August 18, 2011
On August 9, 2011, the Indiana Court of Appeals dealt with the question of when an insurer can be liable for a third-party spoliation claim when evidence is destroyed after the insurer conducts an investigation in
Kelley v. Patel, ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 79A02-1010-CT-1212. The Court's answer? Rarely.
less..
Indiana Insurance insured an inn owned by the Patels. A fire occurred at the inn, killing a man. One or two days after the fire, an investigator hired by Indiana Insurance, examined the scene and took photographs. He noted the presence of a television, a refrigerator, a lamp, and a VCR/DVD player in the area of greatest fire damage. Four weeks later, the investigator returned to the room and found that all the appliances had been removed from the room. He later testified he did not know where the appliances went or why they were taken.
The decedent's estate filed an action against the Patels for wrongful death and an action against Indiana Insurance for spoliation. Indiana Insurance sought summary judgment and the trial court granted that motion. The estate appealed.
On appeal, the Court followed the Indiana Supreme Court's decision in
Glotzbach v. Froman, 854 N.E.2d 337, 339 (Ind. 2006), which held that "in the absence of an independent tort, contract, agreement, or special relationship imposing a duty to the particular claimant," a cause of action for negligent or intentional spoliation of evidence "is not and ought not be recognized in Indiana." The estate argued that Indiana Insurance should have had a duty because of the seriousness of the facts of this case. The Court disagreed.
We do not hold that third-party spoliation claims could never be available against a liability insurer where death or serious injury resulted on the insured's business premises. Yet, as the above discussion of Indiana cases illustrates, our courts recognize spoliation of evidence as an independent tort only in narrow circumstances where a relationship exists between the claimant and the third party sought to be held responsible for a failure to preserve evidence.
Lest the Court be misunderstood, it made a point of emphasizing that since 1998 "no Indiana appellate decision has expanded the availability of spoliation causes of action." Therefore, to prove a third-party spoliation claim, the claimant must either establish a relationship with the third-party or successfully appeal their case to the Indiana Supreme Court.
Lessons:
- A third-party spoliation claim cannot survive absent an independent tort, contract, agreement, or special relationship imposing a duty to the particular claimant.
- A third-party's knowledge that litigation is likely does not create a duty to preserve evidence.
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