North Star Mutual Insurance Company v. CNH America et al
Filing
58
ORDER denying 30 Motion to Exclude; denying 30 Motion for Summary Judgment. Signed by U.S. District Judge Karen E. Schreier on 9/12/2013. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
NORTH STAR MUTUAL
INSURANCE COMPANY, AS
SUBROGEE FOR KYLAN MEIER,
Plaintiff,
vs.
CNH AMERICA LLC, a Delaware
limited liability company,
Defendant.
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CIV. 11-4133-KES
ORDER DENYING DEFENDANT
CNH AMERICA LLC’S MOTION TO
EXCLUDE PLAINTIFF’S EXPERT
WITNESS AND MOTION FOR
SUMMARY JUDGMENT
Defendant, CNH America LLC (CNH), moves for exclusion of the expert
witness for plaintiff, North Star Mutual Insurance Company, and for summary
judgment. North Star, as subrogee for its insured, Kylan Meier, resists CNH’s
motion for summary judgment.
BACKGROUND
Kylan and Al Meier both purchased 2010 Case IH AF9120 combines from
Titan Machinery in the fall of 2009. Docket 39 at 2.1 Both machines were
delivered in June 2010 for use in the fall harvest. Id. The first time Kylan
operated the combine, stripper plates came loose and ran through the combine,
1
For clarity, the court will refer to Kylan Meier’s combine as the combine
and to Al Meier’s combine as the exemplar combine.
causing substantial damage. Docket 36 at 2; Docket 39 at 3.2 Titan sent an
employee to make temporary repairs to the combine so Kylan could finish his
winter wheat harvest. Docket 36 at 2-3. Following that harvest, Kylan brought
the combine to Titan for more extensive repairs. Id. at 3. After the combine was
repaired, one of the Meiers noticed that some nuts and bolts were missing, and
personally replaced them. Id. In September of 2010 the Meiers replaced four
chopper blades that had broken off. Id.
The combine caught fire late in the day on October 8, 2010, while Kylan
was harvesting soybeans near Virgil, South Dakota. Docket 36 at 3; Docket 39
at 3. Kylan stated that the monitor alarms went off and when he looked around
he saw smoke coming out of the back of the combine. Docket 36 at 3, Docket
39 at 3. Another operator saw the smoke and came to help, but ultimately the
two were unable to put out the fire. Docket 36 at 3-4, Docket 39 at 3-4. By the
time the fire department arrived, the combine was destroyed. Docket 39 at 4.
Following the fire, a number of experts and forensic investigators
examined the combine. On November 5, 2010, Jeffrey Wingfield and Chris
Rallis on behalf of North Star, Robert Hawken on behalf of CNH, and Glenn
Johnson on behalf of Titan all inspected the combine, interviewed Kylan, and
2
A stripper plate is an adjustable metal plate that strips the ears of corn
from the stalk. Operator’s Manual for Almaco SPC 40 Combine C-5 available at
http://www.almaco.com/ public/manuals/MOC040611CD.pdf (last visited
Sept. 5, 2013).
2
took photographs. Docket 36 at 4. Next, the experts inspected the exemplar
combine, but Hawken did not attend. Docket 36 at 4.
The investigation established that the cause of the fire was an
accumulation of flammable crop debris in the combine’s engine compartment,
which came into contact with a hot surface, most likely the exhaust manifold
or turbocharger, and ignited. Docket 39 at 4-5. The fire was intensified when
the combine’s fuel tank breached and the remaining diesel fuel added to the
fire. Id.
At some point prior to the fire, the combine’s engine compartment floor
pan was punctured by a chopper blade that broke off, resulting in a hole
roughly two inches long and 3/16 of an inch wide. Docket 36 at 19. A similar
puncture was observed on the exemplar combine. Docket 34-12 at 4. Larry
Hanke, an expert retained by North Star to examine the blade failure,
concluded that the knife blade on the combine fractured due to fatigue. Docket
35-4 at 3. The record indicates that Titan replaced some, but not all, of the
chopper blades on the combine in August 2010. Docket 34-12 at 6.
North Star paid Kylan pursuant to the terms of the insurance policy
Kylan held on the combine. Docket 1 at 2. North Star then initiated this action
against CNH and Titan. North Star and Titan reached a settlement, resulting in
the dismissal with prejudice of all claims by North Star against Titan, and all
counterclaims by Titan against North Star. Docket 57. North Star still asserts
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the following claims against CNH: Count I, strict liability based on a dangerous
and defective design; Count II, negligence based on defective design and
inadequate warning; Count III, breach of an express warranty that the combine
was free from defects; and Count IV, breach of the implied warranties of
merchantability and fitness for a particular purpose.
