Motion-Secondary: PSM/Magna Carta Insurance Companies VS Apria Healthcare

On August 31, 2006 a Motion-Secondary was filed involving a dispute between Caire Medical Systems, Inc., Psm Magna Carta Insurance Companies, and Apria Healthcare, Inc., Caire Medical Systems, Inc., for Unlimited Civil in the District Court of Alameda County.

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NINA M. PATANE, Esq. (SBN 157079) FILED
ALAMEDA
ND ANDREA
PATANE -
C. AVILA,
GUMBERG,
Esq.
LLP
(SBN 193982) COUNTY
Attorneys at Law: FEB 25 2008
4 Rossi Circle, Suite 231
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Salinas, California 93907 CLERK OF THE SU ERIOR COURT
Telephone: (831) 755-1461 By. ey
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Facsimile: (831) 755-1477 Deputy
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Attorneys for Defendant,
CAIRE MEDICAL SYSTEMS, INC.
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SUPERIOR COURT OF CALIFORNIA
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COUNTY OF ALAMEDA
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CASE NO. RGO6286829
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PUBLIC SERVICES MUTUAL
INSURANCE COMPANY, DEFENDANT CAIRE MEDICAL
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SYSTEMS, INC.’S MEMORANDUM
Plaintiff, OF POINTS AND AUTHORITIES IN
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SUPPORT OF MOTION FOR
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SUMMARY JUDGMENT OR
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Vv.
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ALTERNATIVELY, SUMMARY
APRIA HEALTHCARE, INC., CAIRE ADJUDICATION
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MEDICAL SYSTEMS, INC., DOES 1-15,
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Defendants. Date: May 13, 2008
Time: 9:00 a.m.
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Dept.: 301
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Reservation # R 793356
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Trial Date: June 16, 2008
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INTRODUCTION
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Plaintiff Public Service Mutual Insurance Company (PSMI) brings this matter for subrogation
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in an attempt to recuperate itsreimbursement costs by asserting meritless claims against other
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parties including Caire Medical Systems, Inc. (““CAIRE”), the moving party herein, and Apria
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Healthcare, Inc. (“APRIA”). The problem is that they do so without the evidentiary support
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion for Summary
Judgment or Alternatively,Summary Adjudication
necessary to establish itsclaims. The entirety of Plaintiff’s action is based on unreliable hearsay
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and Plaintiff’s own meritless and unreliable statements, both of which are inadmissible. Plaintiff
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has offered no evidence whatsoever establishing that the subject loss resulted from defective
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design or manufacture of an oxygen cylinder by CAIRE. Having no further evidence, Plaintiff's
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claims for negligence, strict liability and breach of implied warranty against CADRE must fail and
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CAIRE’s motion for summary judgment or alternatively, summary adjudication, should therefore
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be granted.
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STATEMENT OF FACTS
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The instant subrogation matter arises out of an apartment fire that occurred on February 11,
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2005 in Alameda, California. The tenant of the apartment where the fire initiated was Ivan Cook,
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an elderly emphysematic patient who required oxygen for breathing assistance. (See Exhibit A,
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Alameda Fire Department EMS Pre-Hospital Care Report) The facts and circumstances leading up
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to the fire are mostly uncertain as Mr. Cook died shortly following the fire (for unrelated
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conditions) and provided only a brief statement while atthe scene. (See Exhibit A) Thus, the
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following facts are based in substantial part on the documents generated by the Alameda Fire
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Department.
