ACandS, Inc. v. Asner

BISHOP, Judge. TABLE OF CONTENTS I. FACTS A Corporate and Commercial History of Appellants p. 616 B. Work and Medical Histories of Decedents p. 617 1. Asner p. 617 2. Wilson p. 617 3.

Payne p. 618 II. DISCUSSION A. Motion for Judgment on Issue of Punitive Damages p. 619 1. Standard of Review p. 619 2. The Zenobia Standard p. 622 3.

The Evidence Against AC & S p. 623 4. The Evidence Against PH p. 632 5. The Holding Regarding Punitive Damages p. 636 a. Wilson and Payne p. 636 b.

Asner. p. 637 B. Threshold Limit Values p. 637 C. Loss of Consortium and Solatium Damages p. 641 D. Exposure to Asbestos of Non-parties p. 646 E. Johns-Manville Sales to Fairfield p. 650 F. Substantial Factor Causation p. 651 1. The Law p. 651 2. AC & S’s Substantial Factor Causation p. 652 3. PH’s Substantial Factor Causation p. 653 III.

CONCLUSION Appellee, Ida S. Asner (“Ms. Asner”), filed suit individually and as personal representative of the estate of Zalma Asner (“Asner”), in the Circuit Court for Baltimore City against thirty-one companies. The complaint alleged that Asner developed mesothelioma because of exposure to asbestos-containing products that those companies manufactured or supplied. The Asner action and the similar actions brought by appellee, Mary M. Wilson (“Ms. Wilson”), individually and as personal representative of the estate of Charles F. Wilson (“Wilson”), and appellees, Harriet G. Payne Hess (“Ms. Hess”), as personal representative, and Jean A. Payne (“Ms. Payne”), individually and as personal representative of the ⁶¹⁵ estate of Milton Payne (“Payne”), were consolidated for the November 1993 Group II cluster of the mesothelioma trials. Appellees filed motions in limine to exclude evidence of threshold limit values and to exclude evidence of decedents’ exposures to the asbestos-containing products of non-parties.

The trial court granted both motions. The jury trial began November 3, 1993, and, with the exception of appellants, ACandS, Inc. (“AC & S”) and Porter Hayden Company (“PH”), all of the other companies settled, became bankrupt, or were dismissed from the case. AC & S was dismissed from the Payne action. Appellants cross-claimed for contribution against Owens-Illinois, Inc., GAF, Inc., Pittsburgh Corning Corporation, and Armstrong World Industries, Inc. At the close of appellees’ case, and at the close of all the evidence, appellants’ motions for judgment on the issues of substantial factor causation and punitive damages were denied.

The jury returned verdicts against AC & S in both the Asner and Wilson actions and against PH in all three actions. Damages were assessed as follows: Ms. Asner was awarded $528,003.58 in compensatory damages as personal representative of Asner’s estate, $1,000,000 for loss of consortium, $1,000,000 for solatium damages, and $500,000 in punitive damages; Ms. Wilson was awarded $510,089.47 in compensatory damages as personal representative of Wilson’s estate, $1,000,000 for loss of consortium, $1,000,000 for solatium damages, and $500,000 in punitive damages; Ms. Payne and Ms. Hess were awarded $549,464.49 in compensatory damages as co-personal representatives of Payne’s estate; Ms. Payne also received awards of $1,000,000 for loss of consortium, $1,000,-000 in solatium damages, and $250,000 in punitive damages. The jury found for appellants as to their cross-claims. Appellants moved for judgment N.O.V. on the issue of loss of consortium and also moved for new trial or, in the alternative, for remittitur on the issue of the amount of consortium damages.

The court denied appellants’ motions and entered judgment on March 21, 1994. This appeal followed. ⁶¹⁶ Issues Appellants raise several issues, which we rephrase and reorder: I. Did the trial court err in denying appellants’ motions for judgment on appellees’ claims for punitive damages?

II

Did the trial court err in excluding evidence of threshold limit values?

III

Does the death of an injured spouse abate the cause of action for loss of consortium, thereby preventing a surviving spouse from recovering both loss of consortium damages and solatium damages?

IV

Did the trial court err in excluding evidence of decedents’ exposures to the asbestos products of non-parties? V. Did the trial court err in excluding evidence of the direct sales of Johns-Manville Products to Fairfield Shipyard?

VI

Did the evidence presented at trial support the jury’s finding of substantial factor causation? I. Facts A. Corporate and Commercial History of Appellants AC & S, an insulation contracting company, was incorporated in the State of Delaware in November 1957 as Armstrong Contracting and Supply Corporation. From its incorporation, until 1969, AC & S was a wholly-owned subsidiary of. Armstrong Cork Company (“Cork”), presently Armstrong World Industries, Inc. (“Armstrong”).

