Lorie Applebaum v. Target Corporation , 831 F.3d 740 ( 2016 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 16a0182p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
LORIE APPLEBAUM, ┐
Plaintiff-Appellant, │
│
│
> No. 15-2198
│
v. │
│
TARGET CORPORATION, et al., │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Ann Arbor.
No. 5:11-cv-15035—Judith E. Levy, District Judge.
Decided and Filed: August 2, 2016
Before: SUTTON, GRIFFIN, and DONALD, Circuit Judges.
_________________
COUNSEL
ON BRIEF: Mark R. Bendure, BENDURE & THOMAS, Grosse Pointe Park, Michigan, for
Appellant. Mark D. Willmarth, THE LAW OFFICE OF MARK D. WILLMARTH, Flint,
Michigan, for Appellee Target.
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OPINION
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SUTTON, Circuit Judge. Cycling and gravity have an uneasy relationship, as anyone
who rides eventually learns. There are many ways, too many ways, to fall. A slick surface, an
effort to avoid a hazard, a suddenly appearing animal, and a suddenly decelerating rider all come
to mind. This lawsuit brings to the fore two other possibilities: a defective bicycle or operator
error.
1
No. 15-2198 Applebaum v. Target Page 2
While browsing in a Target store in 2009, Lorie Applebaum noticed a purple Schwinn
mountain bike that reminded her of her childhood bicycle. A few days later she bought one just
like it at a different Target store. Any nostalgia was fleeting. On the Fourth of July, she took the
bike on an inaugural ride with a friend. Just minutes into the ride, Applebaum fell off the bike at
the bottom of a hill and injured her shoulder. She sued Target, alleging it negligently sold her a
brake-defective bike. Target claimed that there was nothing wrong with the bike. Over the
course of a three-day trial, a jury sorted out the competing evidence, eventually rejecting
Applebaum’s claim that the bike caused her fall. Because she received a fair trial, because the
evidence supports the verdict, and because no errors infected the verdict, we affirm.
I.
The case largely turns on whether Applebaum bought a new or a used (and unrepaired)
bike. According to Applebaum, when she returned to the Target store where she first noticed the
bike in February 2009, the model was sold out. An employee, she says, told her a Target store in
Farmington Hills had one that had been returned because of a brake problem that would soon be
repaired. A week later, Applebaum called the Farmington Hills store and spoke with Sean
Bryan, who allegedly told her the bike was “perfect, all fixed.” R. 107 at 144. As Bryan
recounts the conversation, Applebaum did not mention a repair and asked only if his store had
any of the bikes in stock. She purchased the bike later that day.
The bike spent a Michigan spring in the garage before Applebaum took it out for its first
ride. Less than one-tenth of a mile into the ride, Applebaum fell off the bike and injured her left
shoulder. A passerby came to Applebaum’s assistance, showed her that the rear brakes had
clamped down on the tire, and released the brakes so that the bike could be wheeled back to
Applebaum’s car.
On July 7, Applebaum returned the bike to Target and told Bryan she had been in an
accident caused by a brake problem. She alleges she left the bike with Bryan, but he claims she
left the store with it. One way or another, no one has seen the bike since.
After Applebaum’s visit, Bryan reported the incident to Target’s claims examiner,
Sedgwick Claims Management Services. Sedgwick employee Katherine Kracner investigated
No. 15-2198 Applebaum v. Target Page 3
the complaint and found that Target had no record of a repair being made at the Farmington Hills
store in February 2009.
In 2011, Applebaum filed a negligence lawsuit in state court against Target, Impact
Resources Group (the company that built and repaired bicycles for Target), and National Product
Services (Impact’s parent company). Target removed the case to federal court based on the
diversity of the parties. Impact and National Product Services declined to participate in the
litigation, and the district court entered a default judgment against them for $50,000. The record
does not reveal whether Applebaum was able to collect against these two defendants, though
they apparently have been restructured in the interim. After a trial in which eight witnesses
testified, a jury found that Target was not negligent in selling Applebaum the bike. The district
court denied her motion for a new trial.
II.