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At approximately 8:53 A.M., Alameda Fire Department (Department) was dispatched to
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the scene and after approximately twenty minutes, extinguished the fire. (See Exhibit B, Alameda
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Fire Department Fire Incident Report (“Report”)) Following an investigation led by Captain Karl
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Mims, the Department concluded that the fire originated from the wall heater located in the
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downstairs section of Mr. Cook’s apartment. (See Exhibit B) Of particular significance, the
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Report further indicated that the cause of the fire was “unknown.” (See Exhibit B) Upon
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examination by the Department’s paramedics, Mr. Cook provided his only documented statement
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concerning the fire noting that “he turned his wall heater off and then turned it back on, itstarted a
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fire.” (See Exhibit A) Mr. Cook made no reference whatsoever to any other source being a cause
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or contributing factor to the fire. (See Exhibit A)
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According to Mr. Chong, the subject wall heater was situated in Mr. Cook’s living room,
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion for Summary
Judgment or Alternatively,Summary Adjudication
approximately three feet from Mr. Cook’s 30” round table. (See Exhibit C, Deposition of Michael
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Chong, p. 49, L. 23-25) The wall heater, noted to be a 1985 natural gas fueled model (See Exhibit
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B, p.4), already existed in the unit when the apartments were purchased in 1995 by the owner of
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the apartment building, Michael Chong. (See Exhibit C, p. 50, L. 22-24) According to Mr.
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Chong, he had no standardized policy or procedure for maintaining the wall heaters within the
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apartments and instead addressed problems on an as-needed-basis. (See Exhibit C, p. 15, L. 3-7)
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With regard to the subject heater, Mr. Chong had replaced a pilot generator approximately twelve
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months prior to the fire, (See Exhibit C, p. 14, L. 23)
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As a result of the fire, the apartment building sustained property damage of approximately
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$134,427.46. (See Exhibit D, Supplemental Response to Form Interrogatories, Set No. One, p. 2,
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L. 18) A claim commensurate with this loss was therefore submitted by Mr. Chong to his
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insurance carrier, Plaintiff Public Service Mutual Insurance Company (PSMD), who thereafter
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commenced its own investigation into the fire. (See Exhibit E, Letter from Plaintiff, (1, Exhibit C,
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p. 35, L. 10-11, 16-18) At or about this time, Mr. Chong first informed PSMI of his alleged
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conversation with Mr. Cook occurring several days after the fire. (See Exhibit C, p. 35, L. 21-23)
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According to Mr. Chong, he visited the apartments approximately one week after the fire
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and coincidentally observed Mr. Cook standing outside of his uninhabitable premises. (See
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Exhibit C, p. 27, L. 19, p. 33, L. 18-19) Mr. Cook was not living atthe premises at the time. (See
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Exhibit C, p.27, L. 19) Mr. Chong testified that Mr. Cook allegedly informed him that prior to the
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fire he was filling'his portable oxygen cylinder from the large refilling tank and upon
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disconnection, the large tank continued to leak. (See Exhibit C, p. 28, L. 3-6) Further, he testified
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that Mr. Cook allegedly stated that he contacted Apria Healthcare, Inc. (hereinafter referred to as
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“APRIA”) the same day to report the leak and was told “to throw a towel over it.” (See Exhibit C,
