Controls Solutions, Inc., United Phosphorus, Inc. and Mark Boyd v. Gharda USA, Inc. and Gharda Chemical Ltd.

Opinion issued August 16, 2012
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-10-00719-CV
———————————
CONTROL SOLUTIONS, INC., UNITED PHOSPHORUS, INC., AND
MARK BOYD, Appellants
V.
GHARDA USA, INC. AND GHARDA CHEMICALS, LTD., Appellees
On Appeal from the 55th District Court
Harris County, Texas
Trial Court Case No. 2004-67993
OPINION
Appellants, Control Solutions, Inc., United Phosphorous, Inc. (“UPI”), and
Mark Boyd (collectively, “CSI”),1 appeal from the trial court’s judgment
1
CSI also named “their subrogated insurers,” Hiscox, PLC and Amlin, PLC as
additional appellants. CSI argues that the suit was actually brought by the insurers
under their right to subrogation. See Mid-Continent Ins. Co. v. Liberty Mut. Ins.
notwithstanding the verdict (“JNOV”) that they take nothing by their claims
against appellees, Gharda Chemicals, Ltd. (“Gharda”) and Gharda USA, Inc.
(“GUSA”). In four issues, CSI argues that the trial court erred in (1) granting
JNOV on the ground of unreliable expert testimony based solely on CSI’s experts’
failure to test chemical properties and characteristics; (2) granting JNOV on the
jury’s findings and award against GUSA for a marketing defect when the elements
of that claim were not encompassed within the unreliable expert testimony on
manufacturing defect and causation; (3) granting JNOV on CSI’s negligence claim
because legally and factually sufficient evidence supports the verdict without the
expert testimony found unreliable by the trial court; and (4) granting summary
judgment on limitations grounds against building owner Mark Boyd. Gharda and
GUSA filed cross-points, arguing that: (1) if we reverse the JNOV, the proper
disposition of the case is to remand the case to the trial court; (2) the evidence of
damages is legally and factually insufficient; and (3) in the case of GUSA, the
Co., 236 S.W.3d 765, 774 (Tex. 2007) (holding that contractual subrogation is
created by policy language in which insurer, in exchange for payment of loss,
receives insured’s rights against third party who was primarily liable for payment
and that equitable subrogation “arises in every instance in which one person, not
acting voluntarily, has paid a debt for which another was primarily liable and
which in equity should have been paid by the latter”). However, nothing in the
pleadings or evidence admitted at trial indicates the type or extent of subrogation
that might be applicable here. See id. at 774–75. These entities were not included
in CSI’s pleadings, nor were they parties to the trial court’s final judgment;
therefore, they are not proper parties on appeal. See Cont’l Cas. Co. v. Huizar,
740 S.W.2d 429, 430 (Tex. 1987); Johnson v. Johnson, 841 S.W.2d 114, 115
(Tex. App.—Houston [14th Dist.] 1992, no writ) (holding that, generally, only
parties to action have standing to appeal).
2
amount of its damages is limited by Texas Business and Commerce Code section
7.19(a)(1) to the amount CSI paid for the product.
We overrule Gharda and GUSA’s cross-points on appeal, and we reverse
and remand for the trial court to enter judgment in favor of CSI on the jury verdict.
BACKGROUND
A. Summary
This case arose out of a fire that destroyed CSI’s chemical manufacturing
operation and warehouse in Harris County, Texas in 2004. CSI alleged and argued
at trial that Gharda and GUSA sold “off-spec” chemicals that were the cause of the
fire. Following a jury verdict in favor of CSI, the trial court granted a take-nothing
JNOV in favor of Gharda and GUSA. This appeal followed.
B. Relationship of Parties
CSI is a Texas company that makes insecticides and pesticides. Mark Boyd
is the president of CSI, and he is the owner of the warehouse in Pasadena where
CSI does its chemical manufacturing. The lease between Boyd and CSI requires
CSI to obtain insurance covering all property owned by CSI and Boyd. The policy
identifies “Control Solutions Inc. doing business as CJ Martin Co. and/or Gamat,
Inc., Mark Boyd, Individual,” as the insured. CSI claims that the underwriters paid
$3,163,185.50 for covered damage.
3
In its chemical production, CSI uses a generic chemical produced by Gharda
and sold in the United States by GUSA called chlorpyrifos technical
(“chlorpyrifos”). Gharda makes three grades of chlorpyrifos: a 99% pure grade
sold in the U.S., a 98% pure grade sold in Europe, and a 94% pure grade sold to
rest of world. At the time leading up to the trial, it sold approximately 500 tons of
chlorpyrifos per month. CSI had been purchasing chlorpyrifos from Gharda since
approximately 2001.
On March 8, 2004, a CSI employee placed thirty-two drums containing the
solid chemical chlorpyrifos into a “hot box” in CSI’s warehouse for melting. Each
drum had been sealed at Gharda’s plant in India, and the seals remained intact until
the CSI employee moved the drums into the hot box. The next morning, on March
9, 2004, CSI distribution manager Robert Blair arrived at work at 5:00 a.m. He
was working in the distribution building when he heard a “boom” followed
approximately thirty seconds later by the fire alarm. CSI’s chemical production
facility was destroyed by the resulting fire. The fire also destroyed some of the
products of another company, UPI, which stored materials in CSI’s buildings.
4
C. Suit Filed/Pre-Trial Procedural History
In December 2004, CSI filed suit against Gharda and GUSA for products
liability, breach of express warranty, breach of implied warranty of
merchantability, and negligence.2 UPI subsequently intervened in this suit.
Among the many pre-trial filings, on August 12, 2009, Gharda and GUSA
moved for summary judgment on damages, arguing, among other things, that CSI
did not have the capacity to recover damages for the real property actually owned
by Boyd. CSI responded to this motion on the merits. CSI also filed an amended
petition adding Boyd as a named plaintiff as the owner/lessor of the facility.
Gharda subsequently moved to strike Boyd as a plaintiff based on limitations and
moved for summary judgment as to all of Boyd’s claims. On November 10, 2009,
the trial court denied the motion to strike “without prejudice to the Defendants of
reconsideration after verdict” and further stated, “because the Court finds
Defendants’ motions for summary judgment are conditioned upon the Court
striking the intervention of Mark Boyd, the merits of those motions are not reached
at this time.”
2
CSI claims in its brief that the insurance “underwriters filed this lawsuit in
subrogation in the name of CSI, because it had the contractual obligation to carry
the insurance. CSI also sued for its uninsured damages, as did United Phosphorus,
Inc.” However, the original petition does not mention the insurance companies,
and UPI did not intervene until later. CSI’s original petition also named the
manufacturer and distributor of the hot box as defendants, but they were
subsequently dropped from the suit.
5
Gharda also moved pre-trial to exclude CSI’s expert witnesses. The trial
court conducted Daubert/Robinson hearings on the admissibility of the expert
testimony on May 5, 2009.3 Several experts testified at the hearing, including
Sammy Russo, CSI’s fire-origin expert; Andy Armstrong, a forensic chemist and
chemical fire expert; Nicholas Cheremisinoff, a chemist; and Shannon Rusnak, a
forensic accountant and CSI’s damages expert. The trial court denied Gharda’s
motions to exclude the testimony of these experts.4
D. Trial to a Jury
The trial lasted for approximately two weeks and included testimony from
twenty-two witnesses, many of them expert witnesses, and at least eleven volumes
of exhibits. Gharda and GUSA renewed their objections to CSI’s expert witnesses
at trial, and the trial court overruled those objections.
Robert Blair, the CSI employee who was present when the fire first broke
out, stated that he heard a sound like a truck crashing into the building, and, about
forty-five seconds later, he heard the fire alarms go off and saw smoke billowing
out of vents on the west side of the building. Firefighters responded. They
3
See Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579, 590, 113 S. Ct. 2786,
2795 (1993); E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 554
(Tex. 1995).
4
Gharda also challenged the admissibility of William Green’s testimony. He
testified at the Daubert/Robinson hearing, and his testimony was found reliable by
the trial court. He did not testify at trial, and, therefore, his testimony is not
challenged on appeal.
6
reported that the building was locked and they had to force their way inside. When
they entered the northwest quadrant of the building, they observed evidence of the
fire to their right, which was the southwest quadrant of building where the hot box
was located. Furthermore, firemen indicated that they did not open the hot box
doors in the course of fighting the fire.5
Sammy Russo, CSI’s fire-origin expert witness, investigated the fire. He
opined that the fire began in the hot box containing chlorpyrifos and spread to the
rest of the facility. Other experts, including Armstrong, a forensic chemist and
chemical fire expert, and Cheremisinoff, a chemist, testifying on behalf of CSI,
opined that the fire was caused by ignitable vapors produced during the
chlorpyrifos’s rapid decomposition and that the rapid decomposition was caused
by a contaminant in the chlorpyrifos.
Gharda presented expert testimony from Lloyd Hawkins, a certified fire
investigator, opining that the fire did not start in or near the hot box, but rather, it
started in the northwest quadrant of the warehouse. It also presented expert
witnesses Wayne Britton and John Cayais, expert chemists, who tested
chlorpyrifos to determine its flammability and who tested the retained samples
5
Gharda points out that not all of the firefighters were interviewed. The only
firefighter to testify at trial was Jerry Gardner, who was the chief of the Pasadena
Fire Department at the time of the fire and served as the incident commander.
Gardner testified about his own direct knowledge of the fire and the reports he
received from other firefighters during the course of the fire.
7
(“retains”) from the batches of chlorpyrifos sold to CSI and found that there was
no contamination.
Shannon Rusnak, a forensic accountant and expert on damages, Mark Boyd,
and others presented evidence of CSI’s damages as a result of the fire.
The jury reached the following conclusions:
 Question One: “Did the negligence, if any, of those named below
proximately cause the occurrence in question?” The jury was instructed on
the meaning of negligence, ordinary care, and proximate cause, and it
answered “no” as to CSI and “yes” as to both GUSA and Gharda.
 Question Two: “Was there a manufacturing defect in the Chlorpyrifos
Technical at the time it left the possession of [Gharda] that was a producing
cause of the occurrence in question?” The jury answered “yes.”
 Question Three: “Did [GUSA] exercise substantial control over the content
of the warning or instruction that accompanied the Chlorpyrifos Technical
sold to [CSI]?” The jury answered “yes.”
 Question Four: “Was the warning or instruction inadequate?” The jury was
instructed on what constitutes “adequate” warnings, and it answered “yes.”
 Question Five: “Did the plaintiffs’ damages, if any, result from the
inadequacy of the warning or instruction?” The jury answered “yes.”
 Questions Six and Seven: “Did [GUSA] make an express factual
representation to [CSI] about a material aspect of the Chlorpyrifos
Technical?” The jury answered “yes,” but it also found, in Question Seven,
that the factual representation was not materially incorrect.
 Questions Ten and Eleven: “Was there a defect in the marketing of the
Chlorpyrifos Technical at the time it left the possession of [Gharda] that was
a producing cause of the occurrence in question?” The jury was instructed
on the meaning of “marketing defect,” “adequate” warnings, “unreasonably
8
dangerous” products, and “producing cause.” The jury answered “no.” The
jury also responded “no” to the same question asked about GUSA.
 Question Twelve: “For each company you found caused or contributed to
cause the occurrence, find the percentages of responsibility attributable to
each . . . .” The jury found that CSI had 0% responsibility, that GUSA had
10% responsibility, and that Gharda had 90% responsibility.
 Questions Thirteen, Fourteen, and Fifteen: The jury found that GUSA and
CSI had “an agreement to sell Chlorpyrifos Technical that met product
specifications and was free of contaminants,” that GUSA failed to comply
with its agreement with CSI, and that GUSA’s breach of its agreement was
not a proximate cause of CSI’s injuries.
 Question Sixteen: Regarding damages, the jury found, for Boyd, that “[t]he
reasonable costs in Harris County, Texas to restore the building in question
to the condition it was in immediately before the occurrence in question”
was $1.9 million; for UPI, that “the difference in the market value in Harris
County, Texas, of [UPI’s] contents of the warehouse immediately before and
immediately after the occurrence” was $1 million; for CSI, the jury found
that the “difference in the market value . . . of [CSI’s] contents of the
warehouse immediately before and immediately after the occurrence” was
$2.3 million, that the difference in the market value of the contents of the
office building was $100,000, that the “reasonable and necessary costs for
environmental cleanup costs as a result of the occurrence” were $2.1 million,
that the “reasonable costs . . . for bulk tank repairs and cleanup costs” were
$20,000, that the “[r]easonable and necessary extra production costs” were
$950,000, and that lost profits amounted to $0.
The jury returned its verdict on February 25, 2010.
E. Post-Trial Motions and Final Judgment
On March 2, 2010, the trial court, on its own motion, ordered that all parties
attend post-verdict mediation with David Mathiesen within thirty days. Also on
March 2, 2010, the trial court granted “the Defendant’s Motion for Summary
9
Judgment as to All Claims of Mark Boyd.” This motion was originally filed by
Gharda and GUSA pre-trial, on September 2, 2009.
On April 6, 2010, CSI moved for judgment on the verdict.
On April 9, 2010, Gharda filed its “Response Opposing Motion for Entry of
Judgment.” Gharda argued that it was entitled to JNOV and that CSI had
erroneously included Mark Boyd in its proposed judgment because (1) the trial
court’s March 2, 2010 summary judgment had eliminated the award to Mark Boyd
and “Interested Insurers”; (2) CSI had “hidden what amounts of money the insurers
paid to each separate Plaintiff and why and when those payments were made”; and
(3) the insurers had never proved that they had paid any claims, and the motion for
entry of judgment offered no proof of that fact either, in that the attached copies of
a Lloyd’s insurance policy and three proofs of loss were not admitted as evidence
at trial. This motion asked that the trial court deny CSI’s motion for entry of
judgment and grant Gharda JNOV, or, alternatively, if the court entered judgment
for CSI, that the court not enter judgment for Boyd or the “Interested Insurers”
because the court had granted summary judgment on all of Boyd’s claims.
