United States District Court,

1. New Jersey.

Indemnity Insurance Company of North America, a Corporation, Plaintiff,

v.

UPS Ground Freight, Inc., d/b/a UPS Freight, a Corporation, Defendant.

Civ. Nos. 13-3726 & 13-3727 (KM)(MAH)

|

Signed 03/31/2016

 

 

MEMORANDUM OPINION

MCNULTY, District Judge

*1 This action under the Carmack Amendment, 49 U.S.C. § 14706 et seq., arises from damage to two interstate shipments of goods. The Plaintiff, Indemnity Insurance Company of North America (“Indemnity”), is the subrogating insurance company for the owner of the freight, G.E. Healthcare. (I will refer to the plaintiff as “GE”.) The Defendant, UPS Ground Freight, Inc. (“UPS”), is a motor carrier. Now before the Court is the UPS’s motion (ECF no. 57), pursuant to Fed. R. Civ. P. 56, for partial summary judgment to limit and cap damages. If granted, the motion will limit damages to about $15,000; if denied, damages may total $1 million. Although many of the underlying facts are uncontested, the contractual issues still pose genuine, material issues of fact. For the reasons stated herein, the motion will be DENIED.

 

 

1. Factual Background: The Bills of Lading and the Agreements1

This action arises from two shipments of goods, evidenced by bills of lading dated July 19, 2010, and May 25, 2012. The plaintiff alleges damages of $641,416.66 on the 2010 shipment, and $398,068.28 on the 2012 shipment. Those figures total $1,039,484.94. The defendant contends that damages are contractually limited to the value of goods declared on the bills of lading: $2.30 per pound, which comes out to $9,255.20 on the 2010 shipment, and $6,467.60 on the 2012 shipment. (PSMF ¶¶ 1-8; 2010 BL; 2012 BL) Those figures total $15,772.80.

 

Both shipments originated from a Memphis, Tennessee warehouse. GE had a contract with the warehouse operator, DLSS (the “Warehouse Contract”).2 DLSS agreed to serve as distributor of record and to stage shipments of GE’s goods. In the Warehouse Contract, DLSS agreed to “prepare shipping documentation” and otherwise comply with standard operating procedures. (Warehouse Contract pp. 15-17 (Attachment A), ¶¶ l(a)(iii), 4) The Warehouse Contract provides that the Warehouse “will release rail or truck shipments at the lowest valuation permitted and will not declare value on Products shipped.” (Warehouse Contract p. 25 (Attachment D)) The Carrier, UPS, is not a party to the Warehouse Contract.

 

The July 19, 2010 bill of lading, issued on GE’s behalf by the warehouse, describes the freight as 4 skids containing 656 cartons of “drugs and medicines” weighing 4,024 pounds. This bill of lading explicitly states the “R. Value” (Release Value) of the freight as $2.30/lb. The goods are designated as “NMFC 60000,” a National Freight Motor Classification, and “Class 70,” which signifies a dollar value for “drugs and medicines” of $2.30 per pound. (2010 BL; PSMF ¶¶ 2-5)

 

*2 The May 25, 2012 bill of lading describes the freight as 3 pallets containing 557 cartons of “drugs and medicines” weighing 2812 pounds. This bill of lading explicitly states the “R. Value” (Release Value) of the freight as $2.30/lb. The goods are designated as “NMFC 60000,” a National Freight Motor Classification, and “Class 70,” which signifies a dollar value for “drugs and medicines” of $2.30 per pound. (2012 BL; PSMF ¶¶ 6-8)

 

As of January 12, 2010, GE as “Shipper” entered into a Less-than-Truckload Transportation Contract with UPS as “Carrier.”3 That GE Contract, as I shall call it, provides at section 7(A):

1. Carrier is liable to Shipper for full invoice value (see paragraph E) of Shipper’s goods for loss or damage to goods occurring while in the custody, possession or control of Carrier or resulting from Carrier’s performance of or failure to perform the services provided for in this motor carrier Contract….

GE Contract § 7(A) (the “Full Invoice Value” provision).

 

The cross-referenced paragraph 7(E) provides:

1. Except as otherwise provided, Carrier’s maximum liability will not exceed $250,000 per occurrence.

GE Contract § 7(E) (the “$250,000 Limit” provision).

