Farmland Mut. Ins. Companies v. Chief Inds.

• Decision Date: 20 September 2007
• Docket Number: No. 06CA0402.,06CA0402.
• Parties: FARMLAND MUTUAL INSURANCE COMPANIES, Plaintiff-Appellee, v. CHIEF INDUSTRIES, INC., Defendant-Appellant.
• Court: Colorado Court of Appeals

170 P.3d 832

FARMLAND MUTUAL INSURANCE COMPANIES, Plaintiff-Appellee, v. CHIEF INDUSTRIES, INC., Defendant-Appellant.

No. 06CA0402.

Colorado Court of Appeals, Div. I.

September 20, 2007.

Cozen O'Connor, Thomas M. Dunford, Denver, Colorado, for Plaintiff-Appellee.

Witwer Oldenburg Barry & Johnson, LLP, Patrick Groom, Keynen J. Wall, Jr., Greeley, Colorado, for Defendant-Appellant.

Opinion by Judge TAUBMAN.

Defendant, Chief Industries, Inc., appeals the judgment entered upon a jury verdict in favor of plaintiff, Farmland Mutual Insurance Companies, finding Chief was negligent in the manufacturing of a crop drying heater which caused a fire. We affirm.

Farmland's insured, Onion Growers, Inc., operated a crop storage and drying facility and hired a contractor to install a crop drying heater manufactured by Chief. In September 2003, a fire occurred at the facility, causing extensive damage. Farmland paid Onion Growers $617,625.77 pursuant to its insurance policy and filed suit for subrogation against Chief and the installer (not a party to this appeal), alleging the drying unit was negligently designed, manufactured, and installed.

In support of its claims, Farmland introduced the testimony of four expert witnesses, including Toby Nelson, a forensic mechanical engineer. Chief objected to Nelson's testimony, arguing it was not reliable. After a midtrial hearing pursuant to People v. Shreck, 22 P.3d 68 (Colo.2001), the court admitted Nelson's expert testimony.

Nelson testified that the fire would not have occurred if a fuel line strainer to prevent debris buildup had been installed in the dryer. Because there was no strainer, according to Nelson, debris prevented a gas shutoff valve from closing completely, thereby allowing natural gas to continue to enter the unit and cause the fire.

He found debris in a mesh screen and part of the fuel line. Although Nelson did not find any debris in the portion of the fuel line that would have obstructed the valve, he postulated that any debris was likely expelled when the fire department and gas company energized the system during their respective investigations.

He further testified that Chief always installed a strainer in a propane model of the same drying unit, that Chief had included two valves in prior models of the natural gas drying unit, and that, in his opinion, Chief should have included a strainer before shipping the drying unit because the manufacturer was in the best position to prevent accidents and to protect life and property.

Farmland also presented evidence that Chief's instruction manual accompanying the heater advised that an installer should acquire and attach a strainer. Chief presented evidence that it did not include a strainer in the manufacturing of the natural gas dryer because the strainer required was dependent on which of four sizes of intake valve was used.

At the conclusion of trial, a jury found Chief was negligent and Farmland's insured was comparatively at fault, allocating 57.5% fault to Chief and 42.5% fault to Farmland's insured. Based upon stipulated damages of $617,625.77, the trial court awarded Farmland $355,134.81.

I. Expert Witness Testimony

Chief argues the trial court abused its discretion in admitting the expert witness testimony of Nelson because it was not reliable in that (1) his testimony was not based upon reliable scientific principles and (2) he had never worked in the crop drying industry and therefore was not qualified to testify as to the standard of care of a crop dryer manufacturer. We disagree.

Trial courts are vested with broad discretion to determine the admissibility of expert testimony, and the exercise of that discretion will not be overturned unless manifestly erroneous. People v. Martinez, 74 P.3d 316, 322 (Colo.2003). This is so because a trial court has a superior opportunity to determine the competence of the expert as well as to assess whether the expert's opinion will be helpful to the jury. Id.

Pursuant to CRE 702:

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.

For expert testimony to be admissible under CRE 702, it must be both reliable and relevant. People v. Ramirez, 155 P.3d 371, 378 (Colo.2007); Shreck, 22 P.3d at 77. Expert testimony is reliable if the scientific principles used by the witness are reasonably reliable and the witness is qualified to opine on such matters. Shreck, 22 P.3d at 77. However, "speculative testimony that would be unreliable and therefore inadmissible under CRE 702 is opinion testimony that has no analytically sound basis." Ramirez, 155 P.3d at 378. The liberal standard of admissibility adopted by the supreme court in Shreck is balanced against "[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof." Shreck, 22 P.3d at 78 (quoting Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 596, 113 S.Ct. 2786, 2798, 125 L.Ed.2d 469 (1993)).