Also on April 9, 2010, Gharda moved for JNOV. In this motion, Gharda
argued that the “Plaintiffs cannot make a case based on speculation,” that the
Plaintiffs had “essentially tried the case as a res ipsa case even though CSI, not
Defendants, controlled the drums,” and that, “[i]n fact, the Court properly denied
10
Plaintiffs a res ipsa instruction.” Gharda argued that the jurors could not infer
contamination of the product without competent evidence of contamination and
that “although a jury could have chosen to disbelieve Gharda’s testimony about
what the retains [samples retained by Gharda from the batch of chlorpyrifos at
issue here] showed, the jury had no competent affirmative testimony on which to
conclude that the [chlorpyrifos] was defective when it left Gharda’s control.”
Gharda argued that there was no competent evidence to support the jury’s answer
to Question One on negligence and proximate cause because Cheremisinoff’s
testimony was incompetent. Gharda argued that he did not testify in terms of
reasonable probability (rather, he stated “reasonable possibility”) and that “his
testimony was conclusory and speculative, his testimony was unreliable under
Daubert standards, and his testimony reasoned backwards from a desired result.”
Gharda also argued that there was no competent evidence to support the
jury’s answer to Question Two, that a manufacturing defect was a producing cause
of the fire. It argued that the expert testimony on this subject was conclusory,
speculative, and unreliable under Daubert.
Finally, Gharda argued that there was no competent evidence to support the
jury’s answer to Question Sixteen regarding damages.
On April 23, 2010, CSI filed a motion for leave to amend its petition. It
alleged that the parties and the trial court had agreed that subrogation rights
11
involving the interested insurers would be addressed and calculated post-trial. It
further argued that the parties had treated the issue as if it had been pleaded, and,
therefore, it was tried by consent.
CSI also filed an amended motion for judgment on the verdict. In this
motion, it addressed Boyd’s claims, arguing that the trial court had erred in
dismissing his claims on limitations grounds, and it again argued that the interested
insurers had a contractual right of subrogation to the jury awards in favor of CSI
and Boyd.
On April 29, 2010, Gharda filed a response opposing CSI’s motion for leave
to amend its petition, arguing that the “insurers failed to appear or prove up their
damages” and that “there was no agreement to do so post-verdict.” Also on April
29, 2010, Gharda filed a supplement to its motion for JNOV. This supplement
argued that CSI “failed to disclose trial witnesses and had no good cause for their
[sic] failure.”
Finally, Gharda also responded to CSI’s amended motion for entry of
judgment, arguing that the trial court had correctly granted summary judgment on
Boyd’s claims and that CSI’s alternative judgment gave it $1.5 million more than
the jury awarded. GUSA filed a joinder in these motions.
On May 14, 2010, CSI responded to the motion for JNOV. It also argued
that GUSA’s motion to join Gharda’s motion was not sufficient for the trial court
12
to grant JNOV in favor of GUSA because the two companies “stand in different
shoes.”
On May 20, 2010, the trial court signed the following orders: (1) an order
denying CSI’s motion for leave to amend its petition; (2) an order denying CSI’s
motion for reconsideration of the trial court’s order granting Gharda’s motion to
dismiss all claims of Mark Boyd; (3) an order denying Gharda’s motion for JNOV,
including the supplement; and (4) an order denying GUSA’s motion for JNOV and
supplement.
Also on May 20, 2010, the trial court signed a final judgment awarding CSI
$4,923,000 from Gharda and $547,000 from GUSA, awarding UPI $900,000 from
Gharda and $100,000 from GUSA, and ordering that Boyd take nothing against
Gharda and GUSA.6
On June 9, 2010, Gharda filed its “First Amended Motion for Judgment
Notwithstanding the Verdict.” This motion again argued that CSI “cannot make a
case based on speculation,” that CSI “essentially tried this case as a res ipsa case,”
and that there was no competent evidence supporting the jury’s answers to
Questions One, Two, and Sixteen. Gharda also argued that CSI “failed to disclose
trial witnesses and had not good cause for their [sic] failure.”
6
The record does not provide a source for the damages amounts assessed here by
the trial court. These amounts do not correspond to the jury award or to the
motion to enter judgment on the verdict.
13
Also on June 9, 2010, Gharda moved for a new trial based on “the jury’s
prejudice” and on its arguments that CSI “cannot make a case based on
speculation,” that there was factually insufficient evidence to support the jury’s
answers to Questions One, Two, and Sixteen, and that CSI had failed to disclose
trial witnesses, specifically arguing that CSI “should not have been allowed to call
any witnesses based on their [sic] failure to timely and properly list them” in
response to Gharda’s timely, pretrial interrogatory and that CSI had no good cause
for this failure. Gharda further argued that CSI failed to provide the actual address
for Jerry Gardner, the former chief of the Pasadena Fire Department, even though
it knew his address. On June 17, 2010, GUSA joined Gharda’s amended motion
for JNOV, and it filed its own motion for new trial.
On July 8, 2010, CSI responded to these motions.
On August 10, 2010, the trial court denied Gharda’s and GUSA’s motions
for new trial.
Also on August 10, 2010, the trial court entered its “Amended Final
Judgment.” This judgment stated that the trial court “finds [CSI’s] expert
testimony is unreliable and constitutes no evidence of negligence, manufacturing
defect and causation and, therefore, cannot support the jury’s answers to jury
questions one and two. As a result, the court disregards the jury’s answers to
questions one and two, and finds for Defendants Gharda USA, Inc. and Gharda
14
Chemicals, Ltd. and grants, in part, Defendant’s Motion for Judgment
Notwithstanding the Verdict.” It vacated its May 20, 2010 judgment and order
denying Gharda’s motion for JNOV and ordered that “all Plaintiffs take nothing
against” Gharda and GUSA and that all of the plaintiffs’ claims were dismissed
with prejudice.
JURISDICTION
As a threshold matter, we address the trial court’s jurisdiction to enter JNOV
in this case.
CSI argues that the trial court granted JNOV sua sponte and thereby violated
Texas Rule of Civil Procedure 301, which provides:
The judgment of the court shall conform to the pleadings, the nature
of the case proved and the verdict, if any, and shall be so framed as to
give the party all the relief to which he may be entitled either in law or
equity. Provided, that upon motion and reasonable notice the court
may render judgment non obstante veredicto if a directed verdict
would have been proper, and provided further that the court may,
upon like motion and notice, disregard any jury finding on a question
that has no support in the evidence. Only one final judgment shall be
rendered in any cause except where it is otherwise specially provided
by law. Judgment may, in a proper case, be given for or against one or
more of several plaintiffs, and for or against one or more of several
defendants or intervenors.
TEX. R. CIV. P. 301.
In making this argument, CSI misrepresents the record. Gharda and GUSA
both moved for JNOV, and they both filed amended JNOV motions along with
their motions for new trial following the trial court’s original May 20, 2010
15
judgment. Any motions for new trial or motions to reconsider or modify this
judgment had to be filed within thirty days, or by June 21, 2010. TEX. R. CIV. P.
329b(a). Gharda filed its amended motion for JNOV and a separate motion for
new trial on June 9, 2010, and GUSA joined Gharda’s motion for JNOV and filed
its own motion for new trial on June 17, 2010. These timely motions extended the
court’s plenary power seventy-five days, to August 3, 2010, at which time all of
these motions were overruled by operation of law. TEX. R. CIV. P. 329b(c).
However, Texas Rule of Civil Procedure 329b(e) provides that when a timely
motion for new trial is filed, the trial court has plenary power to grant a new trial or
to vacate, modify, correct, or reform the judgment until thirty days after all such
timely-filed motions are overruled, either by a written and signed order or by
operation of law, whichever occurs first. TEX. R. CIV. P. 329b(e). Thus, the trial
court had plenary power to vacate the original judgment up until September 2,
2010, and the August 10, 2010 judgment vacating the May 20, 2010 judgment was
entered within the trial court’s plenary power.
We conclude that the trial court had jurisdiction to act as it did. We
therefore address the merits of the appeal.
JNOV
In its first, second, and third issues, CSI challenges the trial court’s JNOV.
16
A. Standard of Review
A trial court may grant a motion for JNOV if a directed verdict would have
been proper, and it may disregard any jury finding on a question that has no
support in the evidence. TEX. R. CIV. P. 301. A trial court may disregard a jury
finding and render JNOV if the finding is immaterial or if there is no evidence to
support one or more of the findings on issues necessary to liability. Tiller v.
McLure, 121 S.W.3d 709, 713 (Tex. 2003); Spencer v. Eagle Star Ins. Co. of Am.,
876 S.W.2d 154, 157 (Tex. 1994). A question is immaterial, for the purpose of
determining whether a court may disregard a jury finding, when the question
should not have been submitted or when it was properly submitted but has been
rendered immaterial by other findings. Spencer, 876 S.W.2d at 157.
A trial court properly enters a directed verdict (1) when a defect in the
opposing party’s pleadings makes them insufficient to support a judgment;
(2) when the evidence conclusively proves a fact that establishes a party’s right to
judgment as a matter of law; or (3) when the evidence offered on a cause of action
is insufficient to raise an issue of fact. M.N. Dannenbaum, Inc. v. Brummerhop,
840 S.W.2d 624, 629 (Tex. App.—Houston [14th Dist.] 1992, writ denied). In
such a case, the issue should not be submitted to the jury. See id.
In reviewing the rendition of JNOV, the reviewing court must determine
whether there is any evidence upon which the jury could have made the finding.
17
Tiller, 121 S.W.3d at 713; see also B & W Supply, Inc. v. Beckman, 305 S.W.3d
10, 15 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (holding that we review
JNOV’s under no-evidence standard). The reviewing court must view the
evidence in the light most favorable to the verdict, crediting favorable evidence if
reasonable jurors could and disregarding contrary evidence unless reasonable
jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005); see
Tiller, 121 S.W.3d at 713 (holding that, in reviewing “no evidence” point, court
views evidence in light that tends to support finding of disputed fact and disregards
all evidence and inferences to contrary); Bradford v. Vento, 48 S.W.3d 749, 754
(Tex. 2001).
To sustain a challenge to the legal sufficiency of the evidence to support a
jury finding, the reviewing court must find that (1) there is a complete lack of
evidence of a vital fact; (2) the court is barred by rules of evidence from giving
weight to the only evidence offered to prove a vital fact; (3) there is no more than a
mere scintilla of evidence to prove a vital fact; or (4) the evidence conclusively
established the opposite of a vital fact. Volkswagen of Am., Inc. v. Ramirez, 159
S.W.3d 897, 903 (Tex. 2004).
If some evidence supports the disregarded finding, the reviewing court must
reverse the JNOV and render judgment on the verdict unless the appellee asserts
cross-points showing grounds for a new trial. M.N. Dannenbaum, Inc., 840
18
S.W.2d at 628; Basin Operating Co. v. Valley Steel Prods. Co., 620 S.W.2d 773,
776 (Tex. Civ. App.—Dallas 1981, writ ref’d n.r.e.); see also Beckman, 305
S.W.3d at 15–16 (holding that we must uphold jury’s verdict and not trial court’s
judgment if more than scintilla of evidence supports jury’s finding). However,
JNOV is proper when the trial court is barred by the rules of evidence from giving
weight to the only evidence offered to prove a vital fact. Volkswagen of Am., Inc.,
159 S.W.3d at 903; see also Whirlpool Corp. v. Camacho, 298 S.W.3d 631, 638
(Tex. 2009) (holding that party may assert on appeal that scientific evidence or
expert testimony is unreliable and therefore legally insufficient to support verdict);
Coastal Transp. Co., Inc. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 234–
35 (Tex. 2004) (holding that expert witness testimony on gross negligence claim
was legally insufficient and rendering judgment that plaintiff take nothing).
B. Reliability of Expert Testimony
In its first issue, CSI argues that the trial court erred in disregarding the
jury’s answers to Questions One, Two and Sixteen and entering JNOV on the
issues of negligence, product defect, and causation. In its motion for JNOV,
Gharda argued that there was no competent evidence to support the jury’s answer
to Question One on negligence and proximate cause, because the testimony of
CSI’s expert, Cheremisinoff, was incompetent and unreliable; Gharda also argued
that there was no competent evidence to support the jury’s answer to Question
19
Two, that a manufacturing defect was a producing cause of the fire because the
expert testimony on this subject was conclusory, speculative, and unreliable under
Daubert; and it argued that, consequently, there was no competent evidence to
support the jury’s answer to Question Sixteen, regarding damages.
In determining whether the trial court’s rendition of JNOV was proper, we
must first determine whether the trial testimony of CSI’s experts was unreliable
and therefore constituted no evidence. The admission of expert testimony is
governed by Texas Rule of Evidence 702, which provides:
If scientific, technical, or other specialized knowledge will assist the
trier of fact to understand the evidence or to determine a fact in issue,
a witness qualified as an expert by knowledge, skill, experience,
training, or education may testify thereto in the form of an opinion or
otherwise.
TEX. R. EVID. 702; E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549,
554 (Tex. 1995). “Expert testimony is admissible if (1) the expert is qualified, and
(2) the testimony is relevant and based on a reliable foundation.” Cooper Tire &
Rubber Co. v. Mendez, 204 S.W.3d 797, 800 (Tex. 2006) (citing Helena Chem. Co.
v. Wilkins, 47 S.W.3d 486, 499 (Tex. 2001) and Robinson, 923 S.W.2d at 556).
“In deciding whether an expert is qualified, the trial court must ‘ensur[e] that
those who purport to be experts truly have expertise concerning the actual subject
about which they are offering an opinion.’” Mendez, 204 S.W.3d at 800 (quoting
Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 719 (Tex. 1998)).
20
Scientific testimony must be based on a reliable underlying scientific
technique or principle. Robinson, 923 S.W.2d at 557. “Scientific testimony is
unreliable if it is not grounded ‘in the methods and procedures of science,’ and
amounts to no more than a ‘subjective belief or unsupported speculation.’”
Mendez, 204 S.W.3d at 800 (quoting Robinson, 923 S.W.2d at 557). Expert
testimony may also be unreliable if “there is simply too great an analytical gap
between the data and the opinion proffered.” Id. (quoting Gammill, 972 S.W.2d at
727). “A flaw in the expert’s reasoning from the data may render reliance on a
study unreasonable and render the inferences drawn therefrom dubious. Under that
circumstance, the expert’s scientific testimony is unreliable and, legally, no
evidence.” Id. at 801 (quoting Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d
706, 714 (Tex. 1997)).
