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Breaking Legal Developments

05-26-2003

Published by:
Peter A. Lynch, Esq.
of Cozen O'Connor
palynch@cozen.com
http://www.cozen.com

 

EXECUTIVE SUMMARY:      This weekly newsletter covers:

  1. Pennsylvania Court Discusses Spoliation of Evidence


(1) PENNSYLVANIA COURT DISCUSSES SPOLIATION OF EVIDENCE

In Eichman v. McKeon, No. 147 EDA 2001, May 7, 2003, the Superior Court of Pennsylvania addressed a spoliation of evidence contention. This was an appeal by Karen Eichman, Gregory Scott and Lawrence Branigan (Appellants) from a judgment entered after a jury verdict in favor of Joseph and Edna McKeon (Appellees). Appellants raised numerous challenges to various trial court rulings and claimed they were entitled to judgment notwithstanding the verdict or, alternatively, a new trial. The court affirmed finding no reversible error.

In 1996, Appellant Karen Eichman was renting a home owned by the McKeons situate at 5 Woodmont Trail, Conshohocken, Pennsylvania. Appellant Gregory Scott rented his home located on adjacent property at 4 Woodmont Trail which was owned by Appellant Lawrence Branigan. On December 31, 1996 a fire occurred at the Eichman residence and spread to the adjacent property where Mr. Scott lived. Both buildings sustained significant damage and much of the tenants' property was destroyed. The McKeons' filed a claim for and received first party benefits from Hartford Insurance Co. which conducted an investigation and eventually determined the cause of the fire to be arson. Consequently, Hartford denied benefits to Ms. Eichman for her loss.

Appellants thereafter filed the instant negligence lawsuit based upon their contention that the McKeons had repairs done to the furnace at the Eichman home by Appellee Bradley prior to the fire and that the work was negligently performed. The McKeons arranged for the repairs to be done after the fire department had responded in May 1996 to a call that smoke was filling the two adjoining houses, and faulty wiring of the furnace in Ms. Eichman's home was suspected. There was also evidence that Ms. Eichman subsequently arranged to have the furnace cleaned in October 1996 subsequent to the repairs and that it was operable over the next few months. Appellants sought to establish that the December 1996 fire was caused by faulty work on the furnace and/or the electrical system. Appellees, on the other hand, suggested that the fire did not originate in the furnace but rather started in a shed as the result of Ms. Eichman's negligence in failing to keep the premises safe or, alternatively, that an arson occurred. After trial, the jury returned a verdict in favor of Appellees finding that they were not negligent. Post-trial motions were denied and an appeal followed.

Appellants raise numerous issues which they contended entitled them to judgment n.o.v. or a new trial.

I. Motion for Judgment N.O.V.

Appellants first contended that they are entitled to judgment n.o.v. based upon the McKeons' intentional spoliation of the evidence. They asserted that in March 1997, nearly three months after the fire occurred, Ms. Eichman engaged an expert who attempted to gain access to the properties to conduct an investigation. However, when the expert and Ms. Eichman arrived to view the premises on March 12, 1997, they were unable to gain entry into the interior of the building. They were informed that the premises were unsafe and that a township-directed demolition was scheduled to occur the next day. Consequently, at the request of Appellants' counsel, the McKeons arranged to remove the furnace from the building prior to demolition and it was preserved for inspection by Appellants' expert.

Throughout the trial, Appellants emphasized their inability to conduct a thorough examination of the fire scene. They argued unsuccessfully to the trial court that they were entitled to judgment as a matter of law based upon the McKeons' intentional spoliation of the evidence by refusing to permit Appellants' expert to view the premises before demolition. The trial court did grant their alternative request for a jury instruction which permitted an adverse inference to be drawn from the McKeon's destruction of the property; however, Appellants asserted on appeal that this conduct was so egregious that a more severe sanction was warranted.