CNH moves for exclusion of Wingfield as an expert in this matter and for
summary judgment as a matter of law on all claims.
STANDARD OF REVIEW
Summary judgment is proper “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). “A party asserting that a fact cannot
be . . . genuinely disputed must support the assertion” either by “citing to
particular parts of materials in the record,” or by “showing that the materials
cited do not establish the . . . presence of a genuine dispute . . . .” Fed. R. Civ.
P. 56(c)(1)(A)-(B). The movant can also establish the absence of a disputed
material fact by showing “that an adverse party cannot produce admissible
evidence to support the fact.” Fed. R. Civ. P. 56(c)(1)(B). The burden is initially
placed on the moving party to establish the absence of a genuine issue of
material fact and that the party is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (“[A] party seeking summary
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judgment always bears the initial responsibility of . . . demonstrat[ing] the
absence of a genuine issue of material fact.” (internal quotations omitted)).
Once the moving party has met its initial burden, the nonmoving party
must establish “that a fact . . . is genuinely disputed” either “by citing to
particular parts of materials in the record,” or by “showing that the materials
cited do not establish the absence . . . of a genuine dispute.” Fed. R. Civ. P.
56(c)(1)(A)-(B). For purposes of summary judgment, the facts, and inferences
drawn from those facts, are “viewed in the light most favorable to the party
opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655
(1962)).
In determining whether a genuine issue for trial exists, the court applies
the standard and burden associated with the applicable substantive law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, (1986) (“The judge's inquiry,
therefore, unavoidably asks whether reasonable jurors could find by a
preponderance of the evidence that the plaintiff is entitled to a verdict[.]”).
South Dakota substantive law applies to CNH’s claims because this case
is before the court on the basis of diversity. Hammonds v. Hartford Fire Ins. Co.,
501 F.3d 991, 996 n.6 (8th Cir. 2007) (“We apply South Dakota substantive
law because this diversity action was brought in the District of South Dakota,
and the district court sitting in diversity applies the substantive law of the state
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in which it is located.” (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938))).
Federal law governs the admissibility of expert testimony in diversity cases, so
the court applies the federal standard for admissibility. Unrein v. Timesavers,
Inc., 394 F.3d 1008, 1011 (8th Cir. 2005) (citing Clark v. Heidrick, 150 F.3d
912, 914 (8th Cir. 1998)). Federal Rule of Evidence 702 provides that: “A
witness who is qualified as an expert by knowledge, skill, experience, training,
or education may testify in the form of an opinion or otherwise if: (a) the
expert’s scientific, technical, or other specialized knowledge will help the trier of
fact to understand the evidence or to determine a fact in issue; (b) the
testimony is based on sufficient facts or data; (c) the testimony is the product
of reliable principles and methods; and (d) the expert has reliably applied the
principles and methods to the facts of the case.” Fed. R. Evid. 702.
ANALYSIS
I.
Admissibility of Wingfield’s Testimony
CNH contends that Wingfield’s expert testimony is inadmissible. The
Eighth Circuit has adopted a three-part test to determine the admissibility of
expert testimony:
First, evidence based on scientific, technical, or other specialized
knowledge must be useful to the finder of fact in deciding the
ultimate issue of fact. This is the basic rule of relevancy. Second,
the proposed witness must be qualified to assist the finder of fact.
Third, the proposed evidence must be reliable or trustworthy in an
evidentiary sense, so that, if the finder of fact accepts it as true, it
provides the assistance the finder of fact requires . . . .
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Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir. 2001). CNH argues
that Wingfield does not satisfy the Lauzon test because he is not qualified as a
combine expert and because he did not test or prototype his design
alternatives. As a result, CNH argues that Wingfield’s testimony is not useful to
the finder of fact.
A.
Wingfield’s Qualifications
Under the second prong of the Lauzon test, an expert must be qualified
to assist the finder of fact. CNH argues that because “Wingfield has not
designed component parts of heavy machinery for over five years, he lacks a
basic working knowledge of the operation of a combine, his design experience is
limited to heavy trucks, not agricultural equipment, and Wingfield has never
designed a combine or its component parts . . . ,” he should be excluded from
offering expert testimony in this case. Docket 52 at 12. CNH further states that
Wingfield’s title as an engineer does not alone qualify him as an expert. Id.
North Star points to Wingfield’s experience designing heavy trucks and
industrial equipment, his education, and his familiarity with generally accepted
engineering principles. Docket 39 at 7-12.
