Brannan v. Wallace & Gale Asbestos Settlement Trust

MEREDITH, J. Appellants in this case are personal representatives of the estates of four decedents, each of whom pursued to final judgment claims against various parties in asbestos litigation. 1 The appellee is the Wallace & Gale Asbestos Settlement Trust (“the Trust”), which is the successor to Wallace & Gale (“W & G”), a Baltimore-based insulation contractor that installed asbestos-containing products at various locations in the Baltimore region, including at Bethlehem Steel facilities. The Circuit Court for Baltimore City entered summary judgment in favor of the appellee in this consolidated case in which the four appellants were seeking to hold the appellee liable for paying a portion of judgments previously entered in favor of appellants in earlier asbestos litigation. In 1984, W & G filed for Chapter 11 bankruptcy protection, and as a consequence, was not a party to the four asbestos cases at the time when the appellants obtained judgments against other parties. Appellants ’ previous judgments The four appellants (who will be identified herein as Bran-nan, McFadden, Nardone, and Jakubowski) tried asbestos cases to judgment between 1996 and 2001 as follows.

Brannan Charles T. Brannan, Jr., was a former trolley driver who made daily stops at Bethlehem Steel’s Sparrows Point plant. Brannan was diagnosed with mesothelioma on August 1, 1989, and died of that disease on January 7, 1990. His personal representative brought suit in the Circuit Court for Baltimore City against various entities involved in the provision, manufacture, and/or installation of asbestos-containing products, alleging secondary exposure through asbestos dust carried onto his trolley by Brannan’s passengers. Some defendants ¹⁶⁷ settled prior to trial, but on May 3, 1996, a jury returned a plaintiffs verdict in Brannan’s case against Owens-Corning Fiberglas Co. in excess of two million dollars.

Owens-Corning was successful on its cross-claims against Porter-Hayden Co. and Harbison-Walker Corp., although this Court, in an unreported opinion, 2 reversed on sufficiency of evidence grounds the jury’s finding of liability against Harbison-Walker. Pursuant to the Uniform Contribution Among Joint Tortfeasors Act (“UCAJTA”), Owens-Corning and Porter Hayden were each accountable for $1,012,279. In December 1997, Brannan’s estate settled with Owens-Corning for $802,798.73 in exchange for a release. For its part, Porter Hayden settled with Brannan’s estate for $674,852.67, although no release appears in the joint record extract.

Orders of satisfaction of judgment were not, however, filed. McFadden Gust McFadden worked for Bethlehem Steel as a steelworker from 1946 until his retirement in 1983. He died of mesothelioma on January 16, 1994. In McFadden’s asbestos case, a plaintiffs verdict was rendered on May 3, 1996, in favor of McFadden against Owens-Corning in the amount of $5,091,184.

Owens-Corning prevailed on its cross-claims against Porter Hayden and Harbison-Walker. Under the UCAJTA, the three joint tortfeasors in McFadden’s case were each accountable for $1,697,061.33. Owens-Corning settled with McFadden’s estate for $1,332,852.21 and was released. It appears that Porter Hayden and Harbison-Walker also settled in the McFadden case for less than their pro rata shares.

Nardone Aristide Nardone was a steelworker at Sparrows Point who died of mesothelioma on March 25, 1998. His estate brought survival, wrongful death, and consortium claims, and prevailed against one direct defendant—ACandS—and a jury returned a ¹⁶⁸ verdict in excess of four million dollars. Ten entities 3 were found liable on the third party claims asserted by ACandS. The trial judge entered judgment against ACandS on November 1, 2000, for $842,959.33.

Jakubowski Theodore Jakubowski was a Sparrows Point steelworker who died of mesothelioma on November 22, 1999. His estate brought suit on September 28, 2001, and a jury returned a verdict against two direct defendants, John Crane, Inc., and Durabla Manufacturing Co. Judgments were entered against each of these defendants in the amount of $1,304,071. There were also seven cross-defendants found liable: ACandS, A.W. Chesterton, Garlock, Owens-Illinois, Porter-Hayden Co., Quigley, and Westinghouse. Six of those settled for various amounts less than their pro rata share, and the seventh, ACandS, settled for $560,000, which was more than its pro rata share.

