Opinion
DOCKET NO. A-3470-13T2
08-10-2015
PHILADELPHIA CONTRIBUTIONSHIP INSURANCE COMPANY, Plaintiff-Respondent, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, Defendant-Appellant.
George W. Keefer argued the cause for appellant (Law Offices of William E. Frese, attorneys; Mr. Keefer, on the brief). Dennis J. Crawford argued the cause for respondent (Crawford and McElhatton, attorneys; Mr. Crawford, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Hayden and Sumners. On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-343-11. George W. Keefer argued the cause for appellant (Law Offices of William E. Frese, attorneys; Mr. Keefer, on the brief). Dennis J. Crawford argued the cause for respondent (Crawford and McElhatton, attorneys; Mr. Crawford, on the brief). PER CURIAM
This matter involves a subrogation action by plaintiff Philadelphia Contributionship Insurance Company (PCIC) against defendant Public Service Electric and Gas Company (PSE&G) seeking to recover payments made to repair fire damage to two neighboring residential properties insured by PCIC. A bench trial resulted in a judgment that PSE&G was liable for the fires and damages in the stipulated amount of $128,000. PSE&G appeals from the decision based on discovery, evidentiary and liability rulings made by the trial judge. For the reasons that follow, we affirm.
I.
The record reveals the following facts and procedural history. On September 24, 2009, an electric power line owned and maintained by PSE&G fell to the ground and caused a fire that damaged two parked vehicles and the front porch of 675 Franklin Street in Trenton. After the fire was extinguished by the Trenton Fire Department, an examination using a thermal imaging camera showed no indication of any further fire at the property. However, approximately an hour later, smoke was observed coming out of the basement window on the side of 673 Franklin Street. A second fire had developed in the basement of 673 Franklin Street and fire fighters were called back to extinguish it. The fire destroyed the electrical panel located in the basement. PSE&G troubleshooter Alberto Alfaro, whose job was to secure a location where there was a service problem, went to the basement to survey the situation.
In a letter dated October 13, 2009, PCIC advised PSE&G that it insured 673 Franklin Street, and was seeking payment of approximately $126,000 to repair the fire damage. A PSE&G representative subsequently spoke to PCIC's counsel and requested that the fire site be preserved so that PSE&G could have its liability and damages experts inspect the property.
In a November 13, 2009 letter to the PSE&G representative, PCIC's counsel detailed PSE&G's liability, reiterated the same estimated damages claim, and advised that PCIC also insured 675 Franklin Street. PSE&G responded with a December 7, 2009 letter, requesting additional information to process PCIC's claim and repeating its earlier request to examine the fire site.
In an August 10, 2010 letter, PCIC's attorney advised PSE&G that the claims were finalized with payments of $126,000 and $2519.88, respectively, to its insureds, who completed repairs at the two properties. PSE&G replied that to consider payment of the claim, it still needed PCIC to provide a fire origin and cause report establishing that PSE&G was liable for the loss. Furthermore, PSE&G asserted that given its prior request to inspect the fire site, and if the fire location had been repaired as indicated, it will take the "position deliberate spoliation has occurred." The parties could not resolve their dispute, and PCIC filed its complaint on February 4, 2011.
A bench trial was initially scheduled for September 4, 2012, but was adjourned due to continuing discovery. An adjournment of the second trial date was also granted due to incomplete discovery. Discovery ended by November 5, 2012, the third trial date. However, the trial was adjourned for reasons that are not clear from the record.
On May 16, 2013, following the sixth trial date adjournment, and with discovery having ended almost six months earlier, PSE&G provided its expert's report to PCIC, critiquing the methodology of PCIC's expert's conclusions. PCIC subsequently filed a motion in limine to strike the expert's report as untimely. In addition, PSE&G moved to bar PCIC from introducing evidence regarding the cause and origin of the fire due to spoliation of evidence, contending that it was denied the opportunity to inspect the properties before repairs were made. Alternatively, PSE&G sought to bar the testimony of PCIC's expert as a net opinion.
