Hassoldt v. Patrick Media Group, Inc.,

• Decision Date: 13 October 2000
• Docket Number: No. B113905.,B113905.
• Citation: 84 Cal.App.4th 153,100 Cal.Rptr.2d 662
• Parties: Judy HASSOLDT, et al., Plaintiffs and Appellants, v. PATRICK MEDIA GROUP, INC., Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

100 Cal.Rptr.2d 662

84 Cal.App.4th 153

Judy HASSOLDT, et al., Plaintiffs and Appellants, v. PATRICK MEDIA GROUP, INC., Defendant and Appellant.

No. B113905.

Court of Appeal, Second District, Division 3.

October 13, 2000.

Certified for Partial Publication.^*

Rehearing Denied November 1, 2000.

Law Offices of Harold J. Light and Harold J. Light, Santa Monica, for Plaintiffs and Appellants.

Law Offices of Michael N. Stafford, Michael N. Stafford, Glendale, Benedon & Serlin, Douglas G. Benedon, Woodland Hills, and Gerald M. Serlin, Westbury, N.Y., for Defendant and Appellant.

SCHNEIDER, J.^**

I FACTUAL BACKGROUND

Plaintiffs and appellants Judy and William Hassoldt (the Hassoldts) own a piece of property in Redondo Beach, on which they operate a preschool called Der Kindergarden. The Hassoldts established a trust (the Yankee Trust), which owns the land and leases it to Der Kindergarden, Inc., a corporation. Neither Der Kindergarden, Inc., nor the Yankee Trust is a party to this litigation.

Defendant and appellant Patrick Media Group, Inc. (Patrick), is an outdoor advertising company. In September of 1986, it purchased the assets and some of the liabilities of another outdoor advertising company, Foster & Kleiser.

In October 1992, a tree located on the Hassoldts' property was severely trimmed. When William Hassoldt discovered the tree had been trimmed, he contacted Daniel Voorhees, the employee of Patrick in charge of Patrick's tree cutting activities. Ultimately, Patrick denied it was responsible for cutting the tree. The Hassoldts suspected Patrick had trimmed the tree on their property to better expose its outdoor billboard.

The Hassoldts filed a complaint against Patrick which contained multiple causes of action. The gravamen of the Hassoldts' complaint was that Patrick had tortiously trimmed their tree. Following a trial by jury, the Hassoldts were awarded $130,000 in compensatory damages and $150,000 in punitive damages. (The jury's award will be discussed in greater detail, infra.) Both the Hassoldts and Patrick have appealed timely from the judgment.

II

THE HASSOLDTS' SPOLIATION OF EVIDENCE CAUSES OF ACTION

Procedural Background

The original complaint filed by the Hassoldts contained five causes of action: trespass, nuisance, conversion, intentional infliction of emotional distress and negligent infliction of emotional distress. In a third amended complaint the Hassoldts added causes of action for intentional and negligent spoliation of evidence. The gravamen of these new causes of action was that Patrick destroyed records and photographs relating to its tree cutting activities.¹

The jury was given instructions relating to the Hassoldts' causes of action for trespass; negligence; nuisance; conversion; negligent spoliation of evidence; intentional spoliation of evidence, as well as spoliation damage instructions. The jury was also instructed on the Hassoldts' intentional infliction of emotional distress cause of action.²

Four special findings were submitted to the jury. Specifically, the jury was asked whether it found "by a preponderance of the evidence defendant Patrick Media Group, Inc. responsible for damag[ing] Plaintiffs' tree"; whether it found "by a preponderance of the evidence that defendant Patrick Media Group, Inc. is liable for spoliation of evidence"; whether it found "by clear and convincing evidence that defendant acted with oppression or malice in damaging the tree"; and whether it found "by clear and convincing evidence that defendant acted with fraud, oppression or malice in spoliating evidence." The jury answered all four of these questions in the affirmative. In addition to the special findings, the jury returned a general verdict awarding $130,000 in damages to the Hassoldts. This verdict form did not indicate the cause or causes of action which formed the basis of the damage award.

The jury also returned a second verdict form which stated: "We, the jury in the above entitled action, having previously found Defendant Patrick Media Group, Inc. acted with fraud, oppression or malice in spoliating evidence now award punitive damages in the amount of $150,000." The jury was apparently presented with no verdict form that gave it the option of awarding punitive damages on any of the Hassoldts' other causes of action.

Discussion

As stated, the jury was specifically requested to determine whether Patrick had spoliated evidence.³ Moreover, the jury's award of punitive damages related only to the Hassoldts' spoliation claim. Based on Cedars-Sinai Medical Center v. Superior Court (Bowyer) (1998) 18 Cal.4th 1. 74 Cal.Rptr.2d 248, 954 P.2d 511⁴, Patrick contends the judgment cannot stand. Patrick also contends Cedars-Sinai should be retroactively applied to this case. We agree with both of Patrick's contentions.

