Spoliation of evidence is a circumstance that may arise in business litigation when one party fails to preserve or intentionally destroys evidence after becoming aware of an imminent lawsuit. Spoliation is defined as “[t]he intentional destruction, mutilation, alteration, or concealment of evidence [.]” SPOLIATION, Black’s Law Dictionary (11th ed. 2019). Spoliation issues in business litigation sometimes arise because documents, both in paper and electronic format, are typically important cases in commercial litigation disputes. Parties sometimes destroy or fail to preserve key documents that are important to determining what are the true facts in the lawsuit. The range of remedies available for a party who has been aggrieved by another party’s destruction (or spoliation of evidence) depends on the severity of the wrongful act done and the prejudicial effect of the missing evidence. When a case involves negligent spoliation, courts have utilized adverse evidentiary inferences and adverse presumptions during trial to address the lack of evidence. When a case involves intentional spoliation, courts have often stricken pleadings or entered default judgments. Martino v. Wal–Mart Stores, Inc., 908 So.2d 342 (Fla. 2005). Peter Mavrick is a Fort Lauderdale business litigation attorney. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.
In the case of Golden Yachts, Inc. v. Hall, 920 So. 2d 777 (Fla. 4th DCA 2006), William Scott Hall (“Hall”) fell while aboard a boat at Golden Yachts, Inc. (“Golden Yachts”). The boat’s cradle consisted of two “H-frames” manufactured by Water–Land Manufacturing, Inc., a co-defendant, and assembled with wood and hardware that Golden Yachts purchased from Home Depot. After the accident, Golden Yachts stowed the cradle’s component parts next to a storage container. A videographer filmed the boat yard where the cradle was stored. The manufacturer’s sales representative inspected and photographed the damaged boat cradle. About ten days after the accident, Hall’s counsel wrote to Golden Yachts and requested that all material from the cradle be preserved and offered to store the material if Golden Yachts was unwilling or unable. Golden Yachts hired an investigator, who photographed and measured the debris from the boat cradle and interviewed employees and other witnesses to the accident.
Hall and his wife filed a lawsuit against Golden Yachts for negligence and loss of consortium. Hall later amended the complaint to add the manufacturer as a defendant. Two years after the accident, both plaintiffs and the manufacturer requested inspection of the boat cradle debris. Golden Yachts set aside two H-frames that it believed were involved in the accident, but none of the wood or hardware could be located. The experts who previously examined the H-frames, determined that these were not the H-frames that were involved in the accident. Golden Yachts could not explain what happened, why the H-frames were not been securely stored, or how the second pair of damaged H-frames came into its possession. The investigator hired by Golden Yachts also purged his files. The investigator testified that his common business practice was to turn all investigative material over to the hiring party and then discard the records. Golden Yachts denied receiving the investigator’s photographs but produced some copies of some of the photographs. The plaintiffs amended their complaint to include a claim for spoliation of evidence against Golden Yachts. However, the Halls’ first-party spoliation claims were not allowed. The manufacturer then filed a motion for sanctions against Golden Yachts and requested an adverse inference jury instruction. An adverse inference jury instruction informs the jury that potentially self-damaging evidence was in the possession of a party and the party lost or destroyed the evidence. The trial court denied the motion for sanctions but granted the request for an adverse inference jury instruction. The jury found Golden Yachts was completely liable and a final judgment was entered. Golden Yachts immediately appealed.
The appellate court did not find error in the trial court’s rulings on this issue. “The adverse inference instruction does not relieve a party from its burden of proof at trial.” Anesthesiology Critical Care & Pain Mgmt. Consultants, P.A. v. Kretzer, 802 So.2d 346 (Fla. 4th DCA 2001). The party aggrieved by the spoliation can present evidence about the pre-accident condition of the lost evidence, the circumstances surrounding the spoliation, and instruct the jury on the inferences that may be drawn from the spoliation. The trial court has broad discretion as to the application of these remedies because there is a possibility that the remedies may be cumulative.
Golden Yachts, Inc. v. Hall held that before exercising any remedy due to spoliation of evidence, the trial court must answer three threshold questions: “1) whether the evidence existed at one time, 2) whether the spoliator had a duty to preserve the evidence, and 3) whether the evidence was critical to an opposing party being able to prove its prima facie case or a defense.” The appellate court found that the evidence showed that the H-frames and the component parts of the cradles existed, were involved in the accident, and were last in the possession of Golden Yachts. Further, plaintiffs notified Golden Yachts of the need to preserve the items within ten days of the accident. But none of the cradle material was preserved. The appellate court ruled that the lack of this crucial evidence hampered the plaintiffs in proving their claims and the co-defendant from proving its defense. The trial court was able to answer the three threshold questions in the affirmative, thereby justifying the use of the adverse inference instruction. The appellate court affirmed the trial court’s ruling.
Mavrick Law Firm will provide additional insight into spoliation of evidence of electronically stored information (ESI) under the new Rule 1.380(e) in a future article. Peter Mavrick is a Fort Lauderdale business litigation lawyer. This article does not serve as a substitute for legal advice tailored to a particular situation.