Blue Cross and Blue Shield v. WR Grace & Co.

• Decision Date: 19 August 1991
• Docket Number: Civ. A. No. 6:89-1287-17.
• Citation: 781 F. Supp. 420
• Court: U.S. District Court — District of South Carolina
• Parties: BLUE CROSS AND BLUE SHIELD OF SOUTH CAROLINA, Plaintiff, v. W.R. GRACE & COMPANY, Defendant.

781 F. Supp. 420

BLUE CROSS AND BLUE SHIELD OF SOUTH CAROLINA, Plaintiff, v. W.R. GRACE & COMPANY, Defendant.

Civ. A. No. 6:89-1287-17.

United States District Court, D. South Carolina, Greenville Division.

August 19, 1991.

COPYRIGHT MATERIAL OMITTED

Daniel A. Speights, C. Alan Runyan, Rodney F. Pillsbury, Speights & Runyan, Hampton, S.C., for plaintiff.

L. Gray Geddie, Jr., Michael S. Thwaites, William H. Floyd, III, William S. Rutchow, Ogletree, Deakins, Nash, Smoak and Stewart, Greenville, S.C., Louis C. Woolf, Baker, Worthington, Crossley, Stansberry & Woolf, Knoxville, Tenn., for defendant.

ORDER

JOSEPH F. ANDERSON, Jr., District Judge.

Blue Cross and Blue Shield of South Carolina ("Blue Cross") brought this action against Defendant, W.R. Grace & Co. ("Grace"), to recover costs associated with the presence and removal of Grace's asbestos-containing fireproofing product, Monokote. After a three week trial, the jury awarded Blue Cross $3,827,675.00 in damages.

This matter now comes before the Court on Grace's motion for a judgment notwithstanding the verdict or, alternatively, for a new trial. Grace has moved for a judgment notwithstanding the verdict on the ground that Plaintiff's claims are barred by the statute of limitations as a matter of law. Alternatively, Grace seeks a new trial on three separate grounds: (1) the Court erred in its charge that the architect is not the agent of Blue Cross; (2) the Court erred in granting Plaintiff's motion for a directed verdict as to the affirmative defenses of contributory negligence and assumption of the risk; and (3) the Court erred in limiting Grace's cross-examination of Plaintiff's rebuttal witness, Michael Thompson. After reviewing the submitted briefs and having heard oral argument, the Court denies Grace's motion for the reasons set forth below.

PLAINTIFF'S CLAIMS ARE NOT BARRED BY THE STATUTE OF LIMITATIONS AS A MATTER OF LAW

Under federal law,¹ in determining a motion for a judgement notwithstanding the verdict, the evidence and all reasonable inferences from it are assessed in light most favorable to the non-moving party. Lovelace v. Sherwin-Williams Co., 681 F.2d 230, 243 n. 14 (4th Cir.1982). The credibility of all evidence favoring the non-moving party is assumed. Tights, Inc. v. Acme-McCrary Corp., 541 F.2d 1047, 1055 (4th Cir.1976). Viewing the evidence this way, "the evidence must then be `of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment could reasonably return a verdict for the non-moving party.'" Crinkley v. Holiday Inns, Inc., 844 F.2d 156, 160 (4th Cir.1988), quoting, Wyatt v. Interstate & Ocean Trans. Co., 623 F.2d 888, 891 (4th Cir.1980). Under this standard, viewing the evidence and all reasonable inferences in light most favorable to Blue Cross, the Court finds a reasonable jury could find that its claims were not barred by the statute of limitations. As such, the statute of limitations defense was properly submitted to and determined by the jury.

Grace argues that Plaintiff's suit is barred as a matter of law by the statute of limitations based upon the cumulative knowledge of various Blue Cross employees. Grace principally relies upon the testimony of three witnesses. Joe Sullivan, Chairman of the Board of Directors of Blue Cross, testified that when he came to work for Blue Cross in 1971, he was aware that asbestos had been banned in several cities in New England. At the time Mr. Sullivan began work at Blue Cross, the fireproofing had already been installed and the tower's construction was substantially complete. However, Mr. Sullivan also testified that he did not know the fireproofing in the Blue Cross tower contained asbestos until January, 1989.

Grace also points to a letter George Wilson, Vice President of Administrative Services at Blue Cross, received during the time of construction. Mr. Wilson underlined a sentence that referenced sprayed asbestos fireproofing. At trial, Mr. Wilson testified that he did not know asbestos was hazardous at that time. Mr. Wilson further stated that he did not learn the Monokote fireproofing contained asbestos until he had it tested in January, 1989.

