Commercial Litigation and Arbitration

Spoliation of Contract Irrelevant Once Plaintiff Has Waived the Contract — Waiver Via Position Taken in Divorce Proceedings — Negligent Spoliation under Illinois Law

From Millar v. Lakin Law Firm PC, 2010 U.S. Dist. LEXIS 60057 (S.D. Ill. June 17, 2010):

Millar, an attorney licensed in the states of Illinois and Missouri, began working for Defendant Lakin Law Firm PC ... in May 2000. On or about January 15, 2004, Millar met with Bradley Lakin..., the managing partner of the firm, and Steven Schweizer.., the chief operating officer of the firm. At Lakin's initiative, the three discussed the possibility of Millar entering into a written employment agreement with the firm. ***

Millar signed the contract on or about January 20***.

In August 2005, Millar and his then-wife, Amber Millar..., instituted divorce proceedings. In response to discovery requests from Amber, Millar approached Leuty in mid-February 2006 and requested information relating to his employment with the firm. After searching Millar's personnel file, Leuty informed him that there was no written contract regarding his employment with Lakin Law. Around the same time, Millar asked Schweizer for a copy of his contract. Unable to locate the contract, Schweizer told Millar that "we'll go forward as if there's no contract, from that point going forward." ... Believing that Schweizer had authority to act on behalf of Lakin and the firm, Millar responded, "okay," as that was "fine with [him]."... Millar's understanding was that this exchange lifted the terms of the 2004 contract, including his bonus range. Millar subsequently authorized in writing the release of employment information to Amber. Upon receiving the discovery requests, Leuty informed Amber, in a letter dated August 1, 2006, that no employment contract existed between Millar and the firm. In fact, throughout his divorce, Millar did not represent that a written contract existed between him and the Lakin law firm, instead explaining "what Mr. Schweizer told [him], . . . that [Schweizer ] tried to find [the contract], and he couldn't locate it." ***

V. Negligent Spoliation of Evidence (Count V) and Fraud (Count VI)

Under Illinois law, to successfully assert a negligent spoliation of evidence claim, "a party must show that (1) the party alleged to have been negligent had a duty to preserve the evidence, (2) the party breached that duty, (3) the breach proximately caused an injury, and (4) the party seeking compensation for negligent spoliation suffered actual damages as a result." ***

Here, Millar's negligent spoliation claim is in relation to Defendants' alleged loss or destruction of the 2004 contract. However, his waiver of the contract carries preclusive effect on the issue. Even assuming that Defendants had a duty to preserve the contract and breached that duty by possibly losing or destroying it, Millar could not have been harmed thereby. Specifically, Millar no longer had any rights under the contract upon waiver, which occurred before or at the same time as the alleged spoliation. Moreover, Millar was paid a salary and bonus compensation entirely consistent with the contract during the remainder of his employment with the firm, casting serious doubt on whether he meets the actual damages requirement. For these reasons alone, his negligent spoliation of evidence claim is rendered meritless, contains no genuine issues of material fact, and does not warrant further discussion by the Court.

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