MetLife Auto & Home v. Basil

• Decision Date: 30 December 2002
• Citation: 753 N.Y.S.2d 272,303 A.D.2d 30
• Court: New York Supreme Court — Appellate Division
• Parties: METLIFE AUTO & HOME, as Subrogee of MICHAEL BASIL, Appellant,<BR>v.<BR>JOE BASIL CHEVROLET, INC., et al., Respondents, et al., Defendants.

303 A.D.2d 30
753 N.Y.S.2d 272

METLIFE AUTO & HOME, as Subrogee of MICHAEL BASIL, Appellant,
v.
JOE BASIL CHEVROLET, INC., et al., Respondents, et al., Defendants.

KEHOE, J.

December 30, 2002.

Regan & Regan, Buffalo (Christopher A. Spence of counsel), for appellant.

[303 A.D.2d 31]

Kenney, Kanaley, Shelton & Liptak, L.L.P, Buffalo (Joanneke K.M. Brentjens of counsel), for Joe Basil Chevrolet, Inc., respondent.

Gibson, McAskill & Crosby, LLP, Buffalo (Kathleen M. Sweet of counsel), for Royal Insurance Company, respondent.

HAYES, J.P., HURLBUTT, BURNS and LAWTON, JJ., concur.

OPINION OF THE COURT

KEHOE, J.

The issue before us, one not yet considered by the Court of Appeals or this Court, is whether to recognize a cause of action for a negligent or reckless act of spoliation of evidence committed by one not a party or a potential party to the underlying claim to which the spoliated evidence relates. Under the circumstances presented, we decline to recognize a cause of action for "third-party spoliation" of evidence/impairment of claim or defense, either under principles of negligence law or as an independent tort. We thus conclude that Supreme Court properly granted the motion of defendant Royal Insurance Company (Royal) to dismiss the complaint against it.

I

In reviewing the determination of a motion to dismiss pursuant to CPLR 3211, we must accept as true the facts alleged in the complaint and in the submissions in opposition to the motion, accord the plaintiff the benefit of every possible favorable inference, and determine whether the facts alleged fit within any cognizable legal theory (see Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414; Edmond v International Bus. Machs. Corp., 91 NY2d 949, 951, rearg denied 92 NY2d 871; Tenuto v Lederle Labs., Div. of Am. Cyanamid Co., 90 NY2d 606, 609-610; Leon v Martinez, 84 NY2d 83, 87-88).

Plaintiff, MetLife Auto & Home (MetLife), commenced this action as subrogee of Michael Basil, MetLife's insured under a homeowner's policy. The claim to which MetLife is subrogated is for $330,888.64 in fire damage to the residence of Michael Basil and his wife. MetLife's complaint names as defendants Joe Basil Chevrolet, Inc. (Basil Chevrolet), General Motors Corp. (General Motors), Speaker Shop, Inc. (Speaker Shop), and Royal, and asserts four causes of action. The first three causes of action seek recovery from Basil Chevrolet, General Motors and Speaker Shop for the $330,888.64 in fire damage on theories of negligence, breach of warranties, and strict products liability. The basis for that underlying claim is the allegation that the fire started in the dashboard of a 1999 Chevrolet

[303 A.D.2d 32]

Tahoe that had been parked in the garage attached to the Basil residence. That was the preliminary conclusion reached by fire investigators, who did not perform a "cause and origin investigation" on the vehicle but instead left that for the "insurance company" to perform. The vehicle, which was manufactured by General Motors and owned by Basil Chevrolet, had been made available to Michael Basil and his wife for their use. Speaker Shop had performed "certain after market electrical work and [had] installed a remote starter" in the vehicle.

