WILLIAM RHODES et al. v. A.O. SMITH CORPORATION, et al.

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NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6624-04T16624-04T1

WILLIAM RHODES and DOREEN LEE

RHODES,

Plaintiffs-Respondents,

v.

A.O. SMITH CORPORATION; A.W. CHESTERTON, CO.; AFTON PUMPS, INC.; AIR PRODUCTS AND CHEMICALS, INC.; AMERICAN STANDARD, INC.; THE ANCHOR PACKING CO.; ATLAS TURNER, INC.; AURORA PUMP; AQUA-CHEM COMPANY, F/K/A CLEVER BROOKS COMPANY; BELL ASBESTOS MINES BRADFORD-WHITE WATER HEATER, INC.; BRYAN BOILERS; BRYANT MANUFACTURING CO.; BURNHAM CORPORATION; BW/IP INTERNATIONAL CO., F/K/A BORG WARNER INDUSTRIAL PRODUCTS, INC.; A FORMER SUBSIDIARY OF AND SUCCESSOR TO BORG WARNER CORP.; BYRON JACKSON PUMPS AND UNITED PUMPS & COMPRESSORS; CERTAINTEED CORPORATION; COLUMBIA BOILER CO.; COOPER SUPPLY CO., INC.; CRANE CO.; CRANE PUMP & SYSTEMS, INC.; CROWN CORK & SEAL CO.; ECR INTERNATIONAL, AS SUCCESSOR TO DUNKIRK RADIATOR CORPORATION; THE FLINTKOTE COMPANY; FLOWSERVE CORPORATION, INDIVIDUALLY AND AS SUCCESSOR TO DURION CO., INC., VALTEK CONTROL VALVES AND WILSON SNYDER PUMPS; GARLOCK, INC.; GENERAL ELECTRIC CO.; GOULDS PUMPS, INC.; HB SMITH, INC.; HYDROTHERM, INC.; IMO INDUSTRIES, INC., AS SUCCESSOR TO AND F/K/A DELAVAL TURBINE TRANSAMERICA DELAVAL, AND IMO DELEVAL; INGERSOLL-RAND CO.; JOHN CRANE, INC., F/K/A CRANE PACKING CO.; LABOUR PUMP CO., INC.; LAC D'AMIANTE DU QUEBEC, LTEE; LAWRENCE PUMPS,INC.; LENNOX INDUSTRIES, INC., AS SUCCESSOR IN INTEREST TO DUCANE HEATING CORPORATION; MILLER & CHITTY CO., PACIFIC STEEL BOILER, A DIVISION OF CRANE COMPANY; PEERLESS HEATER COMPANY; STONEY-MUELLER, INC.; TUTHILL ENERGY SYSTEMS, F/K/A KEWANEE BOILER; UNION PUMP CO.; UNIVERSAL ENGINEERING CO., INC.; UTICA BOILERS, INC.; VIKING PUMP CO., INC., A UNIT OF IDEX CORPORATION; WARREN PUMPS; WORTHINGTON CORP.; YORK INDUSTRIES, INC.,

Defendants-Respondents,

and

UNIVERSAL SUPPLY GROUP, INC.,

Defendant/Third Party Plaintiff-Appellant,

v.

SID HARVEY INDUSTRIES, INC. and

NUTLEY HEATING & COOLING SUPPLY, INC.,

Third Party Defendants-Respondents.

_______________________________________

 

Argued December 4, 2006 - Decided December 29, 2006

Before Judges Lintner and Seltzer.

On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-2979-04.

Allan Dunst argued the cause for appellant (Hoagland, Longo, Moran, Dunst & Doukas, attorneys; Marc S. Gaffrey, of counsel and on the brief).

Christopher J. Kelleher argued the cause for respondent (Margolis Edelstein, attorneys; Mr. Kelleher and Dawn Dezii, on the brief).

PER CURIAM

Third-party plaintiff, Universal Supply Group (Universal) appeals from a July 15, 2005, summary judgment dismissing its third-party complaint against Sid Harvey Industries, Inc.

(Sid Harvey). We reverse.

