Pelas v. EAN Holdings, LLC et al
Filing
38
ORDER AND REASONS denying 24 Motion to Dismiss. Signed by Judge Martin L.C. Feldman on 6/19/2012. (caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CATINA PELAS
CIVIL ACTION
v.
NO. 11-2876
EAN HOLDINGS, L.L.C., ET AL.
SECTION "F"
ORDER AND REASONS
Before the Court is defendant EAN Holdings, L.L.C.’s motion
to dismiss the plaintiff’s claim for spoliation of evidence.
For
the reasons that follow, the motion is DENIED.
Background
This personal injury litigation arises out of a rental car
that allegedly malfunctioned.
On October 12, 2010 Chris Whiteley leased a 2010 Hyundai
Elantra from EAN Holdings, L.L.C., which owned the car.
That same
day, Catina Pelas (who was listed as an additional authorized
driver on the car rental agreement) drove the car off the lot in
Gretna and headed toward Plaquemines Parish; upon entering Highway
23 south in Belle Chasse, Pelas drove in the left lane and began to
pick up speed.
As she accelerated, the car pulled severely to the
left, causing Pelas to decide to get over to the right lane so that
she could pull over and stop the car on the shoulder.
As she
attempted to merge into the right lane, however, Pelas allegedly
lost control of the car as it veered sharply toward the left,
crossed a median, and proceeded into oncoming traffic headed
1
northbound on Highway 23. The Elantra came to an abrupt stop after
crashing into a concrete wall.
Pelas claims that she suffered
severe and permanent injuries as a result of the accident.
On October 11, 2011 Pelas sued EAN Holdings, LLC, Enterprise
Leasing Company of New Orleans, Enterprise Rent-A-Car Company, EANNew Orleans, LLC, EAN Services, LLC, and Enterprise Holdings, Inc.
in state court, asserting that the defendants were negligent and
they breached warranties imposed upon them as lessors under La.C.C.
art. 2696-2697.
lawsuit
to
On November 18, 2011 the defendants1 removed the
this
Court,
invoking
this
Court’s
diversity
jurisdiction. The plaintiff requested that her suit be remanded on
the ground that diversity jurisdiction was lacking, but this Court
denied the motion because the defendants demonstrated that it was
facially apparent from the plaintiff’s state court petition that
the jurisdictional amount in controversy exceeded $75,000.
The plaintiff has since filed an amended complaint, in which
she names as defendants only EAN Holdings, L.L.C. and, for the
first time, Bridgestone Retail Operations, L.L.C.2 Pelas reasserts
1
The defendants asserted in their Notice of Removal that EAN
Holdings, LLC is the only proper defendant in this matter and they
point out that both Enterprise Rent-A-Car Company and Enterprise
Leasing Company of New Orleans no longer exist as they were merged
into EAN Holdings, LLC and Enterprise Holdings, Inc., respectively.
2
Pelas alleges that Bridgestone installed tires on the Elantra a
few weeks before she drove it; she seeks to recover for
Bridgestone’s failure to properly install tires, or for installing
defective tires, or for failing to properly align the Elantra.
2
and expands her original claims in which she contends that EAN was
negligent for a number of reasons, that EAN is liable for breach of
warranties, and that EAN is liable to her under any applicable
self-insured insurance program.
Finally, Pelas for the first time
asserts in her amended complaint that EAN is liable for spoliation
of evidence.
EAN now seeks to dismiss Pelas’ spoliation claim.
I.
Federal Rule of Civil Procedure 12(b)(6) allows a party to
move for dismissal of a complaint when the plaintiff has failed to
state a claim upon which relief can be granted.
Such a motion “‘is
viewed with disfavor and is rarely granted.’”
See Lowrey v. Tex.
A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
“‘To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.’”
Gonzalez v. Kay, 577 F.3d
600, 603 (5th Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009)) (internal quotation marks omitted).
“A claim
has facial plausibility when the pleaded factual content allows the
court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.”
Iqbal, 129
S. Ct. at 1940.
“Factual
allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in
3
the complaint are true (even if doubtful in fact).”
Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation marks,
citations, and footnote omitted).
The
United
States
Supreme
Court
suggests
a
“two-pronged
approach” to determine whether a complaint states a plausible claim
for relief.
Iqbal, 129 S. Ct. at 1950.
First, the Court must
identify pleadings that are conclusory and thus not entitled to the
assumption of truth.
supported
by
Id.
factual
A corollary: legal conclusions “must be
allegations.”
Second,
Id.
for
those
pleadings that are more than merely conclusory, the Court assumes
the
veracity
of
those
well-pleaded
factual
allegations
and
determines “whether they plausibly give rise to an entitlement to
relief.”
