Court Opinion

ID: 9897386
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:10:55.542813+00
Date Added: 2024-06-11T09:16:31.729995
License: Public Domain

FILED
                                                                      May 25 2023, 8:48 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
                                                                            and Tax Court

ATTORNEY FOR APPELLANT                                    ATTORNEY FOR APPELLEE
Crystal G. Rowe                                           MICHAELIS CORPORATION
Kightlinger & Gray, LLP                                   Alexander M. Beeman
New Albany, Indiana                                       Reminger Co., LPA
                                                          Evansville, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Safeco Insurance Company of                               May 25, 2023
Indiana as Subrogee of Ramona                             Court of Appeals Case No.
Smith,                                                    22A-CT-1924
Appellant-Plaintiff,                                      Appeal from the Marion Superior
                                                          Court
        v.                                                The Honorable Patrick J. Dietrick,
                                                          Judge
Blue Sky Innovation Group,                                Trial Court Cause No.
Inc.; Cabela’s Wholesale,                                 49D12-2110-CT-35831
L.L.C.; TMBC, L.L.C. of
Missouri; Bass Pro Outdoor
World, L.L.C.; Cabela’s Retail
MO, L.L.C.; Bass Pro, L.L.C.;
Bass Pro Group, LLC; and
Michaelis Corporation,
Appellees-Defendants.

                                 Opinion by Judge Bradford
                               Judges May and Mathias concur.

Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023                               Page 1 of 20
      Bradford, Judge.

      Case Summary                   1

[1]   Safeco Insurance Company of Indiana (“Safeco”) filed suit against Michaelis

      Corporation (“Michaelis”), alleging claims of third-party spoliation and

      negligence after Michaelis, a restoration company, allegedly discarded certain

      evidence relating to a fire at the home of one of Safeco’s insureds. Michaelis

      moved to dismiss Safeco’s claims, arguing that third-party claims for spoliation

      of evidence are only available in narrow and limited circumstances in Indiana

      and Safeco’s claim did not fall within the limited circumstances. Michaelis also

      argued that Safeco’s negligence claim was barred by the economic-loss doctrine.

      The trial court granted Michaelis’s motion, dismissing both Safeco’s third-party

      spoliation and negligence claims. Because we believe Safeco’s pleadings are

      sufficient to survive Michaelis’s motion to dismiss, we reverse and remand to

      the trial court for further proceedings.

      Facts and Procedural History
[2]   The facts, as alleged in Safeco’s complaint, are as follows: on all pertinent

      dates, Ramona Smith owned a home located at 6648 Marmont Circle in

      Indianapolis (“the Property”). Safeco was the “insurance carrier for [Smith]

      1
        We held oral argument in our courtroom in the Indiana Statehouse on May 9, 2023. We wish to commend
      counsel for the high quality of their written submissions and arguments before the court.

      Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023                         Page 2 of 20
      with respect to the Property, and pursuant to its policy of insurance is

      subrogated to the right of its Insured,” i.e., Smith. Appellant’s App. Vol. II p.

      30. On October 31, 2019, a fire broke out at the Property, causing significant

      damage.

[3]   At some point prior to October 31, 2019, Smith had come to own a Cabela’s 12

      Tray Pro Series Digital Dehydrator (“the Product”). On November 6, 2019,

      Safeco conducted a preliminary scene examination, during which it

      “determined that the fire likely originated on the kitchen countertop, to the left

      of the sink, where the Product was located.” Appellant’s App. Vol. II p. 31.

      Either Smith or Safeco retained Michaelis to perform restoration work at the

      Property. A representative for Michaelis was present at the preliminary scene

      examination, during which “the need to preserve the kitchen was verbally

      communicated” to Michaelis’s representative. Appellant’s App. Vol. II p. 32.

      After the preliminary scene examination was complete, the “entrances to the

      kitchen area were taped off with ‘caution tape’ so [that] the area could be

      preserved pending notice to the potentially responsible parties and [the]

      scheduling of a joint scene exam” and Michaelis “constructed a temporary

      structure to provide better weather protection and tarping over the area of the

      fire origin.” Appellant’s App. Vol. II p. 32. At some point between December

      2, 2019 and January 15, 2020, “Michaelis demolished the kitchen and discarded

      the Product and other artifacts.” Appellant’s App. Vol. II p. 32.

