Opinion
1227102.
Decided February 24, 2005.
Sheps Law Group, P.C. Gates Goldstein, LLP MacCartney, MacCartney, Kerrigan MacCartney, Esqs.
The defendant, Rocklyn Fuel Oil Corp., (hereinafter referred to as "Rocklyn Fuel"), moves for an order dismissing the complaints of plaintiff, Nationwide Insurance Company a/s/o Aaron Levy and Alice Levy, (hereinafter referred to as "Nationwide"), and plaintiff, Aaron Levy and Alice Levy, (hereinafter referred to as "Levy"), on the grounds that the causes of action have no merit, and the plaintiffs' intentional destruction of key evidence. The plaintiffs submit opposition. The defendant submits a reply affirmation.
Background
The plaintiff, Nationwide, insurer to Aaron and Alice Levy, initiated a subrogation action against the defendant, Rocklyn Fuel, as a result of property damage sustained to the insured's home on or about March 22, 2002. Levy initiated a separate action to recoup their out of pocket expenses incurred as a result of the property damage sustained to their home.
The defendant, Rocklyn Fuel, and the plaintiff, Levy, had an existing service contract. The defendant, Rocklyn Fuel, serviced the burner and boiler at the Levy home for many years. On or about December 13, 2001, the defendant, Rocklyn Fuel, had performed an annual cleaning and tune-up of the burner and boiler, pursuant to the service contract. Since then, the defendant performed numerous services to the burner and boiler, prior the subject incident. On or about March 22, 2002, a puff-back allegedly occurred damaging the plaintiffs' home.
The plaintiff, Levy, contacted the defendant, Rockland Fuel, after the loss. The plaintiff claims that the defendant sent a technician who fully inspected the heating equipment and took photographs. The defendant claims that a technician was not called right after the incident and that the defendant did not make a full investigation right after the incident occurred. The plaintiff claims that he then contacted his carrier, Nationwide, who sent an investigator to the Levy house, Michael Belfi. Mr. Belfi avers, by way of affidavit, that he personally inspected the Levy home on March 25, 2002, and observed heavy soot and smoke damage as a result of the failure of the home's heating system. Mr. Belfi opined that the defendant negligently installed a blast tube causing the boiler/burner to malfunction, eventually causing soot and smoke to be discharged from the heating system. Mr. Belfi states that on March 25, 2002, while he was at the Levy home, he called the defendant and spoke with a manager named "Bill". Mr. Belfi advised "Bill" that he discovered an improperly installed oil burner blast tube and end core, causing smoke damage to the Levy house, and that he intended to remove these items to preserve them as material evidence. Mr. Belfi states that the defendant's manager "Bill", responded that he had no interest in returning to the Levy house to inspect the unit.
On March 26, 2002, the plaintiff, Nationwide, sent the defendant a letter advising that Nationwide intended to hold the defendant responsible for the property damage sustained by its insured, that Nationwide intends to go forward with testing and examination of the equipment, and that the defendant should notify Nationwide of any potential claimants, so that Nationwide could afford them an opportunity to conduct an independent investigation and inspection of the scene and equipment involved. Donna Bonaccio, Adjuster at Nationwide, by way of affidavit, avers that she mailed the aforesaid letter, and that she did not receive a response from the defendant, or its insurer. Ms. Bonaccio states that Nationwide's investigator, Mr. Belfi, also advised her that the defendant's manager advised Mr. Belfi that the defendant did not intend to inspect the loss any further. Accordingly, Ms. Bonnacio advised Mr. Belfi to preserve relevant physical evidence to the subject loss. Mr. Belfi preserved the blast tube and end cone. The burner and boiler were discarded.
It is the defendant's contention that the discarded unit, the burner, boiler and all of its internal mechanical and electrical components, are the most critical pieces of physical evidence. The defendant submits the affidavit of Michael Raines, P.E., a licensed engineer. Mr. Raines states that he reviewed copies of the pleadings, deposition transcripts, service and maintenance records, photographs, a video tape, and photographs of the blast tube and end cone. Mr. Raines opined that without an inspection of the actual boiler and oil burner system, he can only speculate as to the cause and origin of the damage to the Levy house. The defendant annexes to its motion color copy photos of the boiler, the blast tube, and end cone.
