Under certain circumstances, a contractor who defectively completed a construction project may protect himself from a lawsuit by alleging that the plaintiff spoiled evidence of that defect.

An example of this proposition is New Jersey Municipal Environment Risk Management v. Killam Associates Consulting Engineers, et. al., in which the Appellate Division of the Superior Court of New Jersey considered a spoilation of evidence claim with respect to a construction project. A spoilation claim arises when a party in a civil action has “hidden, destroyed or lost relevant evidence and thereby impaired another party’s ability to prosecute or defend the action.” Id. at 5. To avoid a spoilation claim, a prospective party who is aware of the probability of a law suit has an obligation to preserve evidence related to that claim. If a party was not diligent in seeking to prevent spoliation, he may be subject to sanctions. Id.

In Killam Associates, the Plaintiff hired a contractor (“Defendant”) to design and construct a piping system to transport fuel from an above-ground storage tank to a generator. After six years, the Plaintiff found a defect in the system. Id. at 1. Three years later, the New Jersey Department of Environmental Protection demanded that the Plaintiff provide compensation for the environmental damage caused by the system’s defective condition. In turn, Plaintiff filed the action against the Defendant for negligent installation and design to recover damages for the defects found in the piping system. Id. at 2.

Though the Plaintiff contemplated suing the Defendant when the defect was initially found, the Plaintiff instead proceeded with repairs to the piping system and did not inform the Defendant of any damage. Because the Plaintiff commenced repair, replacement, maintenance and/or disposal of the underground transfer pipes that proved defective and did not notify the defendants of its conduct, the Defendants alleged that Plaintiff wrongfully spoliated the evidence of what caused the leak. The Defendants alleged that the Plaintiff compounded this spoliation of evidence by not notifying the Defendants of the defect to provide them with an opportunity to inspect the faulty piping system before it was removed.

In assessing the Defendants’ Spoilation of Evidence claim, the Court found that the Plaintiff did violate its legal duty to preserve the lost evidence by its failure to:

1) alert the defendants and thereby deprive them of any opportunity to observe the conditions as they existed and take appropriate measures to avoid prejudicial loss of evidence and

2) direct their own agents to preserve the components of the dismantled pipeline. 

Id. at 6.

However, the Court also noted that with respect to commercial construction projects, the parties may consider a “vast array of alternate sources of information that such projects generally provide.” Id. at 7. Therefore, the potential spoliation claim might be mitigated if the information were available from some other source. Id.

Ultimately, the Court held that the Plaintiff did violate its duty to preserve the evidence of the faulty piping material. However, the Court remanded the case to the trial court to rule on the Defendants’ spoliation of evidence claim only after a thorough review of other sources of relevant information regarding the piping system’s defect.

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