The Illinois Appellate Court recently ruled on a spoliation claim in a product liability lawsuit arising out of a 2004 car accident. The trial court had ruled that the insurer for the defendant vehicle salvage company did not have to contribute to any settlement that might arise out the salvage company’s inappropriate destruction of the relevant vehicle. However, the appellate court reversed this ruling and found that the salvage company’s insurance policy did in fact cover any claims arising out of spoliation of evidence. As a result of the appellate court’s decision, the defendant’s insurance company will now have to pay any reasonable damages arising out of the spoliation claim. Universal Underwriters Insurance Company v. LKQ Smart Parts, Inc., et al., No. 1-10-1723 (December 16, 2011).
The product liability lawsuit was based on a 2004 SUV rollover accident. Michael Widawski’s Nissan Pathfinder SUV rolled over, ejecting Monika Gramacki, its only passenger, from the vehicle as it rolled over. Gramacki died and her family brought a product liability lawsuit against Nissan for an alleged defect in the Pathfinder’s rear door.
The main piece of evidence in a product defect claim is the alleged damaged product, which in this case would Widawski’s Nissan Pathfinder. It is not enough for a party to simply allege that a product is defective; it must also be examined by experts to determine the source of the defect and whether that defect caused harm to the party. However, in the present case, no experts were able to examine Widawski’s vehicle because it was destroyed before they could do so.
Following the rollover accident, Widawski’s insurer, Farmers Insurance, handled the preservation of the Pathfinder. Farmers hired LKQ Smart Parts, Inc., a vehicle salvage and storage firm, to store the damaged Nissan and keep it in its current condition. However, LKQ failed to follow these instructions and somehow ended up destroying the Nissan Pathfinder shortly after it arrived. And with its destruction went Gramacki’s family’s hope of a fair and successful product defect claim against Nissan.
In order to rectify this dilemma, Gramacki’s father filed two lawsuits: the first was a product liability lawsuit against Nissan for the allegedly faulty door latch, the second was a spoliation of evidence claim against Farmers for the destroyed Pathfinder. In its claim against Farmers, Gramacki alleged that the “destruction of the subject Nissan Pathfinder deprived Plaintiff of the key piece of evidence necessary to prove an otherwise valid product liability/negligence lawsuit” against Nissan. Farmers then filed a third party lawsuit against LKQ for its role in destroying the Pathfinder.