Oman v. Johns-Manville Corp.

• Decision Date: 11 January 1980
• Docket Number: Civ. A. No. 76-178-NN,77-97-NN.
• Citation: 482 F. Supp. 1060
• Court: U.S. District Court — Eastern District of Virginia
• Parties: James T. OMAN, Fred R. Walker, Hugh V. Reynolds, and Willie A. Gibbsons v. JOHNS-MANVILLE CORP., Owens-Corning Fiberglas Corp., Pittsburgh Corning Corp., and H. K. Porter Co., Inc. v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY.

482 F. Supp. 1060

James T. OMAN, Fred R. Walker, Hugh V. Reynolds, and Willie A. Gibbsons v. JOHNS-MANVILLE CORP., Owens-Corning Fiberglas Corp., Pittsburgh Corning Corp., and H. K. Porter Co., Inc. v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY.

Civ. A. Nos. 76-178-NN, 77-97-NN.

United States District Court, E. D. Virginia, Newport News Division.

January 11, 1980.

COPYRIGHT MATERIAL OMITTED

Robert R. Hatten, Patten & Wornom, Newport News, Va., Richard S. Glasser, Glasser & Glasser, Norfolk, Va., Gene Locks, Greitzer & Locks, Philadelphia, Pa., for plaintiffs.

Glen Huff and Robert M. Hughes, III, Seawell, McCoy, Dalton, Hughes, Gore & Timms, Norfolk, Va., for Johns-Manville Corp.

Jack Greer, Williams, Worrell, Kelly & Greer, Norfolk, Va., for Owens-Corning Fiberglas Corp.

Worth D. Banner, White, Reynolds, Smith & Winters, Norfolk, Va., for Pittsburgh Corning Corp.

Archibald Wallace, III, Sands, Anderson, Marks & Miller, Richmond, Va., for H. K. Porter Co.

Stephen B. Clarkson, Sullivan, Beauregard, Clarkson, Moss, Brown & Johnson, Washington, D. C., Shannon T. Mason, Jr., Mason, Gibson, Cowardin & Spencer, Newport News, Va., Antje E. Huck, Legal and Corporate News Shipbuilding, Newport News, Va., for third-party defendant, Newport News Shipbuilding and Dry Dock Co.

MEMORANDUM OPINION

CLARKE, District Judge.

The plaintiffs in these consolidated actions are present and former employees of the third-party defendant, Newport News Shipbuilding and Dry Dock Co. During the course of their employment at the Shipyard, where they engaged in the trade of pipe covering in various ships and workshops, the plaintiffs were exposed to dust from asbestos products manufactured by the defendants. They allege that, as a result of these asbestos exposures during the time period relevant in these actions, they developed asbestosis or added to their existing asbestosis condition.

There is no dispute that the Shipyard is an employer subject to the Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. §§ 901-50, or that it has paid and continues to pay compensation to the plaintiffs on account of their asbestos-related injuries. The LHWCA is the plaintiffs' exclusive remedy against their employer, the Shipyard. 33 U.S.C. § 905(a). However, section 33(a) of that Act, 33 U.S.C. § 933(a), authorizes suits by injured employees against third-parties, such as the defendants in this case. See American Stevedores v. Porello, 330 U.S. 446, 67 S.Ct. 847, 91 L.Ed. 1011 (1947). Accordingly, the plaintiffs brought this action against these manufacturers, alleging that their injuries were proximately caused by the manufacturers' negligent failure to warn them adequately of the hazards of asbestos, and a related breach of the manufacturers' implied warranty of the safe and merchantable condition of their products.

While the defendants deny any negligence or breach of warranty on their part, they have asserted a third-party indemnity claim against the Shipyard, alleging that any negligence on the part of the manufacturers was merely "secondary" or "passive" in contrast with the Shipyard's "primary" or "active" negligence in failing to secure a safe workplace for the plaintiffs. They also allege that the Shipyard breached an implied warranty to the manufacturers, arising from their vendor-vendee relationship, that the Shipyard would use due care in the handling of these asbestos products. This breach of warranty, the manufacturers claim, requires that the Shipyard indemnify the manufacturers for any judgment against them in favor of the plaintiffs, or in the alternative, that the Shipyard pay contribution to the manufacturers.

The Shipyard has responded to the manufacturers' third-party complaint with a motion for summary judgment, contending that the manufacturers' claims against it are unsupported by the applicable law, and that the LHWCA, especially the exclusivity provision of section 5 of that Act,¹ bars any recovery for contribution.

While the manufacturers predicate their claims for indemnity or contribution on both tort and contract theories, their contract-based claims are without merit. The manufacturers do not rely upon any express contract of indemnity or contribution. Rather, they argue that as a purchaser of products manufactured by the defendants, the Shipyard impliedly warranted that it would use due care in the handling and use of the products and would use these products in a manner contemplated and intended by the defendants.