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p. 28, L. 23-24) Mr. Cook then allegedly stated that prior to leaving the apartment for an hour he
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turned on the wall heater, “heard a poof and saw flames coming from the wall heater” (See Exhibit
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C, p. 30, L. 2-6) and “immediately shut the thermostat off which turned the burner off.” (See
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Exhibit C, p. 31, L. 18-19, 25) Upon returning, the large tank was stillleaking, and once he turned
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the wall heater on again, “that’s when itreally took off.” (See Exhibit C, p. 32, L. 8-9) Mr. Chong
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion forSummary
Judgment or Alternatively,Summary Adjudication
testified that prior to the fireMr. Cook never made any mention of the oxygen tank leaking or to
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any other problems with itsfunctioning. (See Exhibit C, p. 20, L. 21)
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At the time of the fire,Mr. Cook did in fact require use of oxygen for breathing assistance.
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(See Exhibit F, p. 2, L. 16) He maintained two oxygen cylinders. (See Exhibit G, Evidence Chain
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of Possession Form) These units were manufactured by Caire Medical Systems, Inc. (hereinafter
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referred to as “CAIRE”) and distributed by APRIA. APRIA, as distributor of the oxygen
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cylinders, was in charge of selling, leasing, maintaining, and servicing the oxygen cylinders.
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All patient interaction regarding the supply and replacement of the subject oxygen
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cylinders were handled by APRIA. Phone records produced by APRIA reveal no phone call on the
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date of the incident to report a leaking cylinder. (See Exhibit H, APRIA Phone Record)
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PSMI eventually paid Mr. Chong’s claim in its entirety. PSMI thereafter commenced a
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claim for subrogation against CAJRE and APRIA seeking reimbursement for payments made
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based on theories of General Negligence, Strict Liability, and Breach of Implied Warranty. (See
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Exhibit J,Plaintiff s Form Complaint) After commencement of the litigation, CAIRE conducted
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an inspection of the subject cylinders and wall furnace, accompanied by its expert, Jeff Dresow.
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(See Exhibit I,Declaration of Nina M. Patane) Upon viewing the wall furnace, Mr. Dresow and
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the parties confirmed the presence of small cracks within it. (See Exhibit I) With regard to the
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oxygen cylinders, Mr. Dresow, with the consent of the parties, conducted an informal test on the
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oxygen cylinders and determined the presence of oxygen within one. (See Exhibit J) Further
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invasive testing was thereafter scheduled by CAIRE and will occur shortly. (See Exhibit I)
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Despite retaining possession of the oxygen cylinders for over two years, PSMI has yet to perform
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any testing with regard to the oxygen cylinders. (See Exhibit G)
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Because Plaintiff has yet to produce reliable evidence to establish liability against CAIRE
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and will likely never be able to do so, CAIRE is compelled to move this Court for Summary
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Judgment or in the alternative, Summary Adjudication.
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LEGAL ANALYSIS
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Summary judgment allows the court to pierce a party’s pleadings to determine if atrial is
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion forSummary
Judgment or Alternatively,Summary Adjudication
necessary to resolve the dispute. Aguilar v.Atlantic Richfield Co. (2001) 25 Cal.4™ 826, 843. A
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defendant may move for summary judgment ifthe action has no merit. Code Civ. Proc. § 437c(a);

