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State Farm Fire and Casualty v. Omega Flex Inc.

United States District Court, E.D. Arkansas, Western Division

February 1, 2018

STATE FARM FIRE AND CASUALTY, as Subrogee of Michael Crockett and Holly Crockett PLAINTIFF



         Michael and Holly Crockett's home was severely damaged by fire in May 2015. The home was covered by a policy of homeowners' insurance issued by State Farm Fire and Casualty, which paid the loss pursuant to the policy. State Farm brings this action as subrogee of the Crocketts to recover the amount of loss from Omega Flex, Inc. State Farm alleges that a defectively designed Omega Flex product caused the fire and that Omega Flex failed to warn consumers of the product's dangers. State Farm asserts negligence and strict liability claims against Omega Flex. Omega Flex has moved for partial summary judgment on the failure-to-warn claims. Omega Flex also has moved to exclude the testimony of several State Farm experts.

         Omega Flex manufactured yellow-jacketed TracPipe brand Corrugated Stainless Steel Tubing, which was installed by an unknown person in the home when it was built in 2006. Document #69 at ¶¶1-2. The TracPipe supplied natural gas to the home's gas-fired appliances, one of which was a fireplace in the study. Id. ¶¶3, 6. The Crocketts, who bought the house in 2008, did not know that TracPipe was installed in their home when they purchased it, nor did they receive warnings regarding risks associated with the product. Id. ¶8; Document #41-2 at 10.

         On May 9, 2015, lightning struck near the Crocketts' home, electrical energy from the strike entered their home, and the home caught fire. Document #69 at ¶¶25, 26. State Farm contends that electrical energy from the strike entered through the gas service entrance and caused arcing between the TracPipe in the study and a nearby HVAC duct. Id. ¶31. The arcing, in turn, melted a hole in the TracPipe, which allowed gas to escape and be ignited by the arcing. Id. Omega Flex contends that electrical energy entered the home and first ignited other combustibles. Id. ¶32. The fire caused copper wiring to come in contact with the TracPipe, which, in turn, caused electrical arcing between the two. Id. The arcing melted a hole in the TracPipe, and the escaping gas was ignited by the preexisting fire. Id.

         At the time the TracPipe was installed in the Crocketts' home, Omega Flex says that a Design Guide and Installation Instructions was available on its website. The guide warns, “If this system is used or installed improperly, fire, explosion, or asphyxiation may result. The installation instructions and applicable local codes must be strictly followed.” Document #51-3 at 3. Omega Flex says that the TracPipe was not installed according to the instructions in the installation guide available at the time of the home's construction. Both parties agree that the TracPipe was bonded only through the gas appliances' grounding conductors (three-prong plugs). Document #69 at ¶22. Omega Flex says that its installation guide required the installer to bond the TracPipe to a grounding electrode through direct connection to a bonding clamp or heavy gauge bond wire. Document #53 at ¶23. A State Farm expert, Mark Goodson, says that the installation guide can be read in two ways-as Omega Flex reads it or to permit bonding through the gas appliances' grounding conductors. Document #69 at ¶31.

         The use of expert evidence in federal court is governed by Federal Rule of Evidence 702, as interpreted by the Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Rule 702 states:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

         Under Rule 702, the Court must ensure that a proffered expert is qualified by his knowledge, skill, experience, training, or education before that person may testify as an expert. The trial judge has a gatekeeping responsibility to ensure that expert evidence is both relevant and reliable. Daubert, 509 U.S. at 589, 113 S.Ct. at 2795; Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141, 119 S.Ct. 1167, 1171, 143 L.Ed.2d 238 (1999). Regarding relevancy, the Supreme Court stated that Rule 702 requires the proffered expert testimony to have an appropriate “fit” by relating to an issue in the case and being sufficiently tied to the facts of the case. Daubert, 509 U.S. at 591, 113 S.Ct. at 2795-96; see also Lauzon v. Senco Prods., Inc., 270 F.3d 681, 694 (8th Cir. 2001). Regarding reliability, the Supreme Court stated that the Rule702 inquiry is a “flexible one.” Daubert, 509 U.S. at 594, 113 S.Ct. at 2797. The inquiry should focus on the principles and methodology the expert uses and not on the conclusions generated. Id. at 595, 113 S.Ct. at 2797.

