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Star Insurance Co. v. Iron Horse Tools, Inc.

United States District Court, D. Montana, Billings Division

February 7, 2018

STAR INSURANCE COMPANY, Plaintiff,
v.
IRON HORSE TOOLS, INC., and GENERAL ELECTRIC COMPANY, d/b/a GE LIGHTING, Defendant.

          FINDINGS AND RECOMMENDATIONS OF UNITED STATES MAGISTRATE JUDGE

          TIMOTHY J. CAVAN United States Magistrate Judge

         Plaintiff Star Insurance Company (“Star Insurance”) brings this subrogation action to recover amounts paid to its insured, who is the owner of a warehouse that was damaged in a fire. (Doc. 23.) Star Insurance named a tenant of the warehouse, Iron Horse Tools, Inc. (“Iron Horse”) as a defendant, alleging it negligently used clamp lights with halogen bulbs that started the fire. Star Insurance also brought a products liability action against General Electric Company, doing business as GE Lighting (“GE”), premised on the allegation that a halogen light bulb manufactured by GE was the cause of the fire.

         Judge Watters has referred the case to the undersigned under 28 U.S.C. § 636(b)(1)(B). (Doc. 26.) Presently before the Court are GE's Motion for Summary Judgment (Doc. 28), Plaintiff's Motion to Strike Iron Horse's Reply in Support of the Motion for Summary Judgment (Doc. 40), and GE's Motion to Strike the Affidavit of Michael J. Foley. (Doc. 43.) The motions are fully briefed and ripe for the Court's review. (Docs. 29, 31, 32, 36, 41, 42, 44, 45, 46, 47, 49.)

         Having considered the parties' submissions, the Court RECOMMENDS GE's Motion for Summary Judgment be DENIED, Star Insurance's Motion to Strike be GRANTED, and GE's Motion to Strike the Affidavit of Michael J. Foley be GRANTED in part and DENIED in part, as set forth below.

         I. BACKGROUND

         A. Factual Background [1]

         Kelly Supply, Inc. (“Kelly Supply”) owned a steel-framed warehouse in Sidney, Montana (the “warehouse”). (Doc. 33 at ¶ 1.) Star Insurance provided Kelly Supply with a commercial insurance policy for the warehouse that included coverage for loss caused by the fire. (Id. at ¶¶ 2-3.)

         Kelly Supply leased a portion of the warehouse to Iron Horse. (Doc. 33 at ¶ 4.) Iron Horse is in the business of supplying oil field drilling pressure control equipment, and it stored and serviced equipment in the warehouse. (Id. at ¶¶ 5-6.) Iron Horse occupied the southwest portion of the warehouse, and its space was approximately 50 feet by 50 feet. (Docs. 30-1 at 11; 30-2 at 12; 30-3 at 7.) Iron Horse had constructed wooden storage racks and placed them along the east and south walls of its portion of the warehouse. (Id. at ¶ 7.) Clamp style light fixtures were affixed to two of the racks on the east wall. (Id. at ¶ 39.)

         The lights are depicted in a pre-fire photograph of the interior of the Iron Horse space, which was taken by an Iron Horse employee on or about the morning of the fire. (Docs. 30-1 at 11, 51-52; 30-4 at 18.) The photo showed three wood shelving units placed along the east wall of the warehouse. (Doc. 30-1 at 11.) A light is shown attached to the northern-most storage rack, and another light attached to the middle storage rack. (Id.) Both of the lights were turned on in the photo. (Id.)

         The fire was discovered at the warehouse at approximately 11:45 p.m. on March 11, 2013. (Doc. 33 at ¶ 8.) The fire burned into the morning of March 12, 2013, and caused extensive damage to the structure and contents located inside. (Id.)

         On April 12, 2013, a joint site inspection was conducted to investigate the cause and origin of the fire. (Docs. 30-1 at 10, 51; 30-3 at 7.) Star Insurance's experts Michael J. Foley and Lonnie Larson attended, as well as GE's experts from Safety Engineering Laboratories, Inc. (Id.) Laboratory examinations of artifacts recovered from the warehouse were conducted by the parties' experts. (Docs. 30-1 at 10; 30-2 at 12; 30-3 at 7.) The cause of the fire was also subsequently investigated by an expert retained by Iron Horse. (Doc. 30-2 at 12-15.) The investigations resulted in three widely divergent opinions as to the cause and origin of the fire.

