Court Opinion

ID: 9912113
Source: CourtListenerOpinion
Date Created: 2023-12-21 17:09:41.381517+00
Date Added: 2024-06-11T12:51:58.857717
License: Public Domain

J-E02001-23

                                2023 PA Super 271

 ERIE INSURANCE EXCHANGE A/S/O            :   IN THE SUPERIOR COURT OF
 BATES COLLISION, INC. JAMES              :        PENNSYLVANIA
 MYERS, ANITA MORGAN, LOSSIE              :
 AUTO SERVICE, AND BENEDICTINE            :
 SISTERS OF ERIE, INC.                    :
                                          :
                    Appellant             :
                                          :
                                          :   No. 1482 WDA 2021
              v.                          :
                                          :
                                          :
 UNITED SERVICES AUTOMOBILE               :
 ASSOCIATION                              :
                                          :
                                          :
              v.                          :
                                          :
                                          :
 BATES COLLISION, INC.,                   :

           Appeal from the Judgment Entered November 12, 2021
  In the Court of Common Pleas of Erie County Civil Division at No(s): No.
                                12888-18

BEFORE: PANELLA, P.J., OLSON, J., DUBOW, J., KUNSELMAN, J., NICHOLS,
        J., MURRAY, J., McLAUGHLIN, J., KING, J., and McCAFFERY, J.

DISSENTING OPINION BY OLSON, J.:              FILED: December 21, 2023

      I respectfully dissent from the learned Majority’s determination in this

matter and would affirm the trial court’s order, which granted the motion for

summary judgment filed by Appellee, United Services Automobile Association

and dismissed the complaint alleging one claim for promissory estoppel filed

by Erie Insurance Exchange a/s/o Bates Collision, Inc., James Myers, Anita

Morgan, Lossie Auto Service, and Benedictine Sisters of Erie, Inc. (Appellant).
J-E02001-23

      The Majority opines that, in granting summary judgment for Appellee,

“the trial court erred in converting Appellant’s promissory estoppel claim to

one of negligent spoliation and dismissing the [c]omplaint on the grounds that

Pennsylvania does not recognize a cause of action for spoliation of evidence”.

Majority Opinion at 8-9.   Accordingly, the Majority concludes that the trial

court erred in relying on Pyeritz v. Commonwealth, 32 A.3d 687 (Pa. 2011)

in which our Supreme Court held that Pennsylvania law does not recognize a

cause of action for negligent spoliation of evidence. Majority Opinion at 8. I

respectfully disagree.

      In its seminal decision in Pyeritz, our Supreme Court considered the

question of whether Pennsylvania recognizes a cause of action against a third

party not otherwise liable to the plaintiff for damages caused by the third

party’s negligent spoliation of evidence and held that “Pennsylvania law does

not recognize a cause of action for negligent spoliation of evidence.” Pyeritz

32 A.3d at 689, 691, 695. That case, like this action, involved a request to

preserve evidence, disposal of the evidence after a representation that the

evidence would be retained, and a claim for damages for the loss of recovery

in a tort case that depended on the evidence that was destroyed.

      In Pyeritz, the plaintiffs were the estate and family of a decedent who

had fallen to his death from a hunting tree stand when the belt that lashed

him to the tree stand broke. Id. at 689. Following decedent’s death, the

Pennsylvania State Police took possession of the pieces of the tree stand belt

and less than a month later, an attorney for the plaintiffs sent the trooper in

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charge of the investigation a letter stating that the attorney might want the

trooper to retain the tree stand belt “[b]ecause of the extreme need to see

that there is no spoliation of this evidence.” Id. at 689-690. The trooper

advised the plaintiffs’ counsel that the State Police would have to retain the

pieces of the belt until a coroner’s jury determination of the cause and manner

of death.   Id. at 690.    While the belt pieces were in the State Police’s

possession prior to the coroner’s jury proceeding, plaintiff’s counsel and a

representative of a tree stand belt manufacturer took photographs of the belt

pieces. Id. Less than a month after the coroner’s jury determination that

decedent’s death was accidental, the plaintiffs’ attorney asked the trooper to

keep the pieces of the belt in the evidence room at the State Police barracks

and the trooper agreed to the request. Id. The barracks, however, were later

relocated to a new building and the trooper who had agreed to retain the

pieces of the belt was assigned to a different barracks. Id. One month after

the barracks were relocated, the trooper to whom the case was reassigned

destroyed the pieces of the belt because the investigation had been

completed. Id.

