Nolen v. Foster Wheeler
Energy
Filed 8/2/12
Nolen v. Foster Wheeler Energy CA2/2
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
TWO
JOHN M. NOLEN et
al.,
Plaintiffs and
Respondents,
v.
FOSTER WHEELER ENERGY CORP.,
Defendant and Appellant.
B216202
(Los Angeles County
Super. Ct. No. BC391649)
APPEAL
from a judgment of the Superior Court
of
County. Gregory
Alarcon, Judge. Reversed and remanded.
Sedgwick,
Detert, Moran & Arnold, Frederick D. Baker and Brian R. Thompson for
Defendant and Appellant.
Waters
Kraus & Paul, Paul C. Cook and Michael B. Gurien for Plaintiffs and
Respondents.
Foster
Wheeler Energy Corp. (Foster Wheeler) appeals from a judgment entered after a
jury trial on John M. Nolen (John) and Sarah Nolen’s (Sarah) (collectively the
Nolens) claims of strict liability and
negligence arising from John’s exposure to asbestos during his work as a
seller of water treatment chemicals for his employer Nalco Chemical Company
(Nalco), from 1976 through 1979. The
jury found Foster Wheeler liable to the Nolens and awarded them economic and
noneconomic damages of over $8 million.
We
find that under the recent decision of the California Supreme Court in
335 (O’Neil), Foster Wheeler is not
liable for injuries arising from asbestos-laden products to which John was
exposed. Therefore we reverse.
Foster
Wheeler contends it is not liable as a matter of law because California
imposes no liability on a manufacturer for
products it did not manufacture, sell or distribute.
Foster
Wheeler further contends that the trial court committed prejudicial error
because it failed to instruct the jury on the sophisticated intermediary
doctrine and contributory negligence; that the jury’s special verdict is
irreconcilably inconsistent with its findings on causes of action for strict
liability and negligent failure to warn; and that, at a minimum, the jury
miscalculated its damages determination and the Nolens’s award must be reduced
accordingly.
Because
we reverse the judgment on liability, we do not reach the issues of
instructional error or jury error.
John
graduated from Cal Poly Pomona in 1968 with a degree in chemistry. He began working as a sales representative
for Nalco in 1976. In 2008, he was
diagnosed with mesothelioma.
Nalco’s
business was the manufacture and sale of chemicals to the power industry,
including boiler treatment chemicals and cooling water chemicals. As a sales engineer for Nalco, John spent the
majority of his time at various account locations providing service to those
accounts. This service included testing
and inspecting the industrial boilers at the job site. John recalled seeing Foster Wheeler boilers
at four job sites: (1) Nestle in Salinas,
(2) Pacific State Steel in Fremont
or Hayward, (3) Owens-Corning
Fiberglass in Santa Clara, and (4)
Chevron in Richmond.
During
his inspections of the Foster Wheeler boilers, John disturbed thermal
insulating materials on the boilers. He
described the boiler inspection process as follows: “To inspect the boiler, you
have to crawl through a fairly small manhole, going in and out of both the mud
drum and steam drum. And the manholes
were covered on the outside with insulation.”
“[A]s you crawled over those areas, it was impossible not to rub off
some insulation on your clothes and on your hands.” “You get this stuff all of [
boiler. But pieces of it came off on my
clothes and my hands.” This caused dust,
which John breathed.
In
addition to his exposure through the inspection process, John testified that
while he was present on site for the boiler inspections, workers at the various
sites would replace gaskets and repair insulation that was loose. This was done at the same time that the
boiler was inspected, so that “they wouldn’t have to bring the boiler down
again at a later date.” The maintenance
included removing gaskets and “chipping and grinding” to get the gasket
material off. This process created a lot
of dust, which John breathed.
John
described the insulation as “dry cake mud” that was “brownish in color.” He offered no testimony that the insulation
contained asbestos, and admitted that he
was not trained to recognize asbestos.
However, John testified that it was common knowledge that he would
encounter asbestos at the various job sites he visited. He was specifically informed about the
presence of asbestos at one job site.
