Plaintiff ORDER ON DEFENDANTS' v. MOTIONS FOR SUMMARY JUDGMENT CHARLES UNGER dlb I a FORE RIVER STUDIO,
JOSEPH POLLAK dlb I a KNOCK ON WOODWORKS,
and
CASCO BAY BUILDERS, INC. dlb I a KNOCK ON WOODWORKS,
Defendants
BEFORE THE COURT
Before the court is Defendants' Joseph Pollak and Casco Bay Builders
(both dlbl a "Knock on Woodworks") Motion for Summary Judgment pursuant
to M.R. Civ. P. 56. Defendant Charles Unger (d/bl a Fore River Studio) also filed
a Motion for Summary Judgment, joining in part in the reasoning of his co
defendants' motion.
PROCEDURAL HISTORY
Plaintiff filed suit on November 10, 2008, to recover damages from a fire
that occurred at Dana Warp Mill on June 8, 2008. The fire started in Defendants'
woodworking shop, in space the Defendants co-leased in the Dana Warp Mill.
Plaintiff's suit is a subrogation claim pursuant to M.R. Civ. P. 17(c). The insurer
in this case is Lloyd's of London. Plaintiff asserts three claims in the Complaint:
Count I alleges Defendants were negligent; Count II asserts a claim of Trespass
related to fire, smoke, and water damage; and Count III asserts Defendants are strictly liable because their abnormally dangerous activity - the application of
flammable chemicals to furniture with a spray gun - caused the fire.
FACTUAL BACKGROUND Dana Warp Mill, LLC was formed in 2000. Following formation, it
purchased the assets of CCK Realty Trust, including the Dana Warp Mill- a
property consisting of approximately 200,000 square feet of leasable space.
Timothy Flannery was a co-owner of CCK Realty Trust, and is the sole owner of
Dana Warp Mill, LLC. Beginning on September I, 1999, and continuing through
June 8,2006, Defendants Charles Unger and Joseph Pollak co-leased unit 365 of
the Dana Warp Mill. Unit 365 consists of approximately 4,500 square feet of
commercial space. Neither could afford the workspace on their own so they
alternated paying the monthly rent. Unger is the sole proprietor of Fore River
Studio. Unger manufactures residential wooden furniture and custom cabinetry.
Pollak is the president of Casco Bay Builders, doing business as Knock on
Woodworks. Pollak also builds custom residential wooden cabinetry and
furniture. Pollak used the western portion of the workspace in Unit 365, and
Unger used the eastern portion of the workspace. While the two occasionally
would coordinate on large projects, they have separate and independent
businesses and have no formal business relationship.
A few months after moving into the workspace, Unger and Pollak
constructed a spray booth, in which they applied lacquer and other finishes to
their products. Only one person at a time could use the booth. Unger and Pollak
designed and constructed the booth, and they allegedly consulted with the
Westbrook Fire Chief with regard to fire safety issues prior to building the booth.
2 Pl.'s Opp. S.M.F. ~18; Ex. B. pp. 47-48. Both Unger and Pollak used the spray
booth for nearly six years without incident.
On the evening of June 7,2006, Unger (1) used a high pressure, low
volume spray gun to spray a veneered dry bar with lacquer, (2) he used a high
pressure, low volume cup gun to spray two end tables with an oil based paint
thinned with Penetrol and paint thinner, and (3) he applied a mixture of varnish,
Penetrol, paint thinner, and a chemical catalyst to a piece of plywood. Prior to
June 7th, Unger does not recall having used Penetrol within the spray booth.
According to Plaintiff's expert, Penetrol's MSDS 1 form states that it has the ability
to spontaneously combust. When Unger was finished work around 10:00 p.m.,
he ran an exhaust fan for 20 minutes, turned off the lights to the workspace, and
went home. Unger was the last known person to enter the spray booth.
