Ronnie French v. Reyes Perez , 824 S.E.2d 796 ( 2019 )

FIFTH DIVISION
MCFADDEN, P. J.,
RICKMAN and MARKLE, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
March 13, 2019
In the Court of Appeals of Georgia
A18A1679. FRENCH v. PEREZ
RICKMAN, Judge.
In this personal injury case, Ronnie French appeals the trial court’s order
denying his pre-trial motion for sanctions for the spoliation of evidence. We granted
French’s application for interlocutory review but now affirm.
The relevant facts are not in dispute. On December 10, 2014, French was a
passenger in his sister’s vehicle when it collided with a Toyota Corolla operated by
Reyes Perez, owned by Perez’s wife, and insured by State Farm Fire and Casualty
Company. French sustained injuries.1
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Although neither party relied on the accident report at the spoliation hearing,
it states that the two vehicles were headed toward each other when French’s sister
turned left at an intersection and the two vehicles collided. The report states that both
French’s sister and a witness stated that Perez had a green light at the time. The
accident report concludes: “Due to the evidence along with the driver’s and witness
On January 21, 2015, Perez’s wife appointed State Farm as her attorney-in-fact
to sign all papers and documents necessary to secure a Georgia title on the vehicle.
On that day, State Farm took possession of the vehicle. Approximately two weeks
later, French sent State Farm a notice to preserve any evidence related to the accident,
including the damaged car itself and the black box therein. French stipulated that “by
the time the letter went out, [Perez] didn’t even own the vehicle.” There is no
evidence that the notice was sent to Perez or his wife, or received by them. Despite
the request to preserve, State Farm sold the vehicle the following month.
In November 2016, French filed suit against his sister and Perez alleging that
they were both at fault for the collision; he did not name Perez’s wife or State Farm
as defendants. During the litigation, French dismissed his sister as a defendant,
without prejudice. Shortly thereafter, French filed a motion for sanctions against
Perez for spoliation arising out of loss of the vehicle. Following a hearing, the trial
court denied the motion and a motion for reconsideration, but issued a certificate of
immediate review, which this Court granted. For the following reasons, we affirm the
trial court.
statements it was determined that [French’s sister] was at fault.” Consequently,
French’s sister was issued a traffic citation for an “improper left turn (failure to
yield)” as a result of the collision.
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Under OCGA § 9-11-37 (b) (2), “a party or an officer, director, or managing
agent of a party” may be sanctioned for failure to provide discovery, including
spoliation. See, e.g., Howard v. Alegria, 321 Ga. App. 178, 185 (2) (739 SE2d 95)
(2013). “Spoliation refers to the destruction or failure to preserve evidence that is
necessary to contemplated or pending litigation.” (Citations and punctuation omitted.)
Bouve & Mohr, LLC v. Banks, 274 Ga. App. 758, 762 (1) (618 SE2d 650) (2005).
“[A] trial court has wide discretion in adjudicating spoliation issues, and such
discretion will not be disturbed absent abuse.” Phillips v. Harmon, 297 Ga. 386, 397
(II) (774 SE2d 596) (2015).
1. First, “contemplation of potential liability is not notice of potential
litigation.” Kitchens v. Brusman, 303 Ga. App. 703, 707 (1) (a) (694 SE2d 667)
(2010). Thus “the simple fact that someone is injured in an accident, without more,
is not notice that the injured party is contemplating litigation sufficient to
automatically trigger the rules of spoliation.” Id. Here, French made no showing in
the trial court that before State Farm acquired the vehicle, Perez “[knew] or
reasonably should [have known] that the injured party, the plaintiff, [was] in fact
contemplating litigation.” Phillips, 297 Ga. at 396 (II). Indeed, French never even
argued the point. He only argued that Perez was on notice as a result of the letter
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mailed to State Farm. But it is undisputed that the letter was not sent to Perez or his
wife, and, even if it had been, they no longer had possession or control of the vehicle
at the time. Thus, Perez can only be found responsible for spoliation if he can be held
responsible for State Farm’s disposition of the vehicle.
2. “Sanctions for spoliation cannot be applied against a party who did not
destroy the evidence when there is no evidence to show that the destroying party was
acting at the behest of the party.” Sheats v. Kroger Co., 336 Ga. App. 307, 311 (1) (b)
(784 SE2d 442) (2016); see also Boswell v. Overhead Door Corp., 292 Ga. App. 234,
235-236 (664 SE2d 262) (2008) (spoliation presumption cannot be used against a
party where nothing suggested that the entity that destroyed the evidence did so at the
behest of the first party). In other words, sanctions are not warranted unless the third
party “acted as the litigant’s agent in destroying or failing to preserve the evidence.”
