Matter of New York City Asbestos Litig.

2017 NY Slip Op 6343, 153 A.D.3d 461, 62 N.Y.S.3d 309
Appellate Division of the Supreme Court of the State of New York·Decided August 29, 2017·No. 4048 190029/15·Published·Cited by 2 cases

Opinions

[462]*462Order, Supreme Court, New York County (Peter H. Moulton, J.), entered on or about January 5, 2016, which, to the extent appealed from, denied defendant Chevron Corporation’s alleged predecessor in interest’s (Texaco) motion for summary judgment dismissing the complaint as against it, affirmed.

Plaintiff’s decedent, Mason South, and plaintiff, South’s wife, commenced this action alleging that South’s mesothelioma resulted from his exposure to asbestos during his 37-year career in the Merchant Marine. They claimed that defendant Texaco manufactured, produced, sold, supplied, merchandised and/or distributed asbestos-containing products that were located on the ships South worked on. The claims were brought under the Jones Act (46 USC § 30104 et seq.). South’s wife asserted derivative claims and was substituted as plaintiff after South died of mesothelioma.

Texaco moved for summary judgment dismissing the complaint as against it. The basis for the motion was a release that South had given to it in connection with an earlier lawsuit, also in connection with his exposure to asbestos on merchant ships. In that Jones Act action, filed in 1997 in the United States District Court for the Northern District of Ohio, South alleged that “[a]s a direct and proximate result of said exposure to asbestos aboard the said vessels as well as secondary or passive smoke that hung still in the atmosphere free from dissipation for lack of adequate ventilation, Plaintiff suffers cancerpho-bia, traumatic stressful fear of affliction and worsening of pneumoconiosis as well as exacerbation of existing diseases; and suffers anatomical disorder, structural changes, pulmonary diseases inclusive of asbestosis/mesothelioma/lung cancer/ pneumoconiosis/chronic obstructive pulmonary disease/colon cancer/stomach cancer/rectal cancer/kidney cancer/pancreas cancer/pharynx cancer/brain cancer/other anatomical cancer, et cetera, either singularly or in combination thereof; and, moreover, Plaintiff suffers harm in the form of necessity to be monitored for other asbestotic diseases including lung cancer.” The release that South executed in connection with the settlement of the 1997 action stated that South, “for himself, his heirs, administrators, beneficiaries, executors and assigns,” released Texaco “forever” from any and all “actions, suits, [and] claims” which he “has now, has ever had, or which may accrue in the future.” The release included any “bodily and/or personal injuries, sickness or death” which allegedly occurred as a result of South’s asbestos exposure. The release acknowledged that the “long term effects of exposure” to asbestos might result in “obtaining a new and different diagnosis from the diagnosis as [463]*463of the date of this Release.” South stated in the release that despite this, he knew that he would be giving up the right to bring an action in the future for “any new or different diagnosis that may be made” as a result of his exposure to any asbestos or other product. This provision also pertained to South’s executors, administrators, and heirs. South acknowledged that he had read the full release, discussed it with his attorney, and was signing it with full knowledge of its contents, and that he would be legally bound by it. In return for furnishing the release, South was paid $1,750.

In opposition to the motion, plaintiffs argued that the release did not preclude the claim for mesothelioma, based on section 5 of the Federal Employers’ Liability Act (FELA) (45 USC § 55), which requires strict scrutiny of releases and prohibits agreements that exempt common carriers from liability. Under that standard, plaintiffs asserted that at the time South signed the release, he did not have mesothelioma and was not aware of the risk of mesothelioma as a potential injury from his asbestos exposure.

The court denied Texaco’s motion. It focused its analysis on two federal cases, one from the Sixth Circuit adopting a bright-line test voiding releases that attempt to bar claims for injuries that have not been explicitly forsaken, and one from the Third Circuit enforcing such releases, provided that the plaintiff understood the actual specific risks being released. The motion court held that, under either circuit’s standard, Texaco failed to establish that South understood he was releasing a future claim for mesothelioma. Under the more lenient Third Circuit test, the 1997 release was inadequate because although it referred to future claims arising out of asbestos exposure and contemplated a second injury, it did not mention cancer or mesothelioma explicitly. Moreover, the court characterized the settlement payment South received as consideration for the 1997 release as, “[biased on this court’s experience . . . extremely low, given . . . South’s alleged extensive asbestos exposure.” The court alternatively described the amount as “meager.”

Texaco argues on appeal that the release should be enforced because it represents a compromise of a known claim, not an exemption from liability for a future unknown claim. It contends that because the release resolved an action arising out of South’s exposure to asbestos, it applies to additional injuries that might later manifest themselves as a result of the same exposure. Texaco notes that the 1997 complaint asserted a claim for possible diseases stemming from his exposure, and [464]*464mentioned mesothelioma as one of those diseases. Thus, Texaco reasons, the release necessarily embraced mesothelioma as a condition South was aware of as a risk of asbestos exposure but was willing to compromise as a claim in exchange for monetary consideration. Texaco stresses the language in the release by which South acknowledged that his exposure to asbestos could cause new diseases that were not yet apparent on the date he executed the release, and his statement in the release that he had read it carefully and had had the assistance of counsel.

The Jones Act provides merchant mariners, such as South, with a right of action for injuries and death arising out of the performance of their duties. The statute incorporates FELA by reference (American Dredging Co. v Miller, 510 US 443, 456 [1994] [“the Jones Act adopts the entire judicially developed doctrine of liability under the Federal Employers’ Liability Act” (internal quotation marks omitted)]). While section 5 of FELA voids any contract, such as a release, “the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter” (45 USC § 55), the United States Supreme Court has differentiated between an agreement conferring a broad immunity from liability and one, such as a release, that compromises an actual claimed liability (see Callen v Pennsylvania R. Co., 332 US 625, 631 [1948]).

Nevertheless, not all releases can pass muster under section 5. As noted by the motion court, there is a split in the federal circuits as to the standard under which a release should be analyzed for FELA purposes, although both cases discussed by the court resulted in the release at issue being declared unenforceable. In Babbitt v Norfolk & W. Ry. Co. (104 F3d 89, 93 [6th Cir 1997]), the Sixth Circuit concluded that for a FELA release to be valid, it “must reflect a bargained-for settlement of a known claim for a specific injury, as contrasted with an attempt to extinguish potential future claims the employee might have arising from injuries known or unknown by him.” The Third Circuit, in contrast, focused, in Wicker v Consolidated Rail Corp. (142 F3d 690, 701 [3d Cir 1998], cert denied

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Matter of New York City Asbestos Litig., 2017 NY Slip Op 6343, 153 A.D.3d 461, 62 N.Y.S.3d 309 (N.Y. Ct. App. 2017).

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Matter of New York City Asbestos Litig.
2017 NY Slip Op 6343 (Appellate Division of the Supreme Court of New York, 2017)