John
could not identify the manufacturer or the distributor of the asbestos products
to which he was exposed. Nor could he
identify the manufacturer or distributor of the gaskets which he encountered,
or whether they had ever been replaced prior to the time he was present at the
various worksites. There was no evidence
that Foster Wheeler manufactured, sold, distributed, or supplied the asbestos
insulation to which John was exposed.
John
testified that during the entire time that he worked at Nalco, he never
received any warnings that asbestos exposure could cause asbestosis, lung
cancer or mesothelioma. The first time
he learned anything about asbestos hazards was in the 1980’s, when he read
newspaper articles that referenced asbestos hazards and saw people using
respiratory protection for asbestos removal.
When he was working at Nalco, no one wore respirators or warned that
respirators were necessary.
The
Nolens initiated this action on May
29, 2008, against Foster Wheeler and numerous other defendants,
alleging causes of action for negligence, strict liability, false
representation, intentional tort/intentional failure to warn, premises
liability, and loss of consortium. By
the time the case went to trial, Foster Wheeler was the only remaining
defendant.
Foster
Wheeler moved for summary judgment, and later for judgment notwithstanding the
verdict (JNOV), on the ground that it owed no duty to the Nolens for harm caused
by asbestos-containing affixed parts that it did not manufacture, sell or
distribute. At the time,
Foster Wheeler relied on Taylor v.
Elliott Turbomachinery Co., Inc. (2009) 171 Cal.App.4th 564. Foster Wheeler’s motions were denied.
After
trial, the jury returned a special verdict against Foster Wheeler. The jury found that Foster Wheeler’s boilers
failed to perform as safely as an ordinary consumer would have expected and
that Foster Wheeler was negligent in failing to warn John of the danger. The jury did not find Foster Wheeler strictly
liable for failure to warn, because it found that the boilers’ risks were not
known or knowable at the time of manufacture.
The
jury awarded economic damages consisting of medical expenses in the amount of
$225,000, and awarded $296,887 for “household services” damages. It awarded noneconomic damages to John in the
amount of $2,500,000 and noneconomic damages to Sarah in the amount of $5,000,000. The jury apportioned 20 percent of the fault
for John’s injuries to Foster Wheeler, and apportioned 80 percent of the fault
to “all others.” The jury apportioned no
fault to John for his injuries.
Foster
Wheeler’s posttrial motions for JNOV and for a new trial were denied on April
16, 2009.
On
May 14, 2009, Foster Wheeler filed its notice
of appeal from the judgment.
I. Standards of review
This
is an appeal from a jury verdict and denial of a JNOV motion.
“A
party is entitled to a judgment notwithstanding the verdict on a timely motion
if there is no substantial evidence to support the verdict and the evidence
compels a judgment for the moving party as a matter of law. (Code Civ. Proc., § 629; Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865,
877-878.) If the motion challenges the
sufficiency of the evidence to support the verdict, we review the ruling under
the substantial evidence standard. (
Casualty Co. (1997) 52 Cal.App.4th 722, 730.) If the motion presents a legal question based
on undisputed facts, however, we review the ruling de novo. (Trujillo
v. North County Transit Dist. (1998) 63 Cal.App.4th 280, 284.) If we determine that the trial court denied a
motion for judgment notwithstanding the verdict that should have been granted,
we must order the entry of judgment in favor of the moving party. (Code Civ. Proc., § 629.)” (Gillan
v. City of San Marino (2007) 147 Cal.App.4th 1033, 1043-1044.)
II. O’Neil is controlling
While
this appeal was pending, the California Supreme Court issued its decision in
product manufacturer may not be held liable in strict liability or negligence
for harm caused by another manufacturer’s product unless the defendant’s own
product contributed substantially to the harm, or the defendant participated
substantially in creating a harmful combined use of the products.” (O’Neil,
supra, 53 Cal.4th at p. 342.) We
requested additional briefing from the parties as to how the Supreme Court’s
holding in O’Neil affected the issues
presented in this appeal. Both parties
submitted supplemental letter briefs for our consideration.
We
find that the O’Neil decision directs
that Foster Wheeler may not be held liable for the Nolens’s injuries on any
theory advanced by the Nolens, and that the judgment must be reversed and
remanded for entry of judgment notwithstanding the verdict in favor of Foster
Wheeler.
