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Dorman v. State Industries, Inc.

Supreme Court of Virginia

June 16, 2016


         From the Circuit Court of the City of Richmond Walter W. Stout, III, Judge Designate



         In this products liability action filed in 2011 and seeking over 24 million dollars in damages, Carolyn Dorman, Elizabeth Burgin, Nichole Howarth, and Kristin Julia (collectively "appellants") appeal from a judgment of the Circuit Court of the City of Richmond ("trial court") finding State Industries, Inc. ("State") not liable for appellants' breach of warranty and negligence claims. On appeal, appellants argue the trial court erred in allowing State to present certain evidence and in granting Jury Instruction 22.

         I. BACKGROUND

         On August 17, 2007, appellants moved into 1306-F Henry Lane ("the Apartment"), a unit in Collegiate Suites Apartments ("CSA") in the Town of Blacksburg ("Town"). Two days later, Kenneth Compton, a senior service technician with Atmos Energy Corporation, measured high levels of carbon monoxide at the front door of the Apartment. After receiving no answer from the occupants, he entered the Apartment and found the appellants unconscious in their bedrooms.

         Five days after the incident, the town building official Katherine Cook, Town code official Jeffrey Garst, and John Mann, a mechanical engineer in heating and air conditioning design, were present at the Apartment for testing of the atmospheric-vented gas fired hot water heater ("atmospheric heater") manufactured by State. Cook testified they were able to recreate the "back draft and carbon monoxide" conditions of August 19, only when "the water heater was running, all the doors to the bedrooms were closed . . . [and] [w]hen the air conditioning was running." The atmospheric heater was connected to the air handler of the central air conditioning unit that was also manufactured by State.[1]

         Mann testified the temperature and pressure release valve ("T&P valve") was rated to open at 210 degrees to relieve the pressure in the atmospheric heater, but sediment on the T&P valve's sensor caused it to open at 126 degrees. Thus, water was continuously draining out of the atmospheric heater causing a continuous flow of fresh water to enter it, resulting in the gas burner continuously firing to heat the water. Testing revealed there was insufficient combustion air, the fresh air that feeds the fire on a gas-burning appliance, in the Apartment for the atmospheric heater to vent properly, thus it generated carbon monoxide, and, because it was continuously firing on August 19, it generated toxic levels of carbon monoxide. Mann testified it was the installer's responsibility to make sure that the atmospheric heater was installed pursuant to the installation instructions and the local Town codes. Cook testified that the structural and architectural notes for CSA specified electric water heaters were to be installed in the apartments and no changes from the approved plans had ever been submitted to the Town for review and approval of the switch to atmospheric heaters.

         Appellants' expert, Randy Bicknese, is a mechanical project engineer and is familiar with atmospheric heaters through his experience as a fire and explosions investigator. Bicknese opined that the Apartment had an adequate volume of combustion air for the atmospheric heater, but the problem was "the sensitivity of the design of the water heater to slight changes in pressure within the building" primarily caused by "[t]he operation of the Apollo air handler." Other factors that reduced the available combustion air included the weather, operation of the exhaust fans in the four bathrooms, and the airflow characteristics of the Apartment. Moreover, open spaces on the draft hood of the atmospheric heater permitted carbon monoxide to be emitted into the living space. Bicknese opined that the atmospheric heater was "unreasonably dangerous" and unfit for the purpose for which it was marketed because of the design defect of the draft hood and its susceptibility to atmospheric conditions, both interior and exterior, which prevented it from venting properly.

         State asked Bicknese on cross-examination about his opinions regarding the property owners. Appellants objected and argued that State was raising the "empty chair" defense. The trial court ruled State could explore this area "until it's proven, but the court makes a decision as to whether it supersedes" and it could not make "that decision at this time." Bicknese then testified that he previously opined in his disclosure that the atmospheric heater was improperly installed and that the owners of CSA, CSB III, LLC ("CSB"), were responsible for the improper installation. He outlined the various code violations in his disclosure and faulted CSB and CSA's management company, University Management, Inc. ("UMI"), for failing to comply with those codes. Bicknese also opined that Atmos "was knowingly negligent and a proximate cause of [appellants'] carbon monoxide poisoning" in making the gas connection to the atmospheric heater. Bicknese further testified that an electric water heater and three safer power vented gas water heaters were available when the Apartment was built in 1999 and somebody, other than State, decided to install the atmospheric heater.

         The trial court denied State's motion to strike appellants' claim that there was a design defect caused by the opening at the top of the atmospheric heater that allowed carbon monoxide to come out, but granted the motion to strike as to appellants' claims of failure to warn and defects in the T&P valve.

         Sterling Nichols, one of the owners of CSA, testified that the architectural plans called for electric hot water heaters to be installed in each apartment. The first three buildings used electric water heaters but atmospheric water heaters were installed in the "stage 4" building, which included the Apartment. State was not consulted concerning this change; instead, Nichols relied on the opinions of the project's heating and air conditioning contractor, and a gas company representative.

