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Alabama Supreme Court Reverses Spoliation Summary Judgment Permitting Case To Be Tried.
ALABAMA SUPREME COURT REVERSES SPOLIATION SUMMARY JUDGMENT PERMITTING CASE TO BE TRIED.
In Vesta Fire Insurance Corp. v. Milam, et al., available through LEXIS, 2004 Ala. LEXIS 217, (Aug. 27, 2004) the Alabama Supreme Court reversed summary judgments for defendants finding spoliation did not warrant dismissal of plaintiff's action. The cases were the result of a fire that destroyed a video rental store in Bessemer on July 24, 1998. Vesta Fire Insurance Corporation ("Vesta") insured the premises for the owner of the building, and Wausau Insurance Company ("Wausau") insured the store's inventory for Hollywood Entertainment Corporation ("Hollywood"), which owned the inventory. Vesta and Wausau sued, as subrogors of their respective insureds, Landmark Electric Company, Inc. ("Landmark"); Milam & Company Construction, Inc. ("Milam"); Sentry Heating & Air Conditioning ("Sentry"); Sure Air, Ltd.; Lenz-Ramseur, Inc.; and DesignWorx, Inc., alleging that the defendants, as contractors and subcontractors responsible for the construction or maintenance of the building that housed the video rental store, had negligently designed, constructed, and maintained the building and thereby had caused the fire that destroyed the building and its contents. The plaintiffs alleged that the defendants had improperly installed and maintained the electrical components in the air-conditioning system and that that improper installation and maintenance had caused the fire. Vesta filed its action in January 1999, and Wausau filed its action in July 2000. Both plaintiffs asserted substantially the same claims; those included claims of negligence, breach of warranty, and claims under the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD"). The trial court consolidated the two cases for adjudication.
After extended discovery, the defendants filed motions for a summary judgment. After a hearing, the trial court entered a summary judgment for each defendant against both plaintiffs. The summary judgments as to the plaintiffs' claims were based on the trial court's determination that the plaintiffs' conduct had resulted in spoliation of the evidence. In addition, the trial court held that the plaintiffs' claims against Lenz-Ramseur were due to be dismissed on the additional ground that the plaintiffs had presented no expert evidence indicating that Lenz-Ramseur had done anything that had resulted in the fire. As to Landmark, the trial court found additionally that no warranty existed between the plaintiffs and Landmark and that the plaintiffs' breach-of-warranty and negligence claims against Landmark were subsumed in their AEMLD claims against that defendant. The trial court entered a summary judgment for DesignWorx, the architect for the building, on Vesta's claim alleging that it had failed to conduct an inspection of the building based on its finding that Hollywood had assumed all duties of inspection.
In addition to the plaintiffs' claims, Sentry had filed cross-claims against Sure Air, and the trial court entered a summary judgment for Sure Air as to those cross-claims. The plaintiffs appealed. Landmark and Sentry cross-appealed, arguing that they were entitled to summary judgments on grounds other than spoliation of the evidence. The remaining appellees also assert that the summary judgments in their favor are supportable on grounds other than spoliation. The Alabama Supreme Court reversed and remanded.
On appeal, the plaintiffs argued that the summary judgments were improper because there were genuine issues of material fact as to the cause of the fire. The defendants argued that the plaintiffs' investigators who examined the premises immediately after the fire retained only those materials they thought were relevant to their investigatory conclusions and that the premises and remaining evidence were demolished before the plaintiffs filed their respective actions; the defendants asserted that the plaintiffs' failure to preserve relevant evidence resulted in the loss of evidence critical to the defense.
The record showed that in January 1997, pursuant to an agreement with Hollywood, A&M Bessemer, LLC ("A&M"), contracted with Milam to construct a Hollywood Video video rental store at the West Lake Mall in Bessemer. The agreement between A&M and Hollywood provided that A&M owned the physical structure, i.e., the building housing the video rental store, and Hollywood owned the contents, i.e., the video media that would be rented or sold to the public. Hollywood employed DesignWorx as the architect for the building, and Milam, as the general contractor, employed various subcontractors, including Landmark. Landmark was to perform specified electrical work. The heating, ventilation, and air conditioning ("HVAC") system for the building was provided and installed by Lenz-Ramseur, doing business as Standard Heating and Air Conditioning, Ltd., and Sure Air was to provide service and maintenance for the HVAC. Sure Air subsequently subcontracted with Sentry for Sentry to perform the service and maintenance under Sure Air's agreement with Hollywood.
