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2023 PA Super 271
ERIE INSURANCE EXCHANGE A/S/O : IN THE SUPERIOR COURT OF
BATES COLLISION, INC. JAMES : PENNSYLVANIA
MYERS, ANITA MORGAN, LOSSIE :
AUTO SERVICE, AND BENEDICTINE :
SISTERS OF ERIE, INC. :
:
Appellant :
:
: No. 1482 WDA 2021
v. :
:
:
UNITED SERVICES AUTOMOBILE :
ASSOCIATION :
:
:
v. :
:
:
BATES COLLISION, INC., :
Appeal from the Judgment Entered November 12, 2021
In the Court of Common Pleas of Erie County Civil Division at No(s): No.
12888-18
BEFORE: PANELLA, P.J., OLSON, J., DUBOW, J., KUNSELMAN, J., NICHOLS,
J., MURRAY, J., McLAUGHLIN, J., KING, J., and McCAFFERY, J.
DISSENTING OPINION BY OLSON, J.: FILED: December 21, 2023
I respectfully dissent from the learned Majority’s determination in this
matter and would affirm the trial court’s order, which granted the motion for
summary judgment filed by Appellee, United Services Automobile Association
and dismissed the complaint alleging one claim for promissory estoppel filed
by Erie Insurance Exchange a/s/o Bates Collision, Inc., James Myers, Anita
Morgan, Lossie Auto Service, and Benedictine Sisters of Erie, Inc. (Appellant).
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The Majority opines that, in granting summary judgment for Appellee,
“the trial court erred in converting Appellant’s promissory estoppel claim to
one of negligent spoliation and dismissing the [c]omplaint on the grounds that
Pennsylvania does not recognize a cause of action for spoliation of evidence”.
Majority Opinion at 8-9. Accordingly, the Majority concludes that the trial
court erred in relying on Pyeritz v. Commonwealth, 32 A.3d 687 (Pa. 2011)
in which our Supreme Court held that Pennsylvania law does not recognize a
cause of action for negligent spoliation of evidence. Majority Opinion at 8. I
respectfully disagree.
In its seminal decision in Pyeritz, our Supreme Court considered the
question of whether Pennsylvania recognizes a cause of action against a third
party not otherwise liable to the plaintiff for damages caused by the third
party’s negligent spoliation of evidence and held that “Pennsylvania law does
not recognize a cause of action for negligent spoliation of evidence.” Pyeritz
32 A.3d at 689, 691, 695. That case, like this action, involved a request to
preserve evidence, disposal of the evidence after a representation that the
evidence would be retained, and a claim for damages for the loss of recovery
in a tort case that depended on the evidence that was destroyed.
In Pyeritz, the plaintiffs were the estate and family of a decedent who
had fallen to his death from a hunting tree stand when the belt that lashed
him to the tree stand broke. Id. at 689. Following decedent’s death, the
Pennsylvania State Police took possession of the pieces of the tree stand belt
and less than a month later, an attorney for the plaintiffs sent the trooper in
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charge of the investigation a letter stating that the attorney might want the
trooper to retain the tree stand belt “[b]ecause of the extreme need to see
that there is no spoliation of this evidence.” Id. at 689-690. The trooper
advised the plaintiffs’ counsel that the State Police would have to retain the
pieces of the belt until a coroner’s jury determination of the cause and manner
of death. Id. at 690. While the belt pieces were in the State Police’s
possession prior to the coroner’s jury proceeding, plaintiff’s counsel and a
representative of a tree stand belt manufacturer took photographs of the belt
pieces. Id. Less than a month after the coroner’s jury determination that
decedent’s death was accidental, the plaintiffs’ attorney asked the trooper to
keep the pieces of the belt in the evidence room at the State Police barracks
and the trooper agreed to the request. Id. The barracks, however, were later
relocated to a new building and the trooper who had agreed to retain the
pieces of the belt was assigned to a different barracks. Id. One month after
the barracks were relocated, the trooper to whom the case was reassigned
destroyed the pieces of the belt because the investigation had been
completed. Id.
