Frankhauser v. Borgwarner Morse Tec LLC

• Court: Court of Appeals of Iowa
• Decided: August 31, 2022
• Docket: 21-0612
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 21-0612 Filed August 31, 2022

MARY FANKHAUSER and PAUL FANKHAUSER, Plaintiffs-Appellants,

vs.

HONEYWELL INTERNATIONAL, INC.; HONEYWELL INTERNATIONAL, INC. as successor to ALLIEDSIGNAL, INC. Successor to BENDIX CORP; PNEUMO ABEX LLC, and PNEUMO ABEX LLC. Successor in interest to ABEX CORPORATION; BORGWARNER MORSE TEC LLC as Successor in interest to BORGWARNER CORPORATION; DCO LLC; ARVINMERITOR, INC.; INTERNATIONAL TRUCK AND ENGINE CORPORATION; GENUINE PARTS COMPANY Successor in interest to NATIONAL AUTOMOTIVE PARTS ASSOC., A/K/A NAPA; BORGWARNER MORSE TEC LLC; WESTROCK MWV LLC; MIDWEST WHEEL COMPANIES, INC.; NAVISTAR, INC.; MILWAUKEE ELECTRIC TOOL CORPORATION; O’HALLORAN INTERNATIONAL, INC.; LESEY HAYES COMPANY; FORD MOTOR COMPANY; UNION CARBIDE CORPORATION; DEERE & COMPANY; WESTROCK MWV LLC Successor in interest to MEAD CORPORATION, Defendants-Appellees. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg,

Judge.

Plaintiffs in an asbestos action appeal a district court’s ruling that granted

two defendants’ motions for summary judgment based on Iowa Code section

686B.7(5) (2018). REVERSED.

Brian P. Galligan of Galligan Law, P.C., Des Moines, for appellants.

Mark R. Bradford and David M. Dahlmeier and Jonathan Casillo Marquet of

Bassford Remele P.A., Minneapolis, Minnesota, for appellees Honeywell 2

International, Inc. and Honeywell International, Inc. as successor to Alliedsignal

Inc. Successor to Bendix Corporation.

Margaret Mary Chaplinsky of Kalinoski & Chaplinsky, Des Moines, and

Reagan William Simpson, Houston, Texas, for appellees Pneumo Abex LLC.,

Successor in interest to Abex Corporation, Borgwarmer Morse Tec LLC as

successor in interest to Borgwarmer Corporation, Borgwarmer Morse Tec LLC,

DCO LLC, Lesley Hayes Company, and Union Carbide Corporation.

Scott Michael Flaherty, Minneapolis, Minnesota, for appellee ArvinMeritor,

Inc.

International Truck and Engine Corporation, self-represented.

Michael Murphy Skram of O’Meara, Leer, Wagner & Kohl, P.A.,

Minneapolis, Minnesota, for appellee General Parts Company successor in

interest to National Automotive Association, a/k/a NAPA.

Westrock MWV LLC and Westrock MWV LLC successor in interest to Mead

Corporation, self-represented.

Nathan McConkey and Richard Gittins Book, West Des Moines, and

Jessica Lynn Cleereman, Des Moines, for appellee Midwest Wheel Companies,

Steven Reitenour, Minneapolis, Minnesota, for appellee Navistar, Inc.

Alexander E. Wonio, Des Moines, for appellee Milwaukee Electric Tool

Corporation.

Donna Renae Miller of Miller, Zimmerman & Evans, P.L.C., Des Moines, for

appellee O’Halloran International, Inc. 3

Thomas Michael Boes, Des Moines, and Jason Madden of Bradshaw,

Fowler, Proctor & Fairgrave, Des Moines, for appellee Ford Motor Company.

Deere & Company, self-represented.

Considered by Bower, C.J., and Vaitheswaran, and Schumacher, JJ. 4

SCHUMACHER, Judge.

Mary and Paul Fankhauser (Fankhausers) appeal a district court ruling that

granted Honeywell International, Inc.’s (Honeywell) and Pneumo Abex LLC’s

(Abex) (collectively, the defendants) motions for summary judgment. The

Fankhausers also appeal the court’s denial of their motion to reconsider. We find

the district court misinterpreted Iowa Code section 686B.7(5) (2018) by limiting

liability to defendants that mine, process, or refine asbestos. Accordingly, we

reverse.

I. Background Facts & Proceedings

Paul Fankhauser worked for the Iowa Department of Transportation (IDOT)

from 1968 to 2006. During that time, he worked in several positions including an

equipment operator, highway maintenance, truck driver, mechanic’s helper, and

mechanic. He learned that he had malignant pleural mesothelioma in December

2016.

On April 18, 2018, the Fankhausers filed a petition in district court against

multiple businesses, including Honeywell and Abex. The petition claimed that

Paul’s mesothelioma was caused by asbestos released into the air from products

Paul worked with at his job, including various brake parts. Abex manufactured and

sold asbestos-containing friction materials and clutch facings. Honeywell sold

asbestos-containing brake linings and brake blocks. The products contained

processed chrysotile asbestos, the result of extensive refining of raw asbestos ore.

The Fankhausers’ claims included negligence, strict liability, breach of warranty,

punitive damages, and, on behalf of Mary, loss of consortium. 5

Two defendants, Abex and Borg-Warner Morse Tec, Inc., filed motions for

summary judgment, generally alleging that the Fankhausers failed to establish a

jury question on whether the defendants were responsible for Paul’s exposure by

identifying certain products as being associated with each defendant. The court

denied their motions.