Id.
This facial plausibility standard is met when the plaintiff
pleads facts that allow the Court to “draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
Id. at
1949. Claims that are merely conceivable will not survive a motion
to dismiss; claims must be plausible.
Twombley, 550 U.S. at 570;
see also Iqbal, 129 S.Ct at 1949 (“The plausibility standard is not
akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully”).
a
complaint
defendant’s
pleads
facts
liability,
it
that
are
stops
merely
short
of
consistent
with
the
between
line
possibility and plausibility of entitlement to relief.”
4
“Where
a
Iqbal 129
S.Ct.
at
1949
(internal
quotations
omitted).
In
the
end,
evaluating a motion to dismiss is a “context-specific task that
requires the reviewing court to draw on its judicial experience and
common sense.”
Id. at 1950.
II.
The defendant seeks dismissal of the plaintiff’s spoliation
claim on the grounds that (1) Pelas has not alleged facts, which,
if true, would have put EAN on actual or constructive notice of
litigation prior to the sale of the vehicle; (2) Pelas has not
alleged facts, which, if true, would have imposed a duty on EAN to
preserve the vehicle when it was sold.
A.
"The Louisiana tort of spoliation of evidence provides a cause
of action for an intentional destruction of evidence carried out
for the purpose of depriving an opposing party of its use."
Burge
v. St. Tammany Parish, 336 F.3d 363, 374 (5th Cir. 2003)(citation
omitted). As a preliminary matter, sitting in diversity, this Court
applies the substantive law of Louisiana. King v. Illinois Central
R.R., 337 F.3d 550, 555-56 (5th Cir. 2003).
But procedural and
evidentiary matters generally are governed by federal law. See id.
at 556 (citing Washington v. Dep’t of Transp., 8 F.3d 296, 300 (5th
Cir. 1993)). Thus, evidentiary presumptions that permit an adverse
inference based on unproduced evidence are controlled by federal
law.
Id. (citing Hebert v. Wal-Mart Stores, Inc., 911 F.2d 1044,
5
1047 (5th Cir. 1990)); Morris v. Homco Int’l, Inc., 853 F.2d 337,
341 (5th Cir. 1988).
Pelas
spoliation
seeks
of
damages
evidence,
sounding
which
is
in
a
tort
governed
by
claim
based
Louisiana
on
law.
However, she alternatively seeks an adverse presumption based on
the application of the doctrine of spoliation of evidence, which is
controlled by federal law.
Accordingly, the Court analyzes the
sufficiency of her spoliation claim under both state law and
federal law.
B.
1.
Spoliation of Evidence Claim Under Louisiana Law
Again: "The Louisiana tort of spoliation of evidence provides
a cause of action for an intentional destruction of evidence
carried out for the purpose of depriving an opposing party of its
use."
Burge v. St. Tammany Parish, 336 F.3d 363, 374 (5th Cir.
2003)(citation omitted).
The obligation or duty to preserve
evidence arises from the foreseeability of the need for the
evidence in the future.
Dennis v. Wiley, 22 So.3d 189, 2009-0236
(La. App. 1 Cir.9/11/09).
To state a claim for the tort of
spoliation under Louisiana law the plaintiff must plead facts
sufficient to plausibly establish two elements: (1) intentional
destruction of the evidence and (2) destruction of the evidence was
for the purpose of depriving the plaintiff of its use. See Kemp v.
CTL Distribution Inc., 440 Fed. Appx. 240, 2011 WL 3425592 (C.A.5
6
(La. 8/5/11)). Although the U.S. Court of Appeals for the Fifth
Circuit briefly addressed the Louisiana tort of spoliation in Kemp,
it has largely focused on adverse presumption. Thus, there is
little guidance from the Fifth Circuit on Louisiana law governing
the tort of spoliation; the contours of which are still developing
in state courts.
But apparently the vehicle in question is gone.
The defendant contends that Pelas has failed to allege facts
sufficient to establish that EAN had a duty to preserve the vehicle
because she pleads no facts to support EAN having actual or
constructive knowledge of possible litigation when the vehicle was
sold. EAN invokes several Louisiana First Circuit Court of Appeals
cases
that
suggest
that
actual
knowledge,
not
constructive
knowledge, is required to recover damages for spoliation under
Louisiana law. The Louisiana First Circuit Court of Appeals has
observed, “[w]here a suit has not been filed and there is no
evidence that a party knew a suit would be filed when the evidence
was discarded, the theory of spoliation of evidence does not
apply.” Harris v. St. Tammany Parish Hospital Service Dist. No. 1,
2011 WL 6916523, 2011-0941 (La. App. 1 Cir. 12/29/11).
While the
defendant relies solely upon First Circuit Court of Appeals cases
for this premise, the plaintiff counters that the state Fifth
Circuit Court of Appeals has implied that constructive notice is
enough. Robertson v. Frank’s Super Value Foods, Inc., 7 So.3d 669,
673-674 (La. App. 5 Cir. 1/13/09).