William and Doreen Rhodes (Rhodes) filed a complaint on April 26, 2004, alleging that from 1960 through 1990 William Rhodes was employed as a serviceman by Suburban Oil Company (Suburban). He claimed that his employment "regularly exposed [him] to asbestos fibers, dust, minerals and/or other [asbestos] particles" as a result of which he, "was caused to contract mesothelioma[.]" He alleged that Universal's products caused, at least in part, his disability.

On April 29, 2005, Universal obtained leave to file a third-party complaint against Sid Harvey for contribution pursuant to the Joint Tortfeasors Contribution Law, N.J.S.A. 2A: 53A-1 to -5 "and/or" the Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to -5.8. Universal sought to take the deposition of Sid Harvey's employee, Ted Camastra, but was permitted only a limited deposition. Believing the limitation was improper, Universal declined to conduct the deposition. After permitted discovery had been completed, Sid Harvey moved successfully for summary judgment.

Thereafter, the Rhodes matter was tried, resulting in a jury verdict of $10,000,000 of which eighty-five per cent was attributed to Universal. Universal's exposure, however, was limited to $3,000,000 by a "high-low" agreement it had reached with Rhodes. Universal now appeals the grant of summary judgment to Sid Harvey.

Because the third-party complaint was dismissed by summary judgment, we review the judgment by applying the same standard utilized by the motion judge, Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998), without affording any special deference to the judge's interpretation of the law. Balsamides v. Protameen Chems., Inc., 160 N.J. 352, 372 (1999); Manalapan Realty, L.P. v. Twp. Comm. of Twp. of Manalapan, 140 N.J. 366, 378 (1995). That is, we review the record in the light most favorable to Universal to determine if the record, thus viewed, required dismissal as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

To defeat the motion for judgment, Universal was required to produce "factual proof of [Rhodes's] frequent, regular and proximate exposure to a Sid Harvey's products[.]" James v. Bessemer Processing Co., 155 N.J. 279, 304 (1998). Universal resisted Sid Harvey's motion, in part, because it claimed that the limited discovery permitted of Camastra hindered its ability to produce that evidence. However, at oral argument, the judge said that he was

making the assumption for the purpose of this motion that you are successful in determining that Sid Harvey sold asbestos containing products to Suburban during the relevant time period. I'm making that assumption.

I also believe that you have agreed that the only discovery that you have yet to take would be directed toward proving the fact that I have assumed for the purpose of this motion. Is that correct?

Universal's counsel responded that, although he would prefer to obtain information with respect to quantities and dates, "I would say that's probably correct, Your Honor." Because the judge assumed that the requested discovery would produce information favorable to Universal, we need not determine whether the summary judgment motion should have been denied to allow further discovery. See Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 193 (1988).

We therefore examine the record to determine if there was sufficient evidence to allow a finding that Rhodes was frequently, regularly and proximately exposed to Sid Harvey's products. The judge believed that Universal had "no proof that Mr. Rhodes was exposed to any asbestos containing product sold by Sid Harvey." Our independent review of the record, however, leads us to conclude that there was sufficient evidence to survive the motion.

Deposition testimony in both this case and prior litigation demonstrated that the supplies used by Rhodes in his employment at Suburban were kept in the basement of Suburban's offices. A co-worker testified that Suburban did not use materials supplied by Universal exclusively; Suburban also purchased supplies from Sid Harvey during the same period. A salesman for Universal testified that he had seen boxes from Sid Harvey in the basement and was able to identify the labels as indicating that they contained gaskets, relays, and chambers. Other deposition testimony indicated that the materials Suburban purchased from Sid Harvey included Stik-Tite, furnace cement, refractory cement, dry insulation cement, firebrick, and rope packing. All of these materials were used to service equipment. There was evidence that the supplies obtained from Sid Harvey would become exhausted and, inferentially, were replaced. There appears to be no doubt that these products all contained asbestos.

Universal was able to produce proof that Sid Harvey delivered asbestos-containing products used in the fuel oil industry to Rhodes's employer during his employment and that those products were utilized by servicemen in the performance of their duties. Universal can demonstrate that the supplies were regularly exhausted. It is a reasonable inference that Rhodes, one of two servicemen employed by Suburban, regularly used, and was therefore exposed to, the asbestos-containing materials supplied by Sid Harvey. Viewed in the light most favorable to Universal, we believe that this evidence would allow a reasonable fact finder to determine that Rhodes was frequently, regularly and proximately exposed to asbestos-containing products sold by Sid Harvey.

