Davis v. Celotex Corp., No. 20651

CourtSupreme Court of West Virginia
Writing for the CourtMILLER
Citation187 W.Va. 566,420 S.E.2d 557
Parties, 61 USLW 2112, Prod.Liab.Rep. (CCH) P 13,249 Ronald DAVIS, Executor of the Estate of Jennings Davis, Appellee, v. The CELOTEX CORPORATION, Appellant.
Decision Date21 July 1992
Docket NumberNo. 20651

Page 557

420 S.E.2d 557
187 W.Va. 566, 61 USLW 2112,
Prod.Liab.Rep. (CCH) P 13,249
Ronald DAVIS, Executor of the Estate of Jennings Davis, Appellee,
v.
The CELOTEX CORPORATION, Appellant.
No. 20651.
Supreme Court of Appeals of
West Virginia.
Submitted May 6, 1992.
Decided June 12, 1992.
Rehearing Denied July 21, 1992.

[187 W.Va. 567]

Page 558

Syllabus by the Court

1. When an asbestos manufacturer has actual or constructive knowledge of the severe health hazards caused by a product and continues to manufacture and distribute that product, the manufacturer may be found liable for punitive damages to those injured by the product.

2. At common law, the purchaser of all the assets of a corporation was not liable for the debts or liabilities of the corporation purchased. This rule has since been tempered by a number of exceptions and statutory provisions.

3. A successor corporation can be liable for the debts and obligations of a predecessor corporation if there was an express or implied assumption of liability, if the transaction was fraudulent, or if some element of the transaction was not made in good faith. Successor liability will also attach in a consolidation or merger under W.Va.Code, 31-1-37(a)(5) (1974). Finally, such liability will also result where the successor corporation is a mere continuation or reincarnation of its predecessor.

4. When a corporation acquires or merges with a company manufacturing a product that is known to create serious health hazards, and the successor corporation continues to produce the same product in the same manner, it may be found liable for punitive damages for liabilities incurred by the predecessor company in its manufacture of such product.

5. When the record fails to set out sufficient facts to answer the question of whether substantive due process has been violated by multiple punitive damage awards in asbestos cases, we will decline to address the issue.

6. In cases tried before Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991), in which punitive damages were awarded, we will not set aside such awards if there is a factual basis for the punitive damages, if the punitive damages bear a reasonable relationship to the compensatory damages, and if the parties' main assignment of error is that the trial court's instruction did not contain all of the factors enunciated in Garnes.

Scott Segal, Hostler & Segal, Charleston, and Theodore Goldberg and Tybe A. Brett, Henderson & Goldberg, Pittsburgh, Pa., for appellee.

Kathleen S. McAllister, Jones, Gregg, Creehan & Gerace, Pittsburgh, Pa., for appellant.

[187 W.Va. 568]

Page 559

MILLER, Justice:

The Celotex Corporation appeals a final order of the Circuit Court of Monongalia County, which entered a judgment on a jury verdict awarding Ronald Davis, as executor of the estate of Jennings Davis, $66,000 in compensatory damages and $40,000 in punitive damages because of the asbestos-related death of his father. Celotex contends that the trial court erred in permitting the award of punitive damages against it because: (1) there was insufficient evidence presented at trial that Celotex acted willfully, wantonly, or with malice; (2) punitive damages should not be imposed on a successor corporation based upon the conduct of a predecessor company; (3) multiple punitive damage awards should not be assessed against a manufacturer who mass-markets a defective product; and (4) Celotex was not afforded due process. We disagree; therefore, we affirm the trial court's final order.

I.

FACTS

From 1965 to 1974, Jennings Davis was employed as a plumber/pipefitter by several electric power generating plants. During his employment, Mr. Davis was exposed to asbestos-containing products, which were manufactured by numerous companies, including Celotex. As a result, Mr. Davis developed asbestosis and lung cancer and died from lung cancer in 1987.

On November 26, 1986, Ronald Davis, as executor of his father's estate, filed suit against several asbestos manufacturers, including Celotex. Prior to trial, all of the defendants settled with the plaintiff except Owens-Corning Fiberglas, Owens-Illinois, H-K Porter, and Celotex. Following a month-long trial, the jury awarded the plaintiff $66,000 in compensatory damages and assessed Celotex $40,000 in punitive damages. 1 After denying Celotex's motions for judgment notwithstanding the verdict and for a new trial, the trial court, in a final order dated February 2, 1990, imposed $40,000 in punitive damages against Celotex. The compensatory damages were offset by previous settlements the plaintiff had made with the other defendants. 2

II.

INSUFFICIENT EVIDENCE

Initially, Celotex argues that the $40,000 award for punitive damages is not justified because there was insufficient evidence presented at trial that Celotex or any of its predecessors, particularly Philip Carey Manufacturing Company (Philip Carey), 3 was engaged in willful or wanton conduct. We disagree.