In Cedars-Sinai, the court specifically held "that there is no tort remedy for the intentional spoliation of evidence by a party to the cause of action to which the spoliated evidence is relevant, in cases in which, as here, the spoliation victim knows or should have known of the alleged spoliation before the trial or other decision on the merits of the underlying action." (Cedars-Sinai Medical Center v. Superior Court (Bowyer), supra, 18 Cal.4th at pp. 17-18, 74 Cal.Rptr.2d 248, 954 P.2d 511, fn. omitted.)⁵ While the court acknowledged "that the intentional destruction of evidence should be condemned" (id. at p. 8, 74 Cal.Rptr.2d 248, 954 P.2d 511), it refused to create a tort remedy for such destruction.

The court's decision was based on its conclusion that nontort remedies existed to rectify the intentional destruction of evidence by a party. These remedies included permitting the trier of fact to draw an unfavorable evidentiary inference against the party who destroyed the evidence (Evid.Code § 413; BAJI No. 2.03); issue, evidentiary, terminating and monetary sanctions for destroying evidence that should have been produced during discovery (Code Civ. Proc., § 2023); state bar disciplinary proceedings against any lawyer participating in the spoliation of evidence; and criminal penalties (Pen.Code, § 135). The court's disinclination to create a tort remedy for spoliating evidence was also based, in part, on the "uncertainty of the fact of harm in spoliation cases." (Cedars-Sinai Medical Center v. Superior Court (Bowyer), supra, 18 Cal.4th at p. 13, 74 Cal.Rptr.2d 248, 954 P.2d 511.)

The Hassoldts do not, nor could they, dispute the holding in Cedars-Sinai. Rather, they argue that Cedars-Sinai should not be applied retroactively because "the parties have already gone through a trial when the tort of spoliation was recognized by California courts..." As a fallback position, the Hassoldts argue that "even if an exception to retroactivity were deemed not to apply in this case, the Court should treat the jury's award (to the extent, if at all it applies to the destruction of evidence) as a de facto sanction for Patrick's outrageous behavior. Otherwise, the innocent parties in this proceeding, plaintiffs (not to mention the trial court), face the burden of yet another trial, while the clear wrongdoer, Patrick, has yet another opportunity to ratchet up the costs to plaintiffs and perhaps, with the passage of time, escape some of the punishment it so richly deserves." We find neither these nor the Hassoldts' other arguments relating to retroactivity to be persuasive.⁶

"The general rule is that judicial decisions are given retroactive effect." (Camper v. Workers' Comp. Appeals Bd. (1992) 3 Cal.4th 679, 688, 12 Cal.Rptr.2d 101, 836 P.2d 888.) "Several factors are relevant in determining whether an exception to the general rule of retroactivity is warranted, including: `the reasonableness of the parties' reliance on the former rule, the nature of the change as substantive or procedural, retroactivity's effect on the administration of justice, and the purposes to be served by the new rule. [Citations.]' (Woods [v. Young (1991)] 53 Cal.3d [315,] 330 [279 Cal.Rptr. 613, 807 P.2d 455].)" (Camper v. Workers' Comp. Appeals Bd., supra, 3 Cal.4th at p. 688, 12 Cal.Rptr.2d 101, 836 P.2d 888.)

With respect to the parties' reasonable reliance on the existence of the tort of spoliation of evidence, we observe that, before Cedars-Sinai, the Supreme Court had never issued a definitive decision on the subject. In that regard, this case is much like the decision in Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973, 258 Cal.Rptr. 592, 772 P.2d 1059, in which the Supreme Court held that its decision in Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373 was to be given full retroactive effect.⁷ In Newman the court stated: "Because the relevant portion of Foley did not address an area in which this court had previously issued a definitive decision, from the outset any reliance on the previous state of the law could not and should not have been viewed as firmly fixed as would have been the case had we previously spoken. (Compare Moradi-Shalal [v. Fireman's Fund Ins. Companies (1988)] 46 Cal.3d 287 [250 Cal.Rptr. 116, 758 P.2d 58].) Even if one views Foley as breaking new and unexpected ground, a point we do not concede, it did so in an indisputably unsettled area.... The cases were not in agreement as to the appropriate standards permitting recovery of tort damages, leading to uncertainty which was reflected in the variety of Court of Appeal analyses as well as in confusing pleadings in the trial courts." (Newman v. Emerson Radio Corp., supra, 48 Cal.3d at pp. 986-987, 258 Cal.Rptr. 592, 772 P.2d 1059 .)

The fact that the Supreme Court had granted a hearing in Cedars-Sinai almost a year before this case went to trial also argues against any reasonable belief in the continued existence of spoliation of evidence as a tort remedy. As the court in Newman stated: "Although we did not decide Foley until December 1988, our decision to grant review in January 1986 put...