Spesco, Inc. v. General Elec. Co.

• Decision Date: 23 September 1983
• Docket Number: No. 83-1056,83-1056
• Citation: 719 F.2d 233
• Parties: 14 Fed. R. Evid. Serv. 213 SPESCO, INC., an Indiana corporation, et al., Plaintiffs-Appellees, v. GENERAL ELECTRIC COMPANY, a corporation, Defendant-Appellant. Melvin NELSON, et al., Plaintiffs-Appellees, v. GENERAL ELECTRIC COMPANY, Defendant-Appellant. FEDERAL INSURANCE COMPANY, Plaintiff-Appellee, v. GENERAL ELECTRIC COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 233

719 F.2d 233

14 Fed. R. Evid. Serv. 213

SPESCO, INC., an Indiana corporation, et al., Plaintiffs-Appellees, v. GENERAL ELECTRIC COMPANY, a corporation, Defendant-Appellant.

Melvin NELSON, et al., Plaintiffs-Appellees, v. GENERAL ELECTRIC COMPANY, Defendant-Appellant.

FEDERAL INSURANCE COMPANY, Plaintiff-Appellee, v. GENERAL ELECTRIC COMPANY, Defendant-Appellant.

No. 83-1056.

United States Court of Appeals Seventh Circuit.

Argued June 2, 1983.

Decided Sept. 23, 1983.

Bruce P. Clark, Frank J. Galvin, Jr., Galvin, Stalmack & Kirschner, Hammond, Ind., for defendant-appellant.

John P. McQuillan, Spangler, Jennings, Spangler & Dougherty, Merrillville, Ind., for plaintiffs-appellees.

Before BAUER, COFFEY, Circuit Judges, and CELEBREZZE, Senior Circuit Judge. ^*

BAUER, Circuit Judge.

General Electric Co. (G.E.), defendant below in this diversity action, appeals from a jury verdict in favor of Spesco, Inc., Marvin Nelson, American States Insurance Co., Federal Insurance Co., Audree Baker and Chester Baker. ¹ Our jurisdiction is based on 28 U.S.C. Sec. 1291. For the reasons discussed below, we affirm.

I.

The dispute underlying this appeal arose following a fire in the second floor loft at Spesco's building in Valparaiso, Indiana. The parties agree that the loft area was illuminated by eight foot strip fluorescent light fixtures. Each light fixture contained a ballast manufactured by G.E. A ballast is a transformer designed to start and power fluorescent lights. According to Spesco, the suspect ballast in the present case did not contain a thermal protector. Spesco defines a thermal protector as an internal safety device designed to disconnect a ballast in the event of overheating.

In the case before us, the parties dispute the origin of the fire. Spesco asserts that the fire resulted from a defect in the suspect ballast retrieved from the fire. Specifically, it is Spesco's position that the absence of a thermal protector in the G.E. ballast caused the ballast to overheat and subsequently ignite. G.E. maintains that the fire was set deliberately by a Spesco employee.

Spesco's experts offered substantial expert testimony at trial to support its theory of causation. These experts testified that a short circuit occurred in one of the coils inside the ballast. This short circuit created intense overheating. Each ballast is packed with a potting compound, the overheating in the coil caused the compound to liquify and vaporize. Next, the liquid compound was ejected through wire holes at the end of the ballast onto cardboard containers below in the loft. In response to Spesco's experts, G.E.'s own experts offered testimony that it was technically impossible for the fire to have originated according to Spesco's theory.

In a bifurcated trial, the jury resolved all liability issues in favor of plaintiffs and against G.E. The jury awarded damages against G.E. in the following amounts: $239,743.05 to Federal Insurance Co.; $23,230 to Mr. Nelson; $1,245,482.03 to American States Insurance Co.; $600,000 to Chester and Audree Baker. G.E. appeals from the jury verdicts as to both liability and damages.

II.

G.E. presents five issues for review. Initially, G.E. alleges that the jury verdict is against the weight of the evidence. Second, G.E. contends that the district court abused its discretion in admitting the trial testimony of Spesco's expert, Roy Martin, and in denying G.E.'s motion for a continuance to prepare a defense to Martin's testimony. Third, G.E. asserts that the jury was not properly instructed on the "adverse inference" rule, G.E.'s tendered jury instruction number 23. Fourth, G.E. urges that the district court abused its discretion by permitting Spesco to introduce rebuttal testimony that could have been offered in Spesco's case in chief. Finally, G.E. offers several challenges to the jury's calculation of damages for the destruction of Spesco's real property. We reject all of G.E.'s attacks on the judgment below.

