Hawaii Federal Asbestos Cases, In re

• Decision Date: 15 September 1988
• Docket Number: JOHNS-MANVILLE,No. 87-2745,87-2745
• Citation: 871 F.2d 891
• Parties: , Prod.Liab.Rep.(CCH)P 12,110 In re HAWAII FEDERAL ASBESTOS CASES. T. Moana CARVALHO, individually and as special administratrix of the Estate of Manuel S. Carvalho, deceased; Manuel C.K. Carvalho; Michael K. Carvalho; Cynthia U. Kanuha, Plaintiffs-Appellees, v.SALES CORPORATION, etc., Defendant, and Raymark Industries, Inc., successor to Raybestos-Manhattan, Inc., Defendant-Appellant. . Oral Argument Originally Scheduled for
• Court: U.S. Court of Appeals — Ninth Circuit

Page 891

871 F.2d 891

13 Fed.R.Serv.3d 976, Prod.Liab.Rep.(CCH)P 12,110

In re HAWAII FEDERAL ASBESTOS CASES.

T. Moana CARVALHO, individually and as special

administratrix of the Estate of Manuel S.

Carvalho, deceased; Manuel C.K.

Carvalho; Michael K.

Carvalho; Cynthia

U. Kanuha, Plaintiffs-Appellees, v. JOHNS-MANVILLE SALES CORPORATION, etc., Defendant, and Raymark Industries, Inc., successor to Raybestos-Manhattan, Inc., Defendant-Appellant.

No. 87-2745.

United States Court of Appeals, Ninth Circuit.

Oral Argument Originally Scheduled for Sept. 15, 1988.

Proceedings Stayed Pursuant to 11 U.S.C. Sec. 362(a)(1)

Sept. 16, 1988.

Submitted Nov. 10, 1988. ^*

Memorandum Filed Dec. 15, 1988.

Decided April 3, 1989.

Paul Devenes, Ikuzaki, Devens, Lo, Youth & Nakano; Russell H. Ando, Honolulu, Hawaii, for defendant-appellant.

Gary O. Galiher, Galiher and De Robertis, L. Richard De Robertis, Honolulu, Hawaii, for plaintiffs-appellees.

Appeal from the United States District Court for the District of Hawaii.

Before CHOY, CANBY, and TROTT, Circuit Judges.

TROTT, Circuit Judge:

Raymark Industries challenges the district court's application of the statute of limitation; submission to the jury of special

verdict interrogatories phrased in the alternative; refusal to poll the jury on each subpart of each interrogatory; denial of Raymark's motion for JNOV or, in the alternative, for a new trial; and imposition of a Rule 11 sanction against Raymark on Raymark's motion for summary judgment. We affirm.

BACKGROUND

Plaintiffs-appellees ¹ filed this action on behalf of Manuel S. Carvalho, on July 28, 1980, against twenty-seven producers and distributors of asbestos-related products, of whom defendant-appellant Raymark Industries was one. The complaint sought damages for Manuel S. Carvalho's death of asbestosis and asbestos-related lung cancer on September 4, 1978. Carvalho had repeatedly inhaled asbestos dust and fibers while working at Pearl Harbor Naval Shipyard between 1941 and 1971.

The jury found for plaintiffs-appellees, awarding $213,046.62 in compensatory damages against twelve manufacturers, and $500,000 in punitive damages against Raymark. The jury also found that Carvalho knew or should have known on July 5, 1978 that he had a claim for his asbestos-related injuries. The trial court therefore entered judgment for defendants on the ground that Hawaii's two-year statute of limitation for personal injury claims, Haw.Rev.Stat. Sec. 657-7 (1985), barred plaintiffs' cause of action.

Plaintiffs appealed the trial court's judgment, arguing that the court had not instructed the jury that defendants had the burden of proving the date on which plaintiffs' cause of action accrued. We held that the trial court's failure to instruct the jury that defendants had to establish accrual was reversible error, and we remanded the case for retrial solely on the statute of limitation issue. See Carvalho v. Raybestos-Manhattan, Inc., 794 F.2d 454 (9th Cir.1986). On remand, the jury returned a verdict which the trial court interpreted as indicating that the claim was not time-barred, and judgment was entered for plaintiffs reinstating the $500,000 punitive damages award against Raymark. Raymark timely appeals.

ANALYSIS

1. Hawaii Statute of Limitation

We review the district court's application of state law de novo. Edwards v. Teamsters Local Union No. 36, 719 F.2d 1036, 1039 (9th Cir.1983), cert. denied, 465 U.S. 1102, 104 S.Ct. 1599, 80 L.Ed.2d 130 (1984).

The Hawaii statute of limitation for personal injury reads: "Damage to persons or property. Actions for the recovery of compensation for damage of injury to persons or property shall be instituted within two years after the cause of action accrued, and not after, except as provided in Section 657-13 [insanity, infancy or imprisonment]." Haw.Rev.Stat. Sec. 657-7. The district court gave the following instruction to the jury regarding application of this statute:

The Defendant has the burden of proving by a preponderance of the evidence all of the facts necessary to establish when if ever, that Manuel S. Carvalho discovered, or through the exercise of reasonable diligence on his part should have discovered, on or before July 27, 1978: (1) that his asbestos-related lung cancer/asbestosis was caused by asbestos, (2) the Defendant's negligence (or violation of a duty), and (3) the causal connection between the two.

