In Voellinger v. Dow, ___ N.J. Super. ___ (App. Div. 2011), the Appellate Division confronted an issue that, not surprisingly, it had never addressed before:  “whether or to what extent the Division of Criminal Justice (the Division) may be found liable for losing or destroying evidence properly seized years earlier during a criminal investigation.”  The trial court ruled that the plaintiffs could only assert a replevin claim and granted summary judgment to the Division.  The Appellate Division affirmed that result but disagreed with the basis for the trial court’s ruling, as it held that the trial court “should have applied bailment principles, which in these circumstances imposed a gross negligence standard [which] the Division did not breach.”

The plaintiffs were the principals of Aeroplating, Inc., a metal plating business located in Woodbury Heights.  A Woodbury City sewer worker died in 1985 after being exposed to fumes that were traced to Aeroplating.  Thereafter, the Division executed a search warrant and seized several boxes of records concerning the chemicals used at Aeroplating’s facility.  In 1986, Aeroplating and its manager were charged with second-degree manslaughter, and they both pled guilty in 1987.  Three years later Aeroplating shut down its operations and filed for bankruptcy protection.  The property was sold and the plaintiffs were required to remediate the property’s contamination.

In 1980, Aeroplating had bought the subject property and assets of Electro-Coatings, Inc. (“ECI”), which had operated a metal plating business at that site since 1969.  Thus, the plaintiffs filed suit in 2004 against ECI for contribution for the costs associated with cleaning the site pursuant to the Spill Compensation and Control Act.  The plaintiffs, thinking that the Aeroplating records seized by the Division in 1985 were relevant to contamination issues, filed an Open Public Records Act request in August 2007 for them.  In September, the request was denied because the Division could not find the records.  Based on that, in June 2008 the plaintiffs filed suit against the Attorney General alleging negligence and conversion.

Following discovery, the trial court granted the Attorney General’s summary judgment motion.  The court ruled that the plaintiffs’ only cause of action was replevin and found that the claim was barred because of the passage of time that had elapsed.  Alternatively, the court found that even if the plaintiffs had a negligence claim, it was precluded by the doctrine of laches.

The Appellate Division affirmed, but for different reasons.  As an initial matter, the Appellate Division determined that the statutory right of replevin, which consisted of the common law torts of replevin and detinue, was not available to the plaintiffs because it was undisputed that the Division took the documents lawfully and that the Division’s retention of the records was not unlawful.  Next, the court examined the nature of the parties’ relationship to determine if the plaintiffs had a viable cause of action that was not time barred.  In doing so, the Appellate Division pointed out that at some point after the criminal proceedings concluded, the Division’s right to retain the property ceased and Aeroplating had the right to demand the return of the documents.  The Division had written standard operating procedures that required it to notify Aeroplating that the documents were available for return but, due to the passage of time, there was no evidence of what communications, if any, occurred between the Division and Aeroplating.

Not only was that unclear, but the Appellate Division observed that it was unknown what happened to the records.  The Division demonstrated that they were initially maintained in its vault, then transferred to a storage facility, and then transferred to another facility.  There was no dispute that the Division had performed an “exhaustive search” for Aeroplating’s records but that they could not be found.

Against that backdrop, the Appellate Division concluded that once the criminal proceedings ended a bailment was created.  Moreover, the Appellate Division ruled that the Division acted only a “gratuitous bailee” because it was not paid a fee for retaining the records.  As a “gratuitous bailee,” the Division could only be held liable “upon proof that the property was lost as a result of ‘gross negligence.’”  Applying that standard to the facts, the Appellate Division held that the Division was entitled to summary judgment.  Specifically, the court declared that “at some point in or about 1987, the criminal prosecution ended and Aeroplating was entitled to the return of its property.  Aeroplating, however, did not request its return until 2007.  In light of these circumstances, and the absence of any other evidence to suggest the manner in which the property was lost or destroyed, no rational factfinder could conclude the Division was grossly negligent in failing to preserve this property during the decades Aeroplating showed no interest in their return.”