Jury verdict affirmed: Evidence presented at trial supported design defect claim, Calif. court says

By Heather Isringhausen Gvillo | May 13, 2014

SAN FRANCISCO (Legal Newsline) - A California appeals court has affirmed a jury's verdict in favor of a former boiler worker's asbestos claims, finding that the claimant presented sufficient evidence showing design defect.

Justice Jim Humes delivered the unpublished opinion on April 16. Justices Ignazio Ruvolo and Timothy Reardon concurred.

Defendant Crane Co. appealed to California's First District Court of Appeals after a jury found it liable for plaintiff James Hellam's mesothelioma injury.

Hellam sued several defendants, but only Crane Co. remained at the time of trial.

The jury was instructed to consider four claims, including strict liability for design defect, strict liability for failure to warn, negligence and punitive damages.

Ultimately, it entered a special verdict in favor of Hellam on the design defect claim and in favor of Crane Co. on remaining claims, awarding Hellam $937,882.56 in economic damages and $4.5 million in noneconomic damages.

The jury also allocated seven percent of the fault to Crane, 75 percent to MBS and the remaining 18 percent to three other named parties and "all others."

The trial court entered judgment against Crane in December 2012, requiring the defendant to pay the entire economic damages award, although the court noted that the figure "may be adjusted following the court's determination of a motion for allocation of settlement credits," Humes wrote.

The court also reduced the noneconomic damages to $315,000 to reflect Crane's proportionate liability and reserved issuing a ruling on costs.

Crane moved for a judgment notwithstanding the verdict and moved to vacate the judgment because it was "premature and incomplete" by failing to account for settlement credits. Both motions were denied in January 2013.

In regards to court costs, Hellam sought roughly $101,000 in costs but Crane moved to tax several items. In May 2013, the court taxed $16,000 of the costs and awarded Hellam about $85,000.

Crane appealed the orders, which were consolidated by the appellate court.

In its appeal, Crane contended Hellam presented insufficient evidence that its products had both a design defect and were a "substantial factor" in causing the claimant's mesothelioma. Crane also argued the judgment improperly failed to apply settlement credits and was not final, in addition to Hellam's allegedly improperly awarded costs in a post-judgment order.

However, the appeals court affirmed the judgment and concluded that the issues involving settlement credits are moot. The court also affirmed the order awarding certain costs, but remanded to the trial court the limited issue whether costs for pretrial transcripts should be taxed.

Humes explained that Hellam alleged he developed mesothelioma at age 64 after working with Crane Co.'s asbestos-containing products off-and-on from 1962 to 1966.

In the summer months during high school and college, Hellam claims he worked full-time for his grandfather, Harvey Waugh, at Waugh's boiler business, Monterey Boiler Service, or MBS.

MBS primarily specialized in refurbishing boilers, which involved applying an insulating material that Hellam and Waugh referred to as 'asbestos,' the opinion states. Hellam recalled during testimony that the insulating material came packaged in bags labeled with "asbestos."

Hellam further alleges that about half of the insulating cement Waugh purchased came from Crane Supply, saying the two would visit the supply house to restock when MBS ran out of the material.

As part of his job, Hellam would open a bag and empty it into a trough, releasing "quite a bit" of dust into to the air, Humes wrote. After mixing the dusty cement with water, he and Waugh applied the resulting "mud" to the boiler. Humes added that refurbishing a boiler typically required one to two bags of insulating cement.

Hellam was also responsible for cleaning up the boilers by chipping away excess mud that had hardened onto the trough, as well as disposing of the empty cement bags, which would release more visible dust.

Hellam estimated that the process of mixing and applying the cement to each boiler took 15 to 20 minutes and that MBS refurbished 12 to 15 boilers per summer.

Hellam also fabricated gaskets for the boilers, which were used to create a seal between pipes and flanges.

He added that Waugh purchased sheet gasket material called Cranite at Crane Supply.

Cranite, which was trademarked by the defendant, is believed to contain between 75 and 85 percent asbestos, a Crane corporate representative testified.

The gasket-making process involved tapping an outline of each gasket with a hammer and cutting it out, which resulted in material fibers being released into the air, Hellam testified.

Hellam added that each gasket took between 10 and 20 minutes to make.

"Hellam indicated that during the time he worked at MBS he never believed that the cement or gasketing 'were in any way hazardous to his health' or 'were anything more than a nuisance dust,'" Humes wrote.

Hellam added that because he didn't suspect any risks associated with the asbestos-containing products, he did not take any safety precautions when handling the insulation cement and gasket materials.

Appellate decision

Addressing the design defect claim that the products were not as safe as ordinary customers expected, Humes wrote that the court found substantial evidence was presented to support the jury's decision.

