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State Farm Fire & Casualty Company v. Mark Steffen

April 19, 2013


The opinion of the court was delivered by: Dalzell, J.


Plaintiff State Farm Fire & Casualty Company ("State Farm"), as subrogee, invoked our diversity jurisdiction*fn1 and filed a one-count subrogation complaint against defendants Mark and Patricia Steffen alleging that their negligence caused a July 3, 2009 fire that damaged its insured's property.

The Steffens filed a motion for summary judgment. They claim that State Farm's Pennsylvania common law negligence claim must succumb to summary judgment because State Farm lacks any admissible evidence as to the cause of the fire that destroyed its insured's neighboring property, such that it cannot present a prima facie negligence claim. See Fed. R. Civ. P. 56(c)(2). Embedded in the Steffens' summary judgment motion is a Daubert motion that seeks to exclude Robert Kersey, Jr.'s expert opinion evidence on the issue of fire causation because it does not comply with Fed. R. Evid. 702.

State Farm filed its response in opposition to the summary judgment motion, contending that its negligence claim should withstand summary judgment because Kersey's expert opinion evidence is admissible under Rule 702. Alternatively, State Farm asserted that, at a minimum, it was entitled to a summary judgment-defeating adverse inference on the fire's causation because non-party Nationwide Mutual Insurance Company ("Nationwide"), the Steffens' insurer and (so its argument goes) its agent, spoliated the fire scene (the "vicarious spoliation" theory).*fn2

In reply, the Steffens reasserted their lack of causation evidence argument and claim that the undisputed summary judgment record demonstrated that Nationwide was not their agent at the time Nationwide allegedly spoliated the fire scene, thus foreclosing State Farm's vicarious spoliation theory.

Given the nature of the parties' summary judgment briefing, we convened a Daubert hearing on April 10, 2013 to address the admissibility of Kersey's expert opinion evidence. We also ordered supplemental briefing on the Daubert issue and on the vicarious spoliation theory. Upon consideration of the parties' submissions and the hearing testimony, we conclude that additional briefing is not necessary and thus this matter is ripe for decision.

For the reasons detailed below, we hold that Kersey's expert evidence is inadmissible under Fed. R. Evid. 702 and that State Farm has not pointed to any other admissible evidence from which a reasonable factfinder could determine the fire's cause.*fn3

Consequently, State Farm has failed to state a prima facie case for negligence and its single negligence claim must succumb to summary judgment. State Farm's inability to point to any evidence that could lead a reasonable factfinder to conclude that Nationwide was the Steffens' agent at the time the fire scene was allegedly spoliated also defeats its vicarious spoliation theory and, thus, does not resurrect its negligence claim.

I. Summary Judgment Standard "Summary judgment should only be granted if 'there is no genuine dispute as to any material fact." Fed.R.Civ.P. 56(a). A dispute is genuine if a reasonable trier-of-fact could find in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 252 . . . (1986). A dispute is material if it could affect the outcome of the case. Id. In considering the record, we must draw all reasonable inferences in favor of the non-moving party[.] [Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).]" Lichtenstein v. Univ. of Pittsburgh Med. Ctr., 691 F.3d 294, 300 (3d Cir. 2012).

In Celotex Corp. v. Catrett, 477 U.S. 317 (1986), the Supreme Court addressed the movant's burden of production on a motion for summary judgment where the movant contended that a non-movant plaintiff lacked sufficient evidence to establish an essential element of her case. Though Justice Brennan's dissent disagreed with the Celotex Majority's application of the summary judgment standard to the facts of that case, he stated that he "would have [nevertheless] written separately to explain more clearly the" summary judgment standard. Id. at 329 (Brennan, J., dissenting); see also id. at 334. His analysis is instructive.*fn4

Justice Brennan explained that the movant bears the burden of establishing the "nonexistence of a 'genuine issue'", and "[t]his burden has two distinct components: an initial burden of production, which shifts to the nonmoving party if satisfied by the moving party; and an ultimate burden of persuasion, which always remains on the moving party." Id. at 330 (Brennan, J., dissenting). Moreover, "[t]he burden of production imposed by Rule 56 requires the moving party to make a prima facie showing that it is entitled to summary judgment. . . . If the burden of persuasion at trial would be on the non-moving party, the party moving for summary judgment may satisfy Rule 56's burden of production . . . [by] demonstrate[ing] to the Court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim." Id. at 331 (Brennan, J., dissenting) (emphasis added). And "[i]f the nonmoving party cannot muster sufficient evidence to make out its claim, a trial would be useless and the moving party is entitled to summary judgment as a matter of law." Id. (Brennan, J., dissenting) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)).

