FILED
United States Court of Appeals
Tenth Circuit
August 17, 2011
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
RUSSELL J. JOHNSON and
JENNIFER JOHNSON,
Plaintiffs - Appellants,
v. No. 10-1132
LIBERTY MUTUAL FIRE
INSURANCE COMPANY, a
Wisconsin corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:08-cv-01137-MSK-MJW)
Bradley A. Levin (Ross B.H. Buchanan, with him on the briefs), Roberts, Levin,
Rosenberg, PC, Denver, Colorado, for Plaintiffs - Appellants.
Hilary D. Wells (Brian J. Spano, with her on the brief), Rothgerber, Johnson, &
Lyons, LLP, Denver, Colorado, for Defendant - Appellee.
Before HARTZ, McKAY, and GORSUCH, Circuit Judges.
GORSUCH, Circuit Judge.
This case is about a pair of missing tail lights and the limits of reasonable
foreseeability. Russell and Jennifer Johnson blame Liberty Mutual for failing to
hold onto a pair of tail lights that, they say, would have helped them win a
personal injury lawsuit they wanted to bring. Problem is, the Johnsons never
asked Liberty Mutual to keep the tail lights, never mentioned their intent to sue,
and allowed years to pass without a word. Now they fault the company for failing
to divine their hidden (and perhaps not yet formed) intentions. Because the
Johnsons, quite unsurprisingly, cannot identify a statutory or contractual basis for
their claim, they ask us to create one for them in the common law of tort. But, we
hold, the common law doesn’t require such uncommon foresight.
One early summer morning, Russell Johnson was driving a pickup truck
when he was rear-ended. Michael Dellock, an employee of Zimmerman Truck
Lines, did it. When the police arrived, Mr. Dellock told them he crashed into Mr.
Johnson’s truck because the latter’s trailer’s tail lights weren’t working — and,
based on this account, the police issued Mr. Johnson a traffic citation.
Recognizing the potential evidentiary importance of the tail lights, Mr. Johnson’s
insurance company — Liberty Mutual — took them to have them tested. After a
lab report suggested that the lights were operating at the time of the crash, Liberty
Mutual succeeded in fending off liability claims threatened by Zimmerman and
Mr. Dellock’s insurance companies. Even better, Liberty Mutual managed to get
Zimmerman’s insurance company to pay for the damage to Mr. Johnson’s truck
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and trailer. And to top it off, the police dismissed Mr. Johnson’s citation. With
all that accomplished now some two years after the accident, Liberty Mutual
closed its file. Jennifer Johnson, Mr. Johnson’s wife, herself later admitted that
by this time she had “kind of forgot about” the tail lights.
But the end of these lurking lawsuits only marked the birth of another.
Two years after Liberty Mutual closed its file, and some nearly four years after
the accident, Mr. and Mrs. Johnson decided to turn the tables on Zimmerman and
Mr. Dellock and sue them for personal injuries. To help their case, the Johnsons
asked Liberty Mutual to return the tail lights. But by this time the lights were
long gone. Gone because, over all the intervening years, the Johnsons had never
asked Liberty Mutual to return or retain the lights, and never mentioned their
potential interest in suing. Ultimately, the Johnsons settled their personal injury
claims but, they say, at a deep discount because of the missing tail lights.
And this is the nub of our case. Arguing they could have obtained more
money from Zimmerman and Mr. Dellock had Liberty Mutual held onto the tail
lights, the Johnsons filed a diversity suit in district court under Colorado law.
But the Johnsons were apparently unable to find any contractual or statutory
cause of action to fasten their claim onto, so they turned to the common law of
tort. They argued that Liberty Mutual was liable for “spoliation of evidence,”
that the company acted negligently as a bailee, and that the company engaged in
bad faith breach of its insurance duties. The district court, however, granted
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Liberty Mutual’s summary judgment motion on the spoliation and bailee claims,
and the company’s Rule 12(b)(6) motion to dismiss on the bad faith claim. The
Johnsons now appeal, arguing that the district court should be reversed across the
board. We disagree.
The Johnsons seek to use the common law in many uncommon ways. They
ask us to recognize and enforce an independent spoliation tort, but the Colorado
courts have yet to go so far. They say Liberty Mutual neglected its duties as the
bailee of their property, but it’s unclear from the record whether the Johnsons
even owned the tail lights by the time they asked for them. They argue that
Liberty Mutual tortiously (in bad faith) disregarded an insurance obligation, but
it’s hardly obvious what obligations Liberty Mutual had as an insurer to help the
Johnsons anticipate and prepare for an affirmative lawsuit; no one, after all,
suggests that Liberty Mutual had a contractual or statutory duty as insurer to
pursue a lawsuit against Zimmerman and Mr. Dellock for the Johnsons.
