fifth Annual General Liability & Workers Compensation Seminar Carlock, Copeland & Stair Speaker: Scott Huray, Partner WHAT IS IT? Spoliation refers to the destruction or failure to preserve evidence that is necessary to contemplated or pending litigation. Silman v. Associates Bellemeade, 286 Ga. 27 (2009). It is not an independent cause of action. However, it can lead to a court imposing sanctions on a party and thereby drastically changing the outcome of a case. 1

2 WHAT KIND OF SANCTIONS? Trial courts are given wide discretion to fashion sanctions tailored to the circumstances of a specific case. Examples of Sanctions: 1. Exclusion of Evidence, Including Expert Testimony 2. Stipulation of a Contested Fact 3. Striking of Pleadings/Dismissal of Case POPULAR SPOLIATION SANCTION: JURY CHARGE When a party has evidence that rejects (or disproves) a claim or charge made against the party and he/she fails to produce it, or having more certain and satisfactory evidence, relies on that which is of a weaker and inferior nature, a presumption arises that the charge or claim is well founded. This presumption may be rebutted, however. O.C.G.A

3 WHEN ARE SANCTIONS IMPOSED? Spoliation sanctions can be imposed even in the absence of any finding that a litigant willfully or in bad faith altered/destroyed evidence. Spoliation sanctions can be imposed by inadvertent failure to preserve evidence! Three requirements for spoliation sanctions to apply: (1) notice of pending or contemplated litigation, (2) prejudice to the party alleging spoliation and (3) evidence in question was in the possession/control of alleged spoliator or one acting on his her or behalf. NOTICE OF PENDING OR CONTEMPLATED LITIGATION Spoliation can occur before a lawsuit is filed. If a party receives notice that a lawsuit is either pending or contemplated, then that party is required to preserve evidence relevant to the claim. The completion of an accident report alone does not demonstrate notice of contemplated litigation. 3

4 NOTICE OF PENDING OR CONTEMPLATED LITIGATION Examples of notice: You will hear from my lawyer. Spoliation letter: claimant s attorney writes to a carrier notifying retention or requesting payment of medical expenses. Courts can find a party had notice based on conduct. (Bar Manager finds out patron involved in accident and conduct private investigation with staff). An party s testimony that he or she suspected a lawsuit would arise. PREJUDICE TO THE PARTY SEEKING SPOLIATION SANCTION Even where evidence is wrongfully destroyed, the party alleging spoliation must show that such conduct prejudiced the party s ability to prove or defend their case. 4

5 POSSESSION OR CONTROL OF EVIDENCE A party cannot spoliate evidence that does not exist. Ex: no spoliation based on a party s failure to have video surveillance in a store. The evidence in question must be in the possession of the party or the party s agents. A defendant s insurance carrier can be deemed his/ her agent. No spoliation is found where the evidence is destroyed by a third party. Ex: video is turned over to police who then destroy it. RECENT SPOLIATION CASES: 5

6 THE GOOD : POWERS V. PIGGLY WIGGLY (2013) A customer slipped and fell as she was exiting a Piggly-Wiggly store. The customer told the store manager that she would be okay and denied medical assistance. The store manager filled out an incident report, which he was required to do under the company procedures. The incident report contained preprinted language that the report was being prepared in anticipation of litigation. Aspartofhisdutiesasstoremanager,hebegan investigating the incident and taking photographs of the area. POWERS V. PIGGLY WIGGLY (CONTINUED) After the initial investigation, the store manager reported the incident to Piggly-Wiggly s risk manager and third party administrator. During a follow-up interview by the TPA, there was no indication that the customer was seeking an attorney or that she would take legal action. The video was ultimately recorded over as would normally be the case with other video footage. The customer contacted the store three months after the incident. At that time, the video no longer existed. The customer s attorney moved for spoliation sanctions arguing that the incident report s pre-printed language showed that the store manager was anticipating litigation. The trial court disagreed and held that there was no spoliation of evidence in this case. 6

