On Jan. 29, 2013, the First Department released three decisions that addressed issues related to “spoliation” of evidence that, taken together, constitute a primer on how that Appellate Division approaches both the claims of loss, destruction or failure to preserve evidence, on the one hand, and the consequences and sanctions for the negligent or intentional failure to maintain and produce documentary and other proof, on the other.

In Alleva v. United Parcel Service, Inc., 2013 NY Slip Op 00409 “a security guard employed by defendant Pitt [Investigations, Inc.] at a UPS center, [sought] to recover for injuries he sustained when he allegedly was assaulted by defendant [Gary] Calwood, a UPS employee, while searching Calwood’s belongings.”  Alleva sought, and UPS was unable to produce, its “center file” on Calwood – a file that “would document any previous disciplinary issues[.]”

The First Department found that “UPS’s unexplained failure to provide [Alleva with the file] “- except for counsel’s assertion, “without elaboration”– that the file “no longer exists”, constituted spoliation because “[t]he file would be critical in determining whether UPS had notice of Calwood’s propensity for violence, an issues central to [Alleva’s] claims.”

Alleva sought “the extreme sanction of striking UPS’s answer[.]”  The First Department found that such relief was not warranted “since the center file does not constitute the sole source of the information and the sole means by which [Alleva] can establish his case[.]” Instead, the Appellate Division concluded that “[a] a lesser sanction, such as an adverse inference charge, if sought at trial, would be more appropriate.”

Suazo v. Linden Plaza Associates, L.P.,  2013 NY Slip Op 00407,  involved an action for damages based on alleged security breaches in a building that were claimed to be the proximate cause of an assault on the plaintiff. Supreme Court “denied defendants’ motion for summary judgment dismissing the complaint, and granted plaintiff’s cross-motion seeking, as a spoliation sanction, to strike defendants’ answer[.]”

The First Department found “defendants’ failure to take active steps to halt the process of automatically recording over 30-to 45-day surveillance video to preserve it for litigation” constituted spoliation –“[s]ince defendants were ‘on notice of a credible probability that [they would] become involved in litigation’.”

However, as in Alleva, the Appellate Division held that the appropriate sanction was an adverse inference charge, not striking defendant’s answer.  “[S]poliation of the video did not ‘leave [plaintiff] prejudicially bereft of appropriate means to confront a claim [or defense] with incisive evidence[,] – because “[a]t trial plaintiff may present testimony of the two deponents who viewed the video to establish that the assailants were not allowed into the building by a tenant[.]”

Melcher v. Apollo Medical Fund Management L.L.C., 2013 NY Slip Op 00443, was a post-jury trial appeal in an action for breach of contract and other relief.  The First Department was called upon to consider an interlocutory order:

[W]hich denied [Melcher’s] motion to strike defendants’ pleading on the grounds of fabrication and spoliation of evidence with respect to an alleged amendment to an operating agreement that purportedly memorialized an oral agreement between Melcher and Brandon Fradd to make the changes.  Melcher denied the oral agreement; challenged the written amendment; “and asked [defendants’] counsel to make the original document available for forensic ink testing to determine whether, as Fradd claimed, it was signed in May 1998.”

The facts of the case are certainly unique:

In response, Fradd produced a document that was missing the first page and that had been scorched over the signature line. Fradd claimed that the day after Melcher’s counsel requested production of the amendment, he accidentally burned the original document while making tea. According to Fradd, he placed the document near the kettle in the kitchen, answered the door, and returned to find that the paper had ignited from his gas stove flame. Fradd claimed that the top page was destroyed, and the bottom page got partly browned, scorching a portion of his signature.

Melcher’s ink testing expert examined the original document and concluded that the exposure of the document to high heat made it impossible to determine the date of Fradd’s signature. The expert opined that the location of the scorching suggested something other than chance or accident.

Upon a prior appeal, the First Department “determined that issues of fact existed about whether the burning of the amendment was intentional or negligent.”  The Appellate Division held at that time that:

[d]eceit warranting the striking of the answer was not conclusively demonstrated. Whether the destruction of evidence was intentional or merely negligent presents an issue for the trier of fact, and [Melcher] failed to establish that without the evidence he would be unable to prove his case.

Post- appeal and prior to trial, “defendants reversed course and told the trial court…that they would no longer be relying on the May [1998] amendment.”  And “[i]nstead, they planned to argue before the jury that the operating agreement was orally amended.”  Defendants “asked the Court to exclude any evidence of or reference to the burning of the May 1998 amendment[;]” and, ‘[o]ver Melcher’s objection, the [trial] court ruled that Melcher could not present evidence about the amendment on his direct case, but could only present evidence in rebuttal if defendants raised the amendment.”   

The court noted:

The liability issues in [the] case were tried before a jury in May 2009. No evidence or cross-examination was permitted about the alleged falsification and burning of the May 1998 written amendment.

The jury rendered what, in effect, amounted to a defendants’ verdict — in the course of which the jury rejected defendants’ claim that the operating agreement had been orally modified. Melcher made an omnibus post-trial motion that, inter alia, renewed the motion to strike defendant’s pleading on the ground of fabrication and spoliation of evidence.  Supreme Court denied the motion; a judgment was issued in accordance with the jury verdict; and Melcher appealed.

In the appeal Melcher requested the First Department either to grant the motion to renew or, in the alternative, “remand for an evidentiary hearing on whether defendants fabricated, backdated and intentionally burned the amendment, and to direct the court [below] to strike [defendants’] pleadings if they did.”

The First Department summarized the applicable legal standards:

Where spoliation of evidence deprives a plaintiff of any means of establishing a prima facie case, striking the answer is an appropriate remedy… Likewise, striking a pleading may be justified where the spoliation deprives the plaintiff of the ability to confront a defense… Striking a party’s pleading “would be too drastic a remedy where [the opposing party is] not entirely bereft of evidence tending to establish its position.”  (citations omitted)

And, applying those standards to the facts of the case, the Appellate Division concluded that:

[T]he striking of defendants’ pleadings, given the post-verdict posture of the case, would not be an appropriate sanction. Even if defendants fabricated or spoliated the evidence, in view of the jury’s verdict any such misconduct did not prejudice Melcher in establishing or defending his case…[I]t appears that Melcher had planned to introduce evidence of the alleged fabrication of the written amendment to discredit defendants’ claim that an oral agreement existed. But even if such evidence were admissible for that purpose, it would not have made any difference given the jury’s verdict rejecting defendants’ claim that the operating agreement had been orally amended. Thus, Melcher prevailed on the only issue to which the written amendment could have had any possible relevance.

However, in the course of deciding several other substantive issues (and reinstating and granting Melcher judgment as to liability on the cause of action for breach of contract and remanding the action for an assessment of damages on that cause of action), the First Department also remanded the action to Supreme Court “for a hearing on [Melcher’s] allegations of spoliation and fraud”.

The court said:

Although we conclude that striking defendants’ pleadings would be an inappropriate sanction here, we are troubled that the allegations of fraud and deceit remain unaddressed. Defendants’ alleged misconduct should not be immune from inquiry because they made a last-minute decision not to rely upon the allegedly fabricated and spoliated document. By the time defendants altered their position at trial, Melcher had spent substantial time and expense in attempting to prove the falsity of the amendment. Fundamental fairness and maintaining the integrity of the judicial system require that Melcher’s allegations be subject to an evidentiary hearing. We cannot countenance purposeful fabrication of evidence, if that is what occurred, and ignore it simply because the document was not introduced at trial. Thus, in the exercise of our discretion, we remand the matter to the trial court to conduct a hearing. If Melcher’s allegations are proven, the court should impose a monetary sanction, such as attorney/expert fees and disbursements, based on the nature and extent of defendants’ wrongdoing.

The “takeaway” from Alleva, Suazo and Melcher:

Spoliation of evidence will result in the striking of a pleading only where the net result of the misconduct is the total inability of the adverse party to present evidence in support of a claim or defense. In a word, the lost or destroyed evidence must not be available from a secondary source and the inability to access such proof must be clearly and irreparably prejudicial.

Where, as was the case in Alleva and Suazo, the facts “lost” in the spoliated evidence can be substantially replicated by another means of testimonial or documentary proof, the appropriate sanction is an adverse inference charge to the jury (or such a conclusion by the Court in the case of a Bench trial)– not the striking of a pleading.

And where, as was the case in Melcher, the allegations of misconduct are both deliberate and egregious, in general, and (unlike the circumstances in Melcher), arguably fatal to the ability to prosecute or defend a claim or defense, in particular, the Court may be required to hold an evidentiary hearing to determine the extent of the wrongdoing (if any) and the appropriate sanction to be imposed based upon the facts, circumstances, scope and magnitude of the spoliation (if misconduct is found).