Janke et al v. Brooks et al

Filing 91

ORDER: denying 75 Defendants Motion Regarding Spoliation of Evidence and the Motion for Sanctions, by Magistrate Judge Boyd N. Boland on 4/25/12.(bnbcd, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 11-cv-00837-REB-BNB
TERRY A. JANKE, and
MICHELE JANKE.
Plaintiffs,
v.
DONALD BROOKS,
NORMANDY BROOKS, individuals d/b/a B&T Custom Rod & Restoration, and
B&T AUTOMOTIVE, INC., a Nevada corporation,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on the Defendants’ Motion Regarding Spoliation of Evidence [Doc.
# 75, filed 3/23/2012] (the “Motion for Sanctions”). I held a hearing on the Motion for
Sanctions on April 23, 2012, at which I received evidence and heard the arguments of counsel.
The Motion for Sanctions [Doc. # 75] is DENIED.
The facts of the case are set out in the recent order of the district judge granting in part
and denying in part the Defendants’ Motion for Partial Summary Judgment. Order [Doc. # 83,
filed 4/11/2012]. In the broadest sense, this action alleges breach of contract in connection with
the restoration of a 1957 Chevrolet Nomad.
The suit was commenced on April 1, 2011. It is undisputed that after the suit was filed
substantial work was performed on the Nomad by other craftsmen and at the direction of the
plaintiffs to correct alleged defects in the defendants’ restoration efforts and to restore the car to
the condition desired by the plaintiffs. In fact, since May 16, 2011, the Nomad has been

completely disassembled; a new frame has been installed; substantial work has been performed
on virtually every system; the body has been taken down to the metal and substantial additional
body work has been performed; and the Nomad has been prepared for final painting, although it
does not appear that the paint job has been completed.
The defendants claim that the work performed on the Nomad after suit was filed
constitutes spoliation of evidence, and they seek dismissal of the action as a sanction. Motion
for Sanctions [Doc. # 75] at p. 13. The thrust of the defendants’ argument is that although the
components and parts have been preserved and are available for inspection, the relationship
between the parts and installation has been altered. For example, the defendants argue:
Even though the frame is still available as removed from the
Nomad, the claims regarding whether the frame was rubbing on a
part, or improperly “notched” is all destroyed because the
relationship between the parts and the installation on the Nomad
has been altered through the installation of a brand new car frame
by Plaintiffs. The same is true for all other parts that allegedly
were rubbing on another car part or were placed incorrectly.
Id. at pp. 7-8.
The Tenth Circuit Court of Appeals has held:
Spoliation sanctions are proper when (1) a party has a duty to
preserve evidence because it knew, or should have known, that
litigation was imminent, and (2) the adverse party was prejudiced
by the destruction of the evidence. But if the aggrieved party
seeks an adverse inference to remedy the spoliation, it must also
prove bad faith. Mere negligence in losing or destroying records is
not enough because it does not support an inference of
consciousness of a weak case. Without a showing of bad faith, a
district court may only impose lesser sanctions.
Turner v. Public Service Co. of Colorado, 563 F.3d 1136, 1149 (10th Cir. 2009)(internal
quotations and citations omitted).

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The determination of a spoliation motion involves a three-step process. Asher
Associates, LLC v. Baker Hughes Oilfield Operations, Inc., 2009 WL 1328483 at *5 (D. Colo.
May 12, 2009). First, the court must determine whether the evidence at issue is relevant to the
matters in dispute. If it is, the court must decide whether there was an obligation to preserve the
evidence. Finally, if such an obligation existed, the court must review “the non-moving party’s
degree of culpability, the degree of prejudice to the moving party, and the purposes to be served
by exercising the court’s power to sanction.” Id.
Here, there can be no serious debate that the altered or destroyed evidence is relevant to
the dispute. The Nomad was substantially altered after suit was filed, at a time when the
plaintiff’s certainly had a duty to preserve evidence. Consequently, I am left to consider “what
sanction, if any, is appropriate. . . .” Id.
I find that the plaintiffs did not act in bad faith. To the contrary:
(1)

On May 16, 2011, plaintiffs’ counsel met with the defendants’ initial lawyer and

“offered to set up a meeting . . . to inspect those elements of the build which were called into
question.”1 Affidavit of Scott L. Terrell [Doc. # 80-4] (the “Terrell Aff.”) at ¶3. The defendants’
subsequently engaged other counsel, Mr. Vriesman, and the offer to inspect was renewed. Id.
According to the plaintiffs’ lawyer:
4. On 20 June, 2011, the undersigned spoke with Mr. Vriesman,
and reiterated that the Nomad was at Seyfer Automotive, Inc., was
being repaired, discussed the non-conforming elements
discovered with the repairs, and reiterated the Janke’s desire to
have the parties meet with Mr. Seyfer to inspect and discuss