On July 12, 2013, following oral argument, the trial judge issued a bench decision granting PCIC's motion to strike PSE&G's expert report, but denying PSE&G's spoliation motion and request to bar PCIC's expert testimony. In reaching his decision to strike the expert's report, the judge stated:
[y]ou know it's not even disputed by counsel that exceptional circumstances don't exist. The certification under the rule hasn't . . . [been] provided. There's just no basis or authority for me, you know, to allow the expert report to be provided and be allowed in discovery.
With respect to denying the spoliation motion, the judge found that there was an unintentional altering of the fire scene and PSE&G did not show that it was prejudiced by not being able to inspect the site before repairs were done. The judge reasoned that:
[PSE&G's expert could] still go to [the property] even though [it] was altered, there's still some things that haven't been altered, such as the line going into the house, where it went into the house. The [homeowners] could have been deposed with respect to the condition of the basement at that point. And at that time you may have a good application to make for spoliation, but based on the evidence before me, you know, respectfully I can't grant your application.The judge also rejected the alternative net opinion argument; holding that PCIC's expert's two reports "clearly set forth [the] why and wherefore that are necessary and establish the facts upon which [the expert's] opinion is based in order to present to a finder of fact."
At trial, the parties stipulated to damages in the amount of $128,000, consisting of $15,000 for the first fire and $113,000 for the second fire. After the testimony of PCIC's witnesses, retired Trenton Fire Department Battalion Chief Henry Gliottone and forensic electrical engineering expert Terrence Duvall, and introduction of deposition testimony of PSE&G troubleshooter Alfaro, the court heard and denied PSE&G's motions, which were a reconsideration of the pre-trial in limine motions seeking to bar PCIC's expert report and testimony based upon spoliation of evidence. To support his previous ruling that PSE&G failed to show prejudice in being unable to inspect an unaltered fire site, the judge ruled that the spoliation issue was not raised during discovery and was therefore untimely. The judge further found that PSE&G was not at a disadvantage because PCIC's expert did not inspect the fire site and relied upon documentary evidence to formulate his opinion. As for the barring of PSE&G's expert, the judge again held that there was no certification of due diligence as to why the report could not have been submitted during the discovery period.
Following PSE&G's presentation of one witness, PSE&G senior engineer Philip Conte, and closing arguments, the judge issued a bench decision finding PSE&G liable to PCIC for $128,000. The judge found that all the witnesses were credible, but that PSE&G was liable under the theory of res ipsa loquitur for the fallen electric line, which led to the two fires.
Citing Gliottone's testimony, the judge found that the first fire was caused by the fallen electric line igniting the cars' fire and that radiant heat from the burning cars caused the front porch of 675 Franklin Street to catch fire. Regarding the cause of the second fire, the judge noted that Gliottone gave some opinions as to how it occurred, but did not give his testimony any persuasive weight because he was not "an expert and did not give the opinion within a reasonable degree of certainty." Instead, the judge credited Duvall's expert testimony when he ruled:
[Duvall's] testimony was consistent with the documents and the evidence in this case and he testified that he did not in fact go out to the scene, but he did rely upon the documents, testimony, [and] evidence in this case as well as his inspection of the electrical line. And he did in fact examine the conductors themselves.After an order of judgment was entered, this appeal was filed.
He testified that there would be about 7,000 volts going into the ground. He did testify frankly that there could be many reasons why there was a splice and it came apart, but however, he did testify that from the pictures it was clear to him that the pictures showed that the line was arcing on the sidewalk which was right in the area where the utility was. And it was his expert opinion that the electricity traveled into the house from the utility line through the metal conductor that there would be on an old house like that. When it hits the
sidewalk it scalds the concrete and that's a semi-conductor, it can travel through the utility and ignite the service panel. And he testified to that with a reasonable degree of certainty. He noticed that [there was] 7,000 volts to the ground which is significant.
So the lines would become energized with the high voltage, the utility lines that is going into the house and would energize the electrical panel and catch on fire from the heat.
II.
