Texas Treasure Fields, Inc. v. Tommy Ford, et al.
This case involved the largest residential fire loss in American history with $44.5 million in claimed damages. In July 2002, a fire destroyed a 72,000 square foot house located in Dallas, Texas. The house had been under construction for several years and was 90-95% completed. Prior to the fire, it was listed for sale for $44.9 million.
Plaintiffs (the homeowners) held policies with three insurance companies totaling $25 million which were eventually paid out in full as a result of the fire. HPY’s client, a Fortune 500 manufacturer and retailer of varnish alleged to have caused the fire, was sued by both the homeowners for damages in excess of the insurance proceeds and by the three insurance companies for subrogation. Plaintiffs sued HPY’s client for strict product liability (marketing defect) for failure to warn including allegations under the Federal Hazardous Substances Act (FHSA), application regulations (C.F.R.s) established by the Consumer Product Safety Commission and the Texas Health and Safety Code; negligence; and breach of implied warranties.
Plaintiffs’ theory of liability against HPY's client was that electrical sparking in the attic ignited solvent vapors from HPY's client's varnish product and caused the fire. One day before the fire, a flooring contractor applied a large quantity of varnish and let it sit overnight without adequate ventilation. To explain their causation theory, one of Plaintiffs’ experts relied on the concept of fractional distillation, a process traditionally occurring only in laboratory settings whereby a product’s lighter chemicals are separated out and are able to move independently through the atmosphere. But in his deposition, the expert opined that the product at issue spontaneously underwent fractional distillation, certain chemicals migrated into the property’s HVAC system and condensed, then later re-vaporized and were ignited by an incendiary arc from the electronic air cleaner. HPY's client countered that the product was properly labeled pursuant to the FHSA and that its flash point made Plaintiffs’ theory of causation scientifically impossible.
After massive discovery efforts, including more than 100 fact and expert depositions, the trial was set to begin on April 19, 2006. On the eve of trial, Plaintiffs accepted a nuisance value settlement and dismissed the case.