Under Fed. R. Evid. 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc.,
509 U.S. 579 (1993), the court serves as a gatekeeper to ensure that a witness
is qualified as an expert. Shuck v. CNH America, LLC, 498 F.3d 868, 874 (8th
Cir. 2007). “ ‘[FRE] 702 reflects an attempt to liberalize the rules governing the
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admission of expert testimony.’ ” Id. (citing Lauzon, 270 F.3d at 686). “ ‘The
rule clearly is one of admissibility rather than exclusion.’ ” Id. (citing Lauzon,
270 F.3d at 686) (internal quotations omitted).
The court finds that Wingfield is qualified to assist the trier of fact in this
case. He has extensive education, training, and experience in engineering
principles that are relevant to the inquiry at hand. Docket 34-11 (Wingfield’s
curriculum vitae); Docket 34-3 at 7 (describing Wingfield’s education); Docket
39 at 8, 10. Furthermore, Wingfield has demonstrated familiarity with the
operation of combines. Docket 34-3 at 7-8 (describing the operation of a
combine).
CNH emphasizes Wingfield’s lack of experience designing combines or
any component specifically used on a combine. Docket 52 at 12 (“Wingfield is
an engineer, but he has no experience servicing, maintaining, installing
component parts, operating, or designing combines.”). The court disagrees that
Wingfield may only testify as an expert if he has experience specifically on
combines. Fed. R. Evid. 702 and Daubert do not require that an expert have
design experience on the exact product in question. Doblar v. Unverferth Mfg.
Co., 981 F. Supp. 1284, 1287 (D.S.D. 1997) (“The Court concludes that Mr.
Adams’s testimony is . . . valid and will aid the jury . . . . Mr. Adams’s opinions
are the product of good academic training and extensive experience in
commonly used design principles, even though he does not have specific
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experience with regard to gravity grain boxes. Mr. Adams need not actually
have designed a gravity box to assist the jury in understanding the engineering
principles at work.”). Similarly, the court here finds that Wingfield’s knowledge,
skill, experience, training, and education qualify him to aid the jury with
respect to the design principles at issue.
CNH also argues that Wingfield is not as qualified as its expert, CNH
Chief Combine Engineer Jimmie Clifford. Docket 52 at 14; Docket 34-3 at 8.
Clifford undoubtedly has extensive experience designing combines. But
Clifford’s qualifications do not exclude Wingfield from offering testimony.
Wingfield does not need to be the foremost expert on combines or have
specifically designed the product at hand; indeed, such a requirement would
eliminate most experts except those employed by CNH and its peers.
B.
Wingfield’s Proposed Design Alternatives
“To establish liability in negligence for defective product[,] . . . a plaintiff
must show that the defendant failed to use the amount of care in designing
. . . the product that a reasonably careful designer . . . would use in similar
circumstances to avoid exposing others to a foreseeable risk of harm.” Burley v.
Kytec Innovative Sports Equip., Inc., 737 N.W.2d 397, 407 (S.D. 2007) (citing
Restatement (Second) Torts § 395). “To determine whether the designer . . .
used reasonable care, one must balance what the designer . . . knew or should
have known about the likelihood and severity of potential harm from the
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product against the burden of taking safety measures to reduce or avoid the
harm.” Id. at 407 (citing Restatement (Second) Torts § 395).
“Whether a manufacturer know or should have known of a particular
risk involves technical issues . . . which lie beyond the comprehension of most
jurors.” Id. Therefore, North Star must provide expert testimony to support a
design defect, and such testimony “must be reliable or trustworthy in an
evidentiary sense[.]” Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir.
2001).
Reliability relates to whether the reasoning and methodology underlying
the testimony is scientifically valid. Some of the factors a court may consider
include “(1) whether the theory or technique ‘can be (and has been) tested’;
(2) ‘whether the theory or technique has been subjected to peer review and
publication’; (3) ‘the known or potential rate of error’; and (4) whether the
theory has been generally accepted.” Peitzmeier v. Hennessy Indus., Inc., 97
F.3d 293, 297 (8th Cir. 1996) (citing Daubert, 509 U.S. at 593-94). As
recognized in Daubert, however, the Supreme Court did “not presume to set out
a definitive checklist or test.” 509 U.S. at 593.
CNH attacks Wingfield’s reliability because he did not test his design
alternatives to determine their feasability or utility. CNH relies primarily on
decisions in Peitzmeier, Jaurequi v. Carter Mfg. Co., 173 F.3d 1076 (8th Cir.