In 1969, Cork sold Armstrong Contracting and Supply Company, and the name was changed to Acands, Inc. AC & S held itself out as a manufacturer of Cork products and secured the exclusive rights to use the Armstrong name and logo. AC & S was solely responsible for all Armstrong asbestos-containing thermal insulation products from 1958 to 1969. After 1969, all products had the AC & S name and logo. Certain employees who worked for Cork became employees of AC & S, including James W. Liddell, President of AC & S from 1958 to 1981. ⁶¹⁷ From 1958 until 1973, AC & S contracted with various site owners or general contractors to do insulation work.

AC & S, which admits that certain of its products contained asbestos, employed insulators, men who worked with insulation products on a daily basis, from the locals of the International Association of Heat and Frost Insulators and Asbestos Workers Union. In Baltimore, AC & S used workers from Local 11. By 1972, the cements used by AC & S did not contain asbestos, and by January 1974, AC & S discontinued its use of all asbestos-containing insulation products. PH, a Maryland insulation contracting corporation, was formed in 1966 by the merger of Reid-Hayden, Inc. and H.W. Porter & Company, Inc. At all times relevant to the case sub judice, PH installed insulation in industrial facilities in the Baltimore area.

PH concedes that some of the materials it installed in the facilities contained asbestos. B. Work and Medical Histories of Decedents 1. Asner Asner was employed as an outside machinist at Bethlehem Steel’s Key Highway Shipyard (“Bethlehem”), a ship repair yard, from 1941 to 1982. Asner worked around insulators who applied, cut, and mixed asbestos-containing products used to cover steam and water pipes in the engine room.

In 1985, Asner was diagnosed with lung cancer, and, in 1988, he was diagnosed with mesothelioma. Asner died on December 6, 1988. AC & S, which began performing substantial insulation contracts at Bethlehem in 1965, concedes that asbestos-containing products were used at Bethlehem until 1973. Neither AC & S nor PH contest substantial factor causation for Asner. 2.

Wilson Wilson worked as a sheet metal worker at Maryland Shipbuilding and Drydock Company (“Drydock”) in the 1940s, prior to AC & S’s incorporation, where he was exposed to asbestos. From 1946 to 1975, Wilson was a supervisor of the sheet metal workers at Allegheny Ballistics Lab (“ABL”) in ⁶¹⁸ Western Maryland. Wilson was in charge of the sheet metal workers responsible for covering the asbestos insulation to hold it in place on the boilers, ducts, and steam lines. At trial, Mr. John Lohr, employed as a tin shop worker and pipe fitter at ABL from 1956 to the 1970s, testified regarding Wilson’s exposure to asbestos.

Mr. Lohr saw Wilson almost every day “out and around and ... checking on the jobs that his men [were] doing.” Mr. Lohr insulated boilers, ducts, and steam lines with “asbestos shorts,” a dry powder mixed with water to form asbestos cement. Mixing the asbestos cement generated a considerable amount of dust that made the workers’ clothes appear as if they had “flour” on them. Mr. Lohr testified that the logos “Armstrong” and “Mansfield” appeared on the packages of asbestos shorts, that those two products were used the entire time that he worked as a pipe fitter, that Wilson worked around these products and was exposed to the asbestos dust, and that no precautions were taken during the mixing process to minimize the dust created. Wilson was diagnosed with mesothelioma in 1992 and died on August 23, 1992.

PH does not contest substantial factor causation for Wilson’s mesothelioma; however, AC & S does dispute liability regarding its causation of Wilson’s mesothelioma. 3. Payne Payne was employed as an electrician from 1941 until 1945 at the Fairfield Shipyard (“Fairfield”) in Baltimore, where Liberty Ships were built. PH was engaged in contract work at Fairfield from 1940 through 1949 and sold or supplied asbestos-containing materials to Fairfield from 1940 to 1969. PH concedes that its employees handled asbestos-containing materials, that its employees sawed and cut those materials, that its employees mixed asbestos-containing cements, and that the handling of asbestos-containing materials generated asbestos dust.

Mr. Erwin Liphard, Payne’s co-worker, testified at deposition that he saw Payne at Fairfield “all the time.” Although Mr. Liphard never saw Payne using any asbestos-containing products, “[h]e didn’t have to use it; it was there ... in the ⁶¹⁹ engine room with them walkways and the catwalks, it was always coming down. It was like snow.” According to Mr. Liphard, insulators were routinely insulating pipes with asbestos-containing cement. Payne was diagnosed with mesothelioma on January 17, 1992 and died on March 24, 1992. PH contests substantial factor causation for Payne.

