J-A26012-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
LIBERTY MUTUAL INSURANCE, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
NICOLE SANDERS,
Appellee
ERIE INSURANCE EXCHANGE,
Appellant
v.
NICOLE SANDERS,
Appellee No. 1570 WDA 2015
Appeal from the Order Entered September 11, 2015
In the Court of Common Pleas of Allegheny County
Civil Division at No(s):
AR 13-000916
GD 13-002907
BEFORE: BENDER, P.J.E., RANSOM, J., and MUSMANNO, J.
MEMORANDUM BY BENDER, P.J.E.: FILED NOVEMBER 29, 2016
Liberty Mutual Insurance and Erie Insurance Exchange (hereinafter,
“Appellants”) appeal from the September 11, 2015 order, which, inter alia,
granted Nicole Sanders’ (hereinafter “Sanders”) motion for summary
judgment. After careful review, we affirm.
The trial court briefly summarized the facts of this case, as follows:
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On March 5, 2011, [Sanders] was a student at the Art
Institute of Pittsburgh. She was cooking in her dormitory room
on an electric stove provided to her by the school. For reasons
that are not known, a fire started while [Sanders] was cooking
on the stove. The fire triggered an alarm and the activation of
water sprinklers that damaged several rooms. In early 2012,
the stove was removed and destroyed. No record exists of the
removal and disposal. No testing or examination of the stove
was conducted.
Trial Court Opinion (TCO), 12/10/15, at 2.
In early 2013, Appellants filed separate complaints against Sanders,
alleging that she negligently caused the fire and, thus, she was liable for the
resulting damage.1 Sanders filed an Answer and New Matter, as well as a
motion to consolidate the two cases, which the court granted. On June 2,
2015, Sanders filed a motion for summary judgment. Within that motion,
she asserted that Appellants had committed spoliation of evidence by
disposing of the stove involved in the fire, without first permitting Sanders to
inspect or test it, and without inspecting it themselves. See Sanders’ Motion
for Summary Judgment, 6/2/15, at 4 (unnumbered). Sanders requested
that, as sanction for Appellants’ spoliation of evidence, they should be
precluded from presenting any evidence regarding the cause of the fire. Id.
at 6 (unnumbered).
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1
Liberty Mutual Insurance also included a breach of contract claim, alleging
that, pursuant to a “Student Housing License Agreement” completed by
Sanders, she was contractually liable for the damage arising from the fire
that her negligent conduct had caused. See Liberty Mutual Insurance
Complaint, 2/14/13, at 4 (unnumbered).
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Appellants filed a response to Sanders’ motion for summary judgment,
and a hearing was conducted on August 31, 2015. That same day, the trial
court issued an order stating that Liberty Mutual Insurance would not be
permitted to present any evidence concerning the cause of the fire. See
Trial Court Order, 8/31/15 (single page). The order also granted Sanders’
motion for summary judgment. Id. On September 11, 2015, the court
issued a second order clarifying that the August 31st order precluded both
Liberty Mutual and Erie Insurance from presenting evidence regarding the
cause of the fire. The order also reiterated that Sanders’ motion for
summary judgment was granted against both Appellants, Liberty Mutual and
Erie Insurance.
Appellants filed a timely notice of appeal, and also timely complied
with the trial court’s order to file a Pa.R.A.P. 1925(b) concise statement of
errors complained of on appeal. Herein, they present three questions for our
review, which we have reordered for ease of disposition:
1. Did the lower court err and/or abuse its discretion by
misapplication of the Schmid v. Milwaukee Elec. Tool Corp.,
three-prong spoliation test, in finding fault to such an extent and
such prejudice as to justify a finding of spoliation and a grant of
summary judgment?
2. Did the lower court err and/or abuse its discretion by
misapplication of the Schmid v. Milwaukee Elec. Tool Corp.,
three-prong spoliation test, in finding that a grant of summary
judgment, thereby disposing of all claims and all parties, was the
least restrictive sanction?
3. Did the lower court err and/or abuse its discretion in
concluding that [Appellants have] failed to produce[] evidence of
genuine issues of material fact and evidence of facts essential to
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the cause of action such that [Sanders] is entitled to summary
judgment, viewing all facts in the light most favorable to the
non-moving party?
Appellants’ Brief at 4.
Before addressing Appellants’ arguments, we summarize the applicable
legal principles that guide our review of their spoliation-of-evidence issues.
Our Supreme Court has explained that, “‘[s]poliation of evidence’ is the non-
preservation or significant alteration of evidence for pending or future
litigation.” Pyeritz v. Com., 32 A.3d 687, 692 (Pa. 2011) (footnote
omitted).