A. Review of a Jury Verdict

Under Indiana law, ² the jury is the trier of fact and is vested with the responsibility of evaluating the evidence presented and assessing the credence of witnesses who testify. State Highway Commission v. Jones, 173 Ind.App. 243, 363 N.E.2d 1018 (1977). Because great deference is accorded to the jury's judgment in this circuit, it is well settled that a jury verdict will not be set aside if a reasonable basis exists in the record to support that verdict. Lenard v. Argento, 699 F.2d 874 (7th Cir.1983). We are satisfied that a reasonable basis exists in the record here to support the jury verdict.

In the present case, G.E. asserts that there was insufficient evidence from which the jury could draw a reasonable inference that the suspect ballast caused the fire. G.E. maintains that Spesco failed to establish that there was a defect in the ballast's insulation and that this defect was the proximate cause of the fire. Moreover, G.E. urges that the district court erred by not granting its motion for a directed verdict.

The record clearly reveals that both parties offered expert testimony to the jury addressing whether the suspect G.E. ballast contained proper insulation. Spesco's expert testified that the suspect ballast and its companion ballasts retrieved from the fire did not contain insulating thermal protectors. In contradiction, G.E. proffered evidence indicating that the ballasts at issue incorporated heat sensing devices.

As this court determined in Lenard v. Argento, supra, 699 F.2d at 882, questions involving the weight of the evidence are within the purview of the jury despite a clear conflict of testimony. Because such a conflict is present here, the jury was in the best position to determine that the G.E. ballast, purchased and used by Spesco, did not contain a thermal protector or heat sensing device. Accordingly, this court will not substitute its judgment for that of the jury.

G.E. also argues that Spesco failed to establish that the defect in insulation, if such a defect existed, was the proximate cause of the fire. In so arguing, G.E. asserts that Spesco's experts failed to refute G.E.'s own experts' testimony about the origin of the fire. Moreover, G.E. suggests that we reject Spesco's evidence about the origin of the fire as contrary to scientific principles under the "physical facts" rule. We disagree.

In Indiana, the physical facts rule holds that "where a court cannot say as a matter of law that the testimony of a witness is contrary to scientific principles, the law of nature or the physical facts, the question of whether such testimony does so conflict is a question for the jury to determine." Connor v. Jones, 115 Ind.App. 660, 59 N.E.2d 577, 581 (1945). See also Zollman v. Symington Wayne Corp., 438 F.2d 28 (7th Cir.), cert. denied, 404 U.S. 827, 92 S.Ct. 59, 30 L.Ed.2d 55 (1971). In the case before this court, G.E. failed to establish that the testimony offered by Spesco's experts about the origin of the fire is factually or physically impossible. In our view, this case presents a typical example of opposing experts offering conflicting views to the jury about the laws of science as relevant to causation of the fire. It is within the province of the jury to determine which of two contradictory expert statements is deserving of credit. Riggs v. Penn Central Railroad Co., 442 F.2d 105 (7th Cir.1971). Here, the jury properly rejected application of the physical facts rule and accepted Spesco's version about the proximate cause of the fire.

Finally, G.E. contends that the district court abused its discretion in denying G.E.'s motion for a directed verdict at the close of Spesco's case in chief and at the close of all of the evidence. This argument is without merit. Under Indiana law, our review of the denial of a motion for a directed verdict is very limited. Dibortolo v. Metropolitan School District of Washington, 440 N.E.2d 506, 509 (Ind.App.1982). Specifically, Dibortolo requires that:

The evidence must be viewed in the light most favorable to the non-moving party and if there is any evidence of probative value or reasonable inference therefrom which supports the plaintiff's claim, or if the evidence conflicts such that reasonable minds might draw differing conclusions, judgment on the evidence is inappropriate. Only where the evidence is without conflict and susceptible to one inference in favor of the moving party should judgment on the evidence be rendered.

Id. at 508.

It is obvious from our examination of the record and briefs in this case that contradictory evidence was presented to the jury with respect to the origin of the fire. Spesco asserts that the fire resulted from a ballast that overheated. G.E. urges that the fire originated over sixty feet away from where the suspect ballast was retrieved. Because reasonable minds could easily differ in light of the conflicting expert testimony, judgment on the evidence would have been inappropriate in this case. The district court did not abuse its discretion by denying G.E.'s motion for a directed verdict.

B. Admission of Expert Testimony

G.E. asserts that the district court erred by admitting into evidence Spesco's expert, Roy Martin's, testimony because Martin's theory of causation differed from the theory asserted by Spesco's other experts. G.E. maintains that Spesco's other experts disclosed in pretrial discovery that the fire's source of ignition was a defect in insulation inside the suspect ballast. According to G.E., approximately five days before trial, Martin, in his deposition, departed from G.E.'s other experts' pretrial contentions about Spesco's theory of causation and revealed an alternative source of ignition outside the G.E. ballast. To respond to what G.E. alleges was a "new" theory of causation, G.E. filed a motion for a continuance to prepare a defense to Martin's testimony. The district court denied G.E.'s motion. G.E. contends on appeal that this denial...