Ieropoli v. AC&S CORP.

842 A.2d 919, 577 Pa. 138, 2004 Pa. LEXIS 146
Supreme Court of Pennsylvania·Decided February 20, 2004·No. 117 EM 2002·Published·Cited by 116 cases

Opinions

OPINION

Chief Justice CAPPY.

In this appeal, we review the order of the court of common pleas granting summary judgment to Appellee Crown Cork & Seal Company, Inc. (“Crown Cork”) pursuant to the newly enacted statute (“Statute”) that limits the successor asbestos-related liabilities of certain Pennsylvania corporations. 15 Pa.C.S. § 1929.1.1 For all the reasons that follow, we hold that the Statute is unconstitutional as applied under Article I, Section 11 of the Pennsylvania Constitution. Accordingly, the order of the trial court is reversed.

On December 19, 2000, Appellants, Frank and Margaret Ieropoli, commenced a civil action, filing a complaint against Crown Cork and twenty-four other defendants. In their complaint, Appellants alleged that Frank Ieropoli was exposed to defendants’ respective asbestos products while working as a machinist with General Electric from 1947 until 1979, and that as a result, he sustained pleural effusion and parenchymal scarring. Appellants asserted several causes of action against Crown Cork sounding in tort or contract. For the most part, Appellants asserted these same causes of action against Crown Cork’s co-defendants. Appellants requested that a [143]*143judgment for compensatory damages, punitive damages, the costs of suit, and any other relief that was just and proper be entered against Crown Cork and its co-defendants individually, and jointly and severally, where appropriate.

The Statute was passed by the General Assembly, signed into law on December 17, 2001, and made immediately effective. The Statute limits the asbestos-related liabilities of corporations incorporated in Pennsylvania before May 1, 2001 that arise out of mergers or consolidations. The Statute provides:

§ 1929.1. Limitations on asbestos-related liabilities relating to certain mergers or consolidations.—
(a) Limitation on successor asbestos-related liabilities.
(1) Except as further limited in paragraph (2)[2] the cumulative successor asbestos-related liabilities[3] of a domestic business corporation that was incorporated in this Commonwealth prior to May 1, 2001, shall be limited to the fair [144]*144market value of the total assets of the transferor determined as of the time of the merger or consolidation,[4] and such corporation shall have no responsibility for successor asbestos-related liabilities in excess of such limitation.

15 Pa.C.S. § 1929.1(a)(1).

As to its application, the Statute expressly states that it shall apply to mergers or consolidations which occurred prior to May 1, 2001, and to all asbestos claims,5 including existing asbestos claims, and to all litigation, including existing litigation. 15 Pa.C.S. § 1929.1(d)(l)-(2).

On February 7, 2002, Crown Cork filed a “Global Motion for Summary Judgment In All Cases Where It Is A Defendant Or Additional Defendant” (“Motion”), requesting that judgment be entered in its favor in several hundred asbestos cases pending against it in the Court of Common Pleas in Philadelphia County.6

In its Motion, Crown Cork set forth the following undisputed, material facts of record: Crown Cork is a Pennsylvania business corporation and a manufacturer of beverage cans; Crown Cork purchased a majority of the stock of Mundet Cork Corporation (“Mundet Cork”) in November 1963; Mun[145]*145det Cork had a división that made, sold and installed asbestos insulation; Crown Cork never operated the insulation division; Crown Cork sold the insulation division 90 days after acquiring Mundet Cork’s stock; Crown Cork acquired all of Mundet Cork’s stock and merged with Mundet Cork on February 10, 1996; the value of Mundet Cork’s assets at the time of the merger was in the range of $11 to $12 million; the value of Mundet Cork’s assets at the time of the merger adjusted for inflation was in the range of $50 to $55 million; Crown Cork was reincorporated in Pennsylvania on March 30, 1996; Crown Cork was sued in asbestos-related cases solely as a successor to Mundet Cork; and Crown Cork has paid out $336 million on asbestos-related claims.

Based on these facts, Crown Cork asserted that because all of the cases that are the subject of its Motion come within the Statute’s definition of “asbestos claims”; because it has already paid an amount in excess of the limit on liability created by the Statute; and because Appellants no longer have a damages remedy for the claims they asserted against it, the Statute required that its Motion be granted.

In their Response to Crown Cork’s Motion, Appellants did not assert that the presence of genuine issues of material facts precluded the entry of summary judgment in Crown Cork’s favor. See Pa.R.C.P. 1035.3. Nor did Appellants assert that the Statute does not apply in this case to limit Crown Cork’s responsibility for successor-related liabilities. Rather, Appellants argued that application of the Statute in this case is unconstitutional under Article I, Section 11 of the Pennsylvania Constitution. Pa. Const, art. 1, § ll.7 More specifically, [146]*146Appellants asserted that Article 1, Section 11 was violated because application of the Statute in this case serves to extinguish accrued causes of action.

The trial court rejected Appellants’ argument. While acknowledging that the Appellants’ causes of action against Crown Cork accrued prior to the Statute’s enactment,8 the trial court concluded that the Statute did not extinguish any cause of action. The trial court stated:

The effect [of the Statute] is not an extinguishment of plaintiffs’ causes of action, as [plaintiffs argue, but rather, a variation of their available remedy. Plaintiffs are not without alternative avenues to pursue their remedies. In fact, the average number of defendants in plaintiffs’ lawsuits is 34, and under the theory of joint tortfeasor liability, all of plaintiffs’ damages are recoverable against the remaining defendants.
* * *
[T]he statute at issue [in Gibson v. Commonwealth[, 490 Pa. 156], 415 A.2d 80 (Pa.1980)] completely extinguished plaintiffs’ claims, thus barring plaintiffs from any recovery. The Court finds this case more analogous to what transpired in [Bible v. Commonwealth[, 548 Pa. 247], 696 A.2d 1149 (Pa.1997)] where the Supreme Court upheld an amendment to the Worker’s Compensation Act, which merely changed the plaintiffs’ remedy. Here, the Asbestos plaintiffs’ claims will continue through the litigation and should plaintiffs succeed in proving the liability portion of their claims, they will then be required to prove the damages aspect of their claims. Plaintiffs will only be entitled to recover damages against the remaining defendants, if they are able to prove that the negligence of the defendants was a cause in fact of their damages. Retrospective laws are permitted “when [147]*147they impair no contract and disturb no vested right, but only vary remedies, cure defects in proceedings otherwise fair and do not vary existing obligations contrary to their situation when entered into and proseeuted.[”]

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Ieropoli v. AC&S CORP., 842 A.2d 919, 577 Pa. 138, 2004 Pa. LEXIS 146 (Pa. 2004).

842 A.2d 919 (Ieropoli v. AC&S CORP.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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