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Reynolds v. Bordelon, 172 So.3d 607, 2014-2371 (La. 6/30/15)
There is no claim for negligent spoliation of evidence. In other words, there is no claim for negligent spoliation of evidence. The Louisiana Supreme Court could not have made that fact more clear than it did in the case of Reynolds v. Bordelon, 172 So.3d 607, 2014-2371 (La. 6/30/15). The case was decided on a writ from the First Circuit Court of Appeal. Reynolds v. Bordelon, 154 So.3d 570, 2013-1848 (La. App. 1 Cir. 9/19/14). Plaintiff brought suit pursuant to the Louisiana Product Liability Act, alleging that a Nissan side impact air bag failed to deploy and negligent spoliation of evidence under Louisiana Civil Code article 2315 against third parties.
After a multi-vehicle accident in St. Tammany Parish, Plaintiff filed suit against the adverse driver and Nissan North America for failure of a side impact airbag to deploy in a 2003 Infiniti G35. Plaintiff also sued his insurer, Automobile Club Inter-Insurance Exchange (“ACIIE”) and the custodian of his vehicle after the accident, Insurance Auto Auctions Corporation (“IAA”). Plaintiff collected total loss damages for the vehicle. The vehicle was then sent to a salvage yard and ultimately sold. Plaintiff alleged that his insurer and the salvage yard that stored and ultimately auctioned the vehicle were negligent in failing to preserve the vehicle to allow plaintiff an opportunity to inspect it for purposes of proving the underlying product liability claim, despite having notice of the need for preservation. Although the plaintiff alleged there were written agreements to preserve the vehicle between plaintiff, ACIIE and IAA, there is no specific discussion of these written agreements in the decision.
The trial court initially sustained an exception of no cause of action relating to the allegations of negligent spoliation. Plaintiff was given additional time to amend the Petition to allege facts supporting a cause of action for intentional spoliation of evidence. The Plaintiff amended the suit, alleging (1) impairment of a civil claim; (2) loss of a right or opportunity; (3) detrimental reliance; 94) general negligence under La.Civ.Code art. 2315; and (4) breach of contract. No allegations of intentional spoliation of evidence were made. In fact, plaintiff admitted there was no evidence of intentional spoliation of evidence by any defendant. After Clavier v. Our Lady of the Lake Hospital, Inc. (an unrelated First Circuit Court of Appeal “negligent spoliation” decision) was published, the defendants filed a second exception, granted by the trial court, dismissing the claim of negligent spoliation. The First Circuit upheld the trial court’s decision. The Supreme Court granted plaintiff’s writ application.
The Court summarized the plaintiff’s legal argument as follows:
While alternatively setting forth the general negligence theory of liability, the plaintiff asks this court to recognize the cause of action where a specific duty arose due to an agreement, contract, special relationship, or undertaking which was formed between the parties specifically for the purpose of preserving the evidence. Several appellate courts in Louisiana have followed this limited application of the tort; however, we decline to do so and expressly refuse to recognize the existence of the tort. This holding applies whether under a general negligence approach or whether the source of the duty is readily apparent. Instead, we approach the duty element of the negligence analysis from a policy perspective.
Relying on Maraist and Galligan, (Louisiana Tort Law, 1.03, 5.02 (2004)) the court held that it can, when applying “policy consideration factors”, determine whether the tort of negligent spoliation of evidence exists under Louisiana law. In its analysis of the first factor, “deterrence of undesirable conduct”, the Court holds that “the act of negligently spoliating evidence is so unintentional an act that any recognition of the tort by the courts would not act to deter future conduct, but would, rather, act to penalize a party who was not aware of its potential wrongdoing in the first place.” The second factor is “satisfaction of the community’s sense of justice”. That is, how “we determine whether a reasonable person should have acted or not acted in a certain manner”. Intertwining “predictability” in its analysis, the court states:
Recognition of the tort of negligent spoliation would place a burden on society as a whole, causing third parties who are not even aware of litigation to adopt retention policies for potential evidence in cases, in order to reduce their exposure to liability. There is simply no predictability in requiring preservation and record keeping for unknown litigation.
As for the third factor “proper allocation of resources, including judicial resources”, the court holds that allowing derivative tort suits for negligent spoliation of evidence “encourages parties to bring a new suit whether the underlying suit was not successful”, opening “the floodgates for endless lawsuits where the loss is speculative at best.” Also, determining the fault of a spoliation defendant and main defendant(s) in the same proceeding may cause “confusion for fact-finders, particularly juries, in as much as it allows a trial within a trial.” The potential for “inconsistency and the potential for misunderstanding” under these circumstance mitigates against recognition of the tort.