Around 9:00 a.m. the next morning, on June 8th , Pollak saw smoke
billowing out of both spray booth vents. He entered the spray booth with a fire
extinguisher where he saw white smoke at the ceiling and dark colored liquid on
the floor. Pollak turned the exhaust fan on and the fire department arrived. The
fire department instructed Pollak to leave the spray booth and turn off the
power. As he walked to the electrical panel he noticed a small fire on the floor of
the spray booth, which quickly turned into a large fire with flames up to the
ceiling. Opp. S.M.F. ~ 30. The sprinkler and fire alarm activated and Pollak
exited the building. The fire caused approximately $260,000 in damage to the
building.
\ "MSDS" stands for material safety data sheets. MSDS forms provide information regarding a substance's properties, and also include information related to a substance's toxicity, health effects, storage, and spill handling procedures.
3 Plaintiff's expert Donald Hoffman, Ph.D, a specialist in the science and
engineering of analyzing fires and explosions, offers the following opinion
regarding the fire:
[T]he fire started as a result of the misuse and/ or mishandling of hazardous, flammable/ combustible materials in the spray booth .... Defendant Charles Unger was using a chemical known as Penetrol the evening before the fire was discovered. The Penetrol was mixed with oil based paint and possibly thinner, and was applied to a wood surface with a spray applicator. The process resulted in overspray so that the mixture containing the Penetrol was also applied to the surfaces around the work piece, including the barrel used for a work stand and the floor, among other things. There was debris on the floor including sawdust and other overspray residue, and used rags were also likely in the area. The Penetrol waste was not properly disposed of. It is likely the Penetrol spontaneously combusted and started a smoldering fire in the spray booth. There was flammable liquid on the floor of the spray booth which was ignited shortly after Mr. Pollack [sic] discovered the smoke from the smoldering fire.
The fire was caused by the misuse and mishandling of the Penetrol and other flammable liquids. The overspray and sawdust and accumulation of other flammable liquids should have been cleaned up and removed. Used rags should have been removed from the spray booth and properly disposed of. The flammable liquid stored in the spray booth and accumulated on the floor of the spray booth should have been cleaned up properly and removed. Had these flammable and combustible materials, including Penetrol, and their wastes been properly used, handled and stored, this fire would not have occurred. The Defendants knew or should have known about the proper storage, handling and use of the products and should have taken appropriate steps to mitigate the hazards so a fire did not occur.
Def.'s S.M.F., Ex. D, pp. 1-2.
After the fire, Dana Warp Mill, LLC made a claim with Lloyd's of London,
the insurer, for $253,127.18 as a result of the fire. Lloyd's of London paid the
entirety of the claim through East Coast Claims Services, Inc. Dana Warp Mill
has not recovered its $5,000 deductible.
4 As of June 8, 2006, the original lease between Unger and Pollak and the
Dana Warp Mill had expired, such that Unger and Pollak were leasing Unit 265
on a month-to-month basis. Flannery claims it was understood that the month
to-month oral lease was under the same terms as the previous lease, and Unger
and Pollak understood that they could be liable for damage to the building.
Flannery Dep. at 63:19-4:12. According to Unger and Pollak, there were no
written documents in effect that specifically advised them that they would be
liable in subrogation for fire damage. The August 29, 2005 letter from Flannery
that put Unger and Pollak on notice of their month-to-month tenancy made no
mention of the terms of the prior lease. Flannery Dep., Ex. 3. The original lease
required Unger and Pollak to maintain property insurance? Flannery Dep. at
63:19-4:12; Unger Dep., Ex. 1, cl. 9.