This appeal concerns MetLife's fourth cause of action, which is asserted against only Royal, the insurer of Basil Chevrolet and the Chevrolet Tahoe in question, and which likewise seeks recovery of $330,888.64. MetLife alleges that, after the fire, Royal "made arrangements to safeguard the integrity of the subject 1999 Chevrolet Tahoe and [placed it] at a storage lot [or salvage yard] under the direct supervision, control and observation of its duly authorized agent"; that "General Motors[,] Royal * * * [and MetLife] arranged for a joint inspection/ testing of the subject vehicle on or about the 6th day of November, 2000 at the storage lot of" Royal's agent; but that, shortly before the inspection, MetLife learned "from the retained expert of [Royal] that the vehicle had been sold and removed from the storage lot and * * * substantially altered such that there was no chance to do a detailed, scientific and thorough analysis to determine the cause of the subject fire and resultant damage." MetLife alleges that, "as a result of the negligence, carelessness and recklessness of [Royal], invaluable, necessary and important evidence has been destroyed and lost[,] thereby irrevocably impairing [MetLife's] right to pursue successfully the defendants [Basil Chevrolet, General Motors and Speaker Shop]."

According to the averments of Mark D. Hagen, MetLife's subrogation adjustor, Royal "took possession" of the vehicle "as owner" upon indemnifying its insured, Basil Chevrolet, for the fire damage to the vehicle. Hagen subsequently asked both Royal and the salvage yard to preserve the vehicle for examination by MetLife and its experts. He was assured that Royal would "preserve and maintain the integrity of the vehicle so that a detailed cause and origin investigation could be performed." After an inspection had been scheduled by the various parties, Royal's expert notified Hagen that "Royal * * *, through [its] agent the salvage yard, had disposed of the vehicle," and that "the new owner of the vehicle had disassembled it, making a scientific cause and origin examination impossible."

[303 A.D.2d 33]

In lieu of answering, Royal moved to dismiss the complaint against it for failure to state a cause of action (see CPLR 3211 [a] [7]), arguing that spoliation of evidence is not recognized as a cause of action in New York. MetLife opposed Royal's motion and moved for an order dismissing Royal's defense that the complaint fails to state a cause of action. MetLife further sought summary judgment on its cause of action against Royal for spoliation of evidence.

II

The court granted the motion of Royal to dismiss the complaint against it and denied MetLife's motion.^[1] We conclude that the court properly dismissed the complaint against Royal because no cause of action for negligent or reckless spoliation of evidence/impairment of claim lies against a nonparty to the underlying claim.

III

Cases imposing an obligation to preserve and disclose evidence, and subjecting a party to statutory (see CPLR 3126) or common-law sanctions in the event of its failure to do so, are legion (see e.g. Foncette v LA Express, 295 AD2d 471; Marro v St. Vincent's Hosp. & Med. Ctr. of N.Y., 294 AD2d 341; Sage Realty Corp. v Proskauer Rose, 275 AD2d 11, 17-18, lv dismissed 96 NY2d 937; Yi Min Ren v Professional Steam-Cleaning, 271 AD2d 602, 603; Squitieri v City of New York, 248 AD2d 201, 202-204; Kirkland v New York City Hous. Auth., 236 AD2d 170, 173-176; Mudge, Rose, Guthrie, Alexander & Ferdon v Penguin A.C. Corp., 221 AD2d 243). Such authorities are not directly applicable to the issue now before us, although they may become applicable to the case as it plays out (see n 5, infra). Here, we are concerned with an attempt to impose liability in tort for spoliation of evidence and consequent impairment of the spoliation victim's ability to prevail on an underlying claim to which the lost or destroyed evidence pertained or might have pertained.

Traditionally, spoliation has been defined as the "intentional destruction, mutilation, alteration, or concealment of evidence,

[303 A.D.2d 34]

[usually] a document" (Black's Law Dictionary 1409 [7th ed 1999]). As employed in case law, however, spoliation is a much broader term, one that has been applied to intentional conduct ranging from the deliberate destruction of evidence with fraudulent intent to innocent practices and occurrences in the ordinary course of business or events. Moreover, despite its denotation of intentionality, the term has been applied in case law to unintentional conduct, such as the apparently inadvertent (from Royal's standpoint)...