“Rule 702 envisions a flexible inquiry focusing solely on the underlying
principles and methodology, not on the conclusions they generate.” Robinson, 923
S.W.2d at 557 (citing Daubert, 509 U.S. at 593–94, 113 S. Ct. at 2797); see also
Allison v. Fire Ins. Exch., 98 S.W.3d 227, 238 (Tex. App.—Austin 2002, pet.
granted, judgm’t vacated w.r.m.) (“A trial court must focus solely on the validity of
principles and methodology underlying the testimony, not the conclusions
generated.”) (internal quotations omitted).
21
The Texas Supreme Court has identified six non-exclusive factors that trial
courts may consider in determining whether expert testimony is reliable:
(1) the extent to which the theory has been or can be tested;
(2) the extent to which the technique relies upon the subjective
interpretation of the expert;
(3) whether the theory has been subjected to peer review and/or
publication;
(4) the technique’s potential rate of error;
(5) whether the underlying theory or technique has been generally
accepted as valid by the relevant scientific community; and
(6) the non-judicial uses which have been made of the theory or
technique.
Mendez, 204 S.W.3d at 801 (citing Robinson, 923 S.W.2d at 557).
The supreme court has emphasized, however, that these factors are not
exclusive and that they do not fit every scenario. TXI Transp. Co. v. Hughes, 306
S.W.3d 230, 235 (Tex. 2010) (citing Gammill, 972 S.W.2d at 726); see also Ford
Motor Co. v. Ledesma, 242 S.W.3d 32, 39 (Tex. 2007) (holding that Robinson
factors are particularly hard to apply in vehicular-accident cases involving accident
reconstruction testimony). Thus, the supreme court has determined that, “[r]ather
than focus[ing] entirely on the reliability of the underlying technique used to
generate the challenged opinion, as in Robinson,” it is appropriate in some cases
“to analyze whether the expert’s opinion actually fits the facts of the case.”
Hughes, 306 S.W.3d at 235 (citing Volkswagen of Am., Inc., 159 S.W.3d at 904–
22
05). “In other words, we determine whether there are any significant analytical
gaps in the expert’s opinion that undermine its reliability.” Id.
Generally, rulings on objections as to the admissibility of evidence,
including whether expert testimony is reliable, are reviewed for an abuse of
discretion. Whirlpool Corp., 298 S.W.3d at 638. However, in a no-evidence
review, we independently consider whether the evidence at trial would enable
reasonable and fair-minded jurors to reach the verdict. Id. “[A] no-evidence
review encompasses the entire record, including contrary evidence tending to show
the expert opinion is incompetent or unreliable.” Id.
In Robinson, the supreme court held that it is not the trial court’s role “to
determine the truth or falsity of the expert’s opinion. Rather, the trial court’s role
is to make the initial determination whether the expert’s opinion is relevant and
whether the methods and research upon which it is based are reliable.” 923
S.W.2d at 558. The court held that the trial court’s exclusion of Robinson’s expert
testimony was not an abuse of discretion because “[i]t was not based upon a
reliable foundation.” Id. The court cited the fact that the expert “conducted no
testing to exclude other possible causes of the damage . . . even though he admitted
in his deposition that many of the symptoms could be caused by something other
than contaminated Benlate” and stated that “[a]n expert who is trying to find a
cause of something should carefully consider alternative causes.” Id. at 558–59.
23
The court further stated that the expert used “problematic” methodology and that,
while “[s]cientists may form initial tentative hypotheses,” by “coming to a firm
conclusion first and then doing research to support it,” the expert used unreliable
methodology. Id. at 559. Finally, the court considered that “[the expert’s] research
and opinions were conducted and formed for the purpose of litigation.” Id. The
court held,
The fact that an opinion was formed solely for the purposes of
litigation does not automatically render it unreliable. However,
“when an expert prepares reports and findings before being hired as a
witness, that record will limit the degree to which he can tailor his
testimony to serve a party’s interest.” On the other hand, opinions
formed solely for the purpose of testifying are more likely to be biased
toward a particular result.
Id. (quoting Daubert v. Merrell Dow Pharm., Inc., 43 F.3d 1311, 1317 (9th Cir.
1995) (on remand)).
In its motion for JNOV, Gharda asked the trial court to hold that the only
evidence in support of the jury’s answers to Questions One, Two, and Sixteen was
expert testimony, that the testimony of each of CSI’s experts amounted to “no
evidence” because it was unreliable, and that, therefore, the testimony of each of
these witnesses was inadmissible, and the court was barred by the rules of evidence
from submitting it to the jury. Our task, therefore, is to review the testimony to
determine whether the trial court erred in ruling that the testimony of these experts
24
was unreliable and, therefore, should not have been submitted to the jury,
justifying the rendition of JNOV.
1. Gharda’s Arguments in Support of JNOV on Expert Reliability
To establish that contaminated chlorpyrifos caused the fire that destroyed
CSI’s warehouse, CSI relied on the following experts’ testimony: (1) Sammy
Russo, a fire investigator, who testified that the physical evidence showed that the
fire started in the southwest portion of the building in the hot box and that the
damage to that area was consistent with a low-order gas explosion; (2) Harold
Rice, the lead investigator from the Harris County Fire Marshal’s Office, who also
testified that he ended his investigation with the conclusion that the fire started in
the hot box; (3) Roger Owen, an electrical engineer retained at Russo’s request to
inspect the hot box for mechanical or electrical malfunction, who determined that
mechanical or electrical malfunction of the hot box could be ruled out as a cause
for starting the fire in the hot box; (4) Andy Armstrong, a forensic chemist and
chemical fire expert contacted by Russo to analyze the potential cause of the
“differential burning” patterns around some of the drums in the hot box; and
(5) Nicholas Cheremisinoff, a chemical engineer, who testified that the EDC
contamination of the chlorpyrifos occurred at Gharda’s plant.
Gharda and GUSA argue that all of these experts are neither qualified nor
reliable. Therefore, we address the reliability of the testimony each of the experts
25
gave to determine whether the trial court properly ruled in response to Gharda’s
motion for JNOV that all of their testimony amounted to no evidence and should
not have been submitted to the jury.
2. Reliability of Sammy Russo’s Testimony
Gharda argues that the testimony of Sammy Russo, a fire investigator who
investigated the fire at issue in this case, was unreliable and should have been
excluded. Gharda admits that Russo followed the correct methodology, namely,
the National Fire Protection Association (“NFPA”) guide for fire and explosion
investigations, or “NFPA 921.” However, it argues that while Russo claimed to
follow NFPA 921 as his methodology, he did not do so faithfully. Gharda argues
that (1) Russo did not follow NFPA 921’s statement that fires usually start at the
lowest point in the areas of greatest burn; (2) Russo did no testing, including
failing to test his hypothesis about where the fire started; (3) Russo failed to
conduct interviews with persons with knowledge about the events; and (4) Russo
gave contradictory and evasive testimony regarding his ability to “identify the fuel
that fed a hot-box-started fire” and the explanation for differential burn patterns.
a. Russo’s Testimony
Russo testified that he followed the procedures and recommendations in
NFPA 921 and that the physical evidence showed that the fire started in the
southwest portion of the building in the hot box and that the damage to that area
26
was consistent with a low-order gas explosion. He testified that each investigation
effort is a little different because each fire is different, so there is not a
predetermined list of steps for investigators to follow. Russo first heard about the
fire on the news, and he was contacted by CSI’s attorney a few days later to aid in
the investigation into the cause of the fire.
Russo testified that the first thing he did was examine the outside of the
building. He got information from CSI personnel about what materials and
chemicals were in the building and where they were located, and he gathered
material safety data sheets, which contain information about physical and chemical
properties of the materials in the warehouse. Russo also interviewed CSI
personnel, including Robert Blair, who was present when the fire first broke out.
Blair told Russo that he heard a sound like a truck crashing into the building, and
then, about forty-five seconds later, the fire alarms went off.
Russo further testified that he was working with another investigator who
conducted interviews with the firefighters and related information back to him.
Russo testified that he did not want to interview a lot of the firefighters because he
had trained them and he did not want to influence them unduly.
After collecting information, Russo inspected the inside of the entire
building with a team of investigators. He looked at burn patterns and at items that
appeared not to have been damaged by the fire. Russo testified that the burn
27
patterns he found all led away from the hot box. He stated that “there was a
preliminary indication I had an area of origin in the southwest quadrant” because
he “had seen the ridge vent [in that area] compromised on the video.” He saw the
hot box with the hinges “pushed open” and determined that “the fire spread was
from that area.” Russo also noticed “a distortion of the roof above the hot box that
[he] typically see[s] in gas vapor explosions because when you get ignition, these
vapor clouds tend to expand three dimensionally where I had distortion of the
roof.” Russo further testified that he examined the “fuel load” and could “see
where the fire had followed the fuel past the wall behind the hot box.”
Following his inspection of the building with a team of people, including
some investigators who Russo believed were there on behalf of either Gharda or
GUSA, all of the investigators made a list of the samples they would like to have
taken. According to Russo, none of the investigators expressed any interest in the
northwest quadrant of the building at that time. Russo further testified that all of
the experts had input into developing a sampling protocol. Russo was concerned
about “the differential burning of the drums within the hot box, that even though it
was everybody’s understanding and my understanding that all the drums contained
the same product, something very different, you know, from a reaction standpoint
had occurred.” Russo also testified that he contacted Andy Armstrong, “a
competitor in the past in the laboratory business,” and asked for his input as to the
28
best protocol for collecting chemical samples from the drums in the hot box. He
detailed the protocol used for conducting the 3M charcoal badge testing and
explained how the testing canisters worked.
After the sampling was performed, Russo continued to inspect the facilities,
removing additional equipment and other items of interest. He testified, “When
you do a fire investigation, you’ve got to look at the whole picture. It’s—it’s got
many, many components and you’ve got to systematically examine them and then
either rule them in or out. So this is part of looking at other components in the
structure.” In addition to having an electrical engineer inspect fans, electrical
boxes, and other electrical components of the warehouse, Russo recommended
having another electrical engineer inspect the hot box because he “wanted to be
sure it was either working right or not.” Russo also testified that, after the building
was razed, he examined the concrete slab to determine if there were any areas of
extreme heat that he had missed on his earlier inspection.
Russo testified that the charcoal badges were removed for testing on April 9,
2004, and that his team “physically took samples from each drum.” He also stated
that he “didn’t try to save all of the drums because this is a permitted facility under
EPA, I believe; and you can’t keep waste materials at a facility like this for more
than 90 days. So we were under some regulatory pressure to get the samples
out . . . .” Russo testified about the science behind the 3M charcoal badge tests and
29
about how the tests were analyzed, and he stated that “in mass spectrometry, you
can look at selected ions, selected fragments from classes of compounds.” Finally,
he testified that “the bottom line is that while the material appears to be basically
the—the same product, there are differences within the product. They’re not—
they don’t all demonstrate they’re exactly the same. And it gives us some idea as
to what compounds might be there. Toluene showed—showed up, and I think
EDC showed up as well.” He testified that the results of the badge testing told him
“[t]hat the product is non-uniform or consistent, that there are differences within
the product that makes me question whether or not all of the product was on spec.”
CSI’s counsel asked, based on Russo’s review of the documents that were
produced during the investigation and in the course of the lawsuit, deposition
testimony, and news videos, “Have you formed an opinion which is based on
reasonable scientific probability as to the origin of this fire?” Russo answered,
“Yes, . . . [t]he origin is—is the area at the—at the hot box. And the point of
origin, which is a refinement of the identification of origin, is within the hot box.”
He went on to explain the basis of his opinion, which was based in part on news
footage, which early on showed fire in the area where the hot box was located, but
nothing in the northwest corner, where Gharda argued the fire started. He looked
at things like heating of the metal roof, burn patterns, paint discoloration, and the
displacement of a ridge vent on the roof over the location of the hot box. He
30
testified that the video showed firefighters entering the building through the
northwest quadrant early on in the fire, and he stated that “[t]hey’re reporting fire
off to their right, which is where exactly I would expect it to be”—in the direction
of the hot box area.
Russo testified that the fire progressed from the hot box area toward an area
referred to as the “label room” where “there’s a storage rack . . . that had cardboard
boxes that would have been the first combustibles that would have been ignited.”
Russo also testified that early on in the fire, there was “[n]o damage on the other
side of the building”:
[Russo]: The totes hadn’t started to burn. So they would
not be a—particularly a cause. You want to see
where the fire starts and how it progresses. You
got to add the dimension of time when you’re
looking at fire patterns.
[CSI’s counsel]: And by “totes” are you talking about the same
solvent area that we talked about . . . earlier?
[Russo]: The solvent area’s in here. . . . That’s the area of
the building that collapsed. And you look at the
after-the-event pictures, that’s where the fire
department let that burn so that didn’t all run out
and contaminate the environment and there’s a
tremendous amount of fire damage and if you’re
not trained in fire investigation, you might just
immediately say, Hey, greatest burn at the lower
burn, that’s it, without taking into consideration
the dimension of time and that would be a false
origin.
Same way with that northwest corner.
31
....
If you just read literally NFPA 921, it’s the
greatest burn at the lowest point and the reason
they say that is because fire burns up and out. It
rises. Okay? So where it starts it’s supposed to do
the greatest damage at the lowest point and spread
from there and it will also do the greatest damage
to the roof.
If you look at this and don’t take into
account the time element and that this had solvents
there, which are good fuels, and the fact that the
fire department didn’t suppress that, you—follow
NFPA 921 and you’re—you’re likely to pick that
as an origin. . . . or the northwest corner there.
But it was not involved in the—the initial video.
(Emphasis added.)
Russo also testified that his examination of the hot box revealed evidence of
damage to the hot box that was
very consistent with what I see quite frequently in my type of work,
natural gas explosions, as opposed to dynamite or something like that.
It’s a very low order explosion typically characterized by a
deflagration, which is a fancy word for a flash fire that accelerates.
When you trap a fire in a confined space and you add temperature
from the burning, for every 10 degrees Centigrade that you increase
the temperature, you double the reaction rate. So by having a vapor
fire in a confined space, you start increasing the rate and you can
accelerate that until you build a—you know, build pressure in the box.
In this case, you build very low pressure, probably in the order of 1 to
3 pounds.
With the 15,000 or so square inches of surface area on the door,
1 pound of pressure will give you 15,000 pounds of force against that
front door. It didn’t take a lot of pressure to spring the front door
latches, bend the hinges and the rumble or boom is the decompression
of that material into the—you know, as the doors open.
