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Riverview Townhomes Owners' Ass'n v. James Hardie Bldg. Prods., Inc.

COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Nevada)
Jul 10, 2017
No. C078252 (Cal. Ct. App. Jul. 10, 2017)

Opinion

C078252

07-10-2017

RIVERVIEW TOWNHOMES OWNERS' ASSOCIATION, Plaintiff and Respondent, v. JAMES HARDIE BUILDING PRODUCTS, INC., Defendant and Appellant.


NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. TCU104142)

A jury found a manufacturer of fiber cement siding used on a Truckee townhome development 10 percent at fault for the $2.5 million the plaintiff Riverview Townhomes Owners' Association (plaintiff) suffered in damages from a faulty roof design and installation errors in addition to the failure of the siding products to meet an ordinary consumer's reasonable expectations. Based on principles of joint and several liability, the manufacturer, defendant James Hardie Building Products, Inc. (Hardie), is obligated to pay the entire judgment minus the 10 percent the jury also attributed to the plaintiff and the $97,211 allowed as an offset from other defendants. On appeal, Hardie contends the jury verdict is fatally inconsistent, the plaintiff's expert was not qualified to render some of the opinions he offered, and the court erroneously allowed the expert to testify to problems with the manufacturer's products on other jobs. Finding no prejudicial error, we affirm.

FACTS

The Riverview Townhomes were built in three phases between 2001 and 2005. Martin Steiner was the owner of the development and general contracting companies. Riverview was the contracting company's first project. After the companies entered bankruptcy proceedings, the bankruptcy court issued a stay prohibiting plaintiff from proceeding against them. Steiner subcontracted the framing on Phase 1 to Madera Construction. Hardie did not install any of its siding products. The jury ultimately found that Steiner hired Groves Fischer, Inc. as a consultant, not as the framing subcontractor for Phase 2.

Steiner was also the president of plaintiff's board of directors from approximately 2003 until early 2009. In 2005, in his capacity as owner of the contracting company, Steiner assured homeowners the company was proactively taking corrective measures to deal with ice build-up, including contacting a roofing inspector. By 2006 Steiner, in his dual capacity as owner of the contractor and as president of the board of directors, was aware of on-going project-wide roof leaks. According to Steiner, the roofing design caused the buildup of ice, leaks within the structure, and directed excess moisture onto the siding. In an attempt to remedy the problems, heat tape and gutters were installed, but the water and ice problems persisted.

On June 24, 2010, plaintiff filed a complaint for damages against the developer, general contractor, and a number of Doe defendants, and a first amended complaint on May 2, 2014, adding causes of action for strict liability, negligence, and breach of implied warranty. Central to the complaint is plaintiff's allegation of water intrusion through and beyond the window and door systems, through exterior walls, through and beyond exterior cladding and trim systems, and through the foundation system. No one appears to dispute that the design and installation of the roofs was a primary cause of the water intrusion and ensuing damage to the townhomes. The developer defendants, including M.A. Steiner Development, Inc., Riverview Truckee, LLC, and Eland Construction, Inc., were no longer in the case at the time of trial. The trial court ruled, however, that the statute of limitations barred the causes of action against the architects and contractors for negligent design or installation of the roofs.

Remaining for trial against Hardie, Madera Construction, and Groves Fischer, Inc. were causes of action for negligence, strict liability, and violations of the standards imposed by Civil Code section 895 et seq. In the first amended complaint, plaintiff alleged: "California Civil Code Section 895, et seq., applies to new residential construction built and sold subsequent to January 1, 2003, and sets forth construction standards for actions 'arising out of, or related to deficiencies in, the residential construction, design, specifications, surveying, planning, supervision, testing, or observation of construction . . .' and provides that a builder, general contractor, subcontractor, material supplier, individual product manufacturer, or design professional, shall be liable for violation of the standards specifically set forth in Title 7."

All further statutory references are to the Civil Code unless otherwise designated.

Following a five-week trial, the jury entered a lengthy special verdict deciphering the liability of each of the remaining defendants for each of the phases of construction. Very few of the findings are relevant to this appeal. The alleged inconsistent findings will be described below. Suffice it to say for now, the jury found Hardie was not negligent and did not violate any of the standards embodied in the section 895 series. The jury also found the Hardieplank or the Hardieshingle product installed in all three phases did not perform as an ordinary consumer would have expected and their designs were a substantial factor in causing plaintiff's damages. But, according to the jury, plaintiff did not discover that the products had failed to perform as an ordinary consumer would have expected prior to January 8, 2007. Finally, the jury found that Hardie's products were not negligently designed. Hardie appeals.