The Pennsylvania Supreme Court set forth the approach to be taken with respect to a spoliation of evidence claim in Schroeder v. Department of Transportation, 551 Pa. 243, 710 A.2d 23 (1998). There, the plaintiff's decedent was involved in an accident while driving a truck on a state road, and a fire thereafter broke out in the engine area. The driver died at the scene. The plaintiff filed suit against both the seller and manufacturer of the truck as well as the Department of Transportation, claiming negligence, strict liability and breach of warranty. Despite the plaintiff's attempt to preserve the evidence, the truck was sold, and the trial court granted summary judgment in favor of the defendants based upon spoliation of the evidence. The Commonwealth Court affirmed; however, the Supreme Court reversed and remanded. In its decision, the Court addressed the factors to be considered in determining an appropriate sanction for failure to preserve evidence: "(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) the availability of a lesser sanction that will protect the opposing party's rights and deter future similar conduct." Id. at 250, 710 A.2d at 27 (adopting the test of the Third Circuit in Schmid v. Milwaukee Electric Tool Corp., 13 F.3d 76 (3rd Cir. 1994)). In so doing, the Supreme Court found that approach relevant to destruction of evidence against both a product liability defendant and a non-product liability defendant. The Court concluded that a lesser sanction, such as an instruction to the jury that an adverse inference may be drawn from the plaintiff's failure to preserve the evidence, was appropriate and that summary judgment was not warranted.

This Court has recently addressed the issue of spoliation of the evidence in two somewhat factually similar cases. In Oxford Presbyterian Church v. Weil-McLain Co., Inc., 2003 PA Super 14, 815 A.2d 1094 (Pa. Super. 2003), a fire destroyed a church in May 1989. After settling the claim, the church's insurer sought to discover the cause of the fire and subsequently filed subrogation claims against several companies which had been involved in maintaining or repairing boilers in the basement. Although the church had preserved the physical evidence salvaged from the fire scene at a storage facility, it was later learned that the evidence could not be found. The defendant was therefore unable to examine or inspect the evidence and could not investigate its own theory of cause and origin of the fire. The trial court gave an adverse inference instruction to the jury for the church's failure to preserve the evidence. After a jury verdict in favor of the defendant, this Court affirmed. The court noted that such an instruction is a common sanction given for spoliation of the evidence and found no abuse of the trial court's discretion in granting this request.

Mount Olivet Tabernacle Church v. Wiegand, 2001 PA Super 232, 781 A.2d 1263 (Pa. Super. 2001) also involved a church fire. There, the appellant had manufactured an immersion heater which the church used to heat a baptismal pool. After a substantial fire in November 1994, the church filed suit against the appellant claiming that the heater was defective and caused the fire. At trial, the appellant sought a sanction against the church for intentionally destroying the fire scene without providing the appellant with an opportunity to conduct an investigation. The appellant argued it was prejudiced by an inability to determine whether the fire started elsewhere in the church; however, the trial court refused to give an adverse inference instruction. On appeal, after a jury verdict in favor of the church, this Court affirmed. The court explained that it reviewed a trial court's decision to grant or deny a spoliation instruction by determining whether there has been an abuse of discretion. 781 A.2d at 1269. The court also noted that the decision of whether and how to sanction a party rests within the sound discretion of the trial court. Id. And, the court further recognized that "an abuse of discretion is not merely an error in judgment; rather it occurs when the law is overridden or misapplied, or when the judgment exercised is manifestly unreasonable or the result of partiality, prejudice, bias or ill-will." Id. Additionally, the court reasoned that the relevant factors set forth for evaluating a spoliation claim are applicable where alternative potential causes of an accident are lost or destroyed. 781 A.2d at 1270. Under the facts presented, the court found no abuse of the trial court's discretion in refusing to give a spoliation instruction or to impose any sanction on the church.

