Standard Fire Insurance Company v. Federal Pacific Electric Company

In Standard Fire Insurance Company v. Federal Pacific Electric Company, 14 AD3d 213 (1st Dept 2004), the Appellate Division, First Department held that the insurance company/subrogee of the homeowner had an obligation to preserve the defective equipment at issue in the lawsuit for all parties to inspect, and that it had the authority, means and opportunity to safeguard the equipment. In that case the Court indicated that there could be no dispute that plaintiff was on notice at the time of its engineer's inspection that the electrical panel and circuit breakers, which held the key to the cause and origin of the fire, would be needed for future litigation because the cause of the fire was the sole basis of plaintiff's claim against defendants; the same is true of the subrogee and of the stove in the instant actions. Additionally, the Court emphasized that negligent as well as intentional spoliation of a key piece of evidence may warrant dismissal. On that basis, the Court reversed the lower court and dismissed the action on the grounds of spoliation.