While the store was being built, Landmark constructed the circuitry necessary to supply electrical power to the HVAC; that circuitry included a "service disconnect" (a fuse box located on the side of the building) and a "unit disconnect" (a fuse box located on the HVAC unit). Although design plans originally called for a "York" brand HVAC unit, Hollywood substituted a "Trane" brand unit. The Trane HVAC unit was installed by Lenz-Ramseur and Lenz-Ramseur performed some preliminary tests on the unit; thereafter, Sentry performed the maintenance on the unit. In addition to regular maintenance checks, Sentry's work included replacing a bad condenser fan motor, a "rainshield," and a "blade" in December 1997, reconnecting a wire leading to compressor number one on May 19, 1998, and installing on July 1, 1998, split bolts to repair a problem Sentry's service technician believed related to an internal electrical terminal strip that was causing a circuit breaker for the compressor to trip. With respect to the July 1, 1998, repair, Sentry's service technician, Lance Langley, had been called to the store because the HVAC was not working properly; he determined that compressor number two was not working because that circuit breaker for that compressor had been tripped. He tested the unit and discovered a voltage imbalance, which he testified he corrected by installing the split bolts. He further testified that after the repair, he conducted tests that showed that the voltage imbalance had been corrected, and he noted that the unit "ran fine" after the repair. Other problems noted during the operation of the building involved flickering and buzzing in the neon-lighting system.
As a result of the fire, Vesta paid A&M $468,192 pursuant to its insurance policy and became subrogated to A&M's rights for the recovery of damages caused by the fire. Similarly, Wausau paid Hollywood $442,298 under its policy and became subrogated to Hollywood's rights for the recovery of damages.
A City of Bessemer police officer saw the fire at the video rental store between 7:00 and 8:00 a.m. on July 28, 1998. Firefighters who soon arrived at the scene testified that they saw flames emerging from the right rear third of the building. The blaze completely destroyed the building and its contents. An internal security camera, one of six video cameras that were part of the security system for the video store, showed that the building began filling with smoke and showed fire "falling" from the ceiling toward the rear of the building.
On the day of the fire Vesta employed Robert Young, a certified fire investigator of considerable experience, to investigate the fire. The City of Bessemer did not conduct any independent investigation of the fire; instead it relied upon Young, who directed fire department employees at the scene. Young investigated the scene of the fire on the day of the fire and for several days thereafter. Young's report, dated September 14, 1998, concluded that the fire originated in the attic of the building near a steel I-beam described as being in the rear third of the building to the right of center; the I-beam was badly twisted as a result of the fire. Young determined that the fire was caused by an electrical malfunction. In his subsequent deposition, Young stated that during his investigation he observed approximately 25 "arcs" or burn areas caused by electrical short circuits and that approximately eight of those arcs were in the vicinity of the HVAC system. Young's report also states that the fuse boxes located on the outside of the building, "most" of the electrical conduit to the HVAC, and the HVAC unit itself were removed and placed in a secured location after the fire. Young testified that he relied on experts in electrical engineering in concluding that the origin of the fire was electrical. He stated that he was not prepared to offer expert testimony beyond his conclusion as to the general location where the fire started and his opinion that its cause was electrical. Young testified that he had been informed by store employees of problems with the neon lighting; this neon lighting was located on the interior rear and right wall and along a diagonal office wall near the center of the store. Young stated that he did not investigate the transformers for the neon lights because such an investigation needed to be performed by an electrical engineer.
Charles Point, an electrical engineer Young hired to help with the investigation, agreed that the origin of the fire was electrical but was unable to specify a cause. Young also testified that he was not satisfied with Point's investigation of the fire, which Young thought was somewhat cursory, because Point was not able to pinpoint the cause of the fire. Point had observed approximately 23 different arcs and short circuits in the area of the origin of the fire, and approximately 13 of those arcs and short circuits were found in the 120-volt circuits that provided electricity to the receptacles, fluorescent lights, and neon sign transformers in the building rather than in the circuits that provided electricity to the HVAC system. Point reported that he had discovered improperly installed electrical conduit to the HVAC system and that some of the air-conditioning conduit had an oily substance on the surface that could have degraded the wires and resulted in short circuiting. However, Point also reported:
"I cannot say with any engineering degree of certainty that this is what occurred in this particular case since I found short circuits along the 120 volt system as well. It is virtually impossible for me to ascertain which of the approximately 23 different short circuits I found caused the fire. There is no proven method to ascertain which short circuit came first."
