Miller v. Allstate Ins. Co.
| Decision Date | 18 December 1990 |
| Docket Number | No. 88-2806,88-2806 |
| Citation | 573 So.2d 24,16 Fla. L. Weekly 16 |
| Parties | 16 Fla. L. Weekly 16 Marcia MILLER, Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee. |
| Court | Florida District Court of Appeals |
Arthur M. Garel and Jeffrey A. Jacobs, Miami, for appellant.
Barnett, Clark and Barnard and Richard M. Nelson and James K. Clark, Miami, for appellee.
Before HUBBART, FERGUSON and GERSTEN, JJ.
ON MOTION FOR REHEARING
Marcia Miller commenced this contract action against Allstate Insurance Company alleging a breach of promise to return a wrecked automobile which she needed as evidence in a planned products liability action against the manufacturer. Agreeing with Allstate that its promise to preserve the evidence did not create a legally enforceable obligation, or that the agreement was unenforceable because damages were not reasonably certain, the trial court, on stipulated facts, entered a final judgment adverse to Miller on the liability issue.
Marcia Miller and her passenger were severely injured when Miller's new car crashed into a wall. The cause of the crash, according to Miller, was that the vehicle's accelerator stuck, causing an unavoidable collision with a retaining wall. The automobile was a total loss. While Miller was recuperating in the hospital, her father, who is an attorney, contacted Allstate, her automobile insurer, and informed an agent, Kenneth Malkin, that Miller wanted to retain possession of the automobile in order to have it examined by an expert for defects. He was of the opinion that his daughter had a products liability claim against the manufacturer. Malkin told Miller and her father that Allstate wanted temporary possession of the car because they also planned to have an expert examine it for defects as they anticipated that the passenger injured in the accident would file a claim against Allstate.
Eventually the parties reached an agreement whereby Miller relinquished possession of the car to Allstate to prepare for its defense to a claim by the passenger. In exchange, Allstate promised to preserve the car and to make it available for inspection by Miller's experts. The existence of the oral agreement is not disputed. Before any expert examination was performed, however, Allstate, in breach of the agreement, sold the car to a salvage yard where it was disassembled and disposed of. Miller sued Allstate alleging that, as a result of Allstate's breach of the agreement to preserve the wrecked automobile for expert inspection, she was denied the opportunity to maintain a products liability action against the manufacturer.
The court held a special proceeding where Miller's witness, a safety engineer, testified that, although the collision was most likely caused by a defect, he would be unable to give an expert opinion in the case without examining the automobile. Allstate moved for a directed verdict on two grounds: 1) Florida law does not recognize a cause of action in contract for damages based on the denial of an opportunity to prove a products liability case; and 2) even if such a cause of action existed, in light of the holding in Cassisi v. Maytag Co., 396 So.2d 1140 (Fla. 1st DCA 1981)--that a products liability plaintiff may establish a prima facie case for jury consideration on circumstantial evidence--Miller was not denied an opportunity to pursue her case. The court directed a verdict in favor of Allstate.
This court has previously recognized the existence of a tort cause of action for negligent failure to preserve evidence for civil litigation. In Bondu v. Gurvich, 473 So.2d 1307 (Fla. 3d DCA 1984), rev. denied, 484 So.2d 7 (Fla.1986), we held that a wife, whose husband died during surgery, was entitled to bring an action for negligent failure to preserve evidence against a hospital and its physicians where the hospital misplaced records which were indispensable to the plaintiff's medical malpractice action. Cited in Bondu is a line of cases from other jurisdictions that were among the first to recognize a tort cause of action for negligent failure to preserve evidence needed for civil litigation.
A leading case on the issue of spoliation of evidence is Smith v. Superior Court, 151 Cal.App.3d 491, 198 Cal.Rptr. 829 (1984). In Smith, the defendant's van was towed to an automobile dealer following an accident. After promising plaintiff's attorney that it would maintain the vehicle pending further investigation by the plaintiff's experts, the dealer lost or destroyed the evidence. Without the physical evidence, Smith was unable to pursue her products liability claim. She sued the dealer alleging tortious interference with a prospective civil action by spoliation of evidence, breach of contract, and promissory estoppel. The trial court dismissed the tort claim, 1 ruling that it was not a recognized cause of action. The appellate court reversed.
