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Philadelphia Indemnity Insurance Co. v. BMW of North America LLC

United States District Court, D. Arizona

September 29, 2015

Philadelphia Indemnity Insurance Company, et al., Plaintiffs,
v.
BMW of North America LLC, et al., Defendants.

ORDER

JOHN Z. BOYLE, Magistrate Judge.

Pending before the Court are Defendant BMW of North America, LLC's Motion to Exclude Testimony of Willie Nelson (Doc. 92), Motion to Exclude Testimony of George Hogge (Doc. 91), and Motion for Summary Judgment (Doc. 93). For the reasons below, the Court will deny Defendant's Motion to Exclude Testimony of Mr. Nelson, grant in part and deny in part Defendant's Motion to Exclude Testimony of Mr. Hogge, grant Defendant's Motion for Summary Judgment as to Plaintiffs' negligence claim, and deny Defendant's Motion as to Plaintiffs' strict products liability claim.[1]

I. Background

This case arises from a fire that occurred in Plaintiff Michelle Brown's garage in Gilbert, Arizona. Ms. Brown, her insurer Liberty Mutual Fire Insurance Company, and her condominium association's insurer Philadelphia Indemnity Insurance Company assert claims against Defendant for strict products liability and negligence. (Doc. 66.) More specifically, Plaintiffs assert that a defect in the Mini Cooper parked in Ms. Brown's garage, and Defendant's negligence, caused the fire. (Id. )

a. The Fire

On September 13, 2012, a fire began in the garage of Ms. Brown's home. (Doc. 92-1, Ex. A at 2-3).[2] Her son, Terrance Harris, was the only one home at the time of the fire. (Id. at 31.) According to the Gilbert Fire Department Report, Mr. Harris stated that he awoke from a nap to a "loud thud, '" went down stairs, opened the interior door to the garage, and saw dense, white smoke. (Id. at 33.) He then opened the automatic garage door with a remote opener and called 911. (Id. ) Mr. Harris stated that after he walked around the outside of the house to see what was on fire in the garage, "he heard an explosion and witnessed heavy smoke and active flame rolling out from underneath the front, driver's side of the vehicle parked in the garage."[3] (Id. )

Mr. Harris also told the Fire Department that there was nothing plugged into the electrical outlets in the garage. (Id. ) Mr. Harris further stated that his mother parks the Mini Cooper over a rug that had started to deteriorate, and it's possible the carpet came in contact with the bottom of the car. (Id. ) Mr. Harris reported that the only issues with the vehicle are that it occasionally would not start right away and the headlight had flickered during a rainstorm. (Id. ) Mr. Harris also stated that there had been no other repairs to the car, "just routine maintenance."

"Based on the heat damage and the burn patterns in the garage, " the Gilbert Fire Department eliminated the water heater as "the possible source of the fire." (Id. at 32.) Further, "[b]ased on the fire burn patter[n]s and fire movement in the garage, the area of origin was determined to be by the front driver's side of the Mini Cooper." (Id. ) The Fire Department ultimately concluded the following:

After eliminating all other ignition sources in the area of origin, I found two possibilities of the cause [of] this fire: First, an electrical or mechanical malfunction inside the engine compartment of the Mini Cooper. Second, when Terrence pulled the car into the garage; it is possible that the carpet came in contact with the Mini Cooper[]s exhaust or engine, causing the carpet to smolder before igniting.

(Id. )

Ms. Brown reported several items lost in the fire, including a 32-inch television next to a work bench in the southwest corner of the garage, a Ryobi cordless drill, two Ryobi chargers, one of which she believed was plugged in at the time of the fire, a 21-inch computer monitor, two vacuum cleaners, a circular saw, and extension cords. (Doc. 92-1, Ex. E at 57-66.) The workbench in the southwest corner also suffered damage from the fire.

On September 19, 2013, Thomas Kane, an investigator retained by Liberty Mutual, issued a Report regarding his preliminary findings. (Doc. 92-2, Ex. H at 11.) Mr. Kane stated that he followed the scientific method as set forth in the NFPA 921: Guide for Fire and Explosion Investigations (NFPA 921), a publication issued by the National Fire Protection Association. (Id. ) Based on his personal inspection of the fire scene, Mr. Kane stated that although the water softener and garage door opener were plugged in at the time of the fire, "[t]here were no signs of unusual electrical activity at these outlets and switches. Burn patterns and fire damage indicate that the fire moved towards these items as opposed to coming from them." (Id. at 12.) Additionally, Mr. Kane noted that:

[E]xamination of the 2006 Mini Cooper showed no obvious signs of body damage and showed heavy burn and oxidation patterns on the left front quadrant of the hood and left front fender. The left front tire also sustained the heaviest fire damage of all four tires. Upon opening the hood, I observed the heaviest fire damage in the front left quadrant of the engine compartment. This area contained the battery, fuse panel, and a xenon headlight. The observed fire damage in the location of major electrical components suggests that this fire may have been caused by an electrical problem in this area.