Our law with regard to what evidence will justify an award of punitive damages has existed for nearly one hundred years and is contained in Syllabus Point 4 of Mayer v. Frobe, 40 W.Va. 246, 22 S.E. 58 (1895):

"In actions of tort, where gross fraud, malice, oppression, or wanton, willful, or reckless conduct or criminal indifference to civil obligations affecting the rights of others appear, or where legislative enactment authorizes it, the jury may assess exemplary, punitive, or vindictive damages; these terms being synonymous."

A slightly different version of this standard is found in Syllabus Point 3 of Warden v. Bank of Mingo, 176 W.Va. 60, 341 S.E.2d 679 (1985):

" 'To sustain a claim for punitive damages, the wrongful act must have been done maliciously, wantonly, mischievously,,

Page 560

[187 W.Va. 569] or with criminal indifference to civil obligations. A wrongful act, done under a bona fide claim of right, and without malice in any form, constitutes no basis for such damages.' Syl. pt. 3, Jopling v. Bluefield Water Works & Improvement Co., 70 W.Va. 670, 74 S.E. 943 (1912)."

See also Jarvis v. Modern Woodmen of Am., 185 W.Va. 305, 406 S.E.2d 736 (1991); C.W. Dev., Inc. v. Structures, Inc., 185 W.Va. 462, 408 S.E.2d 41 (1991).

In Harless v. First National Bank in Fairmont, 169 W.Va. 673, 691, 289 S.E.2d 692, 702 (1982), we outlined several reasons for awarding punitive damages: "(1) to punish the defendant; (2) to deter others from pursuing a similar course; and, (3) to provide additional compensation for the egregious conduct to which the plaintiff has been subjected." (Footnote omitted). See also Jarvis v. Modern Woodmen of Am., supra; Perry v. Melton, 171 W.Va. 397, 299 S.E.2d 8 (1982). In note 15 of Hensley v. Erie Insurance Co., 168 W.Va. 172, 183, 283 S.E.2d 227, 233 (1981), we further explained that the possibility of recovering punitive damages can "encourage a plaintiff to bring an action where he might be discouraged by the costs of the action or by the inconvenience" and can also serve as "a substitute for personal revenge by the wronged party." (Citations omitted).

At trial, the plaintiff introduced the testimony of two experts on the health risks associated with exposure to asbestos. The first witness, Dr. Barry Castleman, has authored several publications on the hazards of asbestos, has served as a consultant for numerous federal regulatory agencies, and has taught courses on this topic. Dr. Castleman testified extensively about American medical literature, published as early as 1918, documenting the dangers of asbestos. After reciting the health risks identified in these publications, Dr. Castleman opined that during the 1930s, there was a wealth of published information on the risk of breathing asbestos dust from which asbestos manufacturers should have known of the problem and provided warnings to their workers. 4

The second expert to testify for the plaintiff was Dr. Thomas Mancuso. Dr. Mancuso was the Chief of the Division of Industrial Hygiene for the State of Ohio from 1945 to 1962. In October, 1962, Dr. Mancuso was hired by Philip Carey as a special consultant to assist the company in developing policies and procedures to protect its workers from asbestosis. Philip Carey requested Dr. Mancuso's service because several of its employees had filed workers' compensation claims alleging that they suffered from work-related asbestosis. During his employment, Dr. Mancuso advised Philip Carey about the grave risks associated with exposure to asbestos, including the link between asbestos exposure and cancer. In his final report, dated September 23, 1963, Dr. Mancuso reiterated the dangers of asbestos exposure. He also made a series of recommendations to protect workers who were exposed to asbestos and outlined steps Philip Carey should take to limit its future legal liability. Apparently displeased with this report, Philip Carey fired Dr. Mancuso within a week of its submission. Despite Dr. Mancuso's findings, Philip Carey apparently did nothing.

As we explained in Syllabus Point 1 of Bolling v. Clay, 150 W.Va. 249, 144 S.E.2d 682 (1965):

" 'In determining whether the verdict of a jury is supported by the evidence, every reasonable and legitimate inference, fairly arising from the evidence in favor of the party for whom the verdict was returned, must be considered, and those facts, which the jury might properly find under the evidence, must be assumed as true.' Point 3 Syllabus, Walker v. Monongahela Power Co., 147 W.Va. 825, 131 S.E.2d 736 [ [1963) ]."

Page 561

[187 W.Va. 570] See also Duty v. Walker, 180 W.Va. 149, 375 S.E.2d 781 (1988). Applying this standard to the instant case, we believe that there was sufficient evidence in the record to support the jury's finding that Celotex, through the acts of its predecessor, intentionally, willfully, and with reckless disregard concealed the health risks associated with exposure to asbestos and deliberately decided to take no...