On appeal, Applebaum claims that the district court should have granted her motion for a
new trial for three reasons: (1) the evidence did not support the verdict; (2) the court mistakenly
excluded certain evidence as hearsay; and (3) the court mistakenly limited the scope of an
adverse inference instruction relating to the spoliation of evidence by the defendant.
Weight of the Evidence. Applebaum contends that no reasonable jury could have reached
this verdict, requiring a new trial. See Armisted v. State Farm Mut. Auto. Ins., 675 F.3d 989, 995
(6th Cir. 2012). We cannot agree.
On the one hand, we must acknowledge that plenty of evidence (most of it Applebaum’s
testimony) supported her theory of the case. She testified that she bought a used bike from
Target, that Bryan told her it had been sent back to the store due to a malfunctioning brake, that
it did not work when she first tried to slow down, and that it suddenly clamped down, sending
her flying through the air “like the scene in ET” and injuring her shoulder, R. 107 at 151. Had
the jury ruled for Applebaum, this evidence would have supported the verdict.
On the other hand, Target’s account of the purchase and accident suggests the bike was
brand new. Bryan testified that Applebaum never mentioned a repair when she first called about
No. 15-2198 Applebaum v. Target Page 4
the bike, that he had no reason to believe the bike had ever been repaired, and that he retrieved
Applebaum’s bike from the area where the ready-for-sale bikes were kept rather than the
separate area for the repair bikes.
Applebaum herself testified, moreover, that, when she bought the bike, it had cardboard
wheel inserts in place, along with a plastic bag that contained the product manuals. All of these
items were entered into evidence at trial. A Target employee testified that a bike sold with these
items is “brand new . . . out of the box,” R. 110 at 42, and that Target did not keep extras.
Target’s expert witness also attributed Applebaum’s fall to operator error and claimed
that the rear brakes clamped onto the tire as a result of the impact of the accident, not as the
cause of it. All in all, a reasonable jury could credit this testimony and rule in favor of Target.
Applebaum challenges this conclusion on the ground that the absence of any repair
records shows that Impact never repaired the bike’s defective brakes. But of course another
explanation for this evidentiary void exists: The absence of any such evidence confirms the
absence of any defective brakes in the first place.
The rest of Applebaum’s contrary evidence is just that: Applebaum’s contrary statements
and testimony. They include her own account of what unnamed Target representatives told her.
And they include the “Guest Incident Report[]” prepared by Bryan for Sedgwick, which noted
that the bike’s brakes had been repaired by Impact. R. 67-4 at 3. But Bryan testified that this
report was based entirely on what Applebaum told him when she returned with the bike, and that
he had no personal knowledge of the bike’s history. If the jury did not find Applebaum’s
statements credible, as it was entitled to do on this record, it had no obligation to rule for her.
Applebaum is entitled only to a fair jury, not one that believes whatever she says.
It is a “rare occurrence” for this court to find that a verdict was against the weight of the
evidence. Armisted, 675 F.3d at 995. We will not make it any less rare today.
Hearsay. Applebaum challenges the district court’s decision to exclude an email and a
letter from Impact’s counsel to the Sedgwick claims examiner Kracner. Both writings state that
Impact’s records showed it had not performed any repairs at the Farmington Hills Target in
No. 15-2198 Applebaum v. Target Page 5
February 2009. Applebaum argues that both statements should have been admitted under the
business records hearsay exception. Fed. R. Evid. 803(6). This exception allows a court to
admit hearsay if someone familiar with the record-keeping practices of the organization testifies
that the records were made around the time of the recorded event by someone with knowledge,
and that making the record was a regular practice of a regularly conducted business activity. Id.;
see United States v. Baker, 458 F.3d 513, 518 (6th Cir. 2006). Business records that meet these
criteria may still be excluded if they were made in anticipation of litigation because the
circumstances of their preparation tend to indicate a lack of trustworthiness. Fed. R. Evid.
803(6)(E); Palmer v. Hoffman, 318 U.S. 109, 113–14 (1943); see also Byrd v. Alpha Alliance
Ins., 518 F. App’x 380, 386 n.4 (6th Cir. 2013).