The Pyeritz plaintiffs brought a product liability action against two tree
stand belt manufacturers, which settled for $200,000, and brought a
negligence action against the State Police for failing to preserve the belt,
seeking as damages the loss of a greater award or settlement that the
plaintiffs contended that they could have obtained if the belt pieces had not
been destroyed. Id. at 690-91. The trial court granted summary judgment
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in favor of the Commonwealth, the Commonwealth Court affirmed, and the
Supreme Court granted allowance of appeal on the issue of “[w]hether
Pennsylvania recognizes, and if so whether Petitioners have alleged, a cause
of action for negligent spoliation of evidence.” Id. at 691.
The Supreme Court rejected this cause of action on the ground that a
gratuitous agreement to a request to indefinitely retain evidence is not a
sufficient basis to impose a legal duty and on the ground that recognition of
the cause of action was against public policy because there is no way of
knowing whether the evidence, if it been preserved, would support or negate
the claim for which the damages are sought and the damages in such an action
are therefore speculative. Id. at 693. With respect to the latter ground for
rejecting a spoliation cause of action, the High Court reasoned:
Although it may have been reasonably foreseeable to the
troopers that the loss of the evidence might harm Appellants
in their quest for damages in a civil lawsuit against the belt’s
manufacturer, we hold that as a matter of public policy, this
is not a harm against which Appellees should be responsible
to protect. The primary reason is that the tort would
allow the imposition of liability where, due to the
absence of the evidence, it is impossible to say
whether the underlying litigation would have been
successful. It could very well be true in this case, for
example, that if the belt had not been destroyed, it would
have undermined Appellants’ suit against the manufacturers
and they would not have realized even the $200,000
settlement they now have in hand. Of course, in some cases,
one party may have already finished testing the evidence by
the time it is destroyed, or as here, photographs or other
representations of the evidence may still exist. However,
depictions are an inadequate substitute for the evidence
itself, as other parties cannot inspect and test the evidence
independently, which deprives them of the raw material they
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need to mount a potentially successful claim or defense. If
we were to recognize the tort, the inability of the
parties to assess meaningfully the impact of the
missing evidence on the underlying litigation would
result in potential liability based on speculation.
Id. at 693-94 (emphasis added).
Although the Supreme Court in Pyeritz discussed a tort cause of action
and analyzed the elements of negligence, it held that no cause of action for
negligent spoliation (as opposed to intentional spoliation) exists. The Court
did not hold that no tort action for such spoliation (as opposed to a non-tort
cause of action) exists. Nothing in the Pyeritz opinion suggests that mere
changing of the label on the claim to promissory estoppel would alter the
result. To the contrary, the speculative nature of the damages that the Court
held required rejection of the cause of action is the same regardless of the
theory of liability. Moreover, the Court considered the existence of a
gratuitous agreement relied on by the plaintiff in rejecting the cause of action
and specifically rejected this Court’s language in Elias v. Lancaster General
Hospital, 710 A.2d 65, 68 (Pa. Super. 1998) that a special relationship, such
as an agreement or voluntary assumption of a duty to preserve the evidence,
could support liability for negligent spoliation. Pyeritz, 32 A.3d at 693-694.
In addition, the Supreme Court rejected the Pyeritz plaintiffs’ alternative
claim that the State Police were liable for spoliation of the evidence on a theory
of breach of an implied contract for bailment, regardless of whether such a
bailment was shown, on the ground that the damages sought were for
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negligent spoliation of evidence. Id. at 691 n.2; see also id. at 695 (Eakin,
J., concurring).
