Farrall v. Armstrong Cork Co.

• Decision Date: 03 November 1982
• Citation: 457 A.2d 763
• Parties: James FARRALL and Leota Farrall, his wife, Plaintiffs, v. ARMSTRONG CORK COMPANY, Atlas Asbestos Corporation, a subsidiary and/or division of Bell Asbestos Mines, Ltd., and Gale Corporation, Defendants. ARMSTRONG CORK COMPANY and Gale Corporation, Third Party Plaintiffs, v. A.C. & S., INC., Catalytic, Inc. and Babcock & Wilcox, et al., Third Party Defendants. New Castle County. Submitted:
• Court: Delaware Superior Court

Page 763

457 A.2d 763

James FARRALL and Leota Farrall, his wife, Plaintiffs, v. ARMSTRONG CORK COMPANY, Atlas Asbestos Corporation, a

subsidiary and/or division of Bell Asbestos Mines,

Ltd., and Gale Corporation, Defendants.

ARMSTRONG CORK COMPANY and Gale Corporation, Third Party Plaintiffs, v. A.C. & S., INC., Catalytic, Inc. and Babcock & Wilcox, et

al., Third Party Defendants.

Superior Court of Delaware,

New Castle County.

Submitted: Nov. 3, 1982.

Decided: Jan. 7, 1983.

On Motion for Reargument: Jan. 28, 1983.

Third Party Defendants Motions for Summary Judgment. Granted in Part. Denied in Part.

James T. McKinstry of Richards, Layton & Finger, Wilmington, for third party plaintiff Armstrong Cork Co.

Phebe S. Young of Bayard, Brill & Handelman, P.A., Wilmington, for third party plaintiff Gale Corp.

Samuel R. Russell, J. Michael Johnson of Biggs & Battaglia, Wilmington, for third party defendant AC & S, Inc.

Dennis D. Ferri of Becker & Ferri, P.A., Wilmington, for third party defendant Catalytic, Inc.

Stuart B. Young of Young, Conaway, Stargatt & Taylor, Wilmington, for third party defendant Babcock & Wilcox.

WALSH, Judge.

In this products liability action a former asbestos worker seeks recovery for certain pulmonary ailments he sustained as the result of his alleged exposure to asbestos products manufactured or distributed by the primary defendants, Keene Corporation, Armstrong Cork Company, Atlas Asbestos Corporation and Gale Corporation. Plaintiff's wife also seeks recovery, derivatively for loss of consortium and directly for alleged asbestos contamination as a result of handling her husband's clothing. Two of the primary defendants, Gale and Armstrong, have joined as third-party defendants a number of additional manufacturers and distributors of asbestos material whose products may have come into contact with the husband-plaintiff during his work life, as well as three entities which employed him. These former employers, Armstrong Contracting & Supply Corp. (AC & S), Catalytic, Inc. (Catalytic) and Babcock and Wilcox Company (Babcock) have moved for summary judgment on the ground that any claim for contribution or indemnification is barred by the exclusive remedy provision of the Delaware Workmen's Compensation Act. ¹

The basic facts underlying plaintiff's employment history are not in serious dispute but to the extent that inferences are contested, the benefit flows to the non-movants. From 1962 to 1971, when his condition was diagnosed, plaintiff, a member of Local 42, Heat, Frost and Asbestos Workers, was hired by five separate employers to perform certain tasks which involved the handling of pipe coverings and sprays containing asbestos. While in the employ of AC & S, plaintiff presumably used asbestos products manufactured by AC & S. In that respect AC & S occupied a dual role--that of employer-supplier. Catalytic and Babcock, however, stood solely in an employer relationship to plaintiff. It was while he was employed by Allied Insulation Company, his last employer and a non-party, that plaintiff's condition was discovered. He sought and received workmen's compensation benefits from Allied for a disabling occupational disease.

In essence, the movant-employers argue that as predecessor employers in the employment chain they share the same immunity from common law tort actions as Allied, the employer who actually responded to the workmen's compensation claim. To the contrary, Gale and Armstrong contend that immunity from suit extends only to the employer who actually pays benefits. They also argue that AC & S cannot claim immunity because of its dual capacity as a employer-supplier of asbestos products. Finally, they argue that the exclusive remedy of workmen's compensation cannot bar Mrs. Farrall's direct claim for damages. These contentions will be separately considered.

