SPOLIATION OF EVIDENCE Rebecca Levy-Sachs 1

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1 Originally published by the Florida Defense Lawyers Association in "". Reprinted with permission. CHAPTER 11 SPOLIATION OF EVIDENCE Rebecca Levy-Sachs 1 Spoliation is a term you have heard as long as you have been practicing law. Any incident, whether it is an auto accident, a work place injury, a catastrophe such as a fire, or even a claim in the employment context raises the necessity of evidence identification, collection, and preservation, and the possibility of destruction of evidence before the matter can be litigated. Evidence collection is hot just watch any of the CSI series. Unfortunately, the everyday situations that become the civil cases we handle accidents, fire scenes, employment claims do not benefit from the same control and scrupulous security of evidence as do most crime scenes portrayed in these high-tech glitzy shows. We don t have unlimited time, resources, investigators with cool tools, equipment and monogrammed jackets at our disposal. Nonetheless, even the smallest piece of evidence can crystallize opinions or, alternatively, exclude theories in a piece of litigation. The failure to preserve, or the inadvertent disappearance or alteration of evidence, has all too often become the case within the case ; attorneys must appreciate the importance and significance of scene preservation and evidence collection to potential and pending litigation. A failure to preserve evidence, whether it is critical or not, may result in a motion seeking dismissal or other sanctions, and can alter the litigation in drastic ways, shifting burdens, precluding testimony or experts, or resulting in the dismissal of certain theories. Some attorneys regularly challenge expert competency by picking apart scene evidence collection, and others use sanction motions as an aggressive offensive litigation tool. In addition to the overview presented in this Chapter, two sets of Take Away Points offer handy onepage guides regarding spoliation and related electronic discovery issues. I. SPOLIATION PRIMER BASIC CONCEPTS AND SANCTIONS 2 When evidence is lost or destroyed, either intentionally or negligently, an injured party to litigation has several different options. Most traditionally, the party may seek civil discovery sanctions for the loss or destruction of evidence. There are generally three different types of civil discovery sanctions that a court may impose upon a party: 1) an adverse inference, 2) the preclusion of evidence or testimony, and/ or 3) the dismissal of a claim. The spoliating party s degree of intent and the amount of prejudice suffered by the injured party usually determine which sanction, or combination of sanctions, a court imposes. These basic sanctions and the consideration given to their imposition are essentially the same regardless of the type of litigation involved. The three types of sanctions are reviewed below. A. The Adverse Inference The adverse inference is the least severe, but the most commonly issued sanction for the spoliation of evidence. The adverse inference allows the fact finder to draw an unfavorable inference against the spoliating party. 3 Virtually every jurisdiction has recognized and used the presumption of an adverse inference to redress a situation where a party has been harmed by the spoliation of evidence. Specifically, the spoliation of evidence raises a presumption that the destroyed or lost evidence would not have been favorable to the party responsible for the missing evidence. 4 Courts have also drawn an inference that destroyed materials are relevant and, if available, would lead to the proof of a claim. 5 However, before a court will permit an adverse inference against a spoliating party, there must be a showing that the parties responsible for the destruction or loss of the subject evidence possessed, or should have possessed, control of the evidence. 6 59

2 B. Preclusion of Evidence or Testimony of Witnesses In some instances the granting of an adverse inference is not a sufficient sanction for the spoliation of evidence, and a court will take the additional step of precluding the introduction of evidence, or the testimony of a witness. Even if there is no evidence of a party s intent to willfully destroy evidence, some courts have held that the negligent or inadvertent destruction of evidence is sufficient justification for the preclusion of evidence. 7 For example, in Travelers Insurance Co. v. Dayton Power & Light, the court barred the testimony of an expert witness and instructed the jury to infer that any evidence destroyed would have disclosed facts adverse to the party who destroyed the evidence. 8 The court in American Family Insurance Co. v. Village Pontiac-GMC, Inc. also excluded the spoliator s expert testimony as a sanction for allowing the most crucial evidence in the case to be destroyed. 