Throughout Pollak's and Unger's tenancy, CCK Realty Trust or Dana
Warp Mill, LLC maintained an insurance policy on the buildings at Dana Warp
Mill. Opp. S.M.F. err 31. Around November 2000, Flannery received a letter from
Dana Warp Mill's insurer stating that the spray booth was not constructed to
code, and as a result the Mill's insurance premium increased. In response, on
November 29, 2000, Flannery sent Unger and Pollak a letter notifying them that
the insurance premium had increased due to the spray booth, and that he was
passing the cost increase onto them pursuant to the lease? The letter stated the
2 While it is not clear what type of insurance Unger and Pollak had, their depositions indicate that they did have insurance policies. Unger Dep. at 114. Pollak says he was insured through the Concord Group. Pollak Dep. at 14. 3 Paragraphs 5(B)(4) and 5(C) of the lease provide that ifthere is a breach of the lease the "Landlord may at its option either declare the Tenant in default of their lease and exercise its rights and remedies pursuant to paragraph #12 or charge Tenant, as additional rent, for the portion of all insurance premiums previously or thereafter paid by Landlord charged
5 insurance premium for the last four months had increased by $654.58 per month.
Flannery required Unger and Pollak to pay $2,618.32 to cover the increased cost
for the last four months, and stated that Unger and Pollak would have to pay"an
additional $654.58 per month until this matter is resolved." Flannery Dep., Ex. 4.
Unger and Pollak paid the $2,618.32, and made changes to the spray booth to
bring it up to code.
While the insurance premium did not decrease, Unger and Pollak did not
continue to pay the extra $654.58 per month, and the issue "went away." Pollak
Dep. at 114:19-21. Flannery never sent Unger and Pollak another bill for the
increased premium because he believed that the rental income he received from
Unger and Pollak, which he used in part to pay for insurance on the property,
"was adequate to pay for their pro rata share of the insurance premium."
Flannery Dep. at 36-37.
Defendants Pollak and Casco Bay Builders filed a motion for summary
judgment on three issues. Defendant Unger filed a motion for summary
judgment, joining Defendants Pollak and Casco Bay Builders on their first and
third ground for summary judgment. Defendants' first motion claims that based
on North River v. Snyder, 804 A.2d 399 (Me. 2002), Lloyd's of London, as subrogee
of Dana Warp Mill, LLC, cannot recover from the Defendants the $253,127.18 it
paid to cover the cost of the fire damage. Second, Defendants Pollak and Casco
Bay Builders claim that Dana Warp Mill, LLC cannot present prima facie
evidence of negligence because Pollak was not a proximate cause of the fire.
by Landlord's insurer due to Tenant's breach of any provisions of this paragraph #5." Unger Dep., Ex. 1.
6 Third, Defendants claim they are not strictly liable because spraying paint cannot
be considered an abnormally dangerous activity.
DISCUSSION
I. Standard of Review
Summary judgment should be granted if there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law. M.R.
Civ. P. 56(c). In considering a motion for summary judgment, the court should
consider the facts in the light most favorable to the non-moving party, and the
court is required to consider only the portions of the record referred to and the
material facts set forth in the parties' Rule 56(h) statements. E.g., Johnson v. ~
McNeil, 2002 ME 99, err 8, 800 A.2d 702, 704. A contested fact is "material" if it
could potentially affect the outcome of the suit under the governing law. Inkel v.
Livingston, 2005 ME 42, err 4,869 A.2d 745, 747. A fact is "genuine" if there is
sufficient evidence supporting the claimed fact to require a fact-finder to choose
between competing versions of facts at trial. Id. For the purposes of summary
judgment, factual disputes and ambiguities must be resolved against the movant.
Nevertheless, when the facts offered by a party in opposition to summary
judgment would not, if offered at trial, be sufficient to withstand a motion for
judgment as a matter of law, summary judgment should be granted. Rodrigue v.
Rodrigue, 1997 ME 99, err 8, 694 A.2d 924, 926.
