LEGAL NEWSLINE

JACKSON, Tenn. (Legal Newsline) - A Tennessee appeals court held that a mesothelioma lawsuit was proper despite an agreement reached between a railroad company and its employee releasing it from liability of all past and future personal injury claims while settling an asbestosis case in 2002.

Although the two reached a prior negotiated release, freeing Illinois Central Railroad Company from liability, Delores Blackmon filed the lawsuit pursuant to the Federal Employers' Liability Act, alleging her husband Dolphus Blackmon developed mesothelioma as a result of asbestos exposure while working with the railroad company and later died from his injuries.

Illinois Central Railroad was granted summary judgment based on its arguments that the decedent's release, drafted when he settled previous litigation with the railroad, barred the current lawsuit.

However, the Court of Appeals of Tennessee disagreed, reversing the circuit court's decision and remanding the case for further proceedings.

The court held that Illinois Central Railroad failed to submit evidence demonstrating that the plaintiff "cannot prove the invalidity of the release at trial or cannot prove that Mr. Blackmon was not aware of the risk of mesothelioma when he signed the release."

Judge Alan E. Highers delivered the opinion on May 16 with Judges David R. Farmer and Holly M. Kirby joining.

Dolphus Blackmon was employed as a machinist with Illinois Central Railroad Company and its predecessors from 1945 until he retired in 1989.

Blackmon died in 2008 after developing mesothelioma as a result of his asbestos exposure.

In September 2008, his wife Delores Blackmon filed a lawsuit against her husband's former employer and several other defendants.

The complaint claims that Illinois Central Railroad was liable for the wrongful death of Blackmon according to the Federal Employers' Liability Act, or FELA.

The defendant responded by arguing the plaintiff's claims were barred by a release the decedent executed in connection with the settlement of another FELA lawsuit filed against Illinois Central Railroad several years earlier.

According to the previous lawsuit, Blackmon alleged he suffered from asbestosis as a result of his asbestos exposure while working for Illinois Central Railroad. The case was settled in October 2002 and a release was executed in exchange for a lump sum payment of $28,000.

The release stated that Blackmon released Illinois Central Railroad from "any and all claims arising out of Dolphus Blackmon's employment," including further injuries caused by asbestos exposure.

At an April 2009 hearing in the Circuit Court for Madison County, the trial court granted summary judgment to Illinois Central Railroad, finding the release valid and enforceable. Therefore, the plaintiff's claims were barred, it said.

Blackmon appealed, questioning whether the court erred in construing the language of the release as it applied to future claims, whether the trial court erred by determining the validity of the release under the FELA and whether the court erred in failing to heed the Third Circuit's caution against boilerplate language in release agreements.

Blackmon specifically argues that the language of the agreement does not intend to release Illinois Central Railroad from future claims.

The release states that "[i]t is understood and agreed that it is the intention of the parties that this Release releases Illinois Central Railroad Company, a corporation, and all parties released of and from any and all claims, losses, damages, injuries, conditions or diseases, including, but not limited to, pneumoconiosis, cancer, mesothelioma or any other disease allegedly resulting in any manner from the employment of Dolphus Blackmon or any other medical condition allegedly related to the employment of Dolphus Blackmon with the parties released."

However, the plaintiff claims the release used past and present tense, meaning future claims are not included in the compromise.

The court is unconvinced, pointing out a section of the release that addresses "any other or additional claims" arising from the decedent's employment.

"In addition, the fact that the release included many specific conditions that were not present at the time suggests that the release was not intended to cover only Mr. Blackmon's existing injury - asbestosis," Highers wrote.

To determine whether the trial court took the proper approach, the appeals court addressed the validity of a release under FELA, which it said must be determined by federal law.

Blackmon relied on a law passed by Congress after railroad companies attempted to force their employees to sign contracts discharging the company from liability for personal injuries. The law bars companies from carrying out such actions. The claimant believed the release violates this law.

Highers explained that courts considering FELA releases have disagreed as to whether a FELA release can only bar claims for injuries known at the time of the release, or whether the ELA release can also extend to claims for future injuries.

To decide the answer, he added that there are two main approaches set forth in the Babbitt decision and the Wicker decision.

In Babbitt, a company required employees to sign documents releasing it from liability for all future injuries related to their work. Years later, the employees filed FELA claims for hearing loss.

Ultimately, the court held that a release from liability must "reflect a bargained-for settlement of a known claim for a specific injury, as contrasted with an attempt to extinguish potential future claims the employee might have arising from injuries known or unknown."

In Wicker, employees had executed releases in connection with settlements of claims for various injuries, releasing the employer from liability for all past and future injuries. However, the employees said the compromise could not release the employer from injuries the employees did not yet know existed.

The court held that a release is not improper when it is "executed for valid consideration as part of a settlement, and the scope of the release is limited to those risks which are known to the parties at the time the release is signed. Claims relating to unknown risks do not constitute 'controversies,' and may not be waived."

In other words, the court did not want to adopt a "bright line," saying the release "may be strong, but not conclusive, evidence of the parties' intent."

The trial court chose the Wicker approach, but Blackmon alleged the trial court improperly applied the approach when considering the validity of a FELA release.

She asserts that a separate Ayers approach would have been proper when defining a "controversy" under FELA.

The court disagreed, stating that the Ayers case dealt with different issues than the Blackmon case, adding that the word "controversy" does not even appear in the Ayers opinion.

The court concluded that the trial court did not err when applying the Wicker approach.

As for the plaintiff's arguments that the trial court failed to "fully follow" the Wicker decision, specifically noting its caution against boilerplate language, the court agreed that the release wasn't conclusive and failed to prove the decedent was aware of the asbestos health hazards.

Blackmon claims the language was "boiler plate, general in nature, not designed to fully inform [Mr. Blackmon] and failed to comply with the specificity requirements ... discussed in Wicker."

Comparing the two cases, the court held that the release was negotiated by the decedent and his attorney as part of the settlement of an existing claim, as required in Wicker.

However, when evaluating the parties' intent at the time the release was drafted, the court said the agreement included all known hazards in an effort to exempt the company from all potential liability related to the decedent's employment.

Calling it a "standard waiver of liability," the court said the list included generic asbestos hazards rather than specific risks of asbestos the decedent actually faced.

"Illinois Central points out that the Release specifically referenced asbestos and mesothelioma," Highers wrote. "However, these terms were buried laundry list of other substances and diseases."

Highers added that the release does not specify the scope and duration of the risks and fails to indicate that the decedent knew of the health risks associated with asbestos and other toxic substances.

The court also notes the significance that Illinois Central Railroad failed to provide any other evidence on the record, relying strictly on the release to show it intended to cover a future claim for mesothelioma.

"Although it may be likely that Mr. Blackmon was made aware that he was at risk of developing mesothelioma, either by his doctors or by his attorney at the time, there is simply nothing in the record to prove such an awareness, and it would take an assumption on our part to reach that conclusion," Highers wrote.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com