Additional facts will be discussed infra.

II

Discussion A. Motion for Judgment on Issue of Punitive Damages 1. Standard of Review When a defendant moves for judgment at the close of the evidence offered by the plaintiff in a jury trial, “the court shall consider all evidence and inferences in the light most favorable to the party against whom the motion is made.” Rule 2-519(b). In the case sub judice, however, the parties dispute what standard a trial court should apply when determining whether to grant a motion for judgment on the issue of punitive damages in a products liability case. Relying on Owens-Illinois v. Zenobia, 325 Md. 420 , 601 A.2d 633 (1992), appellants argue that the trial court must grant a motion for judgment on the issue of punitive damages if no clear and convincing evidence of the defendant’s actual malice exists.

Appellees argue, however, that, in any civil case, “if there is any competent evidence, however slight, leading to support the plaintiffs right to recover, the case should be submitted to the jury and any motion for directed verdict denied.” Before addressing whether the trial court erred in denying appellants’ motion for judgment on the punitive damages issue, we shall discuss the appropriate standard that a trial court shall apply when reviewing a motion for judgment on the issue of punitive damages in a products liability jury trial. In Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 , 106 S.Ct. 2505, 2514 , 91 L.Ed.2d 202 (1986), the United States Supreme Court held that “the determination of whether a given factual dispute requires submission to a jury [at the directed verdict stage] must be guided by the substantive ⁶²⁰ evidentiary standards that apply to the case.” Therefore, the “appropriate ... question will be whether the evidence in the record could support a reasonable jury finding either that the plaintiff has shown actual malice by clear and convincing evidence or that the plaintiff has not.” Id. at 255-56 , 106 S.Ct. at 2514 . In Southland Corp. v. Marley Co., 815 F.Supp. 881 (D.Md.1993), the United States District Court for the District of Maryland, applying Maryland products liability law, denied the defendant’s motion to preclude the jury from considering the issue of punitive damages with respect to the plaintiffs’ “failure to warn” claim. The court determined that the plaintiffs had established, by clear and convincing evidence, the manufacturer’s actual knowledge of the product’s danger and its deliberate disregard for the potential harm to consumers.

See id. at 885-86 . Moreover, the Court of Appeals, in United States Gypsum Co. v. Mayor & City Council of Baltimore, 336 Md. 145 , 647 A2d 405 (1994), held that the City had not introduced sufficient evidence of actual malice “for the punitive damages claim to have been submitted to the jury.” Id. at 194 , 647 A2d 405 . In other words, the plaintiff did not establish “the requisite malice by clear and convincing evidence.” Id. at 188 , 647 A.2d 405 . In Sard v. Hardy, 281 Md. 432 , 379 A.2d 1014 (1977), the Court of Appeals held that the plaintiff had not produced sufficient evidence to withstand a motion for directed verdict as to her breach of express warranty claim, “particularly in light of the requirement that the jury find the existence of the warranty by clear and convincing evidence.” ' Id. at 453, 379 A.2d 1014 (emphasis added).

See also Sealover v. Carey Canada, 793 F.Supp. 569, 570-71 (M.D.Pa.1992) (directing entry of summary judgment in defendants’ favor on the punitive damage claims because the plaintiff did not show by a preponderance of evidence [Pennsylvania’s standard of proof for entitlement to punitive damages] that the defendant had actual knowledge of the hazard); School Dist. v. United States Gypsum Co., 750 S.W.2d 442, 445-46 (Mo.Ct.App.1988) (holding that, in order to submit a claim for punitive damages to a ⁶²¹ jury in a product liability action, a plaintiff is required to produce evidence of actual knowledge). Whether there is legally sufficient evidence offered to justify submission of an issue to the jury is a question of law for the court. McIntyre v. Saltysiak, 205 Md. 415, 424 , 109 A.2d 70 (1954) (emphasis added). In Harris v. State, 81 Md.App. 247, 293 , 567 A.2d 476 (1989), Judge Moylan, speaking for this Court, wrote: With respect to the burden of persuasion, the role of appellate review is very limited.