DISCUSSION

I

Inconsistent Verdict

Jury Findings

As mentioned, the special verdict was long. The jury was required to address numerous issues pertaining to different defendants. The very first question asked the jury whether the buildings in Phase 1 met the standard defined in section 896, subdivision (a)(10) as follows: "With respect to water issues, stucco, exterior siding, exterior walls, including, without limitation, exterior framing, and other exterior wall finishes and fixtures and the systems of those components and fixtures, including, but not limited to, pot shelves, horizontal surfaces, columns, and plant-ons, shall be installed in such a way so as not to allow unintended water to pass into the structure or to pass beyond, around, or through the designed or actual moisture barriers of the system, including any internal barriers located within the system itself. For purposes of this paragraph, 'systems' include, without limitation, framing, substrate, flashings, trim, wall assemblies, and internal wall cavities, if any." The jury found that the buildings in Phase 1 did not meet this standard.

The jury decided that Madera Construction was negligent in failing to meet the standard, but Hardie was not. Because it found that Madera Construction was negligent, the jury was directed to answer two additional questions about the plaintiff's comparative fault. At issue is the jury's affirmative response to Question No. 1(D): "Did the Association discover the defect from Section 896(a)(10) above prior to January 8, 2007? 'Discovery' is defined for you in Jury Instruction No. 6012."

In response to Question No. 23, the jury unanimously found that either the Hardieplank or the Hardieshingle product installed on the units in Phases 1, 2, and 3 did not perform as an ordinary consumer would have expected when used or misused in an intended or reasonably forseeable way. In answer to Question No. 23(B), "Did the Association discover the Hardieplank and Hardieshingle products failed to perform as an ordinary consumer would have expected prior to January 8, 2007?" nine jurors voted "No."

Hardie contends the jury's finding that plaintiff had discovered the installation errors was fatally inconsistent with its finding that plaintiff had not discovered the products' failure to meet an ordinary consumer's expectations. We agree with plaintiff that the two questions asked the jury to answer two very different questions. There is no inconsistency, and therefore, no reversible error.

Hardie identifies the defect for purposes of product liability and the defect constituting the violation of the building standard set forth in section 896, subdivision (a)(10) broadly to be the same defect—water intrusion into the system. In Hardie's view, once plaintiff noticed water in the system, the statute of limitations began to run. The jury could not find, as it did, that plaintiff noticed the water was in the system for purposes of installation and also find that it did not discover the water for purposes of a design defect based on the same facts. The argument is clever, but wrong.

Basic Legal Principles

Inconsistent Verdicts: Preliminarily, we accept Hardie's understanding of the law it cites. It is true that because we must review a special verdict de novo to determine whether its findings are consistent, (Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 358), we do not infer findings in favor of the prevailing party and there is no presumption in favor of upholding a special verdict. (Zagami, Inc. v. James A. Crone, Inc. (2008) 160 Cal.App.4th 1083, 1092.) An inconsistent verdict is against the law and the proper remedy is a new trial. (Kurtin v. Elieff (2013) 215 Cal.App.4th 455, 481.)

Nevertheless, Hardie ignores equally important principles guiding our review. The vice in an inconsistent verdict is that a fact finder has made inconsistent determinations of fact based on the same evidence. (Cavallaro v. Michelin Tire Corp. (1979) 96 Cal.App.3d 95, 101.) But verdicts are inconsistent only when they are "beyond possibility of reconciliation under any possible application of the evidence and instructions." (Hasson v. Ford Motor Co. (1977) 19 Cal.3d 530, 540, overruled in part on other grounds in Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574 (Soule).) As a consequence, ostensibly inconsistent verdicts "must be harmonized if there is any 'possibility of reconciliation under any possible application of the evidence and instructions. If any conclusions could be drawn thereunder which would explain the apparent conflict, the jury will be deemed to have drawn them.' [Citation.]" (Lambert v. General Motors (1998) 67 Cal.App.4th 1179, 1183.)

Discovery Rule and the Statute of Limitations: The statute of limitations loomed large as a potential defense throughout the litigation involving the Riverview Townhomes. Under the well-accepted discovery rule, a statute of limitations does not commence to run until the plaintiff is aware of the injury and its factual cause or is aware of sufficient facts to be put on inquiry notice of a wrongful cause of injury. (Clark v. Baxter Healthcare Corp. (2000) 83 Cal.App.4th 1048, 1055.) If on inquiry notice, the plaintiff is held to an objective standard; that is, the plaintiff is charged with notice of facts a reasonable inquiry would have revealed. (Landale-Cameron Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401, 1407-1408.) Thus, the jury was appropriately instructed that the "statute of limitations begins to run after any damage is sufficiently appreciable to give a reasonable person or entity notice that it has a duty to pursue its remedies." Whether inquiry notice is sufficient to trigger the statute of limitations is a question of fact for the jury. (Bradler v. Craig (1969) 274 Cal.App.2d 466, 471-472.)