32
Russo went on to explain how the remainder of the damage to the hot box
was consistent with his belief that a low-order explosion occurred. He also
testified that the damage to the outside of the hot box indicated that there was not
“enough temperature on the outside of the box to get past the insulation of the hot
box to heat the contents, you know, to their flammable level.” Regarding the vent
at the back of the hot box, which Gharda argues was the weakest area of the hot
box and would have failed in the event of a low-order explosion, Russo disagreed,
stating that a “control rod going through the vent . . . reinforce[d] the vent. Plus
the surface area there, that’s a very small vent. You don’t have a lot of pounds per
square inch on the surface area of the vent. Plus you got a steel right up the middle
that holds the vent in place. You’re going have to [sic] bend that steel rod or
disjoin the vent flapper itself from the rod.” He testified that the “pressure
differential between the inside of the box and outside of the box is relatively small.
You don’t have enough force” to push the vent open, and that in his scientific
analysis of the issue, he would not have expected the vent to fail or be breached.
Russo further testified that he examined burn patterns all over the building
and that he examined the burn patterns from within the hot box and outside of the
hot box. Russo also testified that he examined and discarded the theory that some
propane from nearby tanks might have leaked out and come into contact with the
hot box to cause the explosion or that the smaller hot box might have somehow
33
been involved. He examined burn patterns and other characteristics of the fire
distribution.
Regarding the bungs, he testified, “[Y]ou notice the bungs [are] removed.
Those bungs, after the low order explosion, are going to be in the same spot. You
don’t have differential pressure to blow those bungs out or give direction to this—
this type of event.”
Russo testified that all of his investigation indicated “the fire actually
emanating at the hot box and then mov[ing] into the combustibles of the label
storage room.” He testified that he used the scientific method to arrive at his
conclusions and stated, “What I’m trying to do is bracket the area of origin, so if
all—either if all the indicators point to it or there’s something that says, Hey,
you’re not right. So I’m literally looking for that.”
During cross-examination, Russo agreed that the chlorpyrifos drums in the
hot box “showed no signs of explosion or high pressure . . . from within the
drum[s].” When counsel asked, “And you saw at least to some extent, the ones
you could see, you had the bung caps sitting right up there on top of the drums
where they had been set by the workers?” Russo replied, “Yes, sir. I didn’t—I
didn’t see bungs on any drums.”
Regarding testing, on cross-examination, Russo testified that the 3M badge
testing was the only testing he was aware of CSI having done—the other samples
34
that were collected from inside the chlorpyrifos drums were never tested, “though
there [were] other tests on other pieces of equipment.” Russo also testified that the
3M badge test was completely different from testing “the virgin product” before it
was damaged by fire. Regarding testing the coke and ash buildup from the burned
drums, Russo testified that, in some ways, the 3M badge test was different and in
some ways it was similar. He stated, “[O]ne of the things you would do with the
coke is to heat the coke, drive the vapors out of the coke and absorb it into a
charcoal strip or, in essence, a 3M badge. So in part this would be exactly the
same analysis that’s conducted on the coke material.”
Regarding the results of the 3M badge testing, Russo testified that type of
testing “can be” both qualitative and quantitative “with appropriate standards and
analysis. It’s used every day in the laboratory to measure how many parts per
million or how many parts per billion of compounds you have.” He testified that
in this case, the testing results were not quantitative, but that the results did present
the relative amounts of particular compounds.
Regarding differential burning, Russo testified that he identified the area
around drums two and three that showed different burn patterns, and he concluded
that the drums in that area were the ones that contained the contaminated
chlorpyrifos. Russo testified that he was not asked during his direct examination
about which contaminant caused the problem. Russo again testified that he did not
35
interview the firefighters—that he had another investigator do that and report back
to him the information developed in the interviews. He testified that firefighters
“saw fire in the northwest corner and that when they made entry, they saw it to the
right. They entered the main door and saw it to the right.” Russo also confirmed
that the drums that he identified as containing the contaminant were either TF-2,
TF-3, or TF-4 and that those same drums did not show any EDC levels in the
testing done by Dr. Armstrong.
Russo further testified that he received a number of documents from Gharda,
but, regarding testing done by Gharda or other experts, “[t]he chemistry has not
been my assignment. And I—I—there are chemists to evaluate that.” He testified
that he did not conduct any calculations or testing to determine what “the yield
strength of [the hot box latches] were” because he did not need to: “I know it
failed under the conditions of the event. I know that’s a fact.” Russo agreed that
the drums from the hot box had been exposed to other chemicals during the fire,
before the charcoal badge tests were performed. He testified that was “why we
were comparing the different badges to see what was the same in all of the drums.
That would be material that was absorbed from the warehouse. What we’re
looking for are spikes in chemicals that were not evenly distributed in the sample.”
He testified, consistent with his deposition testimony, that he was not prepared to
36
identify which chemical caused the fire or what the ignition source might be. He
testified that possible ignition sources he considered were
electrical sparking, perhaps a connection on the heater strips. That’s
why I asked that—that hot box be sent to an electrical engineer, Mr.
Owens, who made an examination to see if there were any sparks.
Also made a determination as to whether or not the hot box is
operating correctly. That’s one possibility.
Thermal degradation of the product. The product, when it
degrades, it becomes exothermic, which means it’s self-heat
generating, and that can accelerate the—the product to a temperature
that you can get—you will get auto ignition or can get auto ignition.
Obviously with a recirculating system, if you got particulates in
that system, you can generate static electricity. . . . At this point I
don’t have an ignition source that I’m willing to identify within a
reasonable degree of scientific probability. I’ll defer to the chemist
who’s looked at that.
GUSA’s counsel asked, “If no one can tell us how much fuel was in there,
then we can’t possibly say what caused this fire?” Russo responded, “I—I
wouldn’t agree with that. I just said I wouldn’t do it. . . . I would want to know
that I had sufficient fuel to reach the lower explosive limit and that that would be
available in the original product.”
On redirect-examination, Russo testified that his investigation indicated that
the fire started with “ignitable vapor within the hot box” and that the only thing in
the hot box was drums of chemicals from Gharda, so he concluded, based on those
two facts, that the ignitable vapor came from the Gharda chemicals. He testified
that all of the evidence he looked at led to that conclusion and that the fact that he
did not have an ignition source that he could identify “probably means I’m just not
37
smart enough to identify it or I haven’t seen enough evidence. But the bottom line
is we did have ignition. So I know it exists. It’s not a—not an imaginary thing.”
He also testified that the products in the warehouse fire had been
“significantly heat stressed. EDC’s a very volatile product. For it to remain after a
fire like this would be a bit unusual and might indicate a very high concentration”
but that he “would defer to the chemist the things” that were within the chemist’s
purview. Gharda’s attorney asked if he could have concluded two days after the
fire what caused it. Russo testified that “there may be fire investigators who would
determine the cause as being an explosion in the hot box and it would be possible
to do that,” but he did not do that. He testified that he had “a higher standard of
scientific responsibility to eliminate a number of possibilities, and I systematically
did that for my job” and that he had to follow the scientific method. He
specifically testified that he did not start his investigation with any particular
conclusion in mind and that he does not “reverse engineer” his investigations.
b. Analysis
To show that Russo’s testimony was unreliable as a matter of law and,
therefore, barred by the rules of evidence and improperly submitted to the jury,
Gharda had to show that Russo was unqualified or that his testimony was not
relevant or reliable. See Mendez, 204 S.W.3d at 800; Robinson, 923 S.W.2d at
556. Gharda challenged the relevance and reliability of Russo’s testimony. It
38
makes no argument and cites no authority showing that Russo, as a professional
fire investigator, was unqualified to opine on the origin of the fire. We conclude
that Gharda failed to show that this testimony should have been barred.
Russo testified that the nature of investigating the origin of a fire is
something that is not readily subject to testing. Rather, it involves application of
some standard protocols and depends to some extent on the experience and
subjective interpretation of the investigator. In this regard, Russo’s investigation is
comparable to other types of accident-reconstruction testimony, in which the
supreme court has held that it is appropriate to analyze whether the expert’s
opinion actually fits the facts of the case and whether there are any significant
analytical gaps in the expert’s opinion that undermine its reliability. See Hughes,
306 S.W.3d at 235; Ledesma, 242 S.W.3d at 39. Russo testified regarding the very
thorough nature of his investigation, the multiple theories or potential sources for
the fire he considered and the reasons he rejected many of those theories, and the
use he made of other information and physical evidence from the fire. He based
his opinion regarding the location of the origin of the fire on video footage taken
by news helicopters during the fire, on firefighter testimony, information about the
contents of the warehouse, burn patterns and physical evidence at the scene,
including the nature of the damage to the hot box itself, and several other sources.
Thus, we conclude that, although his theory, by nature of the investigation itself,
39
does not lend itself to testing, his opinion fits the facts of the case and there are no
significant analytical gaps in his testimony explaining why he determined that the
fire originated in the hot box. See Hughes, 306 S.W.3d at 235.
Gharda’s argument that Russo did no testing, including that he failed to test
his hypothesis about where the fire started, is without merit. Gharda argues, “For
example, if the hot box had contained drums with water, Russo would have
reconsidered his origin assumptions. Though the drums did not contain water, the
same principle applies.” Furthermore, the evidence shows that Russo conducted
testing on the contents of the drums and recommended that a chemist interpret
those tests. The tests showed that the drums did not contain a benign substance
such as water; rather, they contained known flammable substances. This was
sufficient testing to support Russo’s conclusion that ignition of flammable vapors
in the hot box was the source of the fire. Russo also had Owen, an electrical
engineer, inspect the hot box and other items for a mechanical or electrical
malfunction.
Russo’s testimony is also reliable when considering several other Robinson
factors. See Whirlpool Corp., 298 S.W.3d at 639–40 (recognizing that some
subjects do not lend themselves to scientific testing and scientific methodology,
but that many cases require evaluating expert testimony by considering both
Robinson-type factors and by examining for analytical gaps in testimony). The
40
methodology Russo used in conducting his investigation, NFPA 921, has been
subjected to peer-review and publication, and it has been generally accepted as
valid by the relevant scientific community. It is the method used by the Harris
County Fire Marshal’s Office and many other accredited fire investigators, and
Gharda does not dispute the validity of the NFPA methodology. See Mendez, 204
S.W.3d at 801 (discussing Robinson factors).
Gharda claims, however, that Russo violated NFPA’s standard that the
investigator “interview people with knowledge of information about the events” by
failing to interview firefighters. However, this is a mischaracterization of the
evidence. Russo testified that he did not personally interview the firefighters, but a
member of his investigatory team conducted those interviews and reported back to
him. Thus firefighter interviews were conducted as part of Russo’s investigation.
Gharda also claims that Russo did not follow NFPA 921’s statement that
fires usually start at the lowest point in the areas of greatest burn. However,
Russo’s testimony explained why CSI’s fire presented an unusual situation and
why he concluded that the fire started in a different location, namely, the initial
videos did not show that the lowest point was involved in the early stages of the
fire. He also testified that some of the chemicals in the warehouse burned hotter
than other materials in spite of burning for shorter amounts of time, which would
affect the appearance of the burn patterns, and that firefighters made the decision
41
to let certain areas of the warehouse burn longer than others as a method of
preventing environmental contamination, which also affected the appearance of
where the “greatest burn” would have occurred. Russo testified that NFPA 921’s
recommendations are guidelines that must be used flexibly because every fire
investigation is unique, just as each fire is unique. Gharda presented no
contravening evidence that NFPA recommendations are inflexible standards that
must be strictly followed in every case. Nor did it present any evidence that the
fire actually started at the lowest point. Therefore, it failed to carry its burden of
showing that Russo’s testimony should have been barred on this ground.
The methodology Russo employed has been put to non-judicial uses—in
fact, its primary use is to determine the origin of fires. Russo testified that his own
involvement in this case began as a fire-origin investigator in the immediate
aftermath of the fire and that he formed his opinions regarding the origins of the
fire in that capacity. See Robinson, 923 S.W.2d at 559 (holding that, although
opinion formed solely for purposes of litigation does not automatically render it
unreliable, “when an expert prepares reports and findings before being hired as a
witness, that record will limit the degree to which he can tailor his testimony to
serve a party’s interest”) (quoting Daubert, 43 F.3d at 1317).
Furthermore, Russo testified regarding his general use of the scientific
method and proper investigative protocols—he conducted a thorough investigation
42
of the premises, collected several samples, and investigated other possible causes
that he eventually ruled out. His testimony explained the methods he used—
generally accepted methods—to reach his conclusion regarding the place of origin
of the fire. Gharda presented no evidence that the methods used by Russo to reach
his conclusion regarding the place of origin of the fire were not a generally
accepted methodology.
Finally, Gharda argues that Russo gave contradictory and evasive testimony
and points to Russo’s testimony about the progression of the fire beyond the hot
box and the burn patterns surrounding the area of the hot box and about the
possibility of the fire starting outside the hot box. Gharda argues that this
testimony demonstrates that Russo began with a specific result in mind and did not
conduct his investigation to test that theory but instead just looked for evidence to
support it.
However, viewing Russo’s testimony as a whole, we conclude that Gharda
mischaracterizes his testimony. Russo testified that he conducted a thorough
investigation of the entire property and identified several different alternate
theories that he eliminated. He examined burn patterns and fuel load as well as
sampled and examined equipment and electrical connections throughout the
building. Finally, he testified that he used the scientific method and conducted a
43
thorough investigation over the course of several weeks to arrive at the conclusions
he presented.
We conclude that CSI established Russo’s reliability and that Gharda failed
to carry its burden of showing, in its motion for JNOV, that Russo’s evidence was
unreliable. We hold that the trial court erred in concluding that Russo’s testimony
was unreliable, constituted no evidence, and should have been barred. Therefore,
the trial court erred in counting Russo’s testimony as no evidence of defect,
negligence, or causation.
