It is hereby ordered that said appeal is unanimously dismissed. Same memorandum as in People v Aloi ( 78 AD3d 1546 [decided herewith]).
ismissing the spoliation claim. We affirmed and explained, "[a]n action based on the tort of spoliation is meritless unless it can be shown that a party's underlying cause of action has been prejudiced by the spoliation."
Day's estate failed to make out a valid claim for wrongful death because the defendants did not owe a duty to Day; it follows that the failure to disclose a witness to the chase could not have prejudiced the estate because the estate did not have a viable cause of action against the defendants.
897 P.2d 78, 81 (Alaska 1995).
Id. at 79.
id.
The officers stated that they slowed down and backed off from the chase prior to the crash. But the previously undisclosed witness reported that the officers did not slow down prior to the crash. Id. at 79-80.
Id. at 81.
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. Whether the Cook note would have made a difference in the Dooley v. Paul trial has not been determined. For purposes of the decision entered today, it is only important to observe that Dooley's claim for concealment of the Cook note alleges that a viable underlying cause of action was prejudiced by a defendant's intentional interference with necessary evidence.
The superior court opted not to make any conclusions of law or fact about this argument. We did not grant review on this question.
3. The tort of spoliation requires that evidence be destroyed or concealed until it is naturally destroyed.
Hazen v. Municipality of Anchorage concerned the allegation that necessary evidence was intentionally destroyed and irretrievably lost. We have expanded the definition of "destroyed evidence" only once, and only to explain that there is no functional difference between permanently destroying evidence and volitional actions that permit evidence to dissipate or disappear. In Hibbits v. Sides we held that there is "no difference between the intentional destruction or alteration of evidence and the intentional concealment of evidence until it is destroyed by natural causes." In either circumstance, the evidence is completely unavailable for use by one party as a result of another party's decision to interfere with his or her civil cause of action.
718 P.2d 456 (Alaska 1986).
Hibbits v. Sides. 34 P.3d 327 (Alaska 2001).
Id. at 330.
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 evidence caused a party to incur actual damages. Intentional spoliation is not the appropriate cause of action when evidence is concealed, but not destroyed, because late-produced evidence — even evidence produced after the entry of judgment — can still be presented to the fact finder for a ruling on the merits. And trials on the merits are most consistent with the truth-seeking function of the court.
In contrast, when destroyed evidence is permanently unavailable for trial, the impact the missing evidence would have had on the outcome of the case, if any, is wholly speculative. Stale v. Carpenter, 171 P.3d 41, 66-67 (Alaska 2007). For this reason, we have explained that punitive damages are available in spoliation claims, even where a plaintiff cannot prove compensatory damages, because the absence of evidence can make it impossible to prove compensatory damages. Id.
B. Existing Remedies For Delayed Production Of Evidence
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. A court may consider the nature and severity of the violation, the prejudice to the opposing party, and any other factors it deems appropriate.' Courts may order sanctions including payment of expenses incurred as a result of late-produced evidence, burden-shifting, or exclusion of pleadings, testimony, or other evidence. In Dooley's case, Watson was sanctioned for the late production of photograph annotations. The court required him to pay $12,200 to Dooley, Dooley was given the opportunity to re-depose Paul, and additional time was allowed to prepare for trial. In short, the trial court's response was appropriately aimed at reinforcing the importance of abiding by the discovery rules, leveling the playing field, insuring that the case could be fairly tried on its merits, and remedying the financial consequences of concealment.
Sowinski v. Walker, 198 P.3d 1134, 1158 (Alaska 2008).
Id.; Alaska R. Civ. P. 37(b).
Alaska R. Civ. P. 37(b)(2).
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. A motion filed by Dooley under Civil Rule 60(b) would be time-barred even though Dooley cannot be accused of failing to respond promptly; the existence of the Cook note was not revealed to him until more than a year after entry of the judgment in Dooley v. Paul.
"The motion shall be made within a reasonable time, and . . . not more than one year after the date of notice of the judgment. . . ." Alaska R. Civ. P. 60(b).
Final judgment in Dooley v. Paul was entered on November 11, 2005. It appears that as of January 7, 2008, when the superior court denied Allstate's first summary judgment motion, the Cook note was still unknown.
