COA remands fire case for spoliation of evidence evaluation

A swimming pool manufacturer did not intentionally spoliate evidence after a fire destroyed its uninsured warehouse facility in Wolcott, but an appeals panel sent its case against a power company back to the trial court to determine the appropriate remedy, if any, for negligent spoliation.

After a fire in March 2010, international pool maker Aqua Environmental Container Corp. and Joki Leasing, LLC, sued the Northern Indiana Public Service Company. The suit claimed NIPSCO negligently supplied power to the Wolcott area, including the warehouse, resulting in severe power fluctuations that caused a fire in the area of a ceiling-mounted furnace at Aqua’s warehouse.

Afterward, Aqua preserved some, but not all, of the ceiling-mounted furnace equipment, but the trial court denied NIPSCO’s motion for default judgment for spoliation of evidence. The Indiana Court of Appeals affirmed Monday on interlocutory appeal in Northern Indiana Public Service Company v. Aqua Environmental Container Corp. and Joki Leasing, LLC, 91A04-1707-PL-1653.

The appellate panel agreed with the trial court’s determination that Aqua had not intentionally spoliated evidence. A demolition contractor removed some, but not all parts of the furnace, giving rise to NIPSCO’s claim that it would be prejudiced because a key part of the furnace was unavailable for inspection. Aqua insisted it told its demolition contractor to preserve all parts of the furnace, but the COA agreed with NIPSCO that Aqua had a non-delegable duty to preserve the evidence. 

But Aqua also noted NIPSCO waited five years to attempt to inspect the missing furnace part. Other evidence in the record weighing in Aqua’s favor includes evidence that NIPSCO experienced “brownouts” around Wolcott on the night of the fire, and testimony from fire officials and others that lights and power in the area periodically flicked and dimmed the night of the fire.

The panel wrote that the trial court was best positioned to balance culpability versus prejudice regarding the spoliation claim. The COA remanded the case to White Superior Court to make that determination, while upholding its ruling that Aqua did not intentionally spoliate evidence.

“[A] variety of spoliation remedies are available to a party to litigation, such as ‘potent’ discovery sanctions and an inference that the spoliated evidence was unfavorable to the party responsible,” Judge James Kirsch wrote for the panel. The COA remanded “with instructions to the trial court to determine the appropriate remedy, if any, for aqua’s negligent spoliation of evidence.”

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