Emerald Point, LLC v. Hawkins
808 S.E.2d 384, 294 Va. 544 (2017)
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Rule of Law:
An adverse inference jury instruction for spoliation of evidence is only permissible when the evidence supports a finding that the party intentionally lost or destroyed the evidence with the purpose of preventing its use in pending or reasonably foreseeable litigation. Mere negligence in failing to preserve evidence is insufficient to warrant such an instruction.
Facts:
- Lindsey Hawkins, Paul Harmon, Thomas Zamaria, and Edward Guire (the tenants) rented an apartment from Emerald Point, LLC, which was managed by The Breeden Company, Inc.
- On November 26, 2012, the apartment's carbon monoxide (CO) detector sounded. After a maintenance worker replaced the batteries, it sounded again.
- The next day, a gas company inspector found hazardous CO levels, suspected the furnace was the source, and disabled it by 'red tagging' it.
- A maintenance worker for The Breeden Company, who was not licensed for heating system repairs, reported fixing a loose vent pipe in the attic, after which the red tag was removed and the furnace was put back into service.
- On January 4, 2013, the CO alarm sounded again, and an inspector again found high CO levels and red tagged the furnace.
- The landlord hired a contractor to replace the furnace, but high CO levels persisted in the tenants' apartment.
- An inspection then revealed that the flue from an adjoining apartment's furnace was disconnected and venting exhaust, including CO, into the shared attic space.
- After this flue was repaired, CO levels returned to normal. The tenants all suffered injuries from the exposure, and the landlord disposed of the original furnace more than a year after it was removed.
Procedural Posture:
- On November 13, 2014, Lindsey Hawkins, Paul Harmon, Thomas Zamaria, and Edward Guire (tenants) filed a complaint against Emerald Point, LLC and The Breeden Company, Inc. (landlord) in the Circuit Court of the City of Virginia Beach.
- The landlord's pre-trial motion to sever the claims of the individual tenants was denied by the circuit court.
- At the conclusion of a four-day jury trial, the circuit court struck the tenants' claims for punitive damages.
- The court then granted the tenants' motion to increase their compensatory damage requests (ad damnum) over the landlord's objection.
- The jury returned verdicts for the tenants, awarding $3,500,000 to Hawkins and $200,000 to each of the other three tenants.
- The circuit court entered final judgment in accordance with the jury's verdicts.
- The landlord (appellant) appealed the judgment to the Supreme Court of Virginia, with the tenants as appellees.
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Issue:
Does giving an adverse inference jury instruction for spoliation of evidence constitute reversible error when there is no finding that the party intentionally destroyed the evidence in bad faith to prevent its use in litigation?
Opinions:
Majority - Senior Justice Lawrence L. Koontz, Jr.
Yes. Granting an adverse inference instruction for spoliation requires a finding of intentional destruction of evidence to prevent its use in litigation, and granting it without such a finding is an error. The court held that the premise for a spoliation inference is that a party's intentional destruction of evidence implies the evidence was unfavorable. Negligent or even grossly negligent loss of evidence does not logically support this inference, as the evidence could have been favorable to either party. Adopting a standard similar to that in Federal Rule of Civil Procedure 37(e), the court ruled that there must be evidence of a deliberate intent to deprive the other party of the evidence's use at trial. In this case, the trial court explicitly found no 'bad faith' by the landlord, who disposed of the furnace over a year after its removal and before the lawsuit was filed. This action was, at worst, negligent. Therefore, the spoliation instruction was a prejudicial error requiring a new trial. The court also found reversible error in the admission of undisclosed expert testimony regarding the long-term effects of CO poisoning, as this was also prejudicial to the landlord.
Analysis:
This decision establishes a clear and high bar for obtaining a spoliation of evidence instruction in Virginia, clarifying that mere negligence is insufficient. By requiring proof of intentional destruction calculated to suppress evidence, the court aligns Virginia's common law standard with the 'intent to deprive' standard found in the federal rules for electronic discovery. This holding makes it significantly harder for parties to gain a tactical advantage from an opponent's accidental or careless loss of evidence. It protects parties from a potentially case-dispositive jury instruction unless their opponent can affirmatively show they acted in bad faith to hide evidence.