7
Robertson is a slip and fall case in which the defendant
destroyed videotape footage of the time period preceding the
accident.
Id.
constructive
While Robertson does not expressly hold that
knowledge
is
sufficient,
the
court
denied
the
defendant’s motion for the summary judgment on the spoliation
claim, despite the fact that the defendant did not have actual
knowledge that a lawsuit would be filed; thus the court can be said
to have implied that constructive knowledge was sufficient.
Id.
Pelas also points out that the Robertson court took note of the
defendant’s relative legal sophistication in determining whether
the defendant should have assumed that there would be possible
future litigation. Id.
The defendant suggests that Robertson is distinguishable here
because the cost of preserving a vehicle is greater than that of
preserving some piece of videotape. However, a reliance on policy
arguments in an attempt to eliminate a company’s obligation to
preserve evidence based on cost is not an appropriate consideration
on this Rule (12)(b)(6) motion;3 the Court need not resolve policy
arguments in order to determine whether the plaintiff has stated a
plausible claim.
The Court recognizes that the contours of the
3
Furthermore, indulging the defendant’s appeal to policy
considerations, this case arguably calls for an even greater need
to preserve evidence than in Robertson because this case involves
the unavailability of the actual item that allegedly caused the
injury, not a recording of the scene. Clearly, there are policy
considerations in favor of preserving the actual vehicle that
allegedly caused the serious accident.
8
independent
tort
of
spoliation
in
Louisiana
is
relatively
undeveloped and unsettled, including the constructive versus actual
knowledge threshold.4 Significantly, however, nearly all of the
case law suggests that the obligation to preserve evidence arises
from the foreseeability of the need for the evidence in the future,
and
foreseeability
could
logically
arise
from
constructive
knowledge of possible litigation. See Dennis v. Wiley, 22 So.3d
189, 2009-0236 (La. App. 1 Cir.9/11/09).
It is difficult for one
to ignore the seriousness of the events at issue.
Pelas contends that EAN’s sale of the Elantra, just 8 days
after her accident, constitutes spoliation of evidence and entitles
her to damages, or an adverse presumption at trial. In particular,
Pelas asserts:
12.
On October 12, 2010, the...accident was reported to
Defendant, EAN, by Plaintiff...and a claim was made by
Plaintiff under EAN’s self insured personal insurance
program.
13.
At the request of Defendant, EAN, in making the
insurance claim, a “Personal Accident Insurance Claim
Form” was completed on October 12, 2010 regarding the
accident. When prompted by the form to “State how the
accident occurred” it was reported that the “car jerked
4
The Court, sitting in diversity, applies the substantive
law of Louisiana. When, as here, the Louisiana Supreme Court has
not yet addressed an issue, the Court must use its judgment to
determine how the Louisiana Supreme Court would resolve the issue.
Holden v. Connext-Metalna Mgmt.Consulting GMBH, 302 F.3d 358 (5th
Cir. 2002). The Court finds Robertson, the most factually similar
case, instructive in making an Erie guess that the Louisiana
Supreme Court would hold constructive knowledge is sufficient for
a spoliation claim.
9
to the left and lost control (driver front tire) hit
concrete wall.”
14.
On October 13, 2010, Defendant, EAN, created a “Vehicle
Accident Report” Number DX140215R regarding the above
referenced accident.
15.
Sometime shortly thereafter, members of Defendant, EAN’s,
damage recovery unit conducted an investigation into the
cause of the accident.
16.
On February 15, 2012, Plaintiff learned for the first
time through...EAN’s...responses to discovery that on
October 20, 2010, Defendant, EAN, sold the relevant
vehicle to a third party. [P]rior to the sale, no
attempts were made by Defendant, EAN, to preserve any
evidence relating to the vehicle, including, but not
limited to, the tires and/or the event Data Recorder. By
selling the vehicle, Defendant, EAN, intentionally
deprived Plaintiff of the use of said evidence in
prosecuting her claim for damages.
17.
As a result, Defendant, EAN, is liable for spoliation of
evidence entitling Plaintiff to all damages provided by
law and/or an adverse presumption at trial.
Pelas has alleged that EAN was notified of her one car
accident in EAN’s vehicle and that she was injured in the accident.
Pelas also alleges that a claim was filed with EAN’s self-insured
insurance program, which prompted EAN to conduct an investigation.