Appellants’ Claims Against the Trust After the Trust emerged from bankruptcy in 2006, appellants each moved to have their then-dormant cases removed from the inactive docket so that they could pursue damages from the Trust. Discovery commenced, but then the Trust filed a motion for summary judgment, arguing that appellants failed to state a claim upon which relief could be granted due to the operation of the final judgment rule. In the appellee’s motion, the Trust argued that the appellants’ “claims against the Trust are an impermissible effort to reopen final judgments.” According to the Trust, the situation was analogous to a case in which a person had been injured in a motor vehicle accident in which two drivers were alleged to have been at fault. Under such circumstances, the Trust argued, the plain ¹⁶⁹ tiff could sue both drivers, obtain a judgment, and collect the judgment from the two drivers, but, [i]f the [pjlaintiff later learns that there was a third vehicle at fault for the collision, she cannot reopen her case to seek more money from another asserted tortfeasor because her injuries have already been adjudicated to a final judgment and satisfied.

Here, each Plaintiff claimed injuries from his exposure to asbestos. He sued the parties allegedly responsible and established the nature, extent and cause of his injuries. Those claims either settled or went to judgment and were paid. Once paid, the Plaintiffs claims for damages from his exposure to asbestos were extinguished.

Each of these Plaintiffs is entitled only to satisfaction of the judgment as entered in his prior trial. That has occurred in these cases, and Plaintiff has no further right to additional damages from the Trust. The appellants opposed the Trust’s motion for summary judgment, and summarized the prior litigation as follows: Each of the Plaintiffs in this group received verdict awards against manufacturers and/or suppliers of asbestos-containing products. In each of the cases, the jury found that the Plaintiffs decedent had developed mesothelioma as a result of exposure to asbestos and that one or more defendants in the case were liable as joint tortfeasors for his resulting injuries and death.

In each of the cases, the jury awarded damages based upon its assessment of the injuries suffered. In each of the cases, the verdict was reduced to judgment based upon the amount of damages awarded and the number of parties found liable as joint tortfeasors in the case. In each of the cases, the non-settling defendants then either settled and received a joint tortfeasor release or paid the judgment and received for itself a satisfaction of the judgment entered against it. Wallace & Gale Corporation (“Wallace & Gale”) was not sued in these earlier proceedings, having voluntarily filed in ¹⁷⁰ 1984 a Chapter 11 bankruptcy petition that operated, under federal law, as a stay of commencement or continuation of any civil action against it.

As a result, none of the plaintiffs in these cases had the ability to sue or proceed against Wallace & Gale, and their cases proceeded to judgment as to those parties against whom plaintiffs could proceed. The appellants explained that the judgments which had been entered against the various other defendants had not been paid in full, and that they sought to obtain a judgment against the Trust for the joint tortfeasor’s share that would have been allocated to W & G had it not been in bankruptcy at the time the prior judgments were entered. The appellants asserted that they were not seeking a “double recovery.” Rather, they were attempting to supplement the amounts previously recovered. According to the appellants: If the Trust is found liable as a joint tortfeasor, it will pay no more, ultimately, than what Wallace & Gale would have paid as an adjudicated joint tortfeasor in the earlier case in which the judgment was entered.

Principles of equity thus heavily favor allowing the continuance of this action, rather than ordering it discontinued. The circuit court conducted a hearing on the motion. During the hearing, counsel for the appellants acknowledged that there was no known case in which another asbestos plaintiff had done what they were seeking to do in this case. The colloquy between the court and appellants’ counsel was as follows: THE COURT: Now, help me with this. [APPELLANTS’ COUNSEL]: Yes.