7 POWERS V. PIGGLY WIGGLY (CONTINUED) In affirming the trial court s decision, the Court of Appeals found that the store did not have notice of a contemplated litigation: The manager s testimony showed that he did not believe that the customer s fall would lead to litigation because the customer was unharmed. The investigation conducted after the incident was not because the store anticipated litigation. Rather, post-incident investigations were matters of routine practice required for all slip and falls occurring in the store. The Court of Appeals also held that the trial court correctly excluded at trial any testimony regarding the absence of the video evidence, such testimony would be more prejudicial than probative. THE BAD : KROGER V. WALTERS (2013) A customer allegedly slipped and fell on a piece of banana inside the Kroger store. The customer did not report experiencing any pain or symptoms and told the co-manager of the store that he was okay. Following Kroger s written policies, the comanager began to investigate the customer s fall that same day. He filled out an Incident Report with language that the report was made in anticipation of litigation under the direction of legal counsel. 7

8 KROGER V. WALTERS (CONTINUED) The co-manager spoke to the customer again within two weeks after the fall. The customer told him he had an upcoming doctor s appointment for pain related to the fall. The co-manager then saw the customer from time to when he went shopping. During this time, the customer reported problems with his back and legs allegedly caused by the fall. The customer told him that he needed help with medical bills. KROGER V. WALTERS (CONTINUED) Kroger s policies dictated that if a surveillance video covered the area of the fall, it should be retained. However, the video was destroyed. The customer and his wife filed a lawsuit against Kroger. The co-manager provided conflicting testimony as to whether any of the store cameras captured the incident. Initially, he stated that none of the cameras captured the incident, but then later testified he could not recall watching the video. 8

9 KROGER V. WALTERS (CONTINUED) The co-manager testified that the camera closest to the area of the fall was Camera 17. He claimed that the camera had not been moved or re-aimed since the date of the fall. Kroger produced a sample video showing the Camera 17 s field of view. The sample video showed that the camera did not point directly at the location where the plaintiff fell. During the deposition of another Kroger manager, (which was taken at the store), the customer s attorney asked to view a live feed of Camera 17. The live feed of Camera 17 was not pointed in the same direction as the sample video. The camera directly pointed to the location of the customer s fall. KROGER V. WALTERS (CONTINUED) The customer s attorney moved for spoliation sanctions. The trial court concluded that Kroger spoliated video evidence. The trial court also found that Kroger acted in bad faith in failing to preserve the evidence and manipulating the evidence to excuse its action. As a sanction, the trial court struck Kroger s Answer. The trial court also allowed the customer to present at trial evidence that Kroger spoliated video evidence. 9

10 KROGER V. WALTERS: TRIAL 1 AND TRIAL 2 In January 2012, a jury awarded $1,689,456 in damages and $ 675, in attorneys fees a total of a $2.3 million. Kroger appealed. The Court of Appeals affirmed all but one of the trial court s ruling. The Court Appeals found that the trial court should not have excluded testimony by a Kroger employee explaining that Camera 17 was re-aimed two years after the incident in response to shop-lifting in the area. In the second trial of the case, (March 2013), the jury awarded plaintiff $2 million. THE UGLY : HOWARD V. ALEGRIA (2013) A pick up truck driver sued a driver of a tractor trailer, its owner, and insurer after the driver of the tractor trailed collided with the plaintiff s pick up truck. A few days later, the claims manager of the tractor-trailer owner received a spoliation letter from plaintiff s attorney. 10

11 HOWARD V. ALEGRIA (CONTINUED) Instances of Discovery Misconduct The defendants admitted that the owner of the tractor-trailer began repairing the tractor trailer 5 days after the collision. Defendants denied the existence of certain documents, but after the defendants employee was deposed, they supplemented their responses with requested documents stating that another unidentified employee found the documents in a drawer while cleaning out an area around her desk. The parties agreed to depose two non party witnesses. The defendants attorney sent a subpoena and notice to produce certain documents in a private meeting a week before the scheduled deposition. The plaintiff was not notified of this meeting. After discovering the secret meeting, the plaintiff s attorney demanded all documents produced by that witness. The defendants at first agreed to produce these materials, but later denied that any documents were produced. HOWARD V. ALEGRIA (CONTINUED) The plaintiff moved for sanctions for discovery abuse, fraud, and spoliation of evidence. After the motion was filed, the defendants produced documents that they had previously denied existed: such as a print out of an onboard tracking device on the tractor-trailer. The Spoliation Hearing: Defendants argued that the failures to provide evidence were the result of administrative or inadvertent mistakes. Defendants also moved to withdraw their admission that the truck was repaired 5 days after the accident. They also produced a letter dated a month after the collision showing that they provided plaintiff with an opportunity to inspect the tractor-trailer. However, the plaintiff produced evidence showing that the letter was fabricated. After the hearing, the defendants produced documents showing that it had $50 million in excess liability despite denying it throughout discovery. 11