[4]   Following the fire, Safeco paid damages in the amount of $510,861.46 on

      Smith’s behalf in relation to damages sustained during the fire. In an attempt to

      Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023           Page 3 of 20
      recover the funds paid on Smith’s behalf, on October 25, 2021, Safeco filed a

      lawsuit alleging claims of negligence and strict products liability against Blue

      Sky Innovation Group, Inc.; Cabela’s Wholesale, L.L.C.; TMBC, L.L.C. of

      Missouri; Bass Pro Outdoor World, L.L.C.; Cabela’s Retail MO, L.L.C.; Bass

      Pro, L.L.C., and Bass Pro Group, LLC (collectively, “the Principal

      Defendants”).2 Safeco also alleged claims of spoliation and negligence against

      Michaelis. Safeco amended its complaint on December 16, 2021.

[5]   As it relates to Safeco’s third-party spoliation claim against Michaelis, the

      amended complaint alleged that the fire had been caused by the Product,

      Michaelis had been retained to complete restoration work, Michaelis had been

      made aware of the need to preserve the Product, Michaelis had breached its

      duty to Safeco when, at some point, it had discarded or destroyed the Product,

      and Safeco had been harmed by the destruction of the Product. As it related to

      Safeco’s negligence claim, Safeco incorporated its allegations relating to its

      third-party spoliation claim and further alleged that Michaelis had owed it a

      duty to exercise reasonable care in performing work at the Property, Michaelis

      had breached its duty of care by negligently discarding or destroying the

      Product, and Safeco had been harmed by the destruction of the Product.

      2
        We note that neither Blue Sky Innovation Group nor any of the Cabela’s or Bass Pro parties are
      participating in the instant appeal. However, pursuant to Indiana Appellate Rule of Procedure 17(A), “[a]
      party of record in the trial court … shall be a party on appeal.” We further note however, that while the
      instant appeal has been pending, these parties have been dismissed from the trial court action with prejudice,
      leaving Michaelis Corporation as the only current defendant to the lawsuit.

      Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023                                  Page 4 of 20
[6]   On January 5, 2022, Michaelis filed an Indiana Trial Rule 12(B)(6) motion to

      dismiss and supporting brief, in which it alleged that Safeco had failed to state a

      claim upon which relief could be granted. Specifically, Michaelis asserted that

      “third-party claims for spoilation [sic] of evidence as an independent tort are

      available only in narrow and limited circumstances not alleged nor which could

      be reasonably inferred” from Safeco’s case and “any negligence claim is barred

      by the economic loss doctrine.” Appellant’s App. Vol. II p. 40. Safeco filed a

      response in opposition to Michaelis’s motion to dismiss. The Principal

      Defendants also opposed Michaelis’s motion.

[7]   The trial court held a hearing on Michaelis’s motion to dismiss on May 11,

      2022, at the conclusion of which it took the matter under advisement. On June

      7, 2022, the trial court issued an order granting Michaelis’s motion to dismiss.

      In its order, the trial court stated

              Count III and Count IV of the amended complaint are construed
              by this Court as third-party claims for spoliation. Under
              prevailing Indiana case law, third-party claims for spoliation of
              evidence have only been recognized in limited circumstances.
              No such circumstances have been pled by Safeco. Count III and
              Count IV of the amended complaint against Michaelis are hereby
              dismissed for failure to state a claim.

      Appellant’s App. Vol. II p. 16. At the request of the parties, on July 18, 2022,

      the trial court entered “partial final judgment for [Michaelis] and against

      [Safeco] on the Court’s June 7, 2022 Order.” Appellant’s App. Vol. II p. 19.

      Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023          Page 5 of 20
      Discussion and Decision
      I.      Standard of Review
[8]           The standard of review on appeal of a trial court’s grant of a
              motion to dismiss for the failure to state a claim is de novo and
              requires no deference to the trial court’s decision. Sims v. Beamer,
              757 N.E.2d 1021, 1024 (Ind. Ct. App. 2001). The grant or denial
              of a motion to dismiss turns only on the legal sufficiency of the
              claim and does not require determinations of fact. Id. “A
              motion to dismiss under Rule 12(B)(6) tests the legal sufficiency
              of a complaint: that is, whether the allegations in the complaint
              establish any set of circumstances under which a plaintiff would
              be entitled to relief.” Trail v. Boys & Girls Clubs of Northwest Ind.,
              845 N.E.2d 130, 134 (Ind. 2006). Thus, while we do not test the
              sufficiency of the facts alleged with regards to their adequacy to
              provide recovery, we do test their sufficiency with regards to
              whether or not they have stated some factual scenario in which a
              legally actionable injury has occurred. Id.