In the case at bar, the court was presented with a claim that the McKeons also intentionally destroyed the fire scene without providing Appellants with an opportunity to conduct an investigation. Appellants asserted that the McKeons were immediately aware of the likelihood of litigation and had specific knowledge that such evidence should be preserved when Ms. Eichman and her expert arrived to inspect the scene. Among other cases, Appellants cite Pia v. Perrotti, 718 A.2d 321 (Pa. Super. 1998), appeal denied, 558 Pa 621, 737 A.2d 743 (1999). There, a warehouse caught fire and investigation revealed the cause to be an electrical malfunction in a corner of the building, although the source of the fire could not be identified. The appellant and her experts removed certain items involving the building's electrical wiring which they believed to be relevant, and the remainder of the electrical equipment was discarded. On appeal to this Court after a defense verdict, the court affirmed the trial court's decision to give a spoliation inference instruction. The court noted that the appellant bore some responsibility for the lost equipment, and even though the appellees suffered some prejudice they were not unable to assert a defense.

Instantly, Appellants' argument is premised on their conviction that the McKeons' conduct was intentional and a clear display of willful bad faith, which they insist warrants nothing less than judgment in their favor. In resolving this issue, the court must examine the record to determine whether the spoliation inference was an appropriate sanction in light of the relevant factors enunciated in Schroeder, supra, namely degree of fault, degree of prejudice, and the availability of a lesser sanction.

The record reveals that after the December 31, 1996 fire, the township of Lower Merion sent a letter to the McKeons on January 7, 1997 stating that the building was unsafe and dangerous and should be demolished or rebuilt. The McKeons' son made the necessary arrangements for demolition, which was ultimately scheduled for March 13, 1997. Several witnesses testified to the hazardous condition presented by the fire scene. On the day before the demolition was to occur, Ms. Eichman and her expert attempted unsuccessfully to investigate the premises. Consequently, counsel for Appellants wrote a letter asking that the furnace be salvaged, which was accomplished. Additionally, numerous photographs of the actual fire scene were made available to Appellants, as were the results of investigations conducted by township officials.

Applying the factors, the court found that the McKeons bore little responsibility for the demolition of the fire scene. This drastic measure was taken in response to a township directive which recognized the dangerous condition presented on the site. No request to inspect the scene was made until nearly three months had passed, the day before the already-delayed demolition was to occur. At that time the McKeons were simply asked to preserve the furnace and they did so. As such, the McKeons' degree of fault for failing to preserve the fire scene is minimal. See Mount Olivet, supra, 781 A.2d at 1271 (stating that "the scope of the duty to preserve evidence is not boundless,") (quoting Baliotis v. McNeil, 870 F. Supp. 1285, 1290 (M.D. Pa. 1994)). Moreover, the trial court which presided over this lengthy trial did not find that the McKeons acted in bad faith, and we find no abuse of discretion in making this assessment regarding fault. 781 A.2d at 1271-72 (stating that a component of fault is the presence or absence of good faith, which requires a deferential standard of review.)

The court similarly found a low degree of prejudice to Appellants. Although they were precluded from conducting their own independent investigation to ascertain alternate potential causes of the fire, the furnace itself was preserved as requested. In addition, Appellants had available a substantial amount of photographic and other documentary evidence from inside the building, as well as an independent investigation by township officials. Appellants were also able to obtain their own photographs and evidence from an inspection outside the structure. Their own expert possessed sufficient information to express an opinion that an electrical system failure allowed the furnace to overheat and ignite nearby combustible material in the basement, causing the fire. Based on all of the foregoing, the prejudice to Appellants was clearly of minor consequence. See Id. (finding that prejudice is less severe where an independent investigation has taken place, particularly where the object itself has been preserved and other evidence from the scene is available.)

With respect to the third factor, the trial court refused to enter judgment in favor of Appellants and concluded that the lesser sanction of a spoliation instruction was appropriate. Having agreed with the trial court that there was little fault on the part of the McKeons and minimal prejudice to Appellants, the court found no abuse of discretion in the determination that a less severe penalty was warranted. The court therefore rejected the claim.

Mr. Lynch can be reached at Cozen and O'Connor, 501 West Broadway, Suite 1610, San Diego, California 92101, 800-782-3366 (voice), 619-234-7831 (fax), palynch@cozen.com (e-mail), http://www.cozen.com. Follow us on Twitter at @firesandrain.

Please direct comments, suggestions, stories, and other items to the author by e-mail at palynch@cozen.com

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