(Id. )

Before issuing his Report, Mr. Kane also spoke with Ms. Brown and Mr. Harris. (Id. ) Ms. Brown stated that she is the original owner of the house and car and she provided Mr. Kane with the maintenance and repair history of the car, which includes a new battery, cooling system maintenance, power steering system repairs, and regular oil changes. (Id. ) Mr. Harris provided a description of the events on the day of the fire, including his observation that after he opened the exterior garage door, he "saw flames coming from underneath the left front fender and engine compartment." (Id. )

Based on his observations and his discussions with Ms. Brown and Mr. Harris, Mr. Kane concluded that "it appears that there was an electrical failure in the engine compartment of the insured's 2006 Mini Cooper. Further evaluation by an electrical engineer is needed to analyze the electrical system in the vehicle." (Id. at 13.)

On October 17, 2012, Mr. Kane and Principal Electrical Engineer George Hogge conducted a joint examination of the scene. Mr. Hogge testified and included in his Report that he and Mr. Kane completed a "layered excavation" of the garage. (Doc. 91-2, Ex. E at 8; Doc. 92-2, Ex. F. at 3-4.) Mr. Hogge also took photographs of the scene during their excavation and examination that day. (Doc. 91-2, Ex. E at 2.)

b. Mr. Nelson's Report

On July 7, 2014, one of Plaintiffs' disclosed experts, Fire Investigator Mr. Nelson (employed by the same company as Mr. Kane), issued a Report regarding the origin and cause of the fire. (Doc. 92-2, Ex. P at 38-37.) Prior to issuing his Report, Mr. Nelson reviewed or examined: (1) Mr. Kane's Report, including photographs Mr. Kane took of the scene; (2) the Gilbert Fire Department Report; (3) deposition testimony of Ms. Brown and Mr. Harris; (4) Mr. Hogge's scene photographs; (5) observations by Mr. Hogge; (6) the Mini Cooper; and (7) reference materials, including the NFPA 921 and Mini Cooper recall information. (Doc. 92-2 at 39.) Based on his review of the evidence, Mr. Nelson concluded the following:

Based on the evaluation of the available data, my education, training, and experience, and utilizing the recognized investigation methods, including the Scientific Method as defined in NFPA 921, the area of fire origin was determined to be low, on the driver side of the engine compartment, near the bulkhead.
The analyses of the available data, including the evaluation of all reasonable ignition sources, the probable ignition scenario was an electrical event involving the main battery cable igniting ordinary combustibles in this area. The fire spread up and out from this area through the vehicle and subsequently spread to the garage contents and structure.
Refer to Electrical Engineer George Hogge's report for a more detailed analysis of the likely mechanism of failure that led to this fire event.

(Id. at 47.) In his analysis, Mr. Nelson specifically excluded other possible ignition sources of the fire, including ignition by the catalytic converter and a failure of the power steering hose. (Id. at 45-46.)

c. Mr. Hogge's Report

Plaintiffs also disclosed Mr. Hogge, an Electrical Engineer, as an expert. Mr. Hogge examined: (1) the fire scene and Ms. Brown's home; (2) statements made by Ms. Brown and Mr. Harris; (3) the deposition testimony of Mark Yeldham of BMW; (4) Technical Service Bulletins from BMW for certain Mini Coopers; (5) Invoices from Tempe Mini for work done to the Mini Cooper; and (6) wiring diagrams supplied by BMW. (Doc. 91-3, Ex. L at 2-5.) Mr. Hogge also relied on Mr. Nelson's finding regarding the cause and origin of the fire. (Id. at 4.)

Ms. Brown reported to Mr. Hogge that she was "a stickler" for keeping up to date on the maintenance of her car, and with the exception of a friend who replaced the battery six months prior, Ms. Brown only used dealerships for any work on the car. (Id. at 4-5.) Ms. Brown also reported that steering the vehicle had become difficult a number of times, and the dealership subsequently replaced the power steering hose, which it found to be leaking. (Id. at 5.)

