Commercial Litigation and Arbitration

“Spoliation Can Be Knowing or Intentional Even If Not Done with Bad Faith.”

From Schumacher Immobilien und Beteiligungs AD v. Prova, Inc., 2010 U.S. Dist. LEXIS 74144 (M.D.N.C. July 21, 2010):

*** Plaintiff alleges breach of contract and other claims related to two written contracts between the parties in which Plaintiff agreed to purchase from Defendant Prova a 1997 Porsche GT1 race car and various accompanying spare parts. *** Plaintiff alleges that Defendants breached the spare parts contract, breached the warranty of title and against infringement, and breached an express warranty that the parts would conform to various photos that were incorporated into the spare parts contract. ***

*** Defendants first allege that the claims against them should be barred due to spoliation of the evidence. ***

Spoliation of Evidence ***[Plaintiff’s agent] Walch removed the parts from the Pittsburgh storage facility before [Defendant] Cox had an opportunity to inspect the parts in Pittsburgh to compare them with the parts in the Champion photographs. On June 17, 2008, after having removed the car and parts, [Plaintiff] Schumacher emailed Cox an inventory list and photographs of the parts that Walch had taken from Pittsburgh. *** Schumacher subsequently exported the car, along with some spare parts, to Europe, including two sets of wheels, two turbochargers, two carbon fiber side panels, and an ABS system. *** The parties agree that the full inventory of the parts taken from Pittsburgh is, therefore, no longer intact for the purpose of comparing the Champion photos to what spare parts were found in the Pittsburgh storage facility. Defendants further contend that the "missing spares" list provided by Walch is wrong in that it includes several items that were not in the Champion photos. ***

The first element of spoliation — that the party having control over the evidence had an obligation to preserve it when it was destroyed or altered — has been met in this case. ***

I further find that the second element — a culpable state of mind — has been met. Spoliation can be knowing or intentional even if it is not done with bad faith. Buckley v. Mukasey, 538 F.3d 306, 323 (4th Cir. 2008). From Schumacher's emails and the testimony of Schumacher and Walch, it is clear that Schumacher intentionally had the spare parts shipped to Atlanta and that he then exported at least some of the spare parts with the car to Europe, even as he was aware that litigation was likely to ensue over the issue of the spare parts promised to Plaintiff and the spare parts that were actually in the Pittsburgh facility. As soon as Walch notified Schumacher that the parts in the Pittsburgh facility were not those in the Champion photos, Schumacher could have refused to take the parts. Instead of ensuring the preservation of the evidence, Schumacher and Walch made the choice to move the spares out of the garage and onto the truck headed to Atlanta, even though the contract between the parties allowed them to keep the car and parts in Pittsburgh until August 8, 2008, three months after the date of the contracts. Plaintiff contends that Walch was told that he had to remove the parts and the car together. At the very least, however, once the parts were shipped to Atlanta, Plaintiff should have kept all of the parts together. In sum, Plaintiff's acts of knowingly exporting some parts from Atlanta to Europe, and possibly the act of moving the parts from Pittsburgh to Atlanta, satisfy the culpable state of mind requirement for spoliation.

Finally, the third required element for the imposition of spoliation of evidence sanctions has also been met. Here, the evidence that was not preserved was clearly "relevant" to the claims or defenses of the party that sought the discovery of the spoliated evidence.

Share this article:


Recent Posts