United States District Court, D. Arizona
St. Jude Medical Center Incorporated, Plaintiff,
Allstate Energy Incorporated, Defendant.
Honorable Roslyn O. Silver Senior United States District
Allstate Energy Inc. worked on an electrical panel at a
manufacturing facility owned by Plaintiff St. Jude Medical
Center Inc. A little over one week after that work was
completed, there was a fire in the electrical panel. St. Jude
hired a third-party to clean up the area and, contrary to St.
Jude's instructions, that third-party removed material
from the electrical panel. St. Jude later filed the present
case against Allstate, alleging Allstate could have prevented
the fire. Allstate now seeks summary judgment claiming the
third-party's actions mean St. Jude lacks sufficient
evidence to support its claims or, alternatively, the
third-party's actions constituted spoliation of evidence
such that St. Jude should not be permitted to pursue its
relevant facts are undisputed. On December 30, 2014, Allstate
installed a new circuit-breaker subpanel at St. Jude's
manufacturing facility. That subpanel provided power to
vacuum pumps. In doing so, Allstate drilled a hole into a
main electrical panel and ran wiring between the main panel
and the new subpanel. (Doc. 77 at 2). After Allstate
completed that connection, “the vacuum pumps went on
line and St. Jude operated them on a 24/7 basis.” (Doc.
77 at 2).
January 8, 2015-just over one week after Allstate completed
its work-a fire broke out in the main panel. The Scottsdale
Fire Department used fire extinguishers and water to
extinguish the fire. After doing so, the Fire Department took
photographs of the main panel. Those photographs show severe
damage to the main panel but “many of the damaged
interior parts of the [main] panel were still in
place.” (Doc. 77 at 2). St. Jude hired American
Technologies, Inc. (“ATI”) to clean up the
January 9, 2015, a number of St. Jude employees met with ATI
employees regarding the cleanup. During that meeting, St.
Jude's employees “specifically informed ATI . . .
of the need to preserve the [main panel] where the fire had
started.” (Doc. 77 at 23). St. Jude and ATI agreed the
main panel would be marked with caution tape and ATI would
not touch the main panel during the cleanup. Someone marked
the main panel with caution tape by using the tape to place
an “X” over the front of the main panel. During
the cleanup, however, an ATI employee removed material from
inside the main panel. Some, but not all, of the removed
material was placed in a bag or box and kept onsite. It is
undisputed that some of the main panel's contents were
removed and never found. (Doc. 77 at 7).
Jude hired an expert, William R. Haack, to determine the
cause of the fire. Haack visited the site on January 12,
2015, after ATI had removed the contents of the main panel.
(Doc. 77-2 at 82). Haack was able to examine the site, review
photographs taken by the Fire Department, and examine the
contents of the main panel that had not been removed. Based
on his review of the available evidence, Haack concluded
there was only one possible cause of the fire: “a
high-resistance connection between the vertical busses and
one or more circuit breakers” in the main panel. (Doc.
70-2 at 17). St. Jude has not provided an explanation of this
statement in layman's terms. But it is undisputed
Allstate did not cause the fire in an obvious way, such as
through Allstate leaving debris in the main panel or leaving
a loose connection. Instead, Haack concluded it was inaction
by Allstate that rendered it responsible for the fire.
to Haack, the fire was caused by Allstate's failure
“to conduct or recommend testing of the [main] panel in
accordance with accepted industry practice standards.”
If Allstate had performed those tests, it “would have
identified the high-resistance connection in the [main]
panel.” (Doc. 77 at 11). And if Allstate had identified
that connection, it could have advised St. Jude to take
remedial measures that would have prevented the fire. (Doc.
77 at 11).
his deposition, Haack was asked about the testing he believed
Allstate should have performed. Haack described two types of
testing Allstate should have performed: infrared and
connectivity testing. Haack stated infrared testing could
have been conducted while the main panel was in use but he
admitted such testing might not have indicated a troublesome
connection. (Doc. 77 at 11). Connectivity testing, on the
other hand, would have required the panel be
“de-energized” for two days but would have
located the connection. (Doc. 77 at 12, 15). Thus, according
to Haack, Allstate was guaranteed to locate the problem only
if St. Jude had agreed to shut down the main panel for two
days, which would have required a portion of the facility be
out of operation for those two days.
addressed the impact of ATI's actions in a declaration
submitted in response to Allstate's summary judgment
motion. In that declaration, Haack states “[i]deally,
the post-fire . . . debris should have been systematically
collected by forensic engineers.” But “due to the
intensity of the fire, firefighting activities and the
significant post-fire ‘overhaul', it [was his]
professional opinion that the removal of the post-fire . . .
debris did not materially alter the ability to determine the
area of origin and cause of the fire in this case.”
(Doc. 77-2 at 82). In other words, Haack does not believe
ATI's actions had a material impact on determining the
cause of the fire or the fact that Allstate would have
prevented the fire through proper testing.
retained its own expert to address the cause of the fire.
That expert, George Hogge, believes “[t]he removal and
loss of the most important components of [the main
panel]” mean “the exact cause of this failure
cannot be determined.” (Doc. 77-2 at 107). Despite that
opinion, Hogge believes “[t]he most likely cause”
of the fire was “resistance heating in the bus to
circuit breaker adaptor connections” as a result of a
manufacturing defect in the main panel or “thermal
damage” to the main panel from an unrelated incident.
(Doc. 77-2 at 107). Hogge believes ATI's removal of the
main panel components made it impossible to identify with
sufficient specificity where the fire originated. Therefore,
it is impossible, in Hogge's view, “to determine
whether any testing before the fire would have revealed a
high-resistance connection or other flaw in the components of
the panel or their connections.” In other words,
“if you don't know what specifically caused the
fire, you cannot reasonably know whether testing would have
revealed that case.” (Doc. 70-9 at 3).
Jude asserted two claims when it filed this suit: breach of
contract and negligence. According to the complaint, the
breach of contract claim is based on Allstate's failure
“to perform the work expected in a workmanship [sic]
like manner, acceptable within the industry standard.”
(Doc. 1 at 3). The negligence claim is based on a breach of
Allstate's “duty to perform the installation . . .
within the standard of care for work in its industry.”
(Doc. 1 at 4). Allstate now seeks summary judgment on both
claims but its arguments do not differentiate between them.
St. Jude's response also fails to differentiate between
the claims. Thus, the parties appear to assume the claims are
functionally identical. The Court will assume the same.
seeks summary judgment on both claims “based on . . .
the lack of evidence to support St. Jude's . . . claims
and as a sanction for the spoliation.” (Doc. 69 at 1).
On the first argument, Allstate contends ATI's spoliation
of the main panel means St. Jude is unable to present
“a prima facie case that testing would have revealed
the flaw that later caused the fire.” That is, the
spoliation allegedly “made it impossible to determine
whether any testing before the fire would have
revealed” the problem that led to the fire. On the
second argument, Allstate concedes St. Jude did not act ...