Buckholtz v. Am. Optical Corp.
| Decision Date | 24 January 2023 |
| Docket Number | 56257-0-II |
| Court | Washington Court of Appeals |
| Parties | JASON BUCKHOLTZ as Personal Representative for the Estate of DENNIS G. WOODRUFF, Respondent, v. AMERICAN OPTICAL CORPORATION; CROWN CORK &SEAL COMPANY, INC.; METROPOLITAN LIFE INSURANCE COMPANY; NORTH COAST ELECTRIC COMPANY; PFIZER, INC.; UNION CARBIDE CORPORATION; WEYERHAEUSER COMPANY, individually and as successor-in interest to WILLAMETTE INDUSTRIES, INC., R.-W PAPER COMPANY and WESTERN KRAFT; WEYERHAEUSER NR COMPANY; ZIDELL MARINE CORPORATION; ZIDELL DISMANTLING, INC.; PON NORTH AMERICA, INC., individually and as successor to ZIDELL VALVE CORPORATION; GENERAL ELECTRIC COMPANY; GOULDS PUMPS (IPG), LLC; IMO INDUSTRIES, INC., individually and as successor-in interest to DE LAVAL TURBINE, INC.; ITT LLC, as successor- in interest to FOSTER VALVES; VIACOMCBS, INC.; WARREN PUMPS, LLC, individually and as successor-in interest to QUIMBY PUMP COMPANY; and THE PORT OF TACOMA, Defendants, ZIDELL EXPLORATIONS, INC., Appellant. |
UNPUBLISHED OPINION
Zidell Explorations Inc. appeals an $11.2 million judgment in favor of Dennis Woodruff following a jury verdict. Woodruff's lawsuit arose from his exposure to asbestos in the early 1970s while working dismantling ships as an employee of Zidell Dismantling Inc., a related but separate corporation from Zidell Explorations.[1]
Woodruff's liability theory was that Zidell Explorations owed him a general duty of care because it owned at least one and possibly more of the ships that Zidell Dismantling dismantled. Woodruff also claimed that Zidell Explorations was liable because it was the guarantor of Zidell Dismantling's lease with the Port of Tacoma, which required Zidell Dismantling to comply with all safety regulations. Zidell Explorations filed motions for judgment as a matter of law under CR 50(a) and (b), arguing that it owed no duty to Woodruff even if it did own the ships and despite the lease guarantee. The trial court denied the motions. Zidell Explorations appeals the denial of its CR 50 motions.
In 2017, Zidell Dismantling destroyed a number of documents that Woodruff claimed must have included records showing whether Zidell Explorations owned some of the ships that Zidell Dismantling dismantled. The trial court concluded that this destruction of documents constituted spoliation of evidence and as a sanction instructed the jury that it could infer that the ship-ownership records would have been unfavorable to Zidell Explorations. Zidell Explorations appeals the trial court's conclusion that spoliation occurred and challenges the language of the adverse inference instruction.
We hold that (1) Zidell Explorations owed a duty to Woodruff as an owner of at least one of the ships on which Woodruff worked but not as a guarantor on Zidell Dismantling's lease with the Port of Tacoma, and (2) the trial court erred in concluding that Zidell Explorations engaged in spoliation of evidence. Accordingly, we remand for the trial court to vacate the judgment entered against Zidell Explorations and for a new trial.
Zidell Explorations was formed in 1912. The company's headquarters were in Portland, Oregon. Zidell Explorations began dismantling decommissioned Navy ships in Portland in the 1950s.
Zidell Dismantling was formed in 1960. Zidell Dismantling performed ship dismantling operations in Tacoma. The two companies had common owners and officers, but they were operated and maintained as separate corporations. Emery Zidell was the president and part owner of both companies in the early 1970s. The two companies' operations were very similar and they coordinated some of their activities. They also placed joint advertisements for selling and buying vessels and their parts.
Zidell Dismantling entered into a lease with the Port of Tacoma which stated that "Tenant agrees to keep said premises in a clean and safe condition and to comply with all police sanitary or safety laws and all applicable regulations or ordinances of all governmental bodies having authority over said premises." Ex. 123 at 33. The lease was signed by Emery Zidell. Below the lease signature line was the following provision: "The undersigned here jointly and severally guarantee compliance with all of the provisions of the foregoing Lease and Rental Agreement." Ex. 123 at 34. Emery Zidell signed this guarantee on behalf of Zidell Explorations, as did another entity whose name is illegible.
