Abuse of Discretion – Sanctions

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WI Court of Appeals – District IV

Case Name: Tyler A. Mueller, et al., v. Bull’s Eye Sport Shop, LLC, et al.,

Case No.: 2020AP978

Officials: Fitzpatrick, P.J., Blanchard, and Graham, JJ.

Focus: Abuse of Discretion – Sanctions

Tyler Mueller was injured while hunting when a gun he was holding discharged. The gun was owned by Tyler’s brother, Jordan Mueller. Tyler brought this lawsuit against Bull’s Eye Sports Shop, the business that assembled the gun and sold it to Jordan, based on Bull’s Eye’s alleged negligence. Bull’s Eye brought a third-party claim against Jordan, and Tyler later brought a claim against Jordan, both alleging that Jordan’s negligence caused Tyler’s injuries.

Jordan was immediately aware of the incident in which Tyler was injured and later became aware of potential litigation regarding the gun and Tyler’s injuries. Nevertheless, after becoming aware of potential litigation, Jordan had the gun materially altered, and a part of the gun is still missing. Both Tyler and Bull’s Eye brought motions in the circuit court asking that Jordan be sanctioned for his spoliation of the gun evidence. Prior to the circuit court ruling on those motions, Tyler and Jordan entered into a Pierringer release, and Jordan was dismissed from this action based on the terms of that release. The circuit court found that Jordan intentionally spoliated evidence regarding the gun. As a sanction for those intentional acts of Jordan, the circuit court ordered that, at the trial in this case, the jury will receive an instruction from the court stating that the jury may draw an adverse inference against Jordan regarding that spoliated evidence.

Bull’s Eye appeals and makes two primary arguments. First, Bull’s Eye contends that the circuit court erred in deciding which sanction to impose against Jordan for his spoliation of the gun evidence. Bull’s Eye argues that the circuit court should have dismissed Tyler’s claims against it as a sanction for Jordan’s spoliation of evidence. We reject Bull’s Eye’s argument and conclude that the circuit court did not erroneously exercise its discretion in selecting the spoliation inference instruction as the sanction. Second, Bull’s Eye argues that Tyler’s claim against Bull’s Eye must be dismissed based on the following chain of propositions advanced by Bull’s Eye. Indemnity principles require that, based on Jordan’s intentional spoliation of evidence, Jordan must indemnify Bull’s Eye for any negligent conduct of Bull’s Eye that caused Tyler’s injuries. By operation of the Pierringer release between Tyler and Jordan, Jordan’s intentional conduct in spoliating evidence is imputed to Tyler, which in turn requires that Tyler indemnify Bull’s Eye for any negligent conduct of Bull’s Eye that caused Tyler’s injuries. As a result, according to Bull’s Eye, Tyler’s claim against Bull’s Eye must be dismissed. We reject Bull’s Eye’s argument because, under these circumstances, Jordan does not owe an indemnity obligation to Bull’s Eye based on his intentional spoliation of evidence.

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Derek A Hawkins is Associate Corporate Counsel, IP at Amazon.