Id. The court must grant the motion if the defendant shows that there isno triable issue as to any
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material fact, and itis entitled to judgment as a matter of law. Code Civ. Proc. § 437c(c); Id.
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To prevail in a summary judgment motion, a defendant has met its burden of showing that
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a cause of action has no merit by establishing that plaintiff cannot establish at least one element of
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the cause of action, or that there is a complete defense to that cause of action. Code Civ. Proc. §
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437c(o), (p)(2); Aguilar, 25 Cal.4” at 853. Once a moving defendant has "shown that one or more
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elements of the cause of action, even ifnot separately pleaded, cannot be established," the burden
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shifts to the plaintiff to show the existence of a triable issue; to meet that burden, the plaintiff "may
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not rely upon the mere allegations or denials of itspleadings . . .but, instead, shall set forth the

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specific facts showing that a triable issue of material fact exists as to that cause of action. .. ."
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Code Civ. Proc., § 437c, subd. (0)(2); see Aguilar, 25 Cal.4th at 854-855.
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As will be demonstrated below, Plaintiff’s complaint lacks merit in that it isunsupported by
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reliable, substantive, and admissible evidence. The undisputed facts unequivocally reveal that
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Plaintiff cannot meet the requisite elements of each of its causes of action of Negligence, Strict
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Liability and Breach of Implied Warranty. Accordingly, Defendant CAIRE is entitled to summary
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judgment as a matter of law. However, if the Court concludes that summary judgment of
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Plaintiffs’ complaint in itsentirety is not appropriate, then summary adjudication of the issues is
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alternatively requested.
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A. ANALYSIS OF PLAINTIFF’S LIMITED ITEMS OF EVIDENCE AND
INADMISSABLE NATURE OF EACH
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Plaintiff’s evidence of liability against CAIRE is extremely limited. An analysis of the
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items of evidence offered thus far and the inadmissibility of each item follows.
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1. | Plaintiff relies in substantial part on inadmissible hearsay.
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Hearsay isan out of court statement made by a declarant that is offered at trial to prove the
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truth of the matter asserted in that statement. Cal. Evid. Code (“Evid. C”) § 1220(a). Hearsay
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evidence is inadmissible unless it satisfies the requirements of one of the exceptions to the hearsay
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion for Summary
Judgment or Alternatively,Summary Adjudication
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rule created by either statute or by the decisional law. Evid. C § 1200(b). The purpose for which
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declarant’s statement is offered is determinative of whether such a statement ishearsay, and thus
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inadmissible. If a declarant’ s statement is offered for some purpose other than to prove the truth
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of the facts stated, it is not a hearsay statement. People v.Boden (1996) 44 Cal. App. 4th 707,
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715.
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Evidence which is admissible because it isnonhearsay or because itmeets an exception,
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nevertheless can be excluded to avoid "substantial danger of undue prejudice.” Evid. C § 352.
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Plaintiff relies heavily on testimony of Mr. Chong to establish liability against CAIRE.
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However, the testimony of Mr. Chong regarding liability is based entirely on the hearsay
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statements allegedly made by Mr. Cook. As there are no applicable exclusions, the evidence is
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thus unreliable, inadmissible, and cannot be used to establish liability against CAIRE. All
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pertinent statements of Mr. Chong are discussed separately below.
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a. Mr. Cook’s alleged statement to Mr. Chong one week post- incident
that he contacted Apria on the day of the fire regarding the oxygen
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cylinder’s leak.
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During deposition, Mr. Chong testified that Mr. Cook allegedly stated that he called
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APRIA on the day of the fire and reported that his oxygen cylinder was leaking. (See Exhibit C, p.
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28, L. 14, p. 29, L. 8-9) This out of court statement is being offered to prove that CAIRE failed to
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exercise reasonable care in itsdesign and manufacturing of the oxygen cylinder or the cylinder was
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defective and accordingly, was the cause or acontributing factor in the fire. However, because the
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statement is hearsay and there are no applicable exceptions, the statement is inadmissible
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Further, the subject statements were made during casual conversation one week subsequent
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to the fire,after Mr. Cook had several days to reflect on the incident. As a result, this statement is
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unreliable, inadmissible, and cannot be used asa basis to establish liability against CAIR
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b. Mr. Cook’s alleged statements to Mr. Chong one week after the fire
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that (1) while filling his portable air bottle off of the large tanks,
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oxygen continued to leak; and (2) that the oxygen was ignited when
he turned on the wall heater for the second time.
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion forSummary
Judgment or Alternatively,Summary Adjudication
Mr. Chong also testified that during his same conversation with Mr. Cook one week post-
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portable oxygen cartier. (See Exhibit C, p.28, L. 3-6) Additionally, Mr. Chong testified that he
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was told by Mr. Cook that the oxygen was ignited when he turned on the wall heater, causing the
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fire. (See Exhibit C, p.28, L. 3-6) Similarly, these out of court statements are being offered to
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prove that CAIRE failed to use reasonable care in its design/manufacturing, or that the oxygen

cylinders were defective thereby causing or serving as a contributing factor to the fire. However,
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Plaintiff's reliance on the above statements is improper as they are inadmissible hearsay and there
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are no applicable exclusions.

11 As analyzed above, the statements made to Mr. Chong by Mr. Cook were (1) made one week

12 after the accident during casual conversation; (2) made with ample time to contrive and