              A court should accept as true the facts alleged in the complaint,
              and should not only consider the pleadings in the light most
              favorable to the plaintiff, but also draw every reasonable
              inference in favor of the nonmoving party. Id. However, a court
              need not accept as true allegations that are contradicted by other
              allegations or exhibits attached to or incorporated in the
              pleading. Id. Courts also need not accept as true conclusory,
              nonfactual assertions or legal conclusions. Richards & O’Neil, LLP
              v. Conk, 774 N.E.2d 540, 547 (Ind. Ct. App. 2002).

      Lei Shi v. Cecilia Yi, 921 N.E.2d 31, 36–37 (Ind. Ct. App. 2010) (footnote

      omitted). “The trial court’s grant of the motion to dismiss is proper if it is

      apparent that the facts alleged in the complaint are incapable of supporting

      relief under any set of circumstances.” Am. Dry Cleaning & Laundry v. State, 725

      Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023             Page 6 of 20
       N.E.2d 96, 98 (Ind. Ct. App. 2000). “Furthermore, in determining whether any

       facts will support the claim, we look only to the complaint and may not resort

       to any other evidence in the record.” Id.

       II. Overview of the Law Relating to Spoliation Claims
       in Indiana
[9]    Spoliation of evidence consists of “‘[t]he intentional destruction, mutilation,

       alteration, or concealment of evidence, usually a document. If proved,

       spoliation may be used to establish that the evidence was unfavorable to the

       party responsible.’” Cahoon v. Cummings, 734 N.E.2d 535, 545 (Ind. 2000)

       (quoting Spoliation, BLACK’S LAW DICTIONARY (7th ed. 1999)). “First-party

       spoliation refers to the spoliation of evidence by a party to the principal

       litigation.” Howard Reg’l Health Sys. v. Gordon, 952 N.E.2d 182, 188 (Ind. 2011)

       (citing Gribben v. Wal-Mart Stores, Inc., 824 N.E.2d 349, 350 (Ind. 2005)).

       “Third-party spoliation refers to spoliation by a non-party.” Id. (citing Gribben,

       824 N.E.2d at 350).

[10]   In 1991, this court declined to recognize a third-party spoliation claim. See

       Murphy v. Target Prods., 580 N.E.2d 687, 690 (Ind. Ct. App. 1991), trans. denied.

       Specifically, the court concluded that “in the absence of an independent tort,

       contract, agreement, or special relationship imposing a duty to the particular

       claimant, the claim of negligent or intentional interference with a person’s

       prospective or actual civil litigation by the spoliation of evidence is not and

       ought not be recognized in Indiana.” Id.

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023              Page 7 of 20
[11]   In 1998, this court recognized a limited cause of action for third-party spoliation

       in Thompson ex rel. Thompson v. Owensby, 704 N.E.2d 134 (Ind. Ct. App. 1998),

       trans. denied. In Thompson, a young child was mauled by a dog that had broken

       free of a cable that had been restraining the dog to its owners’ yard. 704 N.E.2d

       at 135. The child’s parents sought compensation from the dog owners and their

       landlords. Id. The landlords’ insurance provider took possession of the

       restraining cable but subsequently lost the cable. Id. Neither the insurance

       provider nor the child’s parents had examined or tested the cable before it was

       lost. Id. The child’s parents sued the insurance provider, claiming that the

       insurance provider had breached its duty to maintain the evidence. Id. On

       appeal, we considered whether any such duty existed. Id. at 136. Concluding

       that the insurance provider did have such a duty, we stated:

               A liability carrier like the Insurance Company is in a unique
               position among tort litigants. Using its experience, a carrier is
               able to adopt business practices that lead to resolution of claims
               at the lowest possible cost to the carrier. The claims-resolution
               practices thus benefit the carrier and its shareholders, and can
               benefit third party claimants and insureds so long as the carrier
               uses responsible, efficient practices. It is reasonable for the law to
               require that claims resolution practices be responsible, because
               the carrier has the unique experience and ability to structure its
               practices to avoid harm. If a carrier intentionally or negligently
               engages in a claims-resolution practice that breaches the standard
               of care established by law, a third-party claimant is justified in
               seeking to hold the carrier liable for damages arising from the
               breach.

