(Scott Cramer)

The Pennsylvania Superior Court has ruled that a company whose factory burnt down in a fire caused by a furnace has no legal malpractice claim against a Bucks County attorney and his former firm for failing to assert a products liability claim against the furnace distributor.

The court said the company failed to prove that the furnace had an actionable defect and thus could not sue its former counsel for failing to allege such a defect.

In an unreported opinion in Croydon Plastics v. Groen, Laveson, Goldberg and Rubenstone, a three-judge panel unanimously affirmed a Bucks County trial judge’s ruling that plaintiff Croydon Plastics Co. did not have a cause of action for legal malpractice against its former counsel, attorney Edward Rubenstone, and his former firm, Groen, Laveson, Goldberg and Rubenstone.

Judge Patricia H. Jenkins, writing for the court, said CPCI could not sue its former counsel for failing to allege that the furnace distributor was negligent in not installing a “rollout switch” on the furnace because it could not show either that the furnace did not have a rollout switch or that a rollout switch would have shut the furnace down before the fire started.

“Since CPCI did not specify the activation temperature of the rollout switch or prove that the furnace operated at or above the activation temperature, it cannot prove that the absence of a rollout switch was an actionable defect,” Jenkins said. “Since it cannot prove that the furnace had an actionable defect, CPCI cannot prove it had a valid cause of action against Trane, which in turn defeats its malpractice action.”

Jenkins was joined by Judge Cheryl Lynn Allen and Senior Judge James J. Fitzgerald III.

In Croydon, according to Jenkins, CPCI’s factory was destroyed in a 1992 fire, which the fire marshal determined was caused by a furnace that had been installed too close to a combustible wood-paneled wall.

The company’s insurer paid it about $1.5 million in damages and the two subsequently pursued breach of contract, breach of warranty, negligence and strict liability claims against Trane, the furnace distributor, and Lower Bucks Cooling and Heating, the furnace installer, in the Bucks County Court of Common Pleas, Jenkins said.

Rubenstone represented CPCI in the action, Jenkins said.

In February 1995, according to Jenkins, the trial court granted Trane’s motion to compel CPCI to produce expert reports within 60 days and CPCI missed the deadline.

In October 1995, CPCI replaced Rubenstone with its current attorney, Garland Cherry Jr., and, in February 1996, Trane filed a motion for sanctions seeking preclusion of any experts, which the court granted, Jenkins said.

Trane then filed a motion for summary judgment, which the court also granted, and Lower Bucks settled with CPCI for $1 million, according to Jenkins.

In September 1997, CPCI filed a legal malpractice action against Rubenstone and Groen Laveson, alleging they should have asserted a claim against Trane for failing to install a rollout switch on the furnace, according to Jenkins.

The trial court subsequently granted the defendants’ motion to bifurcate the trial, according to Jenkins, placing the burden on CPCI to prove in the first stage of the trial that it would have obtained recovery from Trane.

If it could prove that, Jenkins said, the firm would then have had the burden to prove in the second stage of the trial that its former counsel’s negligence prevented it from making such a recovery.

In the first stage, CPCI presented expert witness Paul Heldenbrand, who testified that one of the contributing factors that caused the fire was a lack of a rollout switch on the furnace, according to Jenkins.

But Heldenbrand admitted that he never reviewed the manufacturer’s specifications for the furnace and could not definitively say that there was no rollout switch on it, instead saying evidence of long-term damage to the furnace indicated there was no switch, Jenkins said.

According to Jenkins, Heldenbrand testified that because the furnace had been improperly installed, the temperature inside the furnace was constantly between 500 and 600 degrees, causing the wood paneling to exceed 500 degrees, convert into gas and ignite.

“Critically, however, Heldenbrand never identified the temperature at which a rollout switch would have activated to shut down the furnace and stop the wooden panels from catching fire,” Jenkins said. “His testimony left open the possibility that the fire could have started even if the rollout switch had been operating properly.”

Following Heldenbrand’s testimony, Trane moved for a nonsuit and the trial court granted the motion, according to Jenkins.

On appeal to the Superior Court, Jenkins said, CPCI argued that the trial court should not have granted the motion because it had a valid claim under the malfunction doctrine, a strict liability theory in which a plaintiff can point to circumstantial evidence of a malfunction without alleging a specific defect where the product at issue has been destroyed.

Jenkins disagreed, however, saying the lack of a rollout switch on the furnace did not constitute a “defect” under malfunction theory principles.

“Heldenbrand could not say for certain whether the furnace had a rollout switch. He merely inferred that the furnace lacked a rollout switch based on his observations about long-term damage to its interior,” Jenkins said. “Even assuming that the furnace lacked a rollout switch, a fatal flaw still exists in CPCI’s evidence: CPCI’s failure to specify the temperature at which a properly designed rollout switch would have activated to shut down the furnace.”

Jenkins said that, while Heldenbrand testified that the furnace constantly operated at between 500 and 600 degrees due to poor installation, he failed to testify that a rollout switch would have shut the furnace off when it reached that temperature range.

“Conceivably, a rollout switch would not have activated until the furnace exceeded 600 degrees,” Jenkins said.

Because CPCI could not show that it would have been able to recover against Trane, its legal malpractice action against Rubenstone and Groen Laveson was necessarily tossed out, Jenkins said.

Jenkins also rejected CPCI’s argument that the trial should not have been bifurcated.

“To the contrary, this case was an ideal candidate for bifurcation,” Jenkins said. “Unless CPCI first proved that it had a valid cause of action against Trane in the underlying case (stage 1), it made no sense to litigate whether Groen was negligent in the underlying case (stage 2). Since CPCI lost stage 1 of trial, stage 2 became unnecessary. The court’s decision to bifurcate trial undeniably conserved precious judicial resources.”

Counsel for Rubenstone and Groen Laveson, Paul C. Troy of Kane, Pugh, Knoell, Troy & Kramer in Norristown, Pa., said Rubenstone is “a terrific attorney who never should have been sued in this case in the first place.”

Counsel for Croydon, Garland D. Cherry, Jr., of Cape May Court House, N.J., said he was disappointed with the ruling and felt the trial and appellate courts held his client to a higher standard of proof than required under state law.

“The bottom line is Pennsylvania law does not require proof of a specific defect,” Cherry said. “We believe we did show that the product was malfunctioning for a period of years and that the malfunction caused the fire.”

Cherry said he and his client plan to petition the state Supreme Court for allocatur.

Zack Needles can be contacted at 215-557-2493 or zneedles@alm.com. Follow him on Twitter @ZNeedlesTLI.

(Copies of the 13-page opinion in Croydon Plastics v. Groen, Laveson, Goldberg and Rubenstone, PICS No. 14-0568, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •