Electrolux Asks 3rd Circ. To Uphold Win In Fridge Fire Row

Electrolux Home Products Inc. urged the Third Circuit Monday to uphold its win in an insurance company's suit claiming a refrigerator it made caused a fire the insurer covered, arguing that a lower court properly sanctioned the insurer for not preserving a metal can that was a critical piece of evidence.

Indemnity Insurance Co. of America, a subsidiary of ACE Limited, brought the appeal after a jury unanimously sided with Electrolux in a suit stemming from a fire at a school. According to Indemnity Insurance, Electrolux should foot the bill because the fire was caused by a malfunction within the internal wiring of a Frigidaire compact refrigerator made by Electrolux.

But in Electrolux's view, the fire occurred by spontaneous combustion in a metal can, which the appliance maker was unable to analyze because an investigator hired by the insurer did not preserve the can, according to the company's brief.

"Prior to collection, the can was split in two, splayed open on the cleaned and swept fire scene floor, rendering it and its contents almost unrecognizable from its condition post-fire," Electrolux said. "Electrolux proved that it was significantly prejudiced by the destruction of evidence in this matter. As a result, an adverse inference charge was warranted as a sanction against Indemnity Insurance for spoliating evidence."

Granting the adverse inference, a federal court in Pennsylvania had instructed jury members that they could conclude that evidence that was missing would be favorable to Electrolux. The court also told the jury that a party that expects litigation has a duty to preserve relevant evidence.

Indemnity Insurance maintained that the adverse inference instruction was improper because Electrolux was not prejudiced by the missing evidence since the appliance maker was able to depose the fire marshals who investigated the cause of the fire.

But Electrolux said in its brief the fire marshals were unable to settle the matter because they, too, had not tested the surface of the metal can or collected all of the debris inside the can.

In its appeal, Indemnity Insurance also argued that the lower court was wrong to exclude testimony that the fridge was manufactured in China.

According to Electrolux, though, the court rightly found that the relevance of that information was tenuous and that its prejudicial effect was substantially outweighed by any value it would have.

"One can only think that Indemnity Insurance wanted to color the jury by saying that the product was manufactured in China and as a result was somehow inferior," Electrolux said. 

"At no point did Indemnity seek to depose anyone from Electolux about quality controls with regard to the manufacture of the subject product."

Moreover, Indemnity Insurance never showed an interest in conducting discovery on the issue, Electrolux said.

The appliance manufacturer also defended the jury selection process against claims by Indemnity Insurance that the lower court had not properly explained its protocol for jury selection, causing the insurer to lose a chance to challenge the jury composition.

Electrolux insisted that the insurer had waived its chance to challenge jury members during jury selection.

Attorneys for the parties were not immediately available for comment on Tuesday.

Electrolux is represented by Cheryl Nicolson and Melissa Yemma of Nicolson Law Group LLC.

Indemnity Insurance is represented by Law Offices of Dennis J. Crawford.

The case is Indemnity Insurance Co. of North America a/s/o Unionville-Chadds Ford School District v. Electrolux Home Products Inc., case number 12-1454, in the U.S. Court of Appeals for the Third Circuit.