BMW Remains on Hot Seat in Engine Fire Suit

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By Bruce Kaufman

Sept. 30 — A strict liability claim will advance to trial against BMW over a 2006 Mini Cooper that allegedly burst into flames while parked in the owner's garage, the District of Arizona ruled Sept. 29 (Phila. Indemn. Ins. Co. v. BMW of N. Am. LLC, D. Ariz., No. CV-13-01228, 9/29/15).

The ruling by the U.S. District Court for the District of Arizona allows the subrogating insurers pursuing the case to move ahead with a strict liability claim against BMW of North America alleging its failure to properly insulate battery cables constituted a defect, but granted BMW summary judgment on a negligence claim.

A reasonable juror, relying on the evidence, could find that the defect caused the fire, and that the defect existed when the vehicle left BMW's factory, the court said in allowing the strict liability claim under either the consumer expectation test or the risk/benefit test.

The former test asks whether a product functioned as a reasonable consumer would expect; the latter approach asks whether the risks posed by a product design are outweighed by its utility.

BMW succeeded in halting the negligence claim. The court said the plaintiffs didn't offer proof that BMW acted “unreasonably” during the design process for the vehicle, the battery cables or the cable insulation.

Citing Golonka v. GMC, 65 P.3d 956 (Ariz. Ct. App. 2003), the court found no evidence for a juror to conclude BMW failed to take reasonable precautions in designing a safe product or acted unreasonably in light of a foreseeable risk of injury.

The complaint alleges the 2012 fire in Michelle Brown's garage started in the Mini Cooper's engine compartment.

The fire caused at least $130,000 in damage to the property, much of which was covered by insurance.

Expert Testimony Admissible

The District of Arizona largely upheld the testimony of two plaintiffs' experts—fire investigator Willie Nelson and engineer George Hogge.

The experts offered reliable causation testimony with one exception: Hogge may not testify that the manufacturer's alleged failure to secure the wiring harness and battery cable inside the engine compartment constituted a design defect, the court said.

That part of Hogge's testimony was “untested hypothesis,” Magistrate John Z. Boyle said.

Hogge's evaluation of an exemplar vehicle and the arcing found on the cable in the burnt car, although it produced evidence consistent with Hogge's hypothesis, were “an insufficient basis upon which to conclude with reasonable certainty that the battery cable and engine harnesses on 2006 Mini Coopers were defectively designed” by BMW, the court said.

Noting the vehicle's battery cable insulation was destroyed in the fire and could not be examined, the court concluded that Hogge sufficiently tested his conclusion that chafing of positive conductors caused the fire, but not that the chafing was caused by a defect—the way in which the battery cable and/or wiring harnesses were secured.

The court rejected the defendant's argument that the experts' testimony should have been excluded in its entirety because the experts examined evidence from “an altered and incompletely preserved fire scene,” and failed to rule out credible alternate causation theories.

BMW and subrogating insurers Liberty Mutual Fire Insurance Co. and Philadelphia Indemnity Insurance Co. agreed in 2013 to allow a magistrate to oversee all proceedings in this case, including trial, entry of final judgment and post-judgment proceedings, with direct review by the U.S. District Court for the Ninth Circuit.

Bauman Loewe Witt & Maxwell in Scottsdale, Az., represents plaintiff's insurer Liberty Mutual and the insurer for the plaintiff's condominium association, Philadelphia Indemnity.

BMW is represented by Bowman & Brooke in Phoenix.