Before us, PSE&G contends that the trial judge made errors regarding discovery, admissibility of evidence, and the weight of the evidence in finding PSE&G liable. Specifically, PSE&G argues that the judge erred in precluding its expert from testifying due to submission of a late report, and in denying its motions to bar/strike PCIC from presenting expert testimony regarding the cause and origin of the second fire based upon spoliation of evidence and net opinion. PSE&G also contends that the sum of PCIC's evidence does not prove that PSE&G was liable for the second fire.
We initially address the trial judge's decision to strike PSE&G's expert report as untimely submitted. "In general, we apply an abuse of discretion standard to decisions made by our trial courts relating to matters of discovery." Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371 (2011) (citing Bender v. Adelson, 187 N.J. 411, 428 (2006)). We owe deference to a trial court's discretionary determination to grant or deny a motion to strike expert testimony. Townsend v. Pierre, 221 N.J. 36, 52-53 (2015). A trial judge's ruling "based on a mistaken understanding of the applicable law" should be reversed. Rivers v. LSC P'ship, 378 N.J. Super. 68, 80 (App. Div.), certif. denied, 185 N.J. 296 (2005). Further, we will "decline to interfere with discretionary rulings involving discovery unless it appears that an injustice has been done." Cunningham v. Rummel, 223 N.J. Super. 15, 19 (App. Div. 1988).
PSE&G argues that PCIC's failure to allow an inspection of the fire site caused it to submit its expert's report late, and in the interests of justice, the judge should have permitted its expert to testify based upon the opinions expressed in his report. We find no factual or legal support for this argument.
We first must point out that PSE&G did not seek judicial relief to extend discovery to submit its expert's report, prior to the expiration of discovery pursuant to Rule 4:24-1(c). Without any explanation, PSE&G merely submitted its expert's report to PCIC approximately six months after the discovery end date and after four previous trial adjournments. Although the judge did not cite a specific court rule upon which he based his decision, it is apparent from his comments that PSE&G did not provide exceptional circumstances or a certification, that he was relying upon Rule 4:24-1(c), which states that no extension of discovery shall be granted "unless exceptional circumstances are shown," and Rule 4:17-7, which states that an amendment to interrogatories shall not be allowed "later than twenty days prior to the end of discovery" absent a certification by the party seeking to amend "that the information requiring the amendment was not reasonably available . . . by the exercise of due diligence prior to the discovery end date."
As noted, the first two trial dates were adjourned due to continuing discovery. --------
PSE&G offers no reasonable explanation why it could not have submitted its expert's report within the discovery period. Even though PSE&G was not given the opportunity to inspect the fire site prior to repairs being made, PSE&G presents no explanation how that non-occurrence caused such a late submission of its expert's report, or why it never sought judicial intervention. Contrary to PSE&G's contention, the interests of justice do not excuse PSE&G's dilatory conduct. Under these circumstances, we conclude that the judge did not misapply the law or abuse his discretion in striking PSE&G's expert report.
Next, we address PSE&G's contention that PCIC's failure to allow an inspection of the unrepaired fire site constituted spoliation of evidence. "'Spoliation of evidence in a prospective civil action occurs when evidence pertinent to the action is destroyed, thereby interfering with the action's proper administration and disposition.'" Manorcare Health Servs., Inc. v. Osmose Wood Preserving, Inc., 336 N.J. Super. 218, 226 (App. Div. 2001) (quoting Aetna Life and Cas. Co. v. Imet Mason Contractors, 309 N.J. Super. 358, 364 (App. Div. (1998)). When litigation is likely, a prospective party aware of that probability is obligated to preserve evidence. Aetna, supra, 309 N.J. Super. at 365-67.
"'The spoliator's level of intent, whether negligent or intentional, does not affect the spoliator's liability. Rather, it is a factor to be considered when determining the appropriate remedy for the spoliation.'" Id. at 368 (quoting Hirsch v. Gen. Motors Corp., 266 N.J. Super. 222, 256 (Law Div. 1993)) (precluding certain evidence where the plaintiff improperly destroyed evidence without adequate notice to the defendant). Where spoliation of evidence interferes with civil discovery, it cannot be asserted as an affirmative defense, but is properly raised by way of motion. Hirsch, supra, 266 N.J. Super. at 255.
