{"id":903707,"date":"2024-12-11T16:19:07","date_gmt":"2024-12-11T23:19:07","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903707"},"modified":"2024-12-11T16:19:10","modified_gmt":"2024-12-11T23:19:10","slug":"spoliation-of-evidence-planting-seeds-of-accountability","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/spoliation-of-evidence-planting-seeds-of-accountability\/","title":{"rendered":"Planting the Seeds of Accountability\u00a0for Spoliation Sanctions"},"content":{"rendered":"\n

Rob Adler | Kilpatrick Townsend & Stockton<\/a><\/p>\n\n\n\n

When seeking sanctions for spoliated evidence<\/a>, the nature of the evidence and your jurisdiction can play a pivotal role. Are you in state or federal court? Is the missing evidence electronically stored information or not? The same facts and circumstances could yield vastly different outcomes depending on the answers to those questions. In the case of\u00a0Seattle Tunnel Partners v. Great Lakes Reinsurance (UK) PLC<\/em>, a Washington appellate court rejected the lower courts\u2019 imposition of adverse inference jury instructions for spoliation of evidence by Seattle Tunnel Partners (\u201cSTP\u201d), despite lower court findings that evidence was \u201ccritically relevant\u201d and that the disappearance could \u201chardly be characterized as innocent\u2026.\u201d[1]<\/a>\u00a0<\/p>\n\n\n\n

Background<\/h4>\n\n\n\n

The Washington State Department of Transportation (\u201cWSDOT\u201d) engaged STP to construct an underground tunnel for which STP purchased a tunnel boring machine (\u201cTBM\u201d) to carry out the excavation.[2]<\/a> WSDOT and STP acquired insurance coverage for the TBM.[3]<\/a> During the project, the TBM was damaged by an underground steel pipe resulting in a breakdown of the equipment and a two-year delay.[4]<\/a><\/p>\n\n\n\n

After the TBM was damaged, STP recovered nine steel pieces believed to have come from the pipe.[5]<\/a> Several of these steel pieces were placed on a wooden pallet in STP\u2019s construction yard.[6]<\/a> Those steel pieces were ultimately discovered to have been disposed of during a clean-up of the yard.[7]<\/a> In addition, journals of handwritten notes maintained by the deputy project manager for STP were also lost.[8]<\/a><\/p>\n\n\n\n

WSDOT and STP filed insurance claims based on the damage to the TBM; however, those claims were denied based on a policy exclusion for physical damage to the TBM caused by design defects.[9]<\/a> The insurers argued that the damage to the TBM was caused by its ill-suited design and operator error, not by its impact with the steel pipe.[10]<\/a><\/p>\n\n\n\n

The dispute spawned two different litigations before two different courts. In the first, an insurance coverage action and the case before the court\u2019s review in the appeal discussed here, STP and WSDOT sought recovery from the insurers for the damaged TBM (the \u201ccoverage case\u201d). In an ancillary proceeding, WSDOT alleged breach of contract by STP for not completing the project on time (the \u201ccontract case\u201d).<\/p>\n\n\n\n

Spoliation motions against STP were filed by the insurers and WSDOT based on STP\u2019s failure to preserve the steel pipe pieces and the deputy project manager\u2019s journals. The insurers and WSDOT requested adverse jury instructions that would allow the jury to presume the spoliated evidence would have been unfavorable to STP and orders precluding STP from arguing the pipe contributed to the breakdown of the TBM.<\/p>\n\n\n\n

In the coverage case, the court granted the parties\u2019 motions for spoliation and requests for adverse jury instructions.[11]<\/a> Likewise, in the contract case, the court granted WSDOT\u2019s motion for spoliation sanctions in an order containing over 190 findings of fact and 29 conclusions of law, finding \u201cSTP had acted in conscious disregard\u201d of the significance of the pipe pieces and that the \u201cmissing evidence was important and relevant.\u201d[12]<\/a> Importantly, neither court found that STP intentionally destroyed the lost evidence. STP appealed both rulings.<\/p>\n\n\n\n

Spoliation Sanctions under Washington law<\/h4>\n\n\n\n

On appeal, after walking through the evolution of Washington state spoliation case law, the court agreed STP had committed spoliation; however, it reversed the imposition of an adverse jury instruction sanction by the lower court on multiple different bases.<\/p>\n\n\n\n

Duty to preserve<\/h5>\n\n\n\n

First, the court ruled the party seeking sanctions must establish that the spoliating party owed a duty to preserve the evidence \u2013 arising from an agreement, statute, special circumstances, or voluntary undertaking between the parties.[13]<\/a> The court reasoned that while the insurers failed to show STP owed them a duty to preserve the missing evidence,[14]<\/a> WSDOT established STP owed it such a duty based on a provision in the party\u2019s contract.[15]<\/a> WSDOT also tied STP\u2019s duty to the specific evidence spoliated by showing it was foreseeable to STP that the lost evidence was material to a potential lawsuit with WSDOT.[16]<\/a><\/p>\n\n\n\n

Level of Culpability<\/h5>\n\n\n\n

The court\u2019s analysis did not stop there; however, as once a party is demonstrated to owe a duty to preserve evidence that could reasonably be anticipated to be important in potential litigation, and is found to have breached that duty, that party must also be shown to have acted intentionally or in bad faith.[17]<\/a> The court found that because STP was not shown to have acted intentionally or in bad faith, the lower court committed error in imposing adverse inference instructions against STP.[18]<\/a> Interestingly, though the court in the contract case concluded that \u201cSTP acted with a conscious disregard for the importance of the missing pipe pieces,\u201d[19]<\/a> it \u201cfound no bad faith conduct in the loss or destruction of the evidence.\u201d[20]<\/a> But, in perhaps the most debatable conclusion drawn by the court, it did not find STP acted with intent or in bad faith, even though STP \u201coffered no explanation for the loss or destruction of the journals,\u201d[21]<\/a> and despite concluding that \u201cSTP\u2019s conduct was [nevertheless] not innocent.\u201d[22]<\/a><\/p>\n\n\n\n

