Pa. appeals court holds statute of repose bars asbestos plaintiffs' claims

PHILADELPHIA (Legal Newsline) - A Pennsylvania appeals court has reversed a Philadelphia County jury's judgment against a defendant in an asbestos lawsuit, concluding that the statute of repose bars the plaintiffs' claims.

Judge Jack A. Panella of the Superior Court of Pennsylvania delivered the June 26 opinion. Judges Judith F. Olson and James J. Fitzgerald III concurred.

Both parties filed cross appeals arising from an asbestos verdict entered Dec. 28, 2011, in the Court of Common Pleas of Philadelphia County in favor of plaintiffs David and Frances Graver and against defendant Foster Wheeler Corporation.

While both parties raised several issues, but Panella wrote that the court only found need to address whether the statute of repose for improvements to real property bars asbestos personal injury claims against entities involved in the construction of improvements to real property. The court determined that it does.

Graver, now deceased, worked at the Pennsylvania Power and Light's Holtwood Steam Plant from 1983 until his retirement in 2010.

As part of his employment, he worked on a boiler designed by Foster Wheeler, which was 11 to 13 stories tall and contained asbestos products, including Foster Wheeler insulation.

The decedent was allegedly exposed to asbestos being released from the boiler's insulation, causing him to develop mesothelioma.

Prior to trial in July 2011, Foster Wheeler sought summary judgment, claiming the statute of repose barred the plaintiffs' claims against it. The trial court denied the motion.

Foster Wheeler then filed a motion for compulsory nonsuit, again alleging the statute of repose barred suit against it, which was also denied.

The case proceeded to trial and the jury found in favor of the Gravers, awarding the decedent $3 million and his wife $1.5 million for loss of consortium.

The awards were based on the jury's conclusion that five settling defendants were also liable for the decedent's injuries.

Therefore, the trial court reduced the verdicts by one-sixth for a modified verdict of $500,000 for the decedent and $250,000 for his wife. Both parties filed post-trial motions which were denied.

As a result, each party appealed.

Panella wrote that the issue here arises from Foster Wheelers' claim that the statute of repose for improvements to real property bars all of the plaintiffs' claims against it.

On the other hand, the Gravers dispute the contention by claiming there is no statutory right to repose in asbestos cases.

Panella explained that while the trial court found that the boiler at issue was an improvement contemplated within the statute, it declined to apply the statute according to what it classified as "strong dicta" from the Abrams decision, which indicated that there is no statutory right to repose in asbestos cases.

However, Foster Wheeler argued Abrams is "inapplicable because it does not address the statute of repose, but instead concerns the statute of limitations for asbestos-related claims."

Panella said the court agrees with Foster Wheeler, finding the trial court's reliance on Abrams to be incorrect.

Examining the differences of statutes of repose and statutes of limitations, he explained that both statutes establish how long a plaintiff has to bring a cause of action. Specifically, statutes of limitations typically begin to run when the plaintiff suffers harm. On the other hand, statutes of repose bar all lawsuits filed later than 12 years after the completion of the improvement, even if the appropriate time period ends before a claimant suffers a resulting injury from the action.

Because Foster Wheeler completed the boiler in question in 1955, the claimant would have had to file suit by 1967 according to the statute of repose.

However, the Gravers did not file their claims until 2010 - 43 years after the statute of repose deadline.

Although, the Gravers argued the statute is inapplicable.

They claimed Foster Wheeler is a manufacturer and supplier of metal products and asbestos insulation rather than a designer of improvements to real property, as alleged.

"Thus, they claim that since Foster Wheeler's asbestos insulation was merely integrated into the boiler at issue, they cannot seek shelter from liability under the statute of repose," Panella wrote.

They further argued that the asbestos-containing insulation was not an "improvement" according to the statute.

Panella said the contentions are meritless, saying that the trial court found that Foster Wheeler was involved in the design and construction of the boiler and didn't merely supply insulation.

PP&L's general contractor, EBASCO, contracted Foster Wheeler to design the boiler used at the plant and then integrated it into their plans.

Furthermore, the appeals court held that the boiler was "clearly an improvement" according to the statute.

Citing the Pennsylvania Supreme Court, Panella explained that an improvement is defined as "a valuable addition made to property (usually real estate) or an amelioration in its condition, amounting to more than mere repairs or replacement, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further purposes."

As for the Abrams decision, the Gravers argued the Supreme Court held that "'no statutory right of repose exists with respect to asbestos cases. Indeed, had the legislature intended that asbestos exposure cases be subject to a statute of repose, it could have expressly indicated so in its enactment of 42 Pa.C.S.A. § 5524(8).'"

However, the appeals court was unconvinced and concluded that the trial court erred when relying on Abrams.

"While we respect the importance of precedent in shaping the jurisprudence of the Commonwealth, we find it difficult to conclude that such a generalized statement by the Supreme Court is binding on the issue before us today," Panella wrote.

The Abrams case dealt with the relation between the asbestos statute of limitations and the "one disease" and "two disease" rules. It did not discuss the statute of repose for improvements to real estate, he explained.

"In this context, it gives us great pause to conclude that the court's isolated statement was a blanket prohibition of statutes of repose in all asbestos cases," Panella wrote. "This is especially so when such declaration conflicts with a plain reading of the statute at issue."

The Gravers further argued that the statute of limitations should be proper in this case because it was adopted more recently than the statute of repose.

Again, the appeals court disagreed with the argument, stating that the statutes generally operate independently of one another.

"The statute of limitations applies only to those cases arising from alleged exposure to asbestos," Panella wrote. "On the other hand, the relevant statute of repose has a greater reach and involves all claims against those persons involved in the design, planning, supervision or construction of any improvement to real property."

The court concluded that the statute of repose bars the Gravers' claims and explained that exceptions for asbestos claims should be integrated from legislative action, not an act of "judicial fiat," Panella wrote.

"It is not our function as the judiciary to construct an asbestos-related exception to the statute of repose in construction cases," he added.

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