Elmer v. Tenneco Resins, Inc.

• Decision Date: 01 November 1988
• Docket Number: Civ. A. No. 86-295-CMW.
• Citation: 698 F. Supp. 535
• Parties: Nina ELMER, Individually, and in her capacity as Widow of George W. Elmer, Deceased, and as personal representative of his estate, Plaintiff, v. TENNECO RESINS, INC., a Delaware corporation, Tenneco Polymers, Inc., a Delaware corporation, Tenneco Corporation, a Delaware corporation, and Tenneco Inc., a Delaware corporation, Defendants.
• Court: U.S. District Court — District of Delaware

698 F. Supp. 535

Nina ELMER, Individually, and in her capacity as Widow of George W. Elmer, Deceased, and as personal representative of his estate, Plaintiff, v. TENNECO RESINS, INC., a Delaware corporation, Tenneco Polymers, Inc., a Delaware corporation, Tenneco Corporation, a Delaware corporation, and Tenneco Inc., a Delaware corporation, Defendants.

Civ. A. No. 86-295-CMW.

United States District Court, D. Delaware.

November 1, 1988.

Ben T. Castle, and Alison Whitmer Tumas, of Young, Conaway, Stargatt & Taylor, Wilmington, Del., for plaintiff.

James T. McKinstry, and Emily B. Horton, of Richards, Layton & Finger, Wilmington, Del. (George S. Flint, and Joseph T.C. Hart, of Fulton, Duncombe & Rowe, New York City, of counsel), for defendants.

OPINION

CALEB M. WRIGHT, Senior District Judge.

The plaintiff, Nina Elmer, individually and as a personal representative of the Estate of George W. Elmer, brought this product liability action on June 30, 1986, against defendants Tenneco Resins, Inc. ("TRI"), Tenneco Polymers, Inc., Tenneco Corporation and Tenneco Inc. (formerly Tennessee Gas Transmission Company and hereinafter "TGT"). She alleges that the defendants are jointly and severally liable for her husband's 1984 death, which, the parties agree, was caused by deposits of an X-ray contrast material called Thorotrast in the decedent's liver.

The plaintiff alleges that the Thorotrast was administered to Mr. Elmer in 1952 at the Veterans Administration Hospital in Washington, D.C., and was manufactured and sold by Heyden Chemical Corporation ("Heyden"). She further alleges that the defendants are liable as successors to Heyden's liability. The defendants dispute the source of the drug and deny any successor liability. Defendants moved for summary judgment, alleging, inter alia, that they are not liable for the alleged torts of Heyden and that the plaintiff's claims must be dismissed because she cannot produce contemporaneous evidence of the injection sufficient to establish a prima facie case of negligence, strict liability, res ipsa loquitur or breach of warranty. This Court has jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).

For the reasons stated herein, the defendants' motion is granted in part and denied in part.

I. FACTS

On October 30, 1984, plaintiff's husband, George W. Elmer, died of liver failure. An autopsy revealed that the cause of Mr. Elmer's death was angiosarcoma (cancer) of the liver, induced by an injection of Thorotrast many years earlier.

For a number of years prior to December 1, 1953, Heyden, a Delaware corporation, owned the U.S. patent and trademark for and was the sole manufacturer of Thorotrast in the United States. By an agreement made on November 3, 1953, Heyden sold its Antibiotic Division, including its Thorotrast assets, inventory, patent and trademark, to American Cyanamid Company ("Cyanamid"). Pursuant to the terms of the sales agreement, Heyden agreed to indemnify Cyanamid against claims arising from the operation of the antibiotic division prior to December 1953. Cyanamid owned the Thorotrast business until May 1954, when it sold the equipment, inventories and all other rights of the Thorotrast business to Testagar & Co., Inc.

After the sale of its Antibiotic Division, Heyden remained in business for nearly ten years. In 1957, Heyden changed its name from Heyden Chemical Corporation to Heyden Newport Chemical Corporation ("Heyden Newport"). It remained a Delaware corporation.

On June 28, 1963, Heyden Newport entered into a "Plan of Reorganization" with Tennessee Gas Transmission Company ("TGT"), also a Delaware corporation, and HDN Corporation ("HDN"), also a Delaware corporation and a wholly owned subsidiary of TGT. The 1963 Plan called for Heyden Newport to transfer all of its assets, properties, business, goodwill and liability to HDN in exchange for common stock of TGT. Article 5.3 of the Plan provided that HDN would assume those liabilities of Heyden Newport — whether absolute, contingent or otherwise, and whether or not reflected on Heyden Newport's balance sheet — that existed at the closing date of October 4, 1963.¹ The actual extent and effect of this assumption of liabilities is one of the principal disputes in this case, as detailed below. The Plan also provided that HDN would continue the business of Heyden Newport and that HDN would continue to employ the employees of Heyden Newport.