Relevance and Importance of the Spoliated Evidence<\/h5>\n\n\n\n

Finally, the court considered the importance of the lost evidence. In doing so, it looked to six different considerations:<\/p>\n\n\n\n

    \n
  1. Whether the missing evidence would provide direct evidence of a claim or defense;<\/li>\n\n\n\n
  2. Whether the lost evidence is cumulative of other available evidence;<\/li>\n\n\n\n
  3. Whether the culpable party admitted the evidence\u2019s importance;<\/li>\n\n\n\n
  4. Whether the nonspoliating party had the opportunity to inspect the evidence before it was lost;<\/li>\n\n\n\n
  5. Whether the loss of the evidence impeded the parties from developing expert opinions on liability, causation, or damages; and<\/li>\n\n\n\n
  6. Whether the loss of the evidence gave the culpable party an investigative advantage to the prejudice of the nonspoliating party.[23]<\/a><\/li>\n<\/ol>\n\n\n\n

    However, taking the wind out its own sails, WSDOT conceded during the hearing that it would prevail on its coverage claim regardless of whether the cause of the TBM\u2019s breakdown was due to operator error or to its impact with the steel pipe.[24]<\/a>  <\/p>\n\n\n\n

    Conclusion<\/h4>\n\n\n\n

    It is important to recognize up front, at the start of your case, how your jurisdiction may impact discovery issues that could arise later down the road so that you can plan accordingly. In this case, while the court did not ultimately affirm the imposition of an adverse jury instruction, and it did find that STP had a duty to preserve the lost pipe pieces and journals based not only on the parties\u2019 contract, but on evidence that STP had promised WSDOT it would preserve such evidence.<\/p>\n\n\n\n

    By contrast, the insurers failed to demonstrate that STP owed them a duty to preserve, which the court noted could have been done by \u201cany formal or informal request to preserve any evidence before that evidence disappeared.\u201d[25]<\/a> That said, under different facts and circumstances where culpability of the spoliator and relevance of the evidence were not at issue, the issue of duty would have been dispositive.<\/p>\n\n\n\n

    Toward that end, as in-house counsel, if you anticipate that a dispute your organization is embroiled in is likely to result in litigation, it behooves you to enter into a letter agreement with the other party to preserve evidence that you believe will be important to the case, as STP had promised WSDOT it would do in this case, to ensure that the other party is held to account during litigation if or when that evidence unexplainably goes missing. \u00a0<\/p>\n\n\n\n

    \n\n\n\n

    [1]<\/a> 26 Wash. App. 2d 319, 328 (2023).<\/p>\n\n\n\n

    [2]<\/a> Id<\/em> at 324.<\/p>\n\n\n\n

    [3]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [4]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [5]<\/a> Id<\/em> at 325.<\/p>\n\n\n\n

    [6]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [7]<\/a> Id<\/em> at 326.<\/p>\n\n\n\n

    [8]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [9]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [10]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [11]<\/a> Id<\/em> at 328.<\/p>\n\n\n\n

    [12]<\/a> Id<\/em> at 329.<\/p>\n\n\n\n

    [13]<\/a> Id<\/em> at 344.<\/p>\n\n\n\n

    [14]<\/a> The court noted that the insurers failed to offer any evidence that they sent STP a request to preserve any evidence before it disappeared.<\/p>\n\n\n\n

    [15]<\/a> Id<\/em> at 347.<\/p>\n\n\n\n

    [16]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [17]<\/a> Id <\/em>at 352-53.<\/p>\n\n\n\n

    [18]<\/a> Id<\/em> at 355.<\/p>\n\n\n\n

    [19]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [20]<\/a> Id<\/em>.<\/p>\n\n\n\n

    [21]<\/a> Id<\/em> at 354 (internal quotations omitted).<\/p>\n\n\n\n

    [22]<\/a> Id<\/em> at 355 (The court\u2019s finding that STP did not act with intent or bad faith is also at odds with the fact that STP did not even disclose to WSDOT that the steel pieces were gone until February 20, 2015, Seattle Tunnel Partners v. Great Lakes Reinsurance (UK) PLC<\/em>, 26 Wash. App. 2d 319, 349, when they had known they were missing since sometime in February 2014. Id<\/em> at 325-26.).<\/p>\n\n\n\n

    [23]<\/a> Id<\/em> at 355-356.<\/p>\n\n\n\n

    [24]<\/a> Id<\/em> at 356.<\/p>\n\n\n\n

    [25]<\/a>\u00a0Id<\/em>\u00a0at 351.<\/p>\n\n\n\n

    \n\n\n\n

    When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

    Rob Adler | Kilpatrick Townsend & Stockton When seeking sanctions for spoliated evidence, the nature of the evidence and your jurisdiction can play a pivotal role. Are you in state or federal court? Is the missing evidence electronically stored information or not? The same facts and circumstances could yield vastly different outcomes depending on the… Continue reading Planting the Seeds of Accountability\u00a0for Spoliation Sanctions<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[172],"tags":[9895,27,10648],"class_list":["post-903707","post","type-post","status-publish","format-standard","hentry","category-construction-law-2","tag-advise-consult","tag-construction-law","tag-spoliation-of-evidence","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nPlanting the Seeds of Accountability\u00a0for Spoliation Sanctions - 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