 

The GE Contract also has an override provision, paragraph 2(E):

1. To the extent that any bills of lading, or other shipment documents used in connection with transportation services provided pursuant to the contract are inconsistent with the terms and conditions of this contract (including the terms and conditions of Appendices or Exhibits incorporated by reference), the terms and conditions of this Contract (and any incorporated Appendices and Exhibits) shall govern.

GE Contract § 7(E) (the “Override Provision”).

 

The GE Contract contains an “Entire Contract” clause, providing that its terms cannot be modified or waived except by a writing signed by both parties. GE Contract § 15 ¶ 7.

 

 

1. DISCUSSION
2. Applicable Standard

Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Kreschollek v. S. Stevedoring Co., 223 F.3d 202, 204 (3d Cir. 2000). In deciding a motion for summary judgment, a court must construe all facts and inferences in the light most favorable to the nonmoving party. See Boyle v. Cnty. of Allegheny Pa., 139 F.3d 386, 393 (3d Cir. 1998). The moving party bears the burden of establishing that no genuine issue of material fact remains. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “[W]ith respect to an issue on which the nonmoving party bears the burden of proof … the burden on the moving party may be discharged by ‘showing’—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party’s case.” Celotex, 477 U.S. at 325.

 

Once the moving party has met that threshold burden, the non-moving party “must do more than simply show that there is some metaphysical doubt as to material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The opposing party must present actual evidence that creates a genuine issue as to a material fact for trial. Anderson, 477 U.S. at 248; see also Fed. R. Civ. P. 56(c) (setting forth types of evidence on which nonmoving party must rely to support its assertion that genuine issues of material fact exist). “[U]nsupported allegations … and pleadings are insufficient to repel summary judgment.” Schoch v. First Fid. Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990); see also Gleason v. Norwest Mortg., Inc., 243 F.3d 130, 138 (3d Cir. 2001) (“A nonmoving party has created a genuine issue of material fact if it has provided sufficient evidence to allow a jury to find in its favor at trial.”). If the nonmoving party has failed “to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial, … there can be ‘no genuine issue of material fact,’ since a complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir. 1992) (quoting Celotex, 477 U.S. at 322-23).

 

 

1. Limitation of Liability

*3 What the issue comes down to is which shall control: (a) the value declared on the bills of lading, or (b) the more general Full Invoice and $250,000 Limit provisions of the GE Contract.

 

Under the Carmack Amendment, the carrier is generally liable for “actual loss or injury to the property.” 49 U.S.C. § 14706(a). An exception (the “release rate exception”) allows the carrier to limit its liability “to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.” 49 U.S.C. § 14706(c)(1)(A).

 

UPS says that the bills of lading, stating a value of $2.30/lb., are a “written agreement between the carrier and the shipper” (or perhaps a “written … declaration of the shipper”) that limits UPS’s liability. It may be, adds UPS, that the Warehouse breached its agreement with GE when it entered a value on the bills of lading; that lapse might give rise to a claim by GE against the Warehouse, but not against UPS.

 

GE replies that the GE Agreement is the controlling “written agreement between the carrier and the shipper,” and that it renders UPS liable for the Full Invoice Value of the goods, subject only to the $250,000 Limit. Because the values declared in the bills of lading are “inconsistent with” the GE Contract, the § 2(E) Override Provision nullifies the bills of lading. In addition, says GE, the § 15 ¶7 Entire Contract clause bars UPS’s theory, because the bill of lading, which is not a writing signed by both parties, cannot modify the GE Contract.

 

Generally speaking, a bill of lading may serve as a limitation on liability under the Carmack Amendment. In Penske Logistics, Inc. v. KLLM, Inc., 285 F. Supp. 2d 468 (D.N.J. 2003) (Wolin, J.), the contract between the shipper and the carrier called for full value liability of $59,000. The bill of lading prepared by the shipper, however, declared a value of $1.50/lb., for a total of $6800. Penske enforced the limitation in the bill of lading.

 

A bill of lading is both a receipt and a basic transportation contract, and it may serve as a “written declaration” for purposes of the release rate exception. In some circumstances, said Penske, an issue might arise as to whether the shipper was properly informed of the “tariff,” but not here. A bill of lading, drafted by the shipper itself, may validly cap the carrier’s liability to the shipper:

[W]here a shipper, rather than the carrier, drafts the bill of lading and chooses the release rate, the limitation of liability rate found on the bill of lading will be enforced against the shipper.

