Emerald Point, LLC v. Hawkins

         FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH James C. Lewis, Judge

          Present: Lemons, C.J., Mims, McClanahan, Powell, Kelsey, and McCullough, JJ., and Koontz, S.J.

          OPINION

          LAWRENCE L. KOONTZ, JR. SENIOR JUSTICE.

         This appeal arises from a jury verdict in favor of the tenants of an apartment in a premises liability action against the defendants, their landlord and its management company, for injuries alleged to have been caused by carbon monoxide ("CO") poisoning.^[1]

         BACKGROUND

         Familiar principles of appellate review guide our analysis in this case. As the prevailing parties in the trial court, the plaintiffs are entitled to have the evidence and all inferences reasonably drawn from it viewed in the light most favorable to them. Norfolk S. Ry. Co. v. Rogers, 270 Va. 468, 478, 621 S.E.2d 59, 65 (2005). Indeed, as they come armed with a jury verdict approved by the circuit court, the plaintiffs occupy the "most favored position known to the law." Bennett v. Sage Payment Solutions, Inc., 282 Va. 49 54, 710 S.E.2d 736, 739 (2011) (internal quotation marks omitted). In this context, and because the issues raised by the landlord and its management company on appeal are limited to challenging specific rulings of the trial court, initially we shall recite only the record evidence necessary to establish the foundation for our analysis of those asserted errors.

         Lindsey Hawkins, Paul Harmon, Thomas Zamaria, and Edward Guire (collectively, the "tenants") were co-tenants of the apartment unit located at 2163 Dumbarton Drive in the Emerald Point Apartments in Virginia Beach (the "City"), which is managed by The Breeden Company, Inc. ("Breeden") for the owner, Emerald Point, LLC. The unit was heated by a natural gas furnace. On the evening of November 26, 2012, the alarm in the carbon monoxide detector in the unit sounded. A maintenance worker sent by Breeden later that night replaced the batteries in the device, indicating to the tenants that he believed the alarm was merely due to low battery power in the detector, rather than a malfunction in the furnace. Shortly after the maintenance worker left, however, the alarm sounded again.

         The following morning, Hawkins called Virginia Natural Gas ("VNG") about the alarm. VNG dispatched an inspector, Charles Basnight, to the apartment. Basnight measured the CO levels in the apartment at 37 parts per million ("ppm"), a rate significantly higher than the normal range and hazardous to human health. Basnight then turned off the gas supply to the furnace and "red tagged"^[2] it as the suspected source of the CO leak. On the red tag Basnight indicated that the issue might be a cracked heat exchanger in the furnace.

         Later that day, Breeden sent maintenance worker Calvin Morris to the tenants' apartment to assess the problem. Morris declared on a City code enforcement corrective action form that he had "[c]hecked furnace for CO^[] leaks, checked vent pipes for leaks, found vent pipe in attic to 2163, loose[.] Reattached and secured, rechecked CO^[] level it was at 0."

         Although not licensed to make repairs to heating systems, Morris repaired the vent pipe by using zip screws to secure the sections of the pipe together, which is contrary to manufacturer specifications. Morris later returned to the apartment with Danny Carlson, a code enforcement officer from the City, who likewise determined that the CO levels were within the acceptable range. Carlson did not go into the attic or otherwise inspect the furnace, flue or vents. Carlson then permitted the red tag to be removed from the furnace.

         In the early morning hours of January 4, 2013, the alarm in the apartment's carbon monoxide detector sounded again. Although a maintenance worker found no elevated CO readings when sent to the apartment, later that day a VNG inspector found that the CO readings were beyond the acceptable range and again red tagged the furnace.

         The same day, Breeden hired a heating and air conditioning contractor to replace the furnace. However, once the new furnace was installed, the CO levels in the tenants' apartment remained high. An inspection in the attic above their apartment resulted in the discovery that the flue of the furnace in the adjoining apartment was not properly connected and was venting exhaust, including CO, into the attic. When this flue was repaired, CO levels in the tenants' apartment returned to an acceptable level.

         For purposes of this appeal, it is not disputed that the tenants suffered injuries from being exposed to CO gas. Harmon, Zamaria and Guire suffered relatively minor injuries, while Hawkins' injuries were of a more extensive and permanent nature.

         On November 13, 2014, the tenants filed a joint complaint against Breeden and Emerald Point, LLC (hereafter collectively, the "landlord") in the Circuit Court of the City of Virginia Beach. Alleging that the CO exposure resulted from faulty maintenance of the furnace and the associated vent and flue system and that this exposure resulted in their injuries, Harmon, Zamaria and Guire each sought $100, 000 in compensatory damages and $350, 000 in punitive damages. Hawkins sought $5, 000, 000 in compensatory damages and $350, 000 in punitive damages. The claims for punitive damages were based on an assertion that the landlord had been willful and wanton in failing to maintain the furnace and in failing to employ competent staff.

         At the conclusion of the presentation of the evidence at a four-day trial held from May 16 through May 19, 2016, the circuit court ruled that the tenants had failed to establish the requisite level of negligence for punitive damages. Harmon, Zamaria and Guire then were permitted, over the objection of the landlord, to increase their ad damnum prayers for compensatory damages to $450, 000. The jury returned its verdicts for the tenants, awarding Harmon, Zamaria and Guire $200, 000 each and $3, 500, 000 to Hawkins. The court entered final judgment in accord with the jury's verdicts in an order dated June 17, 2016. This appeal followed.

         DISCUSSION

         We awarded the landlord an appeal on the following assignments of error:

1. The Trial Court erred in admitting the testimony of Dr. Allan Lieberman that had not been disclosed in accordance with Rule 4:1(b)(4)(A)(i).

2. The Trial Court erred in granting an adverse inference jury instruction based on the disposal of the furnace because there was no finding of bad faith, the Defendant had no reason to foresee that the furnace would be material evidence in litigation because all of the evidence indicated the leaks were from the flue pipes, and Plaintiffs failed to present evidence that the furnace was material.

3. The Trial Court erred in admitting the irrelevant and prejudicial testimony of Alan Moore regarding alleged defects in the installation of the new furnace and piping, where such defects were after-the-fact and patently not the cause of the carbon monoxide leak.

4. The Trial Court erred in overruling Defendants' Motion to Drop Misjoined parties where each of the four plaintiffs had distinct and ...