Surowiec v. Capital Title Agency, Inc.

James Surowiec (plaintiff) bought a condominium from developer Shamrock Glen, LLC through an escrow closed by Scott Romley of Capital Title Agency, Inc. (defendant), and later sued Capital, alleging Romley failed to disclose that the property was encumbered by Shamrock-investor deeds of trust. Capital's in-house counsel, Lawrence Phelps, learned of the potential litigation when Shamrock's attorney sent a letter describing condominium owners' inquiries about outstanding liens; Phelps discussed this with Capital officers and Romley but never advised them to preserve evidence or suspend the company's routine document-destruction policy. During discovery, it emerged that Capital had destroyed communications and documents relevant to the case, prompting Surowiec to move for a default judgment or, alternatively, an adverse-inference jury instruction.