Is There a Duty to “’Fess Up?”

Several Fourth Circuit, District of Maryland, and Maryland intermediate appellate decisions stand for the proposition that, where a potential litigant is unable to comply with the duty to preserve potentially responsive information, the potential litigant has a duty to notify the anticipated opponent before the information goes missing. For example:

I have written, based in part on the scholarship of Phil Favro,[1] that a party may have a duty, and likely would be prudent, to disclose a failure to preserve information that should have been preserved.  See Damage Control Method.  This blog addresses the situation that may arise before preservable information has gone missing.

Mr. Silvestri was injured in a single vehicle crash while driving  a Chevrolet.  He asserted that the air bag did not deploy properly.  His parents retained counsel while he was in the hospital.  Counsel then retained two accident reconstruction experts.  They examined the car and the scene.  One “later testified that it was his understanding that he was conducting his investigation ‘in anticipation of filing a lawsuit against General Motors.’”  That expert suggested to Silvestri’s attorney that “the car has to be kept” and also stated “General Motors needs to see the car.”  The experts stated that Mr. Silvestri had a case against GM.

However, Mr. Silvestri had borrowed the car.  He waited almost three years – the statute of limitations in Maryland – to file suit.  Before suit was filed, the insurer took possession from the owner/insured, and sold the car.  Mr. Silvestri’s appellate brief explained:

The vehicle Mr. Silvestri was operating was owned by his landlord, Betty Burhans, and titled in her husband’s name. It was declared a total loss after the accident. According to General Motors’ records, and unbeknownst to Mr. Silvestri, Mr. Burhans transferred the title to his own insurance company, Royal Insurance, on January 1, 1995…. Royal Insurance then sold the vehicle to Prestige Collision, Inc., which then moved the car to Canada…. There, it was sold to Triangle Auto, Inc. and then to Coast to Coast, another entity…. After repairs, the vehicle was acquired by Mr. Real T. Durand of Quebec, Canada…. It is undisputed that Mr. Silvestri had nothing to do with, could not  prevent, nor was he aware of, these transfers of title or the repairs.

Brief of Silvestri, Plaintiff – Appellant, 2000 WL 33992316, *5-6 (emphasis in original).

This was held to not provide a defense to spoliation.  The Fourth Circuit wrote:

Notwithstanding the anticipation of litigation against General Motors, neither [Silvestri’s attorney] nor Silvestri took any steps to preserve the vehicle or to notify General Motors of the existence of the vehicle and Silvestri’s potential claim. Indeed, General Motors was not notified about the accident until almost three years later when Silvestri commenced this action against the corporation. Yet, the vehicle remained in its damaged condition for more than three months after the accident. In early 1995, the title-owner of the vehicle, Carl E. Burhans, the husband of Silvestri’s landlady, transferred title of the vehicle to his insurance company, and his insurance company in turn sold the vehicle to Prestige Collision, Inc., which repaired the vehicle and then sold it.

Silvestri v. Gen. Motors Corp., 271 F.3d 583, 588 (4th Cir. 2001)(emphasis added).

After GM later found the car, GM inspected a “module” and obtained evidence that there was no defect in the airbag.

In a remarkable argument, “Silvestri’s expert, however, questioned whether this was the original module that had been in the vehicle at the time of the accident.”  In my words, Silvestri sought to benefit from his failure to preserve the car.

In any event, GM’s expert opined that Silvestri’s failure to preserve the car hindered GM’s defense. Predictably, “General Motors … asked that the case be dismissed based on Silvestri’s spoliation of evidence.”  The District Court dismissed, finding a high degree of prejudice. “[T]he court explained that General Motors was denied the opportunity to reconstruct the accident accurately because of its inability to take the necessary crush measurements.”

On appeal, Silvestri raised a number of arguments, each of which was rejected.[2]  In pertinent part, the Fourth Circuit wrote:

The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. … If a party cannot fulfill this duty to preserve because he [or she] does not own or control the evidence, he [or she] still has an obligation to give the opposing party notice of access to the evidence or of the possible destruction of the evidence if the party anticipates litigation involving that evidence.

Id. at 591 (emphasis added). The Court noted:

In this case, it is true that Silvestri did not own the vehicle, nor did he even control it in a legal sense after the accident because the vehicle belonged to his landlady’s husband. But it is apparent that Silvestri had access to the vehicle, as his attorney Moench and his retained experts were given apparently unlimited access to the vehicle for inspection purposes. Moreover, the vehicle was preserved in its post-accident condition for perhaps two to three months, or more, a period during which Silvestri, his lawyer, and his experts recognized not only that they would be suing General Motors but also that General Motors should be given an opportunity to inspect the vehicle.

The Court wrote:

In sum, we agree with the district court that Silvestri failed to preserve material evidence in anticipation of litigation or to notify General Motors of the availability of this evidence, thus breaching his duty not to spoliate evidence.

Id. at 592 (emphasis added); accord Nolan v. O.C. Seacrets, Inc., et al., 2021 WL 4806337, at *4 (D. Md. Oct. 14, 2021)(quoting Silvestri); McCoy v. Biomet Orthopedics, LLC, 2021 WL 252556, at *32 (D. Md. Jan. 25, 2021)(same; however, litigation was not anticipated); Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494, 514 (D. Md. 2009)(same); In re WRT Energy Sec. Litig., 246 F.R.D. 185, 195 (S.D.N.Y. 2007)(same); Perez-Velasco v. Suzuki Motor Co., Ltd., 266 F. Supp. 2d 266, 269 (D.P.R. 2003)(“At the very least, plaintiffs should have informed Suzuki (which they could have foreseen that they would sue in the future) of the possibility that the evidence would be destroyed once they relinquished the same to the financial entity.”); cf. Garcia v. Vitus Energy, LLC, 2022 WL 1289670, at *5 n. 63 (D. Alaska Apr. 29, 2022)(dicta).

In Silvestri, the Fourth Circuit affirmed dismissal as the sanction.[3]

In dicta, the Maryland Court of Special Appeals  cited Silvestri “for the unremarkable proposition that a party with possession or access to discoverable evidence bears the burden of notifying its opponent before allowing the evidence to be destroyed.” Zorzit v. Comptroller, 225 Md. App. 158, 180, 123 A.3d 627, 640 (2015)(emphasis added).[4]

____

[1] P. Favro, “New Federal Cases Spotlight 2021’s Key Trends in E-Discovery” (Law.com May 13, 2021).

[2] Silvestri argued that “[h]e did not own or have control over the car, nor did he have any duty under New York law to attempt to purchase the accident vehicle. At best, Mr. Silvestri had a duty to notify General Motors of the possible lawsuit. Despite that omission, General Motors was not prejudiced by the repair of the car….”  Brief of Silvestri, Plaintiff – Appellant, at 2000 WL 33992316, *45.

[3] “Silvestri knew the importance of preserving the Chevrolet ‘because when [his first attorney] sued him, he counterclaimed for malpractice, alleging that [former counsel] had failed to preserve the vehicle.’ Both of these occurred before GMC had knowledge of the accident or was sued.”  Jeffrey A. Parness, “Presuit Lawyer Information Duties Relevant to Civil Litigation,” 105 Marq. L. Rev. 921, 931 (2022).

[4] See generally The “Practical Ability” Standard for “Control” in Maryland, discussing Silvestri and Zorzit.