In the case of an issue of fact submitted to a jury, the appellate court is concerned to see that the trial court properly advised the jury as to which standard of persuasion to employ and that it then properly defined for the jury what that standard is. We agree with appellants that the standard of proof must be taken into account when evaluating the legal sufficiency of the evidence. Therefore, if a plaintiff establishes, by clear and convincing evidence, that a defendant’s conduct was characterized by actual malice, then the evidence is legally sufficient to submit the issue of punitive damages to the jury in a products liability case. See Owens-Illinois v. Zenobia, 325 Md. 420 , 601 A.2d 633 (1992) (establishing the “clear and convincing evidence of actual malice” standard for an award of punitive damages in a products liability case, and instructing the trial court, on remand, to determine whether there was sufficient evidence, based on the new standards, to present the issue of punitive damages to the jury); Eagle-Picher Indus. v. Balbos, 326 Md. 179 , 604 A.2d 445 (1992) (remanding issue of punitive damages in asbestos-related products liability case for new trial to determine whether, and if so, what amount of punitive damages should be awarded under the Zenobia standard); Owens-Illinois v. Armstrong, 326 Md. 107, 129 , 604 A.2d 47 , cert. denied, — U.S. -, 113 S.Ct. 204 , 121 L.Ed.2d 145 (1992) (reversing and remanding the jury award of punitive damages so that the plaintiffs can “prove their entitlement to punitive damages by clear and convincing evidence based on the standards set forth in Zenobia.”) If there is evidence of ⁶²² actual malice that the jury could reasonably find to be clear and convincing, then the motion for judgment must be denied. [W]hen ruling on a motion for a judgment the trial judge must consider the evidence, including the inferences reasonably and logically drawn therefrom, in the light most favorable to the party against whom the motion is made....

An appellate court reviewing the propriety of the grant or denial of a motion for judgment by a trial judge must conduct the same analysis. James v. General Motors Corp., 74 Md.App. 479, 484-85 , 538 A.2d 782 , cert. denied, 313 Md. 7 , 542 A.2d 844 (1988). 2. The Zenobia Standard As indicated supra, the Court of Appeals, in Zenobia , changed the standards of proof that a party must show before legally recovering punitive damages. “In a non-intentional tort action, the trier of facts may not award punitive damages unless the plaintiff has established that the defendant’s conduct was characterized by evil motive, intent to injure, ill will, or fraud, i.e., ‘actual malice.’ ” Zenobia, 325 Md. at 460 , 601 A.2d 633 . Noting, however, that “ ‘actual malice’ ... does not translate easily in products liability cases[,]” id., the Court of Appeals held that in order for actual malice to be found in a products liability case, regardless of whether the cause of action for compensatory damages is based on negligence or strict liability, the plaintiff must prove (1) actual knowledge of the defect on the part of the defendant, and (2) the defendant’s conscious or deliberate disregard of the foreseeable harm resulting from the defect.

Id. at 462 , 601 A.2d 633 (emphasis added). Actual knowledge, however, includes the wilful refusal to know, i.e., a defendant cannot “shut his eyes or plug his ears when he is presented with evidence of a defect and thereby avoid liability for punitive damages.” Id. at 462 n. 23, 601 A.2d 633 . In Zenobia, the Court relied on its decision in State v. McCallum, 321 Md. 451 , 583 A.2d 250 (1991), which recognized ⁶²³ that actual knowledge, in the form of “deliberate ignorance” or “willful blindness,” “exists where a person believes that it is probable that something is a fact, but deliberately shuts his or her eyes or avoids making a reasonable inquiry with a conscious purpose to avoid learning the truth.” Id. at 458 , 583 A.2d 250 . Moreover, knowledge under the recognized rule of law may be found, when, with an unlawful purpose in mind, a person deliberately shuts his eyes to avoid knowing the obvious.

Id. at 460 , 583 A.2d 250 . A conscious or deliberate disregard on the defendant’s behalf “requires a bad faith decision by the defendant to market a product, knowing of the defect and danger, in conscious or deliberate disregard of the threat to the safety of the consumer.” Id. at 463 , 583 A.2d 250 . The Zenobia court also recognized that, because of the penal nature of punitive damages, a heightened burden of proof was appropriate, and therefore, “in any tort case a plaintiff must establish by clear and convincing evidence the basis for an award of punitive damages.” Id., 325 Md. at 469 , 601 A.2d 633 (second emphasis added). “[T]o be clear and convincing, ‘the proof must be “clear and satisfactory” and be of such a character as to appeal strongly to the conscience of the court.’ ” 1986 Mercedes Benz 560 CE v. State, 334 Md. 264, 283 , 638 A.2d 1164 (1994) (quoting First Nat’l Bank v. USF & G, 275 Md. 400, 411 , 340 A.2d 275 (1975)). 3. The Evidence Against AC & S AC & S argues that, because Asner and Wilson were “bystanders,” rather than insulators or AC & S employees, AC & S did not have actual knowledge that workers, such as Asner and Wilson, faced any health hazard by working around AC & S insulators or AC & S products.