9 Likewise, the refusal to comply with requests for discovery, including the production of tangible evidence, has led courts to bar the introduction of such evidence as a sanction for the improper conduct. 10 However, the barring of evidence or the testimony of a witness is generally ordered only when substantial prejudice would result to the offended party C. Dismissal of Claim Under certain circumstances, a court may dismiss a claim due to the spoliation of evidence. This discovery sanction is severe and, accordingly, is used only when a less severe sanction will not operate to erase the prejudice suffered by the non-delinquent party. 12 Many of the dismissals and default judgments associated with the spoliation of evidence result from the offending party not being able to prove its prima facie case, not because the court has entered an order of dismissal as the actual sanction. For example, in Fire Insurance Exchange v. Zenith Radio Corp., the party responsible for the spoliation of evidence was barred from presenting the testimony of an expert witness. The barring of this expert s testimony resulted in summary judgment in favor of the injured party. 13 Such a sanction, which effectively precludes a trial on the merits, is only appropriate when the adverse party has incurred prejudice by the alteration or destruction of a crucial piece of evidence. 14 Thus, the ultimate sanction of dismissal is not warranted where a party has not been prejudiced, and a trial on the merits can be had. 15 Courts also take into account the intent of the spoliating party and whether the spoliator acted in bad faith in destroying, or not producing, evidence. 16 Furthermore, a party that destroys evidence in anticipation of litigation may be imputed to possess the requisite intent necessary for a court to order a dismissal sanction since a litigant is under a duty to preserve evidence which it knows, or reasonably should know, is relevant to a potential claim or defense. 17 D. Effect of Prejudice and Intent Courts are faced with a multitude of factors in determining the appropriate sanction(s) for the spoliation of evidence. The intent of the spoliator and the degree of prejudice suffered by the offended party due to the destruction or non-production of evidence are two of the more influential factors courts consider in ordering sanctions for spoliation of evidence. Notwithstanding how egregious a party s actions may have been in destroying or hiding evidence, a court will not impose an adverse inference, preclude the introduction of evidence, or dismiss an action unless the offended party can demonstrate that it has been damaged by the lack of evidence. 18 For instance, in Nehring v. First National Bank, the defendant could not demonstrate any prejudice resulting from the missing documents since there was sufficient evidence to conduct a trial on the merits. 19 Accordingly, the appellate court reversed the trial court s order of dismissal, and remanded the cause for trial with instructions for the trial court to review its findings and determine whether a less severe sanction was appropriate. 20 While some courts have imposed sanctions for negligent spoliation, many courts have held that spoliation requires an intentional act of destruction and that mere negligence is insufficient. 21 Some courts have declined to draw an unfavorable inference when the circumstances indicate that the evidence in question has been lost or accidentally destroyed, or where the failure to produce the evidence is sufficiently explained. 22 Courts similarly have held that an order of dismissal for the spoliation of evidence is only appropriate where there is a showing that the evidence was deliberately destroyed or otherwise manipulated. 23 At common law, there was no general duty for a third-party to preserve evidence against spoliation. Generally, a duty to preserve evidence against spoliation for use in a civil action arises through a contract, agreement, statute, administrative rule, voluntary assumption of duty by the third-party, or other special circumstances. 24 This list is not exhaustive of all the instances in which a party may assume a duty to preserve evidence. A party owes a duty of due care to preserve evidence if a reasonable person in the party s position should have foreseen that

