IN RE: NEW YORK CITY ASBESTOS LITIGATION (2018)

Order, Supreme Court, New York County (Peter H. Moulton, J.), entered on or about November 9, 2015, which granted plaintiff's motion for spoliation sanctions against defendant J–M Manufacturing Company, Inc. (JMM), unanimously affirmed, without costs.

In or around the 1990's, JMM lost and destroyed numerous banker's boxes containing the records of the manufacture, sale, and marketing of pipe which contained asbestos, a line of business it purchased from Johns–Manville in the 1980s.  Although the first claim by an end user for personal injuries was not made with regard to that pipe until 2000, plaintiff adduced evidence that JMM was on notice that the records might be needed for future litigation, and thus JMM's behavior constituted spoliation (see Strong v. City of New York, 112 A.D.3d 15, 973 N.Y.S.2d 152 [1st Dept. 2013];  see also Malouf v. Equinox Holdings, Inc., 113 A.D.3d 422, 978 N.Y.S.2d 160 [1st Dept. 2014] ).  JMM was well aware of the long history of personal injury claims arising from other Johns–Manville asbestos-containing products, and the Worker's Compensation claims filed by individuals who worked in the manufacture of the pipes at issue.

JMM contemplated the possibility of litigation, having entered into a litigation cooperation agreement with Johns–Mansville at the time it purchased the pipe business, and internal memos from the 1980's show that executives and lawyers at JMM discussed the risk-benefit of continuing the product line, as well as the possibility that its insurance carriers would withdraw liability coverage for the product (see e.g. New York City Hous. Auth. v. Pro Quest Sec., Inc., 108 A.D.3d 471, 970 N.Y.S.2d 21 [1st Dept. 2013];  Squitieri v. City of New York, 248 A.D.2d 201, 203, 669 N.Y.S.2d 589 [1st Dept. 1998] ).  Accordingly, the motion court did not abuse its broad discretion in directing that the jury be charged with an adverse inference at the time of trial (see Pegasus Aviation I, Inc. v. Varig Logistica S.A., 26 N.Y.3d 543, 46 N.E.3d 601 [2015];  Gogos v. Modell's Sporting Goods, Inc., 87 A.D.3d 248, 926 N.Y.S.2d 53 [1st Dept. 2011] ).