Appellees argue, however, that AC & S did have actual knowledge of the health hazards faced by bystanders such as Asner and Wilson because, although Asner and Wilson were not AC & S insulators, they were workers exposed at the same time, under the same conditions, and at the same location to the working environments to which AC & S insulators were exposed. ⁶²⁴ AC & S first argues that Asner and Wilson were not members of a class of persons about whom AC & S had actual notice of health risks from AC & S products. AC & S bases this assertion on the insulator-bystander distinction. Specifically, AC & S argues that it could not have knowledge that non-AC & S employee-bystanders in Asner or Wilson’s position would be subject to harm simply because AC & S insulators suffered from asbestos-related injuries. AC & S relies on the following language: “Evidence of a generalized knowledge that asbestos poses a danger to a narrow class of unprotected persons who are exposed during the application or removal of asbestos-containing materials in buildings will not, under the strict requirements for a submissible punitive damages case, support an inference that [defendants] had knowledge of a danger to the much broader class of persons who were merely present in such buildings at other times[.]” U.S. Gypsum Co. v. Mayor & City Council of Baltimore, 336 Md. 145, 188-89 , 647 A.2d 405 (1994) (quoting Kansas City v. Keene Carp., 855 S.W.2d 360, 375 (Mo.1993) (en banc)).

In Gypsum, however, the injured class of persons, to which the Court referred in the above quotation, were ordinary building users exposed to an asbestos product after it had already been installed in the building. The evidence actually introduced in Gypsum focussed solely upon hazards posed to industry workers and workers in related trades, workers such as Asner and Wilson, and not hazards posed to building users. Id. at 190, 647 A.2d 405 . In Smith v. Celotex Corp., 387 Pa.Super. 340 , 564 A.2d 209 (1989), also relied upon by AC & S, the court made a justifiable risk distinction between asbestos factory workers handling raw asbestos and construction workers handling the finished product at locations with different working conditions.

Although we agree with AC & S that risk distinctions can exist between classes of persons exposed to asbestos, depending on the degree, frequency, and duration of exposure, the evidence in the case sub judice supports the conclusion that Asner and Wilson were exposed to AC & S products in a comparable degree, frequency, and duration as ⁶²⁵ AC & S insulators. Any risk distinction in the case sub judice between AC & S insulators and Asner and Wilson, as it relates to the “actual malice” necessary for punitive damages is, therefore, illusory. The evidence presented at trial regarding AC & S’s actual knowledge is as follows: September 12, 1952—A letter from Thomas R. Nunan, District Manager of Cork Building Materials Division, to The Travelers Insurance Company (“Travelers”), Cork’s insurer, regarding the worker’s compensation claim of employee, Richard Rothwell, who was alleging an asbestos-related disease. Attached is an inspection report made by an agent of the Massachusetts Department of Labor and Industries.

A copy of the letter and report is sent to Mr. Liddell, employee of Cork, and later president of AC & S. April 30, 1954—Cork receives a letter from Travelers indicating that the Workmen’s Compensation Commission (“WCC”) determined that Mr. Rothwell’s cancer was caused by his occupational exposure to asbestos. July 25, 1957—Cork officers in Buffalo, New York, and Lancaster, Pennsylvania, receive a memorandum from Travelers regarding the asbestosis claim of an employee and the costs to Cork of such claims. A copy of the memorandum is sent to Mr. Liddell. July 29,1959—A letter from Cork’s insurance department to a California law firm regarding an employee’s asbestosis claim.

The letter indicates that Cork is aware that the attorneys “have had considerable experience handling asbestosis claims.” Copies of the letter are sent to AC & S officers in San Francisco and Lancaster. August 5, 1959—A letter from Cork’s insurance department to the AC & S San Francisco office concerning a workmen’s compensation claim filed in Nevada. The letter states: If the number of claims keep on increasing as they have in the past several weeks, most of your time will be spent on asbestosis and pneumoconiosis claims. Seri ⁶²⁶ ously though, it is important that we cooperate with our insurance carriers and give them all the help we can for two reasons.

First, these claims usually result in total permanent disability which means compensation awards of which we will pay our proportionate share. Second, there is some doubt that our type of work could cause asbestosis. However, since one employee collected under the California Occupational Disease Law, we have had quite a few asbestosis claims. Our only concern, where an award has been made, is to be sure we are not charged with more than our proportionate share.

(Emphasis added). A copy of this letter is sent to the AC & S office in Lancaster. January 16, 1961—A memorandum from the AC & S San Francisco office is sent to the AC & S Lancaster office concerning the asbestosis claim of an employee. January 17, 1962—A letter from Wallace B. Hofferth, AC & S’s assistant general manager of its insurance department, to the AC & S office in Lancaster listing 29 occupational disease claims and the amounts recovered from 1953 to 1962, particularly asbestosis and those akin to it.