         Daubert outlined four factors that should guide a district court's analysis: (1) whether the theory can be or has been tested; (2) whether the theory has been subjected to peer review and publication; (3) in the case of a particular scientific technique, what the known or potential rate of error is and the existence and maintenance of standards controlling the technique's operation; and (4) whether the theory has received “general acceptance” in the relevant scientific community. Id. at 593-94, 113 S.Ct. at 2796-97. These four factors are not a “definitive checklist or test”-other facts may bear on the inquiry Id. at 593, 113 S.Ct. at 2796; Kumho Tire, 526 U.S. at 141-42, 119 S.Ct. at 1171. Courts after Daubert have noted additional relevant factors, including “whether the expertise was developed for litigation or naturally flowed from the expert's research; whether the proposed expert ruled out other alternative explanations; and whether the proposed expert sufficiently connected the proposed testimony with the facts of the case.” Lauzon, 270 F.3d at 687 (citing cases).

         The trial court's role is not to determine whether an expert's opinion is correct because Rule 702 is concerned with an expert witness's methodology, rather than his conclusions. Bonner v. ISP Techs., Inc., 259 F.3d 924, 929 (8th Cir. 2001). “‘[E]ven if the judge believes there are better grounds for some alternative conclusion, and that there are some flaws in the scientist's methods, if there are good grounds for the expert's conclusion it should be admitted . . . .'” Id. (quoting Heller v. Shaw Indus., 167 F.3d 146, 152-53 (3d Cir. 1999)). “Vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.” Daubert, 509 U.S. at 596, 113 S.Ct. at 2798. “Rule 702 favors admissibility if the testimony will assist the trier of fact, and doubts regarding whether an expert's testimony will be useful should generally be resolved in favor of admissibility.” Clark v. Heidrick, 150 F.3d 912, 915 (8th Cir. 1998) (citation and quotation omitted). “Only if an expert's opinion is ‘so fundamentally unsupported that it can offer no assistance to the jury' must such testimony be excluded.” Hose v. Chicago Nw. Transp. Co., 70 F.3d 968, 974 (8th Cir. 1995) (quoting Loudermill v. Dow Chem. Co., 863 F.2d 566, 570 (8th Cir. 1988)).

         Omega Flex moves to exclude Mark Goodson from offering expert testimony that Omega Flex's Design Guide and Installation Instructions can be interpreted in two ways and that a PowerPoint presentation given in 2009 by Robert Torbin incorrectly demonstrates bonding. Omega Flex argues that Goodson is not qualified to offer opinions on the adequacy of the installation instructions and that Goodson's testimony on the instructions will not help the jury understand the evidence. Goodson's testimony that the installation instructions can be read in two ways addresses one of Omega Flex's defenses. Omega Flex defends, in part, on its contention that the failure was caused by TracPipe not being installed according to its instructions. The relevant portion of the instructions states:

1. The piping system is not to be used as a grounding conductor or electrode for an electrical system. In accordance with The National Fuel Gas Code NFPA 54/ANSI Z223, “each above ground portion of a gas piping system upstream from the equipment shutoff valve shall be electrically continuous and bonded to any grounding electrode, as defined by the National Electrical Code, ANSI/NFPA 70.”
2. For bonding of the TracPipe system, a bonding clamp must be attached to the brass AutoFlare fitting adapter (adjacent to the pipe thread area - see Figure 4-21) or to a black pipe component connected to an AutoFlare fitting. The corrugated stainless steel portion of the gas piping system SHALL NOT be used as the bonding attachment point under any circumstances. Bonding electrode conductor sizing shall be in accordance with Article 250 of ANSI/NFPA 70. The bonding is a requirement of the National Electrical Code.

         Document #51-3 at 4. According to Goodson, these instructions can be read to require bonding according to the National Electric Code, which does not require the direct bonding that Omega Flex says is required by its instructions. Goodson is a licensed professional engineer, and his focus is in electrical engineering. Goodson's qualifications and accomplishments establish that he is qualified by his knowledge, skill, experience, training, and education to testify as an expert on how instructions relating to electrical bonding would be understood. Interpreting ...

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