In Re W.R. Grace & Co.

403 B.R. 317, 2009 WL 1019912
CourtUnited States Bankruptcy Court, D. Delaware
DecidedApril 14, 2009
Docket17-12500
StatusPublished
Cited by13 cases

This text of 403 B.R. 317 (In Re W.R. Grace & Co.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re W.R. Grace & Co., 403 B.R. 317, 2009 WL 1019912 (Del. 2009).

Opinion

MEMORANDUM OPINION 1

JUDITH K. FITZGERALD, Bankruptcy Judge.

The matter before the court is Debtors’ Motion and Memorandum for an Order Pursuant to F.R.B.P. 7056 Disallowing and Expunging Eighty-Eight Time-Barred Canadian Asbestos Property Damage Claims, docketed as a Motion for Summary Judgment. 2 Since the filing of the motion, the eighty-eight claims have been reduced to thirty-five due to withdrawal, expungement, or settlement of claims. Debtors assert that these remaining thirty-five claims are time-barred by the applicable Canadian ultimate limitations periods, 3 similar to American statutes of repose, and move for summary judgment. Anderson Memorial Hospital *319 filed a response 4 to Debtors’ motion on its own behalf and on behalf of the Canadian Claimants. The Canadian Claimants dispute the dates upon which the ultimate limitations periods would begin to run and contend that the limitations periods were tolled. 5

Background

The Canadian Claimants seek to recover the costs associated with management and removal of asbestos-containing surfacing materials sold by Debtors and installed in the Claimants’ buildings. The thirty-five remaining Canadian Claims involve buildings in three different Canadian provinces. Thirty-three of the claims arise from properties located in Alberta and the remaining two arise from properties located in Manitoba and British Columbia. It is undisputed that Debtors ceased selling asbestos-containing products in Canada by 1976, at the latest. 6 Based upon this date, Debtors argue that the thirty-three Alberta claims are time-barred. With regard to the Manitoba claim, the parties have stipulated to the fact that the asbestos-containing material was installed in 1956. 7 The British Columbia claim involves an installation date in the 1960s at the latest. 8 Based upon these dates, the Debtors argue that the applicable Canadian ultimate limitations periods expired with respect to each of the remaining claims prior to April 2, 2001, the Bankruptcy Petition Date.

Summary Judgment Standard

Pursuant to Federal Rule of Civil Procedure 56(c), the moving party is entitled to summary judgment where the evidence shows that “there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” The non-moving party can defeat summary judgment if it produces evidence in the record creating a genuine issue of material fact. 9 However, where the moving party has satisfied its burden under Rule 56(c), “its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” 10 The non-moving party cannot “rely merely on *320 allegations or denials in its own pleading; rather, its response must ... set out specific facts showing a genuine issue for trial.” 11 Only evidence which is “ultimately reducible to admissible evidence” will be considered. 12

Causes of Action

Analysis of ultimate limitations periods requires identification of the cause of action being pursued. Debtors assert that, under Canadian law, “any asbestos-in-building tort claims fall under the rubric of ‘pure economic loss.’ ” 13 Therefore, the Debtors addressed only how the ultimate limitations periods would bar economic loss claims. However, the Claimants contend that the Debtors failed to show that claims based on certain other “asbestos-property damage causes of action,” such as nuisance, warranty, conspiracy, restitution, fraud, and misrepresentation, would be barred. 14 In addition, the Claimants assert that, due to a manufacturer’s continuing duty to warn, the ultimate limitations periods cannot bar these claims as “a new cause would accrue for every breach of the continuing duty to warn.” 15

Both parties’ Canadian law experts reached the same conclusion with regard to the cause of action being pursued by the Claimants. That is, in Canada, the claims are cognizable only as negligence claims for pure economic loss. 16 The Supreme Court of Canada in Winnipeg Condominium, Corp. No. 36 v. Bird Construction Co. Ltd., addressed whether the cost of repairing a defect in the construction of a building is the type of economic loss recoverable in tort. 17 Pure economic loss claims are those which do not arise from injury to persons or damage to property apart from the defective product itself. 18 The Winnipeg Condo court recognized and outlined five categories in which these claims arise. The relevant category in both Winnipeg Condo and under the facts of this case is “negligent supply of shoddy goods or structures.” 19 Prior to Winnipeg Condo, *321 the claims asserted by the Canadian Claimants in this case “would have been regarded as speculative if not entirely unarguable in Canadian courts[.]” 20 Furthermore, Canadian courts are skeptical of attempts to recharacterize causes of action and are unwilling to permit the purpose of the ultimate limitations periods to be undermined. 21 Based on reported cases construing Canadian law and the consensus in opinion of the parties’ experts, which is unrefuted on this record, the court will proceed to analyze the claims as negligence claims for pure economic loss.

Canadian Limitations Acts

As the Claimants’ buildings are located in Alberta, Manitoba, and British Columbia, the laws of each of those Canadian provinces must be considered in determining whether the claims are barred by the applicable limitations period.

Alberta’s Limitations Act, R.S.A., ch. L-12

Pursuant to § 3(l)(b) of Alberta’s Limitations Act, a claimant must seek a remedial order within the ten-year ultimate limitations period. 22

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Cite This Page — Counsel Stack

Bluebook (online)
403 B.R. 317, 2009 WL 1019912, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-wr-grace-co-deb-2009.