Hofferth writes: “We have a rather imposing list of cases which we have shown b,elow. This will serve to indicate the importance of this type of claim in the overall workmen’s compensation cost picture.” (Emphasis added). May 31, 1962—A memorandum from R.B. Ross, an AC & S officer in Los Angeles, to J.E. Zeller, an AC & S officer in Lancaster, regarding the Board of Directors meeting of the Associated Insulation Contractors of the Western States. The memorandum states that “a lengthy discussion was held relative to the increasing number of claims from asbestos workers with respect to respiratory illness and lung cancer, supposedly the result of breathing asbestos dust and glass fiber dust.” (Emphasis added).

In the memorandum Ross discusses the increasing number of claims on the West Coast and California and notes that “[t]he result could be a ⁶²⁷ heavy increase in our insurance cost.” A copy of the memorandum is sent to Mr. Liddell. March 25, 1963—A letter from Mr. Hofferth, of AC & S’s insurance department, to Mr. Fred L. Gardner in the AC & S Lancaster office, responding to a request for information on asbestosis cases, particularly prevention. The letter indicates that 36 asbestosis claims have been filed by employees, a rather imposing list of cases and will serve to indicate the importance of this type of claim in the over-all workmen’s compensation insurance cost. Claims of this nature are on the rise....

Some states hold the last employer solely responsible for occupational disease claims.... There isn’t much you can do to defend successfully a valid occupational disease claim. Obviously prevention is the key.” (Emphasis added). October 30, 1963—A letter from Dr. Edgar F. Mauer, physician of an AC & S employee, to Aetna Casualty & Surety Company (“Aetna”), an AC & S insurer, regarding the workmen’s compensation claim of an employee.

The letter states: [There has been] a moderate reduction in pulmonary function. It is obvious that this reduced function is due ... to the inhalation of asbestos fibers. Asbestosis is a progressive disease. It is likely that the degree of pulmonary fibrosis will progress in the coming years.

The lesions is [sic] permanent, it is in all likelihood progressive.... ” June 2, 1964—A letter from John P. Harrington, the General Sales Manager of Eagle-Picher Industries (“Eagle”), to Mr. W.B. King of the AC & S Lancaster office, states that Eagle is going to add “a cautionary note to containers where the products involved included asbestos as a constituent.” (Emphasis added). Eagle asks if AC & S wants to take similar action on the bags of cement that ⁶²⁸ Eagle manufactures for AC & S. Testimony at trial indicates that AC & S did not take any action in response to Eagle’s suggestion. The warning stated: Caution: This product contains asbestos fiber. Inhalation of asbestos in excessive quantities over long periods of time may be harmful.

If dust is created when this product is handled, avoid breathing the dust. If adequate ventilation control is not possible wear respirators approved by the U.S. Bureau of Mines for pneumoconiosis producing dust. January 19, 1967—A letter from Mr. Hofferth, AC & S Insurance Manager, to Mr. Gardner in the AC & S Lancaster office, reporting that 82 asbestosis claims have been filed from 1952 forward, with 42 claims settled for a total of $60,394, 16 of which were settled with no payment, and 40 claims still unsettled. February 6, 1967—An inter-office communication is sent by A.L. Stokely from the AC & S Washington office to Mr. Zeller of the AC & S Lancaster office indicating that the Richmond Local of the Asbestos Workers had x-rays of workers and quite a number of workers, including 6 AC & S employees, were diagnosed with asbestosis.

The letter continues: I really wonder if we have been sufficiently realistic in our thinking concerning asbestosis. Originally, we had half-way assumed that only those with a high intake of alcohol contracted the disease, and that most of them were quite happy to live on compensation without further effort.... The potential for disability in the future would appear to very real, and the cost to us under Workmen’s Compensation could be quite considerable____ I’d like to recommend a strong push on our part, and I would hope also on the part of other National Insula ⁶²⁹ tion Contractors and their compensation carriers, to investigate asbestosis very thoroughly. Not only is it quite obvious that prodigious compensation claims are possible for the future, but more importantly, I think we owe our workmen every effort to investigate and to see if we can avoid this disease, which is bound to be somewhere between partly disabling and fatal.

