On September 11, 2020, Justice Borrok of the New York County Commercial Division issued a decision addressing when a party is entitled to sanctions and an adverse inference at trial for the destruction of relevant evidence. In Carey v. Shakhnazarian, 2020 NY Slip Op 51040 (U), Justice Borrok confirmed longstanding New York precedent that a party that breaches its duty to preserve relevant evidence once there is reasonable anticipation of litigation is subject to sanctions and an adverse inference regarding the destroyed evidence at trial.
In Carey v. Shakhnazarian, pop star Mariah Carey filed a lawsuit against her former executive assistant, Lianna Shakhnazarian, for allegedly breaching a Confidentiality and Non-Disclosure Agreement (the “NDA”) by, among other things, sharing illicit video recordings of Ms. Carey and other confidential information with the press. Ms. Carey filed a motion seeking sanctions alleging the assistant destroyed relevant evidence contained on her cell phone.
When she began her employment in March 2015, Ms. Shakhnazarian signed the NDA agreeing to safeguard Ms. Carey’s privacy and not disclose or publish any confidential material to third parties. In 2017, Ms. Shakhnazarian made at least two video recordings and one audio recording of Ms. Carey without her permission. Ms. Shakhnazarian admitted that she shared the recordings with Ms. Carey’s former manager and physician. In addition, evidence showed that Ms. Shakhnazarian shared with Ms. Carey’s former administrative assistant “video recordings of Ms. Carey of an intimate and graphic nature.” Ms. Shakhnazarian also took pictures of Ms. Carey’s private text messages and shared the details of private conversations between Ms. Carey and Ms. Shakhnazarian with other individuals, even allowing some individuals to eavesdrop on calls with Ms. Carey.
In approximately 2017, Ms. Carey hired a second assistant, and, because the new assistant’s duties overlapped with Ms. Shakhnazarian’s duties, reduced Ms. Shakhnazarian’s salary. Angered by the reduction in salary, Ms. Shakhnazarian began telling third parties that if Ms. Carey terminated her or further reduced her salary she would sell her illicit recordings of Ms. Carey to the press.
In May and June 2019, Ms. Carey served document requests seeking disclosure of certain materials from March 2015 through the present. Despite having received the document requests, Ms. Shakhnazarian did not search the cell phone she had been using since early 2018 for potentially responsive documents. Further, during deposition testimony, Ms. Shakhnazarian denied having backed up the cell phone and claimed in August 2019, she accidentally spilled water on the device, rendering it useless. Ms. Shakhnazarian also admitted that she did not take any action to recover documents and communications from the cell phone.
Ms. Shakhnazarian represented that she had no additional recordings. However, a forensic imaging of the cellphone conducted after litigation had commenced showed a previously undocumented secret recording. In addition, the forensic report showed that Ms. Shakhnazarian attempted to send this secret recording to a third party, and that her phone contained saved copies of materials that were leaked to the press.
In finding that Ms. Carey was entitled to sanctions and an adverse inference against Ms. Shakhnazarian for the destruction of evidence, the court articulated that to prevail on a motion for sanctions the moving party must establish: (1) that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, (2) that the evidence was destroyed with a “culpable state of mind,” and (3) “that the destroyed evidence was relevant to the party’s claim or defense such that the trier of fact could find that the evidence would support that claim or defense.” Pegasus Aviation I, Inc. v Varig Logistica S.A., 26 NY3d 543, 547 (2015), (quoting VOOMHD Holdings LLC v EchoStar Satellite L.L.C., 93 AD3d 33, 45 (1st Dep’t 2012)).
A “culpable state of mind” includes ordinary negligence for purposes of a motion for spoliation sanctions. VOOM, 93 AD3d at 45. The relevance of materials that were intentionally or willfully destroyed is presumed. Pegasus, 26 NY3d at 547. If, however, the evidence was destroyed negligently, the moving party bears the burden to establish that the evidence was relevant to its claims or defenses. Id. at 547-548. The court went on to say that trial courts can exercise discretion in imposing sanctions including preclusion of evidence, awarding costs or imposing an adverse inference instruction against the offending party at trial. Id. at 551 (citing CPLR § 3126 (“If any party . . . refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed . . . the court may make such orders with regard to the failure or refusal as are just”).
After reviewing the evidence, the Court concluded that “it is indisputable that Ms. Shakhnazarian had a duty to preserve evidence by January 16, 2019 when this lawsuit was filed and Ms. Shakhnazarian discarded [her cell phone] approximately seven months later in August 2019 without making any effort to preserve the documents and communications[.]” The Court found that such actions constitute spoliation of evidence and that “credible evidence supports a finding that Shakhnazarian’s conduct [was] willful, intentional, and contumacious.” Accordingly, the Court granted Ms. Carey’s motion for sanctions and stated the Court would impose an adverse inference instruction against Ms. Shakhnazarian at trial.
The attorneys at Schlam Stone & Dolan have extensive experience in high-stakes litigation that frequently involves complex issues regarding the collection, preservation and production of discovery. Contact Schlam Stone & Dolan attorney Chris Dyess at firstname.lastname@example.org if you or a client have questions regarding the management of discovery issues.
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