Kansas City v. Keene Corp.

• Decision Date: 25 May 1993
• Docket Number: No. 75332,75332
• Citation: 855 S.W.2d 360
• Parties: KANSAS CITY, A Municipal Corporation, Appellant-Respondent, v. KEENE CORPORATION, Respondent-Appellant.
• Court: Missouri Supreme Court

Page 360

855 S.W.2d 360

KANSAS CITY, A Municipal Corporation, Appellant-Respondent, v. KEENE CORPORATION, Respondent-Appellant.

No. 75332.

Supreme Court of Missouri En Banc.

May 25, 1993.

Rehearing Denied June 29, 1993.

C. Alan Runyan, David C. Eckstrom, Hampton, SC, Kenneth B. McClain, Steven P. Callahan, Independence, and Nordahl Holte and Richard Ward, Kansas City, for appellant.

C. Brooks Wood, Kristine K. Kraft, Kansas City; Philip W. Vogler, Philadelphia, PA; Spencer J. Brown, Keith A. Carey; Elizabeth M. Drill, Leland H. Carley; and John H. Altergratt, Jr., Kansas City, for respondent.

E. Robert Wright, Fresno, CA and Steven L. Wright, Missouri School Boards Ass'n, Columbia, for amicus curiae, Nat'l School Asbestos Class, et al.

Thomas C. Walsh and Douglas W. King, St. Louis, for amicus curiae, W.R. Grace & Co.

PER CURIAM.

This is the second appeal ¹ from a suit filed by the City of Kansas City, Missouri, against Keene Corporation and others. The city claims damages arising out of a fireproofing spray containing asbestos that was used in the construction of the Kansas City International Airport (KCI). A verdict for actual and punitive damages was returned against Keene. The trial court entered judgment for the city on the award of actual damages but entered judgment notwithstanding the verdict in favor of Keene on the punitive damages award. The compensatory damage award was reduced by the amount paid to Kansas City in a settlement of a similar claim against the Johns-Manville Corporation bankruptcy fund. Kansas City and Keene cross-appealed. Following opinion by the Missouri Court of Appeals, Western District, this Court granted transfer. Rule 83.03. The judgment is affirmed.

KCI terminal buildings A, B and C were constructed between 1969 and 1972. The structures have two levels. The upper level is for passenger services. The lower level, referred to as the apron level, is used for airline maintenance and baggage handling. The ceiling of the apron level is made of corrugated metal with poured concrete above it, which serves as the floor of the passenger level. Beneath this ceiling are steel beams for support. Keene or its subsidiary manufactured and sold a substance called Pyrospray, an asbestos-containing fireproof material, which was applied to the ceiling and the beams of the apron level. Following a determination in 1985 that all asbestos-containing material should be removed, this action was commenced. When the case was tried, only two defendants remained, Keene and another party. Keene was the sole defendant against whom a verdict was returned.

I.

Keene's first claim on appeal is that the trial court erred in failing to direct a verdict in its favor because the undisputed evidence shows the statute of limitations had expired on plaintiff's claims based on strict liability, fraud and breach of warranty when this action was filed on August 12, 1986. These precise issues were addressed in the earlier appeal in this case.

In Grace the trial court had entered summary judgment in favor of Keene and other defendants based on the statutes of limitation. The court of appeals reviewed the record and determined that there were genuine issues of fact as to when the statutes In reviewing a trial court's denial of a motion for judgment notwithstanding the verdict, the evidence is examined in a light most favorable to the party against whom the judgment is sought. Burnett v. Griffith, 769 S.W.2d 780, 783 (Mo. banc 1989). In reviewing a ruling on a motion for summary judgment, the record is viewed in a light most favorable to the party against whom the judgment is rendered. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993); Zafft v. Eli Lilley & Co., 676 S.W.2d 241, 244 (Mo. banc 1984). Thus, the standard for reviewing the evidence regarding the statutes of limitation issue is essentially the same here as it was in Grace. Unless there is a change in the issues or the evidence, the court of appeals' previous holding constitutes the law of the case and concludes any issues decided on remand and subsequent appeal. Gambel v. Hoffman, 732 S.W.2d 890, 895 (Mo. banc 1987). Obviously, the issues here and the issues in Grace regarding the running of the statutes of limitation are precisely the same. The only question is whether there has been a change in the evidence.

of limitation on the claims for strict liability, fraud and breach of warranty had begun to run. The summary judgment was reversed and the cause remanded to the trial court for further proceedings.