Id. at 473 (citing Siren, Inc. v. Estes Express Lines, 249 F.3d 1268, 1274 (11th Cir. 2001); American Cyanamid Co. v. New Penn Motor Express, Inc., 979 F.2d 310, 314 (3d Cir. 1992)). The value as declared on the bill of lading was held to constitute the shipper’s election of the release rate, and was held to limit the carrier’s liability. Id. at 473-75.

 

So far, so good. The next question, however, is whether the GE Agreement overrides the bill of lading. As to that issue, Penske is suggestive, but not controlling. There, as here, the contract between the carrier and shipper had an override provision that “in the event of an inconsistency between the Bill of Lading and the KLLM Agreement, the KLLM Agreement prevailed.” 285 F. Supp. 2d at 470. Under “Cargo Loss,” the Penske contract provided that the carrier would be liable for “all loss or damage … in accordance with 49 U.S.C. § 14706….” Id.

 

*4 Penske cited familiar principles of contract law that interrelated writings should be construed as a single document, and that a contract should not be interpreted in a way that renders terms superfluous or meaningless. Id. at 474. The contract at issue there, it found, “incorporate[d] the Bill of Lading by reference in section two, Receipts, which requires each movement of goods to be ‘evidenced by a written receipt.’ ” Id. It concluded that the declared value of the bill of lading should not be rendered meaningless.

 

I cannot so easily read the court’s interpretation of the Penske contract onto this, the GE Contract. These are not the kind of simultaneously-executed, interlocking agreements to which the rules of contract interpretation cited in Penske most clearly apply. When the GE Agreement was signed, these bills of lading did not yet exist. One permissible reading of the Contract is that GE protected itself against the unknown terms of those future bills of lading by telling UPS, in effect, to ignore them to the extent they conflicted with the Agreement.4 Thus default rules of contract interpretation may not help us where the very purpose of an Override Provision may be to render terms of the other contract superfluous. UPS contends that there is no such inconsistency; but where the contract requires $ 1 million, and the bill of lading requires $15,000, there may well be. Full Invoice Value and the amount on the bill of lading are not the same thing, and at least one permissible interpretation of the Agreement is that it overrides the bill of lading.

 

I am not saying that UPS is wrong; it may be right. I am also conscious of the need for predictability in this commercial shipping context. These matters, however, pose issues of fact that cannot be resolved on a motion for summary judgment.

 

 

CONCLUSION

For the reasons stated above, the motion of UPS for partial summary judgment is DENIED. An appropriate Order accompanies this opinion.

 

All Citations

Slip Copy, 2016 WL 1261266

 

 

Footnotes

1

Herein, citations to the record are abbreviated as follows:

Cplt. = Amended Complaint, ECF no. 50

GE Contract = Less-than-Truckload Transportation Contract, ECF no. 57-3 at 6

DSMF = Defendant’s Statement of Undisputed Material Facts, ECF no.

PSMF = Plaintiff’s Statement of Undisputed Material Facts, ECF no.

Warehouse Contract = Contract between GE and DLSS, ECF no. 57-3 at 41.

2010 BL = Bill of lading dated July 19, 2010, ECF no. 57-3 at 2.

2012 BL = Bill of lading dated May 25, 2012, ECF no. 57-3 at 4.

2

DLSS was formerly known as DDN/Obergefel, LLC. This opinion will ignore the distinction.

3

Actually the contracting party was Overnite Freight, the predecessor of UPS. This opinion will ignore the distinction.

4

That GE contractually forbade its Warehouse from placing the value of goods on bills of lading tends to corroborate that intent, although it probably played no part in the mutual assent that resulted in the GE Contract with UPS.

 

 

United States District Court,

M.D. Pennsylvania.

Jonathan A. Botey, Plaintiff,

v.

Robert D. Green, et al., Defendants.

3:12-CV-01520

|

Filed 04/04/2016

 

 

MEMORANDUM OPINION

Robert D. Mariani, United States District Judge

 

1. Introduction

*1 Presently before the Court is a Motion for Sanctions l e d by the Plaintiff, Jonathan Botey, in the above-captioned action in response to alleged spoliation of evidence by Defendants Conwell Corporation and FFE Transportation Services. (See Mot. for Sanctions, Doc. 74). For the reasons that follow, the Court will grant in part and deny in part Plaintiffs motion.

