Lips v. SCOTTSDALE HEALTHCARE CORP.

SUPREME COURT OF ARIZONA
En Banc

MONICA LIPS; WALTER LIPS, ) Arizona Supreme Court
) No. CV-09-0273-PR
Plaintiffs/Appellants, )
) Court of Appeals
v. ) Division One
) No. 1 CA-CV 08-0097
SCOTTSDALE HEALTHCARE )
CORPORATION, an Arizona ) Maricopa County
corporation, ) Superior Court
) No. CV2006-010041
Defendant/Appellee. )
)
)
) O P I N I O N
_________________________________ )

Appeal from the Superior Court in Maricopa County
The Honorable A. Craig Blakey, Judge

AFFIRMED
________________________________________________________________

Opinion of the Court of Appeals, Division One
222 Ariz. 346, 214 P.3d 434 (2009)

VACATED IN PART
________________________________________________________________

BEUS GILBERT PLLC Scottsdale
By Leo R. Beus
Keith C. Ricker
Attorneys for Monica Lips and Walter Lips

KENT & WITTEKIND, P.C. Phoenix
By Richard A. Kent
Gordon K. Clevenger
Attorneys for Scottsdale Healthcare Corporation

HARALSON, MILLER, PITT, FELDMAN & MCANALLY P.L.C. Tucson
By Stanley G. Feldman

And
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LAW OFFICES OF DAVID L. ABNEY, ESQ. Phoenix
By David L. Abney
Attorneys for Amici Curiae Arizona Association for Justice and
Arizona Trial Lawyers Association
________________________________________________________________

R Y A N, Justice

¶1 We today consider whether to recognize a tort of

negligent or intentional third-party spoliation. Spoliation is

the destruction or material alteration of evidence. When

spoliation is committed by a party to a lawsuit, it is referred

to as first-party spoliation; when committed by a non-party, it

is called third-party spoliation.

¶2 We decline to recognize a tort of third-party

negligent spoliation. We need not decide, however, whether to

recognize a tort of third-party intentional spoliation, because

that tort requires an allegation not made in this case – that

the defendant intended to harm the plaintiff’s interests.

¶3 In 2004, surgeons replaced Monica Lips’s left hip.

The prosthesis failed after seventeen months and parts of it

were surgically removed at a Scottsdale Healthcare Corporation

(“SHC”) hospital. Lips believed that the hip prosthesis was

defective, and asked her surgeon to preserve the explanted

parts. The surgeon, in turn, told SHC that it was obliged to

retain them.

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¶4 Lips later sued the manufacturer of the prosthesis.

During discovery, she learned that the prosthesis parts, which

she believed were being kept by SHC, could not be found. Lips

filed an amended complaint claiming that SHC was liable for

spoliation of the parts.

¶5 The superior court granted SHC’s motion to dismiss,

concluding that Arizona does not recognize third-party

spoliation of evidence as a separate tort. The court of appeals

affirmed. Lips v. Scottsdale Healthcare Corp., 222 Ariz. 346,

351-52 ¶¶ 20-21, 214 P.3d 434, 439-40 (App. 2009).

¶6 We granted the petition for review to consider

“[w]hether Arizona should recognize intentional and negligent

spoliation of evidence by a third party as independent causes of

action,” an issue of statewide importance. See ARCAP 23(c). We

have jurisdiction under Article 6, Section 5(3) of the Arizona

Constitution and Arizona Revised Statutes section 12-120.24

(2003).

¶7 We addressed first-party spoliation in La Raia v.

Superior Court, a lawsuit involving claims for physical injuries

resulting from pesticide poisoning. 150 Ariz. 118, 120-21, 722

P.2d 286, 288-89 (1986). The defendant destroyed the pesticide

can that had been used, delaying the plaintiff’s proper
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treatment. Id. at 120, 722 P.2d at 288. The plaintiff argued

that she had a separate cause of action against the defendant

for destruction of the can. Id. We rejected the claim because

the defendant’s actions exacerbated the physical injuries

already caused by its negligence, and a complete remedy could be

obtained through a damages award in the underlying lawsuit. Id.

at 121-22, 722 P.2d at 289-90. An additional cause of action

was unnecessary.

¶8 Our decision to forgo creating a distinct cause of

action for first-party spoliation in La Raia comports with the

approach of many courts that address such allegations in the

underlying suit through sanctions, including adverse inference

instructions and other mechanisms. See Cedars-Sinai Med. Ctr.

v. Superior Court (Bowyer), 954 P.2d 511, 517 (Cal. 1998)

(explaining that “there are a number of nontort remedies that

seek to punish and deter the intentional spoliation of evidence

. . . . [c]hief among [which] is the evidentiary inference that

evidence which one party has destroyed or rendered unavailable

was unfavorable to that party”); see also Leon v. IDX Sys.

