Charles Barnes Hayes, Jr. and Patricia Jean Kernan Hayes v. Air & Liquid Systems Corporation

Louisiana Court of Appeal·Decided August 11, 2021·No. 54,017-CA·Published

Opinion

Judgment rendered August 11, 2021.

Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.

No. 54,017-CA

COURT OF APPEAL

SECOND CIRCUIT

STATE OF LOUISIANA

*****

CHARLES BARNES HAYES, JR. Plaintiffs-Appellants AND PATRICIA JEAN KERNAN HAYES

versus

AIR & LIQUID SYSTEMS Defendants-Appellees CORPORATION, ET AL.

*****

Appealed from the

Fourth Judicial District Court for the Parish of Ouachita, Louisiana Trial Court No. 2017-3132

Honorable James H. Boddie, Jr., (Ad Hoc) Judge

*****

PARKER ALEXANDER, L.L.C. Counsel for Appellants By: Kevin E. Alexander

DEAN OMAR BRANHAM SHIRLEY, LLP By: Jessica M. Dean Charles W. Branham, III David W. Henderson Kevin W. Paul Lisa White Shirley

TALLEY, ANTHONY, HUGHES & Counsel for Appellee, KNIGHT, L.L.C. SYSTRA Engineering By: Bruce A. Cranner Magdalena Majka

FULTZ & COUGILL, LLP Counsel for Appellee, By: Thomas L. Cougill Reilly-Benton Co. Inc.

FRILOT, L.L.C. Counsel for Appellee, By: John J. Hainkel, III General Electric Co., James H. Brown, Jr. et al.

Magali A. Puente Martin Barry C. Campbell Angela M. Bowlin Kelsey A Eagan Kelly L. Long Lacy T. McCoy

MORGAN, LEWIS & BOCKIUS, LLP Counsel for Appellee, By: Lauren A. McCulloch ITT Corporation, f/k/a Mitchell F. Edesco Industries, Inc., et al.

FORMAN WATKINS & KRUTZ, LLP Counsel for Appellee, By: Mary R. Arthur Uniroyal, Inc.

Amy L. Maccherone

AARON & GIANNA, PLC Counsel for Appellee, By: John D. Person Fluor Enterprises, Inc., Lezly L. Petrovich et al.

Omar K. Mason Courtney H. Payton

SIMON, PERAGINE, SMITH & REDFEARN Counsel for Appellee, By: Susan B. Kohn Eagle, Inc., et al.

*****

Before GARRETT, COX, and ROBINSON, JJ.

ROBINSON, J.

In this mesothelioma case involving multiple defendants, the widow and children of a worker who was allegedly exposed to asbestos appeal a judgment granting the exception of lack of jurisdiction over the person filed by SYSTRA Engineering, Inc.

We reverse the judgment and remand.

FACTS

Beginning in May of 1953, Charles Hayes (“Hayes”) was employed as a general laborer for approximately three months at the Commercial Solvents ammonia plant in Sterlington, Louisiana. He then worked as an assistant operator at the nearby Commercial Solvents fertilizer plant before leaving in April of 1954. Hayes believed that he experienced direct and bystander exposure to asbestos while working with insulation, gaskets, and packing materials at the plants. He recalled that construction and maintenance at the fertilizer plant was performed by employees of Ford, Bacon & Davis.

According to a certificate from the New York Department of State, the certificate of incorporation of EI Associates, Inc. (“EI”) was filed on March 26, 1931, under the name of Ford, Bacon & Davis Construction Corporation (“FBD”). The certificate further states that FBD changed its name to SFB Construction Corporation (“SFB”) on December 11, 1996, and that SFB changed its name to EI on May 21, 1998.

Records from the Louisiana Secretary of State reveal that SFB was known as FBD until December 17, 1996. The registration date for FBD was May 1, 1931. Its mailing address and principal business office were in Monroe, Louisiana. The president and a director were also listed at that

Monroe address. Its domicile address was in New York. SFB was considered to be on inactive status by the Louisiana Secretary of State, with its last report filed on May 8, 1996.