During his electrical examination of Ms. Brown's home, Mr. Hogge noted that there was arcing found on the circuits associated with all of the tripped circuit breakers in the vicinity of the west wall of the garage near the front of the car. (Id. at 6.) Mr. Hogge opined that the arcing found "was consistent with arcing through char, which is always a result of fire attack." (Id. ) Mr. Hogge also collected and examined all of the receptacles and switches within the garage walls, and he found that the damage on the water heater and related receptacle was consistent with an external fire attack. (Id. ) Mr. Hogge did not find evidence of any items being plugged into a power source in the garage other than the small, low voltage transformer for the water softener. (Id. )

Mr. Hogge also examined the Mini Cooper, including x-rays of the Engine Management System computer and the fuse/relay center, which he found did not yield any evidence of internal heating or anomalous electrical activity within the components. (Id. at 7.) Mr. Hogge states that an x-ray of the fuse/relay center was not conclusive because the area was too complex for a useful image. (Id. at 7.) Upon examination, the wiring harnesses that were accessible within the engine compartment were examined and no evidence of arcing was found on those accessible conductors. (Id. ) Many of the wiring harnesses were embedded into melted and hardened debris, which was located at the same place in the car where BMW, in a service bulletin, indicated chafing had caused "various electrical problems." (Id. ) Mr. Hogge also x-rayed a melted mass, which contained the radiator and AC condenser, and he did not find evidence of any internal heating or other electrical anomaly. (Id. at 8.)

Mr. Hogge's examination found the battery "basically undamaged." (Id. ) He noted that the large gauge positive battery cable that extended to the front of the vehicle and along the left frame rail was dangling from the bottom of the vehicle. He also stated that the cable previously had been routed such that it extended upwards along the front of the left fender just behind the front tire and into the engine compartment. (Id. ) According to Mr. Hogge, "the only anomalous electrical activity found during the examination was arcing on the main battery cable as it extended upward into the engine compartment along the front of the fender well just behind the left front tire." (Id. at 11.) Citing to NFPA 921, Mr. Hogge concluded that the "arcing found on the main battery cable clearly would have created sufficient heat to ignite the plastic encasement that it had been routed within." (Id. )

Mr. Hogge also examined an exemplar Mini Cooper, [4] and found that mounting tabs for the plastic encasement of the cable were no longer under the securement nut, which he opined would allow for movement and chafing of the battery cable at the location where the arcing event was observed in the subject Mini Cooper. (Id. at 7.) Additionally, during his examination of Ms. Brown's Mini Cooper, Mr. Hogge found little fire-related damage to the power cable conductors at the power steering pump, which he opined "would serve to eliminate a fire from below the engine." (Id. at 11.)

Mr. Hogge states in his Report that he followed the Scientific Method in NFPA 921 and examined each possible cause of the fire within the area of origin as defined by Mr. Nelson. (Id. ) Mr. Hogge excluded the building electrical systems and any appliances or fixtures within the garage area as possible causes of the fire. (Id. ) Mr. Hogge further determined that the "competent ignition causes within the area of origin as defined within the left side engine compartment include electrical and mechanical components of the vehicle." (Id. at 11.) In addition to an insulation failure of the battery cable, Mr. Hogge considered the catalytic converter igniting the liquid or fumes from the power steering fluid as a possible cause of the fire. (Id. at 11-12.) Mr. Hogge was able to exclude the possibility that the fire developed from below the vehicle based on the amount of damage to conductors and a lack of arcing. (Id. at 12.) Mr. Hogge ultimately concluded the following:

Utilizing the Scientific Method, all of the possible causes of the fire in the area of origin as defined by Willie Nelson CFI were evaluated and many were eliminated. Of those that were not eliminated, the most likely cause of this fire is chafing of positive conductors that resulted in arcing and ignition of the thermoplastic insulation and components in the vicinity. The fact that the engine wiring harness and also apparently the main battery cable are not sufficiently secured to prevent chafing and insulation failure would be considered design defects.

(Id. at 13.)

II. Defendant's Motions to Exclude

Defendant moves to exclude the testimony of both Mr. Nelson and Mr. Hogge on the basis that their opinions are inadmissible under Rule 702 of the Federal Rules of Evidence. (Docs. 91, 92.) Plaintiff contends that both experts meet the qualification and reliability requirements of Rule 702 and, therefore, the Court should not exclude their testimony. For the reasons below, the Court finds that testimony by Mr. Nelson is admissible under Rule 702. However, the Court will exclude Mr. Hogge's testimony that a failure to secure the wiring harness and battery cable are design defects, and those defects were present in Ms. Brown's Mini Cooper, because those opinions are not reliable. The Court will allow Mr. Hogge to testify regarding his other conclusions.

a. Rule 702 of the Federal Rules of Evidence

Rule 702 of the Federal Rules of Evidence provides the following:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence ...

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