3. Reliability of Harold (Buddy) Rice’s Testimony
Gharda argued in its motion for JNOV that Rice, the lead investigator from
the Harris County Fire Marshal’s Office, was unqualified and unreliable because
he (1) repeatedly violated the NFPA standards he purported to follow by focusing
his investigation on the hot box after CSI’s employees told him the hot box was the
only thing on, (2) did not sufficiently investigate the warehouse and failed either to
determine an ignition source or to conduct a thorough investigation into finding an
ignition source, (3) testified inconsistently, (4) did no testing, and (5) was not
competent to investigate the fire. To support its argument that Rice was
unqualified to investigate the fire and that his testimony was unreliable, Gharda
points to Wal-Mart Stores, Inc. v. Merrell, 313 S.W.3d 837, 839–40 (Tex. 2010),
to support its contention that “[a]n expert’s failure to rule out potential ignition
44
sources makes his testimony unreliable,” and to Whirlpool, 298 S.W.3d at 642–43,
to support its contention that “failure to test or measure or calculate makes an
investigation incomplete and testimony unreliable.”
Gharda also argues that Rice was not a competent witness because he was
fired from the fire marshal’s office for failing to follow up on witness interviews,
he did not have the proper experience with explosions, and he could not define
standard fire investigation terms.
a. Rice’s Testimony
Rice was the lead investigator from the Harris County Fire Marshal’s Office
who responded on the morning of the fire to investigate its cause and origin. Rice
testified that he was a certified arson, fire, and explosion investigator and that he
had twenty-two years of experience doing fire investigations, and he agreed with
Russo that NFPA 921 was the proper methodology for investigating the CSI fire.
He also testified that NFPA 921 permitted testing of the investigator’s hypothesis
regarding the origin or cause of the fire to be done through either experimentation
or deductive reasoning.
Rice’s team of investigators interviewed witnesses from CSI and from the
first-responders, including several firefighters. A CSI employee told him that the
hot box was the only equipment that was left on the night before the fire. Rice
concluded, after observing burn patterns and other evidence at the scene, that the
45
fire originated in the hot box. His report concluded that the probable cause of the
fire was the ignition of an unknown vapor inside the hot box.
Rice testified that he did not thoroughly investigate the entire warehouse
because he did not have access to all portions of the warehouse, due to fire
damage, and he conceded that he did not spend any significant amount of time
examining the northwest quadrant of the building—the area in which Gharda
argued that the fire originated.
b. Analysis
Rice used similar methodology and fire investigation procedures as those we
have already determined were reliable in our analysis of Russo’s testimony.
Gharda presented no evidence that Rice violated NFPA standards by focusing on
the hot box under the circumstances of this case. Nor did it present any evidence
or argument that Rice’s investigation of the warehouse was insufficient under
NFPA standards. Gharda’s contentions that Rice failed to conduct a thorough
investigation under NFPA standards, failed to determine an ignition source, and
was not competent to investigate the fire are all unsupported by the record and
contrary to it.
We conclude that Gharda failed to show in its motion for JNOV that Rice’s
testimony was unreliable and inadmissible. Therefore, we hold that the trial court
46
erred in concluding that this testimony amounted to no evidence and should not
have been submitted to the jury.
4. Roger Owen’s Testimony
Gharda does not raise any arguments regarding Owen’s qualifications or
reliability in its appellate brief. However, CSI argues that his testimony supports
the jury’s verdict and should have been considered by the trial court in ruling on
Gharda’s motion for JNOV.
Roger Owen testified as an expert electrical engineer and expert in fire
causation. His investigation included removing and inspecting multiple electrical
boxes and wiring, in addition to an examination of the fan in the hot box. Based on
his inspections, he ruled out mechanical or electrical malfunction as the cause of
the fire. Owen also testified, during Gharda’s presentation of its case, that he ruled
out mechanical or electrical failure of the hot box as the cause of the fire. This
unchallenged evidence demonstrates that CSI retained experts to investigate
multiple potential causes of the fire and supports the jury’s verdict.
5. Reliability of Andy Armstrong’s Testimony
Gharda argued in its motion for JNOV that the testimony of Andy
Armstrong was not reliable and should have been kept from the jury. Specifically,
Gharda argues that (1) Armstrong did not offer reliable testimony of defect or
causation because neither he nor Cheremisinoff, one of CSI’s causation experts,
47
tested their defect, ignition, or causation theories, (2) no literature supported
Armstrong’s claim that allegedly defective chlorpyrifos could explode or ignite,
and (3) Armstrong never identified an alleged defect, a source of ignition, or a
cause of the fire.
a. Armstrong’s Testimony
Armstrong is a forensic chemist and chemical fire expert contacted by Russo
to analyze the potential cause of the “differential burning” patterns around some of
the drums in the hot box. He used 3M charcoal testing badges to test vapors in the
drums and detected the presence of toluene and EDC in some of the drums.
Armstrong testified that the material in the drums was not uniform, that toluene
and EDC were both flammable solvents, and that either can cause an explosion or
fire if present in a sufficient amount. Armstrong also opined that EDC
contamination caused rapid decomposition of the chlorpyrifos and created
significant flammable vapors that auto-ignited.
Armstrong testified that he was a chemist and that he ran a laboratory called
Armstrong Forensic Laboratory. He testified that his laboratory “got its foundation
in fundamental work doing fire investigation, identifying ignitable liquids from
suspect fires” and that it currently does the same thing “as well as environmental
testing.” He testified about his education and other professional background.
48
He testified that he became connected to this case when some samples were
submitted to him for testing and that he subsequently rendered his opinions. He
testified that the type of testing he used in this case—“ignitable liquids
recovery”—was “primarily developed to assist a field investigator to establish
what burned at a fire,” that “over the years it’s developed into a standard test. It’s
been a standard test since about 1989, 1990, when it was first developed,” and that
“[i]t’s been tried and true, and it was not developed specifically for this endeavor.”
He further testified that he tested the 3M badges sent to him by Russo in
accordance with “ASTM E1618,”7 which provides the standard test method for
ignitable liquid residues in extracts from fire debris samples by gas
chromatography-mass spectrometry, like the 3M badges. He detailed the findings
in his report, beginning with the steps he went through to comply with the standard
for testing and the results.
Attorneys for Gharda and GUSA both objected to this testimony based on
the fact that Armstrong did not “qualify under [the] Daubert/Robinson standard.
There’s no reliability to his testimony. . . . There’s no scientific basis for his
testimony as it relates to this case.” The trial court overruled this objection.
Armstrong then testified that the results of the badge testing showed that, for
drum TF-1, “a lot of toluene [was] produced in the recovery. Ultimately we went
7
“ASTM” stands for the “American Society for Testing and Materials.”
49
back and looked at this same analytical data and found detectable levels of
ethylene dichloride or dichloroethylene, depending on which way you want to
name it. . . . EDC.” CSI’s attorney asked him why he went back to look for EDC,
and Armstrong testified:
When we initially did the analysis, I have no knowledge of how this
material is manufactured, I have little knowledge of what burned in
the fire. I’m just reporting what the vapor space is producing from
these different barrels.
We have a high level of toluene. Toluene is . . . a flammable
liquid. And not knowing what to anticipate, we report that we have
significant levels of toluene in the system left over after the fire.
Ultimately, through discovery, the attorneys find out that
toluene is not used in the production of chlorpyrifos; EDC is used in
the production of chlorpyrifos. And I was requested to go back and
look at the analytical data and see, did you detect in the original
analysis that EDC was present at a detectable level.
Armstrong testified that he did as requested, found that EDC was present, and
wrote a report on that finding.
Armstrong testified that he then “looked at the analytical information, the
material safety data sheets [‘MSDS’] that were provided” by Gharda for “warnings
on the system . . . [,] for any kind of chemical hazards that may [be] present, the
flashpoint, the decomposition temperature, everything you can find out about this
particular product.” He stated that U.S. law requires companies like Gharda to
furnish the MSDS so that consumers can understand the properties of the chemical
materials. He learned that the material would thermally decompose, according to
the MSDS, at 266 degrees Fahrenheit. He testified that he did further research into
50
the thermal ability of chlorpyrifos by examining other internal documents stamped
with GUSA’s name that indicated lower temperatures for decomposition. He
found that there was a “great discrepancy” between the decomposition temperature
provided by the Gharda MSDS and the internal documents Gharda had on the
subject.
Armstrong testified that he relied on another study completed by a third-
party lab, which reported that “violent decomposition” of chlorpyrifos would occur
at 222 degrees Fahrenheit.8 He testified that he found another article “published by
the Austrialian equivalent to the EPA indicating thermal decomposition at low
temperatures. We found additional material safety data sheets from Dow and other
producers of the product indicating that it would spontaneously decompose under
elevated temperature.” Armstrong concluded that this information told him
that we have a mechanism to generate a lot of vapor inside this hot
box due to the thermal decomposition, spontaneous thermal
decomposition. We know that the intent of the hot box was to melt
the product.
Chemically we know that reactions go faster the higher the
temperature. Chemically we know that reactions go faster in solutions
than they do in solids. So we have a lot of independent information
8
The record reflects that CSI sought to admit the study, which it claims was
produced by Gharda in the course of litigation, and that the published study itself
stated at the bottom that it was sponsored by Gharda. Gharda objected to its
introduction into evidence as hearsay, and the trial court sustained the objection.
Armstrong was allowed to testify that he relied on it, but he was not allowed to
testify as to “what it [was].” Armstrong testified on the record that the study was
performed by Inveresk and was sponsored by Gharda.
51
about the properties of the material, and most of that information
came from Gharda.
Regarding the ignition source of the vapors that were being produced in this
system, Armstrong stated:
It’s fairly obvious in looking at this data and the stability of the
compound and the temperatures that were invoked, 180 degrees
Fahrenheit, that over an extended period of time, this material was
going to decompose. That’s a given.
....
[T]here are basically three things that you can relate to the ignition.
Either I had a spark—and the static can be generated because of the
circulation of gases in the hot box—or I had a significant
concentration of something—what the chemist would call a free
radical.
The generation of the free radicals comes from this particular
barrel, because it had the most damage, where it began to decompose
early.
Armstrong testified that particular barrel would reach its melting point earlier than
the other barrels because, according to “Raoult’s Law,” the melting point of a
material is lower when there is an impurity in that material. He testified that
based on all the information that I read, that there was an impurity in
some of the drums. As a result of that impurity, I lower the
temperature, it begins to melt at a lower temperature.
When I melt it at a lower temperature, the liquid molecules
have a chance to bang into each other very nicely. That causes them
to decompose.
When I add more decomposition products, I have more
impurities. When I have more impurities, the melting point keeps
going down. So it just takes a little bit to start it, but then I get the
whole barrel melted early.
52
And from the analytical data that was provided to me, this
material starts to decompose. When it decomposes, it generates heat.
When it generates the heat, because I’m in a sealed box, big barrel, I
don’t have any place for that heat to go, the internal product gets
hotter.
And when it gets hotter, we’re going to cook the egg a little
faster. And sooner or later we’re going to generate so much heat that
it’s going to reach one of these multiple decomposition temperatures
and erupt.
When it erupts, it generates a lot of vapor in the hot box. I have
in that vapor free radicals. I have partial molecules. I’ve got a very
active gas . . . . I generate a large amount of gas in this hot box.
It is auto ignition. It is going to start a combustion process
because I have such a high concentration of free radicals. Fire is
nothing more than a free radical reaction that is sometimes controlled
and sometimes not.
Armstrong testified that toluene is a thermal degradation product—a by-
product of the chemical reaction that occurs as the chlorpyrifos decomposes.
However, he did not believe the EDC was a thermal degradation product of this
decomposition because he “could not find a mechanism, a chemical process, to
generate EDC by the thermal decomposition of the product.” Thus, he concluded
that the “EDC was in the container at the time of manufacture and shipping.”
He concluded:
As the exothermic decomposition occurred, the system got hotter. As
it gets hotter, the reaction proceeds more rapidly, and I generate an
awful lot of smoke inside the vessel.
And at some point in time, it either was concentrated enough to
auto ignite or a static discharge caused it. And it really doesn’t make
much difference whether the toluene got ignited first or the EDC got
ignited first or some other decomposition product, the other two
unknown and unidentified, got ignited first.
53
It’s the complex smoke system inside this box with the oxygen
that touched off the event that blew open the doors that burned the
building down.
Armstrong testified that CSI had not had this problem before, in spite of its
frequent use of the same product, because it had not received contaminated product
before and that the product was defective in the way it was marketed because the
“decomposition temperatures were not correctly reported to the general public on
the material safety data sheets. It decomposes at a lower temperature.” He also
testified that a reasonable scientific probability existed that there was a
manufacturing defect in the batch of chlorpyrifos in question. He testified that he
considered other possibilities and “ran through quite a few scenarios in my head as
to how I can get this system to do what it did” and that he followed the scientific
method in arriving at his conclusion.
On cross-examination, Gharda’s lawyers questioned Armstrong about his
allegedly changing opinions: his original opinion that toluene was the
contaminant, then his subsequent opinion that EDC was the contaminant and was
ignited by an unknown ignition source, and then his final conclusion that EDC was
the contaminant and the vapors spontaneously combusted—that “it just heated up
so hot it ran away on its own and didn’t even need an ignition source.” Armstrong
testified,
54
But, sir, that is the ignition source in a self-heating spontaneous
combustion. I don’t have an independent piloted ignition source. I
have to have a high concentration of reactive molecules to cause it.
Now, I did not say that was the exclusive ignition source.
There’s still the probability—or possibility of static in the system
because I’ve got circulating air. And I’ve said may times that I cannot
differentiate between the two; but it is my opinion as a chemist and
what I know about self-heating, and how a fireplace catches on fire
and a few other things, that it’s an overconcentration of free radicals
in the system that caught fire.
The question in my mind is the source of the free radicals.
Regarding his changing opinion, Armstrong testified, “I think that’s
evidence of the use of the scientific method. As additional information comes
forth, as a scientist I have the privilege and responsibility to modify the hypothesis
or modify my opinion based on the evidence presented.” Gharda’s attorney asked
whether everything Armstrong’s firm did involved litigation, and Armstrong
replied, “No . . . . Everything the company does may become involved in
litigation, not that it is involved in litigation. . . . We analyze children’s toys for
lead and phthalates. We do a lot of different things.”
b. Analysis
Armstrong’s testimony indicated that he relied on the methodology
established by ASTM E1618 in conducting and interpreting the charcoal badge
tests. He also relied on established scientific principles and on information
regarding the scientific nature of the chemicals involved that he received from
Gharda itself and from other published tests. Thus, his opinion was based on
55
methodologies and techniques that had been published and subjected to peer
review and that had been generally accepted as valid by the relevant scientific
community. He also testified that these principles were used for many purposes
and were not just for judicial use. He testified that he was contacted by Russo in
the course of Russo’s investigation into the origin of the fire, that he consulted with
Russo on the best way to collect vapor samples, and that he was asked to provide
the chemical expertise necessary to aid in Russo’s investigation into the cause of
the fire, all prior to being asked to testify at trial. See Mendez, 204 S.W.3d at 801
(discussing Robinson factors).