After a further discussion of the possible causes of the fire and where particular circuit breakers and fuses were blown, including the fact that no fuses were blown on the service disconnect for the HVAC unit, Point concluded:
"In summary, it is my opinion that the electrical system was the cause of said fire, but its exact origin and exact circuit which short circuited and arced, cannot be ascertained. It cannot be ascertained simply due to the fact that numerous short circuits were located in the general area of origin and it is impossible to determine the first arc which caused the fire, even by the electron auger method."
Young employed Jim Jones, an electrical engineering professor at the University of Alabama at Birmingham, as another expert to examine the scene. Young and Jones examined the scene on August 3 and 5, 1998. Young's reports issued in August and September 1998 state, that Jones had determined that the HVAC unit caused the fire and would issue a report with details. In a preliminary insurance report dated September 15, 1998, Vesta attributes to Jones a theory that a lubricant used to pull the electrical wires through the conduit to the HVAC unit corroded the insulation of those wires and caused short circuits, which caused the fire. In a report dated November 30, 1998, Jones stated that "the failure to derate the conductors to the roof top air conditioner as required by the NEC [National Electric Code] was the direct cause of the fire." Jones explained the concept of "derating" as ensuring that conductors, wires, and insulation are adequate to accommodate the electrical current passing through them. His report indicated that the fire resulted from arcing caused by the use of undersized wires to the HVAC unit given the amount of electrical current used by the unit and the ambient temperature on the roof where the unit was located. Jones's report also noted, among other things, that the HVAC unit had been vandalized after the fire and that the vandals had removed copper conductors and attachments that had been referred to in the earlier reports by Young and Point.
In his deposition taken on April 25, 2001, Jones admitted that his conclusion that the failure to derate the conductors to the HVAC unit was the cause of the fire was unsound and that he did not know that the combination of conductors to the HVAC unit was the cause of the fire. Specifically, he stated that he was uncertain as to the size of the wire that conducted electricity to the HVAC unit and that he could not make a conclusion as to the cause of the fire until he investigated further. In a subsequent deposition, taken a year later, Jones acknowledged that although he was aware of possible problems with the neon-lighting systems, including the fact that flickering neon signs could indicate short circuits that had the potential to cause fires, he did not investigate those systems.
On April 2, 2002, Jones issued a supplemental report to his November 1998 report, stating that his earlier analysis was incomplete because of a miscommunication with Young. Jones offered a different explanation for the cause of the fire, stating that the fire was caused by a short circuit in the conduit to the HVAC unit resulting from damage to the insulation of the phase conductor and inadequate grounding of the electrical service. Essentially, Jones concluded that the insulation on one of the wires to the HVAC unit had been nicked or scraped, which eventually led to the short circuit that caused the fire. Jones attributed those defects to faulty electrical work, and he speculated that because Sentry's work order of July 1, 1998, did not specifically state that the technician tested the HVAC voltage after his repair, no such test had been performed, and that had such a test been performed, it would have shown a continuing voltage imbalance caused by the defect in the insulation. Both Young and Jones conceded in their depositions that the wiring insulation in the HVAC conduit could have degraded, or melted, as a result of heat from a fire that had begun in another location. In paragraphs 23 and 24 of an affidavit given on February 25, 2003, Jones stated:
"When I prepared my original report, I determined that the only way the fire could have started would have been the failure of insulation on phase conductors to the HVAC unit, causing an arc to the conduit in question. At that time, I knew that the failure of the insulation would be caused by one of only two possibilities: (1) a nick or other damage to the insulation, or (2) an over current condition causing degradation, or flow, of the insulation due to ambient heating. At that time, and functioning on inaccurate information based on a miscommunication with Robert Young, I believed the most likely reason for the failure of the insulation was over-current and the resultant degradation, or flow, due to ambient heating. Even at that time and with that inaccurate data, I believed that a nick or other physical damage to the insulation was one of two possible causes of the insulation failure."
