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Liberty Mutual Fire Insurance Company, et al v. Sharp Electronics Corporation

July 5, 2011

LIBERTY MUTUAL FIRE INSURANCE COMPANY, ET AL., PLAINTIFFS,
v.
SHARP ELECTRONICS CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. John E. Jones III

MEMORANDUM & ORDER

I. INTRODUCTION

This matter is before the Court on the Report and Recommendation ("R&R") of Magistrate Judge J. Andrew Smyser, filed on June 2, 2011. (Doc. 53.) Judge Smyser recommends that the Court grant Defendants Sharp Electronics Corporation, Sharp Corporation, Sharp Electronics Manufacturing Company of America, Inc., (collectively, "Sharp"), and Office Depot, Inc.'s ("Office Depot"), (collectively, "Defendants") Motion for Summary Judgment (Doc. 41) and close the case. Plaintiffs Liberty Mutual Fire Insurance Company ("Liberty Mutual") and Edens & Avant Financing, L.P., (collectively, "Plaintiffs"), filed Objections to the R&R (Doc. 57) and a Brief in Support of the Objections (Doc. 58) on June 20, 2011. Defendants filed a Reply to Plaintiffs' Objections on June 28, 2011 (Doc. 59). Accordingly, this matter is ripe for disposition. For the reasons articulated in this Memorandum, we shall reject the R&R and deny Defendants' Motion for Summary Judgment. An appropriate Order follows.

II. STANDARD OF REVIEW

A. Review of Magistrate Judge's R&R

When objections are filed to the report of a magistrate judge, the district court makes a de novo determination of those portions of the report or specified proposed findings or recommendations to which objections are made. 28 U.S.C. § 636(b)(1); United States v. Raddatz, 447 U.S. 667, 674-75 (1980). The court may accept, reject, or modify, in whole or in part, the magistrate judge's findings or recommendations. Id. Although the standard of review is de novo, 28 U.S.C. § 636(b)(1) permits whatever reliance the district court, in the exercise of sound discretion, chooses to place on a magistrate judge's proposed findings and recommendations. Raddatz, 447 U.S. at 674-75; see also Mathews v. Weber, 423 U.S. 261, 275 (1976); Goney v. Clark, 749 F.2d 5, 7 (3d Cir. 1984).

B. Summary Judgment

Summary judgment is appropriate if the record establishes "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant meets this burden by pointing to an absence of evidence supporting an essential element as to which the non-moving party will bear the burden of proof at trial. Id. at 325. Once the moving party meets its burden, the burden then shifts to the non-moving party to show that there is a genuine issue for trial. Fed. R. Civ. P. 56(e)(2). An issue is "genuine" only if there is a sufficient evidentiary basis for a reasonable jury to find for the non-moving party, and a factual dispute is "material" only if it might affect the outcome of the action under the governing law. Anderson v. Liberty Lobby, Inc, 477 U.S. 242, 248-49 (1986).

In opposing summary judgment, the non-moving party "may not rely merely on allegations of denials in its own pleadings; rather, its response must ... set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e)(2). The non-moving party "cannot rely on unsupported allegations, but must go beyond pleadings and provide some evidence that would show that there exists a genuine issue for trial." Jones v. United Parcel Serv., 214 F.3d 402, 407 (3d Cir. 2000). Arguments made in briefs "are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion." Jersey Cent.

Power & Light Co. v. Twp. of Lacey, 772 F.2d 1103, 1109-10 (3d Cir. 1985). However, the facts and all reasonable inferences drawn therefrom must be viewed in the light most favorable to the non- moving party. P.N. v. Clementon Bd. of Educ., 442 F.3d 848, 852 (3d Cir. 2006).

Summary judgment should not be granted when there is a disagreement about the facts or the proper inferences that a factfinder could draw from them. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir. 1982). Still, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; there must be a genuine issue of material fact to preclude summary judgment." Anderson, 477 U.S. at 247-48.

III. BACKGROUND

On May 22, 2006, a fire began in the Authentic China Wok in State College, Pennsylvania shortly after the restaurant closed for the evening. The Plaintiffs claim that the fire began in a cash register because of an electrical defect. Plaintiffs maintain that Wen Qui Lu purchased a Sharp register at an Office Depot Store in Bellefonte, Pennsylvania and that it was manufactured by Sharp. The fire caused extensive damage to the restaurant and to an adjacent shopping center and Subway restaurant. The owners of the restaurant and the shopping center, their insurers, and the insurer of the Subway all brought actions in the Court of Common Pleas for Centre County, Pennsylvania. The actions were removed to this Court by Defendants and were consolidated. Plaintiffs assert strict products liability claims, breach of warranty claims, and negligence claims.

Defendants filed the instant Motion for Summary Judgment (Doc. 41) on March 22, 2011 and the Motion was fully briefed by the parties. (See Docs. 41, 42, 46, 49, 50, 52.) Defendants maintain that Plaintiffs have not established sufficient evidence to support an inference that the cash register was a Sharp brand, that it was purchased at the Office Depot Store, or that the fire was caused by a defect in the register. We referred the Motion to Judge Smyser on March 23, 2011 (Doc. 44). Judge Smyser recommends that the Court grant summary judgment because, although there are genuine disputes regarding whether the cash register was a Sharp brand and purchased at the Office Depot, Plaintiffs have failed to produce record evidence that could support an inference that a defect in the cash register caused the fire. Plaintiffs object to Judge Smyser's findings, arguing that Plaintiffs have properly ...


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