Steffy v. Home Depot, Inc., No. 1:06-CV-02227 (M.D. Pa. Dec. 10, 2008)

The Court granted in part and denied in part Defendants Patriot Timber Products and The Home Depot’s motion in limine to exclude the expert opinion testimony of Edward Montz Jr. and Weinstein Realty Advisors under Rule 702 of the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Plaintiffs Darrel and Susanne Steffy’s motion in limine, to exclude the reports and testimony of defense experts William Wheatley and E. Mitchell Swan.

The dispute arose from the sale of plywood to the Plaintiffs for construction of a multi-purpose building on their property in 2004. During construction of the building, the Plaintiffs alleged that they had purchased 400 sheets of plywood from one of Defendant Home Depot’s stores, used it to panel most of the interior walls in the building. Thereafter, Plaintiffs claim that they experienced adverse health effects after using the building, and eventually a “pungent, unpleasant” odor was noticed in the building. After tests were performed, the Plaintiffs determined that the odor was formaldehyde, which allegedly rendered the Building uninhabitable.

Plaintiffs’ expert Edward Montz Jr.’s expert report dealt with the formaldehyde concentrations in the Plaintiffs’ Building. After testing some of the sheets of plywood, Montz estimated a concentration of formaldehyde in the plywood when it was initially purchased. The Defendants challenged Montz’s conclusion that “[t]he chamber testing indicated that the 13-layer veneer plywood in the space was a potent source of formaldehyde.” Defendants secondly challenged Montz’s conclusion that the high concentrations of formaldehyde in the plywood “undoubtedly caused the elevated formaldehyde levels detected in the space.” Defendants challenged the methodology, arguing that Montz failed to account for potential alternative causes of formaldehyde in the air. The Court held that while the fact that Montz did not perform actual tests on other potential sources of formaldehyde might affect the weight of his conclusion, it did not make his methodology unreliable, and that Defendants could bring the potential weakness out on cross examination. The Court held that Montz’s methodology in reaching his conclusion that the plywood was a potent source of formaldehyde was reliable. With respect to Defendants second challenge, the Court held that Montz’s methodology in determining that the plywood was the cause of formaldehyde in the air was reliable, as Montz did consider other potential causes, though focusing on the plywood.

Next, Plaintiffs’ expert Elliot Weinstein offered an opinion on the value of the building. In order to determine the value of the building in the context of the property on which the building was situated, Weinstein used the cost approach and the sales comparison approach. Defendants admitted that Weinstein employed accepted models in reaching his valuation of the building, but argued that his appraisal did not satisfy the “fit” requirement of Rule 702 because he has not applied the methods reliably to the facts of the case. Because the building was apparently not zoned for commercial use, the Court found that Weinstein’s determination as to highest and best use, which was a commercial use, lacked adequate foundation and did not satisfy the “fit” requirement of admissibility. Because Weinstein’s highest and best use analysis was based on inadequate foundation, the Court also found that his sales comparison valuation was flawed. However, Weinstein’s cost approach did not rely on his “highest and best use as improved” determination or on his sales comparison valuation. The Court found that Weinstein’s use of the cost approach to value the premises was inappropriate.

Defendants’ expert William A. Wheatley’s report dealt with the design and construction of the building, concluding that residential use “was not the intent of the Building from its design and from its present configuration.” Wheatley ultimately concluded that the HVAC system provided for the building was inadequate to meet the building’s needs for fresh air, which in turn caused the formaldehyde released by the building materials to accumulate rather than to dissipate, and this in turn caused the symptoms experienced that were the subject of the complaint. Wheatley also identified several potential sources of formaldehyde beyond the plywood, such as the carpet, construction glues, and office furniture. The Plaintiffs contended that Wheatley’s opinions relied on faulty assumptions and were speculative and were therefore not helpful to the jury. The Court held that Wheatley’s assumption that the building was being used for commercial purposes did not invalidate Wheatley’s opinions or lack foundation in the record. The Court also approved of Wheatley’s opinion that “the fact that so much plywood and cement was used means that extra care should have been exercised in the design of the air handling system to ensure that fresh air was provided to dissipate the formaldehyde.” The Court held that this statement was based on an objective standard, rather than a subjective standard, and was not based on an assumption that Plaintiffs subjectively understood the standard of care that was required. With respect to reliability, the Court held that Wheatley’s reliance on another expert’s opinion with respect to the necessary HVAC system did not make his opinion unreliable. The Court held that Wheatley’s opinion that the building had more plywood than normal in it was not unreliable simply due to a lack of “scientific testing,” because Wheatley relied on his knowledge and experience as an architect. However, the Court agreed with the Plaintiffs’ reliability challenge as to Wheatley’s statement that construction glues were a substantial contributor to the formaldehyde levels in the building, because Wheatley did not determine whether the glues that were used give off a high level of formaldehyde gas.

Defendants’ expert E. Mitchell Swan’s report opined that the building was not residential and that the HVAC system should have been designed as a commercial grade system. The Court found that, given Swan’s expertise, the data he consulted, and his personal inspection with regard to the building, his opinion that the building should have been designed in accord with commercial codes was not so lacking in record support to make it unhelpful to the jury.

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