may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
IN COURT OF APPEALS
Dodd, et al.,
Leviton Manufacturing Company, Inc.,
Filed May 20, 2003
Olmsted County District Court
File No. C2011381
Margaret K. Ackerman, Ackerman Law Office, 1201 Marquette Avenue South, Suite 330, Minneapolis, MN 55403 (for appellants)
Paula Duggan Vraa, Stephen P. Watters, Rider, Bennett, Egan & Arundel, 333 South Seventh Street, Suite 2000, Minneapolis, MN 55402 (for respondent)
Considered and decided by Harten, Presiding Judge, Peterson, Judge, and Wright, Judge.
U N P U B L I S H E D O P I N I O N
After a fire damaged the residence of appellants Nathanael and Michelle Dodd, the Dodds and appellant Farmers Home Group, of which the Dodds’ insurer Gopher State Mutual was a member, sued respondent Leviton Manufacturing Company, Inc., alleging that the fire was caused by a defective electrical outlet that had been manufactured by Leviton. Although appellants knew within a few days after the fire that the outlet was a potential cause of the fire and that respondent was the manufacturer, they did not notify respondent of a potential claim until eight months later; by that time, the home had been repaired and the fire scene destroyed, and some appliances that were near the outlet had not been preserved. The district court ruled that appellants were barred from presenting any evidence as to the cause or origin of the fire based on lack of notice to respondent and spoliation of the evidence. The court granted summary judgment to respondent. Appellants contend the district court abused its discretion in dismissing the action because they preserved the relevant evidence or, alternatively, the sanction of giving a negative inference instruction to the jury would have cured any prejudice. We affirm.
The fire started in the kitchen of the Dodds’ home. No one was home at the time. When Nathanael Dodd came home, he opened the front door, encountered smoke, and went to a neighbor’s house to call the fire department. The Stewartville Fire Rescue Department responded to the call and later prepared an incident report listing the fire’s source as “undetermined, multiple possibilities in area of origin.”
Gopher State Mutual retained Bruce Lillevold, a cause-and-origin investigator, to investigate the fire. Lillevold determined that the fire originated in the kitchen in the small space between the refrigerator and the stove. Lillevold eliminated the refrigerator, stove, and microwave as possible causes of the fire because they sustained only external damage and did not appear to be possible causes of the fire. Lillevold also eliminated an item left on the stove as a possible cause because all controls on the stove were in the off position and the burn patterns did not support an item being left on a stove burner as the cause of the fire. The Dodds informed Lillevold that they did not have any accelerants or candles in the area of the fire and that they did not smoke. Based on his investigation and the information provided by the Dodds, Lillevold concluded that the only other items in the area of origin that could have possibly caused the fire were a can opener and a small Sony stereo, both of which were plugged into a ground-fault-circuit-interrupter (GFCI) outlet.
Based on that conclusion, Lillevold retained Beth Anderson, an electrical engineer, to investigate the fire. Anderson inspected the fire scene on August 3, 1999, five days after the fire occurred. Anderson also concluded that the fire originated in the small space between the refrigerator and the stove and that the only items that could possibly have caused the fire were the can opener and the stereo that were plugged into the GFCI outlet. Anderson discovered that an internal contact arm of the GFCI outlet was damaged and, based on the type of damage, opined that the most probable cause of the damage was electrical activity in the form of arcing.
Lillevold and Anderson took numerous photographs of the fire scene. They collected and retained fire debris that had fallen through a hole in the kitchen floor into the basement. Appellants discarded the stove, microwave, and refrigerator because they sustained only external damage. Appellants retained the refrigerator cord and the outlet it was plugged into. They also retained the can opener, the Sony stereo, and the GFCI outlet.
Michelle Dodd testified in her deposition that when Anderson conducted her inspection, Anderson indicated that she thought the outlet caused the fire.
On March 29, 2000, appellants provided respondent with notice of their potential claim against it. By then, the Dodds’ home had been repaired. Appellants made available to respondent all photographs of the fire scene and all evidence retained from the fire. In December 2000, appellants began this lawsuit against respondent alleging that the GFCI outlet was defective and had caused the fire.
