Suspicious Timing of Destruction Results in Adverse Inference and Permission to Add a Claim of Exemplary Damages despite Lack of “Smoking Gun”
Smith v. Slifer Smith & Frampton/Vail Assocs. Real Estate, LLC, 2009 WL 482603 (D. Colo. Feb. 25, 2009)
Plaintiffs, as representatives of an estate, retained defendants, including broker Peter Seibert, to assist in selling a piece of the estate’s property. The property eventually sold, on defendants’ recommendation, for approximately $2.8 million. 83 days later, defendants assisted in reselling the property to a development company for $7.2 million. On March 19, 2006, plaintiffs’ counsel contacted defendants and informed them he was conducting an investigation into the sale. On November 2, 2006, plaintiffs filed suit alleging inter alia breach of statutory duties, negligence per se, negligent misrepresentation, and fraud.
Plaintiffs served discovery requests on April 9 and July 30, 2007. Included, were specific requests for electronically stored information (“ESI”) and for inspection and sampling of certain of defendants’ computers. Defendants’ responses indicated that they had searched three primary sources of potentially responsive ESI: Seibert’s old office computer, his home computer, and his laptop.