William 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.
Supreme Court of Alabama.
*431 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 *432 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 actionthat 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.,
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.,
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,
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,
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,
"[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...."
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.,
B. Breach
For the purpose of answering these certified questions, we assume that a duty of care was owed to Smith and that the duty was breached by the destruction of the minivan. However, absent the existence of such a duty, Smith would have no cause of action for spoliation.
C. Proximate Cause
Not every piece of lost or destroyed evidence should lead to a cause of action for negligent spoliation. Where the destruction or loss of evidence defeats any chance of the plaintiffs recovering in the underlying action, we conclude that the plaintiff deserves recourse for such a loss. Therefore, under a claim for negligent spoliation, the defendant's breach must be the proximate cause of the plaintiffs inability to file, or to win, the underlying lawsuit. Other courts that have recognized spoliation within the context of traditional causes of action have required a plaintiff to show that the "defendant's loss or destruction of the evidence caused the plaintiff to be unable to prove an otherwise valid, underlying cause of action." Boyd v. Travelers Ins. Co., supra,
For those cases hinging upon one particular piece of evidence, the loss of that evidence through the tortious acts of a third party adds an additional injury to an already-injured plaintiff by eliminating his opportunity to seek a remedy against the initial tortfeasor. Smith alleges that Chrysler defectively designed a product and that the defect in that product caused the death of his wife, but that because of Metropolitan's alleged actions, he will be unable to pursue any claims against Chrysler. The fact that Metropolitan is a third party should not deprive Smith of his day in court.
Smith has not filed an action against Chrysler, apparently because Metropolitan allowed the destruction of the minivan that Smith contends was defective. In Alabama, a products-liability claim relating to a defective automobile is properly disposed of on a motion for summary judgment if the automobile in question is not available and the plaintiff has no other means of proving the alleged defect. See Capitol Chevrolet, Inc. v. Smedley,
Once a plaintiff has established that the third party had knowledge of the underlying action or potential action, that the third party assumed control over the evidence, and that the lost or destroyed evidence was "vital" to his claim in the underlying action or potential action, a rebuttable presumption arises in favor of the plaintiff. Our treatment here of the effect of spoliation is similar to the rationale set forth in a dissenting opinion in a case involving alleged spoliation by an adverse party in an action presenting a tort claim other than the spoliation, Alabama Power Co. v. Murray,
"`[D]estruction of potentially relevant evidence obviously occurs along a continuum of faultranging from innocence through the degrees of negligence to intentionality.' ... A burden-shifting instruction in the case of a merely negligent loss would not require the innocent party to suffer the consequences resulting from the fact that his or her burden of proof has been made greater by the negligence of the adversary, and, at the same time, it would not impose an excessively harsh sanction upon a merely negligent party."
This burden-shift derives from the rationale set forth by the United States Court of Appeals for the Sixth Circuit in Welsh v. United States,
"Creating this rebuttable presumption occupies a middle groundit neither simply condones the defendant's negligent spoliation of evidence at the plaintiff's expense nor imposes an unduly harsh and absolute liability upon a merely negligent party. Instead, this approach merely selects which of two partiesthe innocent or the negligentwill bear the onus of proving a fact whose existence or nonexistence was placed in greater doubt by the negligent party."
Id. at 1249 (citation omitted).
The rebuttable presumption we adopt for use in third-party spoliation cases is "[a] presumption affecting the burden of proof by imposing upon the party against whom it operates the burden of proving the nonexistence of the presumed fact." Rule 301(b)(2), Ala. R. Evid.; see Charles W. Gamble, McElroy's Alabama Evidence § 451.05(a) (5th ed.1996). The presumed fact is that the plaintiff would have prevailed in the underlying action but for the loss or destruction of the evidence by the third-party spoliator. The third party can overcome the presumption by producing evidence showing that the plaintiff would not have prevailed in the underlying action even if the lost or destroyed evidence had been available. In this present case, if Smith establishes a prima facie case of negligent spoliation, it will be presumed that he would have prevailed in a products-liability action against Chrysler. If that presumption is in place, Metropolitan will have the burden of proving that Smith would not have prevailed on the merits of his products-liability action against Chrysler even if the minivan had not been destroyed.
To illustrate further, assume that the plaintiff in a products-liability action alleges that the front wheel of an automobile separated from the vehicle during operation and that the separation caused a serious accident. Further assume that the garage to which the vehicle was towed was *436 given notice of a pending products-liability action against the manufacturer of the vehicle and voluntarily assumed responsibility for the vehicle, as well as for the separated wheel; and that before the vehicle could be inspected the garage, through inadvertence, sold the vehicle and the wheel for salvage, destroying all relevant evidence and making it certain that the products-liability claim could not survive a summary-judgment motion. In a negligent-spoliation action against the garage, the jury would be instructed to presume that the plaintiff would have prevailed on his products-liability claim against the manufacturer of the vehicle. However, if, for example, the garage produced an eyewitness who testified that the wheel did not separate from the vehicle until after the impact, or that the plaintiff had been driving recklessly before the accident and through his own recklessness had caused the accident, then that testimony would absolve the defendant garage from liability for its spoliation of the evidence if the jury determined that on his products-liability claim the plaintiff would not have prevailed even if the evidence had not been lost or destroyed.
