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Varco, Inc. v. UNS Electric, Inc.

Court of Appeals of Arizona, Second Division

March 23, 2017

Varco, Inc., an Arizona corporation; RW Warehouse Corporation, an Arizona corporation, Plaintiffs/Appellees,
UNS Electric, Inc., an Arizona corporation, Defendant/Appellant.

         Appeal from the Superior Court in Santa Cruz County No. CV201400192 The Honorable Thomas Fink, Judge

          Burris & MacOmber, P.L.L.C., Tucson By D. Rob Burris and Karl MacOmber Counsel for Plaintiffs/Appellees

          Snell & Wilmer, L.L.P., Tucson By Andrew M. Jacobs and W. Danny Green Counsel for Defendant/Appellant

          Judge Miller authored the opinion of the Court, in which Presiding Judge Staring and Judge Espinosa concurred.


          MILLER, Judge.

         ¶1 Defendant UNS Electric appeals from the trial court's grant of a motion for new trial in favor of plaintiffs Varco and RW Warehouse Corporation, after the jury ruled in favor of UNS. The ruling was based on misconduct by UNS's counsel for examining witnesses regarding excluded evidence, as well as disclosure violations.[1] For the following reasons, we affirm.

         Factual and Procedural Background

         ¶2 The lawsuit arose out of a 2013 fire that destroyed a warehouse owned by Varco and rented by RW Warehouse Corporation, hereinafter collectively referred to as "Varco." Varco alleged the fire originated on a utility pole negligently installed and maintained by UNS in close proximity to the warehouse. Specifically, Varco alleged UNS's negligence resulted in electrical "arcing" that caused the fire.

         ¶3 Varco filed motions in limine to preclude evidence that a cigarette butt was found on the site near the fire origination, that Varco did not possess property insurance, and certain opinions of UNS fire expert Keith Paffrath. The trial court granted the motion about the cigarette butt and lack of insurance, but reserved ruling on the admissibility of Paffrath's testimony "pending proof of proper foundation." The minute entry does not reflect the court's reasoning, and UNS did not designate a transcript of the motions hearing as part of the appellate record.[2] We presume the missing transcript would support the court's ruling, Myrick v. Malony, 235 Ariz. 491, ¶ 11, 333 P.3d 818, 822 (App. 2014); further, we rely on the court's statements-made throughout trial-as to the rulings, their scope, and the court's rationale.

         ¶4 On the second day of trial, UNS cross-examined an employee who witnessed the fire, asking him if he and others smoked at the warehouse. After objection by Varco, the trial court reminded the parties that its motion-in-limine ruling was based on the fact that UNS was not expected to offer a witness who could "provide a reasonable basis for the jury to conclude that there was some other cause of the fire, whether it was smoking or anything else"; therefore, evidence of any specific people smoking or of a cigarette butt was not relevant. UNS stated it intended instead to introduce evidence of smoking to show a violation of the fire code, but the court still sustained the objection.

         ¶5 Resuming cross-examination, UNS immediately asked the witness about where smoking is allowed, Varco objected, and the trial court sustained the objection. UNS then asked where smoking is not allowed, Varco objected, and the court sustained the objection. At a bench conference, UNS argued that an expert would testify that smoking in certain areas would have been a violation of the fire code. The court again sustained the objection, concluding fire code violations were irrelevant unless there was testimony that adherence to the fire code would have ameliorated the fire. Later, the court further explained its basis for precluding testimony about smoking and the fire code as both lacking relevance under Rule 401, Ariz. R. Evid., and more prejudicial than probative, confusing the issues, and confusing to the jury pursuant to Rule 403, Ariz. R. Evid.

         ¶6 The next day during direct examination, Varco's expert was asked, "There is no other evidence of anything else starting the pallets on fire other than the sparking; is that correct?" The expert agreed. During cross-examination, UNS asked about smoking areas at the warehouse and whether smoking is a frequent cause of fires. Varco objected, but the trial court overruled the objection on the ground that Varco opened the door to questions about the methodology the expert had used to eliminate other causes of the fire. The court still precluded questions regarding the cigarette butt because there was no evidence the fire began with smoking.

         ¶7 At the start of UNS's case in chief, it began by introducing deposition testimony of a Varco employee. Varco unsuccessfully objected based on a lack of pretrial designation. Several pages into the testimony, UNS's counsel read four questions and answers regarding who smoked at the warehouse and what the warehouse smoking policy was. Varco eventually objected, arguing that UNS had improperly introduced testimony regarding smoking. The trial court sustained the objection.

         ¶8 The absence of property insurance was the source of continuing dispute throughout trial, despite a pretrial ruling precluding reference to it. UNS argued in its written response and throughout trial that a lack of insurance showed a lack of inspection and a general failure to follow fire codes. During trial, the trial court sustained objections involving insurance, noting testimony regarding fire code violations was irrelevant and more prejudicial than probative. The court separately explained it had precluded UNS from offering proof that the warehouse had never been permitted or inspected, based on lack of foundation as well as relevance.

         ¶9 Nonetheless, on the fifth day of trial, UNS asked the owner if the building had a certificate of occupancy, to which Varco objected. The trial court noted that it had reviewed the audio recording of the motions hearing and found this issue fell under compliance with local fire codes, and it was therefore still inadmissible. UNS argued its expert, Paffrath, would testify that had the fire codes been followed, the fire would have remained outside the building. The court concluded UNS could try to establish relevance and lay a ...

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