United States District Court, W.D. New York
For Stephen Reed, Cindy Reed, husband and wife, Plaintiffs: Jeffrey L. Nash, LEAD ATTORNEY, Cozen O'Connor, P.C., Cherry Hill, NJ; Paul A. Sanders, LEAD ATTORNEY, Hiscock & Barclay LLP, Rochester, NY.
For Aqueon Products, Central Garden and Pet, Defendants: Kenneth A. Manning, LEAD ATTORNEY, Joanna Jung-Yao Chen, Phillips Lytle LLP, Buffalo, NY.
DECISION AND ORDER
MICHAEL A. TELESCA, United States District Judge.
Plaintiffs Stephen and Cindy Reed (" plaintiffs" ) bring this action against defendant Aqueon Products, and Central Garden and Pet (" defendants" ) pursuant to this Court's diversity jurisdiction for damages sustained when aquarium equipment manufactured by defendants caused a fire in their daughter's bedroom.
Defendants move for summary judgement contending that since both parties are insured by Liberty Mutual Insurance Company (" Liberty Mutual" ) plaintiff's claims are barred by the anti-subrogation rule. For the reasons discussed below, the Court grants defendants' motion for summary judgment in part. Specifically, the anti-subrogation rule bars plaintiffs' claims for damages already reimbursed by Liberty Mutual. To the extent that plaintiffs have not been reimbursed under their homeowner's policy, they may seek such damages against defendants.
On January 16, 2008, plaintiffs' teenage daughter, Chelsea, woke up in the middle
of the night to find that a fire had started in her bedroom at 730 Manitou Road in the Town of Greece, New York. It was later determined that the origin of the fire may have been an aquarium containing an electric-powered water filter that was manufactured and supplied by defendants. At the time of the fire, plaintiffs were insured under a homeowner's insurance policy issued by Liberty Mutual with a $500.00 deductible. Liberty Mutual also insured defendants under a general commercial liability policy with a $250,000 deductible.
Within hours of the fire, Jason Karasinski (" Karasinski" ), a level-II fire investigator with Liberty Mutual, responded to the scene to investigate and adjust plaintiff's claims for losses caused by the fire. As part of the investigation, he initially interviewed plaintiffs and photographed the fire-damaged scene. Karasinski returned the following day with fire investigator Richard Shiah (" Shiah" ) and electrical engineer Gary Hauf (" Hauf" ) to continue his investigation of the damaged area. They examined debris that had been removed from Chelsea's bedroom and the scene of the fire and recovered pieces of an aquarium and its power cords, which showed signs of electrical arcing. Once Karasinski determined the make and model of the aquarium, he went to the pet store that day and purchased the same model.
Karasinski directed that several relevant pieces of evidence be removed from the scene, including the aquarium and Chelsea's dresser because " based on the amount of damage to the evidence in the area of origin [of the fire], . . . it would be safer to secure it and protect it." Karasinski deposition, p. 44.
At 3:11 p.m. on January 17, 2008, Liberty Mutual's subrogration department put defendants on notice of the fire. The precise content of the notification was not included in the papers submitted by the parties. Reference to the notice was revealed during deposition testimony without quoting from a written notice, if any. The Liberty Mutual commercial adjuster for defendants asked Karasinski to suggest the name of a fire investigator to investigate the incident on defendants' behalf, and he recommended Brian Wydra (" Wydra" ). As part of his investigation of the cause of the fire damage to the residence, Karasinski arranged and conducted a live test burn of the same model aquarium, which mimicked the circumstances and environment of the original fire. He did not notify defendants or Wydra of the live test burn explaining " Per NRPA 921 I'm not required to. Aqueon has their fish tank. They can do whatever testing they want." Karasinski deposition, p. 53. Based on examination of the fire scene, a review of the scene with fire investigators, and the testing and ...