Diversified Concepts LLC v. Koford
Diversified Concepts LLC v. Koford, 2021 UT App 71 (Mortensen, J.)
A couple hired Companies to construct significant retaining walls on their property. After the couple discovered that the walls were bulging and Companies did not respond as they hoped, the couple hired an attorney, and the attorney sent Companies a letter describing the problems with the walls. The couple—through the attorney—then terminated the services of Companies and wrote a series of letters to Companies describing their process of deconstructing the retaining walls and discovering problems with those walls. After the walls were deconstructed, the couple sued Companies. Companies sought to dismiss the lawsuit because of spoliation—the couple had deconstructed the walls that were at the heart of the lawsuit, so Companies were unable to investigate and defend themselves. The district court denied the request. On interlocutory appeal, the Utah Court of Appeals crafted a new spoliation framework and reversed:
- A party who has control of evidence—a custodial party—may discharge its duty to preserve evidence (thereby insulating it from spoliation sanctions—if it (1) has reasonable grounds for destroying the evidence and (2) provides advance notice to the noncustodial party that allows for a full and fair opportunity to inspect that evidence. That notice must inform the noncustodial party of the anticipated claim, the factual and legal bases for the claim, the evidence relevant to that claim which will be destroyed, the reason why the evidence must be destroyed, the date on which evidence will be destroyed, and the opportunity of the noncustodial party to inspect the evidence.
- The burden is on the custodial party to demonstrate that both elements have been met.
- When assessing which sanctions are appropriate under this framework, courts should consider (1) the degree of fault of the party who altered or destroyed the evidence, (2) the degree of prejudice suffered by the opposing party, and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future.