Corp., 464 F.3d 951, 958, 960-61 (9th Cir. 2006) (affirming

dismissal against party for bad faith destruction of relevant

evidence); cf. Ariz. R. Civ. P. 37(d) (“A party’s or attorney’s

knowing failure to timely disclose damaging or unfavorable

information shall be grounds for imposition of serious sanctions
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in the court’s discretion up to and including dismissal of the

claim or defense.”).

¶9 La Raia is not controlling in this lawsuit, which

alleges third-party spoliation. In such instances, courts have

distinguished between negligent and intentional spoliation

claims. Oliver v. Stimson Lumber Co., 993 P.2d 11, 19 (Mont.

1999); Coleman v. Eddy Potash, Inc., 905 P.2d 185, 188-89 (N.M.

1995), overruled on other grounds by Delgado v. Phelps Dodge

Chino, Inc., 34 P.3d 1148 (N.M. 2001). Lips argues that her

complaint states a cause of action under both theories of

liability. We address each in turn.

¶10 Generally, a cause of action for negligence arises

from a duty, a determination that a person is required to

conform to a particular standard of conduct. Gipson v. Kasey,

214 Ariz. 141, 143 ¶ 10, 150 P.3d 228, 230 (2007). Whether a

duty exists is a matter of law for the court to decide. Id.

at ¶¶ 9-10. “Duties of care may arise from special

relationships based on contract, family relations, or conduct

undertaken by the defendant,” and from public policy

considerations. Id. at 145 ¶¶ 18, 23, 150 P.3d at 232. For

example, the common law imposes a duty of reasonable care on a

party who voluntarily undertakes to protect persons or property
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from physical harm. See Restatement (Second) of Torts § 323

(1965). Here, however, Lips alleges that the negligent loss or

destruction of the prosthesis parts compromised her ability to

prove her products-liability related claims against the

manufacturer. Thus, she has alleged purely pecuniary injury

rather than any injury to her person or property.

¶11 Courts have not recognized a general duty to exercise

reasonable care for the purely economic well-being of others, as

distinguished from their physical safety or the physical safety

of their property. See Dan B. Dobbs, The Law of Torts § 452, at

329-31 (Supp. 2009). This reticence reflects concerns to avoid

imposing onerous and possibly indeterminate liability on

defendants and undesirably burdening courts with litigation.

Id. at 331, 333. Consequently, commentators have recognized

that “liability for negligence [in such cases] . . . must depend

upon the existence of some special reasons for finding a duty of

care.” William L. Prosser, The Law of Torts § 130, at 952

(1971); see, e.g., Restatement (Second) of Torts § 766C (1979)

(rejecting liability for pure pecuniary loss based on negligent

interference with contract or prospective contract).

¶12 Our cases are consistent with this approach. For

example, we recognized that interference with business relations

requires intent to interfere with an established or potential

business relationship. Antwerp Diamond Exch. of Am., Inc. v.
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Better Bus. Bureau of Maricopa County, Inc., 130 Ariz. 523, 530,

637 P.2d 733, 740 (1981), modified on other grounds by

Wagenseller v. Scottsdale Mem’l. Hosp., 147 Ariz. 370, 386, 710

P.2d 1025, 1041 (1985). On the other hand, we recognized a duty

to use reasonable care with regard to economic loss in

particular professional and business relationships. See

Flagstaff Affordable Hous. Ltd. P’ship. v. Design Alliance,

Inc., 223 Ariz. 320, ___ ¶ 45, 223 P.3d 664, 673 (2010)

(explaining that fiduciary role of attorney undergirds action

for professional malpractice); Hartford Accident & Indem. Co. v.

Aetna Cas. & Sur. Co., 164 Ariz. 286, 289, 792 P.2d 749, 752

(1990) (insurer bad faith failure to settle); Barmat v. John and

Jane Doe Partners, 155 Ariz. 519, 523, 747 P.2d 1218, 1222

(1987) (“As a matter of public policy, attorneys, accountants,

and other professionals owe special duties to their clients, and

breaches of those duties are generally recognized as torts.”).

Similarly, the tort of negligent misrepresentation recognizes a

duty to exercise reasonable care in providing information to a

limited class of recipients. See Flagstaff Affordable Hous.

