CHRISTEN, Justice.
Allstate Insurance Company (Allstate) and Wayne Watson, an Allstate attorney, seek review of an order denying their motion for partial summary judgment. Allstate and Watson argue that an action in tort for spoliation of evidence may only be maintained where evidence is permanently lost or destroyed, not when evidence is only concealed from the complaining party. We hold that the tort of fraudulent concealment of evidence, not spoliation, is the appropriate cause of action when evidence is intentionally concealed until after entry of judgment and expiration of the period allowed by Alaska Civil Rule 60(b) for seeking relief from a final judgment.
On October 28, 2000, Ron Dooley was injured when he slipped and fell while working on an addition to William Paul's home in North Pole. Dooley was on the second floor, carrying a piece of lumber, when he slipped on ice or snow that had accumulated at the top of the stairway. Dooley could not recall what caused him to fall, but he fell down the stairs and landed on the concrete floor of the lower level. The stairs had no railings at the time.
Paul was insured by Allstate Insurance Company. On November 10, 2000, Allstate sent independent insurance adjustor Larry Staiger to the accident scene. Staiger took photographs of the addition and stairwell and spoke with Paul about the condition of the area at the time of the accident. Staiger later made large copies of the photographs, mounted them on letter-sized sheets of paper, and made separate notes describing each photograph. Staiger also applied "stick-on" arrows to the photographs. The annotations to the photographs contained information about the condition of the accident site gleaned from Staiger's conversation with Paul. Most significantly, the notes suggest that Paul admitted that the area of floor where Dooley slipped was covered by ice at the time of the accident.
Dooley sued Paul, alleging Paul's negligence caused the accident and seeking damages for his injuries. Allstate attorney Wayne Watson defended Paul in the suit. Watson produced Staiger's photographs to Dooley during the discovery phase of the case but he did not produce the annotations to the photographs or the stick-on arrows, under the mistaken belief that they were privileged. During his deposition, Paul made statements that appear to be inconsistent with Staiger's notes. Later, Watson realized that the photograph annotations and arrows were not privileged and produced them. He also agreed that Dooley's attorneys could re-depose Paul, at Allstate's expense.
Dooley sought permission to submit additional instructions on spoliation and "breach of duty of disclosure" shortly before trial. The superior court gave Dooley a choice
The case proceeded to trial after the photograph annotations and stick-on arrows were produced and Paul was re-deposed. Paul's negligence had been established in a pre-trial ruling, but the jury allocated 60% of the total fault to Paul and 40% to Dooley. The jury found that Dooley's total damages were $350,000; its decision to allocate 40% of the fault to Dooley reduced the principal amount of the judgment entered in his favor by $140,000.
Dooley then brought this suit against Watson and Allstate. He claimed that their delayed production of material evidence caused him to incur unnecessary litigation expenses by prolonging the litigation and reducing the value of his claim. Dooley's initial complaint did not identify a specific cause of action, but it alleged that Watson's concealment of the photograph annotations "was intentional, in reckless disregard of the plaintiff's rights, fraudulent and a breach of AS 21.36.125(a)(6) & (8)."
During the discovery phase of this case, Dooley learned that Allstate claims adjuster Don Cook made an entry in his "claim diary" on January 16, 2001, after he interviewed Paul about the slip and fall accident (the "Cook note"). Watson had produced a redacted version of the claim diary before the trial in Dooley v. Paul, but the pages documenting Cook's January 16, 2001 interview with Paul had been removed from the claim diary entirely and had not been produced. Dooley amended his complaint against Watson and Allstate when he learned about the existence of the Cook note. The amended complaint makes three arguments for recovery of damages based on newly-discovered evidence: (1) spoliation of evidence; (2) abuse of process; and (3) fraud and misrepresentation.
Allstate and Watson sought partial summary judgment on Dooley's spoliation claim. Their motion argued that the tort of spoliation of evidence is permitted in Alaska only where evidence is permanently destroyed, or intentionally concealed until it is naturally destroyed, before it can be seen or used by the complaining party. Allstate and Watson argued that Dooley cannot maintain a spoliation claim regarding the Cook note because: (1) the note was not destroyed or irretrievably lost, and (2) deprivation of access to the note did not prejudice Dooley's personal injury suit. The superior court denied the summary judgment motion. The court's order reasoned:
Allstate petitioned for review of the superior court's decision. We granted the petition for review under Alaska Appellate Rule
We review the denial of a motion for summary judgment de novo, and will reverse it if there are no material facts in dispute and the moving party was entitled to judgment as a matter of law.