Prophetically, the court recognized that because "the facts that drive the discovery are different for each alleged statutory defect," the jury's factual findings could lead to the statute of limitations barring some but not all claims. Hardie also raised a statute of limitations defense at trial, insisting that the plaintiff's knowledge of the problems with the roof which allowed water to intrude into the buildings put it on notice of any alleged defects with its products. The jury rejected the argument at trial.

But Hardie insists the jury made inconsistent factual findings. We conclude the findings are easily harmonized and there is no fatal inconsistency.

Analysis

The two questions posed to the jury applying the discovery rule, Question No. 1 and Question No. 23, seek the jury's findings on two different theories of liability. Question No. 1, embodying the section 896, subdivision (a)(10) standard, pertains exclusively to improper installation. In this connection, it is well to recall that the jury absolved Hardie of any negligence in installing products into the Riverview Townhomes, a finding totally consistent with the evidence that Hardie had nothing to do with installation; Madera Construction was responsible for the installation. After finding Madera Construction had negligently violated this standard, the jury was asked to determine whether the plaintiff had notice of Madera Construction's negligent installation. The jury's response was yes.

Ignoring the actual language of the question parroting the section 896, subdivision (a)(10) language describing the standard, Hardie focuses on Question No. 1(D), which asks: "Did the Association discover the defect from Section 896(a)(10) above prior to January 8, 2007?" The defect, according to Hardie, was not the installation; it was the water in the system. As long as the plaintiff had notice of water in the system, Hardie continues, it was on inquiry notice about any defects in the products that were installed. That is not the question the jury was asked and it is not the meaning of the response it gave.

Hardie distorts the plain meaning of the question, as well as the answer. Simply put, the jury was asked if the installation negligently violated the standard. And the negligent installation is the defect identified in Question No. 1(D), which asked whether the plaintiff discovered the defect; in other words, whether the plaintiff had notice of the negligent installation. Based on abundant evidence found in Steiner's testimony and the minutes of the board of directors, plaintiff was well aware at least by 2005 and 2006 that the roof had been negligently installed. Indeed, the jury had before it evidence regarding a lack of gutters, incorrect installation of the weather resistant barriers, issues with reverse lapping, including incomplete installation, and installation with incorrect nails or insufficient nailing.

To broaden the meaning of defect to mean "water in the system" is to ignore the actual language of the standard and do violence to the plain meaning of the words the parties agreed to submit to the jury for resolution. We conclude Question No. 1(D) was factually limited to whether plaintiff discovered or should have discovered Madera Construction's negligent installation and the resulting section 896, subdivision (a)(10) defect prior to January 8, 2007.

The second discovery question, Question No. 23, related to plaintiff's discovery of the alleged product defect. Although the jury found the plaintiff did have notice of Madera Construction's negligent installation, it also found plaintiff did not discover that Hardie's products failed to perform as an ordinary consumer would have expected prior to January 8, 2007. Question No. 23(B) did not refer to a statutory violation defect but instead referred to the consumer expectations test for strict liability design. The finding is consistent not only with other jury findings, but also with the law and the evidence. We begin with a basic, and mercifully brief, tutorial on a manufacturer's product liability.

"A manufacturer, distributor, or retailer is liable in tort if a defect in the manufacture or design of its product causes injury while the product is being used in a reasonably foreseeable way." (Soule, supra, 8 Cal.4th at p. 612.) There are two alternative ways to prove a design defect: the consumer expectations test and the risk/benefits test. (Barker v. Lull Engineering Co. (1978) 20 Cal.3d 413, 426, 430-431.) The consumer expectations test "asks whether the product performed as safely as an ordinary consumer would expect when used in an intended and reasonably foreseeable manner" and the risk/benefit test "asks whether the benefits of the challenged design outweigh the risk of danger inherent in the design." (Saller v. Crown Cork & Seal Co., Inc. (2010) 187 Cal.App.4th 1220, 1232.) The jury was instructed exclusively on the consumer expectations test and Hardie does not challenge its applicability on appeal.

"The rationale of the consumer expectations test is that '[t]he purposes, behaviors, and dangers of certain products are commonly understood by those who ordinarily use them.' [Citation.] Therefore, in some cases, ordinary knowledge of the product's characteristics may permit an inference that the product did not perform as safely as it should. 'If the facts permit such a conclusion, and if the failure resulted from the product's design, a finding of defect is warranted without any further proof,' and the manufacturer may not defend by presenting expert evidence of a risk/benefit analysis. [Citation.] The consumer expectations test is reserved for cases in which the everyday experience of the products' users permits a conclusion that the product's design violated minimum safety assumptions, and is 'defective regardless of expert opinion about the merits of the design.' [Citations.]" (Saller v. Crown Cork & Seal Co. Inc., supra, 187 Cal.App.4th at p. 1232.)