3 the evidence was material to a potential civil action. 25 Moreover, industry standards, such those promulgated by the National Fire Protection Association, may create a standard of care with respect to the preservation and documentation of potential evidence. 26 In a recent Massachusetts case, a court found that, without a contractual or other affirmative duty, a non-party is not required to preserve or store an item simply because that item might be useful in pending or anticipated litigation. 27 This holds true even if the item is a relevant piece of evidence, and the person who has possession of it knows the extent of its probative value. 28 Regardless, a concern for personal property rights has discouraged an automatic imposition of duty to preserve evidence. 29 The court held that a plaintiff may not bring an independent cause of action against a non-party for the tort of spoliation, absent a showing that a duty to preserve evidence was breached. The conduct of a party and the prejudicial impact of the subject testimony are also considered in determining whether to bar a witness testimony. 30 A party s bad faith, or lack thereof, is an additional factor affecting a court s consideration in sanctioning a litigant for the spoliation of evidence. 31 In fact, some courts impose a more stringent intentionality element by requiring proof of fault or bad faith. 32 However, intentional destruction of materials is not necessarily a prerequisite for court-ordered sanctions. In Prudential Insurance Co., the court held that sanctions were appropriate despite the Court s finding that Prudential s conduct was not willful. 33 Similarly, courts have held that the negligent or inadvertent destruction of evidence is sufficient to trigger sanctions where the opposing party is disadvantaged by the loss. 34 E. The Perils of Representing an Insurance Company Because carriers are so frequently involved in litigation, some courts have imposed a higher standard in scrutinizing their activities with respect to the preservation of evidence. The Civil Trial Council of Wisconsin has published a Collection and Preservation of Evidence Report 35 that lists certain factors for courts to consider if the accused spoliator is a subrogating insurance company: 1. Was the claim brought by an insurance carrier with sufficient size or experience to be deemed to recognize the importance of the loss scene? 2. Was the insurance carrier truly compelled to repair or demolish the scene immediately to protect the public or its insured? (This assertion might be undermined when the insurer 61 II. had full access to the fire scene to conduct any investigation it deemed necessary.) 3. Was the insurer aware of a potential subrogation claim? If so, did the insurer invite the potentially culpable party inspect the fire scene? If not, would the plaintiff have been prejudiced in any way by additional inspections by other experts for other parties? How much time passed before the scene was actually repaired? 5. Has there been prejudice to the defendant as a result of plaintiff s actions? SURVEY OF FLORIDA CASES Florida courts have generally followed the general law outlined above in determining degree of fault, actual prejudice, and other case-specific factors in determining the appropriate sanction to be imposed. While other jurisdictions have recognized an independent cause of action in order to address spoliation, two Florida Supreme Court cases, one in the firstand the other in the third-party context, have held that, when the alleged spoliator is the defendant in the underlying cause of action, the matter should be addressed by the imposition of the appropriate sanction, not by an independent cause of action. 37 In Martino v. Wal-mart Stores, Inc., the court reiterated that willful violations of the trial court s discovery order justified harsh sanctions such as a default judgment against a non-complying party. When the loss of evidence is determined to be negligent, the rebuttable presumption of negligence which shifts the burden of proof is applicable. However, in both Martino and in Public Health Trust of Dade Co. v. Valcin, the Florida Supreme Court cautioned that these sanctions are applicable only if the absence of the records hinders (plaintiff s) ability to establish a prima facie case. 38 The Florida courts have identified numerous factual issues that factor into a determination on sanctions for spoliation, including: whether there is a duty to preserve in the first instance; 39 whether the evidence was lost through negligence, or more egregious intentional behavior; 40 and significantly, whether the non-spoliating party is actually prejudiced. 41 Spoliation is a very fact-specific issue, and the best way to present a claim for spoliation, or defend against spoliation sanctions, is to be proactive, detailed and precise. For instance, as to the issue of prejudice, if an adverse party presents an expert and a theory of liability without the missing evidence, an