The
O’Neil matter involved facts that are
similar to those before us. In
codefendant Warren Pumps made valves and pumps that were used with
asbestos-containing external insulation or internal gaskets and packing, none
of which were manufactured or distributed by the defendants. (O’Neil,
supra, 53 Cal.4th at p. 342.) The
defendants sold their valves and pumps to the United States Navy for use in
steam propulsion systems on Navy ships.
Navy specifications required the use of asbestos-containing insulation on
all external surfaces of its steam propulsion systems as well as in the
internal gaskets and packing materials in valves. (Id.
at pp. 343, 344.)
The pumps and
valves sold to the Navy were not made or shipped with external insulation. Such insulation was applied subsequently by
the Navy. (O’Neil, supra, 53 Cal.4th at p. 349.) The valves sold to the Navy contained
internal asbestos-containing gaskets and packing at the time they were sold;
however, the Navy replaced the gaskets and packing from time to time during
routine maintenance operations, and there was no evidence that the
these replacement parts. (
The
plaintiff in O’Neil served on a Navy
ship from 1965 to 1967 and was exposed to asbestos fibers released from
external insulation, gaskets and packing during repair and maintenance of the
ship’s equipment. The
the ship’s steam propulsion system in 1943 or earlier, at least 20 years before
the plaintiff worked aboard the ship. (
345.) The plaintiff in
liable for his injuries caused by the asbestos exposures because their products
included and were used in connection with asbestos-containing parts. The plaintiff also argued that the defendants
should be held strictly liable for failing to warn him about the potential
hazards of breathing asbestos released from their products. (Id. at
p. 348.)
The
Supreme Court concluded the O’Neil defendants
were not strictly liable for the plaintiff’s injuries because (a) any design
defect in the defendants’ products was not a legal cause of injury to the
plaintiff, and (b) the defendants had no duty to warn of risks arising from
other manufacturer’s products. (
348.) The court reasoned that the
plaintiff was not exposed to asbestos from a product made by the
defendants. The evidence showed that
plaintiff was exposed to asbestos dust released from exterior insulation the Navy
had applied to the pumps and valves.
None of the defendants manufactured or sold that insulation, and neither
defendant required or advised that the insulation be used with its products. (Id. at
p. 349.) The uncontroverted evidence
also showed that the plaintiff had been exposed to asbestos from replacement
gaskets and packing inside the pumps and valves that were not the original
parts supplied by the defendants, but were replacement parts the Navy had
purchased from other sources. (
The O’Neil court therefore
determined that “even assuming the inclusion of asbestos makes a product
defective, no defect inherent in defendants’ pump and valve products caused
O’Neil’s disease.” (Id. at p. 350.)
The
Supreme Court also rejected the plaintiff’s argument that the products were
defective because they were “designed to be used” with asbestos-containing
components. (O’Neil, supra, 53 Cal.4th at p. 350.) The court stated: “The products were designed to meet the
Navy’s specifications. Moreover, there
was no evidence that defendants’ products required
asbestos-containing gaskets or packing in order to function. Plaintiff’s assertion to the contrary is
belied by evidence that defendants made some pumps and valves without
asbestos-containing parts. As
alternative insulating materials became available, the Navy could have chosen
to replace worn gaskets and seals with in defendants’ products with parts that
did not contain asbestos. Apart from the
Navy’s specifications, no evidence showed that the design of defendants’
products required the use of asbestos components, and their mere compatibility
for use with such components is not enough to render them defective.” (Ibid.,
fn. omitted.)
Similarly
here, Foster Wheeler made boilers that may have been insulated with
asbestos-containing insulation or used with asbestos-containing gaskets. However, there is no evidence that Foster
Wheeler ever made, sold, or distributed any of the asbestos-containing
insulation or replacement parts to which John was exposed.
Given
the similarities between the two cases, we find that the O’Neil case mandates a verdict in favor of Foster Wheeler.