I

It is settled Delaware law that an alleged tortfeasor responding to a claim by an injured employee may not seek contribution from an employer if the employee-plaintiff could not have sued the employer directly because of the exclusivity of the workmen's compensation remedy. Diamond State Tel. Co. v. University of Delaware, Del.Supr., 269 A.2d 52 (1970); Kofron v. Amoco Chemicals Corp., Del.Supr., 441 A.2d 226 (1982); Howard, Needles, Tammen & B. v. Steers, Perini & P., Del.Supr., 312 A.2d 621 (1973); see also, SW (Delaware), Inc. v. American Consumers, Etc., Del.Supr., 450 A.2d 887, 888 N. 1 (1982).

However, third party actions against employers may be sustained on a contractual, as distinct from a tort, theory of recovery based on express or implied indemnification. Diamond State, supra. See 2A Larson, Workmen's Compensation Law § 76.40 and 76.50 (1982). Since the third party complaints in this case do not assert an indemnification relationship, their validity must be tested by traditional considerations which govern tortfeasor contribution.

Armstrong and Gale do not seriously dispute the statutorily conferred immunity enjoyed by the employer who actually pays workmen's compensation benefits, here Allied. They argue, however, that prior employers should not share immunity from contribution if they have not responded to a compensation claim despite the employee's exposure to the occupational hazard during their respective periods of employment.

The Delaware Workmen's Compensation Act does not address the question of successive employment although it does contemplate situations in which an injury, or its effect, may extend beyond a single employment. Thus, under 19 Del.C. § 2354 an employee in the "joint," i.e. contemporaneous, service of two or more employers is entitled to benefits which are apportioned among the various employers in accordance with their respective wage liability. Section 2327 of the Act provides, in part, for the apportioning of compensation for a "subsequent permanent injury" sustained by an employee who had previously sustained a permanent injury, "from any cause" between the employer and the Second Injury Fund, if the subsequent injury results in total disability.

The exclusivity of workmen's compensation remedy in a successive employer context was the subject of an earlier ruling by this Court in another asbestos case. Lee v. A.C. & S., et al., 79C-DE-125 (Unreported Decision, September 25, 1981). In Lee, the estate of a deceased insulation worker attempted to bring a direct wrongful death action against several employers for whom the deceased had worked during his lifetime. The argument was there asserted that only the last employer, who responded to the workmen's compensation claim, should enjoy immunity from suit. This Court held that the express immunity granted by § 2304 extended to every employer. The rationale for this ruling expressed in Lee bears repeating:

The employee's remedy is deemed exclusive because it is part of the quid pro quo which the employee has exchanged for the coverage extended by each employer during the course of the employment relationship. When so viewed, the immunity of a particular employer does not depend on whether it responds to a claim at any particular time, so long as In Delaware, as in most states, the employer's participation in the workmen's compensation process is statutorily required (19 Del.C. § 2306). The employer may provide benefits either directly as a self insurer (§ 2373), or through an approved compensation liability insurance carrier (§ 2372). The immunity from common law suits, which inures also to the benefit of co-employees, flows from such participation and does not depend on the actual receipt of benefits. Walker v. Patterson, D.C.Del., 325 F.Supp. 1024 (1971). The Act creates a "status oriented" relationship. Price v. All American Engineering Company, Del.Supr., 320 A.2d 336, 339 (1974). It is the relationship which imparts the statutory immunity. Under the comparable Pennsylvania Act it has been held that the employer's immunity is not contingent upon liability under the compensation act and such protection exists even where the employer has successfully defended a claim for compensation. Ryden v. Johns-Manville Products, W.D.Pa., 518 F.Supp. 311 (1981); Shultz v. Bell & Howard, W.D.Pa., 512 F.Supp. 558 (1981).

an entitlement to full compensation benefits is available through the response of one or more employers in the chain of employment. In essence, the adequacy of the remedy depends on the availability of complete benefits, not on the number of employers who respond.

Analogous to the problem of successive employers is that of successive carriers. Again the Act is silent on the question of whether multiple compensation carriers may be required to share responsibility for the payment of benefits where the disability arose over a period of time during which successive carriers were on the risk. In Alloy Surfaces Co. v. Cicamore, Del.Supr., 221 A.2d 480 (1966), the Supreme Court aligned itself with the majority rule that the last carrier must bear the entire burden of compensation and not seek to apportion benefit responsibility among prior carriers.

The policy considerations which support the ruling in Cicamore apply with equal force to limiting compensation liability to the last employer, without consequent loss of immunity on the part of prior employers. In cases of occupational diseases which may develop over a long period of time through a succession of employers the fixing of proportionate liability may prove difficult, if not impossible. The triggering of attempted claims against prior employers usually occurs through the employee's common law action against third parties. As a result many claims against former employers may be time-barred. Employers participate in the workmen's compensation scheme, and procure insurance to implement such participation, with knowledge of the statutorily fixed benefits which they will be required to pay as the result of their individual activities. To permit that participation to...