Very often property managers and board members are faced with having to make common area emergency repairs during the course of construction defect litigation. In light of El Nino, this arose for just about each Homeowner's Association that anticipated or actually filed a claim against developers and/or general contractors for construction deficiencies. The problem that always arises is whether we can make the repairs while the litigation is on-going or whether making that repair spoils the evidence of the defective construction. The California Supreme Court in Cedars-Sinai Medical Center v. The Superior Court of Los Angeles County, (98 Daily Journal D.A.R. 4881, May 11, 1998) considered the problem of spoilation of evidence.
FACTS
In this recent Supreme Court case, the Plaintiff, a baby, through his guardian, sued Cedars-Sinai Hospital alleging medical malpractice for injuries he sustained during birth, including oxygen deprivation. The hospital claimed they had lost all the relevant medical records which the Plaintiff needed to prove his case. Lawyers for the Plaintiff amended the Complaint filed after hearing that the records had been "lost" to include a cause of action for "intentional spoilation of evidence" and alleging that the hospital had intentionally destroyed all the missing records to prevent Plaintiff from prevailing in his medical malpractice case.
SUPREME COURT HOLDING
The court found that there is no separate cause of action for intentionally spoiling evidence. But be aware:
SANCTIONS FOR SPOILING EVIDENCE
Let us say, for example, that your association experienced the need for repairs for everything from roof leaks to flooding. You obtain bids from qualified contractors and not only permanently repair these problems but do not document such repairs. The first thing that the builder will do is file a motion with the court to exclude evidence of these defects for the actions that the association board/manager took above. They will certainly argue that those actions spoiled any evidence of any defect and the association's multi-million dollar claim for damages is now at risk.
Under California law, there are four ways under which a court will find in favor of the builder claiming an association spoiled evidence:
- INFERENCE AGAINST THE ASSOCIATION: Under California Evidence Code Section 413, a jury should "infer" that the evidence spoiled "bad for the party that lost or destroyed it," meaning the association.
- MONETARY FINES AND/OR STRIKING PLEADINGS: The next deterrent lays in the Code of Civil Procedure Section 2023 which authorizes sanctions for certain behavior, including spoiling evidence. These sanctions take the form of monetary fines and/or striking the claims from the pleadings.
- CRIMINAL SANCTIONS: Criminal penalties authorized for spoliation evidence are set forth in Penal Code Section 135.
- ACTIONS AGAINST THE ASSOCIATION ATTORNEY: The final deterrent is that the State Bar of California has an ethics division that monitors lawyer's behavior, including spoiling evidence.
CONCLUSION
As to making those repairs homeowners absolutely need, emergency repairs can be made. However, all other more permanent or cosmetic repairs must be postponed until the litigation's end so that the association is not accused of spoiling the evidence of defective construction. It is vital to balance the requirement to minimize the damage caused by construction defects with the court's desire to see all the evidence, as well as addressing the homeowners plight. In most cases, the damage is so repetitive that this is generally not a problem. If repairs are made, however, the association must do all it can to keep an accurate record. Photographs of the before and after conditions are important as are the invoices from the contractors. That way the association avoids being accused of spoiling the evidence.