 

 

1. Procedural History

This action arises out of a traffic accident that occurred in Hazle Township on May 10, 2011. (See Compl., Doc. 1-2, at ¶ 7). The Complaint alleges that Plaintiff, Jonathan Botey, was traveling north in his car when Defendant Robert Green, a truck driver with Defendants Conwell Corporation and FFE Transportation, attempted to pull his tractor-trailer from a truck stop into the southbound lane of the roadway. (Id. at ¶¶ 7-8). This caused a collision in which Botey was seriously injured. (Id. at ¶ 11).

 

The parties originally planned to take Green’s deposition during the normal discovery period, However, in February 2014, they learned that Green suffered from dementia and was therefore unable to be deposed. (See Oral Argument & Hearing Tr., Feb. 18, 2016, Doc. 120, at 20:8-22:5). Plaintiff then sought discovery from FFE of thirty days’ worth of Green’s trip documents and logs that FFE maintains for each of its truck drivers. (See Mot. to Compel Production of Docs., Doc. 61, at ¶ 3). He explained: “It is Plaintiffs position that Defendant Green was exhibiting signs of dementia prior to being allowed to drive the tractor trailer, and Plaintiff believes that 30-days worth of logs and trip documents would allow the Plaintiff to determine whether Defendant Green was having issues consistent with dementia.” (Id. at ¶ 8). This would be relevant, Plaintiff argued, to establishing his claims against FFE and Conwell for negligence “in allowing Mr. Green to drive their vehicle when he lacked sufficient skill, judgment, and ability to safely do so.” (Id. at ¶ 7). Defendants argued that Plaintiff was only entitled to logs going back 34 hours before the accident. (See Defs.’ Reply Br. to Mot. to Compel, Doc. 64, at ¶ 3).

 

The Court heard argument by telephone on Plaintiffs Motion to Compel production of the thirty days of logs on January 6, 2015. After hearing arguments from both sides, the Court ordered Defendants to provide fifteen days of logs, as a reasonable compromise between the parties’ positions. (See Teleconference Tr., Jan. 6, 2015, Doc. 115, at 10:4-20). The Court’s Order provided that “Defendants shall produce logs, pre-trip inspections, and driver inspection vehicle reports for Defendant Robert D. Green for the 15 days prior to May 10, 2011, as well as the corresponding trip and operational documents and GPS records for those 15 days.” (Order, Jan. 6, 2015, Doc. 70, at 1). As stated by the Plaintiff, “[t]he net effect of this ruling would be that the Plaintiff would get an additional eleven … days of logs and all corresponding documents regarding the movement of the Defendant’s tractor-trailer.” (Doc. 74 at ¶ 30).

 

*2 Defendants only produced four additional days of logs, not the full fifteen that the Court ordered. (Doc. 120 at 11:22-12;9). Plaintiff then filed a Motion for Sanctions (Doc. 74), which requested “that an adverse inference jury instruction be read against Defendants at the time of trial” as well as “an Order precluding Defendants from arguing in dispositive motions that Plaintiff lacks evidence to prove his corporate negligence claims against Defendants FFE and Conwell based on the documents destroyed.” (Doc. 74, at 12). The Court held an evidentiary hearing and oral argument on this Motion on February 18, 2016.

 

 

III. Factual Background

Defendants agree that FFE’s duty to preserve documents began at the time that they received notice that an accident occurred. (See Doc. 120 at 13:16-19). In this case, that day was May 10, 2011: the day of the accident at issue. (Id. at 13:19-20).

 

Mark Rhea, FFE’s Vice President, testified that FFE uses a system called “People Net” to maintain drivers’ logs. (Doc. 120 at 29:14-30:5). People Net works off of “a mobile communication device that is mounted in the cab of the truck that communicates with the driver and the general office,” sending messages back and forth and keeping electronic logs of the driver’s activity. (Id. at 30:1-5). The electronic logs are saved at a database at People Net’s corporate office in Minneapolis, Minnesota for a period of six months. (Id. at 30:8-9). Once a log entry becomes six months old, it is automatically deleted, such that at all times People Net maintains a record of all drivers’ logs going back exactly six months from the current date. (Id. at 30:8-14). In other words, “it’s a rolling, automated deletion.” (Id. at 30:13-14). Only People Net, and not FFE, has the power to delete electronic logs. (See id. at 30:15-22). The only way that FFE could preserve logs is to make a request through People Net. (Id. at 31:8-11). FFE only maintains logs for six months because it believes that is the length of time required by the Federal Motor Carrier’s Administration. (Id. at 44:15-21).