II. Applicability of the Anti-Subrogation Rule
The Defendants' first ground for summary judgment asks the court to
extend the anti-subrogation rule to commercial leases based on the holding in
North River Ins. Co. v. Snyder, 2002 ME 146, 804 A.2d 399. Defendants claim they
7 were "co-insured" under Dana Warp Mill's insurance policy.4 The Snyder court
held that" a residential tenant may not be held liable in subrogation to the
insurer of the landlord for damages paid as a resul t of a fire ... absent an express
agreement in the written lease that the tenant is liable in subrogation for fire
damage." Snyder at <[ 1, 804 A.2d at 400. "The anti-subrogation rule announced
in Snyder is based on considerations of economic waste in the procurement of
insurance and the reasonable expectations of a landlord and a tenant." The
Norfolk & Dedham Group of Ins. Companies v. Kostovick, 2009 Me. Super. LEXIS 50,
*8. The Snyder court only applied the anti-subrogation rule to residential
tenancies based in part on the belief that"commercial tenants tend to be more
sophisticated about the terms of their leases" than residential tenants. Snyder, at
<[ 15, 804 A.2d at 403, n. 7 (citing Seaco Ins. Co. v. Barbosa, 761 N.E.2d 946, 950
(Mass. 2002)).
The argument that the anti-subrogation rule should be applied to
commercial tenancies is not without support. In applying the rule to commercial
tenancies, the Connecticut Supreme Court stated that a rule requiring the tenant
to maintain insurance in anticipation of a subrogation claim is wasteful: "Such a
rule would create a strong incentive for every tenant to carry liability insurance
in an amount necessary to compensate for the value, or perhaps even the
4 The Defendants argue based on the implied co-insured doctrine that they are co-insured under Dana Warp Mill's insurance policy. That doctrine provides that absent an express agreement to the contrary, the tenant can be considered co-insured under the landlord's insurance policy because (1) "both parties have an insurable interest in the premises, the former owns the fee, and the latter has a possessory interest"; (2) the landlords purchased fire insurance to "protect such interests ... as a matter of sound business practice the premium paid had to be considered in establishing the rent rate"; and (3) it follows that "the tenant actually paid the premium as part of the monthly rental." Snyder, at ~ 13, 804 A.2d at 403 (citing Sutton v. Jondahl, 532 P.2d 478, 482 (Okla. App. 1975)).
8 replacement cost, of the entire building, irrespective of the portion of the
building occupied by the tenant." DiLullo v. Joseph, 259 Con. 847 * 854, 792 A.2d
819,823 (Conn. 2002).
However, Defendants' request for application of the anti-subrogation rule
and the implied co-insurance doctrine fails based on the express terms of their
lease agreement. First, the fact that Defendants were holdover tenants subject to
a month-to-month tenancy at the time of the fire is not determinative in this case.
Generally, the legal relationship of the landlord and tenant during a holdover
tenancy is governed by the terms of the prior lease. RESTATEMENT (SECOND) OF
PROP: LANDLORD AND TENANT, § 14.7 (1977). The prior lease required the
Defendants to carry indemnity and public liability insurance. Clause 9 of the
prior lease states that I/[t]he provisions of this paragraph shall survive the
termination or early expiration of the term of his lease." Unger Deposition, Ex. 1,
cl.9. Because the terms of the prior lease generally control during a holdover
tenancy, and because clause 9 of the lease requires insurance to continue beyond
the termination of the original lease, the Defendants' claim that no written
agreement governed the month-to-month tenancy fails.
Second, the anti-subrogation rule only applies absent an express
agreement in the written lease. As previousl y stated, the Defendants agreed in
their lease to carry Indemnity and Public Liability Insurance. Specifically clause
9(A) of the lease states:
Tenant will defend and indemnify Landlord and save Landlord harmless from any and all claims, actions, damages, liability and expense ... in connection with the loss of life, personal injury or damage to property of business arising from, related to, or in connection with the occupancy or use by Tenant of the Leased Premises ....
