Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-02936/USCOURTS-azd-2_04-cv-02936-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Insurance Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

CSE INSURANCE GROUP, )

) No. CIV 04-2936 PHX RCB 

Plaintiff, ) 

) O R D E R

vs. )

)

ELECTROLUX, INC., a Delaware )

corporation, et al., )

)

Defendants. ) )

Plaintiff CSE Insurance Group originally brought this product

liability action in the Superior Court of Arizona in Maricopa

County, seeking recovery of insurance proceeds paid to its insured

following a fire that allegedly was caused by Defendants' products

and destroyed the insured's residence. Compl. (doc. # 1), Ex. A. 

Defendants removed the action from the state court based on this

Court's diversity jurisdiction. Notice of Removal (doc. # 1) at 1-

3. A trial before this Court is scheduled to begin on April 10,

2007. Currently before the Court are Defendants' motions in limine

to exclude two reports by Plaintiff's expert, Erik S. Anderson, and

to preclude Mr. Anderson from testifying at trial (doc. # 46); and 

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to exclude Plaintiff's evidence of damages (doc. # 47). The

motions are opposed. See Resp. (doc. ## 48-49). Having carefully

considered the arguments raised, the Court now rules.

I. BACKGROUND

On approximately December 14, 2002, Plaintiff's insured

purchased a freezer from Sears, Roebuck & Co., which was then

plugged into an electrical outlet in the home. Am. Compl. (doc. #

24) ¶¶ 4-5. On approximately December 18, 2002, a fire allegedly

caused by the freezer destroyed the residence of Plaintiff's

insured. Id. ¶ 6. Plaintiff paid its insured the sum of

$299,491.91 for claimed damages, and brought suit against

Defendants asserting claims of manufacturing, design, and

information defect. Id. ¶¶ 1-18.

Plaintiff hired Erik S. Anderson, a forensic engineer and

licensed professional engineer, to investigate the scene of the

fire. Anderson Aff. (doc. # 48) ¶ 1. Anderson issued a report

expressing his opinion "within a reasonable degree of certainty

that the cause of the fire was likely . . . a failure in the

Electrolux freezer present at the time of the fire." Resp. (doc. #

48) at 2; Anderson Aff. (doc. # 48) ¶ 2. Although he could not

point to a specific apparatus in the freezer that may have caused

the fire, Resp. (doc. # 48) at 2, Anderson based his opinion on

"the significant amount of evidence found at the scene of the fire,

the procedures used to collect and test the evidence, and the

application of accepted principles of engineering applied to the

evidence, all in conformity of [sic] reliable scientific principles

and methods . . . ." Anderson Aff. (doc. # 48) ¶ 3. Plaintiff

plans to call Anderson as an expert witness at trial, and to enter

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1

 Defendants also ask the Court to exclude Anderson's reports

and preclude his testimony pursuant to Fed. R. Evid. 702, and Daubert

v. Merrell Dow Pharmal., Inc., 509 U.S. 579 (1993). Mot. (doc. # 46)

at 2. Because Defendants have not raised any specific legal or

factual arguments that would allow the Court to make an informed

decision in its "gate-keeping" role at this time, Daubert issues, if

any, will have to be evaluated at trial prior Plaintiff's proffer of

evidence.

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his preliminary and final reports into evidence. Final Pretrial

Order (doc. # 44) at 7, 14.

II. DISCUSSION

Defendants have filed motions in limine (1) to exclude

Anderson's reports from evidence and to preclude Anderson from

testifying at trial, and (2) to exclude Plaintiff's evidence of

damages. Mot. (doc. ## 46-47).

A. Expert Testimony and Reports by Anderson

Defendants argue that Anderson's testimony and reports should

be excluded, because their probative value is substantially

outweighed by the danger of unfair prejudice, confusion of the

issues, or misleading the jury, Mot. (doc. # 46) at 2, and also

suggest that Anderson's opinions are not sufficiently grounded in

facts to qualify him as an expert, id. (citing Guidroz-Brault v.

Mo. Pac. R.R., 254 F.3d 825, 830 (9th Cir. 2001)).1 Defendants

contend that Anderson's opinions are "pure speculation," pointing

to deposition testimony where Anderson was unable to identify a

specific "apparatus" in the freezer that may have caused an

"electrical failure" or fire. Id. at 2-4.

In response, Plaintiff acknowledges that Anderson cannot

identify the specific apparatus responsible for the fire, but

maintains that his expertise, and thus the validity of his opinion,

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lies in his experience as a forensic investigator and licensed

professional engineer. Resp. (doc. # 48) at 2. Given Anderson's

background, it appears at this juncture that his opinions are

sufficiently grounded in fact and forensic methods. See GuidrozBrault, 254 F.3d at 830-31.