 

On October 10, 2011, Plaintiffs attorney sent letters by certified mail to FFE, Conwell, and Green informing them of the litigation. (See generally Pl.’s Mot. for Sanctions, Ex. B, Doc. 74-2). The letters recited the requirements of section 395.8(k) of the Federal Motor Carrier Safety Regulations,1 and concluded,

Therefore, please be advised that you are not to destroy the following records:

1. Driver’s logs for the six months preceding the collision;
2. Co-driver’s logs for the same period if team driving;
3. The driver qualification file, and all incident reports involving the driver;
4. All 70 hour and other compliance audits of the drive (and co-driver if applicable);
5. All trip receipts, weight tickets, bills of lading, and operational documents that could be used to conduct log audits and verify log accuracy;
6. Satellite tracking information for the six month period prior to the crash;
7. Bills and statements from Com Data or similar expense/cash advance services used by the carrier;
8. All information contained in or retrieved from onboard data records (ECM units or black boxes);
9. E-mail and other communications between the driver and dispatcher or carrier;
10. All maintenance records, pre-trip inspection reports, post trip inspection reports, and annual inspection records; and
11. The tractor-trailer itself, or at a minimum, relevant portions of the equipment, if there is any evidence or allegation that equipment malfunction or failure played a role in the collision;
12. Any documents evidencing method of payment made to the driver including, but not limited to payroll records, time cards, and any and all records that may pertain to this incident or the parties involved.

*3 (See id. at 2 (FFE), 4 (Conwell), 5-6 (Green)).

 

The letters to FFE and Conwell were both sent to an address in Norman, Oklahoma. (Id. at 1 (FFE), 3 (Conwell)).2 The parties agree that FFE and Conwell’s principal place of business is in Dallas, Texas. (See Compl. at ¶¶ 2-3; Answ., Doc. 4, at ¶¶ 2-3). Nonetheless, FFE does operate a small “administrative office” out of the Norman address, staffed by three employees. (See Doc. 120 at 33:10-15). One of these employees, Blanche Fernandez, signed the return receipt for the letters sent to FFE and Conwell on October 14, 2011. (See Pl.’s Mot. for Sanctions, Ex. C, Doc. 74-3, at 1 (FFE), 2 (Conwell)). Mark Rhea knew Ms. Fernandez personally and testified that she worked at the Norman office at the time the letters were sent. (Doc. 120 at 33:20-34:4). She “was a clerk that worked for a specialized fleet,” i.e., who “monitored and audited temperatures for the specialized fleet [of about twelve trucks] that operated out of Norman, Oklahoma.” (Id. at 34:5-10).

 

For reasons unknown, neither Ms. Fernandez nor her associates ever forwarded the letters to corporate headquarters. (Id. at 54:15-55:3). Had the letter been forwarded to “the right hands in Dallas,” Rhea testified that FFE could have gone into People Net and preserved all records going back six months, i.e., to April 14, 2011 at the earliest, which would have encompassed all of the records subject to this spoliation dispute. (Doc. 120 at 36:20-37:12). Rhea testified that he “wish[es]” that FFE had heeded the preservation letter “because we had nothing to hide here” but that it simply got lost after receipt in Norman. (Id. at 54:21-55:1). He could offer no explanation for the loss. (Id. at 54:21-55:3).

 

Defendants note that none of these letters show that they were cc’d to anyone, such as their attorney. (Id. at 35:20-36:2). Defendants’ attorney admits that “a separate cover letter, [ +] not on letterhead, that’s dated the same time” has been produced that was allegedly mailed to his law firm. (Id. at 36:3-5; see also id. at 16:2-15). Nonetheless, he represents “that we never received that” either. (Id. at 36:6-7).

 

Regardless of FFE’s claims that it “never got” the letters, the record evidence demonstrates that the letters sent to FFE and Conwell were received at an FFE facility and signed for by a FFE employee, and FFE was thus on legal notice that certain records must be preserved for the purpose of Botey’s litigation. Therefore, FFE had a responsibility to place a litigation hold on Green’s file. The fact that it did not do so could constitute, but is not necessarily, sanctionable conduct.

