What Was Legal Consequence of Premature Disposition of Damaged Tanks? 

Dagro Assoc.II, LLC sued four Getty and Chevron companies to recover damages for a violation of Navigation Law § 181. The law establishes a cause of action for damages resulting from an oil or petroleum spill. Dagro alleged that storage tanks were damaged by a spill.

The oil companies moved to strike Dargo’s third amended complaint on the ground of spoliation of evidence. In support of the motion, they asserted that they were deprived of the opportunity to inspect the storage tanks because Dagro disposed of the tanks after its expert had inspected them. Supreme Court denied the motion. The oil companies then moved for leave to reargue their prior motion. And the court, upon reargument, in effect, vacated the prior determination. Dagro appealed.

The common-law doctrine of spoliation applies when a party negligently loses or intentionally destroys key evidence. The responsible party may be sanctioned. A party that seeks sanctions for spoliation of evidence must show that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction; the evidence was destroyed with a culpable state of mind; and the destroyed evidence was relevant to the party’s claim or defense such that the trier of fact could find that the evidence would support that claim or defense. A culpable state of mind for purposes of a spoliation sanction includes ordinary negligence.

But striking a pleading is a drastic sanction to impose in the absence of willful or contumacious conduct. And, in order to impose such a sanction, the court will consider the prejudice that resulted from the spoliation to determine whether such drastic relief is necessary as a matter of fundamental fairness. So where the moving party has not been deprived of the ability to establish his or her case or defense, a less severe sanction is appropriate.

Here, the oil companies demonstrated that Dagro had an obligation to preserve the tanks at the time they were disposed of, which was before they had an opportunity to inspect the tanks; the tanks were destroyed with a culpable state of mind; and the tanks were relevant to the litigation. However, they failed to establish that their ability to prove a defense was fatally compromised by the destruction of the tanks or that the destruction of the tanks was willful and contumacious. Under the circumstances presented, the drastic sanction of striking the third amended complaint was not appropriate. But the lesser sanction of directing that an adverse inference charge be given was warranted. So the jury would be instructed that it could infer that an inspection of the tanks by the oil companies would have resulted in findings adverse to Dagro.