"I later determined that the original data I received was inaccurate, and revised my calculations accordingly. At that time, I realized that over-current and the resulting degradation or flow of insulation due to ambient heat was not likely. Thus, the only way this fire could have occurred would have been a nick or other damage to the conductor insulation present during installation. Thus, what defendants' counsel refers to as my 'nick theory' was not developed recently. I developed it before my first written report of November, 1998."
J. Arthur Smith, a member of A&M and the sole stockholder of the Wilchester Realty Group, the owner of the real estate on which the building owned by A&M was located, stated in an affidavit that "several weeks after the fire, I was required by the City of Bessemer to demolish the remains of the structure and clean off all debris in the time restraints imposed by the City of Bessemer." The record does not provide a time frame for the demolition. Even though Jones had requested that the entire HVAC conduit be salvaged, and Young testified that he had intended to save all such items, the building's demolition resulted in the loss of a section of undamaged HVAC conduit "from about in front of the office back to the back wall" as well as all the other electrical components in the building that Point had noted showed signs of arcing or short circuits, including the electrical receptacles, fluorescent fixtures, and neon-sign transformers. Young's explanation for his failure to salvage the evidence was that he forgot to tell the contractor to notify him before it demolished the building.
Sentry presented evidence detailing its maintenance work on the HVAC, which included the affidavit of Lance Langley concerning the terminal strip repair he performed on the HVAC on July 1, 1998, and portions of Jones's testimony stating that he found nothing wrong with Langley's repair of the HVAC. In addition to Langley's affidavit, Sentry presented his deposition testimony that he did in fact perform a voltage test on the HVAC system after he finished his repairs of the system on July 1, 1998, and that the test showed no voltage imbalance. Landmark presented the deposition of David Smith, a certified fire inspector, who testified that no expert could reasonably form an opinion as to the cause of the fire because so many of the components of the electrical system were missing, including various components of the electrical system that supplied power to the HVAC unit. Smith characterized Jones's conclusions that the fire was caused by faulty electrical work as speculative and without evidentiary foundation.
Because the trial court stated that spoliation of the evidence was the basis for its entering the summary judgments for all of the defendants, the court first considered the application of that doctrine to the facts of this case. "Spoliation is an attempt by a party to suppress or destroy material evidence favorable to the party's adversary. As a general rule, if the trier of fact finds a party guilty of spoliation, it is authorized to presume or infer that the missing evidence reflected unfavorably on the spoliator's interest. Spoliation "is sufficient foundation for an inference of [the spoliator's] guilt or negligence." Spoliation can have special consequences, i.e., sanction under Rule 37, Ala. R. Civ. P., when a party frustrates a discovery request by willfully discarding critical evidence subject to a production request. In such a situation, where the plaintiff is guilty of spoliation, the sanction of dismissal of the claim may be warranted. Dismissal for failure to comply with a request for production may be warranted even when there was no discovery pending or even litigation underway at the time the evidence in question was discarded or destroyed.
In Cincinnati Insurance Co., the insureds' house was destroyed by fire. Within three days Cincinnati Insurance Company, the insurer, had a special fire investigator on the scene; he, in turn, enlisted the services of an engineering professor to inspect the site. The engineering professor examined "'the water heater, furnace, tank, LP gas piping, furnace burner ribbons, a broken pipe fitting on the LP gas line and the regulator located on the 500-gallon tank.'" The experts soon concluded that the LP gas system installed by Synergy Gas, Inc., was the cause of the fire. Subsequently, while the house was being rebuilt, the homeowners, with Cincinnati's knowledge and approval, allowed all of the "appliances, pipe, and all of the LP gas system," with the exception of the regulator, which had been removed by a representative of the Alabama LP Gas Board, to be discarded. Almost two years after the fire, the homeowners and Cincinnati, as their subrogee, sued Synergy. Synergy sought production of the LP gas system and the appliances, which were by then unavailable. The trial court dismissed the case as the sanction it deemed appropriate under Rule 37, Ala.R.Civ.P. This Court affirmed the dismissal as to all of the claims predicated on the alleged malfunction of the components of the gas system that were destroyed, but reversed the dismissal of the claim insofar as it was based on the theory that the preserved regulator was defective and that it alone caused the fire.