"Under the doctrine of strict products liability, the liability of all defendants in the chain of distribution 'is joint and several.' [Citations.] Accordingly, each of those defendants can be held liable to the plaintiff for all damages caused by a defective product reduced only by the plaintiff's comparative fault." (Bostick v. Flex Equipment Co., Inc. (2007) 147 Cal.App.4th 80, 88-89.) Proposition 51's limitation on the scope of joint and several liability does not apply to strict products liability. "The doctrine of strict products liability attaches without regard to fault as a matter of social policy. Thus, Proposition 51, which by its terms applies to actions 'based upon principles of comparative fault' (Civ. Code, § 1431.2, subd. (a)), is not triggered by [the] facts of this case." (Bostick, at p. 93.)

The jury's findings that Hardie's fiber cement siding products did not satisfy the reasonable consumer's expectation test and that plaintiff did not discover the design defect until after January 8, 2007, again are consistent with the evidence presented at trial and do not conflict with its finding plaintiff had discovered Madera Construction's negligent installation. As but one example, plaintiff retained Daniel Chekene, an architect, to investigate the complaints it had received about the Riverview roofs. He was asked at trial about his first-hand observations of the siding. He testified that in 2008, he did not see anything significant. As he put it, "Nothing that caught your eye." He did not see signs of delamination. There was nothing he observed in 2008 that indicated a failure of the siding system. By contrast, when he returned in 2010, he observed "swollen" spots in the siding of buildings. He testified the siding problem was evident in 2010.

The jury also heard from multiple witnesses who viewed the property and the siding and did not consider there was a problem with the siding itself until after January 8, 2007.

We therefore conclude that because the jury's findings to two distinct factual questions are supported by different evidence, we are not faced with inconsistent answers. To the contrary, the jury's findings are entirely consistent. Plaintiff's cause of action against Madera Construction for the negligent installation is barred by the statute of limitations because the jury found plaintiff had discovered or should have discovered the installation defects more than three years from the date on which the complaint was filed. Hardie's failure to provide siding that met a reasonable consumer's expectations, however, presented an entirely different factual issue. Because there was abundant evidence that the problems with the siding were not evident until 2010, the jury answered the very different inquiry whether plaintiff had discovered that Hardie's siding products failed to meet the reasonable consumers' expectations differently from the question regarding plaintiff's discovery of the negligent installation. In short, plaintiff had discovered the negligent installation and had not discovered Hardie's design defect. The findings are compatible and supported by substantial evidence. There is no error.

II

Scope of Expert Witness Testimony

Ignoring the limited scope of appellate review, the limited scope of the trial court's ruling admitting the expert's testimony, and the limited admissibility of expert testimony under the consumer expectations test, Hardie complains the trial court allowed plaintiff's expert Chekene to testify outside his expertise and to rely on unsound methodology. The argument fails for a multitude of reasons.

We begin with the last problem first. Expert testimony is not admissible to prove a design defect under the consumer expectations test. "[T]he consumer expectations test is reserved for cases in which the everyday experience of the product's users permits a conclusion that the product's design violated minimum safety assumptions, and is thus defective regardless of expert opinion about the merits of the design. It follows that where the minimum safety of a product is within the common knowledge of lay jurors, expert witnesses may not be used to demonstrate what an ordinary consumer would or should expect. Use of expert testimony for that purpose would invade the jury's function (see Evid. Code, § 801, subd. (a)), and would invite circumvention of the rule that the risks and benefits of a challenged design must be carefully balanced whenever the issue of design defect goes beyond the common experience of the product's users." (Soule, supra, 8 Cal.4th at p. 567.)

It is important to remember, however, that design defect under the consumer expectations test was only one of plaintiff's theories of recovery. Thus, Chekene's testimony, although inadmissible to establish what an ordinary consumer would or should expect, was relevant to Hardie's causes of action for violation of the statutory standards and negligence.

Second, the scope of appellate review of a trial court's ruling on the admissibility of evidence is exceedingly narrow. A trial court's decision to admit or to exclude evidence, whether in limine or at trial, is reviewed for an abuse of discretion. (Pannu v. Land Rover North America, Inc. (2011) 191 Cal.App.4th 1298, 1317.) We are not at liberty to substitute our judgment for that of the trial court. (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431.)

Third, and foremost, a review of the record reveals that the trial court carefully limited the scope of Chekene's expert testimony based on his qualifications as an architect, not a materials engineer. To determine whether the trial court abused its discretion by allowing Chekene's expert testimony, we must review the argument at the Evidence Code section 402 hearing, Chekene's testimony at trial, if, and when, any objections were lodged, and the trial court's rulings.