In light of this framework, on a motion for summary judgment "[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed. R. Civ. P. 56(c)(2). "[W]hen such an objection [to the admissibility of summary judgment record evidence] is made [under Rule 56(c)(2)], the burden is on the proponent of the evidence to show that the material is admissible as presented or to explain the admissible form that is anticipated." Gannon Intern., Ltd. V. Blocker, 684 F.3d 785, 793 (8th Cir. 2012) (citing the Rule 56 Advisory Committee Note (2010)); id. (noting that on summary judgment the standard for admissibility is "whether it could be presented at trial in an admissible form") (emphasis in original); see also Heffernan v. City of Patterson, 492 F. App'x 225, 228 (3d Cir. 2012) (citing Fed. R. Civ. P. 56(c)(2) because it "permit[s] challenges to supporting evidence"), Cutting Underwater Tech. USA, Inc. v. Eni U.S. Operating Co., 671 F.3d 512, 515 (5th Cir. 2012) (discussing the new Rule 56(c)(2) mechanism); accord 1 Steven S. Gensler, Federal Rules of Civil Procedure, Rules and Commentary Rule 56 nn. 104-106 & accompanying text (current through March 2013) (citing the Advisory Committee's Note (2010)).

II. Factual Background

Drawing all reasonable inferences in non-movant State Farm's favor, we first consider undisputed background facts.

On July 3, 2009, a fire engulfed Mark and Patricia Steffen's house in Marcus Hook, Pennsylvania. This fire spread to and damaged several neighboring properties. Nationwide, the Steffens' insurer at the time of the fire, began a first-party insurance claim investigation at the Steffens' badly burned residence. See, e.g., MSJ Resp. Ex. D 7:8-13.

One of the neighboring fire-damaged properties was owned by William Brazell, State Farm's insured. State Farm paid Brazell for his fire-related claim and became subrogated to certain of his rights and interests arising from the fire. On October 29, 2009, State Farm, as subrogee, filed this one-count negligence complaint.

On February 17, 2010, Nationwide, the Steffens' insurer, initiated an interpleader action that was assigned to our docket as related to State Farm's negligence suit. See Nationwide Mutual Ins. Co. v. State Farm Fire & Casualty Co., et al, E.D. Pa. Civil Action No. 10-671. Nationwide named State Farm as one of the interpleader defendants. State Farm did not file any counterclaims against Nationwide in that suit.

On January 4, 2011 we dismissed Nationwide from the related interpleader action and on August 2, 2011 we approved the interpleader defendants' stipulation of dismissal with prejudice and ratified the parties' agreed-upon distribution of the $100,000 interpleaded funds that Nationwide had deposited into the Registry of the Court. State Farm agreed to take $37,410 from that interpleader fund, though it expressly reserved its right to continue to pursue its negligence claim against the Steffens in this action.

III. The Steffens' Summary Judgment Motion

At bottom, the Steffens' summary judgment motion, reply, and supplemental brief argue that: (1) there is no causation evidence in the record that we may properly consider, and (2) State Farm's vicarious spoliation theory must fail. We consider these contentions in turn.

A. Lack of Causation Evidence

Warrants Grant of Summary Judgment

Causation is an essential element of a prima facie negligent fire claim under Pennsylvania law. See Propert v. Flanagan, 120 A. 783, 783 (1923) ("'[t]he law does not require proof by direct evidence that a fire was caused in a particular way, but it is necessary to establish, not only that it could possibly come from the cause assigned, but that [it] was the probable and natural cause); see also Marrazzo v. Scranton Nehi Bottling Co., 223 A.2d 17, 23 (Pa. 1966) (citing Propert); Lanza v. Poretti, 537 F. Supp. 777, 783 (E.D. Pa. 1982) (arising under Pennsylvania law and "recogniz[ing] that a plaintiff in a fire case where careless smoking is alleged to be the cause can rarely do more than present expert testimony as to the fire's cause, and support such testimony by some evidence of smoking on the premises shortly before the fire began. This will usually make out a case of negligence sufficient ...

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