D. Damages
Just as the plaintiff in a negligent-spoliation action must prove the other three elements of a negligence action (duty, breach, and proximate cause), such a plaintiff also must prove damage. The appropriate measure of damages is difficult to determine in spoliation cases because, without the missing evidence, the likelihood of the plaintiffs prevailing on the merits cannot be precisely determined. "It would seem to be sheer guesswork, even presuming that the destroyed evidence went against the spoliator, to calculate what it would have contributed to the plaintiffs success on the merits of the underlying lawsuit." Petrik v. Monarch Printing Corp., supra,
"[W]hen a defendant's tortious conduct precludes precise calculation of the amount of damages:
"`the jury may make a just and reasonable estimate of damage based on relevant data.... Any other rule would enable the wrongdoer to profit by his wrongdoing at the expense of his victim. It would be an inducement to make wrongdoing so effective and complete in every case as to preclude any recovery, by rendering the measure of damages uncertain. Failure to apply it would mean the more grievous the wrong done, the less likelihood there would be of a recovery.
"`The most elementary conceptions of justice and public policy require [that] the wrongdoer shall bear the risk of the uncertainty which his own wrong has created.'"
Id.,
"To deny the injured party the right to recover any actual damages in such cases, because they are of a nature which cannot be thus certainly measured, would be to enable parties to profit by, and speculate upon, their own wrongs, encourage violence and invite depredation. Such is not, and cannot be the law, though cases may be found where courts have laid down artificial and arbitrary rules which have produced such a result."
*437 American Life Ins. Co. v. Shell,
"But shall the injured party in an action of tort, which may happen to furnish no element of certainty, be allowed to recover no damages (or merely nominal), because he cannot show the exact amount with certainty, though he is ready to show, to the satisfaction of the jury, that he has suffered large damages by the injury? Certainty, it is true, would thus be attained; but it would be the certainty of injustice."
Id. If the lost or destroyed evidence is vital to a party's claim or defense and the evidence was lost or destroyed through no fault of the innocent party, the wrongdoer should bear the risk.
The burden-shifting approach we adopt today puts us on a different footing from that of the states that have already adopted a remedy for negligent spoliation of evidence. The different options available for determining damages in a spoliation action were reviewed in Holmes v. Amerex Rent-A-Car,
"One possibility is to award the plaintiff the entire amount of damages that the plaintiff would have received if the original lawsuit had been pursued successfully. 3 Jerome H. Nates, et al., Damages in Tort Actions § 19.33(3)(1997); see Petrik [v. Monarch Printing Corp.,150 Ill.App.3d 248 , at 260-61,501 N.E.2d 1312 , at 1320-21,103 Ill.Dec. 774 , at 782-83 (1987) ]. The problem with this approach, however, is that it ignores defendant's interest in not providing the plaintiff with a windfall recovery. `If this method is utilized, there is the potential that the plaintiff would benefit more in an instance of spoliation than he might have in the underlying suit.' Nates, supra, § 19.33(3).
"A second possibility is only to award the plaintiff any costs and fees incurred in pursuit of the original suit. This method, however, fails to `adequately "punish" the offending parties or adequately compensate the party who is now apparently unable to pursue its cause of action,' Nates, supra, § 19.33(3). Under this approach, the plaintiff's interest in securing the precluded recovery is ignored.
"Another possibility, one that attempts a balancing of interests in light of the inherent uncertainties of proof relevant to this tort, was suggested by an Illinois appellate court. This approach requires that damages be discounted to account for uncertainties.
"`One possible measure of damages, therefore, could be the damages that would have been obtained in the underlying lawsuit, multiplied by the probability that the plaintiff would have won the suit had he had the spoliated evidence.'"
"Petrik, supra, [150 Ill.App.3d at 260 ,501 N.E.2d at 1320 ,103 Ill.Dec. at 782 ].
"This compromise system would apportion risk between the two parties in an equitable fashion. On the one hand, the plaintiff's interest in recovering the expected but precluded sum is protected because recovery is allowed with lower standards of proof for causation and damages. On the other hand, the defendant's interest in only compensating a plaintiff for actual loss is protected because the recovery will be lessened by the uncertainties involved. Both parties, then, accept some of the risk of windfall or shortage necessitated by the uncertainty inherent in proving this tort.
"The problem with this method is in the difficulty of `proving what the spoliated evidence would have demonstrated and the extent to which it would have changed the outcome.' Nates, supra, § 19.33(3)."
