The Subrogation Strategist

Many subrogation claims involving fire losses rely heavily on expert testimony. Expert testimony is admissible under Federal Rule of Evidence 702 if it is both relevant and reliable. In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), whose standard has been incorporated into Federal Rule of Evidence 702, the Supreme Court instructed federal trial courts to act as a “gatekeeper” of expert testimony, giving them the power to exclude expert testimony that is not supported by sufficient evidence. In Maria Fernanda Elosu and Robert Luis Brace v. Middlefork Ranch Incorporated, Civil Case No. 1:19-cv-00267-DCN, 2021 U.S. Dist. LEXIS 14449 (D. Idaho Jan. 22, 2021) (Brace), the United States District Court for the District of Idaho exercised its gatekeeper role when it granted in part and denied in part the defendant’s motion to exclude expert testimony pursuant to Daubert and Federal Rule of Evidence 702.

Brace, involved a fire at a vacation cabin in McCall, Idaho. The cabin, owned by Maria Elosu (Elosu) and Robert Brace (Brace and collectively with Elosu, Plaintiffs) was part of a homeowner’s association called Middlefork Ranch, Incorporated (MFR). The cabin had a “wrap around” deck with a propane-fired refrigerator on the north side. On the day before the fire, Brace stained the deck using an oil-based stain. That night, Elosu smoked cigarettes on the deck. The next morning, Plaintiffs used rags to clean up excess oil from the deck and an MFR employee changed the propane on the refrigerator and relit the pilot light. At 4:00 p.m., a fire started in or around the cabin while no one was home. The fire was discovered by a group of contractors who testified that the fire was isolated to the east side of the cabin when they first arrived. Importantly, one witness testified that there was no fire and no flames around the propane-fired refrigerator. The fire destroyed the cabin and the contents within.

Plaintiffs sued MFR for negligently starting the fire and alleged that the MFR employee had knowledge of the hazard when he lit the refrigerator pilot light on the oil-stained deck. To prove its claim, Plaintiffs retained a fire investigator, Michael Koster (Koster), who inspected the scene ten months after the loss occurred, and a mechanical engineer, Richard Mumper (Mumper), who conducted various lab tests. Both experts concluded that “the fire started on the north deck as a result of excess oil vapors being ignited by the pilot light on the propane fridge.” In anticipation of trial, MFR filed a motion to exclude the opinions of Plaintiffs’ experts.

Motion to Exclude Koster’s Expert Opinion Regarding the Fire Origin and Cause

With respect to Koster, MFR argued that his conclusions should be excluded because they were speculative and not supported by evidence. The court agreed, finding that Koster failed to satisfy the standards set forth in Daubert and Federal Rule of Evidence 702 because his conclusion was mere speculation, either contrary to or unsupported by evidence in the record. Among other flaws, the trial judge focused on the fact that Koster, by his own admission, stated there was no concrete physical or testimonial evidence to support his theory that the fire started on the north side of the deck.

The court also took issue with the fact that Koster relied on an interested party’s version of the facts without conducting an independent investigation to verify the accuracy of those statements. He discounted other possible explanations for the fire, such as the spontaneous combustion of the oil rags and the careless disposal of smoking materials, based “solely off of the information that was given to [him] by [Plaintiffs].” Additionally, none of the witness interviews or transcripts supported his theory, including the testimony of the disinterested construction workers that reported observing fire on the east side of the cabin when they first arrived. Koster explained his conclusion was a “hypothesis” and that because he could not disprove it, “then there’s a high probability that it did occur.” As stated by the court: “Failing to disprove a theory that is speculative in the first place . . . would swallow the rules as applied to experts if allowed. If an expert could throw out any idea – and claim that so long as it remains unproven it’s a viable option – without oversight, the [c]ourt’s gatekeeping role is meaningless.”

Motion to Exclude Mumper’s Expert Opinion Regarding the Cause of the Fire

Plaintiffs hired Mumper to examine the remnants of the appliances including the propane refrigerator. Mumper conducted various lab tests, examined the evidence, found no abnormal electrical activity, and concluded there was no mechanical malfunction with the refrigerator that caused the fire. He goes on to opine, however, that the refrigerator pilot light caused the fire.

MFR asked the court to exclude Mumper’s opinion regarding the cause of the fire because he was not a certified fire investigator. The court noted that, because he worked for a firm that specialized in forensic fire investigations, Mumper might be qualified to offer opinions as to the origins of the fire. In the end, the court held that it would not preclude Mumper from testifying “about the tests he ran, his conclusions about those tests, and his opinion that those things did not start the fire.” On the other hand, the court ruled that Mumper could not testify as to the cause of the fire because his opinions lacked a proper foundation. The court based its decision on the fact that Mumper’s role appeared to be limited to investigating whether the refrigerator (or other appliances) malfunctioned and that he did not independently investigate other possible causes.

The primary purpose of an origin and cause investigation is to determine where the fire started and why. Expert testimony is admissible under Federal Rule of Evidence 702 if it is: (1) from a qualified source, (2) based on sufficient facts or data, and (3) will assist the trier of fact in resolving an issue that is relevant to the case. As established in Brace, it is generally not enough for a consulting expert to reach a conclusion as to the origin of a fire when his/her conclusion is contrary to or unsupported by evidence in the record.