Opinion
Civil Action No. 03-1098, Section "R" (5).
April 26, 2005
ORDER AND REASONS
Before the Court is defendants' motion for summary judgment dismissing plaintiff Lafayette Insurance Company's claims against them based on Lafayette's alleged spoliation of evidence. For the following reasons, the Court DENIES the motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
On March 29, 2002, a fire destroyed the business known as Mo's Pizza, located in a building at 1112 Avenue H in Westwego, Louisiana, owned by Jeffrey Arcemont III. After the fire, Arcemont made a claim under his insurance policy with Lafayette for the loss of the building, the loss of its contents, and lost profits.
Lafayette hired an independent adjusting company, Crawford Company, to perform the loss adjustment and investigate the origin of the fire. Crawford sent a certified fire investigator, Randy Bruff, to investigate on March 29, 2002, the day of the fire. Bruff determined that the fire originated in the northeast quadrant of the wash room. (Defs.' Ex. 1, Bruff Dep. at 55). Once Bruff determined the origin of the fire and realized that there were several electrical heat sources in the area, he recommended that Lafayette hire an electrical engineer to determine the cause of the fire. (Defs.' Ex. 1, Bruff Dep. at 8). Lafayette then retained George Casellas, an electrical engineer/certified fire investigator, who inspected the site with Bruff on April 2, 2002. Casellas determined that the fire originated at the baseboard level behind a dishmachine and was most likely caused by an overloading of the dishmachine's power cord. (Defs.' Ex. 2, Casellas Cep. at 61). Casellas testified that he was able to eliminate all of the other possible ignition sources and causes of the fire. ( Id. at 127-129). During the inspections of the fire scene, Bruff took 63 photographs of the premises (Bruff Dep. at 77), and Casellas took 16. A Crawford Company representative also took some photographs. The photographs included pictures of the dishmachine and the burn patterns behind it, the dishwashing room, electrical wires and a receptacle that Bruff initially noted as potential heat sources that were later ruled out as a cause of the fire by Casellas. (Bruff Dep. at 36-42, 95-97; Casellas Dep. at 50-61, 76, 128-129).
On April 17, 2002, Crawford Company notified defendant Prism Professional Kitchen Services, Inc., who Lafayette alleges was responsible for maintaining and servicing the dishmachine, of the fire. (Pl.s' Opp. Mot. Summ. J., Ex. 2). The letter indicated that the dishwasher and its components would be preserved in their original position at Mo's Pizza for inspection for ten days, and then would be preserved offsite. ( Id.). The record does not indicate that any other defendants were notified. At some point, Mo's Pizza was demolished, reportedly in accordance with state and local regulations and to permit the business to mitigate its damages. It is unclear from the record who instigated the demolition, but it is clear that before the property was demolished, the dishmachine and the remnants of the power cord were salvaged and preserved. (Bruff Dep. at 88). Although defendants' expert, Daniel Churchward, did not have the opportunity to inspect the scene of the fire, he has had access to all of the photos of the fire scene, the fire report, the reports of cause and origin by Bruff and Casellas, and the dishmachine and the remnants of the power cord.
On March 29, 2003, as subrogee of its insured, Lafayette sued defendants in the 24th Judicial District Court for the Parish of Jefferson. Lafayette alleges that the fire began because the dishmachine had a defective power cord and/or because the motor in the dishmachine was improperly matched with the power cord. Lafayette alleges that Prism Integrated Sanitation Management, Inc. owned the dishmachine and is strictly liable under Louisiana Civil Code articles 2317.1 and 2695, that Prism Integrated Sanitation Management and Prism Professional Kitchen Services, Inc. were negligent in maintaining the dishwasher, that S.C. Johnson Sons, JohnsonDiversey and CMA Dishmachines are strictly liable under the Louisiana Products Liability Act as manufacturers of the dishmachine, and that National Union Fire Insurance Company provides liability coverage for the incident and is directly liable to Lafayette under LA.REV.STAT. ANN. § 22:655.
On April 17, 2003, defendant JohnsonDiversey, Inc. removed the action to this Court under 28 U.S.C. § 1441, grounding subject matter jurisdiction on diversity of citizenship under 28 U.S.C. § 1332. On August 4, 2004, plaintiff voluntarily dismissed defendant S.C. Johnson Sons, Inc. from the suit. Defendants Chemical Methods Associates, Inc. (incorrectly named as CMA Dishmachines, Inc.), Prism Sanitation Management, L.L.C. (incorrectly named as Prism Integrated Sanitation Management, Inc. and Prism Professional Kitchen Services), and National Union Fire Insurance Company now move for summary judgment, requesting that the Court dismiss the case as a sanction against Lafayette for its alleged spoliation of evidence.
II. LEGAL STANDARD
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). A court must be satisfied that no reasonable trier of fact could find for the nonmoving party. Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990). The moving party bears the burden of establishing that there are no genuine issues of material fact.
If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue exists for trial. See id. at 325; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1996).