When reviewing a court's decision to grant or deny a
spoliation sanction, we must determine whether the court
abused its discretion. Croydon Plastics Co. v. Lower Bucks
Cooling & Heating, 698 A.2d 625, 629 (Pa. Super. 1997) (“the
decision whether to sanction a party, and if so the severity of
such sanction, is vested in the sound discretion of the trial
court”), appeal denied, 553 Pa. 689, 717 A.2d 1028 (1998). “An
abuse of discretion is not merely an error in judgment; rather it
occurs when the law is overridden or misapplied, or when the
judgment exercised is manifestly unreasonable or the result of
partiality, prejudice, bias or ill-will.” Pilon v. Bally Eng'g
Structures, 435 Pa. Super. 227, 645 A.2d 282, 285, appeal
denied, 539 Pa. 680, 652 A.2d 1325 (1994).
Mount Olivet Tabernacle Church v. Edwin L. Wiegand Div., 781 A.2d
1263, 1269 (Pa. Super. 2001).
To determine the appropriate sanction for spoliation, the trial
court must weigh three factors:
(1) the degree of fault of the party who altered or
destroyed the evidence; (2) the degree of prejudice
suffered by the opposing party; and (3) whether there is a
lesser sanction that will avoid substantial unfairness to the
opposing party and, where the offending party is seriously
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at fault, will serve to deter such conduct by others in the
future.
Mount Olivet, 781 A.2d at 1269–70 (quoting Schmid v.
Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir.1994)).[2]
In this context, evaluation of the first prong, “the fault of the
party who altered or destroyed the evidence,” requires
consideration of two components, the extent of the offending
party's duty or responsibility to preserve the relevant evidence,
and the presence or absence of bad faith. See Mount Olivet,
781 A.2d at 1270. The duty prong, in turn, is established where:
“(1) the plaintiff knows that litigation against the defendants is
pending or likely; and (2) it is foreseeable that discarding the
evidence would be prejudicial to the defendants.” Id. at 1270–
71.
Creazzo v. Medtronic, Inc., 903 A.2d 24, 29 (Pa. Super. 2006)
(original brackets omitted).
PTSI, Inc. v. Haley, 71 A.3d 304, 316 (Pa. Super. 2013).
Here, the trial court discusses, in its Rule 1925(a) opinion, how it
applied the three-pronged spoliation test to the facts of this case, as follows:
[Appellants] cannot seriously contend that [they] lack[]
fault in the destruction of the stove. [Appellants] admitted that
the stove was removed, not preserved and not tested. Fault for
the lack of preservation is squarely on [Appellant] companies,
and not on [Sanders], a young college student. It is equally
clear that [Sanders] suffered significant prejudice. [Appellants]
allege[] that [Sanders] acted negligently. Yet the very stove she
used and contends may have malfunctioned was destroyed well
before [Appellants] sued [Sanders]. [Appellants] did not appear
to contest the first two prongs at argument. [Appellants’]
counsel stated that[,] “Our argument kind of begins and ends
with the least-restrictive sanction portion of this test.”
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2
The three-part spoliation test set forth in Schmid was adopted by our
Supreme Court in Schroeder v. Commonwealth, Department of
Transportation, 710 A.2d 23, 27 (Pa. 1998).
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The essence of [Appellants’] argument is that the [c]ourt
erred in finding that preventing [Appellants] from producing
evidence concerning the cause of the fire and granting Summary
Judgment was too extreme a remedy. Our [c]ourts have been
given discretion to impose a range of sanctions where spoliation
is found. Preventing [Appellants] from presenting evidence
concerning the cause of the fire is appropriate where
[Appellants] recognized the potential for claiming [Sanders] was
at fault and failed to preserve evidence that may have permitted
[her] to challenge [their] assertions against her. We believe this
to be the only appropriate remedy under the facts of this case.
TCO at 3-4 (internal citations to the record and case law omitted).
On appeal, Appellants’ first two issues challenge the court’s application
of the Schmid test to the facts of this case. First, in regard to the fault
prong of the Schmid test, Appellants’ concede that they are at fault for the
disposal of the stove. Appellants’ Brief at 13. They acknowledge that they
“knew that litigation as to the fire was likely and it [was] arguably
foreseeable that discarding the stove could be prejudicial” to Sanders, thus
establishing that they had a duty to preserve the evidence of the stove. Id.
at 14; see also Mount Olivet, 781 A.2d at 1270-71. Appellants contend,
however, that their “degree of fault is minimal.” Appellants’ Brief at 13. In
support, they repeatedly claim that, “the stove was not immediately
discarded. Instead, the stove was cleaned and remained in the dorm room
for several months following the fire. During that time, the stove would
have been available to Sanders or her insurance carrier.” Id. at 14.
