Appeal
from Jackson Circuit Court (CV-13-900106)
STEWART, JUSTICE.
This
case requires us to consider whether a defendant engaged in
third-party spoliation of evidence that would have been
essential to the plaintiff's products-liability claim
against a manufacturer. For the reasons stated below, we
affirm the judgment entered by the Jackson Circuit Court
("the trial court") following a bench trial insofar
as it found Imperial Aluminum-Scottsboro, LLC
("Imperial"), culpable for negligent spoliation of
evidence and awarded compensatory damages to Tyler D. Taylor.
We reverse the trial court's judgment insofar as it
awarded punitive damages against Imperial based on a finding
of wanton conduct.
Facts
and Procedural History
On
October 10, 2010, Taylor injured his right index finger while
in the line and scope of employment with Imperial. In its
judgment, the trial court provided a summary of the facts
leading up to and relating to Taylor's injury:
"In early October of 2010, [Taylor] was hired by
Imperial to paint some of the structures on its property; he
was given a used paint sprayer with which to complete his
task. After starting his task, [Taylor] realized that the
used paint sprayer was malfunctioning, which he reported to
Imperial. On October 5, 2010, Imperial purchased a new paint
sprayer, a Tradeworks 170, from Sherwin-Williams. The new
paint sprayer included the 'spray gun' component,
which is used to distribute the paint, and the compressor,
which compresses air and is used to send paint to the spray
gun.
"After unboxing the paint sprayer, [Taylor] assembled
the components and began painting Imperial's structures.
On October 10, 2010, [Taylor] had finished his work for the
day and was cleaning paint from the spray gun component, when
the paint sprayer activated and injected paint and mineral
spirits into his right index finger.
"[Taylor] was transported to Highlands Medical Center
and underwent a series of painful procedures in an attempt to
save his finger. Despite the best efforts of his physicians,
they were unable to save his finger, and the decision was
made by [Taylor] and his physicians to completely amputate
his right index finger, all the way down to his
hand.3 Subsequent to this amputation, [Taylor] had
to undergo another procedure to remove a painful neuroma at
the amputation site.
"[Taylor's] doctors have discussed with him the
possibility that he may need to, at least, have carpal tunnel
surgery, and [Taylor] is also at risk of developing arthritis
and other degenerative conditions as a result of his injury.
"3This type of amputation is called a ray
resection."
(Citations to record omitted.)
In
preparation for potential litigation stemming from his
injury, Taylor retained legal counsel.[1] On January 3, 2011,
Taylor's attorney sent Imperial a letter stating:
"We represent [Taylor, ] who was injured while working
at your company on or about October 1 [sic], 2010.
"We understand that a paint gun was the cause of his
injury, which resulted in the loss of his index finger. We
anticipate making a claim for damages arising from this
injury. In this regard, it will be necessary for us to
inspect the paint gun and any equipment utilized with it at
the time of the injury, along with any and all paperwork,
documents, bill of sale, etc., pertaining to its purchase,
manufacture and maintenance. Please preserve the gun along
with any and all paperwork and do not allow anyone to change,
modify, or destroy or otherwise dispose of the paint gun and
other requested items."
The
letter did not include an offer by Taylor to bear any cost or
other burden of preserving the requested evidence.
In its
judgment, the trial court summarized the efforts employees of
Imperial took to preserve the Tradeworks 170 paint sprayer
after receiving the January 3, 2011, letter:
"In response [to the letter], the general manager of
Imperial's Scottsboro facility, Mike Peebles, instructed
Randy Stalnaker to put the paint sprayer up. Imperial was
aware, no later than its receipt of [the] January 3, 2011,
letter, that [Taylor] intended to pursue a claim for damages
arising out of [Taylor's] injury. Randy Stalnaker was the
maintenance supervisor and/or manager at Imperial's
Scottsboro location. Mr. Stalnaker instructed Amanda King to
put the paint sprayer in the finished-goods portion of the
warehouse and to cover it with a bag. After putting the paint
sprayer up, Amanda King confirmed to Mr. Stalnaker that the
'spray gun part' of the paint sprayer was also
preserved."
(Citations to the record omitted.)
On
October 10, 2012, Taylor filed a complaint in the Madison
Circuit Court asserting claims of products liability under
the Alabama Extended Manufacturer's Liability Doctrine
("the AEMLD"), negligence, wantonness, failure to
warn, and breach of warranty against Graco, Inc.
