Smith v. Atkinson

Decision Date04 February 2000
PartiesWilliam Christopher SMITH, individually; as father and next friend of Alexandria Smith and Chris Smith, minors; and as administrator of the estate of Monica Smith v. Carl ATKINSON et al.
CourtAlabama Supreme Court

W. Lee Pittman and Robert Potter of Pittman, Hooks, Dutton & Hollis, P.C., Birmingham, for plaintiff.

Frank J. Stakely and William H. Webster of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for defendant.

LYONS, Justice.

The United States District Court for the Middle District of Alabama has certified to this Court the following questions, acting pursuant to Rule 18, Ala. R.App. P.: "(1) Does Alabama recognize a cause of action for the independent tort of spoliation of evidence against a third party? and (2) If so, what are the elements of that tort?"

I.

The district court's order certifying its questions provides the following background information: On July 20, 1996, William Smith ("Smith"), his wife Monica Smith, and his two children, Alexandria and Chris, were traveling south on U.S. Highway 231 in Montgomery County in a minivan manufactured by Chrysler Corporation. The minivan was struck by another vehicle, which was being driven by Richard Ferguson. As a result of the collision, Monica Smith suffered injuries that caused her death; the remaining three passengers in the minivan suffered bodily injuries.

At the time of the collision, Smith had in full force and effect an automobile insurance policy with Metropolitan Property and Casualty Insurance Company ("Metropolitan") that included a provision for underinsured-motorist coverage. Smith filed a claim on the Metropolitan policy. Carl Atkinson, a claims adjuster, handled the claim for Metropolitan.

After the accident, Metropolitan took possession of the minivan and arranged to have it delivered to the company's storage facility in Montgomery. Subsequently, Smith began investigating a potential products-liability action against Chrysler Corporation, based on the theory that the minivan in which his wife was killed was defective. On four separate occasions, Smith informed Atkinson and Metropolitan that he intended to bring an action against Chrysler and requested that they preserve the minivan for further inspection. On each occasion, Atkinson agreed to retain the vehicle at the Metropolitan storage facility for Smith's use and inspection. On October 4, 1996, Smith executed a power of attorney to transfer the minivan's title to Metropolitan. At some point thereafter, Smith alleges, Metropolitan, after assuring him the minivan would be preserved for his inspection, negligently allowed the minivan to be destroyed before it could be inspected by Smith or his expert.

Smith sued Ferguson and Metropolitan under the underinsured-motorist provision of his automobile insurance policy. On or about September 26, 1997, in exchange for a pro tanto settlement of $150,000, Smith obtained the circuit court's approval and executed documents releasing Metropolitan and Ferguson. Smith specifically released

"any and all claims against Met P & C and its agents, servants, employees, representatives, officers, directors, shareholders and board members, except, `any potential claim that Plaintiffs may have against Metropolitan Property and Casualty Insurance Company and any other person or entity for the independent tort of evidence spoliation (i.e., spoliation of evidence) based on the destruction of the accident vehicle....'"

On July 17, 1998, Smith sued Atkinson and Metropolitan (hereinafter those defendants will be referred to together as "Metropolitan") in the Montgomery Circuit Court. The defendants removed the case to the United States District Court for the Middle District of Alabama, on the basis of diversity jurisdiction. Relying on the pro tanto release, the district court dismissed all claims against the defendants except Smith's potential cause of action for the independent tort of evidence spoliation, which was expressly reserved in the release.1

II.

The district court's certified questions require us to decide whether Alabama recognizes a cause of action for an independent tort of evidence spoliation. This Court has refused to recognize such a cause of action when the spoliator was a defendant in an action—that included a tort claim other than the alleged spoliation —filed by a plaintiff whose evidence was lost or destroyed. See Christian v. Kenneth Chandler Constr. Co., 658 So.2d 408, 413 (Ala.1995). Under the facts of this case, however, the question whether a remedy exists for one whose evidence was lost or destroyed through the acts of a third party (i.e., a party not alleged to have committed the underlying tort as to which the lost or destroyed evidence related) is squarely before us.