In 1981, Zidell Dismantling stopped dismantling ships and was renamed Zidell Marine Corporation. For clarity, we will refer to this company as Zidell Dismantling despite the name change. And in 1997, Zidell Explorations was sold and merged into a different company.
Woodruff worked for Zidell Dismantling from May 10, 1970 to July 17, 1973. He first worked as a burner for 14 months. His job was to use large torches to carve up parts of the ships into smaller sections. Part of being a burner included removing asbestos insulation material from pipes and placing it on the pier. But Woodruff never worked aboard the ships as a burner, only on the back lot where the scrap and debris piles ended up. Woodruff then worked as a laborer. Laborers would do any general labor that was needed throughout the job site, including working on the ships being dismantled. Woodruff testified that he was exposed to asbestos during his time at Zidell Dismantling.
One ship that Woodruff worked on as a laborer was the USS Philippine Sea. There was evidence that Zidell Explorations owned this ship, and it was sent to Tacoma to begin the dismantling process. Dismantling began on April 4, 1971, and on July 19, 1971 the ship was moved to Portland for Zidell Explorations to complete the dismantling.
During his years working at Zidell Dismantling, Woodruff was not warned about the hazards of asbestos by anyone at Zidell Dismantling, Zidell Explorations, or the Port of Tacoma. Nor were there any signs on board the ships being dismantled warning workers about asbestos.
In August 2020, Woodruff started experiencing symptoms and was diagnosed with mesothelioma from being exposed to asbestos.
Woodruff subsequently filed a lawsuit against a number of parties, including Zidell Dismantling, Zidell Explorations, and the Port of Tacoma. Woodruff later dismissed Zidell Dismantling from the lawsuit because he was barred from suing his employer under the Industrial Insurance Act, RCW 51.04.010, and there was no evidence that the case fell within the deliberate injury exception in RCW 51.24.020.
Woodruff eventually settled with all other defendants except Zidell Explorations and the Port of Tacoma.
In response to discovery, Zidell Dismantling produced a list of ships Zidell Dismantling dismantled between 1970 and 1974. Zidell Dismantling supplemented this answer with a list of ships that were worked on by Zidell Explorations in Portland which included the USS Philippine Sea. The trial court referred to these documents as "the ship lists." Clerk's Papers (CP) at 4624. The ship lists contained specific information regarding each ship, including the ship name and type, purchase price, declared value, arrival date, when work began and ended, and notes. The ship lists did not state which entity owned the ships.
William Gobel, the vice president and chief operating officer of Zidell Dismantling, testified as a CR 30(b)(6) designee for both Zidell Dismantling and Zidell Explorations. When testifying on behalf of Zidell Explorations, Gobel testified as follows:
Kathryn Silva, Zidell Dismantling's general counsel, certified both Zidell Dismantling's and Zidell Explorations' discovery responses. Woodruff deposed Silva, and she testified that all of the discovery responses were accurate and complete. But two hours after Silva's deposition ended, Zidell Explorations sent Woodruff a letter attaching a document regarding a 1969 special meeting of Zidell Dismantling's board of directors. The document stated, "[T]he Directors discussed and determined that purchase of vessels for dismantling would thereafter be made by ZIDELL DISMANTLING, INC. rather than by ZIDELL EXPLORATIONS, INC." CP at 1680. The trial court referred to this document as the "board meeting document." CP at 4623.
Woodruff then filed a motion for CR 37 discovery sanctions primarily based on Zidell Explorations' failure to timely produce the board meeting document. Woodruff argued that this document was evidence that Zidell Explorations owned at least some of the ships that were salvaged at Zidell Dismantling. Woodruff requested as a sanction that the fact that he was exposed to asbestos on ships Zidell Explorations owned be taken as established under CR 37(b)(2)(A).
While the motion was pending, the trial court authorized another deposition of Silva. Silva testified about historical litigation involving Zidell entities. In 1997, Zidell Explorations and other Zidell entities filed a lawsuit in Oregon against its insurers seeking insurance coverage for environmental liability arising over its dismantling activities in Portland. That lawsuit was mostly settled by 2000. In 2002, Zidell Dismantling filed a lawsuit in Washington seeking insurance coverage for environmental liability arising over its dismantling activities in Tacoma. And before 1997, Zidell Valves, a division of Zidell Explorations, had been...
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