(Emphasis added). February 13, 1967—A letter from Mr. Gardner, AC & S Contract Officer, to Mr. Hofferth at the AC & S Lancaster office regarding the asbestosis claims of construction workers. Mr. Gardner suggests advising “Aetna of our problem and solicit their assistance in ways to minimize the Workmen’s Compensation claim possibilities. We -will be investigating this problem in more depth.... ” March 29, 1967—A letter from Mr. Hofferth to Aetna, to set up a meeting to discuss “our asbestosis problem.” April 10, 1967—An AC & S internal memorandum is circulated regarding a meeting of AC & S officials who discussed the asbestosis claims.

We discussed detection as well as prevention of asbestosis, but it was generally concluded that there was little AC & S could do as an individual employer. Whatever action would be taken would require the sanction and support of the international asbestos worker’s union. This is really the only way to exercise control.... The union has apparently had this problem under consideration for the past two years, but we know nothing concrete coming out of it.

While nothing concrete came out of this meeting, we do have a better understanding and appreciation of the problem, especially its magnitude and difficulty. Even awareness of the problem is at least a beginning. (Emphasis added). August 16, 1967—A letter from Mr. Hofferth to Mr. Gardner regarding asbestosis claims and their prevention.

The letter mentions that eight separate times, from 1961 to ⁶³⁰ 1967, different AC & S officials “expressed concern” over asbestosis and prevention, yet there was never any concrete action or results. Also, a total of 86 asbestosis claims have been filed against ArmstrongAC & S since 1954; 66 being filed between 1960-67, with a total of $100,000 in claim payments. Aetna recommends pre-employment x-rays. Mr. Hofferth states: “I do strongly feel that the time has arrived for us to take a position concerning this recommendation and the overall asbestosis claims situation which confronts us.” In his letter, Mr. Hofferth cálls for x-rays, periodic check-ups, and a concerted effort at all job locations to keep employees from working in conditions where the atmosphere contains harmful quantities of the disease-producing dust. “Bear in mind that you are the largest insulation contractor in the country....” To promote the sale of its products, AC & S printed various brochures in 1964, 1968, and 1970 that praised the quality of its asbestos insulation; however, AC & S made no statements regarding potential health hazards, the need for dust suppression, or precautionary measures to take when using the products.

AC & S revised its construction manual on August 19, 1968. The section of the manual regarding necessary protective equipment under standard safety precautions stated that “[a]n approved type respirator bearing a Bureau of Mines number should be made available for use by employees who cut pipe covering and block insulations with power saws and also for use by employees who do extensive mixing of insulating cement.” Additionally, the manual contained the National Insulation Manufacturers Association’s (“NIMA”) recommendations for the safe handling and application of asbestos materials. In the April 12, 1972 revised manual, AC & S made the following statement: “We are aggressively moving to eliminate the use of products which contain asbestos. Every effort must be made to inform our customers of the hazards of asbestos dust and encourage them to evaluate and select asbestos free materials for their specifications.” In the January 25, 1972 revised manual, AC & S stated: “We will not ⁶³¹ furnish, handle, use, or install products containing asbestos.” As of April 9,1973, the AC & S construction manual contained OSHA regulations regarding exposure to asbestos dust.

Mr. Charles Fort, an AC & S insulator and foreman between 1954 and 1972, testified that, during his employment for AC & S, no specific training or safety programs existed. Moreover, Mr. Fort said that he never saw the NIMA safety practices recommended in the AC & S manual, that AC & S never told him about necessary precautions for keeping dust to a minimum, and that AC & S never told him to wear a respirator when exposed to excessive dust. According to Mr. Fort, AC & S never informed him of any protective measures that would eliminate excessive exposures to asbestos dust, and AC & S made no effort to protect people on the job, ie., AC & S did not supply respirators. Mr. Fort had to purchase a respirator for himself and said that it was a matter of choice if a worker wanted to wear a respirator.

AC & S admitted, during discovery, that it never conducted research regarding the hazards of asbestos while marketing and/or selling asbestos, and that it never conducted any tests with the purpose of minimizing or eliminating the inhalation of dust. AC & S never contributed to asbestos research or asbestos-related disease research and it never hired an industrial hygienist or medical director. We have set forth, in considerable detail, the evidence presented to the jury in support of the punitive damages claim. Appellees produced sufficient evidence of AC & S’s actual knowledge of the hazardous nature of its products and its conscious disregard of the health risks.

Both Asner and Wilson were exposed to AC & S products when AC & S’s conduct amounted to “actual malice,” based on the Zenobia standard. Throughout the late 1950s and 1960s correspondence clearly indicated that asbestosis was an increasing problem among AC & S employees. AC & S was aware of the hazards of asbestos, failed to place warning labels on their products, failed to make any “effort” to eliminate the use of asbestos-containing products until 1972, and did not stop using ⁶³² the products until 1974. Until that time, however, testimony at trial indicated no safety precautions, no warnings, no respirators, and no action by AC & S relating to the hazards of asbestos.

