News & Press Releases

February 2006 - Metal Building Collapses

When a metal building collapses after the statute of repose has run, are you really out of luck? Not always.

ollapses of pre-engineered metal buildings can present challenging legal and technical issues, but perhaps the most daunting is the statute of repose. In many states, there are statutes of repose that bar plaintiffs from suing designers and contractors of buildings for deficiencies in a building after it has stood for a prescribed number of years. Pennsylvania is one such state, and the repose period there is 12 years.

So when a $2.5 million collapse occurred to a 13-year old pre-engineered metal building, the PA statute of repose barred any avenues for subrogation, right? Wrong.

We analyzed the project and observed that the primary and secondary steel for the structure was designed, fabricated and supplied by a remote company called American Buildings Company of Eufaula, Alabama. We analyzed their contract and conceived a strategy for characterizing ABC as a component supplier who is not protected by the statute, rather than a designer of the building who is.

When ABC moved for summary judgment on the statute of repose, we responded with a cross-motion to strike the statute of repose defense. The Court agreed with our position and struck the statute of repose defense, thus clearing the way for us to proceed against ABC.

November 2005 - Faulty Exhaust Fan Installation

The loss came in with great promise – an $850,000 restaurant fire that started in the chimney stack of a wood-fired pizza oven and its electric exhaust fan. The chimney was made of single-walled aluminum in violation of the applicable codes, and the fan’s specifications said it was rated at 300 ºF, which was too low for a solid fuel appliance.

Slam dunk, right! Not so fast. No one knew who installed the chimney or the fan. The restaurant had changed hands twice since the installation and the former owner had no recollection and no records of who did the installation.

The County Building Department had only incomplete records that led nowhere. So we had to find the culprit the hard way. We subpoenaed records from the electrician who possibly might have wired the fan. The electrician’s company name indicated that it was both an electrical and a mechanical contractor, but the former owner said they only used them for electrical work. The electrician’s records indicated that they supplied, installed and wired bathrooms fans, but not the pizza oven fan.

When gaps appeared in the records, we got suspicious. We deposed current and former employees. We requested accounting records for the gap periods. And we deposed the owner of the electrical contractor. One former employee testified that he remembered installing the fan, and that started a chain reaction. First, the electrician told us that he did not install the fan, but he did obtain it from his supplier for another contractor to install. Then, he admitted charging the restaurant owner a 20% markup for the fan.

Finally, 3 years after we started, the electrician was forced to produce additional records that solidly proved that his company sold, installed and wired the pizza oven fan. By this time, the electrician’s credibility had been eroded, and we were able to settle the case for $600,000.

5/19/2004 - Pontiac, Michigan

Michigan can be hostile territory for subrogation; an expansive view of what constitutes economic loss, the eradication of joint and several liability, and a host of other defense-friendly legal doctrines combine to make subrogation in Michigan challenging. We recently mounted a successful attack on a potent defense weapon – the assessment of fault against a non-party. By way of background, in Michigan, a defendant can file a petition to assess fault against a nonparty, even a nonparty that the plaintiff could not sue. At trial, the defendant tries to pin all of the liability on the nonparty, and any verdict against the defendant is reduced in proportion to the percentage of fault the jury assesses against the nonparty. And since there is no joint liability in Michigan, the assessment of fault serves to reduce not only the amount the named defendant has to pay, but also the amount the plaintiff can collect.

We have just such a case. It involves a fire that started in a fireplace of the insured’s home, broke out into the family room and spread to involve the entire house and to cause over $400,000 in damages. We blamed a guest of the insured homeowner who built a fire in the fireplace, failed to open the damper, then left the house. The defendant petitioned to assess fault against the carpenter who constructed a large wooden cabinet that was mounted to the wall above the fireplace and projected several feet out over the fireplace opening. The codes at the time required such a cabinet to be a minimum of 6” above the fireplace opening; this one was only 4 ½” above. Defendant contends that the cabinet pyrolyzed over the years and coincidentally ignited on this occasion.

The problem is that we could not sue the builder even if we wanted to. The statute of repose was 10 years and the cabinet was built 20+ years ago.

We took the bold step of moving for summary judgment on the assessment of fault issue. We argued that a defendant should not be permitted to assess fault against a nonparty that the plaintiff could not have sued. We relied on a slip and fall case where the plaintiff sued two defendants and one defendant got out based on a ruling by the judge that the unevenness of the sidewalk that the plaintiff slipped on was open and obvious. After that defendant got out, the remaining defendant tried to assess fault against the dismissed defendant, now a nonparty. The Court disagreed and said that an assessment of nonparty fault cannot be made against a party the plaintiff could not have sued.

In our case, the trial court sided with us, and granted our motion to preclude the defendant from assessing fault against the cabinet builder.

3/31/2004 - The U.S. District Court

Eastern District of Pa. issued an order denying defendant Crown Equipment Corp.’s Motion for Summary Judgment and its Daubert Motion. The case involves a pallet jack that is designed so that the operator stands on a platform on the front of the jack. In this case, the operator lost control of the jack and ran into a rack post in a warehouse.

We asserted product liability claims against Crown. Crown filed a motion for summary judgment that incorporated six separate arguments including the argument that the jack was not “unreasonably dangerous” and therefore not properly subject to strict liability under 402A of the Restatement (Second) of Torts. Crown had won a nearly identical motion for the same product in the USDC – WD Pa, and argued that the Court should adopt the prior decision in this case. Crown also filed a Daubert motion challenging both of plaintiff’s liability experts, and the Court held a Daubert hearing at which plaintiff’s experts testified. The Court, per U.S.D.J. Petrese B. Tucker, ruled in plaintiff’s favor on both motions.

We employed several unique approaches in opposing Crown’s motions. We analyzed the prior decision and found that the Court relied on an incorrect understanding of how the product operated, and that Crown did not correct the Court’s misimpression. We also used a unique tactic in the risk-utility analysis – we named as a safer alternative design a product that Crown already was making, thus preventing Crown from complaining that our alternative design was more dangerous. In the Daubert motion, we presented the live testimony of both of the challenged experts. The experts successfully defended their qualifications and methodologies.

3/1/2004 - Law Offices Open

After 14 years of focusing on large loss property subrogation, Steve Smith launches the Law Offices of Steven L. Smith in suburban Philadelphia to offer a unique combination of legal acumen and technical knowledge to property insurance carriers.

11/2004 - Steven L. Smith spoke at seminar

Steve Smith and Jeff Lindsey presented a seminar at the N.A.S.P. Conference entitled 'Current Trends in Electrical Fires - Unintended Paths to Destruction.'