2013 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

4-2-2013

Indemnity Ins Co NA v. Electrolux Home

Products, Inc.

Precedential or Non-Precedential: Non-Precedential

Docket No. 12-1454

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2013

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2013 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Indemnity Ins Co NA v. Electrolux Home Products, Inc." (2013). 2013 Decisions. Paper 1039.

http://digitalcommons.law.villanova.edu/thirdcircuit_2013/1039
NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 12-1454

____________

INDEMNITY INSURANCE COMPANY OF NORTH AMERICA,

a/s/o UNIONVILLE-CHADDS FORD SCHOOL DISTRICT,

 Appellant

v.

ELECTROLUX HOME PRODUCTS, INC.

____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-10-cv-04113)

District Judge: Honorable R. Barclay Surrick

____________

Submitted Pursuant to Third Circuit LAR 34.1(a)

January 8, 2013

Before: RENDELL, FISHER and JORDAN, Circuit Judges.

(Filed: April 2, 2013 )

____________

OPINION OF THE COURT

____________

FISHER, Circuit Judge.

Appellant, Indemnity Insurance Company of North America (“Indemnity”), as 

subrogee of the Unionville-Chadds Ford School District (“School District”), brought suit 

against Electrolux Home Products, Inc. (“Electrolux”) alleging strict liability and breach 
2

of warranty. After a trial and a jury verdict in favor of Electrolux, the District Court 

entered a judgment in favor of Electrolux, from which Indemnity now appeals. We will 

affirm.

I.

We write principally for the parties, who are familiar with the factual context and 

legal history of this case. Therefore, we will set forth only those facts necessary to our

analysis.

This matter stems from a fire that occurred at the Unionville-Chadds Ford High 

School on July 23, 2009. As a result of the fire, the School District submitted a claim to 

its insurance provider, Indemnity. Indemnity paid the claim and filed suit against 

Electrolux to recover the money paid to the School District. The suit alleged causes of 

action sounding in strict liability and breach of warranty. Indemnity specifically alleged 

that the fire was caused by a malfunction within the internal wiring of a Frigidaire 

refrigerator that was manufactured by Electrolux.

Before trial, Electrolux filed a Motion for Summary Judgment, alleging, inter alia, 

that Indemnity spoliated evidence by failing to preserve a metal can and its contents, 

which were next to the refrigerator at the scene of the fire. Electrolux asserted that the 

fire was caused by a spontaneous combustion in the metal can. The District Court denied 

Electrolux’s Motion for Summary Judgment but granted Electrolux’s request that the jury 

be instructed that they could draw an adverse inference based on Indemnity’s failure to 
3

preserve the evidence. The District Court found that because Indemnity’s experts had the 

authority to remove items from the scene when they conducted an investigation on 

July 29, 2009 (before Electrolux had been informed of the fire), and did in fact preserve 

some items, Indemnity bears responsibility for not preserving the metal can and its 

contents – evidence that the experts should have known would be discoverable and would 

likely be destroyed if not preserved at that time. A-63-69. The District Court also stated 

that although it was granting Electrolux’s request for an adverse inference instruction, 

Indemnity would have an opportunity at trial to rebut Electrolux’s claims regarding the 

importance of the metal can and the possibility of spontaneous combustion. A-69.

Electrolux also filed a Motion in Limine to preclude evidence regarding the 

location of the refrigerator’s manufacture in China. Electrolux claimed that the location 

of the refrigerator’s manufacture was irrelevant and unfairly prejudicial under Rules 401 

and 403, respectively, of the Federal Rules of Evidence (“FRE”). The District Court 

granted Electrolux’s motion, holding that “[t]he relevance of the place of manufacture of 

the subject product in this case is tenuous at best.” A-89. Also, in regard to unfair 

prejudice, the District Court stated:

“We are satisfied that the prejudicial effect of this evidence substantially 

outweighs any probative value that it may have. In recent years, 

considerable public attention has focused on products manufactured in 

China, feeding the perception that Chinese-made goods are not safe. For 

example, a November 2007 poll found that 65% of registered voters 

believed that products imported from China were not safe, with another 8% 

unsure. (FOX News/Opinion Dynamics Poll, Nov. 13-14, 2007, available 

at
4

http://www.foxnews.com/projects/pdf/112007_thanksgiving,_china_toys_

web.pdf.)”

