Border City RV Centre v Vanguard Inc. and Parallax Power Components LLC , 2016 ABQB 31
The Plaintiff, Border City R.V. Centre, is a recreational vehicle dealership located in the County of Vermillion River No. 24, approximately 8 km west of Lloydminster, AB. On August 31, 2004, a fire (the “Fire”) destroyed a 20,000 sq. ft. steel framed commercial building located on the property and most of the building contents. The Fire originated in the building showroom. The Plaintiff claimed that the Fire originated within a travel trailer manufactured by Vanguard Inc., which trailer was displayed in the NW corner of the building showroom. The Plaintiff alleged that the Firestarted in a power converter (the “Converter”), manufactured by the Defendant, Parallax Power Components LLC (“Parallax”) and installed in the trailer. The Plaintiff alleged that a capacitor which was a component in the Converter was defective and caused a fire inside the Converter which escaped into the trailer and spread through the showroom, destroying the building and contents. The Plaintiff claimed that the Defendants were negligent and that the Converter was not of merchantable quality pursuant to the Sale of Goods Act. The Defendants denied liability and maintained that the origin and cause of the Fire was undetermined. The Court dismissed the Action on the basis that the Plaintiff failed to prove on a balance of probabilities that the fire started in the Converter, that the capacitor was defective and that the capacitor caused the fire.
The Plaintiff’s origin and cause expert was the only expert to attend the fire scene and the Converter was the sole piece of physical evidence retrieved from the fire scene. Parallax was not identified as the manufacturer of the Converter before the fire scene was destroyed. The Defendants argued that the fire investigation was incomplete and deficient and failed to comply with the requisite standard for investigation set forth in the National Fire Protection Association (NFPA) 921 Guide. The Court agreed and stated that the fire scene investigation conducted by the Plaintiff was incomplete, unreliable and failed to follow the scientific method of investigating the loss. Regarding the Plaintiff’s origin expert the Court stated, “his conclusions as relates to a single source cause are based on an investigation that falls considerably away from the proper application of the proposed scientific method described in the NFPA 921 Guide.” The Court stated that due to a deficient fire scene investigation, the Plaintiff was committed to a theory that origin and cause of the Fire was the Converter. The Defendants never offered an alternate theory of the origin and cause of the Fire.
The theory proffered by the plaintiff’s experts was that the capacitor was flawed and ruptured, causing the Fire. The Plaintiff’s experts theorized that the improper test procedure identified in a recall notice, explain how the capacitor in the Converter caused the Fire. In 2001 Parallax acquired one of its competitors, Magnatek. In 1998, Magnatek self-diagnosed, self-reported and participated in a product recall, based on an internal safety test that was found to have damaged a film capacitor in some of its converters, which created a fire risk. The Plaintiff alleged that a 1998 recall notice issued by Magnatek, was relevant and material to the Converter manufactured by Parallax. The Court disagreed and held that the recall notice was irrelevant. In reaching that conclusion, the Court noted that the recall was based on an erroneous test procedure which was corrected; that the damage was to film capacitors, the composition of which is materially different than electrolytic capacitors, which allegedly failed herein; and that Parallax never acquired the Magantek asset base until 2001, rendering the 1998 recall notice too remote in time.
The Court also rejected the evidence of the Plaintiff’s experts which relied on an underlying assumption that the Converter was the cause of the Fire, based on an internal failure of the capacitor, similar to that set forth in the recall notice. The Plaintiff’s capacitor expert reviewed photos of the allegedly deficient capacitor recovered from the Converter and opined that it had the appearance of a capacitor that failed internally (was defective). Defence experts attempted to recreate failure conditions alleged by the plaintiff’s experts and test same on exemplar capacitors. The result of such testing contradicted the Plaintiff’s theory that the capacitor was defective and failed. The Court held that “the scientific, dispassionate precision and the objective supportive testing [by defence experts]” led to the conclusion that the cause of the fire was undetermined. Accordingly, the Court dismissed the Action.
As a result of the Court’s causation finding, the Plaintiff’s Sale of Goods Act argument was irrelevant.