Ltd., 223 Ariz. at ___ ¶ 39, 223 P.3d at 672 (discussing

negligent misrepresentation); St. Joseph’s Hosp. & Med. Ctr. v.

Reserve Life Ins. Co., 154 Ariz. 307, 312-13, 742 P.2d 808, 813-

14 (1987); Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139

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Ariz. 184, 189, 677 P.2d 1292, 1297 (1984), overruled on other

grounds by Gipson, 214 Ariz. at 144 ¶¶ 14-15, 150 P.3d at 231.1

¶13 Our reluctance to broadly recognize a duty to avoid

causing purely economic loss comports with the refusal of other

courts to recognize a tort for negligent spoliation. See

Fletcher v. Dorchester Mut. Ins. Co., 773 N.E.2d 420, 424-27

(Mass. 2002) (rejecting negligent spoliation as a tort because

of uncertainty in resolving issues of causation and damages);

accord Meyn v. State, 594 N.W.2d 31, 34 (Iowa 1999) (relying on

similar reasoning in affirming dismissal of negligent-spoliation

claim when hospital destroyed failed knee prosthesis despite

plaintiff’s request to preserve it for evidentiary use in future

litigation against manufacturer); Dobbs, supra, at 1280 (2001)

(concluding that negligent spoliation has been disfavored).

¶14 Lips claims, however, that she seeks recognition of

only a “limited” duty, arising from the surgeon’s request to SHC

to retain the prosthetic evidence. In general, however, a duty

of care is not created by a mere request for help, or by

unilaterally being told by another that a duty exists. See La

Raia, 150 Ariz. at 121, 722 P.2d at 289 (explaining that “the

common law generally refused to impose a duty upon one person to
1
Lips did not allege that SHC caused harm to the prosthesis
parts themselves and she conceded at oral argument that SHC’s
alleged spoliation caused no “physical harm” to the parts, as
required under Restatement (Second) of Torts § 323.
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give aid to another”); Chiney v. Am. Drug Stores, Inc., 21

S.W.3d 14, 16 (Mo. App. 2000) (“A mere request for assistance

does not create a legal duty to help another.”); accord

Restatement (Second) of Torts § 314 (1965) (“The fact that the

actor realizes or should realize that action on his part is

necessary for another’s aid or protection does not of itself

impose upon him a duty to take such action.”). We therefore

decline Lips’s invitation to establish a negligent spoliation

tort.

¶15 We reach a different conclusion with regard to Lips’s

claim of intentional spoliation. Every jurisdiction that

recognizes a third-party intentional spoliation tort requires

specific intent by the defendant to disrupt or injure the

plaintiff’s lawsuit. See, e.g., Oliver, 993 P.2d at 22

(requiring “the intentional destruction of evidence designed to

disrupt or defeat the potential lawsuit”); Coleman, 905 P.2d at

189 (same). Because of this requirement, rejecting the third-

party negligent spoliation tort is not inconsistent with

recognizing the tort of intentional spoliation. Coleman, 905

P.2d at 189-90. Nor would such a position be inconsistent with

our cases, which have required proof of some culpable intent in

allowing recovery for certain economic losses. See Antwerp

Diamond Exch., 130 Ariz. at 530, 637 P.2d at 740 (stating that
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interference with business expectancy is a “specific intent”

tort).

¶16 Here, although the complaint alleges that SHC

intentionally disposed of the evidence, Lips concedes it does

not allege that SHC did so with the intent to disrupt the

litigation, nor does the complaint assert any facts from which

such an intent might reasonably be inferred. The complaint

merely asserts that Lips’s surgeon informed SHC of a “duty” to

preserve the prosthesis. This is insufficient to permit an

inference that the hospital knew of the lawsuit and acted to

disrupt or defeat it. See Cullen v. Auto-Owners Ins. Co., 218

Ariz. 417, 419-20 ¶¶ 7, 14, 189 P.3d 344, 346-47 (2008)

(“[C]ourts are limited to considering the well-pled facts and .

. . reasonable interpretations of those facts.”). Therefore,

even assuming that we would recognize the tort of third-party

intentional spoliation, the superior court correctly granted the

motion to dismiss.

III

¶17 For the foregoing reasons, we vacate ¶¶ 13-21 of the

opinion of the court of appeals and affirm the superior court’s

order dismissing the Lips’s spoliation claims.

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_____________________________________
Michael D. Ryan, Justice

CONCURRING:

_____________________________________
Rebecca White Berch, Chief Justice

_____________________________________
Andrew D. Hurwitz, Vice Chief Justice

_____________________________________
W. Scott Bales, Justice

_____________________________________
A. John Pelander, Justice