"This Court has a long-established and compelling policy objective of affording litigants a trial on the merits whenever possible. Although we do not condone the plaintiffs' willful destruction of the most crucial pieces of the evidentiary puzzle in this case, after careful review we are persuaded that, in keeping with this policy objective, the plaintiff should be allowed to proceed to trial, but solely on the theory that the gas regulator was defective and that that defect alone caused the fire." The Court concluded that Cincinnati was aware soon after the fire that litigation was likely and yet allowed the destruction of the items in question with full knowledge of the importance of those items as evidence, thereby warranting dismissal of the claims relating to those items. Restricting the plaintiffs to a single theory of recovery, based on the allegedly defective condition of the regulator, served "to punish them for their willful destruction of crucial evidence" and also assured Synergy "of an opportunity to present an adequate defense."
The trial court had analyzed the spoliation issue in terms of four factors: the importance of the evidence destroyed; the culpability of the offending parties; fundamental fairness; and alternative sources of information. The Supreme Court set out the trial court's entire order describing those factors, with apparent approval. In particular, the Court emphasized the significant role "culpability" should play, quoting from the propositions that “’willfulness’ on the part of the non-complying party is a key factor supporting a dismissal;” that a “willful and deliberate disregard of reasonable and necessary requests for the efficient administration of justice" justifies a dismissal; and that “litigants who have manifested willfulness and bad faith in failing to produce or in allowing spoliation” should receive the ultimate sanctions. The trial court had noted in its order that “there has been no allegation of malicious intent,” but that, nonetheless, it was inconceivable that an insurance company in Cincinnati's position “could fail to realize the importance ... in future litigation” of the evidence it allowed to be destroyed.
At its most flagrant level, the willfulness component of the culpability factor involves knowledge and appreciation by the spoliator that the evidence being destroyed would be pertinent and materially favor the interest of his opponent in litigation being anticipated by the spoliator. "When a party maliciously destroys evidence, that is, with the intent to affect the litigation, that party is more culpable for spoliation." Conversely, willfulness is not shown where the party disposing of an item neither knew nor should have known that the item would be key evidence in the case. ("[The defendant] provided no evidence to show that [the plaintiff] intentionally destroyed [the item of evidence] in order to inhibit [the defendant's] case.").
Although the Alabama Supreme Court did not expressly adopt in Cincinnati Insurance Co., supra the trial court's four-factor analytical approach, other courts have understood it to have at least approved it. Cooper, supra; Thompson v Gardner, [Ms. 2021084, March 26, 2004] ___ So. 2d ___, The parties discus the factors in their briefs and the factors provide a useful template for an orderly analysis of relevant considerations.
A fifth factor -- the possible effectiveness of sanctions other than dismissal -- is also pertinent, however. "We recognize that the sanction of dismissal is the most severe sanction that a court may apply.... Dismissal orders must be carefully scrutinized and the plaintiff's conduct must mandate dismissal." Additionally, the court must consider the option of affirming the judgment of dismissal as to certain claims but reversing it as to others, depending on the relationship of the claims to the evidence preserved and the evidence destroyed. Cincinnati Ins. Co., supra
This factor must be evaluated in the context of the importance of the evidence that was preserved or otherwise available. That body of evidence includes the observations of the Bessemer policeman who observed the early external manifestations of the fire consisting of a small amount of smoke above the right front of the building followed within a minute or two by a wall of flames shooting up at least 20 feet above the roof, in an area on the right third of the building near the center of the roof. The policeman observed no fire inside the building at that time. Responding firemen saw flames emerging from the right rear third of the building. An internal security camera recorded smoke gathering and then what appears to be fire "falling" from the ceiling in the right rear portion of the building. None of the defendants argue that the fire did not begin in the attic area of the building.
