Santa Maria v. Owens-Illinois, Inc.
| Decision Date | 17 December 1986 |
| Docket Number | OWENS-ILLINOI,INC,JOHNS-MANVILLE,Nos. 85-1621,85-1624,86-1260 and 86-1318,s. 85-1621 |
| Citation | 808 F.2d 848 |
| Parties | Leo F. SANTA MARIA and Joan Santa Maria, Plaintiffs, Appellants, v., et al., Defendants, Appellees. Leo F. SANTA MARIA and Joan Santa Maria, Plaintiffs, Appellees, v.SALES CORPORATION, et al., Defendants, Appellees. Appeal of EMPIRE ACE INSULATION MANUFACTURING CORPORATION, Defendant, Appellant. ESTATE OF Joseph F. ZAMPITELLA, et al., Plaintiffs, Appellants, v., et al., Defendants, Appellees. ESTATE OF Joseph F. ZAMPITELLA, et al., Plaintiffs, Appellees, v., et al., Defendants, Appellees. Appeal of EMPIRE ACE INSULATION MANUFACTURING CORPORATION, Defendant, Appellant. |
| Court | U.S. Court of Appeals — First Circuit |
Francis M. Lynch with whom Lecomte, Barber, Emanuelson, Tick & Doyle, Boston, Mass., was on brief, for Empire Ace Insulation Mfg. Corp.
Before BOWNES and TORRUELLA, Circuit Judges, and CARTER, * District Judge.
Plaintiffs-appellants seek, on this appeal, review of the district court's order of April 1, 1985. The order, entered in the case of Leo F. Santa Maria, et al. v. Owens-Illinois, Inc., et al., Civil No. 80-2642-MA, in the District Court for the District of Massachusetts, grants the motion of defendant Empire Ace Insulation Manufacturing Corp. (hereinafter "Empire-Ace") for summary judgment on the issue of that defendant's liability under New York law as a successor enterprise of Empire Asbestos Products, Inc. (hereinafter "Empire"). In addition, plaintiffs-appellants seek review of the same decision of the district court in eleven other cases of the so-called "Massachusetts Asbestosis Litigation." The Santa Maria case was commenced on November 26, 1980. The complaint originally named some twenty companies alleged to be either manufacturers or sellers, or both, of asbestos or asbestos-related products. 1
The district court initially acted on Empire-Ace's motion for summary judgment in a charge conference of the court and counsel on the thirteenth day of trial. The court had previously taken a motion for summary judgment under advisement. The court stated in the course of the conference:
THE COURT: Let me ask: Is there any other defendant who stopped manufacturing somewhere along the line?
Of Course, Empire did.
Let me say in this connection that I do no[w] 2 have an opinion concerning the issue of Empire Ace's successor liability. I will let Empire Ace out. I do not find successor liability as to Empire Ace. And you will have an opinion with findings so that that issue can be raised.
App. at 823. Thereafter, the district court filed, on April 15, 1985, its memorandum of decision articulating findings of fact and a rationale for the court's decision absolving Empire-Ace of any successor liability. App. at 825-40. In that memorandum of decision, the court notes its understanding of an agreement between the court and counsel on April 1, 1985. The court states:
Although the question of the liability of Empire-Ace as successor to Empire is decided in the case of Leo Santa Maria and Joan Santa Maria v. Owens-Illinois, et al., counsel for all plaintiffs in Massachusetts Asbestos Litigation, M.M.L. 2 cases and counsel for Empire-Ace stipulated that this decision would determine Empire-Ace's successor liability for all M.M.L. 2 cases.
Following the court's action on April 1, 1985 with respect to Empire-Ace, the trial of the Santa Maria case continued as to the remaining defendants and was completed on April 3, 1985, the fifteenth day of trial, with the jury returning a verdict in favor of the plaintiffs. Thereafter, a final judgment in the Santa Maria case, dated April 16, 1985, was docketed on April 30, 1985. On May 9, 1985, plaintiffs filed a renewed motion for new trial, which tolled the running of the prescribed period for filing a notice of appeal under Fed.R.App.P. 4(a)(1). Fed.R.App.P. 4(a)(4)(iv). Both that motion and a prior similar motion were denied by the district court on June 28, 1985. Thereafter, the plaintiffs filed a joint notice of appeal on July 25, 1985, followed by the filing of a notice of appeal by Empire-Ace on August 7, 1985. Both notices of appeal were timely filed. Fed.R.App.P. 4(a)(1), (3), (4)(iv). Both appeals were from a final judgment, and there was no need for any Rule 54(b) certification by the court.