13 misrepresent; (3) made by a declarant who is deceased and not available for cross-examination;
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and (4) likely to cause substantial danger of unfair prejudice if admitted. As aresult, there are no
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applicable exclusions to render the statements admissible.
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c. Even if admissible, the hearsay statements do not establish
17 liability against CAIRE.
18 Assuming arguendo that the above hearsay statements were deemed admissible, they offer
19 no support to Plaintiff’s liability claims against CAIRE. First, Plaintiffs have yet to prove that a
20 leak in fact occurred or which of Mr. Cook’s two cylinders was leaking. Secondly, even ifa leak
21 is proven, this does not mean that the leak was the result of a defect in the cylinder or that it was
22 the result of negligence by CAIRE. There are several reasonable explanations for an improper
23 leak which do not involve defective design or negligence, all of which are equally viable causes.
24 Examples include operator error when filling the transporter or disconnecting from the cylinder,
25 failure to properly close the valve, or valve damage resulting from a mishandling or fall of the
26 cylinder.
27 It isalso equally possible that the fire was caused or accelerated by a leak of natural gas
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion for Summary
Judgment or Alternatively,Summary Adjudication
from the wall heater. As noted above, the Department determined that the fire’s ignition source
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was the pilot light of the wall heater. (Deposition Testimony of Captain Mims which has yet to be
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received and will be attached to CAIRE’s Reply) Itmay be that natural gas was improperly
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releasing from the wall heater which served as an accelerant to the fire. The natural gas levels
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within the apartment were never measured by the Department on the date of the fire.
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Simply put, the facts and circumstances leading up to the fire are so uncertain that establishing
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causation will require several leaps of speculation. As this type of proof is insufficient, Plaintiff's
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liability assertions will fail.Summary judgment or alternatively, adjudication istherefore proper.
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2. Plaintiffs factually devoid discovery responses.
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The only remaining assertions that Plaintiff has set forth regarding CAIRE’s liability are
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made in Plaintiff’ s responses to form interrogatories and special interrogatories which in reality are
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void of any facts supporting the existence of negligence by CAIRE or a defect in the oxygen
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cylinders. The relevant questions and responses follow.
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Plaintiff was asked through special interrogatories to identify the defect in the oxygen
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cylinders and any negligence in their design or manufacturing, and to state all facts in support of
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these contentions. Plaintiff’s limited responses include only the following: (1) an objection based
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on attorney-client privilege and the work product doctrine; (See Exhibit F, p. 3, L. 4-5, 16-17, 28;
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p. 4, L. 1, 12-13, 20-21, 23-24) and (2) an assertion that the firewas started as a result of a leaking
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oxygen tank which led to an oxygen-enriched environment. (See Exhibit F, p. 3, L. 6-9, 18-21; p.
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4, L. 2-5, 14-17)
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Plaintiff’s responses to supplemental special interrogatories are as factually devoid as their
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initial responses. In response to the interrogatories described above, plaintiff’s supplemental
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answers include only the following: (1) a claim that plaintiff was “stillinvestigating whether a
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design or manufacturing defect was what contributed to the leaking of oxygen which saturated the
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air and which caused the fire, and that further tests will be performed”; (See Exhibit K, p.2, L. 27-
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28; p.3, L. 1-2, 4-7) and (2) “the oxygen cylinders were inspected and plaintiff will consider
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destructive testing, but what plaintiff does contend is that the incident occurred based upon
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APRIA’s negligence in maintaining and servicing the oxygen cylinders.” (See Exhibit K, p. 3,L.
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion for Summary
Judgment or Alternatively,Summary Adjudication
11-15).
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Plaintiff’ s responses raise no facts or evidence requisite to establish liability against
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CAIRE. Certainly, Plaintiff’s own conclusions about the cause of the fire lack foundation or the
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support of expert opinion and thus, are invalid. Plaintiffs responses to discovery are
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demonstrative of the evidence, or the lack thereof, produced by Plaintiff thus far. The evidence is
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unreliable, inadmissible and therefore cannot be used as a basis to establish liability against
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CAIRE. The instant Motion should therefore be granted.
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B. THE NEGLIGENCE CAUSE OF ACTION HAS NO MERIT.
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Plaintiff's form complaint lacks specificity regarding the facts and circumstances
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underlying itsclaim for negligence. (See Exhibit J,p. 3-5) Instead, plaintiff broadly asserts that
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“CAIRE negligently designed, manufactured, sold, leased, maintained and serviced oxygen
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cylinders so as to cause a fire which in turn caused property damages.“ (See Exhibit J,p.4) As

