Standal v. Armstrong Cork Co.

356 N.W.2d 380, 1984 Minn. App. LEXIS 3673
CourtCourt of Appeals of Minnesota
DecidedOctober 16, 1984
DocketC1-84-615
StatusPublished
Cited by10 cases

This text of 356 N.W.2d 380 (Standal v. Armstrong Cork Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Standal v. Armstrong Cork Co., 356 N.W.2d 380, 1984 Minn. App. LEXIS 3673 (Mich. Ct. App. 1984).

Opinion

OPINION

FOLEY, Judge.

Odber Standal, Sr. brought a product liability action for injuries suffered as a result of exposure to asbestos fibers contained in products sold by several manufacturers, including Keasbey & Mattison Co. Standal sought to hold Nicolet, Inc. liable as a successor to Keasbey. The trial court granted summary judgment finding Nicolet had no liability as a successor to Keasbey. Standal appeals. We reverse.

FACTS

Standal is a Minnesota construction worker who suffers from asbestosis. In 1942-1943 he was exposed to asbestos-containing insulation manufactured by Keas-bey’s industrial products division. The facility which produced the insulation was located in Pennsylvania.

In 1962, Nicolet bought all of the assets of Keasbey’s industrial products division. Nicolet continued to produce and market asbestos-containing insulation under the Keasbey name. Certain-Teed Products Corp. purchased assets of other Keasbey divisions and used the Keasbey name in the manufacturing and marketing of other asbestos-containing products. Keasbey was liquidated and dissolved following the sale of its assets.

ISSUE

Did the trial court err in its choice of law concerning Nicolet’s successor liability for injuries caused by asbestos-containing insulation produced by Keasbey?

ANALYSIS

The facts in this case are undisputed. We are called upon only to decide whether Minnesota’s or Pennsylvania’s law of corporate successor liability applies.

Minnesota has adopted Professor Robert Leflar’s five point choice of law analysis. Leflar’s five “choice-influencing considerations” are as follows:

(a) Predictability of results; (b) maintenance of interstate and international order; (c) simplification of the judicial task; (d) advancement of the forum’s governmental interests; and (e) application of the better rule of law.

Milkovich v. Saari, 295 Minn. 155, 161, 203 N.W.2d 408, 412 (1973).

In this case, maintenance of interstate order and simplification of the judicial task are of negligible importance. Maintenance of interstate order requires only that the state whose laws are ultimately applied have a substantial connection with the facts and the particular issue. Milkovich, *382 295 Minn, at 161, 203 N.W.2d at 412. Both Minnesota and Pennsylvania have sufficient contacts with the case to satisfy the requirement. Furthermore, Minnesota courts are capable of administering the law of another forum. Simplification of the judicial task poses no problem. Id.

, Application of Pennsylvania law would further predictability. Minnesota generally upholds express choice of law contract provisions. Milliken & Co. v. Eagle Packaging Co., 295 N.W.2d 377, 380 n. 1 (Minn.1980). Nieolet and Keasbey expressly provided that Pennsylvania law should govern the transfer which gives rise to this action. Nieolet sought to be governed by Pennsylvania corporate successor liability law in several factually similar cases'arising before Pennsylvania’s adoption and expansion of the product-line rule. See e.g. Osteen v. Combustion Engineering, Inc., No. CV79-0-47 (D.Neb. Sept. 24, 1981). Therefore, the choice of Pennsylvania law would be consistent with the expectations of the parties. Application of Pennsylvania law by courts in all states in which Keasbey asbestosis victims bring suit would also improve predictability and consistency among states.

The choice of Pennsylvania law- also would further Minnesota’s interest in providing compensation for resident tort victims. Hague v. Allstate Ins. Co., 289 N.W.2d 43 (Minn.1979), aff’d, 449 U.S. 302, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981).

Minnesota follows the traditional test of corporate successor liability.

[WJhere one corporation transfers its assets to another corporation, absent consolidation, merger, or a mere continuation of the selling corporation such as reorganization, the receiving corporation is not responsible for the debts of the transferring corporation except (a) where the purchaser agrees, expressly or impliedly, to assume such debts, or (b) the transfer of assets is entered into for inadequate consideration, or otherwise fraudulently, in order to escape liability for such debts.

State Bank of Young America v. Vidmar Iron Works, Inc., 292 N.W.2d 244, 251 (Minn.1980) (quoting J.F. Anderson Lumber Co. v. Myers, 296 Minn. 33, 40-41, 206 N.W.2d 365, 370 (1973)). Standal concedes that under this traditional test Nieolet has no successor liability for injuries caused by insulation manufactured by Keasbey.

However, Nieolet would have successor liability under Pennsylvania’s “product-line” rule. Dawejko v. Jorgensen Steel Co., 290 Pa.Super. 15, 434 A.2d 106 (Pa.Super.Ct.1981); Amader v. Pittsburg Corning Corp., 546 F.Supp. 1033 (E.D.Pa.1982).

Dawejko discusses several factors relevant in determining whether to impose liability on a successor corporation, including:

1. whether the successor corporation advertised itself as an ongoing enterprise Cyr v. B. Offen & Co., Inc., 501 F.2d 1145 (1st Cir.1974);

2. whether it maintained the same product, name, personnel, property, and clients Turner v. Bituminous Casualty Co., 397 Mich. 406, 244 N.W.2d 873 (1976);

3. whether it acquired the predecessor corporation’s name and goodwill, and required the predecessor to dissolve Knapp v. North Am. Rockwell Corp., 506 F.2d 361 (3rd Cir.1974), cert. denied. North American Rockwell Corp., 421 U.S. 965, 95 S.Ct. 1955, 44 L.Ed.2d 452 (1975).

The Pennsylvania Superior Court consciously chose not to include such details in its formulation of the rule. Instead it adopted the broad language used in Ramirez v. Amsted Ind., Inc., 86 N.J. 332, 431 A.2d 811 (1981).

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Bluebook (online)
356 N.W.2d 380, 1984 Minn. App. LEXIS 3673, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standal-v-armstrong-cork-co-minnctapp-1984.