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Selective Insurance Company of America, As Subrogee of Town of Lodi v. John D. Swarey

May 24, 2011

SELECTIVE INSURANCE COMPANY OF AMERICA, AS SUBROGEE OF TOWN OF LODI, PLAINTIFF,
v.
JOHN D. SWAREY, DEFENDANT.



The opinion of the court was delivered by: Michael A. Telesca United States District Judge

DECISION and ORDER

INTRODUCTION

Plaintiff Selective Insurance Company of America, ("Selective") as subrogee of the Town of Lodi, ("Lodi" or "the Town"), pursuant to an insurance policy in which Lodi was the named insured, brings this action against defendant John D. Swarey ("Swarey") claiming that Swarey improperly installed insulation at a highway barn owned and operated by the Town, causing a fire which destroyed the barn, as well as equipment and vehicles stored in the barn. Selective, which paid an insurance claim to the Town of Lodi, claims that Swarey was negligent in installing the insulation too close to a flue pipe, and breached his contract with Lodi to safely install the insulation.

Swarey denies the plaintiff's allegations, and moves for summary judgment in his favor. In support of his motion, Swarey claims that there is no proof that the insulation was improperly installed, or that the insulation caused the fire at issue. Swarey also contends that the expert opinion of plaintiff's fire investigator should be precluded because it is not based upon a reasonable scientific foundation. Defendant further alleges that the fire was in fact caused by a rusted-out flue pipe attached to a wood burning stove. Swarey alleges that the flue pipe had gaps and holes in it from which burning embers could escape, landing on flammable material and igniting a fire. Swarey alleges that Lodi knew of the defective flue pipe, was aware of the hazzard it presented, and even lied to its insurer about having replaced the flue pipe in order to obtain insurance coverage. Defendant contends that Lodi's continued and reckless use of the wood burning stove with the defective flue pipe constitutes a superseding and intervening act of negligence that breaks the causal chain between his alleged negligence and the proximate cause of the fire.

Plaintiff opposes Swarey's motion on grounds that there are numerous questions of material fact that preclude granting judgment as a matter of law. For the reasons set forth below, I deny defendant's motion to preclude the testimony of the plaintiff's expert witness, and deny defendant's motion for summary judgment.

BACKGROUND

Plaintiff Selective Insurance Company of America is the insurer of the Town of Lodi, New York, Highway Department.*fn1 The Highway Department owned and operated a barn in which it housed equipment and vehicles used in maintaining Town roadways. In addition to a radiant heat system that was installed sometime prior to 2006, the barn was heated by a wood-burning stove. Attached to the stove was a flue pipe that extended from the stove to the roof. The flue pipe passed through a drop ceiling in the barn. It is undisputed that the flue pipe extended from the stove, through the drop ceiling, to and above the roof, and was corroded, with rust holes in it.

In January 2006, defendant John Swarey, acting pursuant to a contract with the Town of Lodi, installed blown-in cellulose fiber insulation at the barn in an area between the roof and the drop ceiling. According to Swarey, he was aware of the rusted flue pipe, and took care to maintain an air gap of at least 3 inches between the blown-in insulation and the flue. The purpose of the air gap was to prevent the blown-in insulation from overheating and possibly combusting.

On January 27, 2006, just weeks after Swarey installed the insulation, a fire occurred at the barn. The building and several vehicles and pieces of equipment were destroyed. The Town of Lodi made an insurance claim with Selective for damages resulting from the fire, and Selective paid the claim pursuant to the terms of the insurance policy.

As a subrogee of the Town, plaintiff Selective now brings this action against Swarey claiming that Swarey improperly installed the blown-in insulation, and that the fire resulted from Swarey's negligence. Defendant denies the plaintiff's claims, and alleges that there is no evidence that he acted negligently. He further claims that the fire was caused by burning particles escaping through gaps in the rusted flue pipe and causing the ignition of flammable materials. Finally, he argues that he can not be held liable for the fire because the Town's use of the wood-burning stove was negligent in light of the Town's knowledge that the use of the stove was dangerous given the condition of the flue pipe.

DISCUSSION

I. The Opinion Testimony of the Plaintiff's Expert is admissible.

The defendant argues that the opinion testimony of plaintiff's expert John Goetz must be precluded because it is not based on a reasonable scientific foundation. I find, however, that the opinion testimony is admissible under the Federal Rules of Evidence and the principles espoused by the Supreme ...


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