("Graco"), and Sherwin-Williams Scottsboro Store
Number 2126 ("Sherwin-Williams"). Taylor also
alleged in the complaint that Graco was the manufacturer of
the Tradeworks 170 and that Imperial had purchased the unit
from Sherwin-Williams. Although it is not clear from the
record, the trial court's judgment indicates that
Taylor's case against Graco and Sherwin-Williams was
removed to the United States District Court for the Northern
District of Alabama. On January 18, 2013, Imperial's
attorney sent a letter to Taylor's attorney stating:
"I went to the Imperial Aluminum plant in Scottsboro,
Alabama[, ] to obtain the spray gun involved in this matter.
I was advised at that time that immediately following this
accident which occurred on October 10, 2010, they stopped
using the spray guns of the type involved in the accident
made the basis of this suit. According to the information I
was able to obtain this occurred in December of 2010.
Unfortunately, the spray gun was deposed [sic] of at or near
that time and is no longer available."
On May
8, 2013, after receiving the letter from Imperial's
counsel, Taylor dismissed his complaint against Graco and
Sherwin-Williams.
On the
same day, Taylor filed a complaint in the trial court naming
as defendants Imperial, Mike Peebles, and various
fictitiously named defendants and asserting a claim alleging
third-party spoliation of evidence arising from
Imperial's failure to preserve the spray-gun portion of
the Tradeworks 170 unit. Taylor demanded a trial by a jury.
Imperial filed an answer on June 10, 2013, in which it
stated, in pertinent part:
"5. The Defendant, Imperial Aluminum-Scottsboro, LLC,
would state that [Taylor], through his counsel of record, did
not contacted [sic] it about preserving the 'paint
sprayer' until January 3, 2011, which was not actually
received until a later date.
"6. Prior to January 3, 2011 the 'paint sprayer'
in question was disposed of as it was not longer in use at
the plant."
The
trial court conducted a bench trial on March 12, 2018, during
which it received the testimony of Peebles, Taylor, Amanda
King, and Mike Chenoweth, who was vice president of
operations for Imperial and who had been designated as
Imperial's corporate representative.[2] The deposition
testimony of Randy Stalnaker, the maintenance supervisor at
Imperial's Scottsboro facility, and of Taylor's
treating physicians was read into the record. Chenoweth
testified that he was aware of the January 3, 2011, letter
from Taylor's attorney to Imperial in which Imperial was
asked to preserve the spray gun, as well as other items
related to the Tradeworks 170 unit. Chenoweth testified that,
after Imperial received the letter, Imperial management
instructed maintenance workers to preserve the unit. Under
direct examination by Taylor's counsel, Chenoweth
testified as follows:
"Q. All right. And in this letter, [counsel for Taylor]
also notified Imperial Aluminum that he believed the paint
gun was the cause of Tyler Taylor's injury, correct?
"A. Correct.
"Q. That--that he anticipated making a claim for damages
arising from this injury, correct?
"A. Correct.
"Q. And that it would be necessary for him to be able to
inspect the paint gun and any equipment utilized with it at
the time of injury, along with any and all paperwork,
documents, bill of sale, et cetera, pertaining to its
purchase, manufacture, and maintenance. Do you remember that?
"A. Yes.
"Q. All right. That was not done, correct? That paint
gun, along with all of the equipment and the warnings and the
literature was not preserved by Imperial Aluminum, correct?
"A. No. It's not correct.
"Q. All right. Part of it was preserved, the compressor.
"A. As far as we know, it was all preserved, but ....
"Q. It was all preserved at one time?
"A. At one time.
"Q. Okay. Well, would you agree that as we sit here
today, we don't know where the paint gun is?
"A. Correct.
"Q. We don't know where the box that it came in is,
correct?
"A. Correct.
"Q. We don't know where any of the literature or
warnings are, relative to the paint sprayer or the paint gun,
correct?
"A. Correct.
"....
"Q. Have you seen any of the testimony [in] this case
that would indicate ... that the paint gun was with the
sprayer when it was initially put up?
"A. No, I have not.
"....
"Q. When was the last time that you know of that the
paint gun was still at the plant?
"A. If it was with the sprayer at the time it was put
up, that's the last time [Imperial management] knew it
was there."
When
asked by Taylor's attorney whether the spray gun was
stored with ...