The judge relied upon Provini v. Asbestospray Corp., 360 N.J. Super. 234 (App. Div. 2003). Provini, however, was quite a different case. The plaintiff's employment there was limited in time, id. at 238, and, more importantly, there was "no evidence of the work decedent performed or of the . . . location at which he worked." Ibid. Accordingly, there was no evidential support for the proposition that the Provini plaintiff was exposed to asbestos.

This case, as we have indicated, is substantially different. Although Rhodes was unable to identify Sid Harvey as a supplier of the materials he used, the other evidence produced by Universal was more than sufficient for that purpose and, in fact, the judge assumed Sid Harvey to be a supplier. Moreover, there was evidence that linked Rhodes's duties to the products supplied by Sid Harvey.

Although the judge's assumption moots the question of the adequacy of the discovery allowed to Universal for purposes of the motion, we anticipate that on remand Universal will renew its discovery request. No reason to limit that discovery is apparent to us, but we decline to address the issue absent the benefit of the motion judge's analysis.

Sid Harvey also asserts that Universal's right to contribution was extinguished by its agreement with Rhodes. It asserts first that a "high-low" agreement is a settlement. We have no quarrel with that proposition, although the cases cited by Sid Harvey make only passing reference to the nature of the agreement without any discussion of its effect on the right to contribution. However, Sid Harvey then argues that a settlement extinguishes all claims for contribution by the settling party against others who might also be responsible for the injuries claimed, citing Tefft v. Tefft, 192 N.J. Super. 561 (App. Div. 1983).

The issue is somewhat more complex than might be inferred from Sid Harvey's presentation. Contribution is barred, as a general rule, only in the absence of a judgment against the party seeking contribution. See Polidori v. Kordys, Puzio & Di Tomasso, 217 N.J. Super. 424, 429-30 (App. Div. 1987). The parties have not discussed whether the verdict required by a high-low agreement satisfies this requirement of a judgment so as to permit contribution or fails to satisfy this requirement so that the agreement precludes contribution.

We need not reach that issue in this case, although we have substantial doubt that a high-low arrangement prevents a claim for contribution. Whether Universal might have pursued contribution had Sid Harvey not been removed from the litigation was not decided below, and, accordingly, we decline to consider the question here.

The real issue presented is whether Universal's agreement with Rhodes precludes Universal from seeking to reverse the erroneous grant of summary judgment to Sid Harvey. Sid Harvey has provided no authority for that proposition and we are unable to find any. In the absence of what we have concluded was the erroneous dismissal of the third-party claim, Universal would have had its responsibility fixed, within the limits of its agreement with Rhodes, taking into account the fault of Sid Harvey. There is no apparent reason why Universal should be precluded from regaining its position had the motion been decided correctly.

Reversed and remanded for further proceedings.

 

There is no claim that Universal lacked the necessary medical proofs in the event exposure could be proven.

"A high-low agreement is a device . . . in which a Sid Harvey agrees to pay Universal a minimum recovery in return for Universal's agreement to accept a maximum sum regardless of the outcome of [any] trial. Any outcome between the agreed limits is to be accepted by the parties." Benz v. Pires, 269 N.J. Super. 574, 578-79 (App. Div. 1994).

After the high-low settlement is reached, a trial is still necessary to fix Universal's responsibility. Absent a high-low settlement, Universal would have the opportunity to show that co-defendants bear a share, or all, of the responsibility for the claimed damages. Dunn v. Praiss, 139 N.J. 564, 576 (1995). A third-party defendant is treated as a direct defendant for these purposes. Halloway v. State, 125 N.J. 386, 402 (1991). Similarly, in the absence of both the high-low settlement and the dismissal of Sid Harvey from the litigation by virtue of the judgment attacked on this appeal, Universal would have been able to attempt to convince the jury of Sid Harvey's culpability, thus lowering its own responsibility. It is not apparent to us why the introduction of the the high-low "settlement" would preclude Universal from making that showing.

(continued)

(continued)

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A-6624-04T1

December 29, 2006