Spoliation Examined in LPL Context

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It is a risk management necessity that professionals document their files appropriately and confirm conversations in writing. A recent NY decision goes further, and suggests that it may be wise to save original documents to reduce the likelihood of a spoliation argument. In that decision, the Appellate Division, Second Department of New York considered whether a former client was entitled to evaluate an original document to determine whether her fingerprints were on a settlement offer.

In Doviak v. Finkelstein & Partners, LLP, a law firm (“Defendant Firm”) represented Plaintiffs in an underlying personal injury action stemming from a fall at a construction site.  During trial, the underlying defendants offered increasing settlements beginning at $4 million and finally $10 million.  Plaintiff repeatedly declined the offers on the advice of counsel.

Just prior to closing statements, the underlying defendants provided a written offer of $12 million.  The Defendant Firm allegedly communicated the offer to Plaintiffs, and allegedly handed the written document to Plaintiff’s wife (“Wife”), who apparently rejected the offer and handed the document back to counsel. Things turned for Plaintiffs, however, when the jury returned a lower verdict.

Plaintiffs sued Defendant Firm for malpractice and alleged that it was not entitled to any fees from the verdict. Here’s where things get interesting.  Plaintiffs alleged that they were never informed of the $12 million offer, and would have accepted if they had been.  During Wife’s deposition counsel handed her the “original offer document” of the $12 million settlement.  Plaintiffs immediately moved for sanctions on spoliation grounds, claiming that Defendant Firm had “failed to preserve the offer document for fingerprint analysis and had made such analysis impossible” by handing it to Wife and that the results of an analysis would have shown that Wife’s fingerprints were not on the document.

The Court denied the spoliation motion, and found that Defendant Firm was entitled to its fees.  Plaintiffs appealed.

The Second Department affirmed this determination. In doing so, the Court held that the record supported the conclusion that Plaintiffs failed to demonstrate that Defendant Firm destroyed fingerprint evidence which was critical to the case, and that they had also failed to demonstrate a request or a desire that the offer document be tested for fingerprints, or preserved for forensic testing, prior to the deposition.

Further, plaintiffs failed to demonstrate that, in handing the document over during deposition, that Defendant Firm had destroyed potential forensic evidence or that the failure to preserve the document fatally compromised Plaintiffs’ ability to prove their claims.

While seemingly redundant, this case shows that attorneys should make certain that written settlement offers are communicated clearly to their clients, and may even want to keep records of those efforts at communication.  Otherwise, they may find themselves dealing with fingerprint analysts in malpractice actions.


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