Respondent retained Crawford Wiestling, a professional licensed fire investigator, and David A. Reiter, a professional engineer, to investigate the fire. Wiestling stated in an affidavit:
4. The evidence from the fire that is available for me to examine is insufficient for me to do a comprehensive analysis of the cause and origin of this fire because I am unable to determine the burn patterns, I am unable to see the area close-up, and I am unable to see the areas that were not photographed.
5. I cannot testify in this matter based on the evidence that is available to me for examination because the pictures do not adequately document the fire scene and do not accurately reveal the condition of the scene after the fire.
6. The best evidence for determining the cause and origin of a fire is the fire scene itself because photographs do not adequately replicate the fire scene and do not reveal the details which are necessary to examine to determine the cause and origin of a fire. Without having the opportunity to be at the fire scene, I am unable to determine the cause and origin of this fire.
Reiter stated in an affidavit:
4. In order to do a comprehensive analysis of the electrical components that may relate to a fire, it is necessary to examine all of the electrical items in the house. In this case, this would include, but not be limited to the stove, refrigerator, and microwave. I would also need to examine all the circuitry tracing back from the allegedly defective Ground Fault Circuit Interrupter to the branch circuit breaker in the house. That circuit breaker should then be dynamically tested to insure it operates within its design parameters.
5. I have not examined the stove, refrigerator, microwave, or circuit breaker because these items were not preserved after the fire, or have not been made available for examination.
6. There may be additional items that were present at the fire scene that would be relevant to my comprehensive analysis of this fire, but I am unable to determine what those items might be because I was not given an opportunity to investigate and inspect the fire scene.
7. I have examined the photographs of the fire scene. These photographs are inadequate for determining if there are electrical components other than the ones preserved by Anderson Engineering that caused or contributed to the fire. The photographs and preserved evidence are inadequate to determine if there were electrical items in the home which were faulty or not functioning properly.
At the hearing on respondent’s motion, counsel for appellants indicated to the court that the circuit breaker had not been destroyed in the fire and was still in the Dodds’ home. Counsel stated that it was available for respondent’s experts to inspect, but they had never asked to inspect it.
The district court explained its decision to exclude the expert testimony as follows:
In Amana [a case that the court allowed to proceed despite spoliation of evidence], the court found there was sufficient evidence pointing to the refrigerator as the sole source of the fire. However, this Court is not convinced the same can be said of the fire scene at issue in this case. Consequently, this Court is not prepared to make such a finding. From the photographs taken by [appellants], it appears there is the typical v-shape of charring on the wall containing the receptacle at issue. However, [appellants] have not adequately explained how the large hole in the floor immediately below the location of the allegedly defective receptacle came to be. In addition, [respondent’s] experts are unwilling or unable to testify as to their opinion of the cause or origin of this fire based on the photographs alone. Too many questions remain unexplained despite the existence of photographs.
This Court is also troubled by the lack of notice given to [respondent]. [Appellants] were aware of what they believed was the origin and cause of the fire. They have given no explanation for not having put [respondent] on notice. * * *
[Appellants] in this case apparently knew within four days what they believed to be the source of this fire based on the opinions of their experts retained by the insurance carrier. Courts have been clear that insurance companies have been held to a higher standard in spoliation cases such as this one.
The supreme court has held that the district court has inherent authority to impose sanctions for inadvertent or negligent destruction of evidence. Patton v. Newmar Corp., 538 N.W.2d 116, 119 (Minn. 1995). The propriety of a sanction is determined by the prejudice resulting to the opposing party. Id. In determining a sanction, the court should
examine the nature of the item lost in the context of the claims asserted and the potential for remediation of the prejudice. One challenging the [district] court’s choice of a sanction has the difficult burden of convincing an appellate court that the [district] court abused its discretion—a burden which is met only when it is clear that no reasonable person would agree [with] the [district] court’s assessment of what sanctions are appropriate.
Id. (quotation omitted).
Appellants incorrectly cite N. States Power Co. v. Williams, 343 N.W.2d 627, 630 (Minn. 1984), to argue that this court may review the district court’s findings of fact de novo because they were based on affidavit evidence.
[T]he proposition for which appellant cites Northern States Power is no longer the law. That case was decided before the change in Minn. R. Civ. P. 52.01, which now provides, in part, “Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous * * * .”