The Supreme Court of Illinois has written: "Courts have long afforded redress for the destruction of evidence and, in our opinion, traditional remedies adequately address the problem presented in this case. An action for negligent spoliation can be stated under existing negligence law without creating a new tort." Boyd v. Travelers Ins. Co., 166 Ill.2d 188, 193, 652 N.E.2d 267, 270, 209 Ill.Dec. 727, 730 (1995). We agree with the majority of states that have resolved this issue and conclude that general principles of Alabama law afford a plaintiff an adequate remedy. Therefore, we see no need to recognize a new cause of action for spoliation of evidence.2 We hereby recognize a claim against a third party for spoliation of evidence, under the traditional doctrine of negligence; but in regard to such a claim, we recognize that the burden of proof will be shifted from where it is in the ordinary negligence case.

III.

As in all negligence actions, the plaintiff in a third-party spoliation case must show a duty to a foreseeable plaintiff, a breach of that duty, proximate causation, and damage. Crowne Invs., Inc. v. Bryant, 638 So.2d 873, 878 (Ala.1994). We announce today a three-part test for determining when a third party can be held liable for negligent spoliation of evidence. In addition to proving a duty, a breach, proximate cause, and damage, the plaintiff in a third-party spoliation case must also show: (1) that the defendant spoliator had actual knowledge of pending or potential litigation; (2) that a duty was imposed upon the defendant through a voluntary undertaking, an agreement, or a specific request; and (3) that the missing evidence was vital to the plaintiffs pending or potential action. Once all three of these elements are established, there arises a rebuttable presumption that but for the fact of the spoliation of evidence the plaintiff would have recovered in the pending or potential litigation; the defendant must overcome that rebuttable presumption or else be liable for damages.

A. Duty

Although there is no general duty to preserve evidence, "Alabama clearly recognizes the doctrine that one who volunteers to act, though under no duty to do so, is thereafter charged with the duty of acting with due care and is liable for negligence in connection therewith." Dailey v. City of Birmingham, 378 So.2d 728, 729 (Ala.1979).3 When a third party has knowledge of a pending or potential lawsuit and accepts responsibility for evidence that would be used in that lawsuit, it should be held liable for damage resulting from the loss or destruction of that evidence.

A California District Court of Appeal has clarified the duty element of California's tort of negligent spoliation, in Johnson v. United Services Automobile Association, 67 Cal.App.4th 626, 79 Cal.Rptr.2d 234 (1998), and, although we decline to adopt California's negligent-spoliation tort in its entirety, we are persuaded by that court's rationale for the method by which the plaintiff in a negligent-spoliation case is to establish the existence of a duty on the part of the defendant. In addition to the voluntary assumption of a duty, mentioned above, the Johnson court recognized two additional ways a duty could be imposed upon a third party:

"[A] duty in a third-party negligent spoliation case can be created by the spoliator voluntarily undertaking to preserve the evidence and a plaintiff reasonably and detrimentally relying thereon...; by an agreement to preserve between the spoliator and the plaintiff...; or by a specific request to the spoliator to preserve a particular item...."

67 Cal.App.4th at 635, 79 Cal.Rptr.2d at 239 (citations omitted). We also agree with Johnson that a third party's constructive notice of a pending or potential action is not sufficient to force upon the third party the duty to preserve evidence. Id., 67 Cal.App.4th at 635, 79 Cal.Rptr.2d at 240. "Limiting the usual duty in third-party negligent spoliation to an agreement to preserve, or a voluntary undertaking with reasonable and detrimental reliance, or a specific request, ensures that such a spoliator has acted wrongfully in a specifically identified way." Id., 67 Cal.App.4th at 637, 79 Cal.Rptr.2d at 241.

Metropolitan argues that imposing on a third party a duty to preserve evidence could result in wasteful and unnecessary record- and evidence-retention practices.4 We disagree. If the third party does not wish to take responsibility for evidence, it can decline the responsibility, shifting the risk of loss back to the plaintiff. "The specific request to preserve must be accompanied by an offer to pay the cost or otherwise bear the burden of preserving. We do not think a tort duty to preserve should be created simply by someone specifically requesting a third party to preserve something. Preservation may entail significant burdens." Id.,67 Cal.App.4th at 638,79 Cal.Rptr.2d at 241. In this case for example, assuming the salvage value of the minivan to be $1,000, Metropolitan could have settled Smith's underinsured-motorist claim for $149,000 and the wrecked minivan, instead of $150,000. Smith would have had...

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