Armstrong used these established testing methods to test the vapors
remaining in the drums after the fire, and he based his conclusions on those test
results. He also testified that further “testing” of his theory was not possible
because it would essentially require recreating the explosion on the same scale as
the one that caused the initial fire. He based his theory of how the fire occurred on
the known chemical properties—obtained from Gharda itself and from other
published laboratory tests—of the chlorpyrifos and the flammable vapors shown
by the badge tests to have existed in a few of the drums.
Gharda argues that Armstrong reached his conclusion first and then tried to
justify it and that he failed to conduct proper testing. According to Gharda, the
only tests he performed—the 3M charcoal badge tests—were faulty and proved
56
nothing. Gharda failed, however, to produce any evidence that the 3M badges
were not tested in accordance with the ASTM standard test method for ignitable
liquid residue and failed to show what other testing could have been done that
would have been helpful to support Armstrong’s theory. It is not in question that
the particular vapors identified by Armstrong—the EDC contaminant and toluene
decomposition by-product—are flammable. The known scientific principles that
Armstrong related support his conclusion, and in order to recreate the spontaneous
combustion or static charge within the system, he would have needed to basically
recreate the entire explosion.
We conclude that the contentions made by Gharda regarding the reliability
of Armstrong’s testimony are actually arguments concerning the propriety of the
conclusions that a juror could have drawn from Armstrong’s testimony. These
contentions are not supported by the testimony, and they do not concern
Armstrong’s qualifications or methodology. Gharda failed to show that this
testimony did not satisfy the Robinson factors for determining the reliability of
expert testimony, and we conclude that it does satisfy those factors.9 See id. (citing
Robinson, 923 S.W.2d at 557 (reciting factors in determining reliability)).
9
Gharda also argues that Armstrong’s testimony has been excluded as unreliable by
at least one other court. We conclude that this argument is not relevant to the
admissibility of Armstrong’s testimony in this case.
57
Therefore, we hold that the trial court erred in ruling that Armstrong’s testimony
amounted to no evidence and should not have been submitted to the jury.
6. Admissiblity of Nicholas Cheremisinoff’s Testimony
Finally, Gharda argued, and the trial court agreed in entering its JNOV, that
Nicholas Cheremisinoff’s testimony regarding flaws in the manufacturing and
quality control processes at Gharda was unreliable so that his testimony amounted
to no evidence and should not have been submitted to the jury.
a. Cheremisinoff’s Testimony
Cheremisinoff was CSI’s expert on Gharda’s manufacturing process and
quality control. He testified that he has a Ph.D. in chemical engineering and has
worked for several chemical manufacturing plants, including Exxon. He testified
that he reviewed the manufacturing and quality control processes used by Gharda
in manufacturing the chlorpyrifos. He also reviewed witness testimony, the
product specifications provided by Gharda, the physical evidence and forensic
samples available after the fire, and the testing of the retains—the samples of
chlorpyrifos retained by Gharda from the batches sold to CSI—performed by
Gharda’s experts. Cheremisinoff opined that the flaws in the manufacturing and
quality control processes at Gharda made it “quite possible, well within scientific
certainty, that there are manufacturing flaws” that led to contamination of the
chlorpyrifos at the plant. He also testified regarding flaws in Gharda’s sampling
58
methods and opined that testing of the retains was not a reliable way to determine
whether the chlorpyrifos was contaminated at the time Gharda manufactured it and
sealed it into the drums.
b. Analysis
In its motion for JNOV, Gharda argued that Cheremisinoff testified in terms
of the “possibilities” and did not offer reliable testimony on negligence, existence
of a defect, or causation. Specifically, it argued with respect to these claims that
Cheremisinoff misunderstood Gharda’s production process and never observed
Gharda’s plant or procedures; instead, he only reviewed Gharda’s manufacturing
protocols. Gharda also argued that Cheremisinoff relied on “facts contrary to
actual facts” when testifying about the amount of EDC in the two drums; that he
did no testing of Gharda’s procedures, had no peer-reviewed studies criticizing
Gharda’s procedures, and cited no publications criticizing those procedures; that he
could not identify an ignition source; and that he “failed to follow a methodology
or account for facts contrary to his opinions.”
However, Cheremisinoff explained, using scientific principles, why
Gharda’s testing procedures were insufficient. Cheremisinoff also testified that he
used generally accepted scientific principles relating to proper testing methods to
support his conclusions. Gharda has presented no evidence that this testimony was
false or that the testing principles used by Cheremisinoff were not reliable.
59
Finally, regarding Gharda’s complaint that Cheremisinoff could not identify an
ignition source, Cheremisinoff’s testimony indicated that he was not asked to
investigate or reach any conclusion on a possible ignition source. Armstrong was
CSI’s expert on identifying an ignition source. We conclude that Gharda failed to
show that Cheremisinoff’s testimony was unreliable under the Robinson factors.
See Mendez, 204 S.W.3d at 801 (citing Robinson, 923 S.W.2d at 557) (reciting
factors in determining reliability)).
7. Conclusion on Reliability of CSI’s Expert Witnesses and Response
to the Dissent
In sum, Russo and Rice provided sufficient evidence on the origin of the
fire, and Armstrong provided sufficient evidence on the cause of the fire.
Cheremisinoff provided evidence of defects in the manufacturing process that
could have allowed a reasonable juror to conclude that Gharda was responsible for
the contamination that Armstrong identified as the cause of the fire. We hold that
the trial court erred in deeming any of CSI’s expert testimony to be unreliable,
much less all of it, and in granting JNOV on the ground that the rules of evidence
barred this testimony from consideration by the jury.
The dissent argues that, in examining the testimony of each expert witness,
we used “a flawed approach” that “fail[s] to critically analyze the substance of
what each expert presented to the jury.” Slip Op. at 15–16. The dissent argues that
because each expert’s testimony “depended on some critical element that had to be
60
supplied by another expert,” our analysis is incorrect. Slip Op. at 16. However, in
a case involving complicated scientific evidence, such as this one, it is improbable
that a party will be able to find one expert witness who is an expert in all necessary
areas of scientific inquiry. Thus, if we were to conclude, as the dissent seems to
suggest we should, that Russo, the fire origin expert, was also required to be an
expert in the areas of chemistry, mechanical engineering, electrical engineering,
and manufacturing design for chemical products, CSI and companies involved in
similarly complex litigation would never be able to support their cases.
We maintain that the correct approach to determining the reliability of expert
testimony is to evaluate the qualifications and reliability of each particular expert’s
testimony, as we did here. As the Texas Supreme Court has held, “[i]f an expert
relied upon unreliable foundational data, any opinion drawn from that data is
likewise unreliable.” Helena Chem. Co., 47 S.W.3d at 499. However, if we
determine that an expert relied upon reliable data and methodology in reaching his
opinion, then the expert’s opinion can properly be considered by the jury. See id.
Texas law has long maintained that expert witnesses may rely upon information
about which they have no personal knowledge. See, e.g., TEX. R. EVID. 703
(providing that expert may base opinion on facts or data “perceived by, reviewed
by, or made known to” him and may consider evidence that would be otherwise
inadmissible if it is “of a type reasonably relied upon by experts in the particular
61
field in forming opinions or inferences upon the subject”); In re Christus Spohn
Hosp. Kleberg, 222 S.W.3d 434, 440 (Tex. 2007) (orig. proceeding) (holding that
experts may rely on hearsay, privileged communications, or other information that
lay witnesses may not); Sosa v. Koshy, 961 S.W.2d 420, 427 (Tex. App.—Houston
[1st Dist.] 1997, pet. denied) (holding that accident-reconstruction expert was
allowed to rely on statements by eyewitnesses in forming opinion); Noriega v.
Mireles, 925 S.W.3d 261, 264–65 (Tex. App.—Corpus Christi 1996, writ denied)
(stating that expert witnesses in medical-malpractice case are often forced to rely
upon medical records to form opinions, particularly in situations where plaintiff is
deceased). Thus, as long as a court determines that the expert had a sufficient basis
for his opinion, that opinion may be considered by the jury. We disagree that each
expert’s testimony must “bolster” that of the others. See Slip Op. at 28. Here, no
expert relied on the testimony of another as a source of his conclusions and
opinion. Rather, each expert depended upon the others for the context of his
conclusions and opinion. It is not improper for each expert witness to testify
regarding a separate question in the analysis of a complex circumstance.
Here, we extensively examined the testimony of Russo, CSI’s fire-origin
expert, and determined that he relied upon sound data and methodology in
determining the location where the fire started. Subsequent experts investigated
possible causes for the fire in that location and testified, in Owen’s case, that the
62
fire did not have a mechanical or electrical origin, and in Armstrong’s case, that it
had a chemical origin. The context of their opinions—that they were asked to
investigate potential causes for the fire that the fire-origin expert pin-pointed as
starting in a particular location—was presented to the jury. Because we have
determined that Owen’s and Armstrong’s opinions regarding potential causes for
the fire in the hot box were based on reliable data and methodology, the jury was
entitled to rely on them for that stated purpose.10 The dissent specifically argues
that Armstrong was not reliable because he “simply assum[ed] that the correct
location had been identified for the location of the fire and confin[ed] his analysis
to the restricted universe of factors existing inside of the hot box. . . . His
assumption did not permit a conclusion that no cause existed inside the box.” Slip
Op. at 28–29. However, as we have already discussed, Armstrong was not retained
to identify the location where the fire originated, nor did he testify concerning the
location of the fire’s origin. He concluded that the fire started in the hot box due to
the ignition of flammable vapors; and the nature of his testimony, as we related in
our review of his testimony above, was that he did consider multiple possibilities
10
The jury was likewise free to disbelieve CSI’s experts and to credit the testimony
of Gharda’s experts on fire-origin and causation. However, given the jury’s
findings on these questions, the jury chose to credit the testimony of Russo and
Armstrong. See City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)
(holding, in “no-evidence” review, that we view evidence in light most favorable
to verdict, crediting favorable evidence if reasonable jurors could and disregarding
contrary evidence unless reasonable jurors could not).
63
in reaching his opinion, including the possibility that there was no chemical cause
of the fire.
Likewise, Cheremisinoff was asked to testify regarding the source of the
contamination that Armstrong testified was present in the drums of chlorpyrifos.
We concluded that Cheremisinoff used sound data—data he obtained from Gharda
itself and known scientific principles—and sound methodology in examining and
answering the question he was retained to answer, namely, what was the origin of
the contamination in the chlorpyrifos?
The dissent also argues that CSI’s experts did not do sufficient testing.
However, CSI’s experts testified that they completed all of the testing that was
possible under the circumstances of this case. Regarding the 3M badge tests, the
dissent states that “No testing was conducted to confirm the reliability of [Russo’s]
method of collecting samples, which consisted of placing charcoal badges in the
barrels nearly two weeks after the fire.” Slip Op. at 29. The dissent also cites the
fact that the badge tests showed a “greater amount of toluene, a contaminant that
was not used in Gharda’s production of chlorpyrifos” and that “[n]o testing was
performed to determine whether the EDC, like the toluene, could have been
detected because it was present in the air at the location of the warehouse . . . .”
Slip Op. at 29–30. These arguments do not take Russo’s and Armstrong’s
testimony on the subject into account. Russo and Armstrong both testified that
64
charcoal badge testing was the commonly accepted method for testing the chemical
vapors present, especially in situations where, as here, the actual chemicals
themselves have been completely destroyed by the fire. Russo further testified that
he and the other experts and fire investigators determined that using the badge tests
was the proper method for investigating the types of chemicals that were present in
the hot box because of the nature of the damage caused by the fire. Russo stated
that any testing of scrapings from the insides of the drums would have involved
heating the scrapings to release their vapors and to register the vapors on a
charcoal badge, and, thus, the charcoal badges placed inside the drums themselves
served the same purpose. No expert or other evidence contradicted Russo’s
testimony that this was a scientifically common method for testing under these
circumstances.
Additionally, Russo testified that the experts were able to distinguish
between chemicals and vapors that were present in the environment from
chemicals and vapors that came from the contents of the drums themselves
because, in analyzing these results, the experts looked at chemicals that showed up
in roughly equal amounts across all of the badges. Russo testified that vapors from
the environment would be present in approximately equal amounts in all of the
badges, while spikes of chemicals that appeared only in certain drums indicated
something that came from a particular drum. Russo and Armstrong both testified
65
that this was scientifically reliable and a common testing method, and no expert or
other evidence indicated that this was not a scientifically reliable methodology.
Armstrong testified that the higher levels of toluene that were present in a few of
the barrels was a by-product of the decomposition of the contaminated chlorpyrifos
and, based on Gharda’s own information regarding the composition and
manufacture of the chlorpyrifos, that the higher levels of EDC detected in a few of
the barrels had to be the result of contamination, because EDC should not have
been a part of the manufacturing process, and it was not present in all of the other
barrels, indicating that it was not an environmental contaminant. Regarding the
assertion that CSI failed to test the samples of the chlorpyrifos retained by Gharda,
we observed that Gharda’s experts tested the retains and presented the results to the
jury, and CSI’s expert Cheremisinoff testified regarding why the results from the
testing of the retains did not establish that the chlorpyrifos was uncontaminated.
Specifically, Cheremisinoff testified that Gharda’s methods for collecting the
retains from only one layer of the chlorpyrifos meant that any contaminants that
had stratified into different layers would not be included in the sample.
The dissent argues that Cheremisinoff “did not test his theory that the
Gharda manufacturing process could result in EDC contamination” and that
Armstrong “did not test his theory that chlorpyrifos contaminated with EDC could
spontaneously ignite under the conditions that CSI created in its hot box.” Slip Op.