A-89.

Immediately prior to jury selection, the Courtroom Deputy explained to counsel 

that each side had three peremptory challenges and that the challenges were to be 

exercised “back and forth.” A-93. Indemnity was given the first peremptory challenge. 

After each side exercised one peremptory challenge, Indemnity passed on its next two 

opportunities. A-94. When Electrolux exercised its third and final challenge, Indemnity 

attempted to exercise an additional challenge, but was initially prevented from doing so. 

A-94-96. The District Court explained that “[i]f you don’t make a strike, then you give 

up your right to make that strike.” A-95. Despite this statement, the District Court 

allowed Indemnity to exercise a second peremptory challenge, but not a third. A-96.

Prior to the parties’ opening statements, Indemnity moved to sequester witnesses. 

The District Court, with regard to Electrolux’s expert, declined to do so, stating, “I think 

an expert should be permitted to hear testimony. He has got to come in here and offer his 

opinion and he can listen to the testimony before he does that.” A-103.

After closing arguments, the District Court instructed the jury as follows:

“I’m talking now, ladies and gentlemen, about the metal can that you heard 

about and its contents. Ladies and gentlemen, if you find that the plaintiff 

could have produced the evidence and that the evidence was within his or 

her control and that this evidence would have been material in deciding 

among the facts in dispute in this case, then you are permitted, but you are 

not required to, infer that the evidence would have been unfavorable to the 

plaintiff.”
5

A-169. In addition, following a brief sidebar and immediately before jury deliberation, 

the District Court stated that “with regard to the charge that I gave you at the end of the 

instructions with regard to the adverse inference from the failure to have the can 

available, you should understand that a party that anticipates litigation has an affirmative 

duty to preserve relevant evidence.” A-177.

After the jury returned a unanimous verdict in favor of Electrolux, the District 

Court entered a judgment in favor of Electrolux. Indemnity now appeals from that 

judgment.

II.

The District Court had diversity jurisdiction over this action under 28 U.S.C. 

§ 1332. We have appellate jurisdiction under 28 U.S.C. § 1291.

We review for an abuse of discretion the District Court’s rulings that are relevant 

to this appeal. See Kirk v. Raymark Indus., 61 F.3d 147, 153 (3d Cir. 1995) and 

Fedorchick v. Massey-Ferguson, Inc., 577 F.2d 856, 858 (3d Cir. 1978) (peremptory 

challenges); Bull v. United Parcel Serv., Inc., 665 F.3d 68, 73-77 (3d Cir. 2012) 

(spoliation of evidence); United States v. Zehrbach, 47 F.3d 1252, 1264 (3d Cir. 1995) 

(articulation of jury instructions); United States v. Vosburgh, 602 F.3d 512, 538 (3d Cir. 

2010) (exclusion of evidence under FRE 403); United States v. Agnes, 753 F.2d 293, 306 

(3d Cir. 1985) (sequestration of witnesses under FRE 615), abrogated on other grounds 

by Smith v. Borough of Wilkinsburg, 147 F.3d 272 (3d Cir. 1998).
6

III.

A.

The District Court did not abuse its discretion in prohibiting counsel for Indemnity 

from exercising a third peremptory challenge. According to Rule 47 of the Federal Rules 

of Civil Procedure, a “court must allow the number of peremptory challenges provided by 

28 U.S.C. § 1870.” Section 1870, in turn, provides that “[i]n civil cases, each party shall 

be entitled to three peremptory challenges.” Apart from this requirement, a district court 

is given considerable discretion in regard to the procedure and order of exercising 

peremptory challenges. See Fedorchick, 577 F.2d at 858.

Here, the Courtroom Deputy informed each party that peremptory challenges 

would be exercised “back and forth,” A-93, and the District Court gave each party the 

opportunity to exercise three peremptory challenges. Counsel for Indemnity, in what 

seems to have been an attempt at gamesmanship (to use two peremptory challenges after 

counsel for Electrolux exhausted her challenges), chose to accept the jury as constituted 

during his second and third opportunities to exercise peremptory challenges. A-94. The 

District Court did not abuse its discretion in determining that Indemnity’s attempted use 

of the final two challenges was improper and unfairly prejudicial to Electrolux.