       Id. at 139–40.

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023            Page 8 of 20
[12]   In 2005, in Gribben, the Indiana Supreme Court declined to recognize a cause of

       action for first-party spoliation, concluding

               [n]otwithstanding the important considerations favoring the
               recognition of an independent tort of spoliation by parties to
               litigation, we are persuaded that these are minimized by existing
               remedies and outweighed by the attendant disadvantages. We
               thus determine the common law of Indiana to be that, if an
               alleged tortfeasor negligently or intentionally destroys or discards
               evidence that is relevant to a tort action, the plaintiff in the tort
               action does not have an additional independent cognizable claim
               against the tortfeasor for spoliation of evidence under Indiana
               law.

       824 N.E.2d at 355. The Court recognized, however, that “[i]t may well be that

       the fairness and integrity of outcome and the deterrence of evidence destruction

       may require an additional tort remedy when evidence is destroyed or impaired

       by persons that are not parties to litigation and thus not subject to existing

       remedies and deterrence.” Id.

[13]   In 2006, the Indiana Supreme Court considered the question of whether

       Indiana law recognized a tort claim for third-party spoliation, discussing both

       Murphy and Thompson. See Glotzbach v. Froman, 854 N.E.2d 337, 338–39 (Ind.

       2006). In Glotzbach, the Court was faced with the question of whether an

       employee who had been injured in a workplace accident could bring a claim of

       third-party spoliation of evidence for the destruction of evidence. 854 N.E.2d at

       337. In concluding that the employee could not, the Court held that

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023            Page 9 of 20
               [t]he disadvantages we identified in first-party spoliation claims
               remain concerns as to third-party claims. Proving damages in a
               third-party spoliation claim becomes highly speculative and
               involves a lawsuit in which the issue is the outcome of another
               hypothetical lawsuit. The jury must somehow find all the
               elements of a product liability case, immediately determining
               whether a product defect caused the injury, as opposed to
               inadequate maintenance, or other intervening events. The jury
               would be asked to determine what the damages would have been
               had the evidence been produced and what the collectibility [sic]
               of these damages would have been. We think this exercise often
               could properly be described as “guesswork.”

       Id. at 341 (internal citation omitted). In reaching this conclusion, the Court

       recognized that while evidentiary inferences are not available as a remedy for or

       deterrent to third-party spoliation, “[m]any of the other remedies remain

       applicable.” Id. For instance, the Court noted that

               [c]riminal sanctions apply equally to third parties and first
               parties. Similarly, sanctions under the Indiana Rules of
               Professional Conduct are available if attorneys for the third party
               are involved in the misconduct. Courts also have the power to
               issue contempt sanctions against non-parties who frustrate the
               discovery process by suppressing or destroying evidence.

       Id.

[14]   In 2008, we rejected a claim for third-party spoliation of evidence in American

       National Property & Casualty Co. v. Wilmoth, 893 N.E.2d 1068 (Ind. Ct. App.

       2008), trans. denied. The facts in Wilmoth indicate that on November 1, 2000, a

       home that was being lived in by Traci Wilmoth and Richard Rider and their

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023         Page 10 of 20
       children burnt and the children and Rider died. 893 N.E.2d at 1069. “While

       fighting the fire, firefighters threw a couch and other items onto the front yard,

       where they remained for approximately six weeks.” Id. at 1070. Eventually,

       Robert and Betty Bowers (collectively, the “Bowers”), who had owned the

       home in question, discarded the couch and other items. Id. The fire

       department ultimately concluded that the fire had been accidental and had been

       caused by an electrical space heater. Id. Wilmoth’s expert, however,

       determined that the fire had started “because of electrical arcing from an air

       conditioner power cord in the area of the sofa.” Id. (internal quotation

       omitted). Wilmoth eventually sued American National Property and Casualty

       Co. (“ANPAC”), which had insured the home, claiming that they had been

       damaged by spoliation of certain evidence, i.e., the couch, and that the

       spoliation “was attributable to ANPAC.” Id.

[15]   Citing to Thompson, we recognized that

               [i]n the context of the loss of evidence by an insurance carrier,
               the relationship between the carrier and a third[-]party claimant
               may warrant recognition of a duty if the carrier knew or should
               have known of the likelihood of litigation and of the claimant’s
               need for the evidence in the litigation.

