Indiana Supreme Court Finds No Claim For Spoliation of Evidence Against Employer When Employee’s Injuries Are Covered By The Worker’s Compensation Act
June, 2007
The Indiana Supreme Court recently ruled that an employee injured in a workplace accident to which the Worker’s Compensation Act applies does not have a third-party claim against the employer for spoliation of evidence arising from the accident. Glotzbach v. Froman, 54 N.E.2d 237 (Ind. 2006).
Facts
In Glotzbach, the employee of an environmental waste service corporation was injured while using an electric pump and hose belonging to his employer. The plaintiff suffered fatal burns after an explosion occurred while he and a co-worker were using the pump equipment. Following the accident and at the suggestion of his employer, the co-worker moved the pump equipment and debris from the explosion site. Two days after the accident, the Indiana Occupational Safety and Health Administration (“IOSHA”) contacted the co-worker and instructed him not to dispose of the equipment. However, when IOSHA and the local fire department officials interviewed the co-worker four days later, he reported that the involved pump had been discarded.
The plaintiff filed a complaint against the employer, including a claim for negligent and intentional spoliation of evidence. The employer moved to dismiss the claims, arguing that the Worker’s Compensation Act provided the exclusive remedy for the plaintiff’s accident and, therefore, barred the spoliation claim. The trial court and appellate court found that a valid spoliation of evidence claim existed against the employer. On appeal, the Indiana Supreme Court reversed the lower courts’ holdings and ruled that the employee’s estate did not have a spoliation of evidence claim against the employer because the Worker’s Compensation Act applied.
Analysis
Spoliation of evidence is the “intentional destruction, mutilation, alteration, or concealment of evidence.” Indiana common law does not recognize “first party” spoliation of evidence, which is the intentional or negligent spoliation of evidence by a party to the underlying litigation. Rather, remedies for the destruction of evidence include criminal sanctions against the parties, professional sanctions for attorneys involved in the misconduct and an inference to the jury that the destroyed evidence was unfavorable. In 1991, the Indiana Court of Appeals held that absent an independent contract or imposed duty at the time of the claim of negligent or intentional interference with a potential or actual civil litigation, a cause of action for spoliation of evidence was not recognized by Indiana law. Murphy v. Target Products, 580 N.E. 2d 687, 690 (Ind. Ct. App. 1991). However, in 1998, the Indiana Court of Appeals first recognized a spoliation cause of action against a third-party (i.e. a person who is not a party to the litigation) in Thompson v. Owensby, 704 N. E. 2d 134 (Ind. Ct. App. 1998).
In Glotzbach, the Indiana Supreme Court held that the employer did not owe a duty to preserve the pump involved in the alleged explosion, and, therefore, refused to recognize the plaintiff’s third-party spoliation claim against the employer. Despite IOSHA’s instruction to the decedent’s co-worker to save the pump following the explosion, the Court found that a duty was not created requiring the employer to save the equipment. Although it was likely foreseeable to the employer that the debris from the explosion may have been relevant to a potential claim, the Court found that “mere ownership of potential evidence” does not sufficiently establish a duty to maintain such evidence. In determining whether a spoliation claim exists, Indiana courts focus on the relationship of the parties and whether a duty existed, rather than foreseeability.
In addition, the Court noted several public policy considerations to support its ruling that the plaintiff’s spoliation claim was improper. First, the Court noted that an employer is entitled to recover some of its worker’s compensation benefits if the employee can establish a product liability claim. It is in the employer’s interest, therefore, to preserve evidence that may aid in pursuing subrogation rights against the manufacturer of the product. In addition, to allow claims of spoliation by employees would open the door to litigation against the employer which is exactly what the Worker’s Compensation Act is designed to deter. Further, imposing a duty to preserve evidence could also cause operational issues for the employer. An obligation should not be placed on the employer to retain its equipment indefinitely or to refrain from repairing equipment that might be necessary to conduct business.
Learning Point
As a general rule, Indiana Courts do not recognize claims against employers for third-party spoliation of evidence relevant to claims arising out of workplace accidents. The Worker’s Compensation Act provides the exclusive remedy for industrial accidents and protects employers against claims for negligence and spoliation of evidence. However, as a practical matter, employers should take precautions to preserve evidence whenever possible, in order to avoid the expense of defending a spoliation claim (improper or otherwise) or engaging in discovery disputes that may arise during the course of litigation.
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