The Court also considered any deference owed to the legislature in determining the existence of a tort cause of action. Relying primarily on 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La. 1989), the Court ultimately determines “the legislation on fault and tort law in Louisiana has left to the courts the task of determining the viability of certain causes of action. As such, we conclude that legislative will does not require recognition of the tort of negligent spoliation”.
Citing and adopting the logic of a California decision (Temple Community Hosp. v. Superior Court, 20 Cal. 4th 464, 976 P.2d 223, 84 Cal. Rptr. 2d 852 (1999)), the Court finds that the benefit of recognizing the tort of spoliation of evidence is “outweighed by the burden to litigants, witnesses, and the judicial system that would be imposed by potentially endless litigation over a speculative loss, and the cost to society of promoting onerous record and evidence retention policies”.
After consideration of the policy factors, the court considered one more concern: “availability of other avenues of recourse”. The alternative remedies specifically identified by the Court include discovery sanctions and criminal sanctions against first-party spoliators. The Court also iterates its recognition of the adverse presumption against litigants who had access to evidence and do not make it available or destroy it. The Court also specifically recognizes the viability of contractual remedies of parties who enter into a contract for preservation of evidence and Court orders for preservation of evidence. The Court finally instructs that the “spoliation issue” in this case could have been avoided entirely if the plaintiff would have “retained control of his vehicle and not released it to the insurer, thereby guaranteeing its availability for inspection.” He could have also purchased the vehicle back from his insurer “for a nominal fee”.
The Court concludes its decision by stating that, in consideration of policy factors, “Louisiana law does not recognize a duty to preserve evidence in the context of negligent spoliation”. The plaintiff’s cause of action as to negligent spoliation was dismissed. However, the Court reversed the judgment granting the exception of no cause of action as to the breach of contract claim, remanding that issue to the trial court for further consideration.
Noticeably absent from the decision is any discussion of the evidence produced to support the breach of contract claim. The Court clearly identifies such a claim and in fact encourages parties to enter into contractual agreements to preserve evidence. While there is no specific instruction from the Court as to what language these agreements should contain, obviously the thing to be preserved should be adequately identified; the terms of preservation should be specific; and the penalty for failure to preserve the thing should be well articulated. This arrangement is fine if all parties agree to the terms of agreement. However, in the event of a disagreement over terms, a prudent party will obtain a court order to preserve the evidence or retain the thing himself. Given the Court’s very specific “evidence preservation” instructions, there will likely be little sympathy for a party who does not heed those instructions.
The decision does include some potentially worrisome language: “There is simply no predictability in requiring preservation and record keeping for unknown litigation”. In proper context, the Court is specifically referring to “third parties who are not even aware of litigation”. However, it is easy to imagine this language quoted/contorted by any party who alleges he did not know about any litigation, was never served with a suit, did not know he was a “first party”, and therefore innocently destroyed all evidence in his possession. So, when is litigation “known”? Obviously, filing a claim or suit is a good answer. But what about situations that are not quite as clear cut? How is a trial court to determine the issue of whether the litigation is known or unknown to a person? How much knowledge is required to establish a party knows enough to preserve evidence? Does a letter requesting preservation of evidence, in the absence of a formal agreement, impose a duty to preserve evidence? The not-so-subtle answer to these questions is that the burden of preserving evidence is on the person who seeks to have the evidence preserved – act accordingly. Reynolds articulates three methods of preserving evidence in Louisiana as to third parties: (1) Obtain a Court Order; (3) Contract for preservation; and/or (3) Self-retention. While these methods may not be exclusive, reliance on someone else to preserve evidence is clearly not among them.
Reynolds demonstrates the power and authority of the Louisiana Supreme Court in determining the rights and causes of action of Louisiana citizens and litigants in the absence of clear legislation. It is now abundantly clear that negligent spoliation is not a tort recognized as a viable cause of action under Louisiana law. The preservation of evidence as to third parties is the responsibility of the party seeking to use the evidence to prove any element of a case. Breach of contract claims for spoliation of evidence are viable, the strength of which will be determined by the language in the contract. Sanctions and negative inferences against those parties who intentionally destroy evidence are reiterated and remain strongly supported by the Louisiana Supreme Court. The wise practitioner will take note of the Court’s instructions regarding preservation of evidence. Given the clarity of the instruction, there is little excuse for failure to follow.