66
at 30. There is no legal or scientific requirement that an expert witness test a
generally accepted scientific theory for its reliability, and the dissent cites no
authority for this claim. Cheremisinoff relied upon other information he received
from Gharda itself about its manufacturing and quality control processes, physical
evidence and forensic samples available after the fire, and the testing of the retains,
to opine that the flaws in Gharda’s manufacturing and quality control processes
made it “quite possible, well within scientific certainty,” that manufacturing flaws
led to contamination of the chlorpyrifos at the plant. No expert or other evidence
suggested any other, more scientifically reliable method for determining or testing
for contamination that occurred in the past in a batch of chemicals that was
destroyed by a fire. Armstrong testified that no one could attempt to recreate the
explosion that occurred in the hot box on a small scale because changes in
quantities and pressures would affect the ultimate results, but he relied on known,
well-established scientific principles and chemical properties in reaching his
conclusions about how ignition occurred. No other expert or evidence indicated
that his reasoning was scientifically unsound or that the principles and properties
that he relied upon were unsound.
The dissent compares the present case to Whirlpool Corp. v. Camacho,
reasoning that the following factors of this case are comparable to those present in
Whirlpool: (1) the lack of testing; (2) the fact that “CSI’s experts’ theories were
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‘developed for the litigation [in this case]’” and were not “published in any
scientific journal, treatise, or publication so they could be subjected to peer
review”; and (3) CSI’s experts failed to “indicate that all of the relevant theories
had been accepted as valid by relevant scientific or expert communities.” Slip Op.
at 31–32. We disagree that this case is comparable to Whirlpool.
In Whirlpool, the Camachos sued Whirlpool under a design-defect cause of
action, asserting that Whirlpool’s use of a corrugated tube in a clothes dryer’s air-
circulation system was a design defect that allowed the tube to become clogged
and caused lint to be discharged into the dryer where it was ignited by the heater
element and caused a fatal fire. 298 S.W.3d at 634. The Camachos presented the
testimony of one expert witness as their only evidence of a design defect. Id. at
635. The expert opined that the corrugated tube allowed lint to clog it and that
excessive amounts of lint escaped into the dryer cabinet, where the smoldering lint
particles ignited the clothes in the dryer drum. Id. He based his opinion on pretrial
statements made by the plaintiff that she saw flames coming from the dryer, on the
comparison to a corrugated lint tube that was used under vastly different conditions
than the one in the Camachos’ dryer, and on a Consumer Product Safety
Commission report (“CPSC report”) that analyzed lint-ignition characteristics in a
dryer that was configured differently from the Camachos’ dryer. Id. at 640–41.
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The supreme court stated that the expert “had not seen or read of a test
showing that a corrugated lint transport tube in a dryer properly vented as the
Camachos’ was, would become clogged with lint to the extent it backed lint up into
the blower assembly. He did not personally test his theory. Nor did he test his
theory that the lint would be blown through the lint chute seal if the lint transport
tube became clogged.” Id. at 640. In contrast, the court observed that Whirlpool
presented uncontested expert testimony and test results showing that any particles
of lint that could pass through the inlet grill of the Camachos’ dryer would be
much smaller than those in the CPSC report; that even if larger pieces could
escape, they could not become airborne inside the dryer cabinet; and that lint small
enough to pass through the small openings in the inlet grill would self-extinguish
and would not have ignited clothing in the drum. Id. at 640–41. The court stated,
“While we do not decide whether Whirlpool’s evidence conclusively proved that
Clayton’s opinions were invalid, we note that the evidence, including the CPSC
report relied upon by [the Camachos’ expert] highlights the extent to which [the
expert’s] theory was subject to testing and examining for reliability.” Id. at 642.
The court further observed that the expert testimony left significant analytical gaps:
he did not explain what size particles he believed could have remained airborne
and drawn into the heater box or test or otherwise calculate the maximum size of
such particles; he did not determine and did not know the length of time it took
69
various size particles to self-extinguish or how much heat was generated by the
particles; he did not testify about how ignited lint particles small enough to pass
through the inlet grill could survive and smolder inside tumbling clothes; and he
did not explain how the CPSC report’s testing data supported his conclusions. Id.
The instant case is distinguishable from these facts. Here, CSI’s expert
testimony established that the experts relied upon generally accepted scientific
methodologies and completed all of the testing that was feasible for them to
complete. See id. (“[L]ack of relevant testing to the extent it was possible, either
by the expert or others, is one factor that points toward a determination that an
expert opinion is unreliable.”) (emphasis added). “If testing of critical aspects of
an expert’s testimony has not taken place either by the expert or others in the
relevant scientific or expert community, then an explanation of why it has not is an
important consideration in evaluating the expert opinions and determining whether
they are substantively more than merely the expert’s conclusory, subjective
opinion.” Id. at 642–43.
Here, Russo testified that the charcoal badge tests filled essentially the same
function as testing the burned residue, or “coke,” from inside the drums and that, as
a result of the fire, there was no other material that could have been tested. Russo
and Armstrong both testified that the use of badge tests were the scientifically-
accepted method for testing vapors in cases like this. Armstrong’s and
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Cheremisinoff’s testimony was based on tests completed by other scientists
regarding the decomposition temperatures and rates of chlorpyrifos and the
flammability and ignition rates of vapors like EDC and toluene, including using
some information that came from Gharda’s own materials. Gharda itself tested the
retained samples and presented that evidence to the jury. Armstrong testified that
he could not recreate the conditions that led to the explosion and fire on a smaller
scale because exact quantities and pressures were required to recreate the same
result. Thus, unlike the expert in Whirlpool, there was evidence here that CSI’s
experts all relied on generally accepted scientific principles and that they
conducted relevant testing to the extent it was possible or that they relied on testing
done by others. See id. at 642. To the extent that testing was not possible, CSI’s
experts provided an explanation of why it was not done. See id. at 642–43.
Furthermore, unlike Whirlpool’s own extensive testing that served to “highlight[]
the extent to which [the expert’s] theory was subject to testing and examining for
reliability,” Gharda has presented no such evidence. See id. at 642.
In Whirlpool, the supreme court looked at other factors in addition to the
lack of testing, observing that the expert’s opinion was developed for the litigation
in that case. See id. at 643 (citing Robinson, 923 S.W.2d at 559 (“[O]pinions
formed solely for the purpose of testifying are more likely to be biased toward a
particular result.”)). It also observed that the expert’s opinions and theory had not
71
been published or subjected to peer review. Here, in contrast, Russo, Owen, and
Armstrong were retained to investigate the origin of the fire, and they then testified
about the results of their investigation. Russo, in particular, was retained to
investigate just a few days after the fire occurred, and he, in turn, sought the input
of Owen and Armstrong. Unlike Whirlpool, in which the Camachos’ expert
reached a different conclusion than the fire marshal, here Russo and Rice, the fire
marshal who investigated the fire on behalf of Harris County, both reached the
same conclusions regarding the origin of the fire. See id. at 634. Likewise, while
none of the expert’s investigations and conclusions regarding this particular fire
were published, their opinions were based on scientific principles, such as the
known properties of various chemicals, or other standards, such NFPA 921, ASTM
E1618, or information from Gharda’s own scientists and research, that have been
repeatedly published and subjected to peer review.
Thus, we conclude that the expert testimony of Russo, Rice, Armstrong, and
Cheremisinoff was reliable and constituted some evidence that could have properly
been considered by the jury.
C. Evidence Supporting the Jury’s Negligence, Product Defect, and
Causation Findings
We further hold that, with this testimony, CSI presented more than a scintilla
of evidence on each of the elements of product defect, negligence, and causation.
Therefore, the trial court erred in disregarding the jury’s answers to Questions One,
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Two, and Sixteen and in entering JNOV based on CSI’s failure to prove these
elements essential to Gharda’s liability. See TEX. R. CIV. P. 301; Tiller, 121
S.W.3d at 713; M.N. Dannenbaum, Inc., 840 S.W.2d at 629.
A manufacturing defect exists when a product deviates, in its construction or
quality, from the specifications or planned output in a manner that renders it
unreasonably dangerous. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.
2004). A plaintiff must prove that the product was defective when it left the hands
of the manufacturer and that the defect was a producing cause of the plaintiff’s
injuries. Id. To prove a negligence cause of action, a plaintiff must show that the
defendant breached a duty that was owed to the plaintiff and that the breach
proximately caused the plaintiff’s injury. W. Invs., Inc. v. Urena, 162 S.W.3d 547,
550 (Tex. 2005).
1. Causation
In its first issue, CSI argues that the circumstantial evidence of causation
was sufficient even without an expert opinion on causal mechanism. In its third
issue, CSI argues that the trial court erred by disregarding the jury’s negligence
finding because sufficient evidence exists to support the verdict without expert
causation testimony.
Because we have held that Gharda failed to show that any of the expert
testimony was unreliable as a matter of law, and, therefore, the jury could have
73
considered this testimony to support its verdict, we conclude that the jury’s
answers to Questions One, Two, and Sixteen, regarding a defect in the
chlorpyrifos, negligence, and causation, were supported by more than a scintilla of
evidence.
Russo testified that the fire originated in the hot box, and Armstrong testified
that the explosion and resulting fire was caused by the spontaneous ignition of
flammable vapors. Armstrong testified that the vapors were the result of the rapid
decomposition of the chlorpyrifos that was caused by a contaminant, EDC,
contained in the chlorpyrifos. Cheremisinoff testified that the flaws in the
manufacturing and quality control processes at Gharda made it “quite possible,
well within scientific certainty, that there are manufacturing flaws” that led to
contamination of the chlorpyrifos at the plant. Thus, there was sufficient evidence
to support the jury’s conclusion that Gharda’s negligence resulted in contamination
of the chlorpyrifos and that the contaminated chlorpyrifos was the cause of the fire
and explosion that destroyed CSI’s warehouse. It is therefore unnecessary to look
for further evidence of causation to support the jury’s conclusion.
We sustain CSI’s first and third issues.
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2. Marketing Defect
In its second issue, CSI argues that the trial court erred in entering a take-
nothing judgment because its JNOV did not encompass the jury’s findings on a
marketing defect against GUSA.11
A defendant’s failure to warn of a product’s potential dangers when
warnings are required is a type of marketing defect. Caterpillar, Inc. v. Shears,
911 S.W.2d 379, 382 (Tex. 1995). A defendant can be held liable when the lack of
adequate warnings or instructions renders an otherwise adequate product
unreasonably dangerous. Id.
The marketing-defect claim in this case depended on proof that the
chlorpyrifos caused the fire or was unreasonably dangerous, which depended on
the expert testimony addressed above. The jury concluded that the warning or
instruction provided with the chlorpyrifos was inadequate and that the inadequacy
resulted in CSI’s damages. Because we have already concluded that CSI’s expert
testimony was reliable and constituted some evidence of the origin and cause of the
11
GUSA argues that CSI waived any complaint about this error because it failed to
argue in the trial court that the marketing-defect verdict was not included in the
JNOV. However, CSI filed an amended motion for judgment on April 23, 2010,
seeking, in part, entry of judgment on the jury’s findings regarding a marketing
defect. See Emerson v. Tunnell, 793 S.W.2d 947, 948 (Tex. 1990) (holding that
appellant preserved complaint that trial court erred in amount of judgment entered
by filing motion for judgment on jury’s verdict, stating that appellant “presented a
motion to the trial court for judgment for a quantum meruit measure of recovery
based upon the jury verdict” and that “[h]e obtained an adverse ruling from the
trial court when it granted him judgment for an amount less than he requested”).
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fire, the jury’s findings on the marketing-defect claim are likewise supported by
the record. Thus, the trial court erred in granting JNOV on this ground.
We sustain CSI’s second issue.12
JURY’S AWARD TO MARK BOYD
In its fourth issue, CSI argues that the trial court erred by disregarding the
jury’s award to Mark Boyd to compensate him for the destruction of the
warehouse, that the trial court’s post-verdict rendition of summary judgment
against Boyd was improper, and that Boyd’s claim was the correction of a
misnomer and did not implicate the statute of limitations because the amended
pleading adding him as the building’s owner/lessor related back to CSI’s original
petition.
Gharda moved for summary judgment pre-trial, arguing that CSI was not the
owner of the warehouse and, therefore, it lacked the capacity to sue for damages to
the actual real property. Accordingly, CSI amended its petition to add Mark Boyd,
president of CSI, as the owner/lessor. Gharda subsequently argued that Boyd’s
claims, as added in the amended petition, were barred by the statute of limitations.
A party moving for summary judgment on the basis of limitations must
conclusively establish the bar of limitations. Jennings v. Burgess, 917 S.W.2d 790,
12
CSI also argues, in the alternative, that error in the admission of expert testimony
requires a new trial, rather than a rendition of JNOV, as the trial court did here.
Because of our previous holdings, we do not address this argument.
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793 (Tex. 1996). Thus, the movant must conclusively negate any relevant tolling
provision the non-movant asserted in the trial court. See id.
Generally, “an amended pleading adding a new party does not relate back to
the original pleading” to determine whether it is timely to avoid limitations. Univ.
of Tex. Health Sci. Ctr. at San Antonio v. Bailey, 332 S.W.3d 395, 400 (Tex. 2011)
(quoting Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 121 (Tex. 2004)).
However, “[m]isnomer is an exception . . . .” Id. Misnomer arises when the
plaintiff misnames itself or the correct defendant. Enserch Corp. v. Parker, 794
S.W.2d 2, 4 (Tex. 1990); see also Chilkewitz v. Hyson, 22 S.W.3d 825, 828 (Tex.
1999) (“Misnomer arises when a plaintiff sues the correct entity but misnames
it.”).
Misnomer cases are analyzed by examining whether (1) a judgment under
the original pleading would bar recovery under the amended pleading; (2) the same
evidence supports both of the pleadings; (3) the measure of damages is the same in
both pleadings; and (4) the allegations in both pleadings are subject to the same
defenses. Foust v. Estate of Walters ex rel. Walters, 21 S.W.3d 495, 501 (Tex.
App.—San Antonio 2000, pet. denied). “When a party is misnamed, but no one
has been misled or disadvantaged by the error in the pleading, the relation-back
doctrine operates to preserve the claim against the bar of limitations.” Id. (citing
Dougherty v. Gifford, 826 S.W.2d 668, 677 (Tex. App.—Texarkana 1992, no writ)
77
and Palmer v. Enserch Corp., 728 S.W.2d 431, 434 (Tex. App.—Austin 1987, writ
ref’d n.r.e.)). “If the nature of the suit against the defendants remains unchanged,
the substitution of parties-plaintiff does not constitute a new suit.” Id. (citing
Vaughn Bldg. Corp. v. Austin Co., 620 S.W.2d 678, 682 (Tex. Civ. App.—Dallas
1981), aff’d, 643 S.W.2d 113 (1982) and Medford v. Red River Cnty., 84 S.W.2d
345, 352 (Tex. Civ. App.—El Paso 1935, no writ)).
