( 1 ) after the fire , the Fire Marshal pointed to the ceiling mounted furnace equipment as the area of origin of the fire and stated to Aqua ’ s property manager , “ This is a possible cause , and you may want to save it for your insurance company or other entities ”;
( 2 ) Aqua preserved some , but not all of the furnace system ; and
( 3 ) it was later found that the parts of the system not retained were the most relevant parts for determining the cause of the fire .
This case is a bit unusual in that other spoliation cases address situations where a party arguably knew or should have known to preserve evidence , and failed to preserve any evidence . In this case , on the other hand , the target of the spoliation motion ( Aqua ) had hired a subcontractor and preserved evidence from the correct area at issue , but had not made the correct decision regarding what evidence to preserve .
Aqua responded to NIPSCO ’ s Motion for Default by showing it had retained a subcontractor to remove the ceiling mounted “ furnace ,” and then saved the removed parts in a separate storage area . NIPSCO ’ s experts contended that not all of the relevant equipment and ductwork had been retained and that the parts that had been retained really were not the right ones . NIPSCO contended that because Aqua had failed to identify and preserve the correct parts , a default judgment should be entered against Aqua , even though it retained at least some of the evidence in the area the Fire Marshal had indicated as the area of origin . Thus , NIPSCO contended that the Trial Court erred , as a matter of law , in not entering a finding of spoliation against Aqua .
Before rendering its ruling , the Court of Appeals cited well-established Indiana law on spoliation , which is important and worthy of repeating as a refresher for all who handle evidence , or what may be deemed to be relevant evidence in litigation . That law is as follows :
Our Supreme Court has recognized that “[ t ] he intentional or negligent destruction or spoliation of evidence cannot be condoned and threatens the very integrity of our judicial system .”
Gribben v . Wal – Mart Stores , Inc ., 824 N . E . 2d 349 , 354 ( Ind . 2005 ). However , a finding of spoliation alone does not necessarily require the imposition of sanctions . Popovich , 17 N . E . 3d at 410 ( citing Howard Reg ’ l Health Sys . v . Gordon , 952 N . E . 2d 182 , 189 – 90 ( Ind . 2011 )). Rather , a trial court has broad discretion to redress spoliation of evidence ; its power to sanction spoliation is derived from its broad and inherent discretionary powers to issue evidentiary rulings and to manage the orderly and expeditious disposition of cases . Id . Indiana Trial Rule 37 ( B ) also authorizes trial courts to respond to discovery violations with such sanctions “ as are just ,” which may include , among others , ordering that designated facts be taken as established , prohibiting the introduction of evidence , dismissal of all or any part of an action , rendering a judgment by default against a disobedient party , and payment of reasonable expenses including attorney fees . Gribben , 824 N . E . 2d at 351 . Additionally , if spoliation by a party to a lawsuit is proved , rules of evidence permit the jury to infer that the missing evidence was unfavorable to that party . Glotzbach , 854 N . E . 2d at 338 .
When deciding whether to sanction a party for the spoliation of evidence , courts consider two primary factors : ( 1 ) the degree of culpability of the party who lost or destroyed the evidence ; and ( 2 ) the degree of actual prejudice to the other party . Popovich , 17 N . E . 3d at 410 ; see also WESCO Distribs ., Inc ., 23 N . E . 3d at 703 ( trial court ’ s response to the loss of evidence depends on both the degree of culpability and the extent of prejudice ). Culpability can range along a continuum , from destruction intended to make evidence unavailable in litigation to inadvertent loss of information for reasons unrelated to the litigation . Howard Reg ’ l Health Sys ., 952 N . E . 2d at 189
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