THE COURT: Because a lot of these defendants at various times, not these defendants necessarily but defendants in these cases, a lot of them have been variously in bankruptcy at different times, correct? [APPELLANTS’ COUNSEL]: Yes. THE COURT: In U.S. district courts all over the United States I assume. [APPELLANTS’ COUNSEL]: Yes. ¹⁷¹ THE COURT: Has anybody else done what you’re describing? [APPELLANTS’ COUNSEL]: Your Honor, no, as far as I know. THE COURT: ... [W]hat happens if a, say, ... there is a defendant in a civil case, who among a series of defendants, joint tortfeasors who brilliantly manages to avoid service. [APPELLANTS’ COUNSEL]: Right. THE COURT: And then the case goes to trial and goes to verdict.

I mean, that is sort of more like their situation. [APPELLANTS’ COUNSEL]: Well, Well— THE COURT: They have brilliantly avoided service legally. They didn’t hide literally. [APPELLANTS’ COUNSEL]: I understand what Your Honor is saying. However, in that instance, again, we get back to fundamental principles in regard to statute of limitation. You know, a plaintiff has three years to figure it out.

THE COURT: Yes, ordinarily. In an ordinary tort case. [APPELLANTS’ COUNSEL]: He’s going to sue whom he can and certainly file [against] who he can. But in an instance where a defendant is unserved for any reason, I would grant the Court that it is unlikely that once the plaintiff goes to judgment and collects his judgment, that the Court of Appeals would find that to be an instance where the plaintiff ought to be able to go after that defendant later. THE COURT: Are there any cases discussing this? [APPELLANTS’ COUNSEL]: This is just different from this case because we had no opportunity to sue Wallace & Gale who was immanently serviceable until November 16th of 1984.

THE COURT: Are there any cases, appellate cases that are like this, like what I described? ¹⁷² [APPELLANTS’ COUNSEL]: Frankly, no. THE COURT: You don’t know of any? [APPELLANTS’ COUNSEL]: No. I’ve looked. And that’s what makes this issue such an interesting one. After the hearing, the circuit court granted summary judgment in favor of the Trust.

In a memorandum opinion, the court explained: Defendant Wallace & Gale Asbestos Settlement Trust (“The Trust”) moves for Summary Judgment against various asbestos Plaintiffs on the grounds that their cases have been tried to final judgment against other defendants, while Wallace & Gale was in bankruptcy. Plaintiffs oppose these Motions claiming they should be permitted to recover additional money for the same injury from the Trust. The history of this matter is undisputed. Wallace & Gale filed bankruptcy in 1984.

They remained under the protection of the Bankruptcy Court until 2006. When that Court confirmed their Plan, the Company emerged in the form of the Trust, an entity whose only potential assets were insurance policies that could fund the Trust in order to pay asbestos claims. The cases we deal with here are those that were tried to judgment during the bankruptcy, when Wallace & Gale was protected from suit. The cases at issue here were all tried to final judgment between 1996 and 2001, and a jury set the value of each individual plaintiff[’]s injury.

Because of its bankruptcy, Wallace & Gale did not participate in any of these proceedings, and at the time, there was no indication when it might emerge from bankruptcy, if at all. Meanwhile, each jury award was divided amongst various joint tortfeasors by prorata shares and reduced accordingly by various pre-trial settlements. After the judgments were divided, the Plaintiffs accepted full payment of the pro-rata shares by some defendants and settled with others for reduced amounts to avoid delays caused by appeals, or for other reasons. The result of these various settlements is that a deficit now exists between the amounts actually received and the ¹⁷³ amount of the jury award in each case.

The Plaintiffs now seek to proceed against Wallace & Gale for the remainder of the jury awards, claiming that they are entitled to reopen the verdict and re-divide it, this time including Wallace & Gale, and then collect its pro-rata share. Plaintiffs argue that they still have a viable cause of action against Wallace & Gale since its entry into bankruptcy tolled the statute of limitations and they never surrendered their cause of action. Wallace & Gale, in response,