Johnson v. Liberty Mut. Fire Ins. Co.

• Decision Date: 17 August 2011
• Docket Number: No. 10–1132.,10–1132.
• Parties: Russell J. JOHNSON and Jennifer Johnson, Plaintiffs–Appellants,v.LIBERTY MUTUAL FIRE INSURANCE COMPANY, a Wisconsin corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

648 F.3d 1162

Russell J. JOHNSON and Jennifer Johnson, Plaintiffs–Appellants,

v.LIBERTY MUTUAL FIRE INSURANCE COMPANY, a Wisconsin corporation, Defendant–Appellee.

No. 10–1132.

United States Court of Appeals, Tenth Circuit.

Aug. 17, 2011.

Bradley A. Levin (Ross B.H. Buchanan, with him on the briefs), Roberts, Levin, Rosenberg, PC, Denver, CO, for Plaintiffs–Appellants.Hilary D. Wells (Brian J. Spano, with her on the brief), Rothgerber, Johnson & Lyons, LLP, Denver, CO, for Defendant–Appellee.Before HARTZ, McKAY, and GORSUCH, Circuit Judges.GORSUCH, Circuit Judge.

This case is about a pair of missing tail lights and the limits of reasonable foreseeability. Russell and Jennifer Johnson blame Liberty Mutual for failing to hold onto a pair of tail lights that, they say, would have helped them win a personal injury lawsuit they wanted to bring. Problem is, the Johnsons never asked Liberty Mutual to keep the tail lights, never mentioned their intent to sue, and allowed years to pass without a word. Now they fault the company for failing to divine their hidden (and perhaps not yet formed) intentions. Because the Johnsons, quite unsurprisingly, cannot identify a statutory or contractual basis for their claim, they ask us to create one for them in the common law of tort. But, we hold, the common law doesn't require such uncommon foresight.

One early summer morning, Russell Johnson was driving a pickup truck when he was rear-ended. Michael Dellock, an employee of Zimmerman Truck Lines, did it. When the police arrived, Mr. Dellock told them he crashed into Mr. Johnson's truck because the latter's trailer's tail lights weren't working—and, based on this account, the police issued Mr. Johnson a traffic citation. Recognizing the potential evidentiary importance of the tail lights, Mr. Johnson's insurance company—Liberty Mutual—took them to have them tested. After a lab report suggested that the lights were operating at the time of the crash, Liberty Mutual succeeded in fending off liability claims threatened by Zimmerman and Mr. Dellock's insurance companies. Even better, Liberty Mutual managed to get Zimmerman's insurance company to pay for the damage to Mr. Johnson's truck and trailer. And to top it off, the police dismissed Mr. Johnson's citation. With all that accomplished now some two years after the accident, Liberty Mutual closed its file. Jennifer Johnson, Mr. Johnson's wife, herself later admitted that by this time she had “kind of forgot about” the tail lights.

But the end of these lurking lawsuits only marked the birth of another. Two years after Liberty Mutual closed its file, and some nearly four years after the accident, Mr. and Mrs. Johnson decided to turn the tables on Zimmerman and Mr. Dellock and sue them for personal injuries. To help their case, the Johnsons asked Liberty Mutual to return the tail lights. But by this time the lights were long gone. Gone because, over all the intervening years, the Johnsons had never asked Liberty Mutual to return or retain the lights, and never mentioned their potential interest in suing. Ultimately, the Johnsons settled their personal injury claims but, they say, at a deep discount because of the missing tail lights.

And this is the nub of our case. Arguing they could have obtained more money from Zimmerman and Mr. Dellock had Liberty Mutual held onto the tail lights, the Johnsons filed a diversity suit in district court under Colorado law. But the Johnsons were apparently unable to find any contractual or statutory cause of action to fasten their claim onto, so they turned to the common law of tort. They argued that Liberty Mutual was liable for “spoliation of evidence,” that the company acted negligently as a bailee, and that the company engaged in bad faith breach of its insurance duties. The district court, however, granted Liberty Mutual's summary judgment motion on the spoliation and bailee claims, and the company's Rule 12(b)(6) motion to dismiss on the bad faith claim. The Johnsons now appeal, arguing that the district court should be reversed across the board. We disagree.

The Johnsons seek to use the common law in many uncommon ways. They ask us to recognize and enforce an independent spoliation tort, but the Colorado courts have yet to go so far. They say Liberty Mutual neglected its duties as the bailee of their property, but it's unclear from the record whether the Johnsons even owned the tail lights by the time they asked for them. They argue that Liberty Mutual tortiously (in bad faith) disregarded an insurance obligation, but it's hardly obvious what obligations Liberty Mutual had as an insurer to help the Johnsons anticipate and prepare for an affirmative lawsuit; no one, after all, suggests that Liberty Mutual had a contractual or statutory duty as insurer to pursue a lawsuit against Zimmerman and Mr. Dellock for the Johnsons.

But all these questions pale beside another. To prevail on any of their (putative) tort claims, the Johnsons must show that their claimed damages were reasonably foreseeable—that Liberty Mutual knew or should have known that the destroyed tail lights would be relevant (valuable) evidence in their future...