4 argument can be made that there has been no prejudice and that no spoliation sanction is appropriate. Similarly, a strong argument can sometimes be made that there is sufficient alternative evidence (such as reports, photos, or videotapes) to avoid prejudice to that party. Accordingly, each aspect of the claim of spoliation is subject to scrutiny. CONCLUSION Spoliation decisions are made based upon fairness to litigants and in an effort to assure a full and fair presentation of relevant facts. Sanctions should be imposed if there have been intentional acts or bad faith or prejudice. However, litigants should not be able to turn innocent and unintentional or collateral spoliation to a tactical advantage by the imposition of case-debilitating sanctions. 1 The author gratefully acknowledges Lisa J. Trembly, Gregory D. Miller, and Thomas G. Aljian, attorneys with Podvey Sachs, Meanor, Catenacci, Hildner & Cocoziello, and Betsey Grady, a summer associate at Robinson & Cole, for their research and assistance. 2 This section is edited from Rebecca Levy-Sachs, William Clayton, Gregory Miller & Antonio Morin, Spoliation of Evidence Trend to a New Tort, 49 Fed n Ins. & Corp. Counsel Q. 225 (1999). 3 Hirsch v. Gen. Motors Corp., 628 A.2d 1108 (N.J. Super. Ct. Law Div. 1993). 4 Malone v. Foster, 956 S.W.2d 573, 577 (Tex. 1997); Bright v. Ford Motor Co., 578 N.E.2d 547 (Ohio Ct. App. 1990). 5 In re Prudential Ins. Co. Sales Practices Litigation, 169 F.R.D. 598, 615 (D.N.J. 1997); Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 334 (3d Cir. 1995). 6 Brewer, 72 F.3d at 334 (citing Gumbs v. Int l Harvester, Inc., 718 F.2d 88, 96 (3d Cir. 1983). 7 Travelers Ins. Co. v. Dayton Power & Light Co., 663 N.E.2d 1383 (Ohio App. Ct. 1996) N.E.2d 1115 (Ill. App. Ct. 1992); see also Nally v. Volkswagen of America, Inc., 539 N.E.2d 1017 (Mass. 1989) (precluding expert from testifying where expert removed evidence material to litigation); Fire Ins. Exchange v. Zenith Radio Corp., 747 P.2d 911 (Nev. 1987) (barring party responsible for spoliation from presenting testimony of expert witness resulting in summary judgment for other party). 10 H & H Sand & Gravel Haulers Co. v. Coyne Cylinder Co., 632 N.E.2d 697, 701 (Ill. App. Ct. 1994). 11 Nerney v. Garden State Hosp., 550 A.2d 1003, 1004 (N.J. Super. Ct. App. Div. 1988). 12 Hirsch, 628 A.2d at P.2d 911, (Nev. 1987). 14 H & H Sand & Gravel, 632 N.E.2d at White v. Office of the Public Defender for the State of Maryland, 170 F.R.D. 138, (D. Md. 1997). 17 Hirsch, 628 A.2d at (citing Fire Ins. Exchange v. Zenith Radio Corp., 747 P.2d 911, 914 (Nev. 1987)). 18 Marinelli v. Mitts & Merrill, 696 A.2d 55, 62 (N.J. Super. Ct. App. Div. 1997) N.E.2d 1119 (Ill. App. Ct. 1986) Hirsch, 628 A.2d at 1126 (citing Lawrence Solum & Stephen Marzen, Truth and Uncertainty: Legal Control of the Destruction of Evidence, 36 Emory L.J. 1085, (1987)). 22 Brewer, 72 F.3d at 334 (holding no adverse inference should be drawn from the loss of the evidence where the loss was not intentional and it was adequately explained); see also Baliotis v. McNeil, 870 F.Supp. 1285, 1291 (M.D. Pa. 1994). 23 H & H Sand & Gravel, 632 N.E.2d at Hannah v. Heeter, 584 S.E.2d 560, 569 (W. Va. 2003) See NFPA 21: Guide for Fire and Explosion Investigations (Nat l Fire Protection Ass n, 2004 ed.). 27 Fletcher v. Dorchester Mut. Ins. Co., 773 N.E. 2d 420 (Mass. 2002) White, 170 F.R.D. at Hirsch, 628 A.2d at In re Prudential Ins. Co. Sales Practices Litigation, 169 F.R.D. at Travelers, 633 N.E.2d at 1385 (citing Farley Metals, Inc. v. Barber Colman Co., 645 N.E.2d 964, 968 (Ill. App. Ct. 1994)); see also Nerney v. Garden State Hosp., 550 A.2d 1003 (holding that a party who negligently loses evidence may be barred from introducing testimony regarding that evidence if substantial prejudice would result to the other side). 35 See Robert Bull, Collection and Preservation of Evidence for Experts and Insurers, available at 36 See Baliotis v. McNeil, 870 F. Supp. 1285, (M.D. Pa. 1994) (holding that [p]roperty insurers who permit destruction of a fire scene after identifying subrogation targets should suffer some sanction where... it is clear that relevant evidence has been lost. ). 37 Martino v. Wal-mart Stores, Inc., 908 So. 2d 342 (Fla. 2005) (holding no independent cause of action exists for first-party spoliation of evidence); see also Public Health Trust of Dade Co. v. Valcin, 507 So. 2d 596 (Fla. 1987) ( when evidence was intentionally lost misplaced or destroyed by one party, trial courts are to rely on sanctions found in the Florida Rules of Civil Procedure (b)(2) and that a jury could well infer from such a finding that that the records would have contained indications of negligence. ). 38 Valcin, 507 So. 2d at 599; Martino, 908 So. 2d at Biomet, Inc. v. Fleury, 912 So. 2d 706 (Fla. 2d DCA 2005); Derosier v. Cooper Tire & Rubber Co., 819 So. 2d 143 (Fla. 4th DCA 2002); Aldrich v. Roche Biomedical Lab., Inc., 737 So. 2d 1124 (Fla. 5th DCA 1999). 40 Valcin, 507 So. 2d at 599; Sponco Mfg., Inc. v. Alcover, 656 So. 2d 629 (Fla. 3d DCA 1995). 41 Martino, 908 So. 2d at 347; Aldrich, 737 So. 2d at 1125; Sponco, 656 So. 2d at 630; Valcin, 507 So. 2d at 599. ABOUT THE AUTHOR Rebecca Levy-Sachs is Counsel to the firm of Robinson & Cole, which has offices in Hartford, Boston, New York, Stamford, New London and Sarasota. She has over twenty-five years of experience in claims litigation and has written and spoken extensively on issues related to spoliation. 62