12 HOWARD V. ALEGRIA: THE SANCTION The trial court found: Defendant s claims of innocence lacked any credibility. Defendants spoliated crucial evidence when it repaired the tractor trailer, willfully provided false statements about the existence of documents, and intentionally fabricated evidence. The trial court struck the Defendants Joint Answer and Counterclaim. The Court of Appeals affirmed the sanction. WHEN A PLAINTIFF COMMITS SPOLIATION: RV MOTORS V. FOR THE INSURANCE AGENCY (2013) 12

13 RV MOTORS V. FOR THE INSURANCE AGENCY (2013) Facts: In June 2007, ten motor homes (worth about $500,000) on RV Motor s lot were vandalized. Fearing future vandalism, the owner of RV Motor s moved his remaining four RVs to another lot. He checked with his insurance agent first before moving them to another lot. In October 2007, the remaining four RVs were also vandalized. The insurance company denied the claim because the policy excluded coverage for items moved from the original lot. The RV owner filed suit against the insurance company. The Spoliation: During litigation, the RV owner s attorney told the owner not to let the insurance company s investigators to inspect the damaged vehicles. The owner then later sold the damaged vehicles for salvage and parts. The Sanction: The trial court dismissed this case as a result of the owner s destruction of evidence, and stated that the prejudice to the defendant is extraordinary as it has been denied the ability to defend the case. RV Motors appealed the decision but later dropped it because the Court of Appeals rarely overturn spoliation sanctions. RV Motors was also facing incurring additional attorney fees as the insurance company served a Rule 68 Offer of Settlement of $150,000. WHEN VIDEO EVIDENCE IS PRESERVED: HUNNEWELL V. THE KROGER CO. (2013) 13

14 HUNNEWELL V. THE KROGER CO. (2013) A customer at Kroger slipped on floor wax and fell. He alleged injuries to his back, neck and head. The customer sought $16,000 in lost wages, $5,600 in past medicals, and unspecified damages for pain and suffering. Prior to trial, Kroger offered $10,000, but was rejected by the customer. HUNNEWELL V. THE KROGER CO. (CONTINUED) At trial, Kroger presented a surveillance video depicting the customer s fall. The video showed that the customer fell in a sitting position and contradicted the customer s testimony that he fell and hit his head several times. The jury a defense verdict after 1.5 hours. Surveillance videos can be very helpful! 14

15 SPOLIATION AND SOCIAL MEDIA Trial courts have recently begun imposing spoliation sanctions for deleting material on social media. Case Example: Gatto v. United Airlines Plaintiff sued an airline after colliding with a set of stairs used for aircraft refueling. Plaintiff claimed he was physically disabled and could not live an active and social lifestyle. The airline sent forms to plaintiff that would authorize Facebook, MySpace, e- bay to release his account information. Plaintiff signed all but the Facebook form. SPOLIATION AND SOCIAL MEDIA: GATTO V. UNITED AIRLINES The judge ordered the plaintiff to sign the Facebook form. The plaintiff was ordered to change his password to give access to the airline. The airline s lawyer had attempted to gain access but discovered the plaintiff did not change his password. However, the airline attorney had limited public access to the plaintiff s Facebook account and printed out that material. The airline s attorney ed plaintiff s counsel instructing that his client change the password to obtain full access. The airline s attorney also told the plaintiff s attorney that it had also sent the authorization form to Facebook s corporate offices. 15

16 SPOLIATION AND SOCIAL MEDIA: GATTO V. UNITED AIRLINES In response, Facebook claimed the Stored Communications Act barred it from disclosing the plaintiff's data, but suggested that plaintiff download the contents from his account. It was then discovered that the plaintiff had deleted/deactivated the account. Because he left the account deactivated for a certain period, the account was permanently erased. SPOLIATION AND SOCIAL MEDIA: GATTO V. UNITED AIRLINES Airline requested spoliation sanctions because the plaintiff destroyed Facebook material that would have shown that he was not disabled and lived an active lifestyle as shown by the material she previously printed out. The plaintiff argued that he deleted the account because other people were trying to access his account without permission. (It turned out to be the airline s attorney). Plaintiff also argued that the airline assured that they would not access the account online but through Facebook s corporate offices. The airline denied any such assurance. The judge did not believe the deletion was unintentional. Sanction: A Jury Instruction on Spoliation. 16

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