1999), and Unrein v. Timesavers, Inc., 394 F.3d 1008 (8th Cir. 2005). According
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to CNH, these cases require an expert “to take some additional step to ensure
the reliability of his opinions, whether it is preparing design drawings,
implementing his proposed modifications into the product, or developing and
testing prototypes.” Docket 36 at 11. This court recently held that “[those]
cases stand for the well accepted principle that an expert’s opinion must be
found by the court to be sufficiently reliable before it can be admitted into
evidence.” Jensen v. Hy-Vee Corp., No. CIV. 09-4057-KES, 2011 WL 1832997 at
*6 (D.S.D. May 13, 2011).
“An expert proposing safety modifications must demonstrate by some
means that they would work to protect the machine operators but would not
interfere with the machine’s utility.” Unrein, 394 F.3d at 1012 (emphasis
added). An expert need not manufacture the new device or provide a prototype,
but the opinion must be sufficiently grounded to be helpful to the jury. Id.
1.
Engine Compartment Floor Pan
First, Wingfield opines that the combine should have had a thicker floor
pan to prevent punctures that would allow crop debris into the engine
compartment. Docket 34-12 at 9. CNH argues that Wingfield never tested his
theory about the airflow of the crop debris, and that he has not tested the
effectiveness of a thicker floor pan. Docket 36 at 19. North Star responds that
Wingfield’s opinion relies on generally accepted principles of engineering and is
therefore reliable. Docket 39 at 21-23.
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Wingfield did not test his theory or provide sketches or a prototype
incorporating his alternative design for the floor pan. But Wingfield is not
proposing to add a new part to the combine design—he is only suggesting that
it be made differently. Docket 46-19 at 6. The idea that making a piece of metal
thicker to increase its resistance to punctures is straightforward and
sufficiently reliable to be presented to a jury. See Jensen, 2011 WL 1832997 at
*6-7 (finding that straightforward theories satisfy the fourth Daubert factor).
Additionally, CNH faults Wingfield for not testing whether a puncture in
the floor pan could result in accumulation of debris and for not calculating the
air flow and pressure differentials involved. Docket 36 at 19-20. But Wingfield
did observe the effect of a puncture in the floor pan of the exemplar combine.
Docket 46-11 at 8. The use of an exemplar to confirm a hypothesis makes
Wingfield’s theory sufficiently reliable to be helpful to a jury.
2.
Shielding Engine Components
Second, Wingfield opines that the combine’s exhaust manifold and
turbocharger should have been shielded somehow, and he indicated that the
most effective method would be some type of insulating wrap. Docket 34-12 at
9. CNH contends that because Wingfield has not tested the effectiveness of the
wrap on a combine, his proposed design alternative is not reliable. Docket 36
at 15-16. But Wingfield states that he has tested the effectiveness of the wrap
on other types of diesel engines. Docket 46-19 at 4-5. While those engines were
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not in a combine, the court finds that Wingfield’s testing is reliable enough to
determine if the wrap can reduce surface temperatures below the ignition point
of crop debris.
Furthermore, Wingfield provided a list of combine manufacturers and
other heavy equipment manufacturers that use a wrap to minimize the risk of
fire. Id. Although Wingfield did not provide exact product lines, and he did not
submit pictures of the wrapped engine parts, the court finds his testimony
sufficiently grounded to be helpful to a jury. In addition, CNH’s expert stated in
his deposition with respect to other properties of fire wrapping that “[y]ou don’t
have to physically do the test to know the results.” Docket 34-13 at 3. “When a
litigant clearly believes a certain methodology is acceptable as shown by his or
her own expert’s reliance on that methodology, it is disingenuous to challenge
an opponent’s use of that methodology.” Shuck v. CNH America, LLC, 498 F.3d
868, 874 (8th Cir. 2007). Because Wingfield has indicated that his proposed
modifications are in use in other similar products, the court finds his opinions
on the shielding of the exhaust system to be sufficiently grounded to assist a
jury.
3.
Fuel Tank
Third, Wingfield opines that a metal fuel tank would be less likely to
rupture and add fuel to a fire than the plastic fuel tank on the combine. Docket
34-12 at 10. Wingfield performed no testing on the fire resistance of metal fuel
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tanks, nor did he provide any drawings or prototypes incorporating a metal fuel
tank into a combine. Nonetheless, the prevalence of metal fuel tanks in CNH’s
and other manufacturers’ product lines supports the feasibility of Wingfield’s
proposed design alternative. Docket 46-19 at 3-4.