Analysis

Plaintiff's counsel argued at the Evidence Code section 402 hearing that Chekene had been an architect for 35 years, often acting as a construction manager and a contract administrator in the course of construction projects. Hardie's lawyer agreed with the trial court that one of a professional architect's jobs is to specify materials, and indeed in his 35-year career, he has done precisely that. In addition, Chekene also has been a forensic architect for 23 years. Plaintiff argued: "Part of his experience in that capacity, both as a forensic architectural expert and as an architect, is to investigate products that are failing, such as Hardie's products, that is at issue in this case, and to determine, is it failing, and then to have an opinion as to why it's failing. And that's precisely what he has done at this project, with years of investigation through destructive testing and visual inspections." Chekene lives and works in the Tahoe-Truckee area, is intimately familiar with Alpine climates, and he has had projects with the same Hardie products and similar siding products that have failed for decades.

At the conclusion of the Evidence Code section 402 hearing, the trial court found Chekene was not qualified to offer an opinion about manufacturing or specifically that "there is a manufacturing defect that's resulting in its failure." The court ruled Chekene did not have the expertise to opine that Hardie "should have changed the formula of this product to make it a different density or less absorbent." Chekene, along with another expert, did have the qualifications to testify that based on their observations, the Hardie products "absorbs moisture, and in this freeze-thaw climate, that results in delamination. [¶] They've seen it, not just on this project, but on others." The court also ruled he could testify that the Hardie products are not performing as advertised, but the court admonished plaintiff that it would entertain an objection for a lack of foundation if Chekene were asked to offer an opinion about manufacturing.

At trial, Chekene was very forthcoming about the scope of his expertise. He testified that he was not a materials engineer, he was not an expert in fiber cement technology, he had not conducted any testing on Hardie products, nor was he qualified to do so and, if he needed to test the product, he would need to call in a specialist. Based on his personal observations of the Riverview siding over time and his professional experience, he concluded that the "freeze-thaw cycle" caused the siding to delaminate. According to Chekene, the siding "can cycle back and forth for awhile. [¶] But at some point, it absorbs so much moisture into the Hardie, into the siding, that every time water goes in, it freezes. And every time it freezes, it expands. And at some point, it starts repeating, and the siding deteriorates very rapidly." Even Hardie's own expert, Marcus Kuizenga, came to the same conclusion. He opined that delamination occurs when the siding is subject to freeze-thaw cycles and the siding is saturated with water and does not have an opportunity to dry out.

Despite Hardie's vigorous objection to Chekene's expertise before trial and its aggressive cross-examination during trial, its lawyer remained mute during direct examination. Indeed, even on appeal, Hardie points to only three examples of testimony that purportedly exceeded the scope of his expertise. Although these three examples purportedly violated the court's ruling limiting the scope of Chekene's testimony to his qualification as an architect, and not a materials engineer, Hardie failed to object when Chekene transgressed the trial court's ruling. The failure to object forfeits the right to complain on appeal. (Telles Transport, Inc. v. Workers' Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, 1167.)

Moreover, one of the so-called transgressions did not apply to the siding and the other two, when taken in context, either did not exceed the scope of the trial court's ruling or were clearly harmless. Hardie complains that Chekene testified that its siding had high levels of alkalinity, requiring special primer and, in the absence of the primer, the paint would fall off. Chekene testified that Hardie boards are composed of cement and wood fibers. When the cement boards are not cured with water, according to Chekene, the pH will stay high, and the paint topcoat will peel at the cut ends. He observed that phenomenon in the field. "So what we found in the field is that there were large sections that were peeling off the primer, and then we had sections that, where the primer was peeling off of the Hardie." Chekene testified that the Hardie warranty provides "that the product will not crack, rot or delaminate."

The trial court had ruled Chekene, as a forensic architect, was qualified to testify to his personal observations. It was in that capacity he tested the pH level of the cement boards and opined that the high level of alkalinity was problematic. We disagree with Hardie that Chekene's testimony about alkalinity exceeded the scope of his expertise or violated the trial court's pretrial ruling. It was, however, fertile ground for cross- examination, an opportunity ably seized by Hardie's lawyer at trial. Thus, the question, as pointed out by plaintiff, goes to the weight, not the admissibility, of his testimony.

Next, Hardie objects to Chekene's testimony the Hardie siding expanded laterally, causing leaks in the systems' defenses against water, a condition he attributed to "jumbled" wood fibers. Again Hardie insists Chekene's opinion is well beyond his area of expertise and "Hardie presented evidence directly to the contrary." As to the latter observation, Hardie was certainly free to discredit Chekene, as it attempted to do, with the testimony of its own expert who disputed Chekene's conclusion the wood fibers were jumbled. But that is precisely the role of the jury—to make its own credibility assessments in evaluating the merits of the battling experts' testimony. As the California Supreme Court has admonished, "The trial court's gatekeeping role does not involve choosing between competing expert opinions." (Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747, 772 (Sargon).) As to the substance of Chekene's testimony about "jumbled" wood fibers, we must review the characterization in context.