C. Fraudulent Concealment Of Evidence Is The Appropriate Cause Of Action When Evidence Is Withheld But Not Destroyed.
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 delays another party's access to such evidence in violation of an existing duty to disclose.
Alaska Civil Rule 26(a) sets out the affirmative duty of litigants to disclose all relevant evidence in a civil action without awaiting a discovery request.
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. In Carter v. Hoblit, we stated that a cause of action for fraud may be alleged in cases of "silence or non-disclosure when a fiduciary relationship exists between parties" or, in the absence of such a duty, if the party makes statements that are "half truths, or true remarks which omit material information." Numerous other jurisdictions specifically recognize "fraudulent concealment" as a type of fraud applicable when information is intentionally withheld. This cause of action is a better fit for the harm Dooley alleges, and we recognize fraudulent concealment of evidence as an independent cause of action available in Alaska in limited circumstances.
Carter v. Hoblit, 755 P.2d 1084, 1086 (Alaska 1988); see also Henash v. Ipalook, 985 P.2d 442 (Alaska 1999); Ben Lomond, Inc. v. Schwartz, 915 P.2d 632, 634 (Alaska 1996).
Carter, 755 P.2d at 1086; see also Ben Lomond, Inc., 915 P.2d at 634 (holding "a fiduciary duty allows a finding of fraud even where the fraud is committed by silence or non-disclosure, while the absence of a fiduciary duty precludes a finding of fraud unless the offender makes remarks which are either half true or which omit material information.").
Fraudulent concealment is recognized as a cause of action in numerous jurisdictions across the United States. See, e.g., Taylor v. Am. Chemistry Council, 576 F.3d 16 (1st Cir. 2009); Lemer v. Fleet Bank, N.A., 459 F.3d 273, 291-92 (2d Cir. 2006); Caperton v. A.T. Massey Coal Co., Inc., 225 W.Va. 128, 690 S.E.2d 322 (2009); Picher v. Roman Catholic Bishop of Portland, 91A A.2d 286 (Me. 2009). Dooley draws our attention specifically to the state of New Jersey where fraudulent concealment is both broadly available as a cause of action and specifically applicable to situations in which evidence has been concealed. The elements of fraudulent concealment in New Jersey, as applied to concealed evidence are: (1) the defendant had a "legal obligation to disclose evidence in connection with existing or pending litigation," (2) the concealed evidence "was material to the litigation," (3) the evidence could not "reasonably" have been procured from another source, (4) the defendant withheld or concealed the evidence "with purpose to disrupt the litigation," and (5) "plaintiff was damaged in the underlying action by having to rely on an evidential record that did not contain the evidence defendant concealed." Rosenblit v. Zimmerman, 166 N.J. 391, 766 A.2d 749, 758 (2001).
The elements we adopt for the tort of fraudulent concealment of evidence are: (1) the defendant concealed evidence material to plaintiffs cause of action; (2) plaintiffs 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.
1. In Alaska, a claim for fraudulent concealment of evidence is only available when no other remedy is available.
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. This is consistent with our view that most discovery violations can be appropriately addressed with our existing civil rules. We intend the tort of fraudulent concealment of evidence to be available only when evidence is concealed until after judgment is entered and the time for seeking relief from judgment under Civil Rule 60(b) has expired.
See, e.g., Rosenblit, 766 A.2d at 758 (the same plaintiff may bring an independent tort suit for fraudulent concealment and also recover through discovery sanctions).
Civil Rules 37 and 60(b) will often provide the exclusive remedies for late-produced discovery in Alaska. But we note that existing remedies for the concealment of evidence are not limited to those provided in the civil rules. For example, when concealed evidence prevents a litigant from discovering a cause of action, our existing case law allows for the tolling of the statute of limitations under the "discovery rule." See Williams v. Williams, 129 P.3d 428, 432 (Alaska 2006); Law Offices of Sleveyi D. Smith, P.C. v. Borg-Warner Sec. Corp., 993 P.2d 436, 446 (Alaska 1999).
