641 F.2d 1128 (5th Cir. 1981), 78-1953, Porter v. American Optical Corp.

Docket Nº:78-1953.
Citation:641 F.2d 1128
Party Name:Charles J. PORTER, Plaintiff-Appellee, v. AMERICAN OPTICAL CORP. and Hartford Accident & Indemnity Company, Defendants-Appellants, v. AETNA LIFE & CASUALTY INSURANCE CO., and Continental Insurance Co., Defendants-Appellees, American Motorists Ins. Co., Intervenor-Appellee.
Case Date:April 08, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 1128

641 F.2d 1128 (5th Cir. 1981)

Charles J. PORTER, Plaintiff-Appellee,

v.

AMERICAN OPTICAL CORP. and Hartford Accident & Indemnity

Company, Defendants-Appellants,

v.

AETNA LIFE & CASUALTY INSURANCE CO., and Continental

Insurance Co., Defendants-Appellees,

American Motorists Ins. Co., Intervenor-Appellee.

No. 78-1953.

United States Court of Appeals, Fifth Circuit

April 8, 1981

Page 1129

[Copyrighted Material Omitted]

Page 1130

Paul V. Cassisa, Metairie, La., Frank J. Peragine, New Orleans, La., for defendants-appellants.

M. H. Gertler, James H. Looney, New Orleans, La., for Charles J. Porter.

Allen R. Fontenot, New Orleans, La., for Aetna Ins.

W. K. Christovich, New Orleans, La., for Continental Ins.

Thomas E. Betz, Gallagher, Sharp, Fulton, Norman & Mollison, Michael R. Gallagher, Alan M. Petrov, Cleveland, Ohio, for Insurance Co. of North America, amicus curiae.

Richard A. Epstein, Chicago, Ill., Ben Louis Day, Baton Rouge, La., for Federal Ins. Co. and Fireman's Ins. Co., amicus curiae.

Lewis Herman, New York City, for Philip Alan Froude and Leslie Eric Kemp, amicus curiae.

Jerold Oshinsky, Anderson, Russell, Kill & Olick, New York City, Sidney L. Shushan, New Orleans, La., for Keene Corp., amicus curiae.

Mary Ann D'Amato, Mendes & Mount, New York City, for John Basil, Thomas Bird and certain underwriters, amicus curiae.

Gerald V. Weigle, Jr., Cincinnati, Ohio, amicus curiae.

Thomas M. Nosewicz, New Orleans, La., Christopher C. Mansfield, Charles R. Parrott, Boston, Mass., for Liberty Mut. Ins. Co., amicus curiae.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before COLEMAN, REAVLEY and ANDERSON, Circuit Judges.

COLEMAN, Circuit Judge.

The gravity of this case for the parties concerned, including the novelty of the issues presented with reference to insurance coverage, has inspired prolonged consideration and reconsideration, to the end that an appropriate disposition might be made.

I. The Nature of the Litigation

This diversity action was originally brought by Charles J. Porter, now deceased,

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for damages resulting from asbestosis contracted while he was an employee of the National Gypsum Company in New Orleans and while Porter was supposed to have had the protection of respirator and filter apparatus supplied by the American Optical Corporation (American Optical). Porter subsequently died from his illness and the members of his family were substituted as parties plaintiff.

The primary defendant was American Optical. Also joined as defendants were three insurance companies which, at various times, had insured American Optical (not National Gypsum) during most of Porter's employment and illness: Aetna Casualty and Surety Company (Aetna), Hartford Accident and Indemnity Company (Hartford), and Continental Insurance Company (Continental).

By its verdict, the jury found the American Optical respirator and filter apparatus to have been defective and a proximate cause of Porter's resulting illness and death. Damages were awarded in the sum of $155,000.

Thereafter, in adjudicating the liability of the insurance companies the District Court held that Hartford alone provided the insurance coverage for the American Optical loss. The claims against Aetna and Continental were dismissed.

Consequently, we are now presented with "two appeals in one". American Optical appeals its primary liability. Hartford appeals the determination of its insurance coverage.

We affirm the judgment against American Optical.

We affirm that part of the judgment which absolved Continental of insurance coverage.

We reverse the judgment as to the insurance coverages of Aetna and Hartford.

We remand the case for an apportionment of coverage (liability) as between Aetna and Hartford.

We hold that the District Court erred when it measured insurance coverage by the "manifestation" standard. Instead, it should have used the "exposure" standard and should accordingly have prorated insurance liability coverage.