       Wilmoth, 893 N.E.2d at 1070. However, we concluded that “[t]he duty to

       preserve evidence has limits.” Id. at 1071. In concluding that the plaintiffs

       could not succeed on their attempted spoliation claim, we noted that, unlike in

       Thompson, the insurance company never had possession, “much less exclusive

       possession,” of the evidence and it was unforeseeable that the loss of the
       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023            Page 11 of 20
       evidence might interfere with a future claim as there was no indication that the

       evidence was in any way at fault for the fire. Id. As a matter of public policy,

       we further concluded that “[t]o find a duty in this case would require insurers to

       preserve any potentially relevant evidence available after any potentially

       covered event. Retention and safekeeping of that amount of physical evidence

       would be a practical impossibility in most situations.” Id. at 1073.

[16]   In 2017, in Shirey v. Flenar, 89 N.E.3d 1102, 1107 (Ind. Ct. App. 2017), we

       considered whether a patient had a common-law claim for spoliation of

       evidence against a doctor who had lost or destroyed her medical records “that

       he knew or should have known [were] relevant to [her] personal-injury claim

       relating to [a] car accident.” In Shirey, we noted that “[t]his Court has not

       recognized any third-party spoliation claims since Gribben” but that “we did

       allow one such claim seven years before Gribben” in Thompson. 89 N.E.3d at

       1107. In allowing Shirey’s spoliation claim, we noted that Dr. Flenar had an

       “important relationship with Shirey,” “was aware that Shirey wanted her

       medical records,” and “had good reason to believe that she would be harmed if

       she did not receive them.” Id. at 1108–09. We found that the public policy

       concerns identified in Glotzbach were not relevant to Shirey’s case. Id. at 1110.

       We also found it notable that the Glotzbach Court did not criticize or disapprove

       of our decision in Thompson. Id. at 1111. As such, we concluded that “Dr.

       Flenar had an enforceable duty to preserve Shirey’s medical records once she

       requested them from him and that the trial court erred by granting Dr. Flenar

       summary judgment on Shirey’s spoliation claim.” Id. More generally than the

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023         Page 12 of 20
       specific instances discussed in Thompson and Shirey, however, the Indiana

       Supreme Court has held that “[m]ere ownership of potential evidence, even

       with knowledge of its relevance to litigation, does not suffice to establish a duty

       to maintain such evidence.” Glotzbach, 854 N.E.2d at 341.

       III. Analysis
[17]   We note that the instant matter does not come before us following summary

       judgment or a trial, but rather a dismissal pursuant to Indiana Trial Rule

       12(B)(6). Again, Trial Rule 12(B)(6) allows for dismissal of a lawsuit for

       “[f]ailure to state a claim upon which relief can be granted.” “A motion to

       dismiss under Rule 12(B)(6) tests the legal sufficiency of a complaint: that is,

       whether the allegations in the complaint establish any set of circumstances

       under which a plaintiff would be entitled to relief.” Trail, 845 N.E.2d at 134.

       In reviewing a Trial Rule 12(B)(6) motion to dismiss, we accept as true the facts

       alleged in the complaint, consider the pleadings in the light most favorable to

       the plaintiff, and draw every reasonable inference in favor of the non-moving

       party. Id. Applying this standard to the case at issue, we do not consider the

       merits of the parties’ arguments relating to Michaelis’s ultimate potential

       liability but rather merely examine Safeco’s complaint to determine whether

       Safeco had adequately pled a cause of action for which it may be entitled to

       relief.

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023         Page 13 of 20
       A.      Safeco’s Third-Party Spoliation Claim
[18]   The parties agree that Indiana courts have recognized third-party spoliation

       claims under limited circumstances. Safeco contends that it sufficiently pled its

       third-party spoliation claim to survive a Trial Rule 12(B)(6) dismissal. For its

       part, Michaelis contends that the trial court correctly determined that the

       pleadings are insufficient to state a claim for which relief can be granted.

[19]   Before we turn to Safeco’s pleadings, we look to the elements which a party

       must plead in a third-party spoliation claim: duty, breach of said duty, and

       harm. See Thompson, 704 N.E.2d at 140. The question of whether one may

       recover on a claim of third-party spoliation will likely turn on the question of

       whether the plaintiff adequately pled that a duty to preserve the evidence

       existed as the questions of whether a breach, i.e., the destruction of the

       evidence, occurred and whether the plaintiff suffered harm, i.e., the loss of the

       evidence, tend to be fairly straightforward questions as the evidence in question

       is either available to the plaintiff or it is not.

