Nicolet, Inc. v. Nutt

• Decision Date: 30 September 1986
• Citation: 525 A.2d 146
• Parties: NICOLET, INC., Defendant Below, Appellant, v. Earl R. NUTT, et al., Plaintiffs Below, Appellees. . Submitted:
• Court: Supreme Court of Delaware

Page 146

525 A.2d 146

55 USLW 2611

NICOLET, INC., Defendant Below, Appellant, v. Earl R. NUTT, et al., Plaintiffs Below, Appellees.

Supreme Court of Delaware.

Submitted: Sept. 30, 1986.

Decided: April 28, 1987.

Revised: April 30, 1987.

Upon appeal from the Superior Court. AFFIRMED.

Jeffrey M. Austin (argued) and Howard M. Berg, Howard M. Berg & Associates, P.A., Wilmington, for appellant.

Thomas C. Crumplar (argued), Mary Ann Matuszewski, Robert Jacobs and Douglas B. Canfield, Jacobs & Crumplar, P.A., Wilmington, for appellees.

Before CHRISTIE, C.J., HORSEY and MOORE, JJ.

MOORE, Justice.

Plaintiffs ¹ have sued various asbestos manufacturers seeking damages for injuries caused by exposure to asbestos at the E.I. DuPont de Nemours & Co., Inc., plant located in Newport, Delaware. The appellant, Nicolet, Inc., is the only defendant involved in this interlocutory appeal. Plaintiffs allege that Nicolet participated in an industrywide conspiracy with other asbestos manufacturers to intentionally misrepresent and suppress information concerning the health hazards of asbestos and thus is liable for the asbestos-related injuries sustained by the various plaintiffs. ²

The sole issue here, and a matter of first impression, is whether a cause of action exists against a party whose asbestos products did not cause the purported injury, but who allegedly conspired with other asbestos manufacturers to actively suppress and intentionally misrepresent medical evidence warning of the health hazards of asbestos. The Superior Court denied Nicolet's motion for summary judgment on this point, and recognized such a cause of action. See In re Asbestos Litigation, Del.Super., 509 A.2d 1116 (1986). We affirm that ruling. Thus, if competent medical evidence as to the dangers of asbestos was intentionally misrepresented and suppressed in order to cause plaintiffs to remain ignorant thereof, coupled with proof that such suppression caused injury to a plaintiff, the alleged tort is established. Therefore, we conclude that under the well-settled law of civil conspiracy, Nicolet may be jointly and severally liable for damages caused by the acts of co-conspirators if such acts were committed in furtherance of the scheme.

I.

The issue before us arises from plaintiffs' allegations that the defendants, including Nicolet, "knowingly and willfully conspired and agreed among themselves" to:

8. (b) Cause to be positively asserted to plaintiffs in a manner not warranted by the information possessed by said defendants, that which was and is not true, to wit, that it was safe for plaintiffs to work in close proximity to such [asbestos] materials;

(c) Suppress said medical and scientific data and other knowledge, causing plaintiffs to be and remain ignorant thereof.

Nicolet moved for summary judgment, (1) alleging that plaintiffs could not show the required nexus between it and the injury-causing asbestos products, and (2) on the conspiracy claim for plaintiffs' failure to state a cause of action. The Superior Court granted partial summary judgment in favor of Nicolet on the product nexus issue, but denied the motion as to the conspiracy count. The only issue on appeal is whether denial of summary judgment on the conspiracy claim was erroneous.

In examining the plaintiffs' allegations, the trial court summarized them as follows:

(1) Nicolet or its wholly-owned Canadian subsidiary, Nicolet Mines, Ltd., was a member of the Quebec Asbestos Mining Association ("QAMA") from 1948 until 1968 and a member of the Asbestos Textile Institute ("ATI") in 1969, 1971 and 1972; and

(2) Members of the referenced trade associations suppressed publication as well as general dissemination of medical and scientific data concerning the health hazards associated with inhalation of asbestos fibers.

