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Bank Burned by Document Retention Policy Years After Plaintiff Slips on Ice (NY)

June 29, 2016

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In <em><a href="http://blog.wcmlaw.com/wp-content/uploads/2016/06/Sarach-v-MT-Bank-Corp.pdf">Sarach v M&amp;T Bank Corp</a></em>, the Fourth Department recently issued discovery sanctions to a defendant who destroyed surveillance footage pursuant to their normal business practice months before litigation even began.
Plaintiff allegedly sustained injuries in 2009 when he slipped and fell on the ice next to a decorative water fountain outside the defendant’s bank. The plaintiff commenced the action on March 1, 2012, but on August 10, 2010, he sought an order under CPLR 3102(c) for pre-action disclosure and preservation of evidence. Defendant initially opposed the plaintiff’s request, but represented to the Supreme Court that it had already voluntarily undertaken to preserve certain evidence, including accident reports, photographs, and surveillance tapes. Ultimately, the defendant “consent[ed] to an order of preservation” and so in October of 2010, the court granted plaintiff’s application and ordered the defendant to preserve all “photographs [and] video tapes, including but not limited to security and surveillance video related to the subject accident.”
Once the case was brought and discovery commenced, the plaintiff requested surveillance films related to the accident. In response, the defendant stated that those materials had not been preserved. Apparently, it was bank policy to overwrite surveillance video tapes after 90 days, and so surveillance footage from the date of the plaintiff’s accident would have been destroyed approximately 14 months before the court’s order of preservation. However, the defendants did produce several photographs that had been taken after the plaintiff’s accident. The defendants also submitted an affidavit from a vice-president at that branch of the bank stating that she conducted a diligent search of the bank’s records and all the photographs and videos in their possession at the time of the preservation order had been produced. Accordingly, in August of 2014 plaintiff moved pursuant to CPLR 3126 to strike the defendant’s answer on the grounds that the defendant violated the Court’s 2010 order of preservation. The court granted plaintiff’s motion, and the defendant appealed to the Fourth Department.
According to a majority of the Fourth Department, the trial court was overly harsh, and it abused its discretion by striking the defendant’s answer. While the Fourth Department agreed with the Supreme Court’s finding that the defendant “willfully fail[ed] to disclose information,” it also noted that this particular failure did not leave the plaintiff “prejudicially bereft of the means of prosecuting his action.” Because the defendant’s actions did not entirely prejudice the plaintiff’s ability to maintain his claim, the Fourth Department held that the defendant’s answer should not be stricken, but instead, an adverse inference charge with could be given at trial with respect to the unavailable footage.
In dissent, Associate Justice John Curran argued that his colleagues in the Fourth Department overlooked the fact that the video surveillance was destroyed pursuant to normal business practice. While Justice Curran noted that the majority was “rightfully concerned about the perceived misrepresentation in the affidavit from defendant’s counsel seeming to ensure that surveillance video had been preserved,” the defendant’s actions were not willful and contumacious, and so the penalties of CPLR 3126 should not apply. Accordingly, Justice Curran argued that, instead of an adverse inference charge, the better remedy would have been to preclude the defendant from introducing evidence at trial of the destroyed video’s content as part of its direct case.
Despite the split among the Justices of the Fourth Department, the lesson here is clear: take your discovery obligations seriously. Even though the surveillance footage was destroyed pursuant to standard business practices months before the order was issued, the bottom line is that the defendant consented to the order of preservation and failed to challenge the order after it was issued by the Court. Therefore, the majority was “unable to conclude that defendant’s failure to comply with the order was anything but willful.” Defense counsel should certainly have investigated its client's business practices before submitting to a preservation order.  Thanks to Evan King for his contribution to this post.  Please email <a href="mailto:bgibbons@wcmlaw.com">Brian Gibbons</a> with any questions.

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