United States District Court, N.D. Illinois
January 29, 2004.
LANCELOT JOHNSON, ROBERT JOHNSON, and MARK WILLIAMS, Plaintiffs,
FORD MOTOR COMPANY, INC. and HERTZ CORPORATION, INC., Defendants
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
The Plaintiffs, passengers in an accident involving a Ford Excursion,
sued Defendants, Ford Motor Company, Inc. ("Ford") and Hertz Corporation,
Inc. ("Hertz"), for injuries resulting from the accident. Presently
before the Court is Hertz's Motion to Dismiss Count IV of Plaintiffs'
First Amended Complaint Pursuant to Rule 12(b)(6). For the foregoing
reasons, that motion is denied.
In reviewing a motion to dismiss, the court reviews all facts alleged
in the complaint and any reasonable inferences drawn therefrom in the
light most favorable to the plaintiff. See Marshall-Mosby v. Corporate
Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). A plaintiff is not
required to plead the facts or elements of a claim, with the exceptions
found in Federal Rules of Civil Procedure 9. See Swierkiewicz v. Sorema,
534 U.S. 506, 511 (2002); Walker v. Thompson, 288 F.3d 1005, 1007 (7th
Cir. 2002). Dismissal is warranted only if "it appears
beyond a doubt that the plaintiff can prove no set of facts in support of
his claim which would entitle him to relief." Conley v. Gibson,
355 U.S. 41, 45-46 (1957). The "suit should not be dismissed if it is
possible to hypothesize facts, consistent with the complaint, that would
make out a claim." Graehling v. Village of Lombard, Ill., 58 F.3d 295,
297 (7th Cir. 1995).
The pertinent facts, for the purposes of this motion, are taken as true
from Plaintiffs' Amended Complaint. Plaintiffs are all citizens of
Illinois. Hertz is incorporated in Delaware and does business in Cook
On August 20, 2000, Plaintiffs were passengers in a Ford Excursion that
allegedly rolled over because of a defective right-rear tire valve-stem.
After the accident, Hertz had the vehicle towed to the Hertz storage
facility in Kentucky for storage and safekeeping. The only persons with
day-to-day access to the vehicle were Hertz employees, agents, and
servants. Access to the vehicle by outsiders, including experts, was
allowed only after authorization by Hertz.
Shortly after Hertz took possession of the vehicle, Hertz employees
were told that the vehicle was subject to an internal "legal hold"
because of a pending legal action. Hertz was prohibited from altering,
removing, or disposing of the vehicle, including the right-rear
passenger-side tire, wheel, and valve-stem assembly.
In the early part of 2003, Hertz allowed its mechanic to install a new
valve-stem assembly in the right-rear passenger side of the vehicle.
Hertz did not seek court approval to make such an alteration nor did
Hertz inform Plaintiffs of the alteration. Because of the alteration of
the vehicle, Plaintiffs' tire experts' testimony regarding the precise
condition of the valve-stem and its involvement in the accident will be
Hertz asserts two bases for dismissing the negligent spoliation claim
in its motion. First, Hertz contends that Kentucky law applies to the
negligent spoilation claim and that Kentucky law does not recognize this
tort. Secondly, Hertz argues that Plaintiffs knew about the negligent
spoilation claim in April of 2003 and that Plaintiffs failed to amend
their complaint in a timely manner.
Choice of Law
Kentucky law does not recognize a claim for negligent spoilation of
evidence. Monsanto Co. v. Reed, 950 S.W.2d 811, 815 (Ky. 1997).
Previously, it was determined by this Court that, except for one limited
issue, Illinois law will apply to this matter. See Johnson v. Ford Motor
Co., 2003 WL 22317425 (N.D. Ill. Oct. 9, 2003). However, as Plaintiffs
concede, that ruling did not address Plaintiffs' later claim for
negligent spoilation in the Amended Complaint.
In a diversity action, a district court applies the choice-of-law
principles of the state where it sits. Klaxon Co. v. Stentor Elec. Mfg,
Co., 313 U.S. 487, 496 (1941); Ruiz v. Blentech Corp., 89 F.3d 320, 323
(7th Cir. 1996). Illinois is governed by the choice-of-law principles in
the Restatement (Second) of Conflicts of Law ("Second Restatement").
Ingersoll v. Klein, 262 N.E, 2d 593, 595 (Ill. 1970); Accord Pittway
Corp. v. Lockheed Aircraft Corp., 641 F.2d 524, 526 (7th Cir. 1981).
The Second Restatement provides that "[t]he rights and liabilities of
the parties with respect to an issue in tort are determined by the local
law of the state which, with respect to that issue, has the most
significant relationship to the occurrence and the parties under the
principles stated in § 6." Second Restatement § 145(1). The principles in
Section 6 are:
"(a) the needs of the interstate and international
systems, (b) the relevant policies of the forum,
(c) the relevant policies of other interested
states and the relative interests of those states
in the determination of the particular issue, (d)
the protection of justified expectations, (e) the
basic policies underlying the particular field of
law, (f) certainty, predictability, and uniformity
of result, and (g) the ease in the determination
and application of the law to be applied."
Second Restatement § 6.