While the trial court's published opinion states that Nicolet did not dispute the fact that the members of QAMA and ATI intentionally suppressed information on the dangers of working with asbestos from the 1930's up to and including the 1970's, we have learned that the trial judge orally acknowledged on a motion for reargument that there was such a dispute. In re Asbestos Litigation, Del.Super., 509 A.2d 1116, 1120-21 (1986). This latter circumstance was not called to our attention in the briefs, but it underscores a disputed material fact upon which summary judgment was properly denied.

However, the trial court correctly noted that:

... Nicolet [does not] dispute that the plaintiffs were exposed to the asbestos of other companies who were members of QAMA or A.T.I. Instead, Nicolet denies that it was a member of QAMA or that it knowingly took part in this conspiracy.

"Knowing participation" in a conspiracy, however, need not be an express agreement; tacit ratification is sufficient ... Likewise, consciously parallel action is not sufficient to show conspiracy, but it is enough that knowing concerted action was contemplated or invited, the defendant adhered to the scheme and participated in it ...

There is at least some evidence that Nicolet had direct contact with members of QAMA, which members subsequent to the March 1968 meeting publically minimized the dangers of asbestos.

Id. at 1120-21.

There are several items of evidence supporting the plaintiffs' claims and giving rise to triable issues of fact. A letter from M.Q. Scowcroft of Raybestos-Manhattan, sent to Johns-Manville, copying members of ATI's Board of Governors, dated May 28, 1969, stated in part:

"We feel it expedient to submit a letter prior to June 15th in order to contribute to discouraging a development program on substitutes for asbestos in shipboard insulation."

On May 26, 1969, the president of Nicolet responded to a Navy inquiry about asbestos dangers with the following letter:

Considerable research is now being conducted on the biological effects of asbestos fiber.

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* * *

But more importantly, the results of the research which currently is being reported leaves in substantial doubt, the question of whether or not and to what degree, asbestos fibers may be harmful to health.

* * *

* * *

If asbestos fibers are harmful to health, we do not yet know why, nor do we know under what circumstances asbestos may cause undesirable effects or even whether asbestos used alone can cause any harm to human tissues.

The trial judge noted the following excerpts from a learned treatise by Barry I. Castleman, in considering the allegations that QAMA, ATI and Nicolet actively suppressed relevant medical evidence:

In summary, asbestosis was by 1935 widely recognized as a mortal threat affecting a large fraction of those who had regularly worked with the material.

* * *

* * * The carcinogenicity of asbestos was widely recognized by Nordmann, Hornig, and Koelsch in Germany in 1938 ...

The unpublished records cited in this accounting show U.S. asbestos industry officials to have been concerned about cancer and aware of medical reports by 1943. Some of the more startling data were actually published by the medical officer of Cape Asbestos, Hubert Wyers, in 1949. Dr. Hueper was meanwhile being quoted in popular writings, and this along with his scientific reports were matters of great concern to members of the U.S. asbestos industry by the mid-1950's.

B. Castleman, Asbestos: Medical and Legal Aspects 31, 102-03 (1984).

When viewing all of this evidence in the light most favorable to the non-moving party, for summary judgment purposes, the trial court concluded that the record contained some evidence from which a jury could reasonably find that the alleged conspiracy existed.

II.

To establish a prima facie case of intentional misrepresentation (fraudulent concealment), the following elements must be proven:

(1) Deliberate concealment by the defendant of a material past or present fact, or silence in the face of a duty to speak;

(2) That the defendant acted with scienter;

(3) An intent to induce plaintiff's reliance upon the concealment;

(4) Causation; and

(5) Damages resulting from the concealment.

See Stephenson v. Capano Development, Inc., Del.Supr., 462 A.2d 1069, 1074 (1983). Generally, there is no duty to disclose a material fact or opinion, unless the defendant had a duty to speak. However, where one actively conceals a material fact, such person is liable for damages caused by such conduct.

In Stephenson, this Court outlined the different theories upon which a tort action for fraud may be based: "... [F]raud does...