The dissent argues that a "case within a case" trial may not provide a satisfactory remedy for evidence that was concealed because various factors may prevent the aggrieved party from recreating the original trial for a fact finder. We agree this approach entails the risks associated with the passage of time: memories fade, witnesses die, and other evidence may be lost or destroyed. These risks are a disadvantage of the "case-within-a-case" approach, but we believe the advantages of the approach outweigh its drawbacks. Most notably, today's approach avoids the wholly speculative assessment of how destroyed evidence might have affected the original trial. The availability of the no-longer-concealed evidence substantially reduces the difficulty of determining how the evidence would have affected the original trial. In contrast, the remedy proposed by the dissent would allow an independent claim based upon newly discovered evidence without regard to whether it would have made a difference to the original action. We already engage in merit-based "case-within-a-case" trials in other contexts. See e.g., Shaw v. State, Dep't of Admin., 861 P.2d 566, 573 (Alaska 1993) ("In order to prove he would have been found innocent at trial on the original charges, Shaw, as most civil malpractice plaintiffs, will have to present a `trial within a trial.'"). Extending the process to instances of fraudulent concealment of evidence is similarly appropriate.
2. Fraudulent concealment of evidence is not limited to pending litigation.
In New Jersey, a cause of action for fraudulent concealment of evidence may be maintained only "in connection with existing or pending litigation." If adopted, this element would bar litigants in Dooley's situation from obtaining relief because final judgment has been entered in Dooley's underlying cause of action and the time for seeking relief from judgment has expired. We believe the existing civil rules in Alaska provide adequate remedies for situations in which evidence becomes available while litigation is still pending or before the expiration of the time for seeking relief from judgment under Civil Rule 60(b). Thus, we do not recognize an independent cause of action for late-produced evidence in circumstances when Civil Rules 37 and 60(b) provide redress; a claim for fraudulent concealment of evidence in Alaska may not be filed in conjunction with pending litigation.
Rosenblit, 766 A.2d at 758.
3. Fraudulent concealment of evidence is not a general cause of action available when information is intentionally withheld.
Some jurisdictions permit claims for fraudulent concealment in multiple circumstances involving intentionally withheld information. For example, as fraudulent concealment is defined in New Jersey, the elements have encompassed claims against a seller in a real estate transaction, against a car dealership regarding the sale of an automobile, and against a tenant who misrepresented the status of his insurance. In Alaska, the tort of fraud has not expanded in the same manner; we do not intend to so expand this cause of action now. Instead, we affirm our previous decisions recognizing that a cause of action for fraud may exist when information is withheld in spite of a duty to disclose it. Our existing discovery rules impose a duty to disclose relevant evidence; a violation of this duty is the foundation for the tort of fraudulent concealment of evidence.
See, e.g., Taylor v. Am. Chemistry Council, 576 F.3d 16 (1st Cir. 2009) 2009; Lemer v. Fleet Bank, N.A., 459 F.3d 273, 291-92 (2d Cir. 2006); Caperton v. A.T. Massey Coal Co., 225 W.Va. 128, 690 S.E.2d 322 (2009); Picher v. Roman Catholic Bishop of Portland, 974 A.2d 286 (Me. 2009).
State, Dep't of Envir. Protection v. Ventron Corp., 94 N.J. 473, 468 A.2d 150 (1983).
Ghaleb v. King Motors, Inc., 2008 WL 4763313 (N.J.Super.App.Div. 2008).
Boston Market Corp. v. Hack, 2007 WL 2349989 (N.J.Super.App.Div. 2007).
Cf. Ben Lomond, Inc. v. Schwartz, 915 P.2d 632, 634 (Alaska 1996) (holding that withholding information may only constitute fraud in the presence of a fiduciary relationship); Carter v. Hoblit, 755 P.2d 1084, 1086 (Alaska 1988) (holding that fraud can be established by nondisclosure when a fiduciary relationship exists between the parties).
V. CONCLUSION
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.
718 P.2d 456 (Alaska 1986).
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." Although Hazen involved both first-party and third-party spoliation, the decision's primary basis was Smith v. Superior Court, where the California Court of Appeal allowed an accident victim to sue a car dealer who had destroyed or lost important vehicle parts necessary for the victim's products liability lawsuit. But the California Supreme Court subsequently refused to recognize the tort for either first-party spoliation cases or third-party spoliation cases. And in the nearly 25 years after Hazen the "new tort" has gained little traction in other jurisdictions. 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 concur with the court's recognition of this new tort.
