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Hernandez Concrete Pumping, Inc. v. Duquette

United States District Court, D. New Mexico

September 11, 2019

HERNANDEZ CONCRETE PUMPING, INC., Plaintiff,
v.
RAYMOND ALBERT DUQUETTE, III and ACE AMERICAN INSURANCE COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. BRACK, SENIOR U.S. DISTRICT JUDGE

         Plaintiff Hernandez Concrete Pumping, Inc. (Hernandez Concrete) brought suit against Defendant Raymond Albert Duquette, III (Duquette) and ACE American Insurance Co. after a traffic accident allegedly caused damage to Plaintiff's concrete pumping truck. Hernandez Concrete seeks reimbursement for repairs and lost profits arising from the time needed to repair the truck. Defendant claims, however, that because the truck was repaired immediately after the accident, evidence needed to defend against the claims no longer exists. In this Memorandum Opinion and Order, the Court addresses Duquette's Motion to Dismiss Plaintiff's Complaint for Spoliation of Evidence (Doc. 57). The Court finds that while preserving the truck in its damaged state might have been advisable, the facts neither warrant an outright dismissal of Plaintiff's Complaint nor an adverse instruction regarding the evidence. Therefore, the Court denies Defendant's Motion to Dismiss for Spoliation of Evidence.

         I. Background[1]

         On November 28, 2017, Dennis Hernandez was driving a Hernandez Concrete pumping truck on Interstate 40. (Doc. 1-1 (Compl.) ¶ 8.) Raymond Duquette's tractor-trailer collided with and damaged Plaintiff's truck. (Id. ¶ 8.) Plaintiff suggests that Duquette was looking in his rearview mirror at the time of the collision and that this “inattention” caused the accident. (Id. ¶ 9.) Plaintiff thus claims that Duquette is liable for the damage to the truck. (Id. ¶ 10.)

         Plaintiff filed suit in New Mexico state court on July 17, 2018. The case was removed to this Court on September 4, 2018, through the Court's diversity jurisdiction. (Doc. 1.) Hernandez Concrete seeks $26, 000 in damages for repairs to the truck. In addition, it seeks approximately $58, 000 in lost profits for the time that the truck was not in service.

         On June 4, 2019, Defendant Duquette filed a Motion to Dismiss based on spoliation of evidence. (Doc. 57.) Defendant argues that after the accident, litigation was imminent, but because the concrete pumping truck was immediately repaired, critical proof relating to damages and liability no longer exists. (See id.) As a result, Defendant asks the Court to dismiss Plaintiff's Complaint, or in the alternative impose appropriate sanctions. (Id.)

         II. Legal Standard

         Spoliation involves the “intentional destruction, mutilation, alteration, or concealment of evidence.” Spoliation, Black's Law Dictionary (8th ed. 2004); see also West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) (defining spoliation as “the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation”). Litigants have an “obligation to preserve evidence . . . when the party has notice that the evidence is relevant to litigation.” Zubalake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003) (quoting Fujitsu Ltd. v. Fed. Exp. Corp., 247 F.3d 423, 426 (2d Cir. 2001)). This obligation to preserve evidence arises when litigation is “imminent” and may attach prior to a threatened lawsuit. See Burlington N. & Santa Fe Ry. Co. v. Grant, 505 F.3d 1013, 1032 (10th Cir. 2007).

         A spoliation sanction combats any resulting prejudice associated with the loss of evidence. See Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001) (“The policy underlying this inherent power of the courts is the need to preserve the integrity of the judicial process.”). Its overarching goals include: (i) punishment for discarding valuable evidence; (ii) inclusion of inferences to accurately account for the lost evidence; and (iii) compensation for the aggrieved party. See Browder v. City of Albuquerque, 187 F.Supp.3d 1288, 1300 (D.N.M. 2016).

         In determining whether to sanction a party for spoliation of evidence, courts evaluate two factors: “(1) the degree of culpability of the party who lost or destroyed the evidence, and (2) the degree of actual prejudice to the other party.” Jordan F. Miller Corp. v. Mid-Continent Aircraft Serv., Inc., 139 F.3d 912, at *4 (10th Cir. 1998) (citations omitted). First, courts are divided on whether sanctions require bad faith or ordinary negligence to prove culpability. See Id. at *3-4 (requiring no showing of bad faith to uphold a spoliation sanction); Allstate Ins. Co. v. Sunbeam Corp., 53 F.3d 804, 807 (7th Cir. 1995) (requiring no bad faith); Zubalake, 220 F.R.D. at 221 (discussing the Second Circuit's approach, which only requires “ordinary negligence”); but see Ashton v. Knight Transp., Inc., 772 F.Supp.2d 772, 800 (N.D. Tex. 2011) (discussing the need to prove bad faith to make out a spoliation sanction). Critical to an analysis, however, the Tenth Circuit requires bad faith to prove spoliation when the desired remedy is an adverse inference or dismissal. See Aramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir. 1997) (holding that “[t]he adverse inference must be predicated on the bad faith of the party destroying the records”).

         Second, a party must show “meaningful evidence that [it] has been actually, rather than merely theoretically, prejudiced.” Burlington, 505 F.3d at 1032-33. The crux of this prong is that without the evidence at issue, a party “cannot defend [against the] lawsuit.” Id. at 1032. Courts will not intervene, however, unless the prejudice is “extraordinary.” Silvestri, 271 F.3d at 593.

         Consequently, district courts are equipped with tools to address this prejudice, and they have discretion to fashion remedies for spoliation violations. See Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991) (targeting only violations that “abuse[] the judicial process”). These remedies run the gamut from full dismissal, see Meade v. Grubbs, 841 F.2d 1512, 1520 (10th Cir. 1988) (limiting sanctions to those serving the interests of justice), to adverse inference instructions, see Dillon v. Nissan Motor Co., 986 F.2d 263, 265 (8th Cir. 1993) (upholding a district court's adverse inference instruction), to monetary sanctions, see Harlan v. Lewis, 982 F.2d 1255, 1260 (8th Cir. 1993) (upholding a monetary sanction without an explicit finding of bad faith). Therefore, factual circumstances dictate how district courts handle spoliation. See Chambers, 501 U.S. at 45- 46.

         III. Analysis

         At its core, this dispute is about whether Defendant Duquette is left with enough resources to adequately defend the claims against him, given that certain evidence from the ...


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