Discussion
Where crucial evidence has been negligently destroyed, spoliation sanctions are appropriate. ( Kirkland v. New York City Housing Authority, 236 AD2d 170). One party's negligent loss of evidence can be just as fatal to another party's liability to present a defense as the willful destruction of evidence. ( Squitieri v. City of New York, 248 AD2d 201). Where a party intentionally or negligently destroys essential physical evidence "such that its opponents are `prejudicially bereft of appropriate means to confront a claim with incisive evidence,' the spoliator may be sanctioned by the striking of its pleading. ( New York Cent. Mut. Fire. Ins. Co. v. Turnerson's Elec., 280 AD2d 652, citing, DiDomenico v. CS Aeromatik Supplies, Inc., 252 AD2d at 53).
However, where the loss of evidence does not have the effect of depriving the non-responsible party of all means of establishing its claim or defense, or is not prejudicial, a lesser sanction, or no sanction, may be appropriate ( Klein v. Ford Motor Co., 303 AD2d 376; Marro v. St. Vincent's Hospital and Medical Center, 294 AD2d 341; Mylonas v. Town of Brookhaven, 305 AD2d 561). The sanction of spoliation has been extended to also include the non-intentional or negligent destruction of evidence. ( Cummings v. Central Tractor Farm Country, Inc., 281 AD2d 792; Conderman v. Rochester Gas Electric, 687 NYS2d 213; Kirkland v. New York City Housing Authority, 236 AD2d 170). However, "there must still be evidence of negligence, i.e. failure to exercise reasonableness in the preservation of the evidence." ( Yager v. Thompson, 781 NYS2d 628, citing Klein v. Seenauth, NY Law Journal April 30, 1999). In determining the appropriate sanction, the essential issue is the resulting prejudice to the adversary. ( Conderman v. Rochester Gas Electric, 687 NYS2d 213).
It is well settled that courts have discretion to impose sanctions when a party intentionally, contumaciously, or in bad faith fails to comply with a discovery order, or destroys evidence prior to an adversary's inspection. ( Puccia v. Farley, 261 AD2d 83). The courts have upheld the imposition of such sanctions in cases where a litigant negligently disposes items of evidence before their adversary had an opportunity to inspect them. ( Cummings v. Central Tractor Farm Country, 96 NY2d 896; Puccia v. Farly, 261 AD2d 83; Kirkland v. New York City Hous. Auth., 236 AD2d 170). A claim of spoliation of evidence must be supported by a showing of bad-faith, if intentional. ( Yager v. Thompson, 781 NYS2d 628). "If the destruction was intentional, but was not in bad faith, no spoliation will be found." ( Id., citing Popfinger v. Terminix International Company Limited Partnership, 251 AD2d 564, and Greater New York Mutual Ins. Co. v. Curbeon, 300 AD2d 182).
Here, the plaintiff gave the defendant an opportunity to inspect, test and examine the burner and boiler unit prior to plaintiff's destruction of such unit. While it is debatable as to whether the defendant did actually inspect the unit after the puff-back occurred, and prior to the plaintiff, Levy, contacting its insurer, what is clear is that the plaintiff, Nationwide, sent the defendant written notice of its intent to hold the defendant responsible for the subject loss, and afforded the defendant an opportunity to inspect, test and examine the unit. The defendant did not respond to such notice. Additionally, Nationwide's, investigator also afforded the defendant an opportunity to inspect the unit. The defendant did not seize these opportunities to inspect the unit. Nevertheless, the defendant has not demonstrated that the plaintiff failed to exercise reasonable in the preservation of the evidence.
Moreover, the defendant has not demonstrated that the loss of the boiler and burner unit has deprived the defendant of all means of establishing a defense. The defendant submits an affidavit of Mr. Reines, who states that without an inspection of the actual boiler and burner system, he can only speculate as to the cause and origin of the loss. However, Mr. Reines failed to examine the preserved parts, the blast tube and end cone. Hence, the defendant failed to take the opportunity to inspect the preserved parts to determine whether the inspection of such parts could assist the defendant in determining the cause and origin of the loss.
Under these circumstances, the defendant has not shown bad faith upon the plaintiff, nor prejudice, necessary for the imposition of the drastic remedy the defendant seeks, the dismissal of the plaintiff's complaint.
As to that branch of the defendant's motion seeking dismissal of plaintiff's claim that the defendant breached the service contract, the defendant's motion is denied. The plaintiffs have raised issues of fact regarding the defendant's service of the subject heating unit under the contract to defeat the defendant's motion.
Accordingly, the defendant's motion is denied, in its entirety.