We have made clear the importance of deciding cases on the merits whenever possible.
We have recognized that fraud may be committed through the failure to disclose information in the presence of an affirmative duty to do so.
We have not expressly defined the elements of the tort of spoliation in Alaska, but they can be gleaned from our case law and they illustrate important similarities and differences between the permanent destruction and temporary concealment of evidence. As discussed below, the first two elements gleaned from the case law militate in favor of affirming the trial court's ruling that intentional concealment satisfies the requirements for spoliation. The third element illustrates why a different remedy is required when evidence is concealed but not destroyed.
The tort of spoliation was recognized by our court more than twenty years ago in Hazen v. Municipality of Anchorage.
The superior court allowed Hazen to pursue a claim for intentional alteration or destruction of evidence by implying a cause of action under the Alaska Constitution for deliberate violations of due process.
Intentional action by one party to interfere with another party's ability to bring a civil cause of action is central to the tort of spoliation.
In Estate of Day v. Willis we clarified that claims for intentional spoliation are limited to circumstances in which a valid underlying cause of action is prejudiced by the destruction of evidence.
Allstate argues that an independent reason for dismissing Dooley's claim at the summary judgment level is that the absence of the Cook note did not prejudice Dooley's underlying negligence claim against Paul. The superior court correctly rejected this as a basis for the summary judgment motion.
Hazen v. Municipality of Anchorage concerned the allegation that necessary evidence was intentionally destroyed and irretrievably lost.
We agree with the trial court that where one party merely conceals evidence until after the conclusion of trial and the expiration of other remedies available under the civil rules, the evidence is "destroyed as potential evidence" in the sense that it is unavailable for trial or to support a motion filed under Civil Rule 60(b). But we also agree with Allstate that once the previously concealed evidence becomes available, the situation is markedly different from cases in which evidence is completely destroyed and its impact on the underlying proceedings is mere speculation. If evidence becomes available, our strong policy in favor of trying cases on their merits militates in favor of allowing a fact finder to determine whether concealing the
Allstate argues that Alaska Civil Rule 37 provides adequate sanctions for evidence that is produced late, but while litigation is still pending. We agree. Where evidence is produced late, but before a judgment is entered, Civil Rule 37 grants trial courts broad discretion to fashion remedies for discovery order violations.
Allstate and Watson argue that Civil Rule 60(b) is also the appropriate remedy for the late production of the Cook note, but their argument is unconvincing. Civil Rule 60(b) allows for relief from final judgment under several circumstances, including those in which evidence is newly-discovered and/or where there has been fraud or misconduct by an adverse party. But Civil Rule 60(b) would likely provide no relief at all for Dooley. Motions under Civil Rule 60(b)(2) and (3) must be filed within one year of notice of the entry of judgment.
Spoliation offers a remedy if evidence is completely inaccessible and calculation of compensatory damages is merely speculative. Dooley's situation is fundamentally different because the Cook note is available and a reasonable estimate of damages caused by the delayed production of it, if any, can be undertaken by a fact finder. Moreover, the alleged harm in this situation is different than that in instances of spoliation. In spoliation cases a party causes the complete destruction of evidence and denies another party the right to have the evidence considered on its merits. A party who intentionally withholds disclosable evidence for a prolonged period of time, in contrast, fraudulently
We have recognized that a cause of action for fraud can arise by silence or non-disclosure in the context of an existing fiduciary duty.
