Title: Cincinnati Ins. Co. v. Synergy Gas, Inc.

State: alabama

Issuer: Alabama Supreme Court

Document:

585 So. 2d 822 (1991)
CINCINNATI INSURANCE COMPANY, Tolbert Shelby, and Mildred Shelby
v.
SYNERGY GAS, INC.
1900443.

Supreme Court of Alabama.
July 26, 1991.
*823 William A. Mudd and Edward E. Angwin of McDaniel, Hall, Conerly & Lusk, Birmingham, for appellants.
Richard L. Wyatt of Wallace, Wyatt & Davenport, Birmingham, for appellee.
HOUSTON, Justice.
The plaintiffs, Cincinnati Insurance Company ("Cincinnati") and Tolbert and Mildred Shelby appeal from the dismissal of their complaint against defendant, Synergy Gas, Inc. ("Synergy"), for their failure to comply with a request for production. We affirm in part, reverse in part, and remand.
The trial court entered the following order:
"Certain facts are undisputed:
"3. Subsequent to the fire, after ... Cincinnati Insurance Company's experts had examined the premises and during the rebuilding of the ... Shelbys' home, all of the fire debris, including appliances, pipes, and all of the LP gas system (with the exception of the regulator) was removed from the premises and either *824 destroyed or taken to places unknown. The removal of the debris was allowed by the Shelbys and done at their direction. The regulator had previously been removed from the LP tank by the Alabama LP Gas Board representative.
"The precise question of what sanctions, if any, are appropriate where the plaintiff permits or allows the apparatus made the subject of a lawsuit to be lost or destroyed prior to the filing of the *825 complaint, has not been addressed by Alabama Courts.
"The closest Alabama case is Iverson v. Xpert Tune, Inc., 553 So. 2d 82 (Ala. 1989). In that case, the Supreme Court of Alabama affirmed a trial judge's dismissal of a lawsuit for failure of the plaintiff to produce an alleged faulty fuel pump made [the] basis of the complaint. In Iverson, the plaintiff permitted the fuel pump to be lost or destroyed after a request for production had been filed by the defendant.
"However, the Illinois case of Graves v. Daley, [172 Ill.App.3d 35, 122 Ill.Dec. 420, 526 N.E.2d 679 (1988),] bears a striking resemblance to the facts of this case. That case involved a house fire; an insurance company investigation of the cause; a report by the insurance company that a defective furnace was a suspected cause; and the homeowner allowing the heating system to be lost or destroyed ... prior to the filing of the complaint.
"`Although it is correct that the plaintiffs did not violate court orders, the fact remains that the furnace was destroyed by plaintiffs at Western State's suggestion. The plaintiffs are not free to destroy crucial evidence simply because a court order was not issued to preserve the evidence. Further, the furnace was destroyed by the plaintiffs after their expert had examined it and before the suit was filed, thus, the court could not have issued a preservation order.'
(Emphasis in original.)
Rule 37, A.R.Civ.P., provides the method for dealing with a party's failure to comply with discovery. That rule provides, in pertinent part, as follows:
Rule 37(b)(2)(C) states that the trial court, under the appropriate circumstances, may enter "[a]n order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party." An *826 order to compel discovery is not required in order to bring Rule 37(d) into play. It is enough that a request for inspection or production has been properly served on the party. Iverson v. Xpert Tune, Inc., 553 So. 2d 82 (Ala.1989).
In Iverson, this Court discussed the standard of review applicable to a dismissal under Rule 37 for failure to comply with a discovery request:
"....
"... The trial court is the more suitable arbiter for determining with accuracy the culpability of the failure to produce or of the spoliation, and, for that reason, we will show great deference toward a trial court's decision with respect *827 to such culpability.... [T]rial courts, when confronting litigants who have manifested willfulness and bad faith in failing to produce or in allowing spoliation, must not be unduly hampered in granting the ultimate sanction of a denial of an opportunity to prosecute or defend the claim."
553 So. 2d  at 87-89.
In the present case, the trial court found that the plaintiffs had deliberately disposed of the items that were later the subject of the request for production. Although the trial court noted that there had been no "allegation" of malicious intent on the part of the plaintiffs in destroying the items and that the Shelbys' conduct "might be excusable" because of their lack of knowledge of the importance of preserving evidence for future litigation, the trial court, understandably, could find no justification for Cincinnati's conduct. As we read its order, the trial court found that Cincinnati had willfully allowed the destruction of the items in question, with full knowledge of the importance of those items as evidence in any future litigation. Our conclusion in this regard is based on the trial court's findings that Cincinnati had fire investigators on the scene within three days after the fire; that those investigators had quickly concluded that the gas system allegedly installed by Synergy was the cause of the fire; and that Cincinnati, as subrogee under the Shelbys' policy, was aware of the importance of preserving the evidence for future litigation. We also find it to be significant that the plaintiffs' complaint states that Cincinnati paid the Shelbys over $291,000 under the terms of the policy. Because such a large sum of money was involved, it is certainly not difficult to understand why the trial court apparently believed that Cincinnati was aware soon after the fire that future litigation was likely.
The plaintiffs argue that the trial court's finding of "willfulness" on the part of Cincinnati is not supported by the evidence. We hasten to point out, however, that the record presented to us in this case does not contain any of the affidavits, depositions, etc., on which the trial court based its judgment. Where all of the evidence is not in the record, we presume that the evidence was sufficient to sustain the judgment. See Berryhill v. Mutual of Omaha Insurance Co., 479 So. 2d 1250 (Ala.1985).
We can find no abuse of discretion on the trial court's part in dismissing the plaintiffs' claims that were based on the alleged malfunction of those components of the gas system that were destroyed by the plaintiffs. However, the plaintiffs urge us to allow them to proceed with their claims that are based on the alleged malfunction of the gas regulator, which is still available for further inspection by Synergy's experts. The plaintiffs, who alleged in their complaint that the fire had resulted from a malfunction of "the LP Gas tank, gas furnace and/or gas regulator, component parts thereof, and/or any attending equipment used therewith," apparently have taken the position that they are willing to pursue a recovery under a single theory that the gas regulator was defective and that that defect alone caused the fire. This Court has a long-established and compelling policy objective of affording litigants a trial on the merits whenever possible. Iverson; see, also, Kirtland v. Fort Morgan Authority Sewer Service, Inc., 524 So. 2d 600 (Ala.1988), and Jones v. Hydro-Wave of Alabama, Inc., 524 So. 2d 610 (Ala.1988). Although we do not condone the plaintiffs' willful destruction of the most crucial pieces of the evidentiary puzzle in this case, after careful review we are persuaded that, in keeping with this policy objective, the plaintiffs should be allowed to proceed to trial, but solely on the theory that the gas regulator was defective and that that defect alone caused the fire. By allowing the plaintiffs to proceed to trial solely on this theory, all of the applicable policy objectives will be furthered in this case. The plaintiffs will be afforded the opportunity to have a trial on the merits; the restriction of the plaintiffs' case to the single theory based on the allegedly defective regulator will serve to punish them for their willful destruction of crucial evidence and, therefore, to preserve the integrity of the discovery process; and Synergy will be assured *828 of an opportunity to present an adequate defense.
For the foregoing reasons, we affirm the dismissal of the plaintiffs' claims that were based on the destroyed components of the gas system. However, in keeping with our policy objective of affording litigants a trial on the merits whenever possible, we reverse the dismissal of the plaintiffs' claims that are based on the allegedly defective regulator, and we remand the case for further proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
HORNSBY, C.J., and MADDOX, KENNEDY and INGRAM, JJ., concur.