After the closing, which completed a Sale of Assets under Section 271 of the Delaware General Corporation Law, 8 Del.C. § 271 (1983), Heyden Newport filed a Certificate of Dissolution under the name Denport Corporation. All of the officers of Heyden Newport assumed the same offices with HDN.

TGT organized and incorporated HDN for the express purpose of accepting a transfer of Heyden Newport assets. HDN had no independent office, and it shared a post office box with its parent, TGT. The wholly owned subsidiary was capitalized solely by funds from TGT, for which it paid no consideration. HDN never had any employees, and its original officers and directors were all employees of TGT and were paid no salary by HDN.

A series of name changes followed. Within a year of the 1963 closing, HDN changed its name to Heyden Newport Chemical Corporation, and in 1965 Heyden Newport changed its name to Tenneco Chemicals, Inc. In 1966, TGT changed its name to Tenneco Inc. In 1983, Tenneco Chemicals, Inc. changed its name to Tenneco Resins, Inc. ("TRI"). Subsequent to the filing of the complaint in this case, Tenneco Inc. changed its name to Tennessee Gas Pipeline Company ("TGP").

As noted, the plaintiff originally sued four entities. However, the plaintiff has dropped her claims against Tenneco Polymers, Inc. and Tenneco Corporation. Therefore, summary judgment as to those two companies is granted. There remain, then, two defendants — Tenneco Resins, Inc., ("TRI") and Tenneco Inc. (now "TGP"). The plaintiff asserts liability against TRI on the ground that TRI succeeded to the liabilities of Heyden Newport. She asserts liability against Tenneco Inc. on the ground that Tenneco Inc. dominated or acted as the agent of TRI. TRI has never itself manufactured, promoted or sold Thorotrast.

II. SUMMARY JUDGMENT STANDARD

Under Federal Rule of Civil Procedure 56(c), a moving party is entitled to summary judgment when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Wilmington Housing Auth. v. Pan Builders, Inc., 665 F.Supp. 351, 353 (D.Del.1987). The Court must view all the facts, and any reasonable inference from those facts, in the light most favorable to the party opposing summary judgment. Id.

For a party to prevail on summary judgment in a contract action, the Court must be convinced that the contractual terms present only a question of law. Alexandria Coca-Cola Bottling Co. v. Coca-Cola Co., 637 F.Supp. 1220, 1225 (D.Del.1984) (holding that ambiguity in meaning of contractual phrase precluded summary judgment). That is, the Court must determine whether the language "is so clear that it can be read only one way." Id. at 1226 (quoting Landtect Corp. v. State Mutual Assurance Co. of America, 605 F.2d 75, 80 (3d Cir.1979)). If the non-moving party presents a reasonable reading of the contract that varies from the interpretation offered by the movant, then a question of fact exists which can only be resolved through trial. 637 F.Supp. at 1226.

However, not every factual ambiguity necessitates a trial. By its very terms, the standard of Rule 56(c) provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-28, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986).

III. DISCUSSION

A. Withdrawn Claims

As noted, plaintiff has withdrawn her claims against Tenneco Polymers, Inc. and Tenneco Corporation. Consequently, summary judgment as to those entities is granted. Plaintiff has also withdrawn her claims for breach of express warranties, and summary judgment is granted as to those claims.

Finally, plaintiff concedes that, without a contemporaneous medical record of Mr. Elmer's Thorotrast injection, she cannot prove that the Thorotrast administered to Mr. Elmer was at all times under the control of Heyden Chemical Corporation. Therefore, she is not pursuing her cause of action based on res ipsa loquitur, and summary judgment is granted on that claim.

B. Breach of Implied Warranty

Mr. Elmer allegedly received his Thorotrast injection in 1952. He died on October 30, 1984, and his wife filed suit on June 30, 1986. The defendants argue that Delaware's borrowing statute mandates application of Delaware's statute of limitations and that, under Delaware law, plaintiff's claims for breach of implied warranty are time barred. The plaintiff contends that the District of Columbia's substantive law and statute of limitations should apply to this case and that, under this law, her claims for breach of implied warranty are timely.

The defendants are correct, and plaintiff's claims for breach of implied warranty are time barred. This Court, sitting in diversity, must apply Delaware conflict of law rules. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). A court must apply Delaware's borrowing statute, 10 Del.C. § 8121, when a non-Delaware resident brings a cause of action in a Delaware court and the cause of action arose outside of Delaware. McIntosh v. Arabian American Oil Co., 633 F.Supp. 942, 945 (D.Del. 1986). The plaintiff here is a citizen of Maryland and the defendant corporations are incorporated in Delaware. Assuming arguendo that Mr. Elmer did receive a Thorotrast injection in Washington, D.C., that...