         Star Insurance's expert, Mr. Larson, provided an expert report opining that the origin of the fire was located along the east wall, approximately 38 feet north of the south wall. (Doc. 30-1 at 52, 54, 58.) The area corresponded with the location of the north storage rack. (Id. at 52.) Mr. Larson stated a clamp light was discovered in the area of origin. (Id. at 52.) The clamp light was located at the north end of the north storage rack. (Id.) Mr. Larson opined that the most probable cause of the fire was related to the clamp light fixture. (Id. at 55.) In his supplemental report, Mr. Larson further indicated that the only viable heat source for the fire was a GE halogen bulb, which was purportedly used in the clamp fixture. (Id. at 59-60.) Mr. Larson concluded that multiple other pieces of equipment and wiring were eliminated as potential causes of the fire during the inspection, including a forklift, air compressor, pressure washer, and hanging furnace. (Id. at 52-53.)

         Star Insurance's other expert, Mr. Foley, provided an expert report also opining that a clamp light fixture located at the north end of the north storage rack was the most probable ignition source of the fire. (Doc. 30-1 at 23.) Mr. Foley further stated that the clamp light likely had a GE brand, 100 watt, type PAR 38, Halogen SP 10º spotlight bulb in the fixture. (Id. at 21.) Mr. Foley reached this conclusion based on the recovery of fragments of GE halogen bulbs near the middle storage rack, which he believes indicates that a halogen bulb was likely used in the clamp light on the middle rack. (Id. at 16.) Mr. Foley further concluded that the same GE halogen bulb was likely used in the clamp light on the north storage rack, since the pre-fire photo showed the lights on the north and middle storage racks had the same level of brightness. In Mr. Foley's opinion, this indicates bulbs of the same wattage and type were used in both fixtures. (Id. at 21.)

         Mr. Foley also conducted laboratory testing with an exemplar clamp light fixture and GE halogen bulb, and found they were capable of creating enough heat to start a fire. (Id. at 19-20.) Mr. Foley further opined that the building electrical system or components were not the cause of the fire (Id. at 20), and that the clamp light was the only heat source in the fire origin area capable of starting the fire. (Id. at 21.)

         Mr. Foley further opined that the lights on the storage racks were on at the time of the fire. He based this opinion on the condition of a lamp filament recovered in the investigation, and his conclusion that building wiring and extension cords in the area of the fire's origin were energized at the time of the fire. (Id. at 14-15.)

         Finally, Mr. Foley offered opinions regarding the warnings issued with the GE halogen bulb. (Id. at 22-23.) He noted that the warnings provided with the halogen bulb were located on the inside of the packaging, and not on the outside of the package or on the bulb itself. (Id. at 17-18, 23.) In Mr. Foley's view, this would have diminished the effectiveness of the warning. (Id.) He also observed that the warnings given with the bulb and those provided with the light fixture were inconsistent. (Id. at 18, 22, 23.) In particular, he noted that the fixture warned the light should not remain energized while unattended, while the bulb did not. (Id.)

         GE's expert, Donald J. Hoffman, also provided an expert report in which he appears to agree with Mr. Larson's opinion that the fire likely originated along the east wall, approximately 38 feet north of the south wall. (Id. at 30-3 at 10.) But Mr. Hoffman opined that the cause of the fire was an improperly installed GFI receptacle located in a junction box along the east wall, not the clamp light fixture. (Id. at 11-13.)

         Mr. Hoffman also disagreed with Mr. Foley's conclusions regarding the probability that a GE halogen bulb caused the fire, pointing out that there was no physical evidence of any bulb in the clamp light fixture in the area of origin. (Id. at 8, 11.) He noted that because no bulb was recovered from that clamp light, it was unlikely the bulb was a GE halogen bulb, since a halogen bulb would have been capable of surviving the fire. (Id. at 10.) He, therefore, concluded the bulb in the clamp fixture was likely made of thinner glass, such as an incandescent bulb, which could be destroyed by the fire. (Id. at 10-11.)