Appellants’ also point out that in September of 2011, they advised Sanders’
insurance carrier “that the stove was cleaned after the fire and returned to
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use[,]” suggesting that Sanders could have, and should have, inspected the
stove at that time. Id.
Upon reviewing the documents cited by Appellants in support of their
claims, it is apparent that Appellants are misrepresenting the record. For
instance, in support of their claim that the stove was cleaned and returned
to use for several months before being discarded, Appellants cite Erie
Insurance’s response to Sanders’ request for admissions. In that document,
Erie Insurance stated, in pertinent part:
6. Admitted in Part. Denied in Part. It is admitted that on behalf
of [Erie Insurance], counsel for [Erie Insurance] spoke to Ryan
Cunningham who is an agent, servant, workman and/or
employee of the Art Institute of Pittsburgh who during the course
of this conversation indicated that the maintenance crew advised
him that the subject stove was removed sometime before early
2012.
7. Objection to the extent that this request for admission calls
for a legal conclusion. Without waiving this objection, this
averment is denied in that [Erie Insurance’s] claim is related to
[Sanders’] improper use of the stove. [Erie Insurance] had no
knowledge at the time or to this date that there was any alleged
defect or problem with the stove.
8. It is admitted through [Erie Insurance’s] counsel’s
conversation with Ryan Cunningham that Mr. Cunningham
indicated he had no record of the disposal of the stove.
…
10. Objection. [Sanders] does not define what is meant by
direct access. Once this is defined [Erie Insurance] can respond
to this request. Without waiving this object[ion], it is denied
that [Sanders] was ever refused access to inspect the stove
and/or that [Sanders] ever requested permission to inspect the
stove.
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Erie Insurance’s Response to Sanders’ Request for Admissions, 7/21/15, at
1-2 (unnumbered) (attached to Docket Entry 9 (Erie Insurance’s
Memorandum of Law In Support of Erie Insurance’s Response to Sanders’
Motion for Summary Judgment, filed 7/21/15)). It is clear to this Court that
nothing in the above-quoted document states what Appellants purport, i.e.,
that the stove was cleaned and put back into use months before it was
discarded.
Additionally, to support their contention that they informed Sanders in
September of 2011 that the stove was cleaned and put back into use (thus,
enabling her to inspect it), Appellants cite to documents referred to in their
reproduced record as “Plaintiff’s insured’s incident report.” See Appellants’
Brief at 14 (citing Reproduced Record at 159-60); see also Index to
Reproduced Record (“RR”), 1/22/15, at i. However, those documents state
only that the stove was new in 2007, and that after the fire, “the stove was
still working, [and] just needed to be cleaned….” RR at 159. Contrary to
Appellants’ suggestion in their brief to this Court, nothing in that document
stated that the stove was actually cleaned and ‘put back into use’ months
before it was discarded.
In sum, Appellants’ claims on appeal are not supported by the portions
of the record to which they cite. Thus, they have not convinced us that the
trial court abused its discretion in finding that “[f]ault for the lack of
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preservation is squarely on [Appellant] companies, and not on [Sanders], a
young college student.” TCO at 3-4.3
Next, we assess the prejudice prong of the Schmid test. Again,
Appellants concede that Sanders was prejudiced; however, they argue that
the court erred by finding that the prejudice was significant. Instead,
Appellants maintain that the degree of prejudice was minimal. See
Appellants’ Brief at 17. In this vein, Appellants in large part reiterate the
same arguments presented in their analysis of the fault prong of the
Schmid test, i.e., that the stove was cleaned and put back into use for
months before it was destroyed and, therefore, Sanders had an opportunity
to inspect it. We need not rehash our discussion of why the record does not
support these arguments.
Appellants also argue, however, that due to the “the speculative
nature of [Sanders’] alternative cause, any prejudice suffered by [Sanders]
is lessened.” Appellants’ Brief at 18. In support, they cite Mount Olivet.
There, the plaintiff - a church - filed a complaint against the defendant
heating company, alleging that a heater manufactured by the defendant and
used by the plaintiff to heat water in a large baptismal pool, had
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3
We acknowledge, however, that the court made no explicit finding of bad
faith on the part of Appellants; therefore, we will presume that they did not
dispose of the stove with the specific intent of hampering Sanders’ ability to
defend their lawsuit.
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malfunctioned and caused a massive fire in the church. Mount Olivet, 781
A.2d at 1266. The church kept the allegedly defective heater, but it did not
preserve the fire scene, which hampered the defendant’s “primary defense
that the fire started elsewhere in the church and not within the baptistry.”