But all these questions pale beside another. To prevail on any of their
(putative) tort claims, the Johnsons must show that their claimed damages were
reasonably foreseeable — that Liberty Mutual knew or should have known that
the destroyed tail lights would be relevant (valuable) evidence in their future
affirmative litigation. See, e.g., Castillo v. Chief Alt., LLC, 140 P.3d 234, 236
(Colo. App. 2006) (discussing judicial sanction for spoliation); Vanderbeek v.
Vernon Corp., 50 P.3d 866, 870-72 (Colo. 2002) (discussing reasonable
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foreseeability in tort law generally). And this the Johnsons can’t do as a matter
of law — either on the evidence at summary judgment (in their spoliation and
bailment claims) or on their pleadings at the motion to dismiss stage (in their bad
faith claim).
The Johnsons can’t because we haven’t yet reached the stage where
everyone is bound by the common law to gird for more litigation even after
everything appears settled. Ours may be a litigious world. Lawsuits may tend to
beget more lawsuits. But, in the absence of any statutory or contractual duty, it is
unreasonable to expect anyone to hold onto apparently unwanted property for two
years after all claims involving it appear to have been resolved. The common law
rarely demands such uncommon foresight. Compare Aloi v. Union Pac. RR.
Corp., 129 P.3d 999, 1003-04 (Colo. 2006) (en banc) (defendant-spoliator
sanctioned because it had notice of the lawsuit where plaintiff told the company
of his intent to sue), with Castillo, 140 P.3d at 237 (denial of sanctions for
spoliation where plaintiff never notified the defendant of the litigation); see also
Talmadge v. State Farm Mut. Auto. Ins. Co., No. 96-8044, 1997 WL 73476, *4
(10th Cir. Feb. 21, 1997) (unpublished) (holding that insurance company had no
duty to preserve evidence where insured never told company of intent to sue).
The Johnsons protest that there’s more to the foreseeability story we need
to consider. They point out that Liberty Mutual had an internal policy requiring it
to preserve the tail lights for six years after closing its claims file — in time for
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the Johnsons to use the lights in their affirmative litigation. But this line of
argument conflates two very different things. When you violate a corporate
policy you may well be in trouble with your boss, but that doesn’t necessarily
mean you have committed a tort. Our role as a court of law is not to enforce
private corporate policy but to assess public legal liability. And the Johnsons
never show how, in this case, the existence of the one (the corporate retention
policy) might be evidence of a violation of the other (the law). They never
explain how Liberty Mutual’s adoption of an internal retention policy establishes
that it did foresee or should have foreseen their not yet mentioned (and perhaps
not yet formed) plan to bring an affirmative lawsuit. And they don’t because they
can’t. No one suggests that Liberty Mutual had a contractual or statutory duty to
pursue that affirmative case for the Johnsons. And it is far more likely Liberty
Mutual adopted its internal retention policy not to help out others with their own
lawsuits, but to ensure it could process and defend insurance claims that it had a
contractual or statutory duty to address. See, e.g., Talmadge, 1997 WL 73476, at
*4 n.10.
The Johnsons reply by protesting that the district court didn’t allow them to
introduce an expert affidavit that would have helped with their bailment claim.
But the Johnsons also acknowledge that their expert would have offered no new
facts for the district court to consider, only opinion. So, fact-wise, everything
there was to know on the foreseeability question was known by the time of the
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district court’s ruling. And those facts were undisputed. No doubt, a trial still
might have been warranted if reasonable jurors could have drawn conflicting
inferences from the evidence. But that isn’t our case. Expert affidavit or not, the
district court was right that the undisputed facts of this case are insufficient as a
matter of law to establish reasonable foreseeability.
In closing, the Johnsons suggest that the district court was wrong to dismiss
their bad faith claim so early, at the motion to dismiss stage. They point out that
their complaint alleged Liberty Mutual “knew, or should have known, of [the tail
lights’] evidentiary significance to the Johnson[s’] claims.” Amd. Compl. at 9.
But this is simply a naked legal conclusion, backed by no well-pleaded facts, and
as such hardly enough to state a claim for relief. See Ashcroft v. Iqbal, 129 S.Ct.
1937, 1949 (2009); Bixler v. Foster, 596 F.3d 751, 756 (10th Cir. 2010). Neither
is it particularly surprising that the Johnsons failed to plead facts in their
complaint suggesting that Liberty Mutual could have reasonably anticipated their
personal injury lawsuit. As we have seen, even by the summary judgment stage
on their spoliation and bailment claims they couldn’t find any.
The judgment of the district court is affirmed.
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