APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA HONORABLE WILLIAM J. SRSTKA, JR. Judge.
The opinion of the court was delivered by: Gilbertson, Chief Justice
[¶1.] Master Blaster, Inc. (Master Blaster) appeals several evidentiary and legal rulings made at the jury trial in which it was found liable for damages caused to Supreme Pork, Inc. (Supreme Pork). We affirm.
[¶2.] In 1999, a small fire broke out in the pressure washer room of Supreme Pork's pig farrowing facility near Lake Benton, MN. The power washer sustained some damage but was completely repaired. In restoring the pressure washer room, Supreme Pork contracted with Master Blaster to add and install a second power washer. It was decided that the power washers' venting system needed to be redesigned and a new chimney installed. Master Blaster did not perform these services.
[¶3.] The parties disagree about the details of the subsequent conversation; however, it is undisputed that Master Blaster recommended Pipestone Plumbing and Heating (PP&H) for the venting and chimney work. Following this discussion, Master Blaster contacted PP&H. PP&H provided a price quote to Master Blaster. Master Blaster included the price of PP&H's quote, plus an additional fee, in Master Blaster's quote and bill to Supreme Pork.
[¶4.] On March 21, 2002, a second fire ignited above the ceiling of the pressure washer room, near the exhaust chimney. This fire did significant damage to Supreme Pork's facilities. Fire investigation experts were retained by a number of parties for post-fire causation analysis.
[¶5.] During the June 2007 trial, several of these experts testified about the cause of the fire and the surrounding circumstances. The trial court permitted testimony regarding: an expert's pretrial preparations made after his deposition; the existence of non-causal building code violations in the chimney installation; the power washer manufacturer's recommendation that a more insulated type of chimney be used; a different fire in 1999 which resulted from PP&H's installation; and, a theory of ignition called "pyrolysis."
[¶6.] The trial court determined that PP&H served as Master Blaster's subcontractor/agent for this project, which, under Minnesota law,*fn1 made Master Blaster liable for PP&H's negligence. Master Blaster appeals these rulings.
1. Whether the trial court erred when it failed to give jury instructions on the issue of agency and independent contractors.
2. Whether the trial court erred when it admitted particular testimony from expert witnesses, in regard to:
a. Mr. Rallis' testimony regarding the use of Class A vents.
b. Dr. Schroeder's testimony regarding "undisclosed underlying information."
c. Mr. Rallis' testimony regarding attic shield "top covers."
3. Whether the trial court erred when it admitted evidence of non-causal code violations on the same project or evidence regarding a 1999 fire at another facility.
4. Whether Dr. Schroeder's testimony regarding "pyrolysis" failed to meet the Daubert v. Merrell Dow Pharmaceuticals, Inc. standard.
[¶7.] 1. Whether the trial court erred when it failed to give jury instructions on the issue of agency and independent contractors.
[¶8.] Both parties concede that PP&H was an independent contractor.After considering the briefs and oral arguments presented by Master Blaster and Supreme Pork on appeal, we find that the issue of "agency" was not an issue in this case.*fn2 Because agency was not an issue, no jury instruction was required.
[¶9.] However, the briefs go beyond this initial concern and deal with the issue of vicarious liability. Therefore, it is necessary to expand the discussion beyond a narrow focus on the "agency" issue to the liabilities that arise from independent contractor relationships. The issue on appeal is better phrased as "Whether a primary contractor is liable for its subcontractor's negligence."*fn3
[¶10.] In 1937, the Minnesota Supreme Court held that a boiler company that contracted to manufacture steel plates and attach them to a water tank was not relieved of its duty of care to its customer by delegating work, attaching the plates, to a subcontractor. Instead, the boiler company was liable for the damage caused by the negligence of its subcontractor. See Pacific Fire Ins. Co. v. Kenny Boiler & Mfg. Co., 277 NW 226 (Minn 1937).
[¶11.] The court explained:
As a limitation to the doctrine of repondeat superior this court has laid down the rule that an employer is not liable for the consequences of the negligent acts of an independent contractor. . . . But the tendency is to enlarge the operation of the doctrine of respondeat superior, and it is a limit which has often been exceeded. Indeed it would be proper to say that the rule is now primarily important as a preamble to the catalog of its exceptions. . . .
Where one person owes another a contractual duty to act, the law imposes upon the person owing that duty the further duty of acting with due care in the performance of his contract so as not to injure the contractee's person or property. This duty is nondelegable. That is, the performance of the contract may be delegated to another, but this delegation does not relieve the contractor of the duty to act, or of his duty to act with due care. Consequently defendant is subject to liability for damage suffered by the contractee as a result of the negligence of the independent subcontractor.