AC & S, by its own words, admits inaction as it relates to testing, research, and investigation. This conduct clearly amounts to actual knowledge on AC & S’ part, or, at the very least, a wilful refusal to know, of the hazards of asbestos, and its deliberate disregard of the foreseeable harm. Reviewing this evidence, including the inferences reasonably and logically drawn therefrom, in the light most favorable to appellees, we hold that the trial court did not err in denying AC & S’s motion for judgment on the issue of punitive damages. 4. The Evidence Against PH PH, like AC & S, argues that, with respect to each appellee, ■ there is not clear and convincing evidence that PH had actual knowledge of the potential risks of exposure to asbestos or that it deliberately disregarded those potential risks.

To the extent PH’s argument is premised on the risk distinction between PH insulators and bystanders, our discussion, supra, is controlling. The evidence presented at trial regarding PH’s actual knowledge may be summarized as follows: 1928—PH received a copy of Asbestos, an industry magazine. The issue contained announcements regarding PH and also contained an article about pulmonary asbestosis. 1930—PH received a copy of Asbestos. The magazine contained an article regarding asbestosis that stated the following: Some attention is being given by the U.S. Bureau of Labor Statistics of the Department of Labor, to Pulmonary Asbestosis, a disease resulting from exposure to asbestos dust.

The Bureau urges the establishment of efficient exhaust systems and the introduction of other safety methods. ⁶³³ It is said that the asbestos dust causes a pulmonary fibrosis, attacking the bases of the lungs, and, like, siliensis, it is frequently complicated by tuberculosis. June 1944—PH advertised in the June 1944 issue of Heating and Ventilating. The magazine contained an article entitled “Dust as an Industrial Health Hazard” that discussed asbestosis and the hazards and fatality of the end-use of asbestos-containing products. Prior to 1953—Two claims of asbestosis were filed by PH employees.

February 1956—PH employee, Mr. Frederick M. Le-Grand, filed a worker’s compensation claim because of asbestosis contracted as an insulation worker. December 19, 1956—Mr. M.R. Carr, president of H.W. Porter & Company, received a letter from The Travelers Insurance Company (“Travelers”), PH’s insurer, in which Travelers stated: The Travelers Insurance Company has been underwriting your Workmen’s Compensation and General Liability since January 1953 and unfortunately, there have been some serious losses during this period. [Regarding the Frederick LeGrand case] [a]s a result of his employment, he alleges that he was exposed to asbestos dust which caused the present lung condition and aggravated a preexisting heart condition. He is a very sick man incapable of working. The condition "will probably worsen to the extent that he will eventually become 100% disabled....

The outcome of the case looks bad. This is not the first asbestosis case. It was an asbestosis case or a suspected case which brought about the Employers Liability request that all employees have a pre-employment physical. We are aware and The Travelers are aware that due to your type of operation and the hiring of temporary employees, pre-employment physicals are impossible.

The wearing of respirators on all jobs involving asbestos insulating is also almost impossible. ⁶³⁴ ' As the result of this lack of control, The Travelers do not wish to continue insuring what they consider to be a business loss. Because of your method of operation, they feel that losses due to asbestos dust is a risk you must assume. (Emphasis added). January 18, 1957—Travelers sent Mr. Carr a letter.

With reference to our recent discussion in Baltimore and The Travelers!”] apparent concern over the exposure to asbestos dust, it is our feeling that it would be to your advantage to have an inspector from The Travelers visit a typical job to determine what the dust conditions really are. In this way we hope to avoid any further problems with The Travelers in regard to exposure to asbestosis. May 27, 1957—PH circulated an internal memorandum indicating that PH knew of Mr. LeGrand’s debilitating injury and that Mr. LeGrand prevailed before the WCC. February 14, 1963—PH sent a letter to Insurance Company of North America (“ICNA”) regarding employees’ asbestosis claims and the compensability of the claims under Worker’s Compensation Law.

August 1, 1963—PH’s insurer sent a letter to PH that stated: ‘You will note that there are four lung-dust disease cases totaling close to $60,000 in losses.... If there is any possibility of giving pre-employment x-rays, it certainly should be done.” August 12,1963—PH circulated an internal memorandum stating: ‘You will see there have been four recent lung-dust cases which seriously affect our rates. Our agent recommends pre-employment x-ray examinations. I agree that we should require all new employees hired as Asbestos Workers to successfully pass a medical examination as a requirement for employment.” December 20, 1963—PH circulated an internal memorandum stating that “if asbestosis is more prevalent in the Metropolitan New York