Sunday, July 6, 2014

Whole Lot of Opining Going On

Lasek. v. Vermont Vapor, Inc., 2014 VT 33.

By Nicole Killoran

Ready your tastebuds, folks. This case has a sprinkling of evidence, ethics, and torts all in one. The subjects of the suit are a fire in a commercial building, two tenants, and a landlord. Defendant landlord and co-defendant tenant won at trial for a variety of reasons. The questions of what caused the fire and whether plaintiff, the other tenant, should have won instead get us to the SCOV.

Tenant, Vermont Vapor, leased a space in the southwest corner of a building where its owner mixed liquid nicotine for e-cigarette fillers. Father tricked out an enclosed “clean room” lab within the building that vented to the outside, and worked with his son there. The room was oh-so-precariously poised underneath an industrial space heater that had been suspended from the rafters and connected to a propane tank to run the lab in the winter.

One night, around the crevice of dawn, a fire broke out in the northern half of the building where plaintiff kept his business’s workshop. Plaintiff sued tenant for negligence and strict liability. Plaintiff also sued landlord for breach of a few warranties, negligence, and unjust enrichment. Landlord’s liability insurer defended.

Before he filed suit, plaintiff slapped a lien on the warehouse to protect his interests. He later agreed to remove the lien, but didn’t actually remove it. When landlord’s attorney wrote a strongly-worded letter to plaintiff’s attorney, a concurrent-conflict-of-interest scuffle arose. The trial court denied plaintiff’s motion to disqualify landlord’s attorney, whose firm was hired by plaintiff’s firm to defend in a malpractice suit against plaintiff’s attorney’s partner. Got that? Yeah, me neither. Just go with it.

During the trial, the court ruled that plaintiff’s expert witness could not testify to the cause of the fire because his methodology and analysis was speculative and unreliable. The court also excluded some statements Vermont Vapor’s president’s father had made to police and an insurance investigator as outside the scope of his employment. After plaintiff finished putting on his case, the trial court granted defendants’ motion for judgment as a matter of law. Plaintiff asked for a new trial and tried to beef up his expert’s testimony. The trial court said no. Plaintiff appealed.

Plaintiff has six separate problems with how this case turned out.

First, plaintiff doesn’t like that the trial court excluded his expert testimony mid-way through the trial. The Daubert standard the SCOV applies to this question asks whether plaintiff’s expert’s method and analysis were reliable. If the trial court didn’t abuse its discretion in excluding the testimony, the SCOV will uphold its decision.

The expert here thought that the chemicals used in the lab, including liquid nicotine, mixed together to make a flammable vapor that gassed its way through holes in the ceiling or the door, filled the space above the lab, and ignited the pilot light for the heater, causing a flash fire. While this was a fine theory, the expert readily admitted that he wasn’t a chemical engineer, and the facts on which his opinion rested were speculative.

Plaintiff’s expert didn’t know for sure which chemicals were in the lab that night or if anything was left open, but thought that vaporized nicotine could have done the job if combined with other chemicals. He couldn’t say how much of the vaporized chemicals had to drift up to the open arms of the pilot light to ignite it, or how flammable they were, because he didn’t have the expertise. The nail in the coffin I think, and a plaintiff’s counsel’s nightmare, was when plaintiff’s expert admitted nicotine has a low flammability rating and is heavier than air—it would normally sink rather than rise up to begin a torrid affair with a propane heater.

As you might imagine, the SCOV finds plaintiff’s expert’s methodology in smoking out the cause of this fire to be a bit speculative. There was no evidence that the chemicals that may have created this flammable vapor of doom were present in a sufficient quantity at the pilot light to ignite a conflagration. Plaintiff’s expert didn’t have a reliable explanation of how the nicotine vapors got up there, and he didn’t have a chemical-engineering background to let him explain it sufficiently or give his explanation credibility. The SCOV upholds the trial court here—plaintiff’s expert’s opinion on causation was unreliable and not “based on sufficient facts or data.”

Second, plaintiff doesn’t like that the trial court granted defendants’ motion for judgment as a matter of law. The standard for this issue asks whether there was enough legally-relevant evidence for a reasonable jury to find in favor of the guy who lost the motion. The trial court decided a reasonable jury would not have decided in plaintiff’s favor on any of his claims, and the SCOV agrees.

On plaintiff’s negligence claim, the SCOV presents plaintiff with his inability to make out his basic negligence case without the necessary linkage between his expert’s opinion on the cause of the fire and defendants’ actions. Plaintiff parries with res ipsa loquitur. For the un-indoctrinated, res ipsa is a delightful little trick tort claimants like to dust off and use on occasion in cases where it’s glaringly obvious that someone screwed up, but exactly who screwed up, or the how of the instrument that did the hurting, isn’t clear. Res ipsa loquitur translates to “the thing speaks for itself.” I’ve always thought of it as the “yeah, no $*#&” category.

The SCOV rejects this possible workaround on the doomed causation issue. Res ipsa is a bad theory in fire cases because the cause and origin of a fire is often very difficult to pinpoint. The cause of the fire was a hot mess of a debate in this case, notes the SCOV. And anyway res ipsa is intended for cases where it’s a mystery how someone effed up, not whether his carelessness caused havoc.

Plaintiff also argues that his unjust enrichment claim against landlord should have gotten to the jury. Plaintiff claims landlord (through his insurance payout) got the benefit of some $40,000 plaintiff spent in improvements on his leased half of the warehouse, and that it would be unfair to let landlord keep it. The SCOV rejects this claim too—there was no evidence that landlord got a higher insurance settlement because of the improvements, so he wasn’t unjustly enriched.