Id. at 228(citations omitted). This principle survives to this day. See Brasch v. Wesolowsky, 138 NW2d 619 (Minn 1965); Theissen-Nonnemacher, Inc. v. Dutt, 393 NW2d 397 (MinnCtApp 1986); Federal Ins. Co. v. Westurn Cedar Supply, Inc., 2008 WL 686556 (DMinn March 13, 2008) (Slip copy) (applying Minnesota law). Under Minnesota's rule, the principal contractor is liable for the negligence of its subcontractor.*fn4
[¶12.] Master Blaster is vicariously liable for PP&H's negligence through their contractor/sub-contractor relationship. This issue was properly decided by the trial court as a matter of Minnesota law.*fn5
[¶13.] 2. Whether the trial court erred when it admitted particular testimony from expert witnesses.
[¶14.] In Kaiser v. University Physicians Clinic, 2006 SD 95, 724 NW2d 186, and Papke v. Harbert, 2007 SD 87, 738 NW2d 510, this Court examined the issue of undisclosed expert testimony. The Court recognized that the purpose of pretrial discovery is to allow "the parties to obtain the fullest possible knowledge of the issues and facts before trial." Papke, 2007 SD 87, ¶55, 738 NW2d at 529 (quoting Kaiser, 2006 SD 95, ¶31, 724 NW2d at 194). To fulfill this purpose, the parties are "under a duty seasonably to supplement [their] response[s] with respect to any question directly addressed to . . . the subject matter on which [the expert witness] is expected to testify, and the substance of [the expert's] testimony." Kaiser, ¶32, at 194-95 (quoting SDCL 15-6-26(e)(1)). This is to promote the truth finding process and avoid trial by ambush. Id., ¶34, at 195. Seasonable disclosure allows opposing counsel the ability to effectively cross-examine an expert witness at trial. Id., ¶39 -40, at 197.
[¶15.] "A circuit court's admission of expert testimony falls within its broad discretion and is reviewed under the abuse of discretion standard." Papke, 2007 SD 87, ¶13, 738 NW2d at 515. This Court has identified three areas of concern thatit considers regarding allegations of undisclosed expert testimony: (1) the time element and whether there was bad faith by the party required to supplement; (2) whether the expert testimony or evidence pertained to a crucial issue; and (3) whether the expert testimony differed substantially from what was disclosed in the discovery process. Id., ¶56, at 529; Kaiser, 2006 SD 95 ¶35, 724 NW2d at 195-96.
a. Mr. Rallis' Testimony Regarding the Use of Class A Vents
[¶16.] During the discovery phase of this case, Supreme Pork asked Master Blaster to produce the installation instruction sheet for the All American brand power washer. These instructions provided the manufacturer's recommendations for how the power washer and the venting were to be installed. A copy of these instructions had been given to PP&H prior to installation.
[¶17.] Master Blaster, the product vendor, repeatedly stated it did not have the instruction sheet in its possession and was unable to provide a copy to Supreme Pork or its experts. A copy of the instruction sheet was discovered in the possession of a Master Blaster expert witness*fn6 on May 4, 2007, and given to Supreme Pork. Trial commenced June 11, 2007. No depositions were taken of Supreme Pork's expert witnesses between the time Supreme Pork received the instruction sheet and the beginning of trial. However, their experts received copies of this newly disclosed information.
[¶18.] The instruction sheet stated that for "Venting the Machine," the "Class 'A' Double Insulated Chimney is required for a minimum of 500,000 BTU Heat, or a chimney built of [sic] for 500,000 BTU requirements." The power washers installed at Supreme Pork's facility were rated 480,000 BTUs. The instruction sheet was labeled as Exhibit 26*fn7 and was admitted at trial with no objection by Master Blaster.
[¶19.] Several witnesses, including Master Blaster's owner, Paul Miersma, and a Supreme Pork expert witness, Chris Rallis, discussed or mentioned the contents of Exhibit 26, the differences between Class A and B vents, and the manufacturer's recommendations. Master Blaster did not object to this testimony.
[¶20.] Later, Supreme Pork sought to introduce an actual Class A vent into evidence as an exemplar of what was recommended by the pressure washer manufacturer. This was offered as a comparison to the Class B vent used by PP&H, "so the jury can see what did their manufacturer recommend. Mr. Miersma said he gave to the subcontractor these instructions[, Exhibit 26,] and the subcontractor[, PP&H,] disregarded those instructions. . ." The trial court did not allow the Class A vent into evidence on the basis of Kaiser v. University Physicians Clinic, 2006 SD 95, 724 NW2d 186. During this discussion, the parties again addressed the late discovery of Exhibit 26 and the problems this caused for developing deposition testimony from experts regarding Class A vents.
[¶21.] On the basis of these discussions and these rulings, it is not clear that Rallis' testimony regarding Class A vents rose to the level of the undisclosed expert testimony in Kaiser and Papke. This testimony was the result of newly acquired evidence, long sought by Supreme Pork and only discovered in the possession of a Master Blaster expert witness approximately one month before trial. The bulk of the discussion of Class A vents is made in response to Master Blaster's questioning. From the transcripts, it ...