To determine the appropriate sanction against a spoliating party, we have considered the prejudice suffered by the other party. In Nerney v. Garden State Hosp., 229 N.J. Super. 37, 38 (App. Div. 1988), the defendant physician in a medical malpractice claim sought to bar the plaintiff from presenting testimony regarding X-rays which were negligently lost. We concluded that "[t]he negligent loss of evidence is comparable to a party's failure to comply with discovery obligations, which may result in an order barring introduction of evidence at trial." Id. at 40 (citing R. 4:23-2(b)(2); Clark v. Fog Contracting Co., 125 N.J. Super. 159 (App. Div.), certif. denied, 64 N.J. 319 (1973)). Thus, a plaintiff may only be barred from presenting testimony regarding the negligently lost X-rays when the defendant "would suffer undue prejudice." Ibid. To determine if undue prejudice was suffered, the trial court should consider the circumstances of how the evidence was lost, the basis of the plaintiff's negligence claim, the evidence the plaintiff will present to support that claim, the defendant's defenses, and evidence defendant seeks to present. Id. at 42.
Further, in selecting the appropriate remedy, a trial court should be "guided by the essential purposes that all of the sanctions are designed to achieve." Robert Flavors, Inc. v. Tri-Form Const., Inc., 203 N.J. 252, 273 (2010). If the prejudice against a party can be eliminated, and the parties can again be placed on an equal playing field, sanctions other than dismissal of claims or defenses to specific counts of a complaint should be imposed. Id. at 273-74. The remedy of excluding the spoliating party's evidence "that had been, or could have been, derived from the spoliated material or item" is based upon the premise that the spoliating party had the opportunity to evaluate or test the underlying material or item prior to its destruction gave it an unfair advantage that could not be duplicated. Id. at 264.
Applying these principles, we conclude that the judge did not abuse his discretion in denying PSE&G's request to bar or strike PCIC's evidence of the origin and cause of the second fire because PSE&G was not allowed to inspect the fire scene before it was repaired. We agree with the judge's findings that PCIC's failure to allow such inspection did not prejudice PSE&G from defending against PCIC's claims and thus did not warrant exclusion of PCIC's expert testimony.
PCIC's expert rendered an opinion without inspecting the fire scene. PSE&G's expert could have relied upon the same evidence that PCIC's expert relied upon. Arguably, PSE&G might have been able to establish prejudice, if its expert had visited the scene following the repairs, evaluated the documentary evidence, and opined that the fire's origin and cause could not be determined absent an inspection of the unaltered fire scene. Even so, as noted, PSE&G was properly barred from presenting any expert testimony due the untimely submission of its expert's report. Thus, PSE&G could not present any expert testimony to refute PCIC's expert.
In reaching our decision, we reject PSE&G's argument that the denial of its requests to inspect the unaltered fire scene constitutes "de facto prejudice." In making this argument, PSE&G relies upon the finding of prejudice in Hirsch, supra, 266 N.J. Super. at 251; Aetna, supra, 309 N.J. Super. at 367-68; and Manorcare, supra, 336 N.J. Super. at 230, where the defendants' experts had to rely upon documentary evidence to formulate their opinions because the evidence was destroyed by the plaintiff. However, in each of those cases, a key factor in finding prejudice was that the spoliating parties had their experts base opinions on inspections of the evidence before the evidence was destroyed without giving the other party the same opportunity. See Hirsch, supra, 266 N.J. Super. at 264; Aetna, supra, 309 N.J. Super. at 367; Manorcare, supra, 336 N.J. Super. at 233-34. In this case, PCIC's expert did not conduct an inspection prior to the fire site repairs to formulate his opinion. Thus, PSE&G was not at a disadvantage in defending against PCIC's theory that PSE&G was at fault for the second fire.
Next, we turn to PSE&G's argument that the judge should have barred PCIC's expert testimony by Duvall as net opinion. The Supreme Court has instructed: "'[W]e apply [a] deferential approach to a trial court's decision to admit expert testimony, reviewing it against an abuse of discretion standard.'" Townsend, supra, 221 N.J. at 53 (quoting Pomerantz Paper Corp., supra, 207 N.J. at 371-72).