         Iron Horse retained Randolph J. Harris as an expert in this matter. Mr. Harris provided an expert report opining that the cause of the fire is undetermined. (Doc. 30-2 at 13.) Mr. Harris stated the fire damage was too severe to make an accurate determination. (Id.) Mr. Harris noted the Sidney Fire Department concluded the origin of the fire was in the south half of Iron Horse's space, which was a completely different area than that identified by the other experts in this case. (Id.) Mr. Harris further disagreed with the other experts' determination of the area of origin because it was not the area of most severe damage. (Id.) He also stated that the furnace, pressure washer, fork lift, air compressor, and building electrical system could not be eliminated as the fire's cause. (Id.)

         Mr. Harris also disagreed with the assumptions relied on by Mr. Foley in concluding that the origin of the fire was the clamp light and halogen bulb. (Id. at 14.) He points to discussions he had with an Iron Horse employee, Pat Berka, who stated that they never used halogen bulbs in the clamp lights. Mr. Berka also advised him that the clamp lights in the warehouse had on/off switches, and they were always turned off when the Iron Horse employees left for the night. Mr. Berka also informed Mr. Harris that there was an old motion detector light on the east wall of the warehouse which had halogen lights. (Id. at 14.) In Mr. Harris's opinion, Mr. Foley incorrectly assumed the halogen bulbs were from the clamp lights, but they were actually from the old motion detector light. (Id.) He also disagreed with Mr. Foley's opinion that the lights were on at the time of the fire, finding there were no indications the clamp lights were energized. (Id. at 14-15.)

         Mr. Berka and fellow Iron Horse employee Joseph Almeida were deposed during discovery. (Docs. 30-4, 30-5.) Mr. Berka confirmed that Iron Horse used clamp light fixtures on or near wood shelves that were located along the east wall of the space occupied by Iron Horse. (Doc. 30-4 at 3.) Mr. Berka testified that the clamp fixtures had on/off switches, and their procedure was to turn off the lights at the end of the day. (Id. at 8-9, 13-14.) He stated he purchased halogen bulbs, but never installed them in the clamp light fixtures. (Id. at 9, 11, 18.) He said he only used regular bulbs in the clamp fixtures. (Id. at 12, 17.) Mr. Berka stated that halogen bulbs were only used in their space in a motion detector light fixture. (Id. at 5-6.)

         Mr. Berka stated he knew halogen bulbs are hot and present a risk of fire. (Id. at 15.) He testified that he would look at the wattage of bulbs he purchased, and bought the correct bulb for the fixtures. (Id. 9-10, 12.) Mr. Berka also indicated that he would follow warnings issued for the use of the lighting products. He acknowledged, for example, that if he was warned extension cords should not be used with the clamp light fixtures, he would have changed the manner in which the lights were installed in the warehouse. (Id. at 13-14.)

         Mr. Almeida similarly testified that he installed regular household light bulbs in the clamp light fixtures. (Doc. 30-5 at 3-4.) He believed the clamp light fixtures were limited to 60-watt bulbs. (Id. at 4.) Mr. Almeida also stated the clamp fixtures had a toggle on/off switch, and that he used the toggle switch to turn them off. (Id. at 5.) Mr. Almeida said at the end of each day he turned off all the lights, made sure the air compressor was turned off, and locked the door. (Doc. 34-2 at 4.)

         B. Procedural Background

         Star Insurance originally brought this action in Montana state court on March 9, 2016. (Doc. 1.) On April 29, 2016, GE removed, invoking the Court's jurisdiction under 28 U.S.C. § 1332. (Id.) Star Insurance filed a First Amended Complaint on July 14, 2016. (Doc. 23.)

         On July 14, 2017, GE filed the instant Motion for Summary Judgment. (Doc. 28). On August 1, 2017, Iron Horse filed a document entitled Response to and Joinder in General Electric's Motion for Summary Judgment. (Doc. 31.) The joinder was filed approximately two weeks after the pretrial motions filing deadline had passed. (Doc. 24.) Iron Horse indicated it joined in GE's argument that there is no evidence to support Plaintiff's theory that the fire was caused by a clamp light with a halogen bulb. (Doc. 31.)

         On August 4, 2017, Star Insurance opposed the Motion for Summary Judgment. (Doc. 32.) In support of its opposition, Star Insurance submitted an Affidavit from its expert, Michael J. Foley. (Doc. 35.)

         After Star Insurance filed its opposition, both GE and Iron Horse filed reply briefs. (Docs. 36, 45.) GE also filed a Motion to Strike the Affidavit of Michael J. Foley, on grounds that it was an ...


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