Here, a portion of CSI’s original petition misnamed CSI as the owner of the
building that was destroyed in the fire. CSI subsequently amended its petition to
name its president, Boyd, as the owner and lessor of the building. This amendment
did not add a new claim or a new claimant and it did not increase the potential
liability Gharda faced—it merely renamed the owner of the property as Boyd
rather than CSI. Thus, CSI and Boyd did not both seek damages simultaneously
for destruction of the building; the same evidence supported both pleadings; the
measure of damages was the same in both pleadings; and the allegations in both
pleadings were subject to the same defenses. See Foust, 21 S.W.3d at 501. No
party was misled or disadvantaged by the error in the pleading, and the nature of
the suit against Gharda remained unchanged after CSI’s amendment of its suit. See
id.
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Thus, we conclude that the trial court erred in rendering summary judgment
in favor of Gharda based on its argument that Boyd’s claims were barred by the
statute of limitations.
We sustain CSI’s fourth issue.
GHARDA’S CROSS POINTS
A. Proper Disposition of the Case
Gharda and GUSA argue that if we determine the expert testimony was
reliable and supported the jury’s verdict—as we have already concluded—we must
reverse and remand rather than render judgment on the verdict. Specifically, they
argue that admission of Armstrong’s, Cheremisinoff’s, Rice’s, and Russo’s
testimony was harmful error.
However, we have already concluded that the trial court’s determinations
that the experts were reliable, both pre-trial during the Daubert/Robinson hearings
and during the trial itself, were proper and that the trial court erred in concluding
after the trial that the experts’ testimony had constituted no evidence and in
entering JNOV. Gharda has failed to show that admission of CSI’s expert
testimony was harmful error.
We overrule this cross point.
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B. Sufficiency of the Evidence of Damages
Gharda and GUSA also argue that the evidence was insufficient to support
CSI’s damages, particularly the award of environmental cleanup costs, lost
warehouse equipment, and lost profits. Specifically, they argue that the testimony
of CSI’s forensic accountant, Shannon Rusnak, was insufficient because she had
no personal knowledge of the necessary construction or cleanup costs or of the fair
market value of equipment or inventory.
Rusnak testified that she was a CPA employed as a forensic accountant with
the firm Matson, Driscoll & Damico, a firm that specializes in economic-damage
calculations, and that she was hired by CSI in March 2004 “to help evaluate the
economic damages that arose from the fire.” She testified that she interviewed
several of the principals of CSI and third-party accountants and that she reviewed a
“great deal of paperwork,” including third-party invoices, asset registers, inventory
records, financial records, profit and loss statements, and sales records.
Specifically, she testified that she “[r]eviewed boxes and boxes of documentation
in order to verify the reasonableness of the claimed amounts that have been set
forth today.”
1. Damage to Warehouse
Gharda argues that CSI and Boyd were required to prove the fair market
value of the warehouse because the building was a total loss. However, Boyd’s
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and Rusnak’s testimony established that the property was rebuilt to its former
condition. Thus, CSI was entitled to recover the amount necessary to rebuild its
facility and to compensate for its loss of use during the interim time period in an
amount sufficient to place it in the same position it occupied prior to the fire. See
Coastal Transp., 136 S.W.3d at 235; see also Hall v. Hubco, Inc., 292 S.W.3d 22,
32 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (“If repair is feasible and
does not cause economic waste, then the plaintiff may recover the cost of repair;
otherwise, the plaintiff is entitled to the decrease in market value caused by the
injury.”). CSI was not obligated to present evidence of fair market value to
support the amount of damages awarded for destruction of the warehouse.
Boyd, CSI’s president and the owner of the warehouse, testified that the
actual cost to rebuild the warehouse was $2.3 million. Rusnak testified that CSI
incurred $1,862,325 in damages to rebuild the warehouse. She based this
calculation on estimates, research of market value of similar properties, and her
experience, and the amount she provided was reduced to place Boyd in the same
position he was in right before the fire.
Thus, the evidence was sufficient to support the jury’s finding that “[t]he
reasonable costs . . . to restore the building in question to the condition it was in
immediately before the occurrence in question” were $1.9 million.
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2. Environmental Cleanup Costs
CSI introduced invoices for environmental cleanup through Boyd. Boyd
testified that CSI incurred $2.2 million in cleanup costs and provided invoices to
support those damages. Rusnak testified that her review of the invoices paid by
CSI for environmental cleanup totaled $2,190,086 in damages. Gharda argues that
neither Boyd nor Rusnak knew whether the charges paid by CSI were “reasonable
or necessary.” However, Rusnak testified that she specialized in determining
economic damages and that she “[r]eviewed boxes and boxes of documentation in
order to verify the reasonableness of the claimed amounts that have been set forth
today.” See Mieth v. Ranchquest, Inc., 177 S.W.3d 296, 303 (Tex. App.—Houston
[1st Dist.] 2005, no pet.) (“When an injury to land is temporary and can be
remediated at reasonable expense, the proper measure of damages is the cost of
restoration to its condition immediately preceding the injury.”).
Thus, the evidence was sufficient to support the jury’s award of $2.1 million
for the “[r]easonable and necessary costs for environmental cleanup.”
3. Lost Warehouse Equipment
Gharda also argues that no evidence supported the jury’s award of $2.3
million for the difference in market value of CSI’s contents of the warehouse
immediately before and immediately after the fire. Specifically, Gharda argues
that there is no evidence to support the jury’s finding that CSI was entitled to
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$993,000 for warehouse equipment. However, the jury’s verdict did not segregate
the amount of its award according to inventory or warehouse equipment. It
awarded one lump sum for all of CSI’s “contents” of the warehouse.
Generally, the measure of damages to personal property is “the difference in
its market value immediately before and immediately after the injury, at the place
where the damage occurred.” Thomas v. Oldham, 895 S.W.2d 352, 359 (Tex.
1995); Yazdani-Beioky v. Tremont Tower Condo. Ass’s, Inc., No. 01-10-00107-
CV, 2011 WL 1434837, at *5 (Tex. App.—Houston [1st Dist.] April 14, 2011, no
pet.) (mem. op.). Market value is defined as the amount that a willing buyer, who
desires to buy but is under no obligation to buy, would pay to a willing seller who
desires to sell but is under no obligation to sell. Yazdani-Beioky, 2011 WL
1434837, at *5 (citing City of Pearland v. Alexander, 438 S.W.2d 244, 247 (Tex.
1972)). However, not all property has a “market value,” and, in situations where a
market value does not exist, such as for used household items, “replacement value
is the means of assessing damages.” Id. (citing Gulf States Utils. Co. v. Low, 79
S.W.3d 561, 569 (Tex. 2002)).
When replacement costs would represent an economic gain to a plaintiff
whose property has been destroyed, the measure of damages is “the actual worth or
value of the articles to the owner for use in the condition in which they were at the
time of the [incident] excluding any fanciful or sentimental considerations.” Crisp
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v. Sec. Nat’l Ins. Co., 369 S.W.2d 326, 328 (Tex. 1963); Yazdani-Beioky, 2011 WL
1434837, at *5. In determining actual value, a factfinder “may consider original
cost and cost of replacement, the opinions upon value given by qualified witnesses,
the gainful uses to which the property has been put, as well as any other facts
reasonably tending to shed light on the subject.” Crisp, 369 S.W.2d at 329;
Yazdani-Beioky, 2011 WL 1434837, at *5. The factfinder has discretion to award
damages within the range of evidence presented at trial. Yazdani-Beioky, 2011 WL
1434837, at *5 (citing Gulf States Utils., 79 S.W.3d at 566).
It is undisputed that, as a result of the fire, CSI lost all of the inventory and
equipment contained in the warehouse. Howard Stoddard, a CSI employee,
provided invoices showing the amount paid for the inventory lost in the fire and
invoices showing the purchase price of the equipment. The invoices he provided
indicated that CSI had lost equipment costing approximately $929,000. Rusnak
calculated that CSI lost $1,308,432 in inventory. Rusnak further testified that she
reviewed the list of warehouse equipment and verified the equipment actually lost
in the fire, reviewed original purchase prices, and factored in depreciation to
determine that the lost equipment resulted in a loss of $851,488.
Thus, the jury’s award of $2.3 million for CSI’s lost warehouse contents was
within the range of the evidence presented at trial.
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4. Lost Profits
Finally, the jury was asked to assess damages for CSI’s “reasonable and
necessary extra production costs” and for “lost profits.” The jury awarded
$950,000 for extra production costs and nothing for lost profits. Gharda argues
that extra production costs are a component of lost profits and that the questions
should not have been presented to the jury separately. Gharda objected to the
testimony on extra production costs and to the submission of a separate jury
question on that issue.13
Gharda cites Springs Window Fashions Division, Inc. v. Blind Maker, Inc.,
184 S.W.3d 840 (Tex. App.—Austin 2006, pet. granted, judgm’t vacated w.r.m.).
In Springs Window, the Austin Court of Appeals stated:
[L]ost profits, by definition, must be profits, and should not be
confused with economic gains or losses that are a mere component of
lost profits calculation or with other types of economic harm that may
be compensable though different damage elements. Lost profits are
damages for the loss of net income to a business, and, broadly
speaking, reflect[] income from lost business activity less expenses
that would have been attributable to that activity.
13
Although Gharda points out that it objected to this form of the jury charge, it does
not present this argument in the context of charge error, but only as sufficiency of
the evidence to support CSI’s damages. Thus, to the extent that Gharda intended
to argue charge error, that issue is waived for lack of briefing. See TEX. R. APP. P.
38.1(i).
85
Id. at 884 (emphasis in original) (citing Holt Atherton Indus. Inc. v. Heine, 835
S.W.2d 80, 84 (Tex. 1992) (evidence of “lost income” does not constitute evidence
of lost profits)).
CSI argues, however, that the extra production costs it incurred as a result of
needing to outsource production to third parties and needing to process chemicals
in smaller amounts due to the damage to its bulk tank were separate economic
injuries from lost profits. Stoddard testified that CSI’s increased production costs
totaled $953,000. Rusnak testified that CSI incurred $953,588 in damages as a
result of extra production costs. She testified that she arrived at this calculation by
looking at “the incremental cost, what it cost [CSI] to send that product to the third
party in order to get it processed versus what it would have cost them internally to
do in-house in terms of the raw material and repackaging.” She also testified that
this amount was “offset against any lost revenues” and that “there’s no duplication
between the two.”
Thus, Stoddard’s and Rusnak’s testimony supports the jury’s finding that
CSI suffered a loss of $950,000—distinct from lost profits—as a result of
increased production costs.14
14
We also note that, although Gharda makes the general statement that CSI’s
damages were not supported by the evidence, it did not provide any specific record
references, argument, or citation to authority regarding the jury’s findings for the
contents of the office building or bulk tank repairs. Nor did Gharda challenge the
86
We overrule this cross point
GUSA’S CROSS POINTS: DAMAGES LIMITS
GUSA argues that, if we sustain one or more of CSI’s issues, its liability, if
any, is limited by contract to CSI’s purchase price for the chlorpyrifos—
$110,000—pursuant to Texas Business and Commerce Code section 2.719(a)(1).
GUSA raised this issue in a pre-trial motion for summary judgment on the
limitation of damages, which was denied by the trial court. GUSA did not present
this argument again following the judgment on the merits or in any of its post-trial
motions.
GUSA asserts that the chlorpyrifos it sold to CSI contained a disclaimer
implicating Texas Business and Commerce Code section 2.719(a)(1). The label
stated,
Any damages arising from breach of warranty or negligence
shall be limited to direct damages not exceeding the purchase price
paid for this product by Buyer, and shall not include incidental or
consequential damages such as, but not limited to, lost profits or
values. . . . In no case shall Seller be liable for the consequential,
special or indirect damages resulting from the use or handling of this
product.
GUSA argues that the purchase price for the chlorpyrifos was $110,000. The
disclaimer was not part of the purchase-order contract between CSI and GUSA.
findings regarding UPI’s damages. Thus, any complaint on these issues is waived
for lack of briefing. See TEX. R. APP. P. 38(i).
87
Section 2.719 allows for contractual modification or limitation of remedies
between parties to an agreement for a sale of goods. It states:
(a) Subject to the provisions of Subsections (b) and (c) of this section
and of the preceding section on liquidation and limitation of
damages,
(1) the agreement may provide for remedies in addition to or in
substitution for those provided in this chapter and may limit or
alter the measure of damages recoverable under this chapter, as
by limiting the buyer’s remedies to return of the goods and
repayment of the price or to repair and replacement of non-
conforming goods or parts; and
(2) resort to a remedy as provided is optional unless the remedy is
expressly stated to be exclusive, in which case it is the sole
remedy.
(b) Where circumstances cause an exclusive or limited remedy to fail
of its essential purpose, remedy may be had as provided in this
title.
(c) Consequential damages may be limited or excluded unless the
limitation or exclusion in unconscionable. Limitation of
consequential damages for injury to the person in the case of
consumer goods is prima facie unconscionable but limitation of
damages where the loss is commercial is not.
TEX. BUS. & COM. CODE ANN. § 2.719 (Vernon 2009)
This section applies to damages between a buyer and a seller for breach of
contract. See id.; see also id. § 2.102 (Vernon 2009) (providing scope of UCC and
stating that chapter applies to transaction in goods); id. § 2.701 (Vernon 2009)
(providing that “[r]emedies for breach of any obligation or promise collateral or
ancillary to a contract for sale are not impaired by the provisions of this chapter”).
88
GUSA has presented no authority that we should apply section 2.719 to CSI’s
claims for negligence and marketing defect, as the cases cited by GUSA are all
breach of contract or breach of warranty causes of action.
We overrule this cross point.
CONCLUSION
We overrule the cross points of Gharda and GUSA. We reverse the
judgment of the trial court and remand for the trial court to enter judgment on the
jury verdict in favor of CSI, United Phosphorus, and Mark Boyd.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Higley, and Massengale.
Justice Massengale, dissenting.
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