As noted, Young investigated the scene the day of the fire. In succession he retained Point and Jones to investigate the electrical aspects of the fire. All of these individuals made notes and/or prepared reports of their observations and findings, and an extensive number of photographs were taken. Finally, after Young and Jones concluded that the culprit in the fire in the attic portion of the roof in the right third of the building was a short circuit in the electrical conductors leading to the rooftop HVAC, the decision was made to preserve the wiring and components "germane" to that understanding. Young and Jones had eliminated, to their way of thinking, other causes of the fire and, in the process, other areas of wiring systems and appliances. Removed and stored, and available for inspection by the defendants, were the entire HVAC unit, the unit disconnect panel, the unit's internal wiring, and the conduit forming a part of that unit that had exhibited arcing. Admittedly, some copper conductors originally within the unit were removed by vandals while the fire scene was under the supervision of the Bessemer Fire Department, and a section of HVAC conduit, which Young had intended to preserve but forgot to arrange for its removal before the building was demolished, was also lost. Also not retained were some of the electrical-system components observed by Point. Those were deemed by Young and Jones to exhibit details probably representing only fire damage. No portion of the neon-lighting system that remained after the fire was preserved.
Thus, this is not a case where all of the critical evidence is unavailable, such as was the situation in Verchot, supra and Thompson, supra. Rather, a significant amount of relevant evidence was preserved, and Vesta and Wassau must carry their burden of proof as to defect and causation relying on that evidence. The defendants need not prove what caused the fire; their defense need focus only on the insufficiency of the plaintiffs' proof in that regard.
The defendants do not argue that Vesta and Wausau acted with malicious intent in deciding what evidence to preserve, and the record, when viewed most favorably to Vesta and Wausau under the standard of review applicable to a summary judgment, reflects at most honest error in judgment and/or simple negligence. There is no showing that they allowed evidence that they knew, or should have known, would be favorable to the opposing parties in foreseeable litigation to be discarded. Classic spoliation involves the idea that the offending party "purposefully and wrongfully" destroyed evidence "he knew was supportive of the interest of his opponent."
In the context of choice of sanctions to impose when a party refuses to provide discovery owing under Rules 26 through 36, Ala. R. Civ. P., Rule 37 does not require a showing of willfulness. "Alabama adopted this federal rule [, Rule 37,] subsequent to its 1970 amendment which eliminated the requirement that the failure to respond be “willful.” Weatherly v. Baptist Med. Ctr., 392 So. 2d 832, 835 (Ala. 1981). Nonetheless, “willfulness”... is a key criterion to the imposition of the drastic sanction of dismissal" under Rule 37. Id. See also Iverson, supra. In the context of whether a summary judgment should be entered against a plaintiff alleged to have caused or allowed material evidence to be destroyed, the culpability analysis is somewhat different. Technically, a summary judgment should be entered against a plaintiff only when there is no genuine issue of material fact and the movant-defendant is entitled to judgment as a matter of law. Rule 56(c), Ala. R. Civ. P. Nonetheless, cases have approved of the "sanction" of the entry of a summary judgment against a plaintiff, either partial or entirely, in certain instances of spoliation: Thompson, Copenhagen, Verchot, Vesta Fire Ins. Corp., supra no-opinion affirmance (Houston, J., dissenting); and Smedley, supra (judgment entered on jury verdict for plaintiff reversed and case remanded with instruction that case be dismissed).
In each of those cases either all relevant evidence was destroyed with full appreciation of its significance to anticipated litigation (Thompson, Verchot, Smedley) or the dismissal was upheld only as to those claims based on the destroyed evidence and reversed as to those claims based on retained evidence (Copenhagen and Vesta Fire Ins. Corp.; see also Cincinnati Ins. Co., supra A summary judgment for the defendant based on spoliation has been reversed where the defendant had adequate access to the article in question before it was destroyed, Ex Parte General Motors Co., 769 So. 2d 903 (Ala. 1999 and where the plaintiff did not act willfully, Joyner (judgment as a matter of law entered at conclusion of trial reversed); Buzbee v. Alabama Waste Servs., Inc., 709 So. 2d 61 (Ala. Civ. App. 1998). The court approved the denial of the defendant's motion for a new trial premised on spoliation in Wal-Mart Stores, supra, because of the lack of proof that the plaintiff had acted with knowledge of the significance of the evidence and with the intent to inhibit the defendant's case.
Although the defense expert testified that no one can draw any reliable conclusions concerning the cause of the fire based on the remaining evidence, the plaintiffs' experts Young and Jones are of the opposite view, and the plaintiffs will have the burden of proving from that evidence their theory of the case. As discussed later in this opinion, the giving of "adverse interest" and "burden shifting" jury instructions is within the trial court's sound discretion and can compensate for any undue disadvantage the defendants can demonstrate due to the absence of relevant evidence allowed by the plaintiffs to be discarded.
