Pulte Home Corporation v Simerly 746 S.2d 173 (Ga. 2013) Fooling Around with Documents and E-Mails: Costs and Consequences Case 4.

Pulte Home Corporation v Simerly

746 S.E.2d 173 (Ga.App. 2013)

Fooling Around with Documents and E-Mails: Costs and

Consequences

Case 4.2

FaCtS

In January 2004, Pulte purchased property to develop single-

family residences for what would become the Notting

Hill and Fieldstone subdivisions. The Pulte Development

discharged water into Harris Creek and was located

upstream of the properties owned by Tim and Adele

Simerly and Richard and Susan Trent (Plaintiffs). Pulte

had purchased the property from Macauley Properties,

which previously hired Lowe Engineering to complete

a hydrology and storm-water management study. The

Lowe Study was completed in January 2004, and Pulte

relied upon the study to design and construct its development.

The Lowe Study recommended that storm water

discharges from future developments could be controlled

with the construction of a weir on Harris Creek, which

consisted of a partial wall across the creek, above Drew

Campground Road located within Fieldstone.

Pulte began mass grading and other land-disturbing

activities at Fieldstone in March 2004. Shortly thereafter,

excessive amounts of storm water, dirt, sediment, and

development debris were discharged into Harris Creek

and ultimately into the ponds located on the Simerly

and Trent properties. Investigations revealed that the

discharged sediment and pollutants were caused by

Pulte's activities upstream and its failure to install and

maintain erosion control devices required by law. The

Pulte Development also caused a dramatic increase in the

rate and flow of storm-water discharge into Harris Creek

that caused flooding to the Simerly and Trent properties.

During a subsequent study, it was discovered that the

weir was inadequate to control the storm-water discharge

from the Pulte Development because the Lowe Study,

upon which Pulte had relied for storm-water management,

was based upon flawed assumptions and analysis.

The Simerlys and Trents sued Pulte Home Corporation

for trespass, nuisance, negligence, negligence

per se, riparian rights, unjust enrichment, and ejectment

based on the company's actions in causing excess

storm water and sediment to enter the Simerlys' and

Trents' properties.

The jury found in favor of the Simerlys, Trents, and

Lawsons (collectively, the "Plaintiffs") and awarded them

$2.49 million in damages and attorney fees. The court

had found evidence of spoliation by Pulte and excluded

certain exculpatory evidence from the trial because of a

finding of Pulte's counsel's misconduct. The trial court

also allowed evidence of Pulte's conduct during discovery

in its determination of attorney fees. Pulte appealed.

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JUdiCial OpiNiON

MILLER, Judge

During litigation, the trial court found that Pulte had

engaged in spoliation by deleting emails relevant to the

litigation, and enjoined Pulte from engaging in further

destruction of evidence. The trial court had appointed a

Special Discovery Master to oversee compliance with the

court's injunction and to resolve other discovery issues,

including the attempted recovery of spoliated evidence

through a computer forensic investigation. The Special

Discovery Master issued a report outlining that the

computer forensic investigation revealed that Pulte had

engaged in further spoliation of electronic evidence after

the trial court's order and recommended that Pulte be

sanctioned for its violations. The trial court adopted the

Special Discovery Master's report and recommendation.

The Special Discovery Master also informed the trial

court that the Simerlys' counsel and Pulte's counsel had

provided conflicting statements relating to Pulte's removal

of discovery documents during a May 2009 document

review at Pulte's offices. At a subsequent hearing before

the trial court, Simerlys' counsel, Michael Carvalho, testified

that he and an associate attorney, Christine Westberg,

had a scheduled document review at Pulte's offices in

May 2009. Carvalho testified that during the document

review, he had stacked a number of documents in a pile

that were deemed relevant in order to copy them. Before

taking a break for lunch, Carvalho informed Pulte's counsel

that they planned to copy the documents in the stack.

When Carvalho returned from lunch, he noticed that the

stack of documents was smaller. Carvalho testified that he

asked Pulte's counsel about the missing documents, and

she told him that she took the documents because they

were privileged. Following the hearing, the trial court

found that Pulte's counsel had taken documents during

the document review.

The trial court allowed Carvalho to testify about

spoliation during the May 2009 document review, and

would [not] allow Pulte to benefit from its discovery

violations.

Plaintiffs were forced to undergo unnecessary trouble

and expense to prosecute their claims in this case,

and the evidence [of the spoliation] was properly admitted

as it related to the issue of attorney fees.

Affirmed.

CaSe QUeStiONS

1. Explain what the Special Master found about

Pulte's behavior in the case.

2. What are the consequences when one side

attempts to withhold or destroy evidence?

3. What management lessons should be learned and

applied from this case?