The factors on which the Supreme Court relied in rejecting a spoliation
cause of action are equally present in Appellant’s promissory estoppel cause
of action in this case. The basis of Appellant’s claim, as in Pyeritz, is a
gratuitous, indefinite commitment to preserve an item of evidentiary value for
the benefit of the requesting party. Appellant’s claim is for the same type of
damages, loss of recovery in a lawsuit in which the spoliated item was critical
evidence, and has the identical speculative nature that caused the Supreme
Court to reject the spoliation cause of action in Pyeritz – there is no way to
tell whether further examination of the BMW vehicle at issue would support or
refute the claim of manufacturing defect. Indeed, Appellant brought no action
against BMW and Appellant conceded to the trial court that it could not show
that the fire was caused by a manufacturing defect or by any condition of the
BMW vehicle for which it could have recovered damages. N.T. Summary
Judgment Argument at 9, 29-31, 41. This case, like Pyeritz, also involves
negligent spoliation. The loss of the evidence was the result of a failure by
Appellee to adequately communicate to Insurance Auto Auction (IAA), the
party that disposed of the BMW vehicle, that it needed to hold the BMW
vehicle, not an intentional destruction or disposal of the BMW vehicle by
Appellee.
Although no Pennsylvania case has specifically addressed whether
Pyeritz bars or permits a non-tort claim for damages caused by negligent
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spoliation of evidence, Pennsylvania federal cases have characterized Pyeritz
as broadly holding that no cause of action for damages for negligent spoliation
exists under Pennsylvania law without limiting this statement to tort liability.
Schwartz v. Taylor, 2021 WL 949481 at *3 (E.D.Pa. C.A. No. 17-3799 March
11, 2021); Marinkovic v. Battaglia, 2019 WL 4600207 at **13-14 (W.D.Pa.
Cases Nos. 1:14-cv-49, 2:18-cv-388 September 23, 2019); Turturro v.
United States, 43 F. Supp. 3d 434, 459-60 (E.D. Pa. 2014), aff’d, 629 Fed.
Appx. 313 (3d Cir. 2015).
Appellant argues that this Court should follow a California decision,
Cooper v. State Farm Mutual Automobile Insurance Co., 99 Cal.Rptr.3d
870 (Cal. App. 2009), that allowed a promissory estoppel cause of action for
spoliation, that Pyeritz is distinguishable, and that public policy
considerations require recognition of its promissory estoppel cause of action.
None of these arguments has merit.
In Cooper, the California court held that the plaintiff injured in an
automobile accident that he contended was caused by a defective tire could
recover damages from his insurer on a promissory estoppel theory where the
insurer disposed of the tire despite representations that it would preserve the
tire. Cooper, 99 Cal.Rptr.3d at 873, 882-892. Cooper, however, not only is
not based on Pennsylvania law, but its reasoning is not consistent with Pyeritz
and it involved a situation where the damages were not as speculative as here.
In Cooper, the court allowed the promissory estoppel cause of action for
spoliation based on the fact that the insurer assumed a duty and had a special
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relationship with the plaintiff as a result of its promises to preserve the tire.
Id. at 882-85, 892. Pyeritz specifically rejected both assumed duty by
gratuitous promises to retain evidence and a special relationship between the
parties as bases for liability for spoliation. Pyeritz, 32 A.3d at 693-694. In
addition, unlike this case, the speculative nature of damages that is the basis
for rejecting spoliation suits was substantially reduced in Cooper, as there
was expert opinion in Cooper that there was a manufacturing defect in the
tire, not the mere possibility that a defect would be found if further
examination had occurred. See Cooper, 99 Cal.Rptr.3d at 886-887.
Appellant argues that Pyeritz is distinguishable because the claim in
that case was against the government; i.e. the Pennsylvania State Police, and
would impose burdens outside the government’s function. While Pyeritz did
involve a government defendant and the Court mentioned that the retaining
of evidence for a private civil suit was outside the government function, the
Court did not limit its rejection of the cause of action to government entities.
Rather, the Court rejected the cause of action without regard to the type of
defendant and discussed the burden on non-government parties as a reason
for rejecting the spoliation cause of action, stating:
To the extent recognition of the tort would encourage the
preservation of evidence, that benefit is outweighed by the
financial burden the tort would impose. If it were recognized,
businesses and institutions would be forced to preserve
evidence, at considerable expense, for a myriad of possible
claims that might never be brought.
Pyeritz, 32 A.3d at 694.