Also pending in the District Court for the District of Massachusetts were eleven other asbestos-injury cases, the subjects of the previously indicated stipulation of counsel, in which a "final judgment" of the district court was entered on February 19, 1986. 3 It is clear from the record and the content of the final judgment of February 19, 1986 that the judgment was intended to implement the agreement among counsel that all of the eleven cases identified in the heading of the judgment should be governed by the final determination to be reached in the Santa Maria case on the issue of whether Empire-Ace was subject to successor liability as the successor enterprise to Empire. 4 The judgment makes a terse finding of "no just reason for delay" pursuant to Rule 54(b). 5 Timely notice of appeal was filed by the plaintiffs and defendant Empire-Ace in each of the eleven cases.
The facts on the substantive issue presented by this appeal are the subject of comprehensive, detailed, and thoughtful findings by the district court set out in the memorandum of decision of April 15, 1985 in the Santa Maria case. The district court described the corporate history of the various entities involved in the following language:
Empire Asbestos Products, Inc. was incorporated under the laws of New York on April 27, 1932. At all times relevant to this case--at least after 1947--its president and sole shareholder was Jacob Epstein ("Epstein"). Originally situated on Jerome Street in Brooklyn, by 1947 Empire was located at Atlas Terminal in Glendale, Long Island. Empire was in the business of manufacturing insulation products, some of which contained asbestos. It fabricated air cell pipecovering, a product made with corrugated asbestos paper, and wool felt pipecovering, and it mixed asbestos cements. In addition, it stocked and distributed products manufactured by other companies, including calcium silicate block and pipecovering, fiberglass pipecovering, and millboard. After 1946, it shipped these products to customers in New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, and possibly Maine....
....
In the 1940's, the three Kevelson brothers, Nathan, Al and Irving, began doing business as Ace Asbestos. Ace Asbestos Manufacturing Company, Inc. ("Ace") was incorporated under the laws of New Jersey on December 23, 1954, with the Kevelsons as its only shareholders. Its plant, warehouse, and offices were located at 451 Communipaw Avenue in Jersey City, New Jersey. It was a competitor of Empire and carried on virtually the same business: manufacturing air cell and wool felt, mixing cements, and distributing these and the insulation products of other manufacturers. Like Empire, it sold to customers in New Jersey, New York and New England....
The defendant in this case, Empire-Ace Insulation Manufacturing Corporation, was incorporated in New York on September 1, 1959 by Nathan and Al Kevelson, Irving having died before then. Although Ace continues to exist today and to hold title to the Jersey City property, the Kevelsons admit that they have conducted their insulation business exclusively under the name of Empire-Ace since 1959.
The pertinent additional findings of the district court may be summarized as follows. Prior to September 1959, Empire and Ace were competitors, manufacturing and distributing virtually identical products over the same geographical area. Empire's work force prior to 1959 consisted of at least eleven production employees who worked on the corrugating machine and the tables used to assemble the air cell and wool felt, the dry box, and in the saw room. There were also four salesmen: Epstein himself, John Kriesmer, Eric Wellisch, and Bernie Brown. In the period prior to September 1959, Ace employed ten to twenty production workers. Nathan and Al Kevelson both served as salesmen as did John Kriesmer and Harvey Greenfield.
On September 16, 1959, two weeks after Empire-Ace was incorporated, the principals in Empire and Empire-Ace executed a written agreement to memorialize a prior oral understanding, by which the latter was to purchase most of Empire's manufacturing operation at Atlas Terminal. That agreement provided (1) for the purchase by Empire-Ace of all of Empire's inventory and equipment at Atlas Terminal, except for certain office furniture; (2) that an inventory would be taken on September 30, 1959 to determine the value of the stock on hand and, by agreement, the value of the plant was established at $50,000; (3) for the payment of the purchase price in cash; (4) that Empire would undertake to procure a lease for Empire-Ace of the Atlas Terminal premises; and (5) that, if Empire should liquidate and dissolve, Empire-Ace had the right to obtain use of Empire's name. In the actual implementation of the agreement, the sale of assets to Empire-Ace was entirely for cash. There was no exchange of Empire-Ace stock for the Empire assets. A key employee was Empire's plant foreman, Peter Muscello. Through the transaction he became Empire-Ace's foreman at Atlas Terminal. He had no involvement in the management decisions of either of the two corporations. The transaction did not result in any of Empire's shareholders, directors, officers, or management personnel becoming associated with Empire-Ace.
Empire was not dissolved as a...
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