Silhan v. Allstate Ins. Co.

• Decision Date: 30 September 2002
• Docket Number: Case No. 3:02-cv-266/LAC.
• Citation: 236 F.Supp.2d 1303
• Parties: William A. SILHAN and Melissa L. Silhan, Plaintiffs, v. ALLSTATE INSURANCE COMPANY, et al., Defendants.
• Court: U.S. District Court — Northern District of Florida

236 F.Supp.2d 1303

William A. SILHAN and Melissa L. Silhan, Plaintiffs, v. ALLSTATE INSURANCE COMPANY, et al., Defendants.

Case No. 3:02-cv-266/LAC.

United States District Court, N.D. Florida, Pensacola Division.

September 30, 2002.

COPYRIGHT MATERIAL OMITTED

Diane M. Longoria, Pensacola, FL, for William A. Silhan, Melissa L. Silhan.

Frank Henry Gassler, Fowler, White, Gillen, Tampa, FL, for Allstate Insurance Company.

Harold William Wasden, Pierce, Ledyard, Mobile, FL, Jeffrey Uhlman Beaverstock, Pierce, Carr & Alford, PC, Mobile, FL, for Zurich-American Insurance Group.

ORDER

COLLIER, District Judge.

THIS CAUSE comes before the Court on Defendant Allstate Insurance Company's Motion to Dismiss Plaintiff's Complaint (Doc. 7). Plaintiffs William A. and Melissa L. Silhan have responded in opposition to Defendant's motion (Doc. 10). For the reasons stated below, Defendant Allstate Insurance Company's motion is GRANTED.

I. BACKGROUND

A. Procedural History

On June 6, 2002, Plaintiffs filed a complaint in the Circuit Court for Escambia County, Florida (Doc. 1, Attach.). The Plaintiffs alleged that Defendants Allstate Insurance Company ("Allstate") and Zurich American Insurance Company negligently and/or intentionally destroyed evidence relevant to a prior court proceeding (Id. at ¶ 35). On June 25, 2002, Allstate filed a notice of removal in this Court that based jurisdiction on diversity of citizenship (Doc. 1).¹ Shortly thereafter, on July 1, 2002, Allstate filed a motion to dismiss the Plaintiff's complaint for failure to state a claim for which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. 7). On July 22, 2002, Plaintiffs filed a timely memorandum in opposition to Allstate's motion (Doc. 10).

B. Relevant Facts

For purposes of ruling on this motion, the following facts are assumed true and viewed in the light most favorable to the Plaintiffs. Plaintiffs, William A. and Melissa L. Silhan are residents of Escambia County, Florida (Doc. 1, Attach.¶ 3). Plaintiffs purchased a homeowner's insurance policy from Allstate Insurance Company (Id., ¶ 6).² The policy, numbered 088226195, was in effect at all times relevant to this action (Id.).

On or about the second week of February 1993, Plaintiffs received a recall notice from Sears, Roebuck, and Company ("Sears"), warning the Plaintiffs that their dishwasher posed a fire hazard (Id., ¶ 8). The Kenmore dishwasher was manufactured by White Consolidated Industries, Inc. ("White") (Id.). Then, on or about February 22, 1993, a Sears repairman came to Plaintiffs residence to repair the dishwasher (Id., ¶ 9). Unfortunately, on February 24, 1993, the house was consumed and completely destroyed by a fire (Id., ¶ 10).

Acting in conformity with the homeowner's insurance policy (between Allstate and Plaintiffs), Allstate retained James A. Wark & Associates ("Wark") to conduct a cause and origin fire investigation (Id., ¶ 11). On both February 25 and March 2, 1993, Wark investigated the scene (Id., ¶ 12). At some point during the investigation, Plaintiffs informed Wark and Allstate that the dishwasher had been repaired (due to a fire hazard recall) just two days before the fire (Id., ¶ 12). During the investigation, Wark notified Allstate of its findings on a number of other potential causes of the fire besides the dishwasher (Id., ¶ 13).³ On March 2, 1993, Wark took the dishwasher motor to an engineer for further testing (Id., ¶ 14). Two days later, Wark informed Allstate that the dishwasher was the most likely cause and origin of the fire, and within two weeks, Allstate expressed an intererst in pursuing a subrogation claim against Sears and White (Id., ¶¶ 15-16).

On March 30, 1993, Wark issued its fire investigation report to Allstate, and it concluded that the cause of the fire could not be determined (Id., ¶ 19). On April 2, 1993, Allstate authorized, arranged, and paid for the destruction of the remaining fire scene (Id., ¶ 20). Even though the cause of the fire was undetermined, the dishwasher was the only evidence that Allstate preserved from the fire scene (Id.). In the five weeks prior to the destruction of the fire scene, Allstate did not notify Sears or White of their potential liability for the fire (Id., ¶ 25). In addition, Allstate did not provide Sears or White the opportunity to inspect the fire scene (Id.).

