Case Summary: Quintus Corp.; Court grants default judgment in b/r trial where defendant was found to have destroyed evidence

In a bankruptcy trial where defendant had destroyed electronic files, evidence that “went to the heart of the Trustee’s suit,” for the purpose of clearing more drive space; where defendant had breached a contract and therefore knew that the files would be relevant to potential litigation, the court ruled that judgment should be entered in favor of the Trustee for all claims listed in the Debtors’ b/r schedules and on the claims register. Trustee’s motion seeking attorneys’ fees as well was denied because the court granted a more severe sanction. In re Quintus Corp. v. Avaya, Inc., 353 B.R. 77 (Bkrtcy. D. Del. 2006).

Case Blurb; Quintus Corp.; Appropriateness of Default Judgment as Sanction

Judgment is [an] appropriate sanction where destruction of documents deprives adversary of critical evidence. In re Quintus Corp. v. Avaya, Inc., 353 B.R. 77 (Bkrtcy. D. Del. 2006) (citing Shepherd v. Am. Broad. Cos., F.3d 1469, 1479 (D.C. Cir. 1995)).

Case Blurb: Quintus Corp.; Testing prejudice from destruction of documents

In determining the prejudice suffered as a result of destruction documents, the court should “examine the materiality and value of the suppressed evidence upon the ability of [the movant] to fully and fairly prepare for trial. In re Quintus Corp. v. Avaya, Inc., 353 B.R. 77, 83 (Bkrtcy. D. Del. 2006) (citing Shamis v. Ambassador Factors Corp., F.3d 1469, 1479 (D.C. Cir. 1995)).

Case Blurb: Quintus Corp., Debtor’s failure to comply with Agreement triggers duty to Preserve

Debtor should have anticipated litigation over its failure to comply with an Asset Purchase Agreement, therefore should not have destroyed electronic files relevant to the litigation. In re Quintus Corp. v. Avaya, Inc., 2006 WL 307982 (Bkrtcy. D. Del. 2006).

Case Blurb: Quintus Corp, selective preservation of documents prohibited

A party cannot selectively preserve “relevant documents and only present those that it finds favorable to its case, at a time when if finds it convenient. In re Quintus Corp. v. Avaya, Inc., 2006 WL 307982 (Bkrtcy. D. Del. 2006) (citing Shamis v. Ambassador Factors Corp., F.3d 879, 890 (D.C. Cir. 1995)).

Case Blurb: Quintus Corp., Test for spoliation

Inquiry is whether the party destroying documents “knew or should have known that the destroyed evidence was relevant to pending, imminent or reasonably foreseeable litigation.” In re Quintus Corp. v. Avaya, Inc., 2006 WL 307982 (Bkrtcy. D. Del. 2006) (citing Shamis v. Ambassador Factors Corp., F.3d 1469, 1479 (D.C. Cir. 1995)).

Case Blurb: Quintus Corp., Trigger of Duty to Preserve

The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. In re Quintus Corp. v. Avaya, Inc., 353 B.R. 77, (Bkrtcy. D. Del. 2006) (citing Silvestri v. General Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001)).