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Appellant further relies on the alleged public policy that practices in the
insurance industry required Appellee to retain the BMW vehicle until the
investigation or litigation is complete and that failure to recognize a cause of
action will create unnecessary additional litigation and expense. Nothing in
the insurance industry practices argued by Appellant, which concern which
party routinely holds and preserves evidence, however, negates the key public
policy rationale of Pyeritz that the damages caused by loss of evidence are
too speculative to permit a cause of action for spoliation of evidence that was
not intentional. Moreover, denial of a cause of action does not require
burdensome litigation to preserve evidence. Other steps to ensure that
evidence is in fact preserved, such as payment of storage costs by the party
that wishes to retain the evidence, express agreements as to how long
evidence is held, and express agreements giving the party that wishes to
retain the evidence authority to control its storage and disposal, could achieve
protection of evidence without litigation.
Further – and setting aside my belief that Pyeritz bars Appellant’s claim
– I disagree with the Majority’s conclusion that a genuine issue of material
fact exists regarding Appellant’s promissory estoppel claim. As our Supreme
Court has explained:
Where there is no enforceable agreement between the
parties because the agreement is not supported by
consideration, the doctrine of promissory estoppel is invoked
to avoid injustice by making enforceable a promise made by
one party to the other when the promisee relies on the
promise and therefore changes his position to his own
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detriment. In order to maintain an action in promissory
estoppel, the aggrieved party must show that 1) the promisor
made a promise that he should have reasonably expected to
induce action or forbearance on the part of the promisee; 2)
the promisee actually took action or refrained from taking
action in reliance on the promise; and 3) injustice can be
avoided only by enforcing the promise. As promissory
estoppel is invoked in order to avoid injustice, it permits an
equitable remedy to a contract dispute.
Crouse v. Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000) (citations omitted).
Here, Appellant has not demonstrated a genuine issue of material fact
regarding the element that “injustice can be avoided only by enforcing the
promise.” See id.
In its complaint, Appellant speculates that, if Appellee had preserved
the BMW, Appellant would have prevailed in “its claim against the
manufacturer or the owner of the vehicle or anyone involved in maintaining
the vehicle” – and that Appellant would have received $1,624,217.15, the
amount paid by Appellant to its insureds as a result of the damage caused by
the fire. See Complaint, 11/9/18, at ¶ 21 and “Wherefore” Clause. As noted
above, however, Appellant conceded to the trial court that it could not show
that the fire was caused by a manufacturing defect or by any condition of the
BMW vehicle for which it could have recovered damages. N.T. Summary
Judgment Argument at 9, 29-31, 41. Further, since the BMW was not
preserved, there is now no way to determine whether Appellant could have
prevailed in any potential claim “against the manufacturer or the owner of the
vehicle or anyone involved in maintaining the vehicle.” Complaint, 11/9/18,
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at ¶ 21. In other words, Appellee’s promise to Appellant could have very well
been worth $0.00.
Thus, with respect to the promissory estoppel claim Appellant pleaded
in its complaint – where it expressly sought to recover, from Appellee, the
monetary value of a winning claim against “the manufacturer or the owner of
the vehicle or anyone involved in maintaining the vehicle” – Appellant cannot
establish that “injustice can be avoided only by enforcing the promise,” as
there is simply no evidence that Appellee’s promise caused Appellant any
monetary harm or was worth anything.
In conclusion, because our Supreme Court clearly held in Pyeritz that
Pennsylvania does not recognize a cause of action to recover damages caused
by negligent spoliation of evidence and Appellant’s promissory estoppel claim
against Appellee is an action to recover damages for negligent spoliation of
evidence based on the same kind of a gratuitous agreement to indefinitely
preserve evidence for the Appellant’s benefit and speculative damages that
the Supreme Court held did not permit a cause of action, I conclude that the
trial court properly held that Appellant, as a matter of law, had no cause of
action against Appellee. I would affirm the trial court’s order granting
summary judgment in favor of Appellee and against Appellant and, thus,
respectfully dissent from the learned Majority’s determination in this matter.
Judge Kunselman joins this dissenting opinion.
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