In a recent decision, the Court of Special Appeals of Maryland considered an issue of first impression regarding the doctrine of spoliation. Maryland appellate courts had “not established how to apply the spoliation doctrine in the context of a situation” “where the physical object . . . that was destroyed [was] itself the subject of the case.” Cumberland Ins. Grp. v. Delmarva Power, No. 72, 2016 Md. App. LEXIS 12, at *10 (Md. Ct. Spec. App. Feb. 1, 2016). The court held that “it is appropriate to balance the degree of fault . . . on the part of the spoliator, on the one hand, with the level of prejudice that injures to the defense because the evidence has been destroyed on the other.” Id. at 11. The court explained that if this balance favors imposing a sanction, “the question then becomes what remedy is appropriate and whether a remedy less drastic then dismissal can cure the prejudice to the defendant.” Id.
In Cumberland, an insurer brought a suit against a power company, alleging that its meter was the cause of a fire. The lower court dismissed the case because the insurer demolished the property without giving the defendant, or its experts, an opportunity to inspect the property. Id. at *1. The court found that while the defendant was notified of a potential claim prior to the demolition, it was never informed that the property was going to be demolished. As a result, the insurer was at fault for allowing the demolition to occur. Id. at *22-27. The court then found that the demolition made it impossible for the defendant to put on its defense because its experts had no way to perform a proper inspection and could not rule in or rule out other parts of the house as the area of the fire’s origin. Id. at *27-31. After balancing these factors, the court found that the lower court had not abused its discretion in dismissing the suit. Id. at *30-32.
Prior to Cumberland, Maryland courts that dismissed actions based on spoliation “zeroed in either on a high degree of fault . . . or on a high degree of prejudice . . . .” Id. at *19. The Cumberland court adopted a balancing test that incorporates both the fault of the spoliator and the prejudice on the defendant in determining what sanction, if any, is appropriate when spoliation of the physical evidence that is the subject of the case. This case also highlights the importance of getting subrogation counsel involved early on in matters and working to ensure that evidence is preserved until potential defendants are able to inspect it.