Ann M. S. v. Chevron Corp. (In re New York City Asbestos Litigation)

• Decision Date: 21 February 2019
• Docket Number: No. 8,8
• Citation: 123 N.E.3d 218,33 N.Y.3d 20,99 N.Y.S.3d 734
• Parties: In the MATTER OF NEW YORK CITY ASBESTOS LITIGATION. Ann M. South, Individually and as Executor of Mason T. South, Respondent, v. Chevron Corporation, Individually and as Successor by Merger to Texaco Inc., et al., Appellant, et al., Defendant.
• Court: New York Court of Appeals Court of Appeals

33 N.Y.3d 20

123 N.E.3d 218

99 N.Y.S.3d 734

In the MATTER OF NEW YORK CITY ASBESTOS LITIGATION.Ann M. South, Individually and as Executor of Mason T. South, Respondent,

v.Chevron Corporation, Individually and as Successor by Merger to Texaco Inc., et al., Appellant, et al., Defendant.

No. 8

Court of Appeals of New York.

February 21, 2019

OPINION OF THE COURT

WILSON, J.

Mason South and his wife sued Chevron Corporation¹ and several other defendants, alleging that the defendants are responsible for causing his mesothelioma, from which he died in May 2015. Chevron moved for summary judgment based on a release Mr. South signed when he settled a 1997 lawsuit he filed against Texaco, Inc. and many other defendants, based on his exposure to asbestos. Supreme Court denied Chevron's motion for summary judgment, reasoning that the record at this stage of the proceedings does not meet Chevron's heightened burden, under the Federal Employers' Liability Act (FELA) and admiralty law, to demonstrate that the release forecloses the claims in the present lawsuit. The Appellate Division affirmed, with one Justice dissenting ( 153 A.D.3d 461, 62 N.Y.S.3d 309 [1st Dept. 2017] ), and certified to this Court the question of whether its order was properly made. We answer that question affirmatively.

I.

Mason South worked shipboard as a merchant marine from 1945 to 1982, at which point he retired. During 1953–1955, he worked aboard ships owned by Texaco. In 1997, fifteen years after his last voyage, he, along with hundreds of other plaintiffs, filed individual lawsuits against Texaco and 115 other defendants (including both shipowners and asbestos manufacturers), in the United States District Court for the Northern District of Ohio. All of these plaintiffs were represented by the Jaques Admiralty Law Firm, which also used the name "Maritime Asbestosis Legal Clinic." Mr. South's lawsuit alleged that he "spent his life as a seaman ... plying the waters" during which time, on ships owned by Texaco and others, he was "exposed to asbestos friable fibers causing him to breathe into his system carcinogenic asbestos dust."

A few weeks after Texaco was served with Mr. South's complaint, Texaco reached a settlement with Mr. South and other plaintiffs represented by the Jaques Admiralty Law Firm. The settlement between Texaco and Mr. South was effectuated by the entry of a judgment of dismissal with prejudice of all the claims brought by Mr. South as well as by a release executed by Mr. South, dated December 26, 1997. Although Chevron asserts, without challenge, that Texaco made a single lump-sum payment to settle the claims against it in all the maritime asbestos cases brought in the Northern District of Ohio, the record does not contain any evidence of the number or identity of the cases settled, the amount paid by Texaco, or the basis for distribution of the settlement amount to individual plaintiffs. Plaintiffs claim that Mr. South's share of Texaco's total settlement payment was $ 1,750, which Chevron does not dispute. Chevron alleges that Texaco was not involved in the determination of what portion of the total sum it paid in settlement would be paid to Mr. South, which plaintiffs do not dispute.

Two decades later, on February 4, 2015, Mr. and Mrs. South filed the instant lawsuit in New York Supreme Court against Chevron (as successor by merger to Texaco) and several other defendants, seeking to recover for Mr. South's "serious, incurable and progressive asbestos-related disease" resulting from his exposure to asbestos shipboard, "during the years 1945 through 1982." As against Chevron, the lawsuit pleaded three causes of action: (I) a claim under the Jones Act, 46 U.S.C. § 30104 ; (II) a claim under federal admiralty and maritime law; and (III) a claim on behalf of Mrs. South for loss of consortium. When Mr. South passed away, his estate was substituted for him in this lawsuit.

Chevron, relying on the 1997 release, moved for summary judgment in Supreme Court. Supreme Court denied the motion on the ground that the record did not unequivocally demonstrate the validity of the release under Section 5 of FELA. The Appellate Division affirmed. Like Supreme Court, the Appellate Division concluded that the record did not demonstrate Chevron's entitlement to summary judgment, because the release did not specifically mention mesothelioma, which then required the court to determine whether extrinsic evidence entitled Chevron to summary judgment. Pointing to the "meager consideration" and the lack of any diagnosis of mesothelioma as to Mr. South at the time he settled, the Appellate Division concluded that the record left open the question of whether the release pertained to an existing pulmonary condition and the fear of some future asbestos-related disease, or if it was intended to release all future asbestos-related diseases arising from Mr. South's employment by Texaco. The parties agree that, at the time he executed the release, Mr. South suffered from a nonmalignant pulmonary disease but not from mesothelioma or cancer.