      The Pyeritz plaintiffs brought a product liability action against two tree

stand belt manufacturers, which settled for $200,000, and brought a

negligence action against the State Police for failing to preserve the belt,

seeking as damages the loss of a greater award or settlement that the

plaintiffs contended that they could have obtained if the belt pieces had not

been destroyed. Id. at 690-91. The trial court granted summary judgment

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in favor of the Commonwealth, the Commonwealth Court affirmed, and the

Supreme Court granted allowance of appeal on the issue of “[w]hether

Pennsylvania recognizes, and if so whether Petitioners have alleged, a cause

of action for negligent spoliation of evidence.” Id. at 691.

      The Supreme Court rejected this cause of action on the ground that a

gratuitous agreement to a request to indefinitely retain evidence is not a

sufficient basis to impose a legal duty and on the ground that recognition of

the cause of action was against public policy because there is no way of

knowing whether the evidence, if it been preserved, would support or negate

the claim for which the damages are sought and the damages in such an action

are therefore speculative. Id. at 693. With respect to the latter ground for

rejecting a spoliation cause of action, the High Court reasoned:

        Although it may have been reasonably foreseeable to the
        troopers that the loss of the evidence might harm Appellants
        in their quest for damages in a civil lawsuit against the belt’s
        manufacturer, we hold that as a matter of public policy, this
        is not a harm against which Appellees should be responsible
        to protect. The primary reason is that the tort would
        allow the imposition of liability where, due to the
        absence of the evidence, it is impossible to say
        whether the underlying litigation would have been
        successful. It could very well be true in this case, for
        example, that if the belt had not been destroyed, it would
        have undermined Appellants’ suit against the manufacturers
        and they would not have realized even the $200,000
        settlement they now have in hand. Of course, in some cases,
        one party may have already finished testing the evidence by
        the time it is destroyed, or as here, photographs or other
        representations of the evidence may still exist. However,
        depictions are an inadequate substitute for the evidence
        itself, as other parties cannot inspect and test the evidence
        independently, which deprives them of the raw material they

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        need to mount a potentially successful claim or defense. If
        we were to recognize the tort, the inability of the
        parties to assess meaningfully the impact of the
        missing evidence on the underlying litigation would
        result in potential liability based on speculation.

Id. at 693-94 (emphasis added).

      Although the Supreme Court in Pyeritz discussed a tort cause of action

and analyzed the elements of negligence, it held that no cause of action for

negligent spoliation (as opposed to intentional spoliation) exists. The Court

did not hold that no tort action for such spoliation (as opposed to a non-tort

cause of action) exists. Nothing in the Pyeritz opinion suggests that mere

changing of the label on the claim to promissory estoppel would alter the

result. To the contrary, the speculative nature of the damages that the Court

held required rejection of the cause of action is the same regardless of the

theory of liability.   Moreover, the Court considered the existence of a

gratuitous agreement relied on by the plaintiff in rejecting the cause of action

and specifically rejected this Court’s language in Elias v. Lancaster General

Hospital, 710 A.2d 65, 68 (Pa. Super. 1998) that a special relationship, such

as an agreement or voluntary assumption of a duty to preserve the evidence,

could support liability for negligent spoliation. Pyeritz, 32 A.3d at 693-694.

In addition, the Supreme Court rejected the Pyeritz plaintiffs’ alternative

claim that the State Police were liable for spoliation of the evidence on a theory

of breach of an implied contract for bailment, regardless of whether such a

bailment was shown, on the ground that the damages sought were for

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negligent spoliation of evidence. Id. at 691 n.2; see also id. at 695 (Eakin,

J., concurring).

