Part One of a two-part series.
When construction disputes arise, the evidence often tells the story. Whether it’s defective materials, improper installation, or design flaws, physical evidence and documentation can make or break a case. But what happens when that crucial evidence disappears, gets destroyed, or is altered? This is where the legal concept of “spoliation of evidence” becomes critical to understand.
What is Spoliation of Evidence?
Spoliation of evidence occurs when a party to litigation intentionally or negligently destroys, alters, or fails to preserve evidence that is relevant to ongoing or anticipated legal proceedings.
In simple terms, spoliation happens when someone who should have preserved evidence either deliberately gets rid of it or carelessly allows it to be lost or damaged. This can occur before a lawsuit is filed, during litigation, or even after a legal hold notice has been issued.
The spoliation of evidence is a serious issue that can significantly “undermine the truth-seeking function of the judicial system and the adjudicatory process.” Brookshire Bros., Ltd. v. Aldridge, 438 S.W.3d 9, 16-17 (Tex. 2014). The absence of documentary proof or other relevant discoverable evidence can significantly hamper the nonspoliating party’s ability to present its claims or defenses. Id.
The Legal Duty to Preserve Evidence
Once litigation is reasonably anticipated, parties have a legal obligation to preserve relevant evidence. Wal-Mart Stores, Inc. v. Johnson, 106 S.W.3d 718, 722 (Tex. 2003). This duty typically arises when:
- A lawsuit has been filed
- A party receives a demand letter or notice of claim
- A notice to preserve evidence is received
- A letter of representation is received
- Internal discussions suggest litigation is likely
- A party becomes aware of a potential legal dispute or that legal action could reasonably follow from an incident.
- In the construction industry, awareness of potential legal dispute could take many forms – including realization of defective or nonconforming materials, defective construction, potential breach of contract, unjustified nonpayment, and even injuries. (I will elaborate on spoliation related to the construction industry in part two of this series.)
Both a) the party who has potentially been harmed and is in a position to bring a claim and b) the party who allegedly caused the harm, have the same duty to preserve evidence, so that the ability to properly present claims and defenses is maintained.
The scope of this preservation duty is broad and can include preserving physical evidence, documents, electronic data, photographs or video, communications, and even witness testimony.
Spoliation in Construction Cases: Common Scenarios
Construction litigation in both the residential and commercial context presents unique challenges when it comes of evidence preservation. Here are some typical scenarios where spoliation issues arise:
Physical Evidence Destruction
Construction sites are dynamic environments where evidence can easily be lost or destroyed. Common examples include:
- Demolition and Remediation: When defective work is torn out and replaced before proper documentation, crucial evidence may be lost forever.
- Material Disposal: Throwing away allegedly defective materials, failed components, or damaged products before they can be inspected and tested.
- Site Cleanup: Routine cleaning and maintenance activities that inadvertently destroy evidence of water intrusion, structural problems, or other defects.
Documentation Issues
- Missing Records: Failure to maintain or preserve construction logs, inspection reports, change orders, or correspondence.
- Electronic Data Loss: Deletion of emails, text messages, photos, or digital files relevant to the construction project.
- Overwritten Security Footage: Allowing surveillance cameras to record over footage that might show construction activities or incidents.
Testing and Sampling Destruction
- Destructive Testing: Consuming samples or specimens during testing without preserving enough material for opposing parties to conduct their own analyses.
- Improper Storage: Allowing evidence to deteriorate due to inadequate storage conditions.
Consequences of Spoliation
Once spoliation has been determined, courts have a wide range of remedies available and discretion to craft appropriate remedies. Brookshire Bros., Ltd., 438 S.W.3d at 21. The sanction implemented should be directly related to the action and not be excessive. Id. Courts determine the extent of the sanctions by weighing the culpability of the spoliating party and the prejudice of the non-spoliating party. Petro. Sols., Inc. v. Head, 454 S.W.3d 482, 488-89 (Tex. 2014).
Courts take spoliation seriously, and the consequences can be severe:
Monetary Sanctions
Courts may impose financial penalties to compensate the opposing party for the costs of dealing with the spoliation, including attorney fees and expert witness costs.
Exclusion of Evidence
Courts may exclude certain testimony or evidence that may be based on what the lost evidence would have shown or supported as there is no longer a way to verify this evidence with the corresponding spoliated evidence.
Adverse Inference Instructions
One remedy is an “adverse inference” instruction, where the judge tells the jurors they may assume the destroyed evidence would have been unfavorable to the party who spoiled it. This can be devastating to a case.
Striking Pleadings
Another remedy that the court may implement is to strike the spoliating party’s pleadings, meaning the Court will eliminate certain claims, parts or elements of claims, or defenses. This will prevent the spoliating party from arguing the struck claims, facts or elements of the claim, or defenses to the jury or court. This, too, can be devastating to the defense of a case.
Case Dismissal or Default Judgment
In extreme cases, courts may dismiss a case entirely or enter default judgment against the spoliating party.
The more severe sanctions are not implemented lightly by the court. A spoliation instruction or striking the spoliating party’s pleadings relating to what the spoliated evidence might have shown are available only if “(1) the spoliating party acted with intent to conceal discoverable evidence, or (2) the spoliating party acted negligently and caused the non-spoliating party to be irreparably deprived of any meaningful ability to present a claim or defense.” Petro. Sols., Inc., 454 S.W.3d at 488-89.
Part Two in this series will discuss: Texas Residential Construction Litigation Act (TRCLA) Considerations, Best Practices for Evidence Preservation, and the Importance of Legal Counsel.
Have a construction or litigation question? Please view our Construction Law page or contact a team member.
