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Court Declines to Find Spoliation for Inadvertent Destruction of Computer Prior to Lawsuit

Posted on October 28th, 2016

Reyes et. al. v. Julia Place Condominiums Homeowners Association, Inc., et. al., Case No. 12-2043 (E.D.L.A., Oct. 7, 2016) is a class action lawsuit brought by condominium owners throughout New Orleans against their various condo associations alleging debt collection practices that violate state and federal law. After motions to certify three classes of owners, the court certified a class of FDCPA claims limited to condo owners who received certain types of letters, as well as a class related to usury and divided into two subclasses – one seeking monetary relief and one seeking injunctive relief. Thereafter, Defendant Parkview filed a Motion for Summary Judgment, arguing that no past or present Parkview condo owner was a member of the usury class, nor has any Parkview condo owner been charged with or paid late fees or interest. Plaintiffs argued to the contrary, alleging that one Parkview owner was charged a late fee and that a lien was recorded with a usurious fee. In their opposition to Parkview’s Motion, Plaintiffs argued that Parkview had failed to turn over its ledgers for the two years prior to the lawsuit. Parkview had stated that it did not have the documents, as they were “inadvertently destroyed” prior to the lawsuit and there were no backups of the files located on a damaged computer and hard drive. Plaintiffs sought an adverse inference instruction for spoliation. Parkview argued that Plaintiffs never requested retention of its ledgers and that Parkview was under no duty to retain them.

The court noted that the Federal Rules gives the power to issue sanctions, but that federal courts also have that power inherently, although it must be “exercised with restraint and discretion”. The court reiterated the standard, which is that the court must find that the party had an obligation to preserve the evidence at the time it was destroyed, and then determine whether the destruction was intentional. Finally, the court must find that the destroyed evidence would have been relevant.

Plaintiffs claimed that they requested the information in September 2012 and that Parkview threatened them but never provided the evidence, nor did Parkview claim that the documents had been destroyed. Parkview countered that it would have had no reason to believe it would be involved in the litigation at that time, because the Plaintiffs at that time were not and had never been residents; further, the computer and hard drive containing the ledgers had been destroyed inadvertently prior to commencement of litigation.

The court found that Plaintiffs had failed to produce any evidence that Parkview had a duty to preserve or that the destruction was in bad faith. Therefore, the court denied the request for an adverse inference, and ultimately dismissed Parkview from the lawsuit.

ILS – Plaintiff ESI Discovery Experts

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