5 Take-Away Points for Clients on Avoiding Spoliation of Evidence 1. Spoliation of evidence is the intentional or negligent, prejudicial destruction or significant alteration of a scene, object or document, making it permanently unavailable to the other party, when there is an anticipation of, or a reasonable likelihood of litigation with respect to the evidence or scene. 2. Evidence spoliation can include: failure to preserve, failure to properly collect, or intrusive and destructive testing of evidence, negligent preservation of evidence, abandonment of evidence, and denial of existence of evidence (such as documents). 3. A duty arises with respect to the preservation of evidence or something of evidentiary value once you have control of the scene or the evidence, or have the ability to control them; if you have a duty to control or preserve the evidence; and if failure to preserve would cause foreseeable prejudice to an adverse party in a future anticipated or probable litigation. As to such evidence, you must act reasonably to preserve or secure the evidence or scene. A failure to act reasonably may result in the imposition of discovery sanctions, adverse inferences, barring expert testimony, or dismissal. 4. With respect to the preservation of documents, make sure employees are aware of document retention policies; put a procedure in place for suspending document destruction to comply with orders in litigation or based upon regulatory requirements; and make sure these procedures are followed. Advise counsel immediately if any order is violated by error or negligence. 5. As to physical evidence involved in an accident or potential claim: make sure the scene is documented thoroughly; bring in trained experts early on who will see to it that regulatory, and other relevant standards (NFPA and ASTM) for collection and preservation of evidence are followed. 6. Make sure your adjusters, experts, consultants and lawyers are aware of and competent to assess evidentiary issues and prevent spoliation. They should avoid destructive or intrusive testing which will impair the value of evidence which may be relevant to the litigation; you should retain counsel to advise with respect to the limits of and appropriateness of testing which can be done without notice to the other side. 7. Make sure you ask your adjuster, lawyer and expert to provide proper notice to potential parties before any relevant evidence is discarded, destroyed, involved in invasive testing, or moved, if its location on the scene is relevant to the theory of the action. E-Discovery Take-Away Points for Your Corporate Clients 1. 93% of corporate documents are created electronically; 70% of those never migrate to paper; 30 billion s are sent per day. It has been estimated that, by 2005, corporations generated 17.5 trillion s annually. 2. E-discovery is as admissible as any other document or data compilation under all rules of procedure, only there is much more of it; it is harder to find and produce; it is harder to get rid of; it is more expensive to produce, and it is more dangerous. 3. Courts infer knowledge and management of all computer data. Additionally, courts assume that as soon as litigation is anticipated, all documents will be maintained. 4. Therefore, a failure to properly preserve electronic records if litigation is anticipated may result in the imposition of a sanction for the spoliation of evidence. The sanction may include an adverse inference against the party which failed to maintain or improperly destroyed the evidence, disallowance of testimony based upon the missing evidence, or dismissal of a claim. 5. To protect your company you must understand the damage can do and make sure all employees use it judiciously. 6. You must make sure your company has created and follows sound document retention policies, which include suspending routine document destruction when litigation is anticipated. For instance, if s are regularly deleted and there is ongoing litigation, care must be taken to preserve any s or other documents related to the issues in the matter. 7. Once litigation begins, be prepared to address document issues. This is easier if you have a plan or team in place, which includes IT and document management personnel, before litigation commences. 8. Make sure your company is equipped and prepared to handle document discovery involving all media and make sure responses are company wide. Make sure orders from the court directing the preservation of documents are promptly circulated. Some companies have standardized answers identifying its digital systems, document retention and document location policies. 9. Take e-discovery requests, preservation orders, and documents preservation seriously. Plaintiffs attorneys perceive this as an area of corporate vulnerability and courts take a company s failure to preserve records or follow court ordered preservation orders seriously, even if a loss of records is due to a mistake or failure to provide notice to the proper people. 63