Checkene was asked, "What were your findings with respect to the condition of the Hardie siding after you started investigating this project?" He responded: "Well, we found that both the shingle siding and the lap siding are warped, swollen and delaminating to various degrees. We found that the siding is expanding laterally.

"In other words, if you have two long boards on that wall behind you and they're butted together, that when the siding swells, it crushes the butt joint. And because of that, it tears the nail, the nail that's sticking through the paper, where the siding was attached.

"That's important because, if you take a piece of cedar, and most of you probably have either plywood or cedar homes in Truckee, is pretty typical, but if you put a 14-foot piece of cedar on that wall, and another 14-footer, you butt it together, it will never expand in that direction, because the fibers in the material know where they belong.

"They know that they were growing in a tree this way, and that's it. And they're not going to fight each other.

"Now, if you're talking about this, the width of the board, that will shrink. So you might buy an eight-inch board, and it will end up at seven-and-three quarters.

"But with Hardie, and with some of the other synthetic compositions, the wood fibers are all jumbled, and that increases the expansion and contraction."

As a forensic architect Chekene investigated the Riverview project and concluded the siding was "warped, swollen and delaminating." He sought to explain the potential cause of the damage he personally observed. As a professional architect for 35 years and a forensic architect for 23 years, who had specified products for construction jobs for decades, he was qualified to opine on the difference between wood and synthetic siding. Contrasting the two, he used the colloquial term "jumbled" to explain how the wood fibers within a fiber concrete siding differed from the fibers in wood. We cannot say that in this context, the trial court abused its discretion in allowing Chekene to venture his professional opinion that where wood would not expand, the synthetic composite would, particularly where, as here, Hardie did not object at the time the testimony was given and the opinion did not exceed the scope of the trial court's pretrial ruling.

It is true the trial court warned Chekene not to opine whether any problems or deficiencies he observed in Hardie products constitute a manufacturing defect. The court ruled that testimony about manufacturing exceeded the scope of his qualification. At trial, Hardie's lawyer cross-examined Chekene about the damaged roof shingles. The cross-examination is confusing. It reads:

"Q. And there was also a lot of loss of granular content on those shingles?

"A. Yes, there was a lot. You can see how many granules are missing.

"Q. Okay. And you have photographs of lots of granular material from the top of the -- or from the shingles, is that correct?

"A. That's correct, if the shingle is not composed right with its asphalt content and its granules, under ice it shears off.

"Q. Okay. And so, so what is causing that is the ice, correct?

"A. This is the ice. I don't know how close it is to the edge. This is also, as we've seen in a couple of cases in Mammoth, basically a defective, defective manufactured shingle.

"Q. Okay. So you don't believe that -- do you remember who made the shingles at Riverview?

"A. I don't remember who made the shingles. And the manufacturers approach it completely differently. If I were to put in, or if an attorney were to put in a claim on it, some of them would just provide you new shingles, and others fight Armageddon against you. It just depends on the manufacturer. I don't remember whose they are."

It is unclear from this record that Chekene was even talking about a Hardie product when he ventured an opinion that the shingle in the photograph he was discussing was defective. He expressly testified twice that he did not know who had manufactured it and the subject of the testimony involved the roofs. Counsel did not ask the judge to admonish the witness for violating the pretrial order directing Chekene from opining on whether any of Hardie's products were defective. And finally, we conclude that even if Chekene had slipped and in this one instance stated that the shingle in the photograph, like others he had observed in Mammoth, was defective, the transgression was harmless. After all, Chekene was explaining a photograph to the jury, and therefore, the jurors themselves had the opportunity to observe the alleged "defect"—whether there were missing granules. His testimony was not an assessment of a complicated manufacturing process the jury would be ill equipped to evaluate in the absence of expert testimony, but rather a visual assessment of the granules that were missing from the shingle. For all these reasons, we conclude his one lapse into using the word "defect" does not constitute reversible error.

Nor is Chekene's testimony similar to the speculative, circular expert testimony disparaged by the Supreme Court in Sargon, supra, 55 Cal.4th 747 which, the court found, had no rational basis. In reversing the Court of Appeal, the court found the trial court did not abuse its discretion by excluding the expert testimony on lost profits based on "speculative projections of future spectacular success." (Id. at p. 781.) The expert's lost profit projections were " 'wildly beyond, by degrees of magnitude, anything Sargon had ever experienced in the past.' " (Id. at p. 779.)