A. Scientific Method

Chief asserts Nelson's methodology was not reasonably reliable because (1) he used a process of elimination to determine the cause of the fire and this was not a reliable scientific method; (2) his opinion was not supported by any evidence; and (3) he did not confirm his conclusions through testing. We disagree.

Expert witness testimony must be grounded in "the methods and procedures of science rather than subjective belief or unsupported speculation." Ramirez, 155 P.3d at 378 (quoting Gallegos v. Swift & Co., 237 F.R.D. 633, 639 (D.Colo.2006)). A court determines the reliability of a scientific method based upon consideration of the totality of the circumstances that may, but need not, include consideration of whether the technique can be and has been tested. Shreck, 22 P.3d at 77-78.

1. Process of Elimination

Chief contends the process of elimination is not a reliable scientific method. We are not persuaded.

The vast majority of courts that have addressed the issue have concluded that the process of elimination can be a reliable scientific method. For example, in Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1236 (10th Cir. 2004), the court concluded that the process of elimination, or "differential diagnosis," "is a valid scientific technique to establish causation." Noting the method's roots in the medical context, the court observed that federal courts have regularly found differential diagnosis reliable. Id. Other courts have reached similar conclusions. See, e.g., Allstate Ins. Co. v. Hamilton Beach/Proctor Silex, Inc., 473 F.3d 450, 459 (2d Cir.2007); Hickerson v. Pride Mobility Prods. Corp., 470 F.3d 1252, 1257 (8th Cir.2006); Superior Aluminum Alloys, LLC. v. U.S. Fire Ins. Co., (N.D. Ind. No. 1:05-CV-207, June 25, 2007)(unpublished order); see also U.S. Aviation Underwriters, Inc. v. Pilatus Bus. Aircraft, Ltd., (D.Colo. No. 01-CV-02056-JLK, Sept. 29, 2006) (unpublished order) (process of elimination accepted methodology to determine causation in accident investigations); Thirsk v. Ethicon, Inc., 687 P.2d 1315, 1318 (Colo.App. 1983)(in products liability case, generally discussing use of testimony by medical expert based on process of elimination); Rivers v. State, 393 Md. 569, 903 A.2d 908, 916 (2006) (the process of elimination, if properly conducted, is a reliable scientific methodology).

Although the federal district court in Stibbs v. Mapco, Inc., 945 F.Supp. 1220, 1224 (S.D.Iowa 1996), relied on by Chief, found the expert testimony based upon a process of elimination was not reliable, it did not rule out the possibility that such a technique could be reliable in some cases. Id. ("[I]t may be that this sort of reasoning could pass muster in some cases where the obvious result explains the etiology." (quoting Sorensen v. Shaklee Corp., 31 F.3d 638, 649 (8th Cir. 1994))).

Furthermore, a number of courts have held that the Guide for Fire and Explosion Investigations published by the National Fire Protection Association (NFPA 921), relied on by both Nelson and Chief's experts, is an accepted reference for fire investigators. See Fireman's Fund Ins. Co. v. Canon U.S.A., Inc., 394 F.3d 1054, 1057-58 (8th Cir.2005) (holding NFPA 921 qualifies as a reliable scientific method endorsed by a professional organization); see also Nationwide Mut. Ins. Co. v. Nat'l RV Holdings, Inc., 2007 WL 954258 (M.D. Pa. No. CIV A 105-CV-2509, Mar. 28, 2007)(unpublished memorandum)(collecting cases).

Pursuant to NFPA 921, the process of elimination is an acceptable investigative technique:

Process of Elimination. Any determination of fire cause should be based on evidence rather than on the absence of evidence; however, when the origin of a fire is clearly defined, it is occasionally possible to make a credible determination regarding the cause of the fire, even when there is no physical evidence of that cause available. This finding may be accomplished through the credible elimination of all other potential causes, provided that the remaining cause is consistent with all the known facts.

Therefore, not only have the vast majority of courts addressing the issue accepted the process of elimination as a reliable scientific methodology, NFPA 921 relied on by both parties explicitly accepts it as well. In addition, other courts have approved use of the process of elimination in fire causation cases based upon the NFPA standards. See United States v. Santiago, 202 Fed.Appx. 399, 401 n. 2, 2006 WL 3037750 (11th Cir.2006) (unpublished per curiam opinion) (expert's use of process of elimination consistent with NFPA Guide); see also Allstate Ins. Co., 473 F.3d at 459 (expert testimony using process of elimination to identify ignition source based upon burn pattern constitutes circumstantial evidence of probable...