Illinois choice of law, therefore, presumes that "the local law of the
State where the injury occurred should determine the rights and
liabilities of the parties, unless Illinois has a more significant
relationship with the occurrence and with the parties, in which case the
law of Illinois should apply." Ingersoll, 262 N.E.2d at 595. Section
145(2) lists the four key contacts that a court must consider when
applying the principles outlined in Section 6: (a) the place where the
injury occurred; (b) the place the conduct causing the injury occurred; (c)
the domicile, residence, nationality, place of incorporation, and place
of business of the parties; and (d) the place where the relationship, if
any, between the parties is centered. Second Restatement § 145.
For the purposes of this motion, it is undisputed that: (a) the injury
occurred to Plaintiffs in Illinois, where the case is pending; (b) the
conduct causing the injury occurred in Kentucky, where the vehicle was
stored and allegedly altered; (c) Hertz is incorporated in Delaware, and
Plaintiffs are residents of Illinois; and (d) the parties' relationship
is centered in Illinois. It is also undisputed that Hertz's principal
place of business is not in Kentucky.
Hertz cites Vhora v. Michelin North America, Inc., 98 C 2657, 1999
U.S. Dist. LEXIS, at * 13-14 (N.D. Ill. Feb. 4, 1999) ("Vhora") in
arguing that Kentucky law should be applied to the negligent spoliation
claim. The Vhora court held that a negligent spoliation claim, based on
the destruction of documentary evidence pursuant to a corporation's
internal codes of conduct
regarding document retention policies, should be evaluated under the laws
of the state where the conduct occurred. This decision was based on two
factors. First, the injury was pecuniary in nature; thus, the place of the
injury was given less weight than in an ordinary tort action. Secondly,
the corporation was "domiciled" in the state where the conduct occurred;
and that state had "a significant interest in regulating the conduct of
its corporate domiciliaries." Vhora, 1999 U.S. Dist. LEXIS 1246, at *11,
Here, the alleged injury involves the destruction of evidence
potentially favorable to a tort victim. Also, Kentucky does not have a
significant interest in regulating the conduct of Hertz. Hertz is not
domiciled or incorporated in Kentucky nor does Hertz have its principal
place of business in Kentucky. Moreover, there is no showing that Hertz's
"corporate codes of conduct" are applicable to the claim at issue. See
Vhora, 1999 U.S. Dist. LEXIS 1246, at * 13-14. Accordingly, the place
where the conduct occurred, Kentucky, is given little weight.
In contrast, Illinois's contacts with the negligent spoilation claim
are strong. Illinois has a significant interest in regulating the conduct
of litigants using Illinois courts. Plaintiffs, who are Illinois
citizens, will be injured in Illinois if they are unable to fully examine
and present evidence concerning the valve-stem at issue. The parties'
relationship is also centered in Illinois.
It is also appropriate to consider Illinois and Kentucky contacts in
light of the general policies discussed in Section 6 of the Second
Restatement set out above. The policy behind a negligent spoilation claim
in Illinois is to prevent the loss of evidence relevant to a litigant's
claim, Kentucky has no significant interest, if any, in regulating
evidence which may be admissible in a foreign state trial.
Moreover, these policies are consistent with the justified expectations
of the parties, the basic policies of the law, and the certainty and
predictability of the law. Parties would naturally expect that the forum
state's law would apply to issues concerning the loss of evidence. The
basic policy against a negligent spoilation claim seeks to proscribe
conduct that would alter or destroy evidence, no matter where the conduct
occurred. Laws that prohibit the spoilation of evidence most directly
affect the state where the issue is being litigated. This policy is
served by applying the law of the forum state, Illinois. Finally, this
choice of law is certain and predictable; parties are required to follow
the forum state's law regarding evidentiary matters.
Therefore, Illinois law will be applied to Plaintiffs' negligent
spoilation claim. Hertz's Motion to Dismiss the negligent spoilation
claim based on the application of Kentucky law is denied.
Amending the Pleadings
Hertz contends that Plaintiffs failed to amend their pleadings in a
timely fashion. A party may amend its pleading by obtaining leave of the
court, which "shall be freely given when justice so requires."
Fed.R.Civ.P. 15(a). Parties are permitted to amend their pleadings to
assert new claims or defenses found only after the completion of
discovery, as long as the new matters are promptly raised. See, e.g.,
Venters v. City of Delphi, 123 F.3d 956, 967-68 (7th Cir. 1997).
Here, Plaintiffs were permitted to amend their pleadings on October 1,
2003. Hertz argues that Plaintiffs knew about the negligent spoilation
claim, which was added in the Amended Complaint, in March or April of
2003. However, Hertz provides no evidence that Plaintiffs knew of this
claim in March or April of 2003.
Plaintiffs assert and provide evidence in support that they did not
discover any information about the missing valve-stem until May of 2003.
Plaintiffs then conducted discovery and took depositions of Hertz
employees on the specific issue of what happened to the valve-stem.
Plaintiffs also then learned from their experts the extent to which the
investigation was impaired by Hertz's alleged alteration of the
valve-stem. This discovery was not completed until late August of 2003.
Based on this record, Plaintiffs' motion to amend its complaint to add a
negligent spoliation claim was timely.
For the foregoing reasons, Hertz's Motion to Dismiss Count IV of
Plaintiffs* First Amended Complaint Pursuant to Rule 12(b)(6) is denied.
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