It never ceases to amaze me how “coincidences” seem to happen. Last week, I was scheduled to mediate a “lemon law” case in which, while the lawsuit was pending, plaintiff was involved in an automobile accident which caused a total loss to the vehicle. (Thank goodness, she and her passenger were not injured.) In her lawsuit, plaintiff was seeking either the repurchase, replacement and/or diminution in value of a vehicle which she no longer possessed but which resided in some junkyard as a heap of scrap metal.
This scenario raises several issues, one of which is “spoliation of evidence.” By happenstance, the Court of Appeal of the State of California, Second Appellate District published an opinion on this issue, Williams v. Russ (Case No. B194598 – October 27, 2008.)
In Williams v. Russ, the plaintiff – Doug Williams – appealed from a judgment dismissing his legal malpractice claim against defendant Russ and Russ’ law firm as a discovery sanction because Williams had allowed destruction of most of his files pertaining to the case.
First, (and before getting caught up in the appellate decision), “spoliation of evidence” is defined as “. . . the destruction or significant alteration of evidence or the failure to preserve evidence for another’s use in pending or future litigation.” (Id. at 8.)
In Williams v. Russ, plaintiff Doug Williams was the administrator and trustee of an employee benefits retirement plan known as EPA. Williams and EPA initiated litigation which eventually settled but which caused his removal as the head of the EPA. So, Williams sued his lawyer, Bruce Ashton, for legal malpractice contending that Ashton’s prior advice led to his removal as EPA’s trustee. Ashton won on a summary judgment motion. So, Williams sued his next lawyer – Larry Russ and Russ’ law firm – for legal malpractice – in the handling of the lawsuit against Ashton and EPA for legal malpractice. (Id. at 2.)
In February 2001 and pursuant to California Rules of Professional Conduct, Rule 3-700(1), Williams demanded that Russ turn over Williams’ files to him. Russ complied – turning over 36 boxes. Before doing so, Russ made copies of only portions of the file. Williams put the boxes in rented storage space.
As fate would have it, between March and December 2001, Williams fell behind on paying rent for the storage space. Eventually, the facility notified Williams of the default and that if the rent was not brought current, the items in storage would be sold. Williams did not bring the account current and so in December 2001, the boxes were destroyed. However, Williams did not advise Russ of this fact but kept it a secret.
Three years later in December 2004 - Russ made a discovery request for the 36 boxes. Initially, Williams did not tell him that the boxes had been destroyed, but, instead, objected to the requests. Eventually, in January 2005, Williams admitted that the boxes had been destroyed. (Id. at 3 – 4.)
Russ moved to dismiss the action as a discovery sanction based on Williams’ spoliation of evidence. The trial court, after an extensive review of the matter, granted the motion, ordering the case dismissed.
Williams appealed, contending among other things, that he was merely negligent because he believed that Russ had copied all of the files, not just portions of them, and that there was no evidence that portions of the file could not be retrieved from other sources, such as Russ’ computer. (Id. at 7.)
The appellate court affirmed the dismissal noting that:
“Such conduct [spoliation of evidence] is condemned because it “can destroy fairness and justice, for it increases the risk of an erroneous decision on the merits of the underlying cause of action. Destroying evidence can also increase the costs of litigation as parties attempt to reconstruct the destroyed evidence or develop other evidence, which may be less accessible, less persuasive, or both.” (Citation).” (Id. at 8).
The appellate court disagreed with Williams’ contention that the destruction of the files was negligent. Finding the evidence conflicting on this point, the appellate court noted that Williams was given plenty of warning and notice from the storage facility about his delinquent payments and the consequences if those payments were not brought current, yet, “. . .Williams did nothing to prevent their sale and concomitant destruction.” (Id. at 9). Thus, the appellate court agreed “. . . with the trial court that this is tantamount to intentionally destroying the file.” (Id.).
The appellate court was not at all pleased that Williams kept the destruction of these boxes a secret for more than three years and revealed the truth only after Russ served a discovery request demanding their production. (Id. at 10.)
In conclusion, the appellate court rejected Williams’ contentions and affirmed the court’s dismissal of the action as a discovery sanction for spoliation of evidence.
So. . .back to the lemon law case scheduled for mediation. It settled the day before the mediation was to occur. In light of this new appellate decision, the settlement was probably a wise and good thing. If the matter had not settled but proceeded to trial, the defendant manufacturer would have requested plaintiff to produce the vehicle for inspection so that the manufacturer could inspect and test drive the vehicle to determine if the alleged defects causing it to be a “lemon” really existed. Having had the vehicle totaled in an accident, the plaintiff would not have been able to produce the vehicle. In response, the defendant manufacturer might well have filed a motion to dismiss based on “spoliation of evidence” which the trial court may well have granted.
The morale: preserve the key evidence because without it, you may no longer have a viable dispute.
. . . Just something to think about.