Pelas asserts, and the Court agrees, that these are sufficient
allegations to support a plausible claim that EAN had constructive
knowledge of a serious event that would alert them to possible
future litigation. Given that Robertson suggests that constructive
notice is sufficient to support a spoliation claim, and that Pelas
has also alleged facts to plausibly support a finding that EAN
10
intentionally sold the car shortly after the incident despite
notice of a claim, and intentionally deprived Pelas of the use of
the car as evidence, the plaintiff has asserted enough facts to
support a plausible independent cause of action for spoliation of
evidence under Louisiana Law.5
2.
Adverse Inference Based on Evidence Destruction Under
Federal Law
For a plaintiff to be entitled to an adverse assumption based
on spoliation under federal law, the plaintiff must show: (1) the
defendant had a duty to preserve the evidence, (2) a culpable
breach of that duty, and (3) the plaintiff was prejudiced as a
result.
Hunt v. Marquette Transp. Co. Gulf-Inland, LLC., No. 09-
6055, 2011 WL 3924926, at *2 (E.D.La. Aug. 5, 2011).
Federal law
is more settled as accepting constructive knowledge as a basis for
a duty to preserve evidence.
“A duty to preserve arises when a
party knows or should know that certain evidence is relevant to
5
This Court’s finding that the plaintiff has stated a
claim for spoliation withstands the defendant’s other arguments
against such a finding. For example, the defendant complains that
the plaintiff has failed to allege facts sufficient to establish
that EAN had a duty based on a statute, contract, special
relationship, or affirmative agreement or undertaking to preserve
the vehicle when it was sold. But, the defendant fails to
acknowledge that the authority on which it relies was decided on
the basis that at the time no separate spoliation cause of action
was recognized in Louisiana; accordingly the court required the
duty to arise from something else. See Bell v. CSX Transportation
Inc., No. Civ. A. 97-2941, 1997 (E.D.La. 11/7/1997). The defendant
itself concedes that that has changed with the development of a
separate cause of action for spoliation. See Burge v. St. Tammany
Parish, 336 F.3d 363, 374 (5th Cir. 2003)
11
pending or future litigation.”
Id. at *2 (citation omitted).
Furthermore,
is
“[o]nce
litigation
reasonably
anticipated,
a
potential party to that litigation has a duty not to destroy
unique, relevant evidence that might be useful to an adversary.”
Id. at *2 (citations and internal quotations omitted).
Federal
procedural law and evidentiary rules focus on the bad conduct or
bad faith of the defendant in determining whether an adverse
inference based on the destruction of evidence is warranted.
King
v.
Cir.
Illinois
Central
R.R.,
337
F.3d
550,
556
(5th
2003)(establishing that an adverse inference for spoliation of
evidence is predicated on the bad conduct or bad faith of the
defendant).
Again, the parties seem to dispute only whether Pelas has
sufficiently alleged a duty to preserve evidence. The plaintiff,
relying on Consolidated Aluminum Corp. v. ALCOA, contends that
constructive knowledge of reasonably foreseeable litigation created
a duty on the part of EAN to preserve the vehicle at the time it
was sold.
Consolidated Aluminum Corp. v. ALCOA, 244 F.R.D. 335
(M.D. La. July 19, 2006).
Pelas contends EAN was put on notice to
preserve the vehicle when it was notified that Pelas was injured in
a one car accident while driving a vehicle owned by EAN and when
Pelas filed a claim with EAN’s self-insured insurance program.
The defendant counters, predictably, that constructive
knowledge is not sufficient for an adverse inference based on
12
spoliation
because
Consolidated
used
language
similar
to
constructive knowledge, but the holding in fact was limited to
situations in which a demand letter gave rise to reasonable
anticipation of litigation.
See id.
EAN argues that a demand
letter is tantamount to actual notice.
Even if constructive
knowledge is sufficient for a spoliation claim, EAN argues that
Pelas failed to state facts sufficient to establish that EAN had
constructive notice to preserve the vehicle.
disagrees.
The Court, again,
Pelas has alleged facts which, if proved, would
demonstrate that EAN reasonably could have anticipated litigation.
See Hunt, 2011 WL 394926.
Moreover, although neither the defendant, nor the plaintiff,
addresses whether Pelas has pleaded enough facts to plausibly claim
that EAN acted in bad faith, the Court finds that she has.
Pelas
alleges that she had reported the accident to EAN and that, after
that, EAN “intentionally” sold the vehicle to deprive her of its
use in litigation. Taken as true, it is plausible that this conduct
constitutes bad faith and, if proven, Pelas would be entitled to an
adverse presumption under federal evidentiary law.
Accordingly, the defendant’s motion to dismiss is DENIED.
New Orleans, Louisiana, June 19, 2012
_____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?