Applebaum did not present any evidence concerning Impact’s record-keeping practices
and thus never laid an adequate foundation for the admissibility of the writings. Even if
Applebaum had established that these writings amounted to business records, they would be
barred all the same because they were made by Impact’s counsel in response to a claim for
indemnification by Target. In these circumstances, Impact’s repeated claims that it never
repaired the bike that allegedly injured Applebaum lack the objectivity of a typical business
record.
Applebaum persists that the documents should be considered Sedgwick’s business
records because they were included in Kracner’s case file for Applebaum’s claim, and that
Kracner laid an adequate foundation for the records in her deposition. But Sedgwick did not
make these statements, and therefore Kracner could not lay a foundation for them based on her
familiarity with Sedgwick’s record-keeping practices. See Fed. R. Evid. 803(6)(A), (C). Impact
instead made the statements in response to Sedgwick’s inquiries. Placing Impact’s replies into a
Sedgwick case file does not transform them into Sedgwick’s business records. Else, base
hearsay could be transformed into admissible evidence whenever organizations corresponded
with each other, indeed with one click on a computer screen in some instances.
Spoliation Adverse Inference Instruction. When a party destroys evidence in anticipation
of litigation, the trial court may impose sanctions for spoliation. Adkins v. Wolever, 554 F.3d
No. 15-2198 Applebaum v. Target Page 6
650, 651 (6th Cir. 2009) (en banc). Because Applebaum claims she returned the bicycle and
Target failed to produce it, the district court advised the jury that
[i]f you find (1) that the bicycle had previously been returned for repair of the
brakes, (2) that plaintiff turned over the bicycle to defendant, and (3) that
defendant disposed of the bicycle and has not shown a reasonable excuse for
doing so, you may infer that inspection of the bicycle would have shown that the
brakes were not repaired by Impact.
R. 95-7. Applebaum thinks that this instruction was incomplete. She argues that the jury should
have also been advised that “destruction of the bicycle prevented forensic examination to
determine the cause of the brake locking,” and that they could draw an adverse inference from
Target’s failure to produce sign-in sheets, work orders, and serial-number tracking records that
would show the bike’s repair history and past ownership. Appellant’s Br. 21.
Applebaum’s proposed “forensic examination” instruction adds nothing meaningful to
the given instruction, which informed the jury that they could infer that the brakes were
unrepaired—and thus defective—if they found that Target unreasonably disposed of the bike.
The district court did not abuse its discretion by declining to belabor the point.
Nor did the district court err in refusing to give an adverse inference instruction for
spoliation of the records Applebaum sought. Applebaum has offered no evidence that some of
these records even existed, much less that Target had control over them and destroyed them with
a culpable state of mind, as she must to justify a spoliation instruction. Beaven v. U.S. Dep’t of
Justice, 622 F.3d 540, 553–54 (6th Cir. 2010). On the contrary, Bryan testified that Target never
registered the serial numbers of bicycles in its computer system. Another Target employee
testified that he never issued written work orders to Impact and that he believed they kept their
own books. Target did keep vendor sign-in sheets at the Farmington Hills store, but Bryan
testified that these were disposed of weekly or even daily. What’s more, Target had no notice of
potential litigation until Applebaum returned to the store on July 7, 2009, at which point the sign-
in sheets from February were long gone. Target’s failure to document events that might prove
relevant to unforeseen litigation and to retain those records indefinitely does not amount to
spoliation.
No. 15-2198 Applebaum v. Target Page 7
Applebaum points to the contract between Target and Impact, which allegedly required
written work orders and sign-in sheets for all repairs, as evidence that Target must have had
access to the records and willfully failed to produce them. But the contract does not establish
that work orders were filled out in practice, or that Target had control of the records. And it
certainly does not establish that Target retained work orders and sign-in sheets for months on
end.
It bears adding that to the extent Applebaum sought an adverse inference instruction for
spoliation of electronic information, a 2015 amendment to Civil Rule 37(e)(2) required her to
show that Target had “intent” to deprive her of the information’s use. A showing of negligence
or even gross negligence will not do the trick. Fed. R. Civ. P. 37, 2015 Advisory Comm. Note.
Applebaum would not have been able to show any degree of fault for Target’s alleged
destruction of records, because she cannot show that Target destroyed the records—if they even
existed in the first place—after it was put on notice of litigation.
For these reasons, we affirm.