RISKVUE ARCHIVE | RISK BITES
Negligent Spoliation of Evidence:
New York Court of Appeals Speaks Out
By Frederic R. Mindlin
The New York Court of Appeals recently explained the extent under New York law to which a litigant can rely upon the doctrine of spoliation of evidence in connection with prosecuting a claim. The decision could have a significant impact on the procedures followed in connection with handling of evidence both by property insurers that are prosecuting subrogation claims and by liability insurers that are defending property damage claims.
The term “spoliation of evidence” usually refers to the loss, destruction or alteration of evidence. Black’s Law Dictionary 1401 (6th ed. 1990). Spoliation can occur either intentionally or negligently. Traditionally, courts in civil actions have dealt with spoliation by imposing sanctions, including the extreme sanction of dismissing a lawsuit because the defendant did not have the evidence it needed to defend itself due to the plaintiff’s failure to preserve that evidence. See e.g. Thornhill v. A. B. Volvo, 304 A.D.2d 651 (2d Dep’t 2003) (automobile involved in accident was destroyed, rendering defendant unable to defend a claim that a tie rod was defective); Silvestri v. General Motors Corp., 271 F.3d 583 4th Cir. 2001 (claim against automobile manufacturer dismissed because evidence unavailable to perform accident reconstruction).
More recently in some jurisdictions such as Alaska, Florida, Illinois, New Jersey and Ohio, courts have recognized an independent tort of intentional spoliation of evidence.1 Jurisdiction such as Illinois and Florida and others such as California have also recognized a cause of action for negligent spoliation of evidence.2 It is now clear that New York is not one of these jurisdictions, at least with respect to a tort for negligent spoliation of evidence.
In MetLife Auto & Home v. Joe Basil Chevrolet, Inc., N.Y.2d. (February 24, 2004) (NYLJ 2/25/04, p. 25, col. 4), the New York Court of Appeals affirmed the dismissal of a complaint seeking recovery for negligent spoliation of evidence.
The facts in MetLife are straightforward. A fire started in a 1999 Chevrolet Tahoe owned by Joe Basil Chevrolet, Inc. and driven with permission by Michael Basil. At the time of the fire, the vehicle was parked in Mr. Basil’s garage. The fire caused more than $330,000 damage to the home. MetLife insured the home and paid the claim. Royal Insurance Company insured the vehicle and took possession of it after the fire. Although Royal had agreed in a telephone conversation with MetLife to preserve the vehicle and had arranged a date for a joint inspection and testing, Royal disposed of the vehicle before the testing occurred. MetLife brought a subrogation action against Joe Basil Chevrolet, General Motors, and the company that had installed a remote starting device in the vehicle’s dashboard. In that same action, MetLife also sued Royal for negligent spoliation of evidence. Royal moved to dismiss for failure to state a cognizable cause of action. The trial court and Appellate Division held for Royal and dismissed the complaint. The New York Court of Appeals affirmed.
The Court held that Royal had no duty to preserve the vehicle which at the time in question was owned by Royal. Nor, according to the Court, did any relationship exist between MetLife and Royal that would give rise to such a duty. The Court also stated that MetLife had made no effort to preserve the evidence either by court order or written agreement and had not even volunteered to cover the costs of storage. The Court of Appeals concluded:
The burden of forcing a party to preserve [evidence] when it has no notice of an impending lawsuit, and the difficulty of assessing damages militate against establishing a cause of action for spoliation in this case, where there was no duty, court order, contract or special relationship.
The lesson from this case for a property insurer that is contemplating a subrogation action—the success of which depends upon evidence in the possession of another—is clear and unmistakable: Do not rely on others to preserve the evidence voluntarily. Rather, the subrogated insurer must attempt to obtain a written agreement requiring preservation of the evidence that will probably involve participation in the costs of storage. If obtaining an agreement is not possible, then the insurer must obtain a court order that will require the preservation of the evidence. Without either an agreement or a court order, the evidence may be thrown out and the insurer’s chances of successfully prosecuting a subrogation action may be thrown away at the same time.
While the number of jurisdictions recognizing the independent tort of intentional spoliation of evidence has grown, the Met Life decision by the New York Court of Appeals makes it unlikely that the roster of jurisdictions recognizing the tort of negligent spoliation will expand. Only a few states had recognized that tort before this decision. Now that New York has rejected that tort forcefully as a matter of law, it is doubtful that other states will disagree.
1 See Hazen v. Municipality of Anchorage, 718 P.2d 456 (Alaska 1986); Bondu v. Gurvich, 473 So.2d 1307 (Fla. Dist. Ct. App. 1985); Shelbyville Mut. Ins. Co. v, Sunbeam Leisure Products Co., 634 N.E. 2d 1319 (Ill. App. 1994); Viviano v. CBS, Inc., 597 A.2d 543 (N.J. Super Ct. App. Div. 1991), cert. denied, 606 A.2d 375 (N.J. 1992); Smith v. Howard Johnson Co., 615 N.E. 2d 1037 (Ohio 1993).
2 Velasco v. Commercial Building Maintenance Co., 215 Cal. Rptr. 504 (Ct. App. 1985); Bondu v. Gurvich, 473 So.2d 1307 (Fla. Dist. Ct. App. 1985); Boyd v. Travelers Ins. Co., 652 N.E. 2d 267 (Ill. 1995).
ABOUT THE AUTHOR
Frederic R. Mindlin is a partner at the New York City-based law firm of Mound Cotton Wollan & Greengrass. Mr. Mindlin has had over 25 years of practice in all aspects of civil litigation, including general commercial, tort, and products liability. He has extensive experience in all phases of insurance litigation and arbitration, including fraud, business interruption, computer and technology claims, arson, fine arts, jeweler’s block, all-risk, mold, homeowners, boiler and machinery, and subrogation. He can be reached at 212-804-4250.
This article originally appeared in the March 23, 2004, issue of Mealey’s Litigation Report. Reprinted with permission.
riskVue | The webzine for risk management professionals