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37 practice notes
  • Arch Mineral Corp. v. Babbitt, Civ. A. No. 2:95-0032.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • August 1, 1995
    ...Litig., 193 W.Va. 119, 454 S.E.2d 413, cert. denied, ___ U.S. ___, 115 S.Ct. 2614, 132 L.Ed.2d 857 (1995); Davis v. Celotex Corp., 187 W.Va. 566, 420 S.E.2d 557 (1992); Blizzard v. National R.R. Passenger Corp., 831 F.Supp. 544 (E.D.Va.1993); Rafael v. Hurst Performance, Inc., 793 F.Supp. 1......
  • West Virginia Div. of Environmental Protection v. Kingwood Coal Co., No. 23876
    • United States
    • Supreme Court of West Virginia
    • July 16, 1997
    ...2-2.84(b)(6) (1996), we need not determine whether Kingwood was a successor-in-interest to KMC. See generally Davis v. Celotex Corp., 187 W.Va. 566, 420 S.E.2d 557 1 The DEP is not represented by the Attorney General in this case, but by their own agency counsel, as is permitted by the stat......
  • Dunn v. HOVIC, No. 91-3837
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 27, 1993
    ...Balbos, 604 A.2d at 472; Fischer v. Johns-Manville Page 1386 Corp., 103 N.J. 643, 512 A.2d 466, 475-80 (1986); Davis v. Celotex Corp., 187 W.Va. 566, 420 S.E.2d 557, 564-66 (1992); Wangen v. Ford Motor Co., 97 Wis.2d 260, 294 N.W.2d 437, 466 (1980); Froud v. Celotex Corp., 107 Ill.App.3d 65......
  • William Dunn, Hess Oil Virgin Islands Corp. v. Hovic, No. 91-3837
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 27, 1993
    ...215-16 (Colo. 1984); Balbos, 604 A.2d at 472; Fischer v. Johns-Manville Corp., 512 A.2d 466, 475-80 (N.J. 1986); Davis v. Celotex Corp., 420 S.E.2d 557, 564-66 (W. Va. 1992); Wangen v. Ford Motor Co., 294 N.W.2d 437, 466 (Wis. 1980); Froud v. Celotex Corp., 437 N.E.2d 910, 913 (Ill. App. 19......
  • Request a trial to view additional results
36 cases
  • Arch Mineral Corp. v. Babbitt, Civ. A. No. 2:95-0032.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • August 1, 1995
    ...Litig., 193 W.Va. 119, 454 S.E.2d 413, cert. denied, ___ U.S. ___, 115 S.Ct. 2614, 132 L.Ed.2d 857 (1995); Davis v. Celotex Corp., 187 W.Va. 566, 420 S.E.2d 557 (1992); Blizzard v. National R.R. Passenger Corp., 831 F.Supp. 544 (E.D.Va.1993); Rafael v. Hurst Performance, Inc., 793 F.Supp. 1......
  • West Virginia Div. of Environmental Protection v. Kingwood Coal Co., No. 23876
    • United States
    • Supreme Court of West Virginia
    • July 16, 1997
    ...2-2.84(b)(6) (1996), we need not determine whether Kingwood was a successor-in-interest to KMC. See generally Davis v. Celotex Corp., 187 W.Va. 566, 420 S.E.2d 557 1 The DEP is not represented by the Attorney General in this case, but by their own agency counsel, as is permitted by the stat......
  • Dunn v. HOVIC, No. 91-3837
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 27, 1993
    ...Balbos, 604 A.2d at 472; Fischer v. Johns-Manville Page 1386 Corp., 103 N.J. 643, 512 A.2d 466, 475-80 (1986); Davis v. Celotex Corp., 187 W.Va. 566, 420 S.E.2d 557, 564-66 (1992); Wangen v. Ford Motor Co., 97 Wis.2d 260, 294 N.W.2d 437, 466 (1980); Froud v. Celotex Corp., 107 Ill.App.3d 65......
  • William Dunn, Hess Oil Virgin Islands Corp. v. Hovic, No. 91-3837
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 27, 1993
    ...215-16 (Colo. 1984); Balbos, 604 A.2d at 472; Fischer v. Johns-Manville Corp., 512 A.2d 466, 475-80 (N.J. 1986); Davis v. Celotex Corp., 420 S.E.2d 557, 564-66 (W. Va. 1992); Wangen v. Ford Motor Co., 294 N.W.2d 437, 466 (Wis. 1980); Froud v. Celotex Corp., 437 N.E.2d 910, 913 (Ill. App. 19......
  • Request a trial to view additional results

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