[20]   With respect to duty, it stands to reason that a third party can only be found

       liable for the destruction of evidence when the third party owed a duty to

       preserve the evidence in question. In determining whether a third party owes

       another a duty to refrain from destroying evidence, “we analyze (1) the

       relationship between the parties, (2) the reasonable foreseeability of the type of

       harm to the type of plaintiff at issue, and (3) the public policy promoted by

       recognizing an enforceable duty.” Wilmoth, 893 N.E.2d at 1070–71. We have

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023             Page 14 of 20
       recognized that the fact that a third party has taken possession or control of the

       evidence, i.e., giving it the opportunity and ability to preserve the evidence,

       points in favor of finding a duty to maintain the evidence. See Thompson, 704

       N.E.2d at 139 (providing that the Thompsons could pursue a third-party

       spoliation claim when the third-party “took possession of the evidence and lost

       it”).

[21]   With respect to its third-party spoliation claim, Safeco alleged in its amended

       complaint as follows:

               13. That on or about October 31, 2019, the Product failed,
               causing a fire at [Smith’s] Property.

               14. That on or about November 6, 2019, a preliminary scene
               exam was conducted; representatives for [Safeco], [Michaelis],
               and others were in attendance.

               15. [That] on or about November 6, 2019, [Safeco’s]
               representatives and consultants determined that the fire likely
               originated on the kitchen countertop, to the left of the sink,
               where the Product was located.

               16. That on or about November 6, 2019, the entrances to the
               kitchen area were taped off with “caution tape,” so the area
               could be preserved pending notice to the potentially responsible
               parties and scheduling of a joint scene exam.

               17. That the need to preserve the kitchen was verbally
               communicated to [Michaelis] and its representatives, including
               Mr. Rick Smith.

               18. That on or about November 6–7, 2019[,] representatives for
               [Michaelis] constructed a temporary structure to provide better

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023           Page 15 of 20
        weather protection and tarping over the area of fire origin.

        19. That between November 8, 2019 and January 15, 2020,
        [Michaelis] never requested and was never given permission to
        demolish the kitchen or discard the Product or other artifacts.

        20. That on information and belief, sometime after December 2,
        2019 and before January 15, 2020, [Michaelis] demolished the
        kitchen and discarded the Product and other artifacts.

                                                 ****

        34. At all relevant times, [Michaelis] had a duty to preserve the
        scene of the subject incident at the Property and to not remove
        and/or destroy any materials or items, including the Product,
        without express direction and/or consent.

        35. Notwithstanding this duty, [Michaelis], by and through its
        agents, servants and employees, breached their duty by engaging
        in one or more of the following negligent acts or omissions:

                 (a) Carelessly and negligently allowed, caused or
                 failed to prevent the fire scene located at 6648
                 Marmont Cir., Indianapolis, Indiana from being
                 demolished or otherwise modified, such that
                 evidence necessary to Plaintiff’s case was irreparably
                 destroyed;
                 (b) Carelessly and negligently discarded, demolished
                 or destroyed evidence, including the Product and
                 other artifacts, located 6648 Marmont Cir.,
                 Indianapolis, Indiana, knowing the evidence was
                 being preserved as part of an ongoing investigation;
                 (c) Carelessly and negligently modified, altered or
                 demolished the fire scene located at 6648 Marmont
                 Cir., Indianapolis, Indiana;
                 (d) Carelessly and negligently destroyed or discarded
                 evidence, including the Product, located at 6648

Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023            Page 16 of 20
                        Marmont Cir., Indianapolis, Indiana; and
                        (e) Was otherwise careless and negligent.

               36. As a direct and proximate result of one or more of the
               preceding acts and/or omissions of [Michaelis], [Safeco’s] ability
               to prove its claims against the [Principal Defendants] was and is
               substantially and irreparably impaired.

               WHEREFORE, [Safeco] as Subrogee of [Smith], prays that
               judgment be entered against [Michaelis] in the amount of
               $511,861.46, plus costs of suit, and such other relief as this court
               deems proper and just.

       Appellant’s App. Vol. II pp. 31–32, 35–36.