9 Additionally, clause 9(B) of the lease states:
Tenant agrees to maintain in full force during the term hereof a policy of public liability and property damage insurance under which Tenant is named as insured and Landlord as additional insured, and under which the insurer agrees to indemnify and hold Landlord and those in privity with Landlord harmless from and against any and all costs, expenses and/ or liability arising out of or based upon any and all claims, accidents, injuries, and damages mentioned in [clause 9(A)] .... The minimum amount of liability of such insurance shall be ... $100,000.00 with respect to property damage.s
The requirements under the lease are unambiguous and are sufficient to put the
Defendants on notice that they could be held liable to the Landlord's insurer in a
subrogation claim. Given that there are express contractual terms regarding
indemnity in the Defendants' lease, the anti-subrogation rule is not applicable.
Defendants claim they are co-insured under Dana Warp Mill's insurance
policy because Flannery charged them increased insurance and used rental
income to pay for the Defendants' "pro rata share of [the] insurance premium."
This argument fails due to the terms of the lease as well. Under clause 9(D),
tenants agreed to pay for the landlord's increased insurance expenses if the
increase was a result of the tenants' use of the premises. It was permissible
under the lease to pass the increased costs on to Unger and Pollak, and it only
makes sense that a landlord would pay for insurance costs out of rental proceeds.
III. Defendant Pollak and the Issue of Proximate Causation
Defendants Pollak's and Casco Bay Builders' second ground for summary
judgment argues that Pollak's conduct was not a proximate cause of the fire.
This motion is based on the fact that it was Unger, and not Pollak, who used the
5 The record does not indicate whether the tenant procured the insurance required by this provISIOn.
10 chemical Penetrol, which is believed to have caused the fire through spontaneous
combustion.
Generally, the issue of proximate cause is a question of fact for the jury.
Simmons, Zillman & Gregory, Maine Tort Law § 7.13 (2004 ed.) at 7-34. "The
question of whether a defendant's acts or omissions were the proximate cause of
a plaintiff's injuries is generally a question of fact, and judgment as a matter of
law is improper if any reasonable view of evidence could sustain a finding of
proximate cause." Houde v. Millett, 2001 ME 183, en: 11, 787 A.2d 757, 759. The
foundational basis for proximate causation is the reasonable foreseeability of the
injury. Brewer v. Roosevelt Motor Lodge, 295 A.2d 647, 652 (Me. 1972). "An injury
or damage is a reasonably foreseeable consequence of an act or failure to act
when that act or failure to act creates a risk which might reasonably be expected
to result in the injury or damage in question, even though the exact person
injured or the exact nature of theinjury need not, itself, be foreseeable." DONALD
G. ALEXANDER, MAINE JURY INSTRUCTION MANUAL § 7-80 (3rd ed. 2009). Under
Maine law, it is possible that there may be more than one proximate cause to a
particular accident. Fournier v. Rochambeau Club, 611 A.2d 578, (Me. 1992).
A jury could find Defendant Pollak's conduct to be a reasonably
foreseeable factor in causing the fire. As Plaintiff's expert Dr. Hoffman will
opine, the fire was caused by misuse and mishandling of flammable liquids and
materials in the spray booth. While Penetrol may have been the final ingredient
that started the fire, both Unger and Pollak could be found to have contributed to
the fire through the improper storage of chemicals and t1ammable liquids, and
through the failure to dispose of overspray, sawdust, and rags inside the spray
booth. Because it is possible Dana Warp Mills could show that Defendant Pollak
11 was a proximate cause of the fire, Pollak's motion for summary judgment on the
issue of proximate causation is denied.
IV. Abnormally Dangerous Activity
Defendants' seek summary judgment on Count III of the Plaintiff's
Complaint, which classifies the Defendants' conduct as an abnormally dangerous
activity. Dana Warp Mill's Complaint asks the court to hold Defendants strictly
liable for applying flammable chemicals with a spray gun. The application of
strict liability based on abnormally dangerous activity remains an open question
in the State of Maine. Thompson's Point Inc. v. Gates Formed-Fibre Prods., 1997 Me.
