ALERT: Spoliation of Evidence
December 21, 2016
In Pennsylvania, spoliation of evidence is the destruction of evidence relevant to the dispute. Spoliation of evidence may lead to sanctions including the dismissal of claim, exclusion of countervailing evidence, or an adverse jury instruction that the destroyed evidence would have been unfavorable to the offending party. In short, spoliation provides that a party cannot benefit from its own withholding or destruction of evidence. The Pennsylvania Superior Court’s recent opinion in Liberty Mut. Ins. v. Sanders, No. 1570 WDA 2015 (November 29, 2016), while non-precedential, provides a good measure of the sense of the court regarding the issue of spoliation of evidence in the context of fire subrogation case.
On March 5, 2011, Nicole Sanders, who was then a student at the Art Institute of Pittsburgh, was cooking in her dormitory room on an electric stove provided to her by the school. For reasons that were undetermined, a fire started while she was cooking on the stove. The fire triggered an alarm and the activation of water sprinklers that damaged several rooms within the dormitory. In early 2012, the stove was removed and destroyed. No record exists of the removal and disposal. No testing or examination of the stove was conducted prior to the disposal of the stove.
In the consolidated subrogation action brought by Liberty Mutual Insurance and Erie Insurance Exchange (collectively, “Appellants”) against Ms. Sanders it was maintained that she negligently caused the fire and, was thus liable for the resulting damage. Ms. Sanders eventually filed a motion for summary judgment on the basis that the spoliation of evidence had been committed as the subject stove was disposed of before she had an opportunity inspect or test it, and before the Appellants had inspected the stove themselves. The trial court granted Sanders’ motion for summary judgment and precluded Appellants from presenting evidence regarding the cause of the fire.
On appeal, the Appellants questioned, among other things, whether the lower court erred and/or abused its discretion by misapplication of the Schmid v. Milwaukee Elec. Tool Corp., three-prong spoliation test, in finding fault to such an extent and such prejudice as to justify a finding of spoliation and a grant of summary judgment. In reviewing the trial court’s ruling on the purported spoliation, the Superior Court provided a summary of the applicable legal principles that guide its review of the spoliation of evidence issues. Citing the standard set forth in Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir.1994), and its progeny, the Sanders court recognized that to determine the appropriate sanction for spoliation, the trial court was obligated to weigh three factors: (1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future.
As recognized by the Superior Court, the underlying trial court noted that the Appellants did not appear to contest the first two prongs on appeal, but rather, the essence of the Appellants’ argument was that the trial court erred in finding that preventing Appellants’ from producing evidence concerning the cause of the fire and granting summary judgment was too extreme a remedy. The Superior Court further noted that the Appellants conceded that they were at fault for disposal of the stove; yet, they maintained that their degree of fault was minimal. To that end, the Appellants claimed that “the stove was not immediately discarded. Instead, the stove was cleaned and remained in the dorm room for several months following the fire. During that time, the stove would have been available to Sanders or her insurance carrier.”
In reviewing the trial court record cited by the Appellants, the Superior Court found that Appellants’ representations regarding their purported notification to Ms. Sanders that the stove was cleaned and put back into use months before it was discarded was misleading. The Superior Court ruled that by discarding the stove before any investigation or testing, the Appellants deprived Ms. Sanders from being able to present any defense that the stove malfunctioned and caused the subject fire. Despite the Appellants’ claim that their investigation did not reveal any alternative causes of the fire except Ms. Sanders’ negligence, the Appellants conceded the stove was neither investigated nor tested in any manner. As such, there was no way to rule out Ms. Sanders’ claim that the stove malfunctioned, and no way for Ms. Sanders to prove that claim if the case went to trial. Regarding the severity of the preclusion sanction, and the resultant entry of summary judgment, the Superior Court noted, among other things, that the Appellants failed to demonstrate that a lesser sanction should have been imposed.
While obtaining a spoliation sanction in practice may be an uphill battle, cases such as the Sanders matter demonstrate that spoliation can be a powerful factor to winning or losing a liability case. The takeaway is that parties must exhaust all reasonable steps to obtain and retain evidence once they learn a product may be involved in an accident or loss.
For more information, please contact Fred Lorusso at firstname.lastname@example.org. Fred concentrates his practice in the areas of general casualty defense litigation, including premises, motor vehicle, construction and product liability matters.