The Court is also not convinced by Defendants' conclusory

assertion that the probative value of Anderson's testimony and

reports is so substantially outweighed by the danger of unfair

prejudice, confusion of the issues, or misleading the jury that

they must be excluded. As Plaintiff aptly notes, those dangers

will be largely eliminated by Defendants' opportunity for crossexamination. See Resp. (doc. # 48) at 3. Defendants' motion in

limine to exclude Anderson's reports and preclude his testimony

(doc. # 46) will therefore be denied.

B. Plaintiff's Evidence of Damages

Defendants also seek to exclude Plaintiff's evidence of

damages. Mot. (doc. # 47) at 1-2. Defendants contend that the

loss estimates prepared during the investigation of Plaintiff's

insured's claims are inherently "arbitrary and speculative" due to

Plaintiff's hand in their preparation. Id. They also argue that

Plaintiff has not disclosed any witnesses to lay the necessary

foundation for its evidence of damages. Mot. (doc. # 47) at 1-2.

In response, Plaintiff points out that it has already named

two witnesses with requisite knowledge to testify. Resp. (doc. #

49) at 1-2. The Final Pretrial Order (doc. # 44) identifies Kellee

Rose of CSE Insurance Group and Joel T. Gutche of West Tech Claims

and Risk Service, Inc. as fact witnesses for Plaintiff. Rose has

personal knowledge of Plaintiff's payments on its insured's claims

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resulting from the fire. Rose Affidavit (doc. # 49) ¶¶ 2-3. 

Although Plaintiff apparently intended to include an affidavit by

Gutche to demonstrate his personal knowledge of the fire damage and

the costs associated with it, see Resp. (doc. # 49) at 2, the Court

has not located any such affidavit. The error is of no consequence

here, because Gutche's personal knowledge is evident from his

identification as the claim adjuster on several pages of damage

estimates attached to Defendants' motion. See Mot. (doc. # 47),

Ex. A. The Court finds that Plaintiff's disclosure of these

witnesses and the demonstration of their personal knowledge

sufficiently addresses Defendants' concern with foundation.

Defendants' more substantive argument is that Plaintiff should

not be permitted to prove its damages by relying on its payments to

its insured, or the damage estimates prepared during its

investigation of its insured's claims, due to the inherently "selfserving" nature of such evidence. See Mot. (doc. # 47) at 1-2. 

None of the cases cited by Defendants support this position. See

Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1198-1215 (6th

Cir. 1988) (reducing district court's award of damages in mass

toxic tort case, because causation was not proven with reasonable

medical certainty to demonstrate plaintiffs' present and future

injuries); Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1405-09

(9th Cir. 1993) (Roll, J.) (affirming district court's finding that

plaintiff in trademark infringement action failed to provide

sufficient evidence of its sales history to demonstrate damages);

Gilmore v. Cohen, 95 Ariz. 34, 386 P.2d 81 (1963) (affirming trial

court's rejection of builder's claim for loss of future profits,

because plaintiff failed to provide records of past profits or

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other evidence to establish future profits with reasonable

certainty); Rancho Pescado, Inc. v. Northwestern Mut. Life Ins.

Co., 140 Ariz. 174, 680 P.2d 1235, 1244-47 (Ct. App. 1984)

(affirming trial court's remittitur of jury award for aspiring

catfish farmer's claim of loss of future profits in a new business,

because plaintiff failed to prove likelihood of success in risky

aquacultural venture with 95% failure rate); Ervco, Inc. v. Texaco

Ref. & Mktg., 422 F. Supp. 2d 1084, 1086-89 (D. Ariz. 2006)

(discussing lack of evidence demonstrating damages in connection

with contractual claim for right of first refusal to purchase real

property). The Court is not aware of any authority that would

prohibit an insurance company, when bringing a claim against a

third party by subrogation or otherwise, from proving its damages

based on its own loss estimates and payments to its insured. 

Moreover, the fact that Plaintiff hired an independent adjuster to

investigate its insured's claims diminishes the appearance of bias

suggested by Defendants. See Resp. (doc. # 49) at 2.

The parties seem to agree on the uncontroversial proposition

that damages must be established with reasonable certainty. This

does not preclude a plaintiff from relying on its own estimates to

prove damages. This much is clear from the cases cited in

Defendants' motion, none of which fault a plaintiff for attempting

to prove its damages by self-created estimates or studies, but

criticize the failure of the plaintiff to do more in that respect.

Defendants have not shown any reason to question the accuracy or

certainty of the figures established by Plaintiff's estimates or

payments. Although Defendants accurately perceive Plaintiff's

evidence as "self-serving," it is permissibly so. Such is the

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nature of advocacy in an adversarial system of law.

III. CONCLUSION

In light of the forgoing analysis,

IT IS ORDERED that Defendants' motion in limine to exclude the

expert reports and testimony of Erik S. Anderson (doc. # 46) is

DENIED.

IT IS FURTHER ORDERED that Defendants' motion in limine to

exclude Plaintiff's evidence of damages (doc. # 47) is DENIED.

DATED this 27th day of March, 2007.

Copies to counsel of record

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