[22]   Safeco’s amended complaint alleges that Michaelis was informed of the need to

       preserve the evidence and took steps to preserve it before ultimately discarding

       or destroying it. Safeco has sufficiently alleged that such a duty existed. Safeco

       also alleged that Michaelis had breached its duty by discarding or destroying the

       evidence and that Safeco had been harmed by the destruction of the evidence.

       Safeco’s amended complaint, therefore, contains the necessary allegations to

       potentially support a claim of third-party spoliation. Because Safeco pled a

       claim for which it could potentially be entitled to relief, we conclude that the

       trial court erred by granting Michaelis’s Trial Rule 12(B)(6) motion to dismiss.

       B.      Safeco’s Negligence Claim
[23]   We reach the same conclusion with regard to Safeco’s negligence claim.

               To prevail on a claim of negligence the plaintiff must show: (1)
               duty owed to plaintiff by defendant; (2) breach of duty by

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023           Page 17 of 20
               allowing conduct to fall below the applicable standard of care;
               and (3) compensable injury proximately caused by defendant’s
               breach of duty. Absent a duty there can be no negligence or
               liability based upon the breach.

       Goodwin v. Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016)

       (cleaned up).

[24]   In asserting its negligence claim, Safeco incorporated the above-stated

       allegations relating to its third-party spoliation claim and further alleged as

       follows:

               38. At all times relevant, [Michaelis] owed a duty to [Safeco]
               and others to exercise reasonable care and due caution in
               performing work at 6648 Marmont Cir., Indianapolis, Indiana,
               so as not to cause injury to persons or property.

               39. Notwithstanding said duties, and in violation thereof,
               [Michaelis] committed one or more of the following negligent
               acts and/or omissions:

                        (a) Carelessly and negligently allowed, caused or
                        failed to prevent the fire scene located at 6648
                        Marmont Cir., Indianapolis, Indiana from being
                        demolished or otherwise modified, such that
                        evidence necessary to [Safeco’s] case was irreparably
                        destroyed;
                        (b) Carelessly and negligently discarded, demolished
                        or destroyed evidence, including the Product and
                        other fire artifacts, located 6648 Marmont Cir.,
                        Indianapolis, Indiana, knowing the evidence was
                        being preserved as part of an ongoing investigation;
                        (c) Carelessly and negligently modified, altered or
                        demolished the fire scene located at 6648 Marmont

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023          Page 18 of 20
                        Cir., Indianapolis, Indiana;
                        (d) Carelessly and negligently destroyed or discarded
                        evidence, including the Product, located at 6648
                        Marmont Cir., Indianapolis, Indiana; and
                        (e) Was otherwise careless and negligent.

               40. As a direct and proximate result of one or more of the
               aforesaid careless and negligent acts and/or omissions of
               [Michaelis], [Safeco’s] ability to prove its claims against the
               [Principal Defendants] was and is substantially and irreparably
               impaired.

               41. That pursuant to the aforementioned policy of insurance,
               [Safeco] was required and did pay to or on behalf of [Smith’s]
               damages in the amount of $510,861.46, that [Smith] incurred a
               $1,000.00 deductible, and [Safeco] is subrogated to the rights of
               [Smith].

               WHEREFORE, [Safeco] as Subrogee of [Smith], prays that
               judgment be entered against [Michaelis] in the amount of
               $511,861.46, plus costs of suit, and such other relief as this court
               deems proper and just.

       Appellant’s App. Vol. II pp. 36–37.

[25]   As we concluded above, Safeco sufficiently pled that Michaelis had owed it a

       duty, Michaelis had breached said duty, and Safeco had suffered harm as a

       result of the breach. While the question of whether Safeco will ultimately be

       entitled to recover from Michaelis is a question to be decided during a later

       stage of the litigation, Safeco’s amended complaint contains the necessary

       allegations to support a negligence claim. Because Safeco pled a claim for

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023            Page 19 of 20
       which it could be entitled to relief, we again conclude that the trial court erred

       by granting Michaelis’s Trial Rule 12(B)(6) motion to dismiss.

[26]   The judgment of the trial court is reversed, and the matter is remanded to the

       trial court for further proceedings.

       May, J., and Mathias, J., concur.

       Court of Appeals of Indiana | Opinion 22A-CT-1924 | May 25, 2023          Page 20 of 20