Appellant contends that under Sec. 657-7 the accrual of a claim begins when the plaintiff discovers or should have discovered the cause of his injury rather than when that discovery is joined by awareness of the defendant's negligence and the causal connection between the injury and the negligence. Appellant supports this contention by asserting that Hawaii has confined the Appellant's attack on the district court's interpretation of Sec. 657-7 is without merit. The district court's interpretation finds support in our past decisions. See In re Asbestos Cases, 847 F.2d 523, 527 (1988); Carvalho v. Raybestos-Manhattan, Inc., 794 F.2d at 456. The treatment of Sec. 657-7 and Sec. 657-7.3 in Hawaii Supreme Court opinions reveals that our understanding of Hawaii's personal injury statute of limitation is correct.

interpretation of the statute of limitation embodied in the trial court's jury instructions to the medical malpractice context, which is governed by Hawaii Rev.Stat. Sec. 657-7.3.

Before the enactment of Sec. 657-7.3 in 1973, Hawaii medical malpractice actions were governed by the statute of limitation for property damage and personal injury claims set forth in Sec. 657-7. Yamaguchi v. Queen's Medical Center, 65 Hawaii at 84, 88-9, 648 P.2d 689, 692 (1982). In Yoshizaki v. Hilo Hospital, a pre-1973 case, the Supreme Court of Hawaii held in the medical malpractice context that the statute limiting the time for beginning an action for damages to persons or property did not begin to run until the plaintiff "could reasonably have been aware that she had a claim." 50 Hawaii 150, 154, 433 P.2d 220, 223 (1967). After the passage of Sec. 657-7.3, the Hawaii Supreme Court adopted this standard as the relevant interpretation of both Sec. 657-7 and Sec. 657-7.3. See Yamaguchi v. Queen's Medical Center, 65 Hawaii at 90, 648 P.2d at 692-93.

The fact that Yoshizaki and Yamaguchi are both medical malpractice actions might seem to leave room for doubt as to whether Sec. 657-7 should be interpreted differently outside the malpractice context. But, in Basque v. Yuk Lin Liau, an action for damage to the plaintiff's store caused by leakage from the defendant's broken sewer pipe, the Supreme Court of Hawaii held that Yoshizaki should be extended to cases involving injury to property. See 50 Hawaii 397, 399, 441 P.2d 636, 637 (1968) ("Although there are factual differences between actions to recover damages to persons and property, they are insufficient to justify a different construction of the same statute.... Therefore, on remand, the trial court must determine when the plaintiff knew or in the exercise of reasonable care should have discovered that an actionable wrong has been committed against his property."). It is reasonable to conclude that if Yoshizaki applies to injury to real property, it will apply to personal injury, which is more analogous to medical malpractice.

Hawaii Supreme Court precedent as well as our past decisions thus establish that the district court correctly interpreted Sec. 657-7. Under Hawaii law, an action for personal injury or property damage accrues when the plaintiff knew or in the exercise of reasonable diligence should have known that she had a claim. In the personal injury context, knowledge of a claim involves knowledge that the defendant's negligence or violation of a duty may have caused the injury.

2. Form of the Special Verdict

According to Fed.R.Civ.P. 49(a), the trial court's complete discretion as to whether a special or general verdict is to be returned extends to determining the form of the verdict and interrogatories, provided that the questions asked are adequate to obtain a jury determination of all factual issues essential to judgment. R.H. Baker & Co. v. Smith-Blair, Inc., 331 F.2d 506, 508 (9th Cir.1964). We have a duty to reconcile the jury's special verdict responses on any reasonable theory consistent with the evidence. Ortiz v. Bank of America National, 824 F.2d 692, 696 (9th Cir.1987) (citing Gallick v. Baltimore & O.R.R., 372 U.S. 108, 119-22, 83 S.Ct. 659, 668-69, 9 L.Ed.2d 618 (1963)).

The three factual issues necessary to judgment of when appellees' cause of action accrued should be apparent from the foregoing discussion of the Hawaii statute of limitation. The interrogatories composing the special verdict must have determined clearly whether Carvalho discovered or reasonably should have discovered the damage, the negligent act, and the causal The following interrogatories composed the special verdict:

connection between them more than two years before his claim was filed.

1. By what date, if any, did Manuel S. Carvalho know, or through the exercise of reasonable diligence on his part should have known, that he had diseases diagnosed as abeestos-related lung cancer/asbestosis?

2. By what date, if any, did Manuel S. Carvalho know, or through the exercise of reasonable diligence on his part should have known, that Raymark Industries, Inc. was negligent in the manufacturing of its asbestos-containing products (or violated a duty towards him?)

3. By what date, if any, did Manuel S. Carvalho know, or through the exercise of reasonable diligence on his part should have known, of the causal connection between his lung cancer/asbestosis and the negligence or the violation of a duty by Raymark Industries, Inc.?

The jury answered Interrogatory One with "July 22, 1978" (two years and six days before plaintiffs filed the action). In the answer blank following Interrogatories Two and Three, the jury drew a line. Because the...