Rather, Chekene's testimony is more analogous to the post-Sargon product liability case of Garrett v. Howmedica Osteonics Corp. (2013) 214 Cal.App.4th 173 (Garrett), wherein a metallurgist filed a declaration in opposition to a motion for summary judgment stating that he had determined through destructive testing and other observations that a portion of the plaintiff's prosthesis was "softer than the 'minimum required hardness' in two of the three ASTM specifications covering the alloy for use in an implant and was less than the 'expected hardness' of the third specification." (Id. at p. 187.) The defendants, relying on Sargon, challenged the admissibility of the metallurgist's opinion. In Garrett, the court rejected the Sargon analogy and so do we.

The court explained: "In our view, [the metallurgist's] failure to describe the particular testing processes that he used to arrive at his conclusions regarding the hardness of the prosthesis and his failure to more particularly describe the results of that testing do not in any manner indicate that his conclusions are speculative, conjectural or lack a reasonable basis. Whatever shortcomings that cross-examination may or may not reveal in [the metallurgist's] testing methods and opinion, we believe that the absence of more specific information as to the testing methods used and the results obtained would not provide any grounds for the trial court to conclude that there was no reasonable basis for [the metallurgist's] opinion." (Garrett, supra, 214 Cal.App.4th at p. 187.)

Both courts relied on the deferential standard of review in assessing the admissibility of the expert's opinion. Neither the Supreme Court in Sargon nor the Court of Appeal in Garrett found that the trial court had abused its discretion. In Sargon, the Supreme Court reminded trial courts to be cautious in excluding expert testimony. (Sargon, supra, 55 Cal.4th at p. 772.) "The trial court's preliminary determination whether the expert opinion is founded on sound logic is not a decision on its persuasiveness. The court must not weigh an opinion's probative value or substitute its own opinion for the expert's opinion. Rather, the court must simply determine whether the matter relied on can provide a reasonable basis for the opinion or whether that opinion is based on a leap of logic or conjecture. . . . The goal of trial court gatekeeping is simply to exclude 'clearly invalid and unreliable' expert opinion." (Ibid.)

The record documents how ably the trial court performed its gatekeeping function. As in Sargon and Garrett, the trial court carefully evaluated Chekene's credentials and the foundations upon which he purportedly relied in rendering his expert opinion. The court tailored the scope of the testimony to equate to the scope of his expertise and he expressly instructed the jurors to limit their consideration of the testimony he offered. None of the three rather trite examples Hardie proffers evidence an abuse of discretion. To the contrary, when reviewed in context they vividly demonstrate the exemplary fashion in which the trial court acted as the gatekeeper, and to this end, allowed the jury to only hear and consider expert opinion commensurate with the expert's credentials and the foundation the plaintiff carefully laid. We can find no evidentiary error.

III

Testimony Regarding Other Alpine Projects

At the center of this case was the credibility of two of the key expert witnesses, Chekene for plaintiff and Kuizenga for Hardie. Plaintiff portrayed Chekene as an extremely experienced architect familiar with construction in an alpine environment and quite familiar with using Hardie products in such a grueling climate. By contrast, plaintiff attempted to discredit Hardie's product specialist, Kuizenga, who had transferred to the litigation department and had been flown in from Chicago to attest to the performance of Hardie products in a climate he was unfamiliar with. It was in this context that plaintiff initially sought to introduce evidence of Chekene's familiarity with Hardie products in an alpine environment and, later when Kuizenga testified that Hardie had installed a billion square feet of their product and it was all doing well, to discredit his testimony.

On appeal, Hardie contends it is entitled to a new trial because the trial court erroneously allowed Chekene to testify to the failure of its products without proof of the substantial similarity between the products used at Riverview and the products used in the other alpine projects. (Mixon v. Pacific Gas & Electric Co. (2012) 207 Cal.App.4th 124, 138.) We review Hardie's objection to the admission of the expert testimony for an abuse of discretion. (Sargon, supra, 55 Cal.4th at p. 773.) "A ruling that constitutes an abuse of discretion has been described as one that is 'so irrational or arbitrary that no reasonable person could agree with it.' " (Ibid.)

Analysis

The issue was thoroughly vetted during trial. The trial court allowed Chekene to testify to his familiarity with Hardie products in other alpine projects. The testimony was brief. Most significantly, the court gave the jury a limiting instruction. During redirect examination, plaintiff's lawyer asked Chekene, "Now [Hardie's lawyer] questioned you extensively about your experience with Hardie products, Hardie siding, and you have had -- have you had other experience with Hardie siding in the mountain regions of California?"

Chekene responded: "We were the architectural expert in Mammoth for Eagle Run where we experienced very similar failure of the Hardie.

"We were the architectural experts in Mammoth Green, where we've seen very similar failure. Both of those projects are being stripped. Eagle Run is being done by someone else. Mammoth Green we're doing. It going to bid here in the next couple of weeks.