II. The Liability of American Optical

Porter instituted this suit in July, 1975. He died about two years later. His wife and daughters have pursued the litigation. On two grounds, the suit sought damages from American Optical for the injury and death of Porter: (1) defective design in the respirator apparatus which was unreasonably dangerous and a proximate cause of the injury to Porter, and (2) negligence of American Optical in failing to warn Porter of dangers inherent in the use of the respirator apparatus, also a proximate cause of the injury in question. In addition to facts relating to the structure of the National Gypsum plant and Porter's working habits and health record, the jury trial consisted largely of expert testimony offered by both sides concerning design and performance of the respirator apparatus and the credibility given to this testimony.

  1. The National Gypsum Plant

    The National Gypsum Company is a manufacturer of building materials which includes sheetrock, asbestos wall boards, and other asbestos-cement roofing and siding products. The three main ingredients used by National Gypsum in its manufacturing process were cement, asbestos, and silica. These three materials are mixed together, combined with water, molded into a slab form, and left to dry to produce a final product. Because of the dusty atmosphere produced by the handling of these ingredients, National Gypsum required all employees in certain areas to wear protective respirators and filters as a preventive against respiratory ailments. Since 1953, these respirators were supplied to National Gypsum by the American Optical Corporation. 1

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    The National Gypsum plant in New Orleans consists of two buildings. One is a large building usually referred to as the main plant. The other is a much smaller building located in the rear, adjacent to railroad tracks, referred to as the cement pump house. Cement and silica are delivered to the plant by railroad gondola cars. The cement and silica are pumped out of these cars into storage tanks in the cement pump house, where they are in turn pumped into the main building. The pump in the pump house malfunctions at times and releases a cloud of dust throughout the pump house area.

    Asbestos is delivered to the plant in packages, is removed from railroad cars by a lift machine, and is stored in a warehouse in the main plant. Consequently, it never passes through the smaller pump house.

    The main plant has three floors, used for various purposes. Prior to 1972, according to the plant manager, there were no printed signs placed in the plant to indicate working areas that required the use of a respirator. All employees were informed by supervisors and safety personnel of specific areas that required respirator use, however, and were continually checked by the supervisors to ensure the wearing of the breathing apparatus. Outside continuous dusty areas, the employees were to use their own judgment concerning dust levels and the need to wear the respirator. Areas requiring the respirator included the second and third floors of the main plant and the cement pump house. In 1972, after the enactment of the Occupational Safety and Health Act (OSHA), signs were placed at various places in the plant to indicate mandatory respirator areas. These areas included part of the second floor of the main plant where the various particles were mixed together, the third floor, and areas where sawing and sanding operations were conducted. The first floor did not require use of the respirator.

  2. Asbestos Particles and Asbestosis

    Asbestos is a mineral easily separable into long flexible fibers. Its particles are not of uniform shape or size. The Occupational Safety and Health Administration classifies asbestos fibers by six different types. Each type has a different length, texture, strength, acid resistance, and flexibility. 1A The number of small asbestos fibers that will pass through the filter of a respirator, therefore, may be dependent on the particular types of asbestos particles present in the atmosphere of employment. 2

    In the working atmosphere of a plant such as National Gypsum, the air is full of minute asbestos dust particles not visible to the eye. While a certain number of the particles are present throughout the plant, the concentration is highest where the asbestos

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    is stored, handled or mixed. 3 Continuous breathing of asbestos-laden air will cause an eventual concentration of the particles in the lung tissue. Once in the lung, the particles cannot be coughed out and remain there permanently. The noxious effect of these rock particles causes the body to set up an inflammation until eventually fibrosis occurs. Through fibrosis the body lays down scar tissue in the lung surrounding the asbestos fibers. With a large concentration of the fibers lodged in the lung cavities, scar tissue eventually replaces most of the healthy lung tissue, disrupting the intake of air into lung air sacs and causing a shortness of breath. A sufficiently high concentration and buildup of the condition will cause death. This process, called asbestosis, can also be a precipitating cause of other illnesses such as emphysema, bronchitis, and pneumonia.

    Asbestosis is a cumulative and progressive disease. It does not occur overnight after breathing in a substantial number of asbestos particles during the day. Rather, the disease is a culmination of body reaction to the particles inhaled during years of exposure. The disease is slow in nature and may require from ten to twenty years from onset to fully manifest itself. Persons may develop asbestosis long after they have left contact with an asbestos environment. Continuous exposure to asbestos particles, however, prods the disease at a greater rate. Even though the body has begun a reaction to the fibers, inhalation of new fibers adds to...

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