Supreme Pork v. Master Blaster, 24645.

• Citation: 2009 SD 20,764 N.W.2d 474
• Decision Date: 01 April 2009
• Docket Number: No. 24645.,24645.
• Parties: SUPREME PORK, INC., Plaintiff and Appellee, v. MASTER BLASTER, INC., Defendant and Appellant.
• Court: South Dakota Supreme Court

764 N.W.2d 474

2009 SD 20

SUPREME PORK, INC., Plaintiff and Appellee, v. MASTER BLASTER, INC., Defendant and Appellant.

No. 24645.

Supreme Court of South Dakota.

Argued November 4, 2008.

Decided April 1, 2009.

Ronald A. Parsons, Jr., A. Russell Janklow, Tamara A. Wilka of Johnson, Heidepriem, Janklow, Abdallah & Johnson, LLP, Sioux Falls, South Dakota, Attorneys for plaintiff and appellee.

James W. Redmond, Marie H. Ruettgers of Heidman Law Firm Sioux City, Iowa, Attorneys for defendant and appellant.

GILBERTSON, Chief Justice.

[¶ 1.] Master Blaster, Inc. (Master Blaster) appeals several evidentiary and legal rulings made at the jury trial in which it was found liable for damages caused to Supreme Pork, Inc. (Supreme Pork). We affirm.

FACTS

[¶ 2.] In 1999, a small fire broke out in the pressure washer room of Supreme Pork's pig farrowing facility near Lake Benton, MN. The power washer sustained some damage but was completely repaired. In restoring the pressure washer room, Supreme Pork contracted with Master Blaster to add and install a second power washer. It was decided that the power washers' venting system needed to be redesigned and a new chimney installed. Master Blaster did not perform these services.

[¶ 3.] The parties disagree about the details of the subsequent conversation; however, it is undisputed that Master Blaster recommended Pipestone Plumbing and Heating (PP & H) for the venting and chimney work. Following this discussion, Master Blaster contacted PP & H. PP & H provided a price quote to Master Blaster. Master Blaster included the price of PP & H's quote, plus an additional fee, in Master Blaster's quote and bill to Supreme Pork.

[¶ 4.] On March 21, 2002, a second fire ignited above the ceiling of the pressure washer room, near the exhaust chimney. This fire did significant damage to Supreme Pork's facilities. Fire investigation experts were retained by a number of parties for post-fire causation analysis.

[¶ 5.] During the June 2007 trial, several of these experts testified about the cause of the fire and the surrounding circumstances. The trial court permitted testimony regarding: an expert's pretrial preparations made after his deposition; the existence of non-causal building code violations in the chimney installation; the power washer manufacturer's recommendation that a more insulated type of chimney be used; a different fire in 1999 which resulted from PP & H's installation; and, a theory of ignition called "pyrolysis."

[¶ 6.] The trial court determined that PP & H served as Master Blaster's subcontractor/agent for this project, which, under Minnesota law,¹ made Master Blaster liable for PP & H's negligence. Master Blaster appeals these rulings.

ISSUES

1. Whether the trial court erred when it failed to give jury instructions on the issue of agency and independent contractors.

2. Whether the trial court erred when it admitted particular testimony from expert witnesses, in regard to:

a. Mr. Rallis' testimony regarding the use of Class A vents.

b. Dr. Schroeder's testimony regarding "undisclosed underlying information."

c. Mr. Rallis' testimony regarding attic shield "top covers."

3. Whether the trial court erred when it admitted evidence of non-causal code violations on the same project or evidence regarding a 1999 fire at another facility.

4. Whether Dr. Schroeder's testimony regarding "pyrolysis" failed to meet the Daubert v. Merrell Dow Pharmaceuticals, Inc. standard.

ANALYSIS AND DECISION

[¶ 7.] 1. Whether the trial court erred when it failed to give jury instructions on the issue of agency and independent contractors.

[¶ 8.] Both parties concede that PP & H was an independent contractor. After considering the briefs and oral arguments presented by Master Blaster and Supreme Pork on appeal, we find that the issue of agency was not an issue in this case.² Because agency was not an issue, no jury instruction was required.

[¶ 9.] However, the briefs go beyond this initial concern and deal with the issue of vicarious liability. Therefore, it is necessary to expand the discussion beyond a narrow focus on the "agency" issue to the liabilities that arise from independent contractor relationships. The issue on appeal is better phrased as "Whether a primary contractor is liable for its subcontractor's negligence."³

[¶ 10.] In 1937, the Minnesota Supreme Court held that a boiler company that contracted to manufacture steel plates and attach them to a water tank was not relieved of its duty of care to its customer by delegating work, attaching the plates, to a subcontractor. Instead, the boiler company was liable for the damage caused by the negligence of its subcontractor. See Pacific Fire Ins. Co. v. Kenny Boiler & Mfg. Co., 201 Minn. 500, 277 N.W. 226 (1937).

[¶ 11.] The court explained:

As a limitation to the doctrine of respondeat superior this court has laid down the rule that an employer is not liable for the consequences of the negligent acts of an independent contractor.... But the tendency is to enlarge the operation of the doctrine of respondeat superior, and it is a limit which has often been exceeded. Indeed it would be proper to say that the rule is now primarily important as a preamble to the catalog of its exceptions.

...

Where one person owes another a contractual duty to act, the law imposes upon the person owing that duty the further duty of acting with due care in the performance of his contract so as not to injure the contractee's person or property. This duty is nondelegable. That is, the performance of the contract may be delegated to another, but this delegation does not relieve the contractor of the duty to act, or of his duty to act with due care. Consequently defendant is subject to liability for damage suffered by the contractee as a result of the negligence of the independent subcontractor.

Id. at 228 (citations omitted). This principle survives to this day. See Brasch v. Wesolowsky, 272 Minn. 112, 138 N.W.2d 619 (1965); Theissen-Nonnemacher, Inc. v. Dutt, 393 N.W.2d 397 (Minn.Ct.App. 1986); Federal Ins. Co. v. Westurn Cedar Supply, Inc., 2008 WL 686556 (D.Minn. March 13, 2008) (Slip copy) (applying Minnesota law). Under Minnesota's rule, the principal contractor is liable for the negligence of its subcontractor.⁴

[¶ 12.] Master Blaster is vicariously liable for PP & H's negligence through their contractor/sub-contractor relationship. This issue was properly decided by the trial court as a matter of Minnesota law.⁵

[¶ 13.] 2. Whether the trial court erred when it admitted particular testimony from expert witnesses.

[¶ 14.] In Kaiser v. University Physicians Clinic, 2006 SD 95, 724 N.W.2d 186, and Papke v. Harbert, 2007 SD 87, 738 N.W.2d 510, this Court examined the issue of undisclosed expert testimony. The Court recognized that the purpose of pretrial discovery is to allow "the parties to obtain the fullest possible knowledge of the issues and facts before trial." Papke, 2007 SD 87, ¶ 55, 738 N.W.2d at 529 (quoting Kaiser, 2006 SD 95, ¶ 31, 724 N.W.2d at 194). To fulfill this purpose, the parties are "under a duty seasonably to supplement [their] response[s] with respect to any question directly addressed to ... the subject matter on which [the expert witness] is expected to testify, and the substance of [the expert's] testimony." Kaiser, ¶ 32, at 194-95 (quoting SDCL 15-6-26(e)(1)). This is to promote the truth finding process and avoid trial by ambush. Id., ¶ 34, at 195. Seasonable disclosure allows opposing counsel the ability to effectively cross-examine an expert witness at trial. Id., ¶ 39-40, at 197.

[¶ 15.] "A circuit court's admission of expert testimony falls within its broad discretion and is reviewed under the abuse of discretion standard." Papke, 2007 SD 87, ¶ 13, 738 N.W.2d at 515. This Court has identified three areas of concern that it considers regarding allegations of undisclosed expert testimony: (1) the time element and whether there was bad faith by the party required to supplement; (2) whether the expert testimony or evidence pertained to a crucial issue; and (3) whether the expert testimony differed substantially from what was disclosed in the discovery process. Id., ¶ 56, at 529; Kaiser, 2006 SD 95, ¶ 35, 724 N.W.2d at 195-96.

a. Mr. Rallis' testimony regarding the use of Class A vents.

[¶ 16.] During the discovery phase of this case, Supreme Pork asked Master Blaster to produce the installation instruction sheet for the All American brand power washer. These instructions provided the manufacturer's recommendations for how the power washer and the venting were to be installed. A copy of these instructions had been given to PP & H prior to installation.

[¶ 17.] Master Blaster, the product vendor, repeatedly stated it did not have the instruction sheet in its possession and was unable to provide a copy to Supreme Pork or its experts. A copy of the instruction sheet was discovered in the possession of a Master Blaster expert witness⁶ on May 4, 2007, and given to Supreme Pork. Trial commenced June 11, 2007. No depositions were taken of Supreme Pork's expert witnesses between the time Supreme Pork received the instruction sheet and the beginning of trial. However, their experts received copies of this newly disclosed information.

[¶ 18.] The instruction sheet stated that for "Venting the Machine," the "Class `A' Double Insulated Chimney is required for a minimum of 500,000 BTU Heat, or a chimney built of [sic] for 500,000 BTU requirements." The power washers installed at Supreme Pork's facility were rated 480,000 BTUs. The instruction sheet was labeled as Exhibit 26⁷ and was admitted at trial with no objection by Master Blaster.

[¶ 19.] Several witnesses, including Master Blaster's owner, Paul Miersma, and a Supreme Pork expert witness, Chris Rallis, discussed or mentioned the contents of Exhibit 26, the differences between Class A and B vents, and the manufacturer's recommendations. Master Blaster did...