While Wingfield’s report and proposed testimony do not satisfy every
Daubert factor, Wingfield’s opinions are sufficiently reliable to be helpful to a
jury. “As a general rule, the factual basis of an expert opinion goes to the
credibility of the testimony, not the admissibility . . . . Only if the expert’s
opinion is so fundamentally unsupported that it can offer no assistance to the
jury must such testimony be excluded.” United States v. Countentos, 651 F.3d
809, 820 (8th Cir. 2011) (citing Hartley v. Dillard’s, Inc., 310 F.3d 1054, 1061
(8th Cir. 2002). Additionally, the Supreme Court recognized in Daubert that
“[v]igorous cross-examination, presentation of contrary evidence, and careful
instruction on the burden of proof are the traditional and appropriate means of
attacking shaky but admissible evidence.” Daubert, 509 U.S. at 596 (citation
omitted). For these reasons, the court finds that Wingfield’s testimony is
sufficiently reliable. Cf. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999)
(“Thus, whether Daubert’s specific factors are, or are not, reasonable measures
of reliability in a particular case is a matter that the law grants the trial judge
broad latitude to determine.” (citation omitted)).
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Ultimately, Wingfield has presented alternative designs. Reasonable
minds could disagree about whether CNH properly balanced safety and utility
in arriving at the design of the combine, or whether CNH should have
incorporated some or all of Wingfield’s proposed alternatives. The court leaves
that issue for a jury to decide.
II.
Spoliation
CNH asserts that an adverse inference is warranted due to the alleged
destruction of a short video of the fire on Kylan’s cell phone. Docket 36 at 1819. A court must find that four factors have been met before giving a spoliation
instruction:
An instruction on the inference that may be drawn from the
spoliation of evidence is proper only when substantial evidence
exists to support a conclusion that the evidence was in existence,
that it was in the possession or under the control of the party
against whom the inference may be drawn, that the evidence would
have been admissible at trial, and that the party responsible for
destroying the evidence did so intentionally and in bad faith.
State v. Mulligan, 736 N.W.2d 808, 822 (S.D. 2007) (citing State v. Engesser,
661 N.W.2d 739, 755 (S.D. 2003)). CNH argues that North Star admitted a
video existed, that Kylan was on notice of the fire investigation, and that the
video no longer exists; therefore, the deletion of the video must have been in
bad faith. CNH has not provided substantial evidence that the video would
have been relevant evidence. Additionally, CNH has not shown that North Star
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intentionally and in bad faith destroyed the video. CNH has not met its burden
on this issue.
III.
Implied Warranties
CNH asserts that it is entitled to summary judgment on North Star’s
claim of a breach of the implied warranties of merchantability and fitness for a
particular purpose because the express warranty disclaimed the implied
warranties. This argument is raised for the first time in CNH’s reply brief.
Docket 52 at 18-19. Accordingly, the court will not consider CNH’s argument
because North Star has had no opportunity to respond. Bearden v. Lemon, 475
F.3d 926, 930 (8th Cir. 2007) (quoting Navarijo-Barrios v. Ashcroft, 322 F.3d
561, 564 n.1 (8th Cir. 2003)) (“[I]t is well settled that [the Eighth Circuit Court
of Appeals] do[es] not consider arguments raised for the first time in a reply
brief.”); Johnson v. Berry, 171 F. Supp. 2d 985, 990 n.3 (E.D. Mo. 2001) (“The
Court does not consider an argument made for the first time in a reply, to
which the opposing party has no opportunity to respond.”); McCullough v.
Aegon USA, Inc., No. 06-CV-0068-LRR, 2008 WL 268895 at *7 (N.D. Iowa
Jan. 29, 2008) (“By raising such arguments for the first time in the Reply,
Plaintiff denied Defendants an opportunity to respond to the allegations.”).
IV.
Summary Judgment Motion
CNH contends it is entitled to summary judgment because North Star is
unable to prove the existence of a design defect in the combine. Because
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Wingfield’s testimony is sufficient to prove the existence of a design defect and
his testimony is admissible, CNH’s motion for summary judgment is denied.
CONCLUSION
The court denies CNH’s motion to exclude Wingfield’s testimony. In light
of that decision, and having reviewed CNH’s motion for summary judgment in
the light most favorable to the nonmoving party, the court finds that genuine
disputes of material fact exist with respect to each claim. Therefore, it is
ORDERED that CNH’s motion to exclude North Star’s expert witness
(Docket 30) is denied.
IT IS FURTHER ORDERED that CNH’s motion for summary judgment
(Docket 30) is denied.
Dated September 12, 2013.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
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