III. The exceptions stated in
The
Nolens point out that the O’Neil
court acknowledged two exceptions to its ruling. Specifically, the high court noted that “a
product manufacturer may not be held liable in strict liability or negligence
for harm caused by another manufacturer’s product unless [1] the defendant’s
own product contributed substantially to the harm, or [2] the defendant
participated substantially in creating a harmful combined use of the
products.” (O’Neil, supra, 53 Cal.4th at p. 342.) In addition, the Nolens point out that the
Supreme Court included a footnote describing circumstances that do not come
within its holding. The court explained:
“A
stronger argument for liability might be made in the case of a product that
order to operate. In such a case, the
finished product would inevitably incorporate a defect. One could argue that replacement of the
original defective part with an identically defective one supplied by another
manufacturer would not break the chain of causation. Similarly, if the product manufacturer
specified or required the use of a defective replacement part, a stronger case
could be made that the manufacturer’s failure to warn was a proximate cause of
resulting injury. In both contexts,
however, the policy rationales against imposing liability on a manufacturer for
a defective part it did not produce or supply would remain. [Citation.]
These difficult questions are not presented in the case before us, and
we express no opinion on their appropriate resolution.”
(
6.)
The
O’Neil defendants had not
substantially participated in the use of asbestos materials with their
products, because the design choices dictating the use of asbestos were made by
the Navy. In other words, the “products
were designed to meet the Navy’s specifications.” (O’Neil,
supra, 53 Cal.4th at p. 350.)
The
Nolens argue that here, unlike in O’Neil,
there is evidence “from which the jury could conclude that Foster Wheeler
specified the use of asbestos insulation on its boilers.” Specifically, the Nolens point to the
testimony of professional insulator and California Certified Asbestos
Consultant Charles Ay (Ay). The Nolens
claim Ay testified that, generally, the manufacturer of a boiler would specify
how it wanted the boiler to be insulated.
Prior to approximately January 1, 1973, when the use of the
manufacturing of asbestos insulation was outlawed, it was industry standard for
the insulation to contain approximately 15 percent asbestos.
Based
on Ay’s testimony, the Nolens claim, it is a “small inferential step” for the
jury to conclude that it was Foster Wheeler, the boiler manufacturer, which
specified the use of asbestos insulation on the Foster Wheeler boilers
inspected by John. The Nolens claim they
are entitled to all reasonable inferences in their favor. (Community
Cause v. Boatwright (1987) 195 Cal.App.3d 562, 569.) However, a closer review of Ay’s testimony
reveals that it does not support a reasonable inference that Foster Wheeler
specified the use of asbestos on or around its boilers at any of the locations
where John worked in the 1976-1979 time period.
The
Nolens’s first citation to the record is to testimony given by Ay during an
Evidence Code section 402 hearing which took place outside the presence of the
jury. Thus, this testimony was not evidence
that was considered by the jury.
Further, the testimony primarily concerned the date when asbestos
stopped being installed on boilers:
“Q: Okay.
In terms of -- you talked about the specifications. The boiler manufacturers actually specified
the use of asbestos insulation up until ’71
A: Well, that was -- the end of ’71 is the last
dates [sic] that I recall. In fact, it clearly stated that if you didn’t
follow these recommendations, you voided your warranty on the boiler.
“Q: Okay.
And this includes specifications that were done by Foster Wheeler
“A: These are Foster Wheeler boilers, yes, sir.”
The
testimony suggests that, up until 1971, some boiler manufacturers, including
Foster Wheeler, specified the use of asbestos insulation on their boilers.
specified the use of asbestos on the boilers at the four locations John visited
during the 1976-1979 time frame. Without
further specific information regarding the date of manufacture of those boilers,
or specific details regarding Foster Wheeler’s instructions as to the care of
those boilers, an inference that Foster Wheeler directed the use of asbestos on
any specific boilers during 1976-1979 is not reasonable.
Next,
the Nolens cite more testimony given outside the presence of the jury in an
Evidence Code section 402 hearing.
Again, this testimony was not evidence on which the jury relied. Further, the testimony is not sufficient to
suggest that Foster Wheeler mandated the use of asbestos on the boilers at the
four locations relevant to this matter.
Ay testified that he worked on insulating boilers through 1973. He further testified:
“Q: Okay.
And in terms of the insulation that was used on boiler systems, was that
something that was -- that you chose how they were insulated
“A: No.
“Q: How did you determine how they were to be
insulated
“A: Well, what predicates the insulation is the
k-factor of the insulation and the temperature of the boiler. So you can’t put something that holds 200
degrees on an 800- degree boiler. So you
have to match the insulation with the boiler.