City of Lake Elmo v. City of Oakdale, 468 N.W.2d 575, 578 (Minn. App. 1991); see also Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999) (applying Minn. R. Civ. P. 52.01).
This court has recognized that “a fire scene itself is the best evidence of the origin and the cause of a fire,” and that a fire scene is of “unquestionable relevancy.” Hoffman v. Ford Motor Co., 587 N.W.2d 66, 71 (Minn. App. 1998). In Hoffman, a fire started shortly after the plaintiff parked a new Ford Taurus in the garage attached to his house. Id. at 68. After a deputy state fire marshal and plaintiffs’ insurer investigated the fire scene, but before Ford had an opportunity to conduct an independent investigation, the Taurus was taken to a salvage yard, and the garage and home were demolished. Id.
Based on its findings that important evidence was destroyed, lost, or altered and that Ford was prejudiced by the spoliation, the district court sanctioned the plaintiff by excluding “all testimony and evidence regarding the cause of the fire that derived from an investigation of the car itself, the garage, or any contents of the garage.” Id. at 70. Without that evidence, the plaintiff could not prove his claim, so the sanction resulted in dismissal of the case. Id. This court upheld the sanction. Id. at 72.
Here, as in Hoffman, respondent was deprived of an opportunity to conduct a firsthand investigation of the fire scene. Both of respondent’s experts stated that they were unable to determine the cause and origin of the fire from the photographs and preserved evidence. Wiestling stated that
[t]he best evidence for determining the cause and origin of a fire is the fire scene itself because photographs do not adequately replicate the fire scene and do not reveal the details which are necessary to examine to determine the cause and origin of a fire.
Appellants argue that Wiestling’s and Reiter’s review of the preserved evidence was incomplete because Reiter did not review the fire department’s photographs or examine the circuit breaker and Wiestling did not review the items retained from the scene. But Wiestling stated that photographs do not adequately represent the fire scene, and Reiter stated that he needed to examine the stove, microwave, and refrigerator, not just the circuit breaker. Thus, according to their affidavits, even if they had reviewed all of the available items, it still would have been insufficient for them to determine a cause.
Appellants argue that they did not destroy relevant evidence because they retained all of the items that could possibly have caused the fire. Although appellants’ investigators concluded that only the can opener, the stereo, or the outlet could have caused the fire, another investigator examining the fire scene could have reached a different conclusion. See Hoffman, 587 N.W.2d at 71 (noting that Ford “had been deprived of an opportunity to conduct a firsthand investigation of a myriad of possible alternative ignition sources at the scene of the fire and was forced instead to rely on unclear and incomplete photographs and the testimony of other fire investigators to rebut appellants’ claims”).
The district court’s memorandum indicates that it assigned significant weight to the insurer’s failure to provide to respondent notice of the potential claim against it until eight months after the fire when appellants knew within a few days after the fire that they believed the fire was caused by the GFCI outlet. See Baliotis v. McNeil, 870 F. Supp. 1285, 1292-93 (M.D. Pa. 1994) (stating “[p]roperty insurers who permit the destruction of a fire scene after identifying subrogation targets should suffer some sanction, where, as here, it is clear that relevant evidence has been lost”); Allstate Ins. Co. v. Sunbeam Corp., 865 F. Supp. 1267, 1278 (N.D. Ill. 1994) (in upholding sanction of exclusion of evidence for insurer’s failure to preserve second propane tank located near grill that burst into flames, court noted that rule requiring preservation of evidence rests on “basic fairness” and “there is no reason to limit it to the [claimed defective] product itself” and that rule was especially applicable to subrogated insurer who intended to bring a claim all along) affm’d 53 F.3d 804 (7th Cir. 1995).
The authority cited by appellants indicates that it would not have been an abuse of discretion for the district court to impose a lesser sanction, such as an adverse-inference instruction. But this court applies an abuse-of-discretion standard of review to the district court’s choice of a sanction for spoliation of evidence and will not reverse unless it is clear that no reasonable person would agree with the district court’s decision. Patton, 538 N.W.2d at 119. The affidavits by respondent’s experts state that they could not determine a cause based on the preserved evidence; Gopher State Mutual delayed eight months in providing notice to respondent; and the evidence supports the district court’s finding that the evidence presented by appellants on causation was not conclusive. Under these circumstances, the district court’s decision was not an abuse of discretion.