B.

The District Court did not abuse its discretion in determining that spoliation 

occurred or in deciding that the jury could draw an adverse inference as a result of the 
7

spoliation. Spoliation occurs where “the evidence was in the party’s control; the 

evidence is relevant to the claims or defenses in the case; there has been actual 

suppression or withholding of evidence; and, the duty to preserve the evidence was 

reasonably foreseeable to the party.” Bull, 665 F.3d at 73. Here, as recognized by the 

District Court, Indemnity’s experts had an opportunity (before Electrolux knew about the 

fire) to preserve the metal can and its contents. A-64. Also, despite the fact that the 

experts should have known that the metal can and its contents would be discoverable and 

likely destroyed if not preserved at that time, they decided not to preserve the metal can. 

Id. Electrolux was thus unable to expound upon its theory of the case. Therefore, the 

District Court did not abuse its discretion in determining that spoliation occurred.

The District Court also did not abuse its discretion in determining that an adverse 

inference instruction was warranted due to the spoliation. “The unexplained failure or 

refusal of a party to judicial proceedings to produce evidence that would tend to throw 

light on the issues authorizes, under certain circumstances, an inference or presumption 

unfavorable to such party.” Gumbs v. Int’l Harvester, Inc., 718 F.2d 88, 96 (3d Cir. 

1983). Such an inference or presumption permits the trier of fact to conclude that the 

unpreserved evidence “would have been unfavorable to the position of the offending 

party.” Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 78 (3d Cir. 1994). Thus, 

when the District Court instructed the jury that it was permitted (but not required) to
8

“infer that the evidence would have been unfavorable to the plaintiff,” A-169, the District 

Court did not abuse its discretion.1

C.

The District Court did not abuse its discretion in precluding evidence regarding the 

refrigerator’s place of manufacture in China. FRE 401 provides that evidence is relevant 

(and thus eligible to be admitted) if “it has any tendency to make a fact more or less 

probable than it would be without the evidence; and the fact is of consequence in 

determining the action.” FRE 403, in turn, provides that “[t]he court may exclude 

relevant evidence if its probative value is substantially outweighed by a danger of . . . 

unfair prejudice.”

We agree with the District Court that the relevance of the place of manufacture, in 

this case, is tenuous at best, and that to the extent the place of manufacture may be 

somewhat relevant, it was within the District Court’s discretion, in this instance, to hold 

that the probative value of the place of manufacture in China was substantially 

outweighed by a danger of unfair prejudice.

 

1

Indemnity also argues that the District Court misled the jury by initially stating 

that the jury was not required to make an adverse inference, but later stating that “with 

regard to the charge that I gave you at the end of the instructions with regard to the 

adverse inference from the failure to have the can available, you should understand that a 

party that anticipates litigation has an affirmative duty to preserve relevant evidence.” A177. This argument is without merit.
9

D.

Finally, the District Court acted within its discretion in refusing to sequester the 

expert witness in this case. FRE 615 provides that “[a]t a party’s request, the court must 

order witnesses excluded so that they cannot hear other witnesses’ testimony . . . . But 

this rule does not authorize excluding . . . a person whose presence a party shows to be 

essential to presenting the party’s claim or defense.” The “essential” exception applies 

most often in cases involving expert witnesses. There is little, if any, reason for 

sequestering a witness who is to testify as an expert and not to the facts of the case. 

Morvant v. Constr. Aggregates Corp., 570 F.2d 626, 629 (6th Cir. 1978). Where a party 

seeks to except an expert from sequestration so that the expert can hear firsthand the 

testimony of witnesses, the decision whether to permit the expert to remain is within the 

discretion of the trial judge and should not normally be disturbed on appeal. Id. at 630.

Here, the District Court declined to sequester the expert witness, stating, “I think 

an expert should be permitted to hear testimony. He has got to come in here and offer his 

opinion and he can listen to the testimony before he does that.” A-103. We will not 

disturb the District Court’s ruling on appeal.

IV.

For the above stated reasons, we will affirm the District Court’s judgment in favor 

of Electrolux.