Finally, Grace references the testimony of Willie Mullins. Mr. Mullins has worked on the custodial staff at Blue Cross since May 2, 1983. Mr. Mullins testified that, during a walk-through of the building shortly after he began work, someone told him the fireproofing contained asbestos. However, Mr. Mullins also stated that he did not know that asbestos might be harmful to his health until much later. This is evidenced by the fact that for years Mr. Mullins worked in the dusty conditions around the fireproofing without respiratory protection. It was undisputed at trial that the work practices above the ceiling and around the fireproofing were dramatically altered under the operations and maintenance program implemented in 1989, after Blue Cross discovered the fireproofing contained asbestos.

There was ample evidence from which a jury could reasonably find that Blue Cross did not know it had a cause of action against Grace until January, 1989. That is the period that several Blue Cross employees (e.g. Joe Sullivan, Robert Leichtle and George Wilson) testified the issue of asbestos in the Monokote first came to their attention. It cannot be said as a matter of law that Blue Cross knew it had a cause of action against Grace prior to May 19, 1983. The issue was properly presented to the jury,² and this Court will not overturn the jury's findings that Plaintiff's claims are not barred.

THE COURT PROPERLY INSTRUCTED THE JURY THAT THE ARCHITECT IS NOT THE AGENT OF THE PLAINTIFF

The Court charged the jury that the architect is not the agent of the plaintiff for statute of limitations purposes. This issue was thoroughly argued in the numerous jury charge conferences the Court had with counsel for both sides. Grace presents no new arguments why this Court should change its previous ruling. Based on the law and the evidence, the Court adheres to its charge.

The crux of Grace's argument is that the architect is the agent of the owner. As an agent, any knowledge available to the architect about the hazards of asbestos would be imputed to the owner, Blue Cross. This argument fails legally and factually. An architect may be both an independent contractor and an agent, depending upon the function the architect is performing. See, State ex rel. McLeod v. C & L Corp., Inc., 280 S.C. 519, 313 S.E.2d 334, 338 (Ct.App.1984).

The architect is an independent contractor of the building owner for matters concerning the preparation of plans and specifications. 5 Am.Jur.2d, Architects, § 6 (1962), and Acret, Architects and Engineers: Their Professional Responsibilities, § 8.3 (1977).³ Because a building owner's control over an architect extends only to the final product of the specifications, and not to the means by which they are produced, the architect is an independent contractor. Young v. Warr, 252 S.C. 179, 165 S.E.2d 797, 802 (1969). See also, Gantt v. Van der Hoek, 251 S.C. 307 162 S.E.2d 267 (1968) (builder furnishing all labor, materials and supervision and constructing residence according to plans is an independent contractor, not an agent, of owners). It is not contested that the architect makes his selection of fireproofing products as part of the preparation of the plans and specifications.

An architect is an agent of the owner only for those matters regarding the architect's supervision over the construction of the building. 5 Am.Jur.2d, Architects, § 6 (1962). Accord, Hines v. Farr, 235 S.C. 436, 112 S.E.2d 33 (1960) ("an architect, in the performance of his supervisory functions with respect to a building under construction, ordinarily acts as the agent and representative of the owner.") The cases cited by Grace for the proposition that the architect is an agent of the building owner specifically reference the agency relationship to the architect's duties in supervising construction.⁴

Grace asserts that the architect could have issued a change order regarding his selection of products during the supervision of the construction phase. Grace emphasizes that the contract between Blue Cross and the architect provides that the architect shall be the agent of the owner during construction. Thus, by Grace's argument, the knowledge held by the architect regarding the development of the plans and specifications becomes imputable once construction begins.

This argument undermines the legal distinction the law provides for the different roles of an architect. The Court sees no justification for imputing the architect's knowledge about the selection of building materials to an owner simply because construction begins on the building as specified and designed.

Even if the charge was in error, under the facts of this case, such error would not warrant a new trial. There was no evidence in this case that the architect for this building knew anything of the hazards of asbestos or that Monokote contained asbestos. In its brief, Plaintiff points out that Grace deposed the architect in this case. Yet Grace presented none of this testimony to the Court or jury.

Grace contends that the hazards of asbestos were widely known during the time the Blue Cross tower was constructed. This assertion is severely undercut by the fact that Grace did not, at any time, place warnings on the bags of Monokote. There was no evidence that at any time prior to the installation of Monokote in the Blue Cross tower did Grace place any warnings in its advertising brochures or in Sweet's catalogs for architects.⁵ Documents presented by the plaintiff during the cross-examination of Grace's witness, Thomas Egan, indicate that Grace made an affirmative decision not to call the asbestos hazard to the attention of architects. Furthermore, Plaintiff called Grace's salesman who testified by deposition that he did not know Monokote...