      The factors on which the Supreme Court relied in rejecting a spoliation

cause of action are equally present in Appellant’s promissory estoppel cause

of action in this case.   The basis of Appellant’s claim, as in Pyeritz, is a

gratuitous, indefinite commitment to preserve an item of evidentiary value for

the benefit of the requesting party. Appellant’s claim is for the same type of

damages, loss of recovery in a lawsuit in which the spoliated item was critical

evidence, and has the identical speculative nature that caused the Supreme

Court to reject the spoliation cause of action in Pyeritz – there is no way to

tell whether further examination of the BMW vehicle at issue would support or

refute the claim of manufacturing defect. Indeed, Appellant brought no action

against BMW and Appellant conceded to the trial court that it could not show

that the fire was caused by a manufacturing defect or by any condition of the

BMW vehicle for which it could have recovered damages.         N.T. Summary

Judgment Argument at 9, 29-31, 41. This case, like Pyeritz, also involves

negligent spoliation. The loss of the evidence was the result of a failure by

Appellee to adequately communicate to Insurance Auto Auction (IAA), the

party that disposed of the BMW vehicle, that it needed to hold the BMW

vehicle, not an intentional destruction or disposal of the BMW vehicle by

Appellee.

      Although no Pennsylvania case has specifically addressed whether

Pyeritz bars or permits a non-tort claim for damages caused by negligent

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spoliation of evidence, Pennsylvania federal cases have characterized Pyeritz

as broadly holding that no cause of action for damages for negligent spoliation

exists under Pennsylvania law without limiting this statement to tort liability.

Schwartz v. Taylor, 2021 WL 949481 at *3 (E.D.Pa. C.A. No. 17-3799 March

11, 2021); Marinkovic v. Battaglia, 2019 WL 4600207 at **13-14 (W.D.Pa.

Cases Nos. 1:14-cv-49, 2:18-cv-388 September 23, 2019); Turturro v.

United States, 43 F. Supp. 3d 434, 459-60 (E.D. Pa. 2014), aff’d, 629 Fed.

Appx. 313 (3d Cir. 2015).

      Appellant argues that this Court should follow a California decision,

Cooper v. State Farm Mutual Automobile Insurance Co., 99 Cal.Rptr.3d

870 (Cal. App. 2009), that allowed a promissory estoppel cause of action for

spoliation,   that   Pyeritz   is   distinguishable,   and   that   public   policy

considerations require recognition of its promissory estoppel cause of action.

None of these arguments has merit.

      In Cooper, the California court held that the plaintiff injured in an

automobile accident that he contended was caused by a defective tire could

recover damages from his insurer on a promissory estoppel theory where the

insurer disposed of the tire despite representations that it would preserve the

tire. Cooper, 99 Cal.Rptr.3d at 873, 882-892. Cooper, however, not only is

not based on Pennsylvania law, but its reasoning is not consistent with Pyeritz

and it involved a situation where the damages were not as speculative as here.

In Cooper, the court allowed the promissory estoppel cause of action for

spoliation based on the fact that the insurer assumed a duty and had a special

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relationship with the plaintiff as a result of its promises to preserve the tire.

Id. at 882-85, 892.     Pyeritz specifically rejected both assumed duty by

gratuitous promises to retain evidence and a special relationship between the

parties as bases for liability for spoliation. Pyeritz, 32 A.3d at 693-694. In

addition, unlike this case, the speculative nature of damages that is the basis

for rejecting spoliation suits was substantially reduced in Cooper, as there

was expert opinion in Cooper that there was a manufacturing defect in the

tire, not the mere possibility that a defect would be found if further

examination had occurred. See Cooper, 99 Cal.Rptr.3d at 886-887.

      Appellant argues that Pyeritz is distinguishable because the claim in

that case was against the government; i.e. the Pennsylvania State Police, and

would impose burdens outside the government’s function. While Pyeritz did

involve a government defendant and the Court mentioned that the retaining

of evidence for a private civil suit was outside the government function, the

Court did not limit its rejection of the cause of action to government entities.

Rather, the Court rejected the cause of action without regard to the type of

defendant and discussed the burden on non-government parties as a reason

for rejecting the spoliation cause of action, stating:

        To the extent recognition of the tort would encourage the
        preservation of evidence, that benefit is outweighed by the
        financial burden the tort would impose. If it were recognized,
        businesses and institutions would be forced to preserve
        evidence, at considerable expense, for a myriad of possible
        claims that might never be brought.

