Understanding and Avoiding Spoliation

Transcription

1 Understanding and Avoiding Spoliation Presented By: Gary L. Wickert Matthiesen, Wickert & Lehrer, S.C. SPOLIATION Definition: The intentional destruction, mutilation, alteration, or concealment of evidence. Black s Law Dictionary Effect: Undermines the truth-seeking function of the judicial system. Sanctions For Spoliation Adverse Inference All things are presumed against a despoiler. Jury instruction is given. Dismissal Court strikes introduction of evidence. Case dismissed because party cannot meet its burden of proof.

2 Milwaukee Constructors v. MMSD, 177 Wis.2d 523 (Ct. App. 1993) $32.5m Breach of Contract case. Destruction of documents at off-site warehouse. Court Requires intentional and egregious conduct or knowing disregard of judicial process No sanctions for negligent spoliation. Sentry Ins. v. Royal Ins., 196 Wis.2d 907 (Ct. App. 1995) Defective refrigerator. Ex parte destructive testing. Expert removed wiring and part of fridge was destroyed without notice to tortfeasors. Arguably dealt with negligent conduct, but court found that it dealt with intentional conduct. Led to confusion over spoliation standard. Garfoot v. Firemans Fund, 228 Wis.2d 707 (Ct. App. 1999) Personal injury from propane explosion. Plaintiff s expert disconnected and reconnected joints in the gas piping, depriving defendants from doing an LP pressure test. Harmonized Sentry with Milwaukee Constructors [R]equires a finding of egregious conduct, which, in this context, consists of a conscious attempt to affect the outcome of litigation or a flagrant knowing disregard of the judicial process.

3 Intentional, Egregious Conduct Standard Estate of Neumann v. Neumann, 2001 WI App. 61. City of Stoughton v. Thomasson Lumber Co., 2004 WI App 6. Morrison v. Rankin, 2007 WI 186. American Family v. Golke Brothers Background and Investigation Fire destroyed the Ronaldson s home on 2/13/2000. American Family immediately investigated and sent out two C&O experts. Experts took photos to document area of origin. Golke Brothers Roofing negligently installed plywood roof sheathing around chimney pipe in Adjuster met with Golke Brothers in person.

4 Notice to Liable Parties Adjuster wrote letters to Golke Brothers March 13, 2000 (David) (Charles & Joseph) Letter stated that company s negligence caused fire and gave until April 1 to investigate. Charles and Joseph denied receiving. David received it and forwarded it to Indiana Insurance Company. Indiana Insurance acknowledged subrogation claim but took no action to investigate. (Coverage Denial) Notice Continued Second notice letter on April 6, Requested liability insurance information re the loss. Certified mail to Golke s (Joseph signed receipt). Charles left voice message for American Family adjuster. Adjuster returned call and left voice message. Ronaldson home was razed sometime on April 11 th. Trial Court American Family filed a subrogation action against Golke Brothers. Spoliation Trial Relied exclusively upon Sentry decision. Found that American Family could have done more to preserve evidence (preserve chimney and roof sheathing, videotape, etc.). No finding of egregious conduct.

5 Court of Appeals Certified Questions Under what circumstances may evidence crucial to potential legal claim be destroyed? What notice must be given to a civil litigant before evidence is destroyed? What factors should a court consider in evaluating whether a party s conduct constitutes a flagrant and knowing disregard of the judicial process? Should a court weigh the cost and effort to preserve the evidence? Should a court evaluate only the conduct of the party who allows or causes the evidence to be destroyed because dismissal for spoliation is a sanction, or should a court consider whether the other parties acted reasonably and whether the other parties did, in fact, receive notice? Golke Brothers Arguments Notice was legally insufficient. U.S. Mail is not proof of actual notice. 2 nd letter was insufficient. Lacked cause and origin opinion Failed to warn litigation was imminent. Failing a response from the opposing party, [American Family] should continue to preserve it. Relying upon Sentry, no egregious conduct or bad faith needed for dismissal. Wisconsin Reinsurance Amicus Subrogation should only be allowed if equitable. An insurer using subrogation must have superior equity. Horace Mann Ins. v. Wauwatosa Board of Education (1971). Notice must be equitable. Requires something more than letters via U.S. Mail and actual notice. Does not address Indiana Insurance Co s actual notice. Evidence preservation must be equitable. Subrogated insurer must retain all evidence in the area of origin. Slippery slope argument.

6 NASP Amicus Brief Egregious Conduct Standard for Dismissal. When Can We Destroy Evidence? U.S. Mail is sufficient. Notice and opportunity to inspect. What Factors Should the Court Consider? Context and Costs. Prejudice to Victim. You can lead a horse to water but you can make him drink. Wisconsin Supreme Court Some Justices were troubled by the minimal amount of evidence retained by American Family. Many of the justices were skeptical of the Golke s unsophisticated defense to notice. Justices were also troubled by the defendants inaction. Justice Roggensack asked about whether an intermediate rule could be fashioned. The Holding Notice by Mail The court also declared that notice to potential defendants via first-class mail is appropriate: The legislature has long recognized that first-class mail service is an efficient mechanism that is reasonably calculated to provide actual notice of possible or pending litigation, the Court remarked. Notice of mail is usually considered complete upon mailing, not proof of receipt, the Court added. The Court said that evidence of mailing a letter raises a rebuttable presumption that the addressee received the letter. This presumption cannot be overcome without a denial of receipt, the Court said. Mere non-remembering of receipt is not enough, the Court stated.

7 The Holding Duty to Preserve The court held that the duty to preserve evidence is discharged once the party in possession has (1) given reasonable notice of a possible claim, (2) explained the basis for that claim and the existence of evidence relevant to the claim, and (3) provided a reasonable opportunity for inspection of the evidence. Factors A Trial Court May Consider The Court said a trial court may use its discretion, guided by the totality of the circumstances, to judge the sufficiency of the content of the notice letter. Relevant factors include: (1) Length of time evidence can be preserved, (2) Ownership of the evidence, (3) Prejudice posed to possible adversaries by destruction of the evidence, (4) Form of the notice, (5) Sophistication of the parties, and (6) Ability of the party in possession to bear the burden and expense of preserving the evidence. Minimizing Spoliation In Future Cases

8 Evidence Preservation & Spoliation 1. Protect the Scene. 2. Notice to ALL Potentially Interested Parties 3. Schedule a Joint Inspection 4. Establish a Protocol/Chain of Custody 5. Preserve the Key Evidence -Photos and video are a minimum. -Retain key physical evidence and alternate causes when feasible. 6. Move Swiftly to Prosecute Claim WISCONSIN SPOLIATION LAW UPDATE Presented By: Gary L. Wickert Matthiesen, Wickert & Lehrer, S.C.