Dorsa v. National Amusements, Inc., 2004 WL 886979 (N.Y. App. Div., Apr. 26, 2004)

The subject of evidence spoliation has been at the forefront of civil litigation, subrogation and otherwise, for the past ten-to-fifteen years. A New York appellate court recently addressed circumstances where a defendant had discarded documents after a claim was asserted that would act to either support or limit an important disputed issue. Although the court lessened the sanction originally imposed (striking defendant’s Answer), it did direct the trial court on remand to preclude the defendant from offering any evidence at trial in its support on the issue and to instruct the jury with an adverse inference charge (whereby the jury was to infer from the conduct of the defendant that if the documents were preserved they would be unfavorable to the defendant).

The decision arose from a simple personal injury action filed by a patron of a movie theater after she slipped and fell near the theater’s water fountain. The plaintiff alleged that the defendant was negligent in causing or permitting water to accumulate at that location. A plaintiff in such a case must establish that the defendant either created the defective condition or had actual or constructive notice of it. See, e.g., Nedd v. Associated Hosp. Servs. of N.Y., 654 N.Y.S.2d 611 (1997). New York courts have held that a "defendant who has actual knowledge of a recurring dangerous condition can be charged with constructive notice of each specific reoccurrence of that condition." See, e.g., Fielding v. Rachlin Mgt. Corp., 766 N.Y.S.2d 381 (2003).

During discovery, the defendant's former managing director testified that, in accordance with her normal custom and practice, she disposed of the theater's maintenance records after "a couple of years." As the court noted, the destruction of the theatre's maintenance records after "a couple of years" took place subsequent to when the defendant received notice of the plaintiff's claim and the commencement of the action, and prevented the plaintiff from obtaining evidence to reasonably demonstrate that the defendant had actual notice of a recurring dangerous condition.

The trial court imposed an extremely strict sanction, striking defendant’s entire Answer. On appeal, the court noted that although it agreed that sanctions were appropriate, such severe a sanction acted to shift the burden of proof on the claim to the defendant. Accordingly, the appellate court modified the order to preclude the defendant from offering any evidence at trial as to the condition of the water fountain and directing that an adverse inference jury charge be issued against the defendant.

PRACTICE TIPS:

1. Spoliation can act as a sword when an opposing party has failed to preserve important evidence, or as a mistake that should be guarded against so as to fully protect the assertion of a subrogation claim. Although the topic is typically addressed in the latter context, carriers and their counsel (as demonstrated in this decision) can look to wield it as a weapon when a defendant fails to preserve evidence.

2. Spoliation is often spoken of in terms of physical evidence or preservation of a loss scene itself. Document preservation, however, is of equal importance and can form the basis of a spoliation claim (for or against either party).

a. Documentary evidence spoliation concerns compel insurance carriers and their counsel to ensure that any physical records supporting their claim be preserved throughout the life of the claim, and that the insured be instructed accordingly as well.

b. Poor record preservation by a defendant (involving such wide-ranging topics as engineering drawings and files, maintenance records, security records, employment and job-time records, and payment records, to just name a few) can act to buttress any claim where it can be demonstrated that such records were discarded or lost after the underlying claim was asserted or litigation filed.