Edward P. Leren, Resp v. Kaiser Gypsum Company, Inc., App

442 P.3d 273
CourtCourt of Appeals of Washington
DecidedMay 28, 2019
Docket77870-6
StatusPublished
Cited by7 cases

This text of 442 P.3d 273 (Edward P. Leren, Resp v. Kaiser Gypsum Company, Inc., App) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edward P. Leren, Resp v. Kaiser Gypsum Company, Inc., App, 442 P.3d 273 (Wash. Ct. App. 2019).

Opinion

FILED 5/28/2019 Court of Appeals Division | State of Washington

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

EDWARD P. LEREN, as Executor of the Estate of Marvin A. Leren,

No. 77870-6-I

Respondent,

Vv.

et al, Defendants.

ELEMENTIS CHEMICALS, INC., PUBLISHED OPINION

Appellant.

) ) ) ) )

KAISER GYPSUM COMPANY, INC., _ ) ) ) ) ) ) FILED: May 28, 2019 )

VERELLEN, J. — We are asked to resolve whether the product line doctrine of successor liability applies to a distributor of raw asbestos where the acquired distributor faces strict liability under section 402A of the Restatement (Second) of Torts. We conclude the product line doctrine applies.

The purpose of the product line doctrine is to afford a product liability victim with a meaningful remedy when a successor business entity acquires the assets of a predecessor, leaving a mere corporate shell. Although stock purchasers are generally not responsible for the conduct of the companies in which they invest, if a business entity buys 100 percent of a corporation’s stock in a single transaction

and promptly begins the process of dissolving the corporation, thereby acquiring No. 77870-6-1/2

the predecessor’s assets, then a court may look past the form of the combined stock purchase and dissolution to recognize the substance of an asset acquisition. And if, after acquiring the assets, the purchaser avails itself of the goodwill associated with the distributor's sales of unreasonably dangerous materials by holding itself out as a continuation of the acquired distributor, then the purpose, policy, and logic of the product line doctrine applies.

Additionally, the limitations period in RCW 23B.14.340 regarding claims against dissolved corporations and their shareholders does not apply to defeat the product line doctrine of successor liability.

A jury award of noneconomic damages is sustainable under the wrongful death and survivor statutes where the required beneficiary under RCW 4.20.020 is an adult child with compelling bonds of affinity that survived the stepparent’s divorce.

Finally, the court properly declined to give a superseding cause instruction because the requesting party failed to show the decedent's employer had actual, specific knowledge of the harm from prolonged asbestos exposure.

Therefore, we affirm.

FACTS

Marvin Leren graduated from Ballard High School in 1961 and went to work for the Z-Brick Company the following year. Leren worked at Z-Brick until 1981. Z-Brick made thin, decorative bricks. Benson Chemical Corporation supplied

2-Brick with raw asbestos used to make the bricks. Leren poured 100-pound No. 77870-6-1/3

sacks of raw asbestos into large hoppers used to mix ingredients for the bricks. Pouring asbestos produced huge clouds of asbestos dust. After the bricks hardened, Leren cut them with a power saw, producing more dust. Generally, Z-Brick was “a mess” with “powder on the floor” and “particles floating in the air.” Leren never wore a mask or any other protective gear.

In 1969, Leren met and began dating fellow Z-Brick employee Gretha Zylstra. He soon met Zylstra’s three-year-old daughter Jo because she accompanied Zylstra and Leren on their first date. Leren and Zylstra married in 1974. They divorced amicably in 1985.

During the springtime of 2015, Leren felt short of breath and began losing energy. In late September or early October of that year, he had a lung biopsy and began feeling “immense pain.” Soon after, he was diagnosed with the rare myloxoid variant of mesothelioma and began chemotherapy. Leren was admitted to the hospital after having a bad reaction to his first round of chemotherapy. He never left. Doctors placed him on palliative care. Leren made out a will on November 10, naming his brother Edward as administrator of his estate (the Estate), providing a monetary bequest to Jo. He filed a complaint seeking damages for negligence and product liability on November 19. He died on

November 24, 2015.

‘ Report of Proceedings (RP) (Oct. 24, 2017) at 611. 2 RP (Oct. 19, 2017) at 302-03. No. 77870-6-1/4

The Estate maintained the lawsuit. Over the next 10 months, the Estate added a claim for wrongful death and added Elementis as a defendant. In the late 1970s, Harrisons & Crosfield (Pacific), Inc. (HCP) acquired 100 percent of Benson's stock and dissolved Benson as an independent company. Elementis is the undisputed successor to HCP.

Elementis was the sole defendant at trial. Based on the jury’s special verdict and its own findings of fact, the court relied on the product line doctrine and entered judgment in favor of the Estate.

Elementis appeals.

ANALYSIS

|. Corporate Successor Liability

Leren alleged personal injuries from mesothelioma caused by frequent asbestos exposure. Because these exposures occurred prior to enactment of the Washington Product Liability Act,? we evaluate potential liability using common law principles embodied in the Restatement (Second) of Torts.4 Under section 402A of the Restatement, strict liability may be imposed on any party involved in distributing an unreasonably dangerous product.® It is undisputed that asbestos is

unreasonably dangerous and that Benson distributed the raw asbestos that

3 Ch. 7.72 RCW. 4 Simonetta v. Viad Corp., 165 Wn.2d 341, 348, 354, 197 P.3d 127 (2008).

5 Id. at 354-55 (citing Seattle-First Nat. Bank v. Tabert, 86 Wn.2d 145, 148-49, 542 P.2d 774 (1975); Restatement (Second) of Torts § 402A cmt. f (1965)). No. 77870-6-1/5

caused Leren’s mesothelioma. The question is whether Elementis is liable for those sales based upon HCP’s acquisition of Benson’s assets.

Elementis argues it cannot be liable for Leren’s injuries because HCP was a mere investor who acquired Benson’s assets by automatic transfer upon dissolution rather than by purchase. The trial court disagreed. We review conclusions of law de novo.®

Generally, a successor corporation is not responsible for its predecessor’s liabilities simply because it acquired the predecessor's assets.’ But case law provides well-established exceptions.’ In product liability cases, successor liability arises where one corporation benefits from another’s goodwill after acquiring its product line. Washington adopted the product line doctrine of corporate successor liability for the “essential purpose” of

afford[ing] a products liability claimant an opportunity to bring an

action against the successor corporation when his or her rights

against the predecessor corporation have been essentially extinguished either de jure, through dissolution of the predecessor,

6 Blackburn v. State, 186 Wn.2d 250, 256, 375 P.3d 1076 (2016).

” Cambridge Townhomes, LLC v. Pac. Star Roofing, Inc., 166 Wn.2d 475, 481-82, 209 P.3d 863 (2009) (citing Hall v. Armstrong Cork, Inc., 103 Wn.2d 258, 261-62, 692 P.2d 787 (1984)).

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