The standard rule in the industry, if you don’t have a set of documents,
is that -- it’s a slang. It’s called
‘lag to the existing.’ ‘Lag’ is the
slang for ‘lagging,’ i.e., insulation.
Whatever you took off, you put back.
That is the -- that’s the accepted practice. That way you know you’re right. So it was lag to the existent, or the
k-factor of the product, that it met the temperatures and pressures of the
boiler.
“Q: Okay.
And the specifications for the temperatures and the pressures and
insulation for the -- let’s put just -- start at this: for the original
insulation of the boiler, where did those come from
“A: From the boiler manufacturers.”
This
evidence is insufficient to support a reasonable inference that Foster Wheeler
directed the use of asbestos on any specific boilers during the years 1976
through 1979.
Ay’s
testimony, as summarized by the court, was that asbestos-containing insulation
was “industry-wide standard pre-1972, based on his training and experience, but
not necessarily specific to the defendant.”
When asked whether he had ever seen a manual specific to the boilers at
the four sites relevant to this matter, Ay admitted: “I have not seen a manual specific to any of
those four sites you’ve mentioned in my entire life.” Ay further admitted that he has never seen a
Foster Wheeler manual for a Foster Wheeler packaged boiler for the years 1973,
1974, or 1975. Again, Ay’s general
testimony that manufacturers, including Foster Wheeler, specified the use of
asbestos insulation up until 1971 does not lead to a reasonable inference that
asbestos was specified by Foster Wheeler at the four sites relevant to this
appeal during the time that John was employed by Nalco.
The
Nolens cite to no evidence presented to the jury from which the jury could
reasonably infer that Foster Wheeler specified the use of asbestos in
connection with its boilers located at Nestle in Salinas, Pacific State Steel
in Fremont or Hayward, Owens-Corning Fiberglass in Santa Clara, or Chevron in
Richmond, during the time period in question.
As pointed out by Foster Wheeler in its
foundation for any such testimony because Ay testified that he had never seen a
Foster Wheeler manual during the relevant time period, nor had he ever seen a
manual specific to the boilers located at the four relevant work sites. At oral argument, counsel for the Nolens
emphasized Ay’s general testimony that, prior to 1973, it was industry standard
for boiler manufacturers to specify the use of asbestos insulation on
boilers. We reiterate that this general
testimony, relating to an earlier time period, is insufficient to create a
reasonable inference that Foster Wheeler specified the use of asbestos in its
boilers after 1976.
IV. Conclusion
“A
manufacturer is liable only when a defect in its product was a legal cause of
injury [Citation.]” (Soule
v. General Motors Corp. (1994) 8
Cal.4th 548, 572.) As explained in
setting was the asbestos insulation, not the [boilers] to which it was applied
after defendants’ manufacture and delivery.”
(O’Neil, supra, 53 Cal.4th at
pp. 350-351.) Foster Wheeler did not
manufacture, sell, or distribute the asbestos products which caused the
Nolens’s injuries, and the Nolens presented no evidence that Foster Wheeler
specified the use of asbestos on or around its boilers at the four sites where
John worked during the years 1976-1979.
Under the circumstances, we find that O’Neil mandates a judgment in favor of Foster Wheeler.
The
judgment is reversed, and the matter is remanded for entry of judgment
notwithstanding the verdict in favor of Foster Wheeler. Foster Wheeler is entitled to its costs on
appeal.
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS.
___________________________,
J.
CHAVEZ
We concur:
____________________________, Acting P. J.
DOI TODD
____________________________, J.
ASHMANN-GERST
name="_ftn1" title="">[1] John
survived long enough to testify at the trial of this action, but died on August
25, 2009, after judgment. Judgment had
been entered on February 18, 2009.
name="_ftn2" title="">[2] Earlier
testimony suggests that asbestos was not the only material recommended by the
boiler manufacturers. Ay testified “the
boiler manufacturers recommended the products that you use on their
boiler. And again, depending on the
boiler, depending on the temperature of the boiler and the k-factor of the
material as to what you used. Obviously,
if you use the wrong material, it wouldn’t hold up.”