 

 

1. Standard of Review

*4 A party which reasonably anticipates litigation has an affirmative duty to preserve relevant evidence. Baliotis v. McNeil, 870 F.Supp. 1285, 1290 (M.D. Pa. 1994). The duty arises whenever “the party in possession of the evidence knows that litigation by the party seeking the evidence is pending or probable and the party in possession of the evidence can foresee the harm or prejudice that would be caused to the party seeking the evidence if the evidence were to be discarded.” Kounelis v. Sherrer, 529 F.Supp.2d 503, 518 (D.N.J. 2008) (citing Joe Hand Promotions v. Sports Page Cafe, 940 F.Supp. 102, 104 n.13 (D.N.J.1996); Baliotis, 870 F.Supp. at 1290).

 

Under Pennsylvania law, to determine the penalty for a spoliation of evidence claim, Plaintiff must show (1) the degree of fault of Defendant in altering or destroying the evidence (2) the degree of prejudice Plaintiff has suffered, and (3) the availability of a lesser sanction that will protect Defendant’s rights and deter future similar conduct. Schroeder v. Commonwealth of Pa., 710 A.2d 23,27 (Pa. 1998) (adopting the Third Circuit’s approach in Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76 (3d Cir. 1994) in design defect case). Although a party’s motive for destroying evidence is relevant in determining the appropriate sanction, if any, a finding of “bad faith” or “evil motive” is not necessary. Baliotis, 870 F.Supp. at 1291.

 

 

1. Analysis

Defendants acknowledge that FFE’s duty to preserve documents began at the time that they received notice that an accident occurred, i.e. May 10, 2011. (Id. at 13:16-20). Further, this Court has found that the letters sent to FFE and Conwell were received at an FFE facility and signed for by a FFE employee in October, 2011, and FFE was thus on legal notice that certain records must be preserved for litigation.

 

Although Defendants contend that they only had a duty to maintain six months of driver’s logs, Plaintiff argues that FFE was actually required to maintain these logs for three years, a reference to the Federal Motor Carrier Safety Regulations, 49 C.F.R. § 379, Appendix A, K.2.3 (See PL’s Supplementary Br. in Supp. of Mot. for Sanctions, Doc. 122, at 5). However, Plaintiff admits that “the distinction between the six month and three year retention periods is not dispositive of the issue before this Court” because “Plaintiff’s preservation letters were sent to the Defendants within a matter of days following the accident and then again five months after the subject accident.” (Id. at 6). Because Green only worked for FFE for approximately three months prior to the accident (see id. at 9; Doc. 120, at 111:22), the question of whether Defendants should have preserved six months or three years of certain records is largely irrelevant. (See also, Testimony of Expert Witness Whitney Morgan, Doc. 120).4 Whether the records should have been preserved for three years as opposed to six months is further of minimal importance because Plaintiff ignores the fact that this Court’s January 6, 2015 Order only required Defendants to produce records “for the 15 days prior to May 10, 2011.” (Doc. 70). Thus, at issue for purposes of this motion is only the several days of missing records, which as discussed above, the Court has already found Defendant was under a legal duty to preserve.

 

*5 As a result, the Court must determine whether Defendants’ affirmative duty to preserve the evidence, and their failure to do so, requires a finding of spoliation and that an appropriate penalty be imposed on them.

 

Plaintiffs need for the destroyed records arises from his contention, and attempt to establish, that Green was suffering from dementia at the time of the accident. The first record indicating that Defendant Green suffers from dementia appears to be Nurse Practitioner Alan Swartz’s Progress Notes, dated November 8, 2012, which note that Green “[s]tates [he] starts talking and forgets what is being said[;] getting worse over the last several years.” (Doc. 77-3). Swartz’ observations were therefore noted approximately a year and a half after the accident and it is unclear that Green was even diagnosed with dementia at that time. However, Plaintiff argues that Green was showing signs of dementia well-prior to the time of his diagnosis. (Doc. 75, at 10-11). Thus, Plaintiffs request for the information he now contends was spoliated arose from a “need to look further back in the records to see whether or not there’s evidence contained within the logbooks, toll receipts, bills of lading or things of that nature, which would show that Mr. Green was exhibiting further signs of dementia by continuing to get lost or to deliver his loads late or things of that nature.” (Doc. 115, at 5:23-6:3).

