Restaurant Management Co. v. Kidde-Fenwal, Inc.

1999 NMCA 101, 986 P.2d 504, 127 N.M. 708
CourtNew Mexico Court of Appeals
DecidedJune 24, 1999
Docket19,137
StatusPublished
Cited by20 cases

This text of 1999 NMCA 101 (Restaurant Management Co. v. Kidde-Fenwal, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Restaurant Management Co. v. Kidde-Fenwal, Inc., 1999 NMCA 101, 986 P.2d 504, 127 N.M. 708 (N.M. Ct. App. 1999).

Opinion

OPINION

BUSTAMANTE, J.

{1} This case requires us to examine the scope and manner of exercise of a court’s inherent power to sanction litigants for spobating evidence before initiating litigation. Plaintiffs appeal the dismissal of their suit, which they filed against Defendants for damages caused by a fire at a restaurant in Carlsbad, New Mexico. Before filing suit, Plaintiffs allowed a fire-suppression system to be destroyed during renovation of the restaurant. The fire-suppression system allegedly failed, abowing the fire to become more destructive than it should have been. All Defendants maintain they needed access to it to prepare their respective defenses. After learning of the loss of the fire-suppression system, Defendants all moved either for summary judgment or dismissal. The district court granted each of the motions because Plaintiffs had permitted the destruction of evidence that should have been preserved. We reverse and remand for reconsideration in bght of this opinion.

FACTS

{2} The underlying facts are largely undisputed. In the late afternoon of February 1, 1995, employees on duty at Restaurant Management Company’s (RMC’s) Carlsbad, New Mexico, Long John Silver’s restaurant heard popping noises, smelled burning electrical insulation, and saw smoke in the area of one of the restaurant’s fryers. On closer inspection, the employees noticed the fryer’s heating cobs glowing bright red. They turned the fryer off, but the ob in it caught fire nonetheless. The employees attempted unsuccessfully to control the fire; it soon spread to other parts of the restaurant, causing considerable damage.

{3} Prior to the fire, RMC hired Hobart Corporation (Hobart) to examine the fryer because it had not been heating properly. The Hobart technicians who examined the fryer recommended that RMC have new heating elements installed. RMC agreed and purchased the elements from Hobart. Two days before the fire occurred, RMC hired Vance Galloway, doing business as Quality Heating, Air Conditioning and Refrigeration of Carlsbad (Quality), to install the new heating elements. Also prior to the fire, Fire Safety Industries, Inc. (Fire Safety), had for some time periodically inspected and maintained the fire-suppression system in the restaurant. Kidde-Fenwal, Inc. (Kidde-Fenwal), manufactured the fire-suppression system that allegedly failed to activate during the fire and that Plaintiffs allowed to be destroyed.

{4} RMC had fire insurance on the building with St. Paul Fire and Marine Insurance Company (St.Paul). On February 6, 1995, several days after the fire, Raymond Marion, an independent adjuster working for St. Paul, examined the restaurant. Based on his investigation he concluded that St. Paul might have subrogation claims against Hobart, Quabty, and Kidde-Fenwal. Two days later, on February 8, 1995, St. Paul claims adjuster Juan Azcarate hired Richard Skinner, an independent fire investigator, to examine the restaurant and attempt to determine the cause of the fire. Skinner concluded that a problem in the fryer caused it to overheat, which in turn caused the oil to catch fire. He recommended that St. Paul remove and save the fryer. He also concluded that the fire-suppression system located in the hood above the fryer had failed to activate during the fire, and he recommended that St. Paul hire an engineer to examine both the fryer and the fire-suppression system.

{5} St. Paul hired engineer Lewis Poe to investigate the fire further. Poe concluded that “[t]he probable cause of the fire was an electrical short in the fryer which over heated [sic] the fat to its ignition point.” Poe also found that the fire-suppression system “failed to operate in a timely manner,” suggesting that it was designed improperly. Poe submitted his report to St. Paul on May 15, 1995, but by that time the fire-suppression system had already been destroyed during the razing of the restaurant preparatory to reconstruction.

{6} Plaintiffs filed their suit on October 21, 1996. It included claims for breach of implied warranty and negligence against all four Defendants, and for strict liability against Defendants Kidde-Fenwal and Hobart. Upon learning of the destruction of the fire-suppression system, Defendants each moved either for summary judgment or dismissal of the complaint. The district court granted each of the motions. The district court did not enter any findings of fact or conclusions of law in support of its decision. It did send the parties a letter ruling in which it stated: “In my opinion the defense Motions To Dismiss and for Summary Judgment must be granted because of the destruction of necessary evidence which should have been preserved.”

{7} Subsequent to the filing of the appeal, Kidde-Fenwal settled its dispute with Plaintiffs, and it has been dismissed as a party.

STANDARD OF REVIEW

{8} The parties agree that the motions forming the basis of this appeal were directed to the court’s inherent power. In addition, to the extent the court explained its ruling, we can infer that it intended to exercise its inherent power. We therefore analyze the district court’s ruling in the context of case law discussing the inherent power of courts. Cf. Baliotis v. McNeil, 870 F.Supp. 1285, 1289 (M.D.Pa.1994) (invoking court’s own inherent power because, “[although raised in the context of a summary judgment motion, the arguments of [the defendants] address[ed the e]ourt’s discretion to impose appropriate sanctions for spoliation of evidence”). We review the district court’s exercise of its inherent power to dismiss Plaintiffs claims for abuse of discretion. See Chambers v. NASCO, Inc., 501 U.S. 32, 55, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991); Gonzales v. Surgidev Corp., 120 N.M. 151, 157, 899 P.2d 594, 600 (1995). Our review is deferential. See Marrocco v. General Motors Corp., 966 F.2d 220, 223 (7th Cir.1992) (‘We cannot understate the difficulty of the task litigants face when challenging a district court’s choice of sanctions.”).

DISCUSSION

{9} The California Court of Appeal has defined spoliation broadly as “the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence, in pending or future litigation.” Willard v. Caterpillar, Inc., 40 Cal.App.4th 892, 48 Cal.Rptr.2d 607, 616 (1995), overruled in part on other grounds by Cedars-Sinai Med. Ctr. v. Superior Court, 18 Cal.4th 1, 74 Cal.Rptr.2d 248, 954 P.2d 511, 521 n. 4 (1998). “Destruction of potentially relevant evidence obviously occurs along a continuum of fault — ranging from innocence through the degrees of negligence to intentionality. The resulting penalties vary correspondingly.” Welsh v. United States, 844 F.2d 1239, 1246 (6th Cir.1988).

{10} The vehicles for imposing penalties likewise vary. For example, a majority of states, including New Mexico, see NMSA 1978, § 30-22-5 (1963), have laws criminalizing the destruction of evidence.

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Bluebook (online)
1999 NMCA 101, 986 P.2d 504, 127 N.M. 708, Counsel Stack Legal Research, https://law.counselstack.com/opinion/restaurant-management-co-v-kidde-fenwal-inc-nmctapp-1999.