Analogizing the intentional tort of spoliation of evidence to the tort of intentional interference with a prospective business advantage, the court observed, on the way to its holding, that "a prospective civil action in a products liability case is a valuable 'probable expectancy' that the court must protect" from interference, and that the defendants had interfered with the plaintiff's opportunity to prove her lawsuit. Smith, 151 Cal.App.3d at 502, 198 Cal.Rptr. at 837. Other cases have expressly or implicitly recognized the existence of a tort cause of action for destruction of evidence where all the traditional tort elements were present. 2
Conceding, in light of the considerable authority which includes Florida cases, that the law recognizes a tort cause of action for the destruction of evidence, Allstate argues, generally, that Miller's election of a contract remedy is fatal. We disagree. An action in contract differs from an action in tort in that the former is based on the breach of a duty imposed by agreement while a tort action is based on the breach of a duty imposed by law. Banfield v. Addington, 104 Fla. 661, 140 So. 893 (1932). In a contract action the threshhold question is whether the defendant breached a promise which the law will enforce, or the performance of which the law in some way recognizes as a duty. Restatement (Second) of Contracts, § 1, at 5 (1981).
Whether a cause of action should be pursued in contract or tort is not dictated by the character of the act giving rise to the injury, but instead, it is the character of the duty breached which determines which cause of action should be maintained. 1A C.J.S. Actions § 85, at 486 (1985). Where the parties have a contract, and the same act or transaction constitutes both a breach of the agreement, express or implied, and a tort, the tort may be waived and the injured party may sue on the contract. Gay v. Southern Builders, Inc., 66 So.2d 499 (Fla.1953); Doyle v. City of Coral Gables, 159 Fla. 802, 33 So.2d 41 (1948).
In Bondu, the defendant physician and hospital owed a duty to the plaintiff, imposed by statute and administrative regulation, to make and maintain medical records. We held there that the complaint for negligent failure to preserve medical records stated a cause of action because it was clear that the plaintiff's interests were entitled to legal protection against the conduct of the defendants. In this case the insurer owed a duty to the plaintiff, imposed by a contract, to preserve evidence essential to a civil litigation. As in Bondu, we conclude that the plaintiff's interests are entitled to legal protection against the defendant's conduct. That the duty arises from a valid contract, rather than a statute or administrative regulation, is no basis for a different result. 3
Allstate argues further, specifically, that its agreement with Miller should not be recognized as imposing a legal duty because of the uncertainty of damages. Although there is a requirement for certainty of damages in a contract action, Restatement (Second) of Contracts §§ 351, 352 comment a (1981); C. McCormick, Damages § 31, at 105 (1935), the requirement may be met, according to the old rule from Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854), by evidence of what damages were in the contemplation of the parties at the time the contract was made. See Life Investors Ins. Co. v. Johnson, 422 So.2d 32 (Fla. 4th DCA 1982). Under the certainty rule, which applies in both contract and tort actions, recovery is denied where the fact of damages and the extent of damages cannot be established within a Recognizing the certainty element of damages as the most troubling aspect of an action for intentional spoliation of evidence, the Smith court noted that the underlying products liability case had not yet gone to trial and it was possible that the plaintiff could prove her case through other means. 5 Noting that although damages usually must be established within a reasonable degree of certainty, the court reasoned, nevertheless, that when the difficulty in establishing damages is caused by the defendant, he should bear the risk of uncertainty that his own wrong created. 6 Concluding that the plaintiff suffered "some" damage in preparing her product liability case, the court permitted recovery even though the damages could not be stated with certainty. Smith, 151 Cal.App.3d at 503, 198 Cal.Rptr. at 837. Likewise, in Bondu, we held that the plaintiff was damaged when the hospital failed to furnish hospital records causing her to lose a medical negligence lawsuit. 7 The difficulty in assessing damages in Bondu was no bar to plaintiff's claim for negligent failure to preserve evidence. Bondu, 473 So.2d at 1313.
reasonable degree of certainty. Restatement (Second) of Contracts § 352 (1981); Restatement (Second) of Torts § 912 (1982); McCall v. Sherbill, 68 So.2d 362 (Fla.1953); Farrington v. Richardson, 153 Fla. 907, 16 So.2d 158 (...
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