 

During Oral Argument, Defendants conceded that Green received negative reviews during his driver training, that one of his trainers demanded that Green be fired, that Green ran a stop sign at one point, and “got lost or didn’t follow directions well.” (See, e.g. Doc. 120, at 24:13-25:24). Although these admissions could lend some credence to Plaintiffs contentions, the crux of Plaintiff’s argument is that Green was getting lost while driving in the weeks leading up to the accident and that this is indicative of cognitive difficulties. (See generally, e.g., Testimony of Expert Witness Whitney Morgan, Doc. 120) (explaining that Green went over 100 miles out of his way on the trip in question and approximately 500 miles out of his way on trip immediately before). While the Plaintiff did not have access to all of Green’s driving logs, counsel pieced together two routes that Green took by using weigh station records, fuel receipts, and other tracking information. (Id.). The routes, which Plaintiffs counsel provided to the Court in the form of poster boards during the Oral Argument, demonstrate that Green took large, seemingly unnecessary detours along a different highway from the most direct route and then looped back into the most direct route farther along his trips. Morgan’s testimony indicates that Green’s actions would be inappropriate and waste company money and the parties appeared to agree at the evidentiary hearing that Green should not have taken these detours.

 

Despite the above evidence and admissions, under the three prongs set forth in Schroeder, the Court rejects Plaintiff’s argument that the missing documents rise to the level of spoliation by the Defendants.

 

The focus of the parties’ arguments is on the adverse inference sanction. Although the Defendants were on legal notice that certain records must be preserved for litigation, and thus erred in not preserving the requested documents upon receiving the litigation hold letter, Plaintiff has not shown that he is entitled to the “adverse inference” sanction.

 

*6 Preliminarily, Plaintiff does not explain what “adverse inference” he wants. It is too great a leap to conclude that, if the destroyed records were preserved, they would have shown such evidence of a loss by Green of his mental faculties that Defendants would have been placed on notice that he was suffering from dementia and was likely to cause accidents and therefore advance Plaintiffs negligence claims against FFE and Conwell. The Court will thus deny any request that it provide an instruction to the jury that the destroyed evidence would have been adverse to the Defendants as it would have shown evidence of Green suffering from dementia at the time of the accident, or more generally, that the jury should or could adopt the Plaintiffs interpretation of what the documents would have demonstrated. To the extent that this is not the adverse inference Plaintiff seeks, the Court will also deny any other adverse sanction inference at this time given that Plaintiff fails to clarify or narrow his request, and the Court is unable to determine what Plaintiff is seeking.

 

Even assuming that the destroyed records would in some way negatively reflect on Green’s driving, Plaintiff does not contend that the missing records would show other accidents or safety violations. Rather, Plaintiff argues that the absence of these records is prejudicial to him because “we’re not going to be able to show exactly what occurred on those trips, and that he was, in fact, getting lost, if he was, in fact, getting lost.” (Doc. 120, at 96:7-16). It is unclear why or how Green’s alleged tendency to get lost would put FFE on notice that Green was more likely to make dangerous turns into traffic. Plaintiff’s counsel admitted that he was not “suggesting that the trucking company should have diagnosed Mr. Green with dementia.” (Doc. 120, at 75:22-23; 98:25-99:3). However, while Plaintiff couches his need for the purged records in terms of helping to prove his negligence claim against the Defendants in that “they should have been watching him” and they “dropped the ball” and “negligently instructed him and didn’t supervise him in a proper way when he was having” difficulties in training (see Doc. 120, at 99:3-100:7), Plaintiffs actual request for the missing records was an attempt to establish that Green was exhibiting signs of dementia at the time of the accident at issue. According to Plaintiff, he is “prejudiced in proving his negligence claims against Defendants as the documents encompassed by the Court’s January 6, 2015 Order would show whether or not Defendant Green was having cognitive issues while driving and whether Defendants FFE and Conwell would have been aware of these issues.” (Doc. 75, at 10-11).5 However, as Defendants point out, in May of 2011, Green had been “cleared by a medical doctor, in accordance with the Federal Motor Carrier’s Safety Act, had a valid Med cert card and underwent that examination and was allowed to drive, in accordance with the regulations.” (Doc. 120, at 22:24-23:3). Defendants state that they only received notice that Green was suffering from dementia in February, 2014. (Doc. 120, at 20:8-16). Any argument that they allowed records to be destroyed in an attempt to hide evidence of cognitive deficiencies on Green’s part is therefore entirely unconvincing.