II.

"To grant summary judgment, it must clearly appear that no material and triable issue of fact is presented" ( Glick & Dolleck, Inc. v. Tri–Pac Export Corp. , 22 N.Y.2d 439, 441, 293 N.Y.S.2d 93, 239 N.E.2d 725 [1968] ). "Summary judgment should not be granted where there is any doubt as to the existence of a factual issue or where the existence of a factual issue is arguable" ( Forrest v. Jewish Guild for the Blind , 3 N.Y.3d 295, 315, 786 N.Y.S.2d 382, 819 N.E.2d 998 [2004], citing Glick , 22 N.Y.2d at 441, 293 N.Y.S.2d 93, 239 N.E.2d 725 ] ). On summary judgment, " ‘facts must be viewed in the light most favorable to the non-moving party’ " ( Vega v. Restani Constr. Corp. , 18 N.Y.3d 499, 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 [2012], quoting Ortiz v. Varsity Holdings, LLC , 18 N.Y.3d 335, 339, 937 N.Y.S.2d 157, 960 N.E.2d 948 [2011] ), and "the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" ( Alvarez v. Prospect Hosp. , 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ).

Chevron claims the 1997 release entitles it to summary judgment because the release unequivocally demonstrates that Mr. South previously released the claims he now seeks to pursue. The sole question presented to us on this appeal is whether Chevron has established that the release, coupled with the 1997 complaint, eliminates all material questions of fact and proves that the release bars the claims here as a matter of law. Answering that question requires us to consider the protections afforded to Mr. South by admiralty law and Section 5 of FELA ( 45 U.S.C. § 55 ), which is incorporated into the Jones Act by 46 U.S.C. § 30104.

III.

We turn first to the question of whether plaintiffs bear the burden to show the invalidity of the release or Chevron bears the burden to show its validity. In Garrett v. Moore–McCormack Co. , 317 U.S. 239, 63 S.Ct. 246, 87 L.Ed. 239 (1942), the United States Supreme Court considered the law applicable to a release executed by a merchant marine in favor of a shipowner. The merchant marine brought, in Pennsylvania state court, both a Jones Act claim and an admiralty claim for maintenance and cure; the Court noted that the two causes of action were "independent and cumulative" ( 317 U.S. 239, 240 n. 2, 63 S.Ct. 246 ). The Pennsylvania courts applied their state-law rule that a plaintiff bears the burden to show the invalidity of a release by "clear, precise and indubitable" evidence, instead of the federal admiralty rule that the defendant bears the burden of proving the validity of the release ( id. at 242, 63 S.Ct. 246 ). The Supreme Court reversed, holding that "a seaman in admiralty who attacks a release has no such burden imposed upon him as that to which the Pennsylvania rule subjects him" ( id. at 246, 63 S.Ct. 246 ). Although the Court did not, in that regard, expressly state that it was treating the Jones Act claim as one "in admiralty," it did state that "the Jones Act is to have a uniform application throughout the country, unaffected by ‘local views of common law rules,’ " ( id. at 244, 63 S.Ct. 246 [citing Panama Railroad Co. v. Johnson , 264 U.S. 375, 392, 44 S.Ct. 391, 68 L.Ed. 748 [1924] ). The Court went on to hold "the burden is upon one who sets up a seaman's release to show that it was executed freely, without deception or coercion, and that it was made by the seaman with full understanding of his rights" ( 317 U.S. at 248, 63 S.Ct. 246 ).

Six years later, in Callen v. Pennsylvania Railroad Co. , 332 U.S. 625, 68 S.Ct. 296, 92 L.Ed. 242 (1948), the Court rejected Callen's argument "that the burden should not be on one who attacks a release, to show grounds of mutual mistake or fraud, but should rest upon the one who pleads such a contract, to prove the absence of such grounds" ( 332 U.S. 625, 629, 68 S.Ct. 296 ), thus placing the burden to prove invalidity on the plaintiff—the opposite of the holding in Garrett . Callen concerned a railroad worker, not a plaintiff in admiralty, and its decision did not purport to change the holding in Garrett that in the case of mariners, the burden rests on the employer to prove the validity of the release. Consistent with that Supreme Court precedent, Chevron acknowledges that Garrett applies to plaintiff's claims and places on Chevron the burden to prove the release's validity.

IV.

The Jones Act incorporates FELA, including Section 5 thereof. Section 5 provides in relevant part: "Any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void" ( 45 U.S.C. § 55 ). Callen makes clear that Section 5 does not bar employers from settling claims brought against them by...