In the recent decision in JFF Cecilia LLC, et al. v. Weiner Ventures, LLC et al., a Superior Court judge held that the defendants engaged in sanctionable spoliation of evidence by failing to preserve communications they knew at the time may be relevant to a possible lawsuit. The Superior Court issued a revised decision allowing the Plaintiffs’ motion for sanctions after remand from an interlocutory appeal.

Businesses and individuals should implement cost-effective and simple preservation measures, such as archiving emails, when there is the slightest hint of litigation.

This case arises from a business dispute where the Plaintiffs partnered with the Defendants to build an $800 million luxury condominium high-rise over the Massachusetts Turnpike. In August 2019, the Defendants pulled out of the project, and, just days later, the Plaintiffs sent notice to the Defendants that they had violated the parties’ agreement and that the Plaintiffs were reserving their legal rights. Subsequent thereto, the Plaintiffs filed suit on October 23, 2019. The Plaintiffs maintain that from the time the Defendants withdrew from the project to the time the Plaintiffs initiated the lawsuit, the Defendants failed to preserve and actively destroyed relevant communications, including text messages and emails.

The Plaintiffs sought sanctions against the Defendants for destroying relevant evidence. Initially, the Superior Court denied the Plaintiffs’ motion for sanctions on that basis that “(i) a reasonable person in the [Defendants’] position before October 1, 2019, would not have thought it very likely that they would be sued, and (ii) [the Plaintiffs] have not shown that they suffered any prejudice from spoliation of evidence between October 1 and October 23, 2019.” The Plaintiffs filed an interlocutory appeal.

A single justice of the Appeals Court held that the Superior Court applied the wrong legal standard in its analysis and remanded to the Superior Court with an order that the court “determine if the Defendants knew or reasonably should have known that evidence might have been relevant to a possible action.” (emphasis added). The phrase “possible action” means something materially different than “likely” litigation, the standard initially applied by the Superior Court. Under the Appeals Court’s remand order, a defendant may be subject to spoliation sanctions if, at the time they destroyed relevant evidence, they knew or reasonably should have known that litigation was “possible,” even if a reasonable person would not have considered the litigation to be probable or “likely.”

On remand, the Superior Court used the appropriate standard and issued its revised decision finding that a reasonable person in the Defendants’ position would have known and, thus should have known, at the time of the Plaintiffs’ August 2019 notice that there may be evidence relevant to the a possible action. The Superior Court held that the Defendants breached the duty to preserve evidence by intentional or negligent spoliation of evidence, and imposed sanctions upon the Defendants. The sanctions issued by the Superior Court permitted the Plaintiffs to offer evidence at trial of the spoliation of email and text messages and held that that the Plaintiffs are entitled to a jury instruction that the jury may infer that the contents of the deleted text messages and emails were unfavorable to the Defendants.

Takeaway

This recent decision provides some clarity to the duty of potential litigants to preserve relevant evidence of a “possible” lawsuit. As was the case here, anyone who sends or receives a correspondence about a business dispute should take the proper measures to preserve documents, including emails and text messages. Businesses and individuals should implement cost-effective and simple preservation measures, such as archiving emails, when there is the slightest hint of litigation.

A copy of the decision in JFF Cecilia LLC, et al. v. Weiner Ventures, LLC et al., is available here.