 

Nonetheless, while the Court will not grant Plaintiff’s request for an adverse inference, it is only logical and fair that Defendants will not be allowed to rely on the missing records in support of any dispositive motions. This is for obvious reasons: Defendants cannot claim that information in records that was destroyed would exonerate them and expect the Court to permit such an argument.

 

*7 Accordingly, although the Defendants were at fault for not preserving the requested documents, this appears to be mainly carelessness in failing to preserve documents from destruction in the ordinary course of business. There is no indication that such a failure even approached the level of intentionality. The Court does not want to minimize Defendants’ negligence and does recognize that Plaintiff need not show bad faith to prevail. However, losing preservation letters and then allowing documents and information to be purged from People Net is different from actively destroying relevant and pertinent documents. This is particularly the case where, as here, nothing in the record shows Green’s dementia or any sign of it was within the knowledge of FFE at the time the records were routinely purged by People Net.

 

With respect to the second Schroeder factor, the degree of prejudice to the Plaintiff is light. As previously stated, Plaintiff does not contend that the missing records would show other accidents or safety violations. The Court is not precluding the Plaintiff from advancing any argument for liability on any of his causes of action by this Opinion, which is limited to the sole question of whether the Defendants engaged in spoliation, and if so, an appropriate penalty. Plaintiff is free to assert whatever record evidence he chooses which relates to the documented deficiencies on the part of Green in connection with his truck operating duties and his adherence, or lack thereof, to the applicable company rules.

 

Therefore, not allowing Defendants to rely on the destroyed records or other evidence designed to show their contents is the appropriate resolution of the issues raised by Plaintiff as a result of Defendants’ inactions. Therefore, the Court will deny Plaintiff’s motion insofar as it seeks an adverse inference but will not allow the Defendants to prove the contents of the destroyed documents by other means or argue their contents in dispositive motions or at trial.

 

 

1. Conclusion

For the foregoing reasons, Plaintiff’s Motion for Sanctions (Doc. 74) will be granted in part and denied in part. A separate Order follows.

 

All Citations

Slip Copy, 2016 WL 1337665

 

 

Footnotes

1

Pursuant to 49 C.F.R. § 395.8(k), entitled “Retention of driver’s record of duty status”,

(1) Each motor carrier shall maintain records of duty status and all supporting documents for each driver it employs for a period of six months from the date of receipt.

(2) The driver shall retain a copy of each record of duty status for the previous 7 consecutive days which shall be in his/her possession and available for inspection while on duty.

49 C.F.R. § 395.8(k).

2

The letter to Green has no bearing on the spoliation issue.

3

Appendix A, K.2 of 49 C.F.R. § 379 currently requires trucking companies to maintain for six months of “[s]upporting data for periodical reports of accidents, inspections, tests, hours of service, repairs, etc.” However, the six month period was only imposed effective October 1, 2012. See Technical, Organization, and Conforming Amendments to the Federal Motor Carrier Safety Regulations, 77 Fed. Reg. 59818, 59824 (Oct. 1, 2012). Before this, i.e., at the time of the accident, the requirement was three years.

4

During Plaintiffs examination of his expert witness, the following exchange took place:

MUNLEY; So the information that we were seeking in October of 2011 should have been retained by the company for a period of three years, not six months?

MORGAN: Yes. But in this instance, the driver had only been with FFE for a period of a few months, so it shouldn’t have been overly burdensome for FFE to have maintained the records for this driver, because they couldn’t even go back six months, much less three years, they only had to go back a few months.

(Doc. 120, at 65:15-22),

5

In Plaintiff’s Answer to Defendants’ Statement of Material Facts, submitted in response to Defendants’ motion for summary judgment, Plaintiff states that he “sought and this Court permitted discovery of logbooks which were ultimately destroyed … [and] that these logs would show such violations and dangerous behavior as well as further signs of Defendant Green’s progressive dementia.” (Doc. 109, at ¶ 17).