"When we repaired the Snow Crest Lodge at Kirkwood, we saw a very similar problem, but it was in a much more limited fashion, because at Kirkwood, most of the building is stucco, and only the decorative elements had Hardie on it. I believe the ridge and two sections and some of the balconies. So that was replaced, but it was never really articulated as a major issue. But the same type of delamination was going on there.

"The, there is a project right across the street from Riverview, away from the river across the rodeo, called Winter Park, I believe it's called. And that project was in our office. I did not have it, but, again, it was a Hardie project, and it is being stripped right now."

Hardie called their product specialist, Kuizenga, to attest to the quality of their products. He specifically testified that Hardie had been selling products in the Truckee area since the 1990's. According to Kuizenga there are about three million square feet in the area and two billion square feet around the country and in Canada, including mountain regions. He concluded, "So we've had a history of selling product into Alpine areas. And it's fine." He went further in describing other projects noting that Hardie products were used on two projects adjacent to Riverview and again, "they all look fine."

Kuizenga, a lawyer, also worked with the warranty department. Hardie offers a 50-year warranty that its product "won't crack, rot or delaminate." He testified there are not many claims. He stated, "There is [sic] very, very few claims." His testimony opened the door to searing cross-examination about other claims and other lawsuits.

Hardie vehemently objected, insisting "[t]hat is exactly what 1101/1102 is designed to protect against." The court responded: "And on direct examination, this is a direct quote, 'There aren't that many claims,' was his testimony. [¶] . . . [¶] His testimony was also, a direct quote, '95 percent of our warranty claimants are satisfied with the processing of their claim.' He opened that door, and they're entitled to walk right through it. [¶] We're not going to have a mini-trial about Mammoth Green and Winter Creek or all those other places. But they're entitled to impeach that portion of his testimony, and that's what they're doing. [¶] At some point, I'll say, enough's enough. I'm not there yet."

The trial court admonished the jury to consider Chekene's testimony only for the limited purpose of establishing his familiarity with the product. "A juror has asked how, if at all, the jury should consider the testimony of Mr. Chekene about the performance of Hardie fiber cement siding products at alpine climates other than the Riverview project. Some evidence is admitted for limited purposes. This testimony by Mr. Chekene about other projects . . . projects other than the Riverview project was admitted to establish Mr. Chekene's familiarity with the product as foundation for his proffered expert opinions about the performance of the Hardie fiber cement siding product at the Riverview project. It may be properly considered by the jury only for this purpose. This trial is focused only on the Riverview project. We will -- we will not be taking evidence about other projects. The jury should not be distracted by speculating about other projects not at issue in this case."

On this record, we can find no abuse of discretion. The trial court allowed Chekene to testify during redirect examination to a small sampling of other projects involving Hardie siding to demonstrate his familiarity with Hardie products and thereby to establish his credentials and credibility with the jury. As evidenced by the prologue to plaintiff's lawyer's question, Hardie had examined Chekene about that very topic—his familiarity with Hardie products. In response to cross-examination, the trial court simply allowed plaintiff's lawyer to bolster his credibility by demonstrating that, in his capacity as a forensic architect, he had examined Hardie products on other projects and had observed some of the same problems.

Moreover, the trial court did not allow the examination to devolve into a mini-trial on other projects. In balancing the probative value against the risk of undue prejudice, the court allowed Chekene to briefly describe the other projects. The questioning is reflected in a mere page in the reporter's transcript. Thus, the probative value was substantial in establishing Chekene's expertise and the risk of undue prejudice was minimal.

Nor can we say the trial court abused its discretion where, as here, it gave an appropriate limiting instruction. By directing the jury to consider Chekene's testimony about Hardie products used on other projects only as evidence of his familiarity with the products, the court minimized the risk of any prejudice that his reference to problems with the siding on other projects was proof of either negligence or a design defect. The trial court carefully assessed the evidentiary value of the brief testimony and focused the jury's consideration of the evidence to the narrow question of expertise and, in doing so, exercised its broad and sound discretion. We are not at liberty to reassess the trial court's calculus in the absence of an abuse of discretion.

DISPOSITION

The judgment is affirmed.

RAYE, P. J. We concur: NICHOLSON, J. DUARTE, J.


Summaries of

Riverview Townhomes Owners' Ass'n v. James Hardie Bldg. Prods., Inc.

COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Nevada)
Jul 10, 2017
No. C078252 (Cal. Ct. App. Jul. 10, 2017)
Case details for

Riverview Townhomes Owners' Ass'n v. James Hardie Bldg. Prods., Inc.

Case Details

Full title:RIVERVIEW TOWNHOMES OWNERS' ASSOCIATION, Plaintiff and Respondent, v…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Nevada)

Date published: Jul 10, 2017

Citations

No. C078252 (Cal. Ct. App. Jul. 10, 2017)