PHILLIPS Et Al. v. OWNERS INSURANCE COMPANY
2017 Ga. App. LEXIS 333
Ga. Ct. App.2017Background
- On May 11, 2013 Kenneth Phillips was injured when his car flipped after an alleged tire blowout; Owners Insurance (Owners) insured the vehicle and took possession of the totaled car.
- Phillips’ counsel notified Owners to preserve the vehicle and tires for potential products-liability litigation; Owners agreed to store the car at a Savannah facility and to notify counsel before any move; a “seller hold” was placed.
- Owners obtained title after Phillips accepted a property-damage settlement and the vehicle remained at the Savannah lot for ~1.5 years.
- When additional storage charges arose in October 2014, Owners released the hold and sold the car (and tires) without notifying Phillips or his counsel.
- Phillips later learned of the sale when seeking the tire for litigation, sued the tire manufacturer (settled part of medical claim), and then sued Owners for third-party spoliation of evidence, breach of contract, promissory estoppel, and negligence.
- The trial court granted summary judgment to Owners on the third-party spoliation claim; Phillips appealed that ruling only. Owners’ summary-judgment denial on the contract/promissory-estoppel claims was separately appealed and affirmed.
Issues
| Issue | Phillips' Argument | Owners' Argument | Held |
|---|---|---|---|
| Whether Georgia recognizes an independent tort of negligent third-party spoliation of evidence | Georgia should recognize a standalone tort for negligent spoliation by third parties to provide a remedy when evidence is lost and other remedies are inadequate | Georgia should not recognize a separate tort; existing remedies (court orders, contractual promises, promissory estoppel, sanctions) suffice and new tort would duplicate or complicate remedies | Court declined to recognize an independent tort of third-party negligent spoliation and affirmed summary judgment for Owners on that claim |
| Whether Phillips lacked an adequate alternative remedy absent recognizing the tort | A spoliation tort is necessary because contractual and equitable remedies make proof of damages speculative and may be inadequate | Phillips had available remedies: seek preservation orders, contract/estoppel remedies against Owners, or sanctions in underlying litigation; no showing these were inadequate | Court held Phillips failed to show inadequacy of available remedies; existing mechanisms obviate need for new tort |
| Whether sanctions or remedies derived from third-party conduct can supply relief | N/A (argued implicitly that sanctions insufficient without tort) | Sanctions or enforcement of orders/contracts are the proper avenues; third-party spoliation claims are unnecessary | Court reiterated that sanctions/enforcement remain available and that Lustre-Diaz remedies are limited to sanctions tied to litigation, not a separate tort |
| Whether negligence claim (traditional tort) was implicated by same facts | Phillips asserted negligence separately in trial court | Owners did not obtain summary judgment on negligence; appellate court should not decide that claim here | Court declined to decide whether ordinary negligence principles could support relief and left that question open (not addressed) |
Key Cases Cited
- Owens v. Amer. Refuse Sys., 244 Ga. App. 780 (2000) (declining to recognize independent cause of action for third-party spoliation and describing available alternative remedies)
- Sharpnack v. Hoffinger Indus., 231 Ga. App. 829 (1998) (discusses spoliation issues between parties but did not adopt a separate third-party spoliation tort)
- Lustre-Diaz v. Etheridge, 309 Ga. App. 104 (2011) (recognizes that sanctions for spoliation may be assessed in litigation based on third-party conduct, but as litigation sanctions, not a standalone tort)
- Goddard v. City of Albany, 285 Ga. 882 (2009) (describes burden of proof for promissory estoppel and related contract-based remedies)