         Allen Eberhardt, State's expert in mechanical engineering with expertise in evaluating gas appliances as the source of carbon monoxide, was present at the testing of the atmospheric heater on August 24, five days after appellants were injured. He testified the atmospheric heater operated normally producing no carbon monoxide until the bedroom doors were shut and the air handler was turned on, at which time it starting producing carbon monoxide. At that point, the air stopped circulating through the ductwork, the air pressure in the bedrooms increased forming "positive pressure, " and the air pressure in the rest of the Apartment decreased forming "negative pressure." The negative pressure tried to balance itself by pulling air from the flue that connected the draft hood of the atmospheric heater to the outside. At that point, the gas burner no longer had sufficient air for clean combustion and began producing carbon monoxide.

         Eberhardt testified this condition had not previously occurred because the space under the closed bedroom doors allowed sufficient air return to the atmospheric heater. Then, nine days before the incident, new carpet was installed in the Apartment, which reduced the space under the doors and created the negative pressure. The UMI employee who approved the new carpet installation testified that no analysis was done to determine the effect of the carpet on the airflow in the Apartment.

         Eberhardt testified the manual for the atmospheric heater provided warnings with regard to air return and inadequate combustion air. The manual stated that the atmospheric heater had to be installed according to the instructions and discussed different ways to increase air volume by creating openings to the crawlspace or attic in order to bring more air into tightly sealed newer homes. Eberhardt opined that the installation of the atmospheric heater in the Apartment was inappropriate because there was no return of air from the bedrooms when the bedroom doors were closed and when the space under the closed bedroom doors was reduced by the new carpet.

         Charles Adams, State's expert in mechanical engineering with particular expertise in the design, operation, and manufacture of gas-fired water heaters, testified he was chief engineer and Director of Government Affairs for A. O. Smith Corporation ("Smith"), a manufacturer of water heaters and boilers that had "around 500 engineers worldwide."[2] Adams testified that the installation manual for the atmospheric heater required it to be installed in compliance with the American National Standards Institute ("ANSI") and the National Fire Protection Association ("NFPA"), two installation codes that specified how return air ductwork should be installed. The codes required that when installing the atmospheric heater with an air handler, provisions had to be made in order to import combustion air from outside the room. Adams testified "the incorrectly-installed air handler was stealing the air needed for combustion, " as the one-half horsepower blower motor on the air handler overcame the ability of the warm air generated by the gas burner in the atmospheric heater to naturally rise through the ceiling vent. Adams also testified, "there's about 60 million atmospheric gas water heaters operating in the United States." He opined that the opening at the draft hood of the atmospheric heater did not render it unreasonably dangerous at the time it was installed or at any other time.

         At the conclusion of the evidence, appellants renewed their previously filed motion seeking to exclude State's "empty chair" evidence, arguing that there was sufficient evidence for the jury to consider that State's conduct was a proximate cause of appellants' injuries. State argued that the issue was for the jury to decide as State's evidence demonstrated CSB was responsible for the decision to install the atmospheric heater and the installers failed to determine the effect of the pressure conditions on the combustion air. The trial court overruled the motion.

         The trial court granted State's Proposed Jury Instruction 22, which stated: "A superseding cause is an independent event, not reasonably foreseeable, that completely breaks the connection between the defendant's negligent act and the plaintiff's injury. A superseding cause breaks the chain of events so that the defendant's original negligent act is not a proximate cause of the plaintiffs' injury in the slightest degree." Appellants objected to the instruction, arguing that unless the trial court believed that it could say, "that State was not negligent even in the slightest degree, " then State was not entitled to a superseding cause instruction. The trial court ruled that the issue was whether State was negligent "at the start, " and if State was not negligent, "the case is over." The trial court further ruled that if there was negligence on State's part, "then the jury may deserve some explanation of why others aren't here."

         In closing argument, State argued that Smith employs over "500 engineers who do nothing other than make sure that the products they manufacture are safe." Appellants objected that State was making "an inappropriate attack" on Bicknese's credibility. Appellants argued State should not be allowed to argue that millions of its atmospheric heaters were in general use, that an atmospheric heater had never before flooded an apartment with carbon monoxide or that the atmospheric heater had "a safe design record."

         State argued "the issue [was] whether or not the design and use of this design" in the industry was admissible and evidence of custom and usage was relevant in order to properly assess the opinion of appellants' expert, Bicknese, that every atmospheric heater was defective. The trial court ruled that compliance with regulation statutes or industry standards may be admissible but was not dispositive. The dispositive issue was whether the product was reasonably safe for its intended purpose. The trial court ruled State could present evidence of prior incidents "as to the custom and usage based on design." The trial court overruled appellants' objection to State's closing argument, ruling that Adams testified the Smith engineers "do testing, it's part of making the product safe" and appellants could respond to the argument in rebuttal.

         The jury returned a verdict for State on all claims. The trial court then denied appellants' motion to set aside the verdict and motion for new trials. This appeal followed.

         II. ANALYSIS

         On appeal, "we review the circuit court's evidentiary rulings using an abuse of discretion standard, [and] we will reverse the circuit court's decision to admit evidence only upon a finding of abuse of that discretion." Hyundai ...

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