Pyeritz, 32 A.3d at 694.

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      Appellant further relies on the alleged public policy that practices in the

insurance industry required Appellee to retain the BMW vehicle until the

investigation or litigation is complete and that failure to recognize a cause of

action will create unnecessary additional litigation and expense. Nothing in

the insurance industry practices argued by Appellant, which concern which

party routinely holds and preserves evidence, however, negates the key public

policy rationale of Pyeritz that the damages caused by loss of evidence are

too speculative to permit a cause of action for spoliation of evidence that was

not intentional.   Moreover, denial of a cause of action does not require

burdensome litigation to preserve evidence.       Other steps to ensure that

evidence is in fact preserved, such as payment of storage costs by the party

that wishes to retain the evidence, express agreements as to how long

evidence is held, and express agreements giving the party that wishes to

retain the evidence authority to control its storage and disposal, could achieve

protection of evidence without litigation.

      Further – and setting aside my belief that Pyeritz bars Appellant’s claim

– I disagree with the Majority’s conclusion that a genuine issue of material

fact exists regarding Appellant’s promissory estoppel claim. As our Supreme

Court has explained:

        Where there is no enforceable agreement between the
        parties because the agreement is not supported by
        consideration, the doctrine of promissory estoppel is invoked
        to avoid injustice by making enforceable a promise made by
        one party to the other when the promisee relies on the
        promise and therefore changes his position to his own

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        detriment. In order to maintain an action in promissory
        estoppel, the aggrieved party must show that 1) the promisor
        made a promise that he should have reasonably expected to
        induce action or forbearance on the part of the promisee; 2)
        the promisee actually took action or refrained from taking
        action in reliance on the promise; and 3) injustice can be
        avoided only by enforcing the promise. As promissory
        estoppel is invoked in order to avoid injustice, it permits an
        equitable remedy to a contract dispute.

Crouse v. Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000) (citations omitted).

     Here, Appellant has not demonstrated a genuine issue of material fact

regarding the element that “injustice can be avoided only by enforcing the

promise.” See id.

     In its complaint, Appellant speculates that, if Appellee had preserved

the BMW, Appellant would have prevailed in “its claim against the

manufacturer or the owner of the vehicle or anyone involved in maintaining

the vehicle” – and that Appellant would have received $1,624,217.15, the

amount paid by Appellant to its insureds as a result of the damage caused by

the fire. See Complaint, 11/9/18, at ¶ 21 and “Wherefore” Clause. As noted

above, however, Appellant conceded to the trial court that it could not show

that the fire was caused by a manufacturing defect or by any condition of the

BMW vehicle for which it could have recovered damages.         N.T. Summary

Judgment Argument at 9, 29-31, 41.           Further, since the BMW was not

preserved, there is now no way to determine whether Appellant could have

prevailed in any potential claim “against the manufacturer or the owner of the

vehicle or anyone involved in maintaining the vehicle.” Complaint, 11/9/18,

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at ¶ 21. In other words, Appellee’s promise to Appellant could have very well

been worth $0.00.

      Thus, with respect to the promissory estoppel claim Appellant pleaded

in its complaint – where it expressly sought to recover, from Appellee, the

monetary value of a winning claim against “the manufacturer or the owner of

the vehicle or anyone involved in maintaining the vehicle” – Appellant cannot

establish that “injustice can be avoided only by enforcing the promise,” as

there is simply no evidence that Appellee’s promise caused Appellant any

monetary harm or was worth anything.

      In conclusion, because our Supreme Court clearly held in Pyeritz that

Pennsylvania does not recognize a cause of action to recover damages caused

by negligent spoliation of evidence and Appellant’s promissory estoppel claim

against Appellee is an action to recover damages for negligent spoliation of

evidence based on the same kind of a gratuitous agreement to indefinitely

preserve evidence for the Appellant’s benefit and speculative damages that

the Supreme Court held did not permit a cause of action, I conclude that the

trial court properly held that Appellant, as a matter of law, had no cause of

action against Appellee.    I would affirm the trial court’s order granting

summary judgment in favor of Appellee and against Appellant and, thus,

respectfully dissent from the learned Majority’s determination in this matter.

      Judge Kunselman joins this dissenting opinion.

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