Author(s): David M. Shafer

The Michigan Court of Appeals declines to recognize a separate tort cause of action for “spoliation of evidence” against an insurance company for its fire investigator’s alleged destruction of physical evidence at a house-fire site

In Teel v Meredith, __ Mich App __ (7-2-2009), the Michigan Court of Appeals, in a 2-1 published opinion, held that the Wayne Circuit Court had properly granted the defendant insurance company’s motion for summary disposition, because Michigan law does not yet recognize the separate tort cause of action of “spoliation of evidence” against a third party for interfering with a plaintiff’s prospective civil action.

The plaintiff, his wife, and their children were living in an upper flat rented from Meredith. Meredith’s property was insured by the defendant insurance company. A fire broke out in the flat, and as a result, the plaintiff was injured and his wife died.

Six days after the fire, and without notice to or the presence of the plaintiff, the insurance company sent a fire investigator to inspect the flat. During the inspection, the investigator allegedly altered the scene, removed certain items from the flat, and purportedly spoiled some evidence concerning the origin and cause of the fire affecting the plaintiff’s ability to succeed in product-liability litigation relating to the fire.

After the plaintiff filed a lawsuit in the Wayne Circuit Court, the defendant insurance company brought a motion for summary disposition, arguing that Michigan law does not recognize a separate tort cause of action for the spoliation of evidence by a third party. The circuit court granted the insurance company’s motion, and the plaintiff filed a claim of appeal in the Michigan Court of Appeals.

In a majority opinion, Court of Appeals Judges Henry Saad and Deborah Servitto voted to affirm the circuit court’s order, and in a dissenting opinion, Judge Alton Davis voted to reverse that order.

Judges Saad and Servitto explained that while “[t]here are certainly considerations that would support the recognition of an independent tort claim for spoliation of evidence,” there are “countervailing policy considerations that weigh against the adoption of a tort for spoliation of evidence” by the Court of Appeals. More specifically, Judges Saad and Servitto were of the opinion that “[t]he proposed cause of action carries with it many potential concerns and effects, resulting in more complications than clarifications” and that “[t]he Legislature would have the resources and tools needed to investigate the consequences of the proposed cause of action and to study the long-term effects of the cause of action in the jurisdictions that have recognized it.” Accordingly, Judges Saad and Servitto wrote that “the Legislature is the body best suited to creating new causes of action” such as the plaintiff’s proposed cause of action of spoliation of evidence against a third party.

The majority opinion additionally noted that the Michigan Legislature has taken it upon itself to comprehensively regulate the insurance industry and the rights and remedies available to the public by passing insurance statutes that contain more than 1,000 sections, so that if such a novel duty is to be owed by an insurance company to a non-insured third party, “it is preferable for [that] duty to be statutorily declared.” The majority opinion further noted that most of the “very few” states throughout the nation that recognize a separate tort cause of action for spoliation of evidence relied heavily upon California case law dating from 1984, but that that case law was repudiated by the California Supreme Court in 1998 and 1999, thereby indicating that “the strength and longevity of the other states’ opinions are in question.”

In his dissenting opinion, Judge Davis wrote that the case actually concerns the development of a new “remedy” for an already existing duty not to spoliate evidence. According to Judge Davis, “[t]he reason why this Court should recognize a cause of action for spoliation of evidence is that, where the spoliator is not already a party, there is simply no other way to provide a remedy for the invasion of the recognized right to that evidence,” and “[t]he only way to remedy such a harm is to permit this kind of cause of action.” (Emphasis in original.) According to Judge Davis, it is the proper role of the courts, not the Legislature, to craft new remedies for existing rights of this kind.