Id. at 463 (recognizing "new tort" of intentional interference with prospective civil action by spoliation of evidence although issue was not raised by the parties and "was neither briefed nor discussed at oral argument").
Hibbits v. Sides, 34 P.3d 327, 329 (Alaska 2001), clarified diat Hazen involved both first-party and third-party spoliation claims.
Hazen, 718 P.2d at 463-64 (discussing Smith v. Superior Court, 151 Cal.App.3d 491, 198 Cal. Rptr. 829, 831-32, 836-37 (1984)).
Cedars-Sinai Med. Ctr. v. Superior Court, 18 Cal.4th 1, 74 Cal.Rptr.2d 248, 954 P.2d 511, 514-21 (1998). In Cedars-Sinai the court acknowledged the policy concerns arising from the intentional destruction of evidence. Id. at 515. But weighing against recognizing the new tort were (1) "the dangers of creating new torts to remedy litigation-related misconduct"; (2) the extensive and effective nontort remedies available to address spoliation; (3) the elusive certainty of harm in spoliation cases impeding the jury's ability to evaluate the evidence and accurately compensate a party; and (4) the costs associated with creating a spoliation tort remedy. Id. at 515-21. Expressly "part[ing] company" with Smith v. Superior Court, the court declined to recognize a tort "for the intentional destruction or suppression of evidence by a party to the underlying litigation." Id. at 513, 519 n. 3, 521.
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").
Temple Cmty. Hosp. v. Superior Court, 20 Cal.4th 464, 84 Cal.Rptr.2d 852, 976 P.2d 223, 225 (1999) (expanding Cedars-Sinai to spoliation caused by non-party).
See Timber Tech Eng'd Bldg. Prods, v. The Home Ins. Co., 118 Nev. 630, 55 P.3d 952, 954 (2002) ("[T]he vast majority of jurisdictions have never recognized tort remedies for spoliation of evidence.").
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. For the new tort the court concludes that unlike the complete destruction of evidence and its unavailability for trial, "mere concealment" of evidence beyond the time the victimized party can do anything about it in the underlying litigation does not really create uncertainty whether the absence of the evidence caused the victim any actual harm — the victim simply must go to the expense of a second trial and prove that the first trial would have had a quantifiably different conclusion. I disagree.
Hazen, 718 P.2d at 464 n. 10 (noting that because Hazen might prove compensatory damages in the form of extra expense in litigating underlying claims without the destroyed evidence on remand, there was no need to address the issue of punitive damages in the absence of compensatory damages); State v. Carpenter, 171 P.3d 41, 66-67 (Alaska 2007) (affirming punitive damages award accompanying compensatory damages award for destroyed evidence (but not for underlying tort claim), and noting Hazen's contemplation that punitive damages might be awardable even in the absence of a compensatory damages award and that "punitive damages may sometimes be the only appropriate damages recoverable for spoliation, especially when the jury finds no liability for the underlying claims" (emphasis in original)).
First, if a victim can prove the five non-damages elements of the new fraudulent concealment tort established by the court, the victim already has established both (1) the right to receive the compensatory litigation-costs damages noted in Hazen and (2) the obvious basis for "retribution and deterrence" noted in State v. Carpenter. The court's narrow focus on whether the victim can prove that the underlying trial would have been quantifiably different ignores the harm unquestionably caused by the fraudulent concealment of evidence — the added expense to the victim and the affront to our system of justice from intentional disruption of the underlying litigation.
The five non-damages elements adopted for the fraudulent concealment of evidence tort are: (1) the defendant concealed evidence material to the plaintiff's cause of action; (2) the plaintiff's underlying cause of action was viable; (3) the evidence could not reasonably have been procured from another source; (4) the evidence was with-held with the intent to disrupt or prevent litigation; and (5) the withheld evidence was discovered at a time when the plaintiff lacked another available remedy.
718 P.2d at 464 n. 10.
171 P.3d at 67.
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 create the new tort, it should not create a remedial framework different from Hazen.
For the foregoing reasons, I concur in part and dissent in part.