"A manufacturer, distributor or retailer is liable in tort if a defect in the manufacture or design of its product causes injury while the product is being used in a reasonably foreseeable way," Humes wrote.

Crane argued there was insufficient evidence proving design defect or the elements of liability under the consumer expectations test.

It added that the jury imposed "absolute liability" for "the mere presence of asbestos in the products at issue."

Crane contended that the verdict on the design defect claim was only supported by evidence that its products lacked warnings. According to Crane, this evidence cannot sustain the design defect claim because the jury specifically rejected the failure-to-warn claim.

However the appellate court disagreed, saying evidence was also presented that the products had "propensity to emit toxic asbestos fibers during ordinary use."

Humes explained that Hellam's testimony that visible dust was released while working with the products coupled with expert testimony from industrial hygienist Philip John Templin that Hellam inhaled asbestos fibers each time he worked with the materials constituted evidence of a design defect.

Crane claims that "characterizing the defect as the products' propensity to emit asbestos fibers, rather than the products' asbestos content, is a 'distinction ... without a difference.'"

However, Humes wrote that Hellam presented evidence that asbestos fibers were routinely emitted while mixing insulating cement and cutting gaskets, successfully providing sufficient evidence of design defect.

Crane also argued that Hellam failed to satisfy the consumer expectations test required for proving a design defect claim.

Humes explained that the consumer expectations test asks whether the product performed as safely as an ordinary consumer would expect when used in an intended and reasonably foreseeable manner.

"Crane argued the test was inapplicable here because Hellam's testimony alone was insufficient to establish the expectations of 'plumbing and heating contractors working in the boiler repair industry,' since he was a self-described 'gofer' who 'didn't know ... much about the business,'" Humes wrote.

However, the appeals court rejected the argument, referring to Hellam's testimony that he did not believe the products or the resulting dust posed any health risk. Humes added that because Hellam routinely used the products for work, his statements were sufficient to establish safety expectations of ordinary consumers.

Even if Crane were correct that the claimant must present evidence showing a boiler professional's expectations, Humes continued, Hellam testified that Waugh required safety precautions during other activities but did not instruct him to take precautions with any other asbestos products.

"The jury could have relied on this evidence to conclude that the products did not perform as safely as ordinary consumers expected," the opinion states.

Crane contended that Hellam also failed to present enough evidence that its products were a substantial factor in causing his mesothelioma.

However, Humes wrote that Hellam only had to prove that the defendant's product was a substantial factor contributing to the illness in reasonable medical probability, which the court found he successfully proved through expert testimony.

Templin testified that Hellam's exposure levels greatly exceeded ambient, or background, levels of asbestos.

Dr. Barry Horn and Dr. Allan Smith both testified that each exposure increased Hellam's risk of developing mesothelioma.

Horn added that "'there is unequivocally a dose-dependent relationship' between asbestos and mesothelioma, which means that the more asbestos one is exposed to, the higher one's risk of developing the disease."

"As Templin's testimony established, those exposures were at levels significantly greater than ambient levels. Moreover, Hellam's testimony established that he was exposed to the products dozens of times over his employment at MBS," Humes wrote. "As a result, the jury could reasonably conclude based on Dr. Horn's testimony that the products were a substantial factor in increasing Hellam's risk of developing mesothelioma

Addressing Crane's appeal based on awarded costs and requested taxes, the appeals found that the awarded costs were proper, but remand is necessary for the trial court to consider in the first instance whether Hellam is entitled to recover his costs for transcripts of pretrial proceedings.

Hellam sought $101,092.40 in costs. The trial court granted in part Crane's motion to tax costs, subtracted $16,000 to account for "daily transcript fees" that the court determined were not recoverable and awarded Hellam the remaining $85,092.40.

Crane argued the trial court erred when it failed to tax costs Hellam incurred during litigation against other defendants, claiming the costs were "not integrally associated with Hellam's claims against Crane Co." and were therefore not "reasonably necessary to pursuit of those claims," the opinion states.

However, the appellate court disagreed, saying Hellam's mesothelioma was caused by his cumulative exposure to asbestos, making it difficult to separate issues according to defendant.

"Here, the trial court recognized that costs must be both reasonably necessary and reasonable in amount, but it declined to prorate the costs awarded to account for other defendants," Humes wrote. "In doing so, it observed that Crane was the only defendant remaining at trial and indicated its concern that apportionment could deny Hellam costs to which he was entitled."

Lastly, Crane argued that the trial court erred by not taxing all of the costs attributable to transcripts.

Humes wrote that the record is unclear and remanded the question back to the trial court to consider whether costs for pretrial transcripts are recoverable.

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

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