As for the rest of plaintiff’s claims the trial court dismissed—strict liability (what ultrahazardous activity?), breach-of-the-warranty-of-habitability (not in Vermont!), and duty-to-warn (what duty?)—the SCOV doesn’t touch them because plaintiff didn’t brief them.

Third, the trial court refused to allow into evidence a few statements tenant’s owner’s father made. According to the police report, the morning of the fire father made a few statements to police about the chemicals in the lab, the make-up of the e-cigarette filler, and whether his son, the president of Vermont Vapor, was the lone handler of the nicotine. In supposed contradiction to these statements, according to landlord’s insurer’s investigation report father later told the investigator he was the last person in the lab, working until the wee hours of the morning, not long before the fire was reported, filling an order for the next day himself.

The trial court decided these statements were hearsay because plaintiff didn’t prove that father’s job description included public relations—it wasn’t father’s job to make statements like that to the police or to an investigator. This comes back to the “agency” exception to hearsay—if something your employee said comes back to haunt you, it can’t be used against you unless what he said related to his job. But, the SCOV concludes, this doesn’t mean he has to be authorized to say what he said. Father was an employee in the lab, and he knew what was in the lab and what happened in the lab. The trial court screwed up when it excluded these statements.

But what does it matter, queries the SCOV? Plaintiff needed to show us that, with those statements, the case would have come out differently. Father claimed at trial that he didn’t actually have any hand in the creation of the e-cigarette fillers, but his statements the morning after the fire were contradictory. Even with this contradiction it didn’t explain how chemical vapors from the lab got up to the pilot light and milled around until they reached critical mass. Father’s statements would not have fixed the issue of causation. Sorry plaintiff, says the SCOV—the trial court got this one right too.

Fourth, plaintiff doesn’t like that the trial court rejected his motion for a new trial and claims that this is because the trial court got the science wrong. Plaintiff’s motion for a new trial tried to lay out the scientific support for his expert’s theory to prove that it wasn’t just junk science. He presented evidence that, at room temperature, nicotine vapors expand and become lighter than air. If the trial court abused its discretion by denying this motion, the SCOV will reverse.

The SCOV ruins plaintiff’s hopes again. The trial court based its conclusion not on questionable science but on plaintiff’s failure to prove causation because he had a weak expert. Plaintiff had this information during trial, and could certainly have presented the theory through a witness at trial, but he didn’t. It wasn’t an abuse of discretion to deny plaintiff a new trial, concludes the SCOV.

Fifth, plaintiff doesn’t like that the trial court let defendants recover the cost of depositions. The SCOV decides that plaintiff finally gets lucky on this question. The costs the trial court awarded defendants included the cost of obtaining transcripts of depositions plaintiff paid for, and the cost of video recording depositions while they were being taken and transcribed. The SCOV will uphold the trial court’s decision on the cost question if the depositions were “reasonably necessary” to prepare for the litigation.

The list of deposition costs that can be recovered by the prevailing party isn’t limited to just the obvious—the cost of having a stenographer take the testimony and transcribe it. It can include the cost of obtaining copies of the transcripts, notes the SCOV. The trial court didn’t screw up by awarding defendants the costs of copies of all depositions of witnesses who actually testified at trial.

But the trial court should not have let defendants recover the cost of concurrent video recordings of the depositions. This is duplicative, and the rules say if someone wants to spend the cost to record it twice, he gets to pay for it. Also, the trial court should not have awarded deposition costs for one witness who didn’t testify at trial because the trial court didn’t determine whether his deposition was “reasonably necessary.” Defendants should not get these costs, and on these two questions alone—the duplicative recordings and whether the extra deposition was reasonably necessary—the SCOV remands to the trial court.

As a last note on the deposition cost question, the SCOV answers in the affirmative on the question of whether a defendant can recover costs even though its insurer defended. This comes back to basic subrogation rights—an insurer stands in its insured’s shoes, and gets to recover costs when it wins just like its insured would.

Sixth, and finally, plaintiff doesn’t like that the trial court refused to disqualify landlord’s attorney when plaintiff raised the specter of a conflict of interest. When plaintiff’s attorney promised landlord’s attorney in December 2011 that he was going to remove the lien on landlord’s property, and landlord learned in a land-record search six months later that it weren’t so, landlord’s owner went into actual shock and required medical attention. Landlord’s attorney’s gruff letter to plaintiff’s attorney informed him that plaintiff was at risk of being responsible for paying landlord’s hospital bill.

Plaintiff’s attorney, bristling, moved to disqualify landlord’s attorney. Landlord’s attorney’s firm was defending plaintiff’s attorney’s firm partner in a separate and unrelated malpractice action. Concurrent conflict of interest! Uh, no, said the trial court. And, uh, no, says the SCOV. Plaintiff hasn’t given the SCOV a transcript to prove what the trial court had on its plate when it decided this issue. And plaintiff hasn’t shown that disqualification was necessary.

Disqualification is a pretty drastic solution. According to the rules of lawyerly ethics it’s really only an option where you will be representing one client directly adverse to another client and representing one client will cause you to suck at representing the other client adequately. The reason disqualification is not an option here, says the SCOV, is that it doesn’t meet the definition of “directly adverse.” Landlord’s attorney wasn’t picking on plaintiff’s attorney personally, or his firm, he was picking on a client. The finger-wagging letter told plaintiff’s attorney to do his job, but didn’t threaten suit against plaintiff’s attorney personally. The SCOV thinks it’s important to allow parties the freedom to pick their attorney, and upholds trial court’s decision on this last question.

For all his effort to convince the SCOV the trial court was wrong, plaintiff loses on all but a minor question of costs and gets a ruined workshop that went up in smoke. Defendants walk away clean. I can’t help but think that plaintiff also leaves with a nagging feeling that e-cigarettes ruined his life.

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