As noted, a wealth of relevant evidence survives, in the form of eyewitness observations of the outbreak and progress of the fire, the video taken by the security camera, photographs, reports, and the HVAC unit, its disconnect panel, and the bulk of its conduit.
The trial court had the option of restricting the plaintiffs' claims to those based on the remaining evidence. It may disallow or restrict any claim predicated indispensably on evidence no longer available. It may fashion "adverse interest" and “burden shifting” instructions along the lines suggested by Justice Lyons in his dissent in Murray, 751 So. 2d at 503-04
"I write specially to state that I do not consider a spoliation instruction allowing an inference of wrongdoing from the destruction to be precluded every time the alleged spoliator makes a potentially self-serving claim of negligence. In such instances, the victim of spoliation should not be deprived of such an instruction merely upon the spoliator's asserting, “Oops, I dropped it.” However, in order to overcome such an assertion by the alleged spoliator, the victim should do more than simply prove the occurrence of the destruction, as was the case here. The victim should, however, be entitled to a spoliation instruction upon adducing evidence that would be sufficient for the jury to infer the commission of an intentional act--evidence such as the rarity of such an occurrence of destruction in the ordinary course of business; the frequency with which such a destruction occurs under circumstances that make a claim possible; inconsistencies in the testimony of those asserting that simple negligence caused the destruction; or other evidence challenging the credibility of the persons claiming the destruction was caused merely by negligence.
"Even in instances where the circumstances surrounding the destruction of evidence suggest simple negligence, an instruction that is not so severe as to allow an inference of wrongdoing based on the fact of the destruction, but that shifts the burden of proof, might be appropriate, especially where the plaintiff has satisfied all other elements necessary to defeat a motion for a judgment as a matter of law. See Welsh v. United States, 844 F.2d 1239, 1246 (6th Cir. 1988) where the court recognized that “destruction of potentially relevant evidence obviously occurs along a continuum of fault--ranging from innocence through the degrees of negligence to intentionality.” The Welsh court then analyzed the resulting penalties that are possible dependent upon the circumstances of each case, going from nothing to a burden-shifting rebuttable presumption to an inference that the missing evidence would have been unfavorable to the spoliator. A burden-shifting instruction in the case of a merely negligent loss would not require the innocent party to suffer the consequences resulting from the fact that his or her burden of proof has been made greater by the negligence of the adversary, and, at the same time, it would not impose an excessively harsh sanction upon a merely negligent party." See also the adverse-interest charges approved in Murray and in Campbell v. Williams, 638 So. 2d 804 (Ala. 1994). Thus, for example if an evidentiary basis for an adverse-interest charge premised on a finding by the jury of a wrongful destruction of evidence by the plaintiffs is established at trial, an instruction could be formulated relating to the inference the jury could draw adverse to the plaintiffs' theory of causation.
Bearing in mind the court’s "long-established and compelling policy objective of affording litigants a trial on the merits whenever possible," Iverson, 553 So. 2d at 89 and considering the factors and alternative sanctions discussed above, the court concluded that the trial court exceeded its discretion in employing "the most severe sanction that a court may apply," Iverson, 553 So. 2d at 87. At the summary-judgment stage the court must accept the explanations given by the plaintiffs for how and why various items become unavailable, including in this case the professed opinion and judgment of their experts that materials at the fire scene that were allowed to be demolished were not "germane" to a determination of the cause of the fire. Thus, viewing the record most favorably to Vesta and Wausau, the court concluded that their culpability was of a relatively low range "along a continuum of fault." Furthermore, there has not been complete destruction of material evidence; rather, a significant body of evidence remains. The plaintiffs have the burden of proving their theory of causation from that evidence whereas the defendants have no affirmative burden to establish a cause for the fire.
The defendants had argued plausibly in their briefs to the Court numerous reasons why the causation sequence postulated by the plaintiffs' experts was flawed and invalid, including testing data they say indisputably was derived by the Sentry technician who repaired the HVAC unit approximately three weeks before the fire and that they say conclusively contradicts the plaintiffs' theory of causation. Seemingly the defendants will be able to mount an adequate defense even in the absence of the missing evidence.
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