A stock purchase agreement executed on or about September 22, 2000, between SYSTRA USA, Inc. as the buyer and EI Associates Group, Inc. as the seller was filed under seal. EI Associates Group, a New Jersey corporation, was the sole stockholder of EI, a New York corporation. In consideration of the sale, SYSTRA USA, Inc., a New Jersey corporation, transferred, conveyed, and assigned all of the issued and outstanding stock of EI Builders, Inc., a New Jersey Corporation. The new name of the company was SYSTRA Engineering, Inc. (“SYSTRA”). SYSTRA averred that the sole purpose of the purchase was to be “grandfathered in” to have a professional engineering license in order to do business in the State of New York due to a change in the law in New York.

Hayes, who moved to the state of Washington in 1964, was diagnosed with mesothelioma in April of 2016. On September 21, 2017, Hayes and his wife, Patricia Hayes, filed suit in Ouachita Parish against numerous defendants who were divided into three classifications: (i) miners, manufacturers, sellers, suppliers, and distributors of asbestos; (ii) employers, premises owners, contractors, and executive officers; and (iii) insurers. The petition alleged that Hayes was exposed to asbestos through his employment at Commercial Solvents.

The petition was amended on June 14, 2018, and again on July 31, 2018. SYSTRA (f/k/a SFB Construction Corporation and Ford, Bacon & Davis) was named as a defendant in the second amended petition. Unfortunately, Charles Hayes died on August 19, 2018. The petition was

amended for a third time on December 11, 2018, to add his children as party plaintiffs. Exception of lack of jurisdiction over the person On September 11, 2018, SYSTRA filed an exception of lack of jurisdiction over the person. SYSTRA, a New York corporation, maintained it had never been registered with the Louisiana Secretary of State to conduct or contract business in Louisiana or directed to Louisiana. SYSTRA argued it lacked the minimum contacts with Louisiana necessary to afford courts of Louisiana personal jurisdiction over it under La. R.S. 13:3201 or any other provision consistent with due process. SYSTRA further argued that there was insufficient proof of minimum contacts that would permit a Louisiana court to exercise personal jurisdiction over SYSTRA as a corporate successor.

In support of its exception, SYSTRA attached an affidavit from Garry Hartwig, the Secretary of SYSTRA. He stated that SYSTRA never manufactured, designed, or distributed asbestos or asbestos-related products. Furthermore, SYSTRA was never registered to do business in Louisiana and had never done or contracted business in Louisiana or directed to Louisiana. Hartwig also stated that SYSTRA purchased the stock of EI in 2000 and changed the name to SYSTRA. He added that EI was formerly known as SFB and before that, FBD. According to Hartwig, FBD was first registered to do business in New York in 1931 as an engineering company and it and its successors have consistently operated as an engineering company since 1931. He asserted that FBD is not the same company as Ford, Bacon & Davis, Inc.

Plaintiffs argued in opposition to the exception that there was no reason to treat SYSTRA differently from FBD for purposes of personal jurisdiction. They maintained that the trial court had jurisdiction over SYSTRA under La. R.S. 13:3201 because SYSTRA is the successor to FBD. Plaintiffs asserted that Hayes worked near FBD employees when he was exposed to asbestos dust in Louisiana, all of the tortious dust exposure by FBD occurred in Louisiana, and SYSTRA lacked evidence to controvert the claim that Hayes was exposed while working around FBD in Louisiana.

Attached to their opposition to the exception were: (i) the certificate from the New York Department of State; (ii) SYSTRA’s responses to personal jurisdiction discovery requests in the East Baton Rouge Parish case of Bannister v. SFB Companies, Inc., 2019-0079 (La. App. 1 Cir. 11/15/19), 290 So. 3d 1134, writ denied, 20-00263 (La. 5/1/20), 295 So. 3d 943; (iii) Hayes’s depositions taken in November of 2017 and August of 2018; (iv) Hartwig’s responses on behalf of SYSTRA to a deposition by written questions in Bannister; (v) the record from the Louisiana Secretary of State regarding SFB Construction Corporation; and (vi) a construction contract entered into by FBD in Louisiana in 1960.

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