The elements we adopt for the tort of fraudulent concealment of evidence are: (1) the defendant concealed evidence material to plaintiff's cause of action; (2) plaintiff's underlying cause of action was viable; (3) the evidence could not reasonably have been procured from another source; (4) the evidence was withheld with the intent to disrupt or prevent litigation; (5) the withholding caused damage to the plaintiff from having to rely on an incomplete evidentiary record; and, (6) the withheld evidence was discovered at a time when the plaintiff lacked another available remedy. We note that the elements we adopt provide for a cause of action with a much narrower scope and application than the broader tort of fraudulent concealment recognized in other jurisdictions. We now highlight the most important distinctions between the cause of action we adopt here and the similar cause of action as it has been adopted in other jurisdictions in order to avoid confusion about the scope of the remedy we recognize in this decision.
In contrast to claims for fraudulent concealment in other jurisdictions, a cause of action for fraudulent concealment of evidence may be maintained in Alaska only when a plaintiff lacks another sufficient remedy.
In New Jersey, a cause of action for fraudulent concealment of evidence may be maintained only "in connection with existing or pending litigation."
Some jurisdictions permit claims for fraudulent concealment in multiple circumstances involving intentionally withheld information.
We VACATE the superior court's order denying Allstate's motion for partial summary judgment and REMAND for further proceedings consistent with this decision.
WINFREE, Justice, concurring in part and dissenting in part.
I reluctantly agree with the court's recognition of the fraudulent concealment of evidence tort. Alaska already stands in the very small minority of states recognizing intentional spoliation of evidence as a tort, and the policy justifications for the new tort do not seem to clearly outweigh the policy concerns against it. Nonetheless, I am persuaded that if Alaska is to maintain its recognition of the intentional spoliation tort, it would be inconsistent to deny recognition of the fraudulent concealment tort. But I do not see how the remedies can substantively differ between this new tort and the spoliation tort recognized in Hazen v. Municipality of Anchorage.
The 1986 Hazen decision included a sua sponte recognition of the "new tort" of "intentional interference with prospective civil action by spo[li]ation of evidence."
Hazen is hardly a solid foundation for the creation of yet another tort. But Hazen is the law of Alaska, there has been no request to reconsider and overrule it, and there is no persuasive distinction between Hazen's spoliation tort and the fraudulent conduct tort recognized today. I therefore reluctantly
Paradoxically, although I only reluctantly agree with the creation of the new fraudulent concealment tort, I strongly disagree with the court's limitation on its remedy through an unpersuasive distinction between the two torts — the tortious conduct is the same, the effect of the tortious conduct is the same, and the remedy for the tortious conduct should be the same.
It has been suggested, but never squarely held, that proof of compensatory damages might not be a necessary element of the spoliation tort and that punitive damages might be awardable even in the absence of compensatory damages.
First, if a victim can prove the five non-damages elements of the new fraudulent concealment tort established by the court,
Second, the court's assurance that a second trial with the newly found evidence will provide the victim with a "trial on the merits" of the original claim is not adequate. In this case the facts are seductive because of the close proximity in time between the first trial and the discovery of the concealed evidence, making it seem logical that an adequate remedy would be a case-within-a-case trial giving the victim an opportunity to prove the original trial would have been different had the evidence been available. But extend the timeline and that logic loses luster. What if critical concealed evidence is discovered two, five, or ten years later, but by that time previously existing evidence is no longer available to put on the case-within-a-case trial? Witnesses die; memories fade; documents are lost or destroyed; and other physical evidence perishes. The victim might have the critical, but previously concealed, evidence but might no longer have the ability to put on the case-within-a-case trial because other evidence no longer exists.
I find it fundamentally unfair, and inconsistent with the Hazen line of cases, that the court would place such an extraordinary burden of proof and persuasion on the victim in these circumstances. If the court is going to
For the foregoing reasons, I concur in part and dissent in part.
The nontort remedies noted by the California Supreme Court are available in Alaska. See Sweet v. Sisters of Providence in Wash., 895 P.2d 484, 492 (Alaska 1995) (finding on the facts of that case no need to recognize tort of negligent destruction of healthcare records in light of available remedy of burden-shifting); Alaska R. Civ. P. 37 (allowing discovery abuse sanctions); Alaska R. Prof. Conduct 3.4(a)-(b) (establishing disciplinary rule prohibiting unlawful destruction or concealment of evidence); AS 11.56.610 (establishing class "C" felony for "tampering with physical evidence," including destroying, mutilating, altering, concealing, or removing that evidence "in an official proceeding").
