In TIAA Global Investments LLC, et al. v. One Astoria Square, LLC, et al., Index No. 652907/2012 (Sup. Court, N.Y. County) (Decision and Order, Hon. Anil C. Singh, J.S.C. February 22, 2016), an owner and purchaser of a large multi-unit building complex sued the seller for alleged fraud and intentional misrepresentation. Among other things, the plaintiff purchaser alleged that the defendant seller had sought to conceal a latent building defect concerning air infiltration and widespread tenant complaints regarding that defect. The plaintiff sought email evidence from the defendant seller regarding this alleged active concealment, but defendant maintained that it was its normal course of business to delete all emails after they were reviewed and addressed. The defendant seller also maintained that it had not been asked to maintain a litigation hold at the time of the email deletions, and its expert confirmed that the destroyed emails were not retrievable from Yahoo at any time after seven days post-deletion.
The Court reasoned that the email deletions were intentional but not necessarily in bad faith. There was no evidence showing malice. However, the Court also reasoned that the seller defendant had reason to preserve emails, at relevant times, when it received information about the tenant complaints. Thus, the Court found the email deletions to be negligent conduct, in light of the seller's knowledge of the complaints, but not reckless or grossly negligent. As such, the Court determined that striking of defendant seller's pleadings was uncalled for, and that a less drastic remedy should be implemented.
The Court thus held that plaintiff would be permitted an adverse inference charge against defendant seller at trial. An adverse inference charge is generally an instruction that a judge gives to the jury, directing that, where evidence is unavailable, the jury may infer that this unavailable evidence was unfavorable to the party that should have, or at some point did have, possession of that evidence.
The Court's holding was based on the following additional key reasoning. The email evidence sought was clearly relevant to plaintiff's claim, but, on the other hand, significant prejudice against plaintiff was unlikely. The missing emails would not deprive plaintiff of the ability to establish its case. And, instead, with the tenant emails and complaints already in plaintiff's possession, the deleted emails would merely be cumulative. As such, the Court found an adverse inference charge to be the most appropriate remedy, in lieu of striking of pleadings, imposition of fees, or preclusion.
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