The admissibility of expert testimony is governed by two rules of evidence. N.J.R.E. 702 identifies when expert testimony is permissible and requires the experts to be qualified in their respective fields. N.J.R.E. 703 addresses the foundation for expert testimony. Expert opinions must be grounded in "'facts or data derived from (1) the expert's personal observations, or (2) evidence admitted at the trial, or (3) data relied upon by the expert which is not necessarily admissible in evidence but which is the type of data normally relied upon by experts.'" Ibid. (quoting Polzo v. Cnty. of Essex, 196 N.J. 569, 583 (2008)); State v. Townsend, 186 N.J. 473, 494 (2006). "The net opinion rule is a 'corollary of [N. J.R.E. 703] . . . which forbids the admission into evidence of an expert's conclusions that are not supported by factual evidence or other data.'" Id. at 53-54 (quoting Polzo, supra, 196 N.J. at 583); Townsend, supra, 186 N.J. at 494; see also Creanga v. Jardal, 185 N.J. 345, 360 (2005) (citing Buckelew v. Grossbard, 87 N.J. 512, 524 (1981)).
Therefore, an expert is required to "'give the why and wherefore' that supports the opinion, 'rather than a mere conclusion.'" Townsend, supra, 221 N.J. at 54 (quoting Borough of Saddle River v. 66 E. Allendale, LLC, 216 N.J. 115, 144 (2013) ); Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 410 (2014) (quoting Pomerantz Paper Corp., supra, 207 N.J. at 372); Creanga, supra, 185 N.J. at 360 (quoting Rosenberg v. Tavorath, 352 N.J. Super. 385, 401 (App. Div. 2002)). The net opinion rule directs that experts "'be able to identify the factual bases for their conclusions, explain their methodology, and demonstrate that both the factual bases and the methodology are reliable.'" Townsend, supra, 221 N.J. at 55 (quoting Landrigan v. Celotex Corp., 127 N.J. 404, 417 (1992)). In short, the net opinion rule is "'a prohibition against speculative testimony.'" Harte v. Hand, 433 N.J. Super. 457, 465 (App. Div. 2013) (quoting Grzanka v. Pfeifer, 301 N.J. Super. 563, 580 (App. Div.), certif. denied, 154 N.J. 607 (1997)).
PSE&G contends that Duvall did not have the necessary qualifications to offer an expert opinion on the cause of the second fire, and had little or no factual basis to support his opinion. Specifically, PSE&G argues that Duvall did not do a cause and origin investigation of the second fire nor investigate the basement to determine how the electrical current was transmitted into the basement. PSE&G also asserts that Duvall failed to establish why the second fire did not begin until two hours after the first fire was extinguished. Without Duvall's testimony, PSE&G contends that there is no proof that it is liable for the second fire. We are not persuaded.
The trial court did not abuse its discretion in permitting Duvall to offer his expert opinion regarding the cause of the second fire. As a professional electrical engineer in seven states who conducted more than two thousand technical investigations, Duvall was qualified to give an opinion on the cause of a suspected electrical fire, as in the present case. PSE&G's challenge to Duvall's testimony goes to the weight of his testimony by the factfinder, not to admissibility of his opinion. See Rosenberg v. Tavorath, 352 N.J. Super. 385, 400-401 (2002) (jury determines deficiencies in expert's qualifications, and the weight and probative value of expert's testimony) (citations omitted).
While Duvall did not inspect the fire site, even after it was repaired, his opinion was supported by facts provided by Gliottone's deposition and trial testimony, deposition testimony of Alfaro, and inspection of the physical and documentary evidence. Duvall gave a causal connection between the fallen electrical line and the starting of the second fire. Therefore, we do not conclude he gave a net opinion.
In our review of the decision of a trial judge sitting without a jury, "'we do not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice[.]" Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011) (quoting In re Trust Created By Agreement Dated December 20, 1961, ex. rel. Johnson, 194 N.J. 276, 284 (2008) (internal quotation marks omitted)). Here, for reasons noted above, there was sufficient evidence to find that PSE&G was liable for the second fire.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION