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Great Northern Insurance Co. v. NGL Warehouse, LLC

United States District Court, D. Colorado

January 18, 2017



          PHILIP A. BRIMMER United States District Judge

         This matter comes before the Court on Plaintiffs' Motion to Exclude Defense Expert Testimony [Docket No. 152], wherein plaintiffs seek to prevent defendant NGL Warehouse, LLC (“NGL”) from introducing certain opinion testimony of witnesses Joseph B. Michels, Ph.D. and Sher Paul Singh, Ph.D.

         The factual background of this case is contained in the Court's order on plaintiffs' summary judgment motion [Docket No. 140] and will not be recounted here except as relevant. Plaintiffs seek indemnification from NGL for a settlement payment and associated defense costs they paid to resolve a Texas lawsuit involving a fatal accident at a Home Depot store. The accident occurred when doors manufactured by plaintiff Unique Home Designs, Inc. (“Unique”) fell onto and killed John Valdez, a Home Depot employee. Docket No. 140 at 1. At the time of the accident, Mr. Valdez was unloading the doors from a pallet that defendant NGL, a warehouse company, had packed. Id. NGL failed to follow the customer specific requirements (“SOPS”) it received from Unique requiring the doors to be packed at an angle using a stop block and wrapped in groups of four using blue inner wrapping material. Id. at 4-5.

         After the fatal accident, Mr. Valdez's estate and his surviving relatives sued The Home Depot, Inc., Unique, and NGL (the “underlying action”). Docket No. 140 at 2. Home Depot filed third-party claims against the plaintiffs in the underlying action to recoup employee benefits it had paid[1] and against Unique for indemnification. Docket No. 154-4. Home Depot and Unique settled the claims against them in the underlying litigation, with Home Depot contributing $950, 000 and Unique and its insurer, plaintiff Great Northern Insurance Company, contributing $5 million. Docket No. 1 at 7-8.[2]

         Unique and NGL are parties to a Warehouse Agreement, which contains the following indemnification provision:

Each party (the “Indemnitor”) shall indemnify and hold the other party and any affiliated, controlling or subsidiary entities of such party, and the directors, employees, officers, agents, subcontractors, licensors and suppliers of all of them (in each case, the “Indemnitee”) harmless from and against all liabilities, claims, suits, actions, fines, damages, losses, costs and expenses (including reasonable attorneys' fees) (“Damages”) arising out of injury to or death of any person, or damage to or loss or destruction of any tangible personal property or improvements to real property (except for lost or damaged Goods where liability is governed by Article III or V) to the extent caused by or resulting from such party's willful misconduct or negligent acts or omissions or those of its employees or agents. If the Indemnitor and the Indemnitee have, through their negligent acts or omissions, jointly contributed to any of the matters to be indemnified hereunder, the indemnification hereunder shall only be to the extent that the same was not caused by the negligent acts or omissions of the Indemnitee.

Docket No. 105-1 at 13, ¶ 12.01. The Warehouse Agreement is governed by Colorado law. Id. at 14, ¶ 14.01.

         Unique and Home Depot are parties to a Supplier Buying Agreement (“SBA”), which contains the following indemnification and defense provision:

[Unique] will indemnify and defend [Home Depot] . . . from and against any and all claims or allegations made by any person (including those made by [Unique's] directors, officers and employees), losses, damages, suits, fees, judgments, costs and expenses (including attorneys' fees incurred in responding to such claims) that [Home Depot] may suffer or incur arising or alleged to have arisen out of or in connection with (a) any personal injury (including death) or damage to property arising out of the acts or omissions of [Unique], its employees and agents, contractors, subcontractors and/or any other persons for whose conduct [Unique] may be or is alleged to be legally responsible . . . . This agreement to indemnify, defend and hold [Home Depot] and its affiliates harmless applies whether or not the claim or loss was alleged to have been caused in whole or in part by the negligence or fault of [Home Depot].

Docket No. 154-2 at 8, ¶ 6.1.

         On November 7, 2016, plaintiffs filed their motion to exclude. Docket No. 152. NGL does not oppose the exclusion of the opinions of Dr. Michels identified by plaintiffs. Docket No. 157 at 2. Accordingly, the Court will grant the motion with respect to the opinions of Dr. Michels identified by plaintiffs.

         Plaintiffs argue that (a) certain of Dr. Singh's opinions about the packing of the doors and Home Depot's and NGL's alleged negligence are irrelevant because the only issue in this case is whether NGL must indemnify Unique for its contribution to the settlement of the underlying action, Docket No. 152 at 7-10; (b) NGL fails to establish that any of Home Depot's failures caused the accident and are therefore irrelevant, id. at 10-11; (c) Dr. Singh's opinions lack a reliable methodology, id. at 12-13; and (d) two of Dr. Singh's purported opinions are really fact statements that are not the proper subject of expert testimony. Id. at 4.

         Defendant responds that Home Depot's alleged negligence is relevant because part of plaintiffs' $5 million payment in the underlying action is attributable to Home Depot's negligence, for which NGL has no duty to indemnify Unique. Docket No. 157 at 5-6 (citing Docket No. 154).


         Rule 702 of the Federal Rules of Evidence provides that:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. As the rule makes clear, while required, it is not sufficient that an expert be qualified based upon knowledge, skill, experience, training, or education to give opinions in a particular subject area. Rather, the Court must “perform[ ] a two-step analysis.” 103 Investors I, L.P. v. Square D Co., 470 F.3d 985, 990 (10th Cir. 2006). After determining whether the expert is qualified, the specific proffered opinions must be assessed for reliability. See id.; Fed.R.Evid. 702 (requiring that the testimony be “based on sufficient facts or data, ” be the “product of ...

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