Holmes,
Because the approach we adopt today to this cause of action is distinct from *438 the approaches adopted by other States, observations such as those made in Holmes fail to consider the additional protection provided to defendants through notice requirements and the element of a rebuttable presumption that would shift the burden of proof in a negligent-spoliation action. Thus, in Alabama, under the approach we adopt today, the risk of a windfall to the plaintiff has been minimized. We decline to gauge damages on the plaintiff's probability of success on the merits. We conclude that without the spoliated evidence, the plaintiff's probability of success is too tenuous a measure to be consistently applied and that any attempt to apply it would constitute pure speculation. Therefore, in determining damages, we reject the use of probability of success as a benchmark, in favor of the use of compensatory damages that would have been awarded on the underlying cause of action, if the defendant cannot overcome the rebuttable presumption.
Any punitive damages that would have been rendered against the original tortfeasor in the underlying litigation should not be included in the plaintiff's recovery for negligent spoliation. It would be wholly unjust to punish a merely negligent party by imposing punitive damages for which the tortfeasor in the underlying claim would have been liable. "Punitive damages are not awarded because the injured party is entitled to them as a matter of right; they are awarded as a punishment to the wrongdoer and to deter him and others in the same or similar situation from such wrongdoing in the future." City Bank of Alabama v. Eskridge,
IV. Conclusion
Jury charges that presume missing evidence weighs against the spoliator, and discovery sanctions, both of which are available when spoliation is charged against an opposing party, are not available to remedy the injustice caused by spoliation when the spoliator is a third party. However, "`[t]he most elementary conceptions of justice and public policy require [that] the wrongdoer shall bear the risk of the uncertainty which his own wrong has created.'" Petrik,
QUESTIONS ANSWERED.
HOOPER, C.J., and MADDOX, HOUSTON, COOK, JOHNSTONE, and ENGLAND, JJ., concur.
BROWN, J., concurs in the result.
SEE, J., dissents.
SEE, Justice (dissenting).
The main opinion answers in the affirmative the certified question whether Alabama recognizes a cause of action for spoliation of evidence by a third party. It establishes as the elements of that cause of action, in addition to the elements of a negligence cause of action, a complicated *439 procedure for determining liability, involving a shifting rebuttable presumption and a "three-part test": "(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 cause of action."
In Peek v. State Auto Mutual Insurance Co.,
It appears that a small number of jurisdictions recognize an independent tort of spoliation of evidence in first-party situations or in third-party situations, or in both. See, e.g., Hazen v. Municipality of Anchorage,
"This Court has previously recognized the tort of intentional spoliation of evidence. Coleman v. Eddy Potash, Inc....
". . . .
"In Coleman, we followed California, Alaska, and Ohio in recognizing the tort of intentional spoliation of evidence. We noted, however, that a majority of jurisdictions had rejected a separate cause of action for intentional spoliation of evidence and had chosen, instead, to rely exclusively on traditional remedies, such as sanctions for discovery violations or an instruction to the jury that spoliation gives rise to a permissible inference that the evidence would have been unfavorable to the spoliator. Since our decision in Coleman, the high courts of other states, including California, the state in which a separate cause of action for spoliation found its genesis, have now joined the majority of jurisdictions in relying solely on traditional remedies rather than recognizing a separate tort."
(Citations omitted.)
Several years after a California District Court of Appeal, in Smith v. Superior Court,
"We do not believe that the distinction between the sanctions available to victims of first party and third party spoliation should lead us to employ the burdensome and inaccurate instrument of derivative tort litigation in the case of third party spoliation. We observe that to the extent a duty to preserve evidence is imposed by statute or regulation upon the third party, the Legislature or the regulatory body that has imposed this duty generally will possess the authority to devise an effective sanction for violations of that duty. To the extent third parties may have a contractual obligation to preserve evidence, contract remedies, including agreed-upon liquidated damages, may be available for breach of the contractual duty. Criminal sanctions, of course, also remain available.
"If existing remedies appear limited, that may well be because third party spoliation has not appeared to be a significant problem in our courts. After all, the nonparty who is not acting on behalf of a party but is independently motivated to destroy evidence with the intent to interfere in the outcome of litigation between other parties must be a rarity, perhaps because such destruction can subject the nonparty to criminal prosecution.
"Finally, our conclusion that recognition of a tort cause of action for intentional third party spoliation would be unwarranted is strengthened by the realization how anomalous it would be to impose such liabilityincluding potential punitive damagesupon those spoliators who are third parties to litigation, when we have concluded in Cedars-Sinai that tort liability for spoliation should not be imposed upon litigants who engaged in such behavior to obtain an advantage in their own litigation....
*441 "In sum, we conclude that the benefits of recognizing a tort cause of action, in order to deter third party spoliation of evidence and compensate victims of such misconduct, are outweighed by the burden to litigants, witnesses, and the judicial system that would be imposed by potentially endless litigation over a speculative loss, and by the cost to society of promoting onerous record and evidence retention policies."
NOTES
Notes
[1] We simply respond to the district court's questions and leave for that court the issue whether Smith's complaint states a claim against the defendants.
[2] Other states have held that their existing law provided ample remedies. See Wilson v. Beloit Corp.,
[3] This Court has held that this principle applies to insurance companies and their agents. Palomar Ins. Corp. v. Guthrie,
[4] See, e.g., Temple Community Hosp. v. Superior Court,