The Shipyard breached this warranty, the manufacturers maintain, by failing to instruct its employees in the proper use of asbestos products. It is therefore required, the argument continues, to indemnify, or pay contribution to, these manufacturers for any liability which they may be found to have to the plaintiffs.

The short answer to this reverse-warranty argument is that it distorts the concept of implied warranty "out of all relation to reality." Zapico v. Bucyrus-Erie Co., 579 F.2d 714 (2d Cir. 1978), quoting: 2A Larson, Workmen's Compensation Law 324, 402 (1976). Under Virginia law, which this Court has previously determined to be controlling in these cases, no such warranty from the purchaser to the seller arises from the statutory provisions governing sales, which recognize only certain implied warranties running from the seller to the buyer, and not the reverse. See Code of Virginia §§ 8.2-314, 8.2-315. Nor does any duty of care on the part of the purchaser, such as that suggested by the manufacturers, arise from the vendor-vendee relationship itself. See Jennings v. Franz Torwegge Mach. Wks., 347 F.Supp. 1288, 1289 (W.D.Va.1972). See also White v. Texas E. Trans. Corp., 512 F.2d 486, 488 n. 5 (5th Cir. 1975), cert. denied, 423 U.S. 1049, 96 S.Ct. 776, 46 L.Ed.2d 638 (1976), in which the Fifth Circuit rejected a similar indemnity claim brought by a manufacturer of equipment against a purchaser-employer, based upon the purchaser's alleged implied warranty that it would use the product only in accordance with the manufacturer's specifications and recommendations.

Moreover, the consumer-protection purpose of the developing implied warranty doctrine is not furthered by the reverse warranty proposed by the defendants. Although manufacturers and merchants are entitled to protection against liability where an injury results from a purchaser's misuse of a product, this shield cannot be transformed into a sword to impose affirmative liability on the purchaser.

The manufacturers also contend that the Shipyard is bound to indemnify them as third-party beneficiaries to the contract between the Shipyard and its employees, such as the plaintiffs, which requires the Shipyard to exercise due care in handling materials, and to furnish its employees with a reasonably safe place in which to work. To profit from this third-party beneficiary theory, however, Virginia law requires the third party to show that the primary parties to the contract clearly and definitely intended to confer a benefit upon him. See Professional Realty Corp. v. Bender, 216 Va. 737, 222 S.E.2d 810, 812 (1976). It is insufficient for the third party to show that he would benefit from the contract incidentally. In re County Green Ltd. Partnership, 438 F.Supp. 693, 698 (W.D.Va.1977); Valley Landscape Co. v. Rolland, 218 Va. 257, 237 S.E.2d 120 (1977).

The manufacturers point to no express contractual language or other agreement which would make them a party to the employment contract between the Shipyard and its employees, and the law will not create such a contractual benefit where it does not exist. See Valley Landscape Co. v. Rolland, supra, at 122. Therefore, the Shipyard does not owe the manufacturers indemnity or contribution as an incident of its contractual duties to its employees. See also Groover v. Magnavox Co., 71 F.R.D. 638 (W.D.Pa.1976) (No right of indemnity or contribution accrued to television manufacturer against landlord out of the contractual relation between plaintiff-tenant; manufacturer not within class of parties intended to be protected by implied warranty of habitability).

Shorn of these untenable contractual bases, the manufacturers' claims for indemnity or contribution rely solely upon tort-based theories which permit one whose negligence was merely secondary or passive to shift the full burden of liability to another who was primarily or actively negligent. We are faced, therefore, with the question whether the exclusivity provision of the LHWCA bars recovery of delictual indemnity or contribution based on this doctrine.

To support their claims, the manufacturers rely upon a line of cases recognizing contract-based indemnity, which was spawned by the Supreme Court's decision in Ryan Stevedoring Co. v. Pan-Atlantic Steamship Co., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). In Ryan, a longshoreman employed by Ryan Stevedoring Co. was injured when a roll of paper, improperly stowed aboard a vessel owned by Pan-Atlantic, broke loose and struck him. The roll had been stowed aboard the vessel by another of Ryan's employees at a different port. When the shipowner was sued by the employee for negligence and the vessel's unseaworthiness, it brought a third-party action against Ryan for indemnity, based not upon any contractual obligation, but on a common-law duty to indemnify under the circumstances of that case.

The Court, however, did not reach this issue, noting that the shipowner's action was "not founded upon a tort or upon any duty which the stevedoring contractor owed to its employees," but rather was "grounded upon the contractor's breach of its purely consensual obligation owing to the shipowner to stow the cargo in a reasonably safe manner." 350 U.S. at 131-32, 76 S.Ct. at 236. With four members of the Court dissenting,² the Court held that the LHWCA's exclusivity provision did not bar an action for indemnity based upon a stevedore's implied contractual obligation to...