Id. at 1268-69. Consequently, the defendant alleged a spoliation of
evidence claim against the church. In assessing the defendant’s claim under
the three-pronged Schmid test, we concluded that the defendant had
“suffered a relatively low degree of prejudice.” Id. at 1272. We stressed
that at trial, the defendant had been able to present a “vigorous defense to
the Church’s theory of causation, and presented a renowned fire expert to
render an opinion based on the Church’s evidence.” Id. at 1272. We also
noted that the church had conducted investigations of the scene, as had the
fire marshal, and no alternative fire source had been revealed. Id.
Two important facts make Mount Olivet distinguishable from the
present case: (1) the plaintiff in Mount Olivet kept the heater, which it
claimed caused the fire, and (2) because the defendant had access to the
heater, it was able to mount a ‘vigorous defense’ challenging that the heater
had malfunctioned. To the contrary, in this case, Appellants discarded the
stove, without which Sanders is unable to present any defense that the
stove malfunctioned and caused the fire. Moreover, while Appellants claim
that their “investigation did not reveal any alternative causes,” Appellants’
Brief at 17, they also concede that the stove was never investigated or
tested in any manner. Thus, there is no way to rule out Sanders’ claim that
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the stove malfunctioned, yet there would also be no way for Sanders to
prove that claim if the case proceeded to trial. For these reasons, the
present case is distinguishable from Mount Olivet, and we disagree with
Appellants that Sanders only suffered ‘minimal prejudice.’ Rather, we
ascertain no abuse of discretion in the court’s determination that Sanders
suffered ‘significant’ prejudice.
Thus, we now assess the third prong of the Schmid test - whether
there was a lesser sanction the court could have imposed that would have
avoided the unfairness to Sanders caused by Appellants’ disposal of the
stove. Appellants address this prong of the Schmid test in their third issue
on appeal. We need not delve into the details of Appellants’ argument in
support of this issue, as it is wholly premised on their incorrect conclusion
that the sanction imposed by the court was granting Sanders’ motion for
summary judgment. Contrary to Appellants’ claim, the record demonstrates
that the sanction imposed by the court for the spoliation of evidence was
precluding Appellants from presenting evidence regarding the cause of the
fire. See TCO at 4 (“Preventing [Appellants] from presenting evidence
concerning the cause of the fire is appropriate where [Appellants] recognized
the potential for claiming [Sanders] was at fault and failed to preserve
evidence that may have permitted [her] to challenge [Appellants’] assertions
against her. We believe this to be the only appropriate remedy under the
facts of this case.”). On appeal, Appellants offer no argument regarding why
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that sanction was an abuse of the court’s discretion. Accordingly, they have
again failed to convince us that the court abused its discretion.
In any event, even if we accepted Appellants’ claim that the court’s
sanction was granting Sanders’ motion for summary judgment, we would not
reverse the trial court’s decision. We acknowledge that both our Supreme
Court and this Court have stated that “[w]here fault and prejudice are not
severe, dismissal is inappropriate.” Mount Olivet, 781 A.2d at 1273 (citing
Schroeder, 710 A.2d at 27-28; Pia v. Perrotti, 718 A.2d 321, 325 (Pa.
Super. 1998); Schmid, 13 F.3d at 81). “Generally, courts should select the
least onerous sanction commensurate with the spoliator’s fault and the other
party’s prejudice.” Id. (citation omitted).
Here, Appellants “note that in cases similar to this one, a spoliation
[jury] instruction is often granted because it is considered the least onerous
penalty commensurate with the plaintiff’s degree of fault and the defendant’s
prejudice.” Appellant’s Brief at 25 (quoting Mount Olivet, 781 A.2d at 1723
(citations omitted)). Curiously, however, Appellants’ fail to mention that at
the hearing on Sanders’ motion for summary judgment, their counsel argued
that a jury instruction would not be appropriate in this case. See N.T.
Hearing at 5. Thus, they have waived their argument on appeal that a jury
instruction would have been an appropriate sanction. See Pa.R.A.P. 302(a)
(“Issues not raised in the lower court are waived and cannot be raised for
the first time on appeal.”).
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We also point out that at the hearing, Appellants’ counsel did not
address, in any fashion, defense counsel’s argument that the appropriate
sanction would be to “restrict … [Appellants] from being able to present any
evidence on causation of the subject fire….” N.T. Hearing at 4. As stated
supra, Appellants again fail, on appeal to this Court, to explain why that
particular sanction, which ultimately was imposed by the court, was
inappropriate. Even more problematic is the fact that, while Appellants
continuously state throughout their brief that the court should have “applied
a lesser sanction,” Appellants’ Brief at 25, they at no point specify what that
sanction should have been. Based on the record before us, and Appellants’
misleading and undeveloped argument, they have failed to convince us that
the trial court abused its discretion by imposing a sanction of precluding
Appellants from presenting evidence regarding the cause of the fire, which
then led to the court’s granting Sanders’ motion for summary judgment.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/29/2016
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