Honeywell and Abex filed another series of motions for summary judgment,

claiming that Iowa Code section 686B.7(5) limits liability to those who make or sell

component parts that are the source of the asbestos exposure. The defendants

highlight that raw asbestos is processed into chrysotile asbestos. And since

neither defendant did the actual processing, they should not be held liable since

they were using a product—the chrysotile—which was made by a third party. The

district court agreed and granted summary judgment on November 19, 2020.

The Fankhausers moved to reconsider pursuant to Iowa Rule of Civil

Procedure 1.904(2). The court denied the motion, finding that it raised no new

facts or issues and was merely asking the court to reconsider a legal question that

the court had ruled upon. The Fankhausers appeal.

II. Standard of Review

We review rulings on a motion for summary judgment and rulings on

statutory interpretation issues presented for correction of errors at law. Albaugh v.

The Reserve, 930 N.W.2d 676, 682 (Iowa 2019).

III. Discussion

The central issue on this appeal is one of statutory interpretation: Whether

section 686B.7(5) limits the defendants’ liability. That section states, “A defendant

in an asbestos action or silica action shall not be liable for exposures from a 6

product or component part made or sold by a third party.” The district court, without

the benefit of appellate guidance, held that the section granted the defendants

immunity from the suit. Indeed, the district court found that the section limits liability

to companies who “mine, mill, refine, or process asbestos.”

Since the district court rendered its decision, our supreme court filed an

opinion interpreting the scope of section 686B.7(5). That decision, Beverage v.

Alcoa, Inc., 975 N.W.2d 670 (Iowa 2022), controls this appeal. The case involved

claims brought by Larry Beverage against Iowa-Illinois Taylor Insulation, Inc. (IITI)

for its role in installing insulation that contained asbestos at Alcoa, Inc.’s aluminum

plant where Beverage was employed.1 Beverage, 975 N.W.2d at 673. The district

court granted summary judgment for the two defendants, finding that only the

insulation manufacturer could be liable under section 686B.7(5) because it was a

third party who had made and sold the asbestos containing products. Id. at 674.

The court of appeals affirmed. Id.

After examining the broader state of asbestos litigation in the nation, our

supreme court turned to the legislation that added chapter 686B to the Iowa Code.

See 2017 Iowa Acts ch. 11 (codified at Iowa Code chs. 686A-686C (2018)).

Despite “[t]he legislation [being], to some extent, modeled after legislation enacted

in other states,” section 686B.7(5) “is unique; no other state legislation includes a

similar limitation on liability.” Beverage, 975 N.W.2d at 677, 679.

The court found that, by examining “each term of the Statute on an almost

granular level,” the district court missed the broader context of the statute. Id. at

1 Beverage also brought premise liability claims against Alcoa, although such claims are not relevant to the present appeal. See Beverage, 975 N.W.2d at 688. 7

679-81. In particular, by examining “product or component part” in isolation, the

court missed that the statute was referring to the “component parts doctrine.” Id.

at 681. That reference was critical because it shifted the meaning of the statute

from a broad bar on asbestos claims to one that resembled the “Bare Metal

Defense.” Id. at 682. That defense is “a specific application of the component-

parts defense, which provides ‘that a manufacturer has no duty to warn about

potential dangers from exposure to a part of its product if the manufacturer did not

make or distribute the part.’” Id. (quoting Toxic Torts Litigation Guide § 33:18).

Our supreme court, after examining a recent United States Supreme Court

case involving the Bare Metal Defense, Air & Liquid Sys. Corp. v. DeVries, 139

S.Ct. 986 (2019), found that section 686B.7(5) tracked the broadest view of the

defense as enunciated in DeVries:

[If a defendant] did not itself make, sell, or distribute the part or incorporate the part into the product, the manufacturer is not liable for harm caused by the integrated product—even if the product required incorporation of the part and the manufacturer knew that the integrated product was likely to be dangerous for its intended uses.

Beverage, 975 N.W.2d at 683 (quoting DeVries, 139 S.Ct. at 993). Put another

way, the statute’s “very focus is on the part produced or sold by the defendant as

compared to a part made or sold by a third party, limiting or eliminating liability for

the manufacturer or seller whose product was not the dangerous part.” Id. at 684.

In applying the statute to the facts at issue, the supreme court differed from

the district court’s analysis, which had determined that because the asbestos-

containing insulation was made by a third party, IITI was not liable. Id. at 688. The

supreme court clarified that such an outcome turned the disjunctive “made or sold”

into a conjunctive, “made and sold.” Id. Rather than taking such a limited view of 8

the statute, the court held that the statute was intended “to capture those in the

line of distribution for the offending product or component part.” Id. Ultimately,

because IITI sold the insulation to Alcoa, the exposure was from a product sold by

IITI, not a third party. Id. Therefore, section 686B.7(5) did not protect IITI from

liability, and summary judgment was improper. Id.

Here, the district court sought to go one step further than the district court

in Beverage, by finding that only mines, mills, or refineries could be held liable

since they were the ones to initially make raw asbestos ore into a product—

chrysotile. Thus, any later product which used the chrysotile was using a product

made or sold by a third party.

We apply Beverage to find that the district court improperly interpreted the

statute. Honeywell and Abex sold asbestos-containing products such as friction

brakes, drum brake linings, and brake pads to Paul Fankhauser’s employer. Thus,

the defendants, not third parties, made or sold the asbestos-containing products

that resulted in Paul’s exposure and are not protected by section 686B.7(5). See

id.. Summary judgment was improper.2

REVERSED.

2 Because we find the district court erred on its interpretation of the statute in its ruling on summary judgment, we need not consider the Fankhausers’ claim involving the motion to reconsider.