Super. LEXIS 262 *9 *(Sept. 3, 1997) (stating that "the Law Court has not adopted
the concept of strict liability with respect to dangerous activities").
In support of the position that Defendants' should be strictly liable for
their activity, Dana Warp Mill cites authority from other jurisdictions that hold
that "the storage of highly flammable substances is an abnormally dangerous
activity." Pl.'s Opp'n to Def.'s Mot. Summ. J. at 14. However, these cases are
distinguishable based on the fact that they involve defendants that manufactured
or stored large volumes of chemicals.
The court turns to the Restatement to determine if the application of
flammable chemicals with a spray gun is an abnormally dangerous activity. The
Restatement identifies six factors to consider in determining if an activity is
abnormally dangerous. 6 RESTATEMENT (SECOND) OF TORTS § 520 (1977). While
6 According to section 520 of the Restatement (Second) of Torts, "[i]n determining whether an activity is abnormally dangerous, the following factors are to be considered (a) existence of a high degree of risk of some harm to the person, land or chattels of others; (b) likelihood that the harm that results from it will be great;
12 applying flammable chemicals with a spray gun may present a high risk of harm,
that risk can be minimized or eliminated through the use of reasonable care. In
this case, Defendants' took precautions by constructing a spray booth designed
to comply with fire safety code. Also, Dr. Hoffman identified several
precautions that could have been taken to minimize the risk of fire. These
precautions indicate that the risks presented by these flammable chemicals can
be eliminated through reasonable care. Additionally, the application of
flammable chemicals to wood products is a common activity. Many of the
chemicals present in Defendants' spray booth (paint, paint thinner, and lacquer)
are also present in the garages and basements of hobbyists and do-it-yourselfers
across the State. Using and storing the flammable chemicals at issue in this case
is too common for the application of a strict liability standard.
Based on these factors, the court grants the Defendants' motion for
summary judgment on the issue of abnormally dangerous activity.
(c) inability to eliminate the risk by the exercise of reasonable care; (d) extent to which the activity is not a matter of common usage; (e) inappropriateness of the activity to the place where it is carried on; and (f) extent to which its value to the community is outweighed by its dangerous attributes.
13 Therefore, the entry is:
Defendants' Motion for Summary Judgment on the applicability of the anti-subrogation rule is DENIED.
Defendant Pollak's Motion for Summary Judgment on the issue of proximate causation is DENIED.
Defendants' Motion for Summary Judgment on the issue of Abnormally Dangerous Activity is GRANTED.
Dated at Portland, Maine this 2 Jlt/ day of~~ ,2009.
~
14 STATE OF MAINE CUMBERLAND COUNTY SUPERIOR COURT
142 FEDERAL STREET PORTLAND, MAII\lE 04101
To:
J WILLIAM DRUARY ESQ - f{ q, t . . . f? c!.o..) CO MARDEN DUBORD BERNIER & STEVENS PO BOX 708 WATERVILLE ME 04901-0708
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To: - 0;::) '" /' ... STEPHEN BELL ESQ ROBINSON KRIGER & MCCALLUM· PO BOX 568 PORTLAND ME 04112
;iii A I:fi .Jr~~}k· 142 FEDERAL STREET (.'~~~I~§YJ PORTLAND, MAINE 04101
BLAIR JONES ESQ • ~ FRIEDMAN GAYTHWAITE WOLF & LEAVITT PO BOX 4726 PORTLAND ME 04112
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,~.IIi·i CUMBERLAND COUNTY SUPERIOR COURT
Jt~\~4 'L '>'....c cf\'G' 142 FEDERAL STREET 0~~iy PORTLAND, MAINE 04101
BRENDAN RIELLY ESQ -I JENSEN BAIRD GARDNER & HENRY PO BOX 4510 PORTLAND ME 04112