III. DISCUSSION
A. The Spoliation of Evidence Doctrine
Because federal law controls evidentiary issues in diversity matters, federal law governs the determination of whether sanctions should be imposed against Lafayette for alleged spoliation of evidence. King v. Illinois Cent. R.R., 337 F.3d 550, 555-56 (5th Cir. 2003). The spoilation of evidence doctrine concerns the intentional destruction of evidence. Menges v. Cliffs Drilling Co., 2000 WL 765082, at *1 (E.D. La. June 12, 2000). If a party intentionally destroys evidence, the trial court may exercise its discretion to impose sanctions on the responsible party. Id. The seriousness of the sanctions that a court may impose depends on the consideration of:
(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 other in the future.Id. (quoting Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 78 (3d Cir. 1994)). The sanctions may include exclusion of the spoiled evidence or an instruction to the jury to infer that the party spoiled the evidence because the evidence was unfavorable to that party's case. Exclusion of spoiled evidence, however, not to mention dismissal of the entire case, is a "drastic sanction" that courts generally try to avoid, especially when a lesser sanction would sufficiently even the playing field. Id. at *2; see also Tandycrafts, Inc. v. Bublitz, No. 3:97-CV-1-74-T. 2002 WL 324390, at *3 (N.D. Tex. Feb. 27, 2002) (noting that summary judgment is an extreme remedy and should not be applied as a sanction for spoliation when a lesser sanction is available).
Before a court may consider imposing sanctions, however, "the party having control over the evidence must have had an obligation to preserve it at the time it was destroyed." Menges, 2000 WL 765082, at *3. Such a duty "arises when the party has notice that the evidence is relevant to litigation." Id. Once a court concludes that a party was obliged to preserve the evidence, it must then consider whether the evidence was intentionally destroyed and the likely contents of that evidence. Id. The Fifth Circuit requires the party who seeks sanctions to show that the party who allegedly spoiled the evidence acted in "bad faith." King, 337 F.3d at 556; see also Anderson v. Prod. Mgmt. Corp., No. Civ.A. 98-2234, 2000 WL 492095, at *3 (E.D. La. Apr. 25, 2000) (collecting authorities). Negligence is not enough to support the imposition of sanctions for spoliation, "for it does not sustain an inference of consciousness of a weak case." Vick v. Texas Employment Comm'n, 514 F.2d 734, 737 (5th Cir. 1975). Accordingly, a party seeking sanctions is not even entitled to an adverse inference, much less to the more severe sanction of dismissal that defendants seek in this case, unless that party can show that its adversary intentionally and in bad faith disposed of the evidence.
B. Analysis
Here, the burden of proof to show that Lafayette acted in bad faith is on defendants. See King, 337 F.3d at 556. Accordingly, on summary judgment, defendants are required to establish that there are no genuine issues of material fact regarding Lafayette's intentional and bad faith destruction of evidence. Defendants argue that the Court should infer that Lafayette acted in bad faith when it failed to notify defendants and preserve the fire scene for their inspection, and when it failed to preserve the allegedly defective product, the power cord that Casellas identified as the cause of the fire.
Defendants have failed to meet their burden of showing that no genuine issues of fact exist as to whether Lafayette acted in bad faith with respect to the evidence from the fire. The Court finds that a genuine issue as to Lafayette's intent exists because Lafayette took significant steps to preserve evidence from the fire that are inconsistent with a bad faith attempt to spoil evidence. Indeed, the evidence in the record indicates that Lafayette preserved key pieces of evidence, to the extent it could, considering the destruction wrought by the fire, when it salvaged and preserved the dishmachine and the remnants of the power cord. (Casellas Dep. at 127; Pl.s' Opp. to Mot. Summ. J., Ex. 2). The record also indicates that Lafayette's experts took numerous photographs of the scene and the burn patterns on which they relied to draw their conclusions as to the cause and origin of the fire, and Lafayette provided the photographs to defendants. Lafayette's attempts to preserve evidence from the fire are sufficient to raise a genuine issue as to Lafayette's intent regarding the destruction of evidence from the fire.
Next, and perhaps most significantly, the record indicates that Lafayette gave notice to at least one defendant that Lafayette would preserve the scene, including the dishmachine in its original position at Mo's Pizza, for a specified period of time for that party's inspection. (Pl.'s Ex. 2). This action by Lafayette is inconsistent with an attempt to destroy evidence and rebuts defendants' assertion that Lafayette acted in bad faith. Along with Lafayette's other attempts to preserve evidence from the scene, this evidence is sufficient to raise a genuine issue of material fact as to Lafayette's intent that precludes summary judgment.
Lafayette suggests that the scene was demolished for innocent reasons, in accordance with state and local regulations and so that Mo's Pizza could mitigate its damages. See King, 337 F.3d at 556 (considering party's innocuous explanation for destruction of evidence in finding that no bad faith destruction occurred); Pressey v. Patterson, 898 F.2d 1018, 1022 (5th Cir. 1990) (same). Lafayette cites no evidence in the record to support this explanation. Nevertheless, defendants have the burden of showing that no genuine issue exists as to Lafayette's intent to destroy evidence in bad faith, and, as noted above, there are sufficient facts in the record to raise a genuine issue on this point.
IV. CONCLUSION
For the foregoing reasons, the Court DENIES defendants' motion for summary judgment.