Strategies, Challenges, and Answers

Nevada Does Not Recognize An Independent Tort Action For Spoliation

After remodeling, the Taco Cabana Restaurant was open again for business. But the remodeled decorative ceiling collapsed onto the customers.  People were hurt.  A lawsuit followed.

The contractors and the restaurant entered into an agreement to preserve the collapsed ceiling until all lawsuitsregarding the collapse were resolved.  Thereafter, the insurance companies of the contractor and the restaurant became involved.  The insurance companies paid the warehouse fees to store the debris. But after three years, the insurance companies didn’t want to carry the storage fees any longer.  They stopped paying the bill and eventually, the debris was disposed of.

Timber Tech, the manufacturer of the decorative beams used in the ceiling, was a defendant in the suit brought by the customers.  After the debris was discarded, Timber Tech settled with the injured customers and then filed suit against the contractor and the insurance company.  While the causes of action were entitled Punitive Damages, Equitable Indemnification and Contribution, the court pointed out that all of them revolved around the disposal of the debris.  In dispositive motions, the trial court found against Timber Tech.

Timber Tech appealed.  In Timber Tech Engineered Bldg. Prods. v. Home Ins. Co., 118 Nev. 630, 55 P.3d 952 (2002), the Nevada Supreme Court agreed with the trial court, which had found in favor of the contractors and the insurance company.  The Court distinguished the claims brought against the contractor (first-party spoliation against a party to the underlying litigation) and the insurance companies (third-party spoliation against those who were not parties).  Citing to the California precedent of Temple Cmty. Hosp. v. Superior Court, 20 Cal. 4th 464, 84 Cal. Rptr. 2d 852, 976 P.2d 223 (1999), the Nevada Supreme Court determined that the burdens of recognizing a separate tort of spoliation outweighed the benefits of recognizing a tort cause of action for spoliation.  The court saw the burdens as including the cost to the judicial system of additional litigation, the speculative nature of the claimed loss and the burdens on society of having to preserve evidence unnecessarily.  The Court pointed out that since Timber Tech was not a party to the agreement to preserve the evidence, the parties did not owe any duty to Timber Tech to continue with the preservation.  Furthermore, Timber Tech did not plead a breach of the agreement.

In the end, the Nevada Supreme Court rejected the concept of an independent tort for spoliation, in either the first or the third-party context.

If you have questions about insurance coverage in Nevada, please don’t hesitate to call Mike Mills at 702-240-6060×114 or email him at mmills@blwmlawfirm.com.

Michael Mills About Michael Mills

Mr. Mills practices in the area of civil litigation and appeals, with particular experience in matters involving trucking liability, insurance defense, insurance coverage, premises liability, products liability and defense of personal injury. Mr. Mills is a member of the Trucking Insurance Defense Association, the Defense Research Institute Trucking Committee and the Nevada Motor Transport Association. Mr. Mills is licensed to practice before the Nevada Supreme Court and the Utah Supreme Court. He is also licensed to appear before the United States Supreme Court, the U.S. District Courts for the Districts of Nevada and Utah, as well as the U.S. Court of Appeals for the Ninth Circuit. Mr. Mills has created 3 Blogs for the benefit of the insurance industry. He serves as editor and publisher of the Nevada Insurance Law Blog, the Nevada Coverage and Bad Faith Blog and the Nevada Trucking Law Blog.

 
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