The court of appeals in Grace had before it essentially the same evidence that was presented to the trial court below on the statutes of limitation issues. In 1972, following an inspection by representatives of the Occupational Safety and Health Administration (OSHA), contractors ceased using the asbestos-containing Pyrospray. Regulations known as the National Emissions Standards for Hazardous Air Pollutants (NESHAP) were promulgated by the Environmental Protection Agency on April 6, 1973. In 1976, the "McCrone" report confirmed that asbestos had been used in the fireproofing in terminals B and C. A 1977 report by the National Institute of Occupational Safety and Health (NIOSH) indicated that air samples showed that asbestos was below the minimum detectable level inside the terminals. Potential exposure to employees did not pose an immediate hazard. The report cautioned that asbestos should be replaced "where technically feasible."

In addition, both the summary judgment court and the jury had before them the testimony of the manager of the Environmental Hazard Section of the Kansas City Public Health Department that he believed asbestos-containing products posed a serious health problem for building occupants, and he advocated the removal of all asbestos from the buildings. The record also reflects that air samplings began in the mid-1970's at the instance of OSHA after airline employees made complaints.

The record before the jury and before the summary judgment court reflects that it was not until 1983, however, that OSHA unequivocally reported "that there was no level of exposure to asbestos below which clinical effects did not occur." From 1975 through 1990, various interested parties conducted air sampling at KCI. Not until 1990 did any sampling disclose asbestos fibers in excess of that found in ambient air. It was not until 1985, as a result of a report by Hygienetics, Inc., that a recommendation was made that asbestos materials be removed and replaced to eliminate concern about asbestos fiber fallout rates.

After reviewing essentially the same record that is before the Court here, the court of appeals in Grace concluded that there were "genuine issues of material fact as to when asbestos fibers were released into the environment of Kansas City's airport buildings and when Kansas City was capable of ascertaining a substantial and unreasonable risk of harm from the release." 778 S.W.2d at 271. The court noted that a cause of action for strict liability and fraud accrues "when the damage resulting therefrom is sustained and is capable of ascertainment." § 516.100. ² Therefore, the summary judgment was reversed on those claims.

With regard to the breach of express warranty claim, the representation by To prevail on its statutes of limitation claim here, Keene must establish a change in the evidence from that before the court of appeals in Grace. This Court has examined the lengthy transcript and Keene Corporation's brief on appeal. We fail to find any significant difference in the evidence here and that considered by the court of appeals in Grace. Because Grace establishes the law of the case, it may not be disturbed.

                Keene Corporation that Pyrospray was resistant to air erosion, assuring the safety of the application, was determined to be a promise of future performance in Grace.   A cause of action for breach of warranty for future performance accrues when the breach is or should have been discovered.  §  400.2-725(2).   Thus, there was a genuine issue of fact as to whether the representation of the safety of the asbestos product was capable of ascertainment prior to 1981.  778 S.W.2d at 272
                

In reaching this conclusion, this Court is not called upon to decide whether Grace was properly decided. Under essentially the same facts now under consideration, the court of appeals held that the date of accrual of plaintiffs' claims was a disputed fact. Accepting, as we must, that decision as the law of the case, the factual questions were necessarily left in the hands of the jury.

Keene further argues that this Court should reconsider the requirement of Grace that the statutes of limitation only commence running when there is actual fiber release. In addition to the law of the case principles enunciated above, Keene submitted its defense to the jury under instructions consistent with the Grace decision. No effort was made to offer any instruction consistent with the theory now advanced. Having failed to raise its alternative theory before the trial court, the issue is not preserved for review.

II.

Keene next asserts that the trial court erred in admitting evidence of Underwriters Laboratories' (U.L.) fire testing of "Pyrospray Type I." The trial court admitted the testimony of Dr. Michael Pierce along with memoranda that showed Keene surreptitiously tamped Pyrospray during U.L. fire tests in order to pass the tests. Keene claims the evidence was incompetent because Pierce lacked personal knowledge of the facts and because Pierce's assertions were not an admission of Keene. The record, however, shows that Pierce had personal knowledge of the facts as director of research and later as vice-president of engineering. Keene also argues that Pierce's memoranda about cheating on U.L. testing were not an admission of Keene. Nevertheless, admissions against interest made by an employee are...