No Spoliation in Mortgage Fraud Case

In this complex fraud case arising out of the misappropriation of millions of dollars in loan proceeds, one issue before the Court of Appeals was whether the trial court erred in denying the plaintiff’s request for a spoliation instruction.  The plaintiff had moved to compel certain communications from one of the defendants, but that defendant had replaced its servers and did not back up the data.  Because there was no evidence that the defendant had acted with intent to conceal the discoverable evidence or acted negligently to irreparably deprive the plaintiff of “any meaningful ability to present its claims,” the Court of Appeals affirmed the trial court’s decision not to give a spoliation instruction to the jury.

Flagstar Bank, FSB v. Walker