Allstate and Plaintiffs entered into a subrogation agreement and filed a products liability action against Sears and White in a Florida Circuit Court on March 7, 1995 (Id., ¶ 26). Allstate and the Plaintiffs alleged that the dishwasher was the cause of the fire and the ultimate destruction of the Plaintiffs' home (Id.). Pursuant to the subrogation agreement, Allstate had the primary authority and responsibility for prosecuting the products liability action against Sears and White (Id.). The Plaintiffs retained co-counsel to handle individual claims that just Plaintiffs had against Sears and White (Id.). After initiation of the suit, Allstate rejected a $5,000 settlement offer (Id., ¶ 27).⁴

On or about December 30, 1998, after extensive discovery, Sears and White filed a motion for summary judgment on the following grounds: 1) there was insufficient evidence in the record that the Kenmore dishwasher had caused the fire, and 2) Allstate's destruction of the fire scene precluded Sears and White from defending their claim by presenting evidence of an alternative cause of the fire (Id., ¶ 28). Allstate then authorized Plaintiffs' individually retained counsel to "take the lead" in both prosecuting the case and defending the summary judgment motion (Id., ¶ 30).

On April 14, 2000, just one business day before the summary judgment hearing, Allstate settled its subrogation claim with Sears and White (Id., ¶ 31). On the day of the summary judgment hearing, Allstate filed a dismissal with prejudice as to its claim (Id.). Plaintiffs were left to defend the summary judgment motion alone (Id.). As a result, Plaintiffs became exposed to liability for any adverse summary judgment ruling, including the attorneys' fees and costs of the non-prevailing party (Id.). Then on September 6, 2000, the trial court entered summary judgment for Sears and White (Id., ¶ 32). Although the court rejected Sears and White's argument that there was no genuine issue of material fact for trial, the court entered summary judgment against Plaintiffs as a sanction for Allstate's destruction of critical evidence (Id.). Plaintiffs chose not to appeal the state trial court's ruling (Doc. 7, ¶ 4). Instead, Plaintiffs filed suit against Allstate for negligent and/or intentional destruction of evidence (Doc. 1, Attach.¶ 34). In the complaint, Plaintiffs alleged that Allstate's destruction of evidence resulted in the Plaintiffs suffering a loss of a viable products liability action against Sears and White (Id., ¶ 38).

II. MOTION TO DISMISS

A. Standard

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure is designed to eliminate counts or complaints that fail to state a claim upon which relief can be granted. As such, this Court must accept all allegations of the complaint as true and construe those allegations in the light most favorable to Plaintiffs. See Lopez v. First Union Nat'l Bank of Fla., 129 F.3d 1186, 1189 (11th Cir.1997); Webb v. Town Council of Town of Hilliard, 766 So.2d 1241, 1243 (Fla. 1st DCA 2000); Rohatynsky v. Kalogiannis, 763 So.2d 1270, 1272 (Fla. 4th DCA 2000). A count may not be dismissed for failure to state a claim unless it appears beyond doubt that plaintiffs can prove no set of facts in support of their claim that would entitle them to relief. See Lopez v. First Union Nat'l Bank of Fla., 129 F.3d 1186, 1189 (11th Cir. 1997). "The threshold of sufficiency that a complaint must meet to survive a motion to dismiss is exceedingly low." Quality Foods de Centro Am. v. Latin Am. Agribusiness Dev. Corp., 711 F.2d 989, 995 (11th Cir.1983).

B. Discussion

This case involves a relatively new tort known as "spoliation of evidence" or "destruction of evidence." "Spoliation of evidence...is a cause of action which holds someone liable for negligently or intentionally destroying material which is needed as evidence in litigation." Bard D. Rockenbach, Spoliation of Evidence: A Double-Edged Sword, 75 Fla. B.J. 34 (2001). There are two different types of spoliation of evidence claims. See id. The first type occurs when a party, during litigation, destroys or loses evidence that is vital to the opposing party. See id. Such loss is then treated by the court as a discovery violation, which is subject to a variety of discretionary sanctions. See id. The second type is an independent cause of action. See id. at 36. A spoliation claim arises against a defendant when that defendant breaches a duty to preserve evidence resulting in the destruction of a plaintiff's cause of action against a third party. See id. The type of spoliation claim at issue in the current case is the latter.⁵

Spoliation of evidence is still in its relative infancy in Florida law. The tort first appeared in the state of Florida in 1984. See Bondu v. Gurvich, 473 So.2d 1307 (Fla.Dist.Ct.App.1984). In order to recognize the new tort, the District Court of Appeal for the Third District of Florida relied on two California state court decisions that created new causes of action for both "negligent failure to preserve evidence for civil litigation" and "intentional interference with prospective civil action by spoliation of evidence." See Bondu v. Gurvich, 473 So.2d 1307 (Fla.Dist.Ct.App.1984)(citing Williams v. California, 34 Cal.3d 18, 192 Cal.Rptr. 233, 664 P.2d 137 (1983); citing Smith v. Superior Court 151 Cal.App.3d 491, 198 Cal. Rptr. 829 (Cal.Ct.App.1984)(overruling recognized by Johnson v. United Services Auto. Assn., 67 Cal.App.4th 626, 629, 79 Cal.Rptr.2d 234 (Cal.Ct.App.1998))). Once recognizing spoliation's existence, the...