Bouve & Mohr, 274 Ga. App. at 762 (1). An agency relationship exists “wherever one
person, expressly or by implication, authorizes another to act for him or subsequently
ratifies the acts of another in his behalf.” OCGA § 10-6-1. And, “[an] agent shall act
within the authority granted to him, reasonably interpreted.” OCGA § 10-6-21. Here,
there is simply no evidence in the record that Perez maintained any authority over
disposition of the vehicle after it was transferred to State Farm, and no evidence that
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he authorized State Farm to destroy the vehicle or that he ratified State Farm’s
destruction of the evidence.
The dissent attempts to rely on a provision of the policy. But neither the actual
insurance policy between the parties nor the declarations page is in the record. French
filed an “exemplar” State Farm policy in connection with his motion for
reconsideration in the trial court, Although Perez has not objected to this document
as representing the terms of an agreement, the absence of the declarations page alone
prohibits our use of the policy to resolve the issue before us. The exemplar policy
states: “This policy contains all of the agreements between all named insureds who
are shown on the Declarations Page and . . . [State Farm]”. Thus, it is not even clear
whether Perez is a named insured. In fact, he might be considered a “resident relative”
of the named insured under the policy, if, in fact, the named insured is Perez’s wife,
the owner of the car. And the dissent has not determined whether a resident relative
of the named insured is also in an agency relationship with State Farm.
Furthermore, the dissent has not shown how the specific language of OCGA
§ 33-7-12 is not applicable. That Code section refers directly to the language that the
dissent relies on:
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Any provision in a liability policy of insurance which provides that the
insurer shall have the right to compromise or settle claims of third
persons against the insured without the consent of the insured shall be
deemed to create, as between the insurer and the insured, the
relationship of an independent contractor. . . .
(Emphasis supplied). That Code section was enacted in order to abrogate case law
that held that such a clause in an insurance contract made the insurer the insured’s
agent for the purpose of effecting settlement of claims. See Brown v. Seaboard
Lumber & Supply Co., 221 Ga. 35, 37 (142 SE2d 842) (1965).
In an attempt to overcome his own failure to produce evidence of agency,
French argues that Perez should be held to have spoliated the evidence because Perez
provided no evidence that State Farm was not acting as his agent when it received the
spoliation letter then disposed of the vehicle. But “where the existence of an agency
is relied upon, the burden of proof rests with the party asserting the relationship.”
Carter v. Kim, 157 Ga. App. 418, 418 (277 SE2d 776) (1981) ; accord Handy v.
DeKalb Med. Center, Inc., 298 Ga. App. 82, 83 (679 SE2d 107) (2009). Thus,
French’s argument is without merit.
Chapman v. Auto Owners Ins. Co., 220 Ga. App. 539 (469 SE2d 783) (1996),
upon which French relies, is distinguishable. In that case, this Court held that “where
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a party has destroyed evidence which may be material to ensuing litigation, the trial
judge may be authorized to dismiss the case or prevent that party’s expert witnesses
from testifying in any respect about the evidence.” Id. at 542-543. Notably, however,
Chapman did not consider or address the agency relationship between the plaintiff
and the investigator who destroyed the evidence; rather, the case addressed what
remedies were available for spoliation. Id. Moreover, the facts of Chapman show that
the plaintiff had hired the investigator who, in the course of the investigation,
destroyed key evidence for the case. Id. at 540. No similar evidence was presented
here. See Sheats, 336 Ga. App. at 311 (1) (b) (affirming the trial court’s denial of a
motion for sanctions against a defendant where there was no evidence that the
defendant directed that the evidence be destroyed). The case of R. A. Siegel Co. v.
Bowen, 246 Ga. App. 177, 179 (2) (539 SE2d 873) (2000), upon which the dissent
relies, also did not examine the question of whether and to what extent an insurer can
be considered the agent of the insured with regard to spoliation of a vehicle, and
therefore is not controlling.
Given that the record is not even clear as to the identity of the named insured
under the policy, or Perez’s status under the policy, we are not in a position to decide
whether, as a matter of law, State Farm operated as Perez’s agent such that Perez, who
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was not on notice to retain the vehicle, may be punished for spoliation of a vehicle
that Perez no longer owned. For the above reasons, we hold that the trial court did not
abuse its discretion by denying French’s motion for sanctions.