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The Terrell Affidavit states that the offer was made on May 16, 2010. Terrell Aff. [Doc.
# 80-4] at ¶3. When read in context, it is clear that this is a typographical error and that the offer
to inspect was made on May 16, 2011.
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the questionable elements of the build without formal
discovery.
5. On 20 June, 2011, Mr. Vriesman told the undersigned that he
[Vriesman] was “OK with sitting down and looking at the vehicle”,
was not sure what the negotiations were all about, but that before
he would agree to any inspection, he wanted the undersigned to
prepare a “top ten list” of those major items which we believed
were problems with the build for his review, because inspection of
the Nomad before then would be a “waste of time”
Id. at ¶¶4-5 (bolded underlining supplied; italics in original).
Defense counsel does not dispute that an offer to inspect was made, stating that
“Plaintiffs’ counsel offered for Defendants’ counsel to view the Nomad in the R-Goods body
repair shop” but that “[t]his offer was deferred until after discovery or some explanation was
received from Plaintiffs that specifically set out the alleged ‘defects’ or ‘problems.’” Motion for
Sanctions [Doc. # 75] at p. 2.
The defendants were notified that the plaintiffs intended to make alterations to the
Nomad and were given the opportunity to inspect it before those alterations occurred. The
defendants thus made the tactical decision not to inspect the Nomad prior to the subsequent
repairs;
(2)

The plaintiffs’ craftsmen who performed the subsequent restoration, Messrs.

Seyfer and Aregood, preserved the damaged and defective parts which they removed during their
restoration efforts. In addition, they generated extensive documentation of the condition of the
Nomad before and during their restoration efforts, including records of the work performed and
extensive photographs of the condition of the Nomad when they received it and throughout the
progress of their work; and
(3)

There is substantial legal authority that the approach taken by the plaintiffs is
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permitted. For example, in Jordan F. Miller Corp. v. American Eagle Ins. Co., 1998 WL 68879
(10th Cir. Feb. 20, 1998), an unpublished opinion of the circuit court, an airplane crashed while
landing. An FAA inspector determined that the cause of the crash was “the left main landing
gear collapse. . . .” Id. at **1. The landing gear was removed and the airplane was repaired.
Neither the trial court nor the circuit court found any fault in these actions. The problem arose,
instead, when it was learned that “all but one of the component parts of the left landing gear has
been lost or destroyed.” Id. at **2. The trial court imposed a sanction based on the loss of the
removed parts, not because the airplane was repaired, id. at **6, and the circuit court affirmed.
Similarly, in Burlington Northern and Santa Fe Railway Co. v. Grant, 505 F.3d 1013
(10th Cir. 2007), the circuit court affirmed a decision denying spoliation sanctions. In Grant, the
defendant claimed that the railroad had spoiled evidence by removing a tar-like material (TLM)
which migrated from the defendant’s property downhill onto the railroad’s property. Id. at 1018.
The circuit court ruled:
[W]e conclude that no reasonable finder of fact could determine
that Grant was meaningfully prejudiced by BNSF’s removal and
destruction of portions of the TLM on its property. The gravamen
of Grant’s argument regarding prejudice is that he cannot defend
this lawsuit because BNSF’s clean-up altered the topography and
slope of the land, and prevented him from having the alleged TLM
migration measured scientifically. We reject this claim. BNSF
generated extensive documentation of the condition of the land
before and during remediation, and the factual dispute regarding
any change in elevation of the remediation site amounts to, at
most, one and a quarter inches. In light of this, and absent
meaningful evidence that Grant has been actually, rather than
merely theoretically, prejudiced, we affirm the district court’s
denial of Grant’s motion for spoliation sanctions.
Id. at 1032.
In addition, I find that the defendants have failed to establish that they have suffered any
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actual prejudice as a result of the subsequent restoration efforts. First, and perhaps most
important, is the fact that the defendants performed the work in question and maintained
extensive records, including photographs, of the condition of the Nomad when it was delivered
and of the work they performed. The defendants know and have substantial evidence concerning
the work they performed on the Nomad and its condition when it was delivered to the plaintiffs.
In addition, the defendants engaged an appraiser who inspected the Nomad at the time it was
delivered to the plaintiffs and recorded the results of his inspection, including more photographs.
The defendants had the opportunity to inspect the Nomad before the post-suit restoration
work was performed and elected for tactical reasons not to conduct the inspection.
Consequently, I find that any prejudice suffered by the defendants is of their own making.
Finally, the defendants have had the opportunity to depose Messrs. Seyfer and Aregood,
who have testified at length about the condition of the Nomad, their criticisms of the work
performed by the defendants, and their efforts to restore the car. See Turner, 563 F.3d at 1150.
In connection with the spoliation of evidence, “a court should impose the least onerous
sanction that will remedy the prejudice and, where applicable, punish the past wrongdoing and
deter future wrongdoing.” Jordan F. Miller Corp., 1998 WL 68879 at **6. I find in this case
that there has been no showing of actual prejudice to the defendants. In addition, “a failure to
produce or preserve relevant evidence may involve conduct that falls along a continuum of fault-ranging from innocence through degrees of negligence to intentionality.” Asher Associates,
2009 WL 1328483 at *8 (internal quotation and citation omitted). The failure to preserve in this
case, if any, was innocent. The imposition of a spoliation sanction under these facts--in the
absence of any prejudice to the defendants and without any wrongdoing by the plaintiffs--would

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be unnecessary and improper.
IT IS ORDERED that the Motion for Sanctions [Doc. # 75] is DENIED.
Dated April 25, 2012.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

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