In an action for negligence, a plaintiff must demonstrate that the defendant “had a duty to
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use care, that he breached that duty, and that the breach was the proximate or legal cause of the

elements of breach and causation necessary to support a finding of negligence.
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A manufacturer’s duty of care isowed to anyone who ought to be expected to use the
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chattel or be in the vicinity of itsuse. Pike v.Frank G. Hough Co. (1970) 2 Cal.3d 465, 470. For
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purposes of this motion only, CAIRE is not disputing that a duty of care was owed to plaintiff.
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The undisputed facts failto demonstrate that CAIRE neglected to use reasonable care in
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carelessly made, is likely to injure persons when used in a foreseeable manner (Reynolds v.
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Natural Gas Equip. (1960) 184 Cal.App.2d 724, 736), whether or not the article is inherently
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Defendant Caire Medical Systems, Inc.’sMemorandum ofPoints and Authorities in Support of Motion forSummary
| Judgment or Alternatively,Summary Adjudication
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dangerous. Nebelung v.Norman (1939) 14 Cal.2d 647, 654. The care required is that care
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commensurate with the danger of using the product (Dow v. Holly Mfg. Co. (1958) 49 Cal.2d 720,
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727), including due care in making tests and inspections during fabrication and after completion.
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Sheward v. Virtue (1942) 20 Cal.2d 410, 414.
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A manufacturer of a product isalso under aduty to exercise reasonable care in its design so
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that it can be safely used as intended by its consumer. Williams vy.Beechnut Nutrition Corp.
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(1986) 185 Cal.App.3d 135, 141; 229 Cal.Rptr. 605. "Similarly, [the] manufacturer's duty of care
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extends to all persons within the range of potential danger." Id. at 195, quoting Pike v. Frank G.
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Hough Co., 2 Cal.3d at473.
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Negligent design, as opposed to strictliability, focuses on the "reasonableness of the
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manufacturer's conduct” as opposed to the "condition of the product itself." Barker v. Lull
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Engineering Co. ( 1978) 20 Cal. 3d 413, 434. The analysis parallels the "risk-benefit" test,in that
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the test of negligent design "involves the balancing of the likelihood of harm to be expected from
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a machine with a given design and the gravity of harm if ithappens against the burden of the
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4th 465, 479 (quoting Pike v.Frank G. Hough C o.,2 Cal. 3d at 470). Thus, under a negligence
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Id.
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Plaintiff's offers of proof regarding CAIRE’s negligence are discussed in Section A above.
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The items are limited to unreliable hearsay and Plaintiffs own meritless and unreliable
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statements, both of which are inadmissible. Plaintiff has offered no evidence whatsoever
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establishing that the fireresulted from the defective design or manufacture of an oxygen cylinder
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by CAIRE. Having no further evidence, Plaintiff’s claim for negligence must fail and CAIRE’s
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a. The undisputed facts fail to demonstrate causation between the
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oxygen cylinders and plaintiff’s property damage.
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Defendant Caire Medical Systems, Inc.’sMemorandum of Points and Authoritiesin Support of Motion forSummary
Judgment or Alternatively,Summary Adjudication
In addition to being the actual cause of damages, causation of damages requires that the
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damages be proximately caused by the defendant’s breach, and their causal occurrence is atleast
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reasonably certain. US Ecology Inc. V. State of California (2005) 129 Cal.App.4” 887, 910.
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Plaintiff has no reliable evidence that CAIRE’s

Case Info

Case No.

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Document Filed Date

February 25, 2008

Case Filing Date

August 31, 2006

County

Parties

Andrea C. Avila Attorney
Apria Healthcare, Inc. Cross-defendant
Apria Healthcare, Inc. Defendant
Caire Medical Systems, Inc. Cross-complainant
Caire Medical Systems, Inc. Defendant
James W Peel Attorney
Lynne L. Bentley Attorney
PSM/Magna Carta Insurance Companies Plaintiff
WILLIAM H. WESTOVER Attorneys for Plaintiffs
Nina Patane Attorney
David Bremer Attorneys for Plaintiffs
Samuel Phillips Attorneys for Plaintiffs

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Motion-Secondary: PSM/Magna Carta Insurance Companies VS Apria Healthcare

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