Judgment affirmed. Markle, J. concurs and McFadden, P. J., dissents.*
* THIS OPINION IS PHYSICAL PRECEDENT ONLY. COURT OF APPEALS
RULE 33.2(a).”
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In the Court of Appeals of Georgia
A18A1679. FRENCH v. PEREZ.
MCFADDEN, Presiding Judge, dissenting.
I respectfully dissent from the majority’s decision affirming the trial court.
State Farm Fire and Casualty Company was acting as defendant Reyes Perez’s agent
when it sold the car involved in the collision. So I would vacate the trial court’s order
and remand for further findings.
The undisputed evidence shows that after the collision, the car had been turned
over to State Farm. The owner of the car, Perez’s wife, signed a power of attorney
allowing State Farm to secure a Georgia title on the car. State Farm possessed the car
when plaintiff David French sent State Farm a notice to preserve the car and its black
box.
Despite French’s request, State Farm sold the car the following month. Perez
admits in his appellate brief that under the terms of the insurance contract, “State
Farm ha[d] the unilateral power to investigate, negotiate, and settle any claim or
lawsuit for damages payable under the policy’s liability coverage.” See Barnett v.
Fullard, 306 Ga. App. 148, 153 (3) (b), n. 4 (701 SE2d 608) (2010) (acknowledgment
of fact in appellate brief “constitutes a binding admission in judicio”) In other words,
under the insurance contract, Perez, expressly or by implication, authorized State
Farm to act for him in the resolution of this claim. See OCGA § 10-6-1 (“The relation
of principal and agent arises wherever one person, expressly or by implication,
authorizes another to act for him or subsequently ratifies the acts of another in his
behalf.”).
OCGA § 33-7-12 has no application to this case. Under subsection (a) of that
statute, “a provision [in an insurance policy] which permits the insurer to compromise
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claims or defenses of the insured without his consent shall be deemed to create the
relationship of an independent contractor.” Mandato & Assoc. v. Sepulveda Masonry,
303 Ga. App. 438, 439-440 (693 SE2d 620) (2010) (citation, punctuation, and
emphasis omitted). The statute “was enacted to change the Georgia common law rule
that an insured was barred from asserting his own claims if his insurer effected a
settlement, even without his consent.”Jefferson Mills, Inc. v. Gregson, 124 Ga. App.
96, 97-98 (183 SE2d 529) (1971) (discussing prior version of the statute). The statute
is in derogation of the common law and must be strictly construed. Mandato, supra,
303 Ga. App. at 440. Here, there has been no settlement. OCGA § 33-7-12 is
inapplicable.
State Farm acted for Perez when, with its “unilateral power” pursuant to the
insurance contract, it sold the car despite the notice from French. So in this matter,
State Farm was acting as Perez’s agent. Since State Farm was Perez’s agent for the
purpose of resolving issues arising from the collision, its disposition of the car can
be attributed to him. Bouve & Mohr, LLC v. Banks, 274 Ga. App. 758, 762-763 (1)
(618 SE2d 650) (2005). See R.A. Siegel Co. v. Bowen, 246 Ga. App. 177, 179-183 (2)
(539 SE2d 873) (2000) (spoliation sanctions imposed against defendants because
defendants’ insurance company allowed vehicle to be sold during pendency of suit
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despite an order to preserve it). See also Lustre-Diaz v. Etheridge, 309 Ga. App. 104,
107 (709 SE2d 309) (2011) (acknowledging in dicta that “it is possible and indeed
plausible that the [missing] photographs in question were taken by the defendants’
insurance company, which could be deemed their agent and support a finding of
spoliation”). By disposing of this evidence, State Farm caused consequences for itself
and its principal. A defining characteristic of agency is that a principal can suffer the
consequences of his agent’s actions. OCGA § 10-6-51 (“The principal shall be bound
by all the acts of his agent within the scope of his authority. . . .”).
So I would vacate the trial court’s order and remand for the trial court to
determine: “(1) whether [French] was prejudiced as a result of the destruction of the
evidence; (2) whether the prejudice [can] be cured; (3) the practical importance of the
evidence; (4) whether [State Farm] acted in good or bad faith; and (5) the potential
for abuse if expert testimony about the evidence [is] not excluded.” R. A. Siegel Co.,
supra, 246 Ga. App. at 180 (citation omitted).
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