Owens-Illinois, Inc. v. Zenobia

Decision Date01 September 1991
Docket NumberINC,No. 66,OWENS-ILLINOI,66
Citation325 Md. 420,601 A.2d 633
Parties, 60 USLW 2620, Prod.Liab.Rep. (CCH) P 13,060 et al. v. William ZENOBIA, Sr. et al. ,
CourtMaryland Court of Appeals

Gardner M. Duvall (Harry S. Johnson, Patrick C. Smith, John G. Billmyre, Whiteford, Taylor & Preston, on brief, C. Robert Loskot (John G. Sakellaris, Bernstein, Sakellaris, & Ward, on brief), Baltimore, John J. Nagle, III, Margaret E. Swain, Barbara M. Gaughan, Power & Mosner, P.A., on brief), Towson, for petitioners/cross respondents.

Thomas V. Monahan, Jr., Toni-Jean Lisa, Goodell, DeVries, Leech & Gray of Baltimore, amicus for Maryland Ass'n of Defense Trial Counsel.

Gary I. Strausberg, Janet & Strausberg, Paul B. Bekman, Israelson, Salisbury, Clements & Bekman, Baltimore, amicus for Maryland Trial Lawyers' Ass'n.

Robert Dale Klein, Wharton, Levin & Ehrmantraut, Annapolis, Malcolm E. Wheeler, Parcel, Mauro, Hultin & Spaanstra, PC, Denver, Colo., amicus for Product Liability Advisory Council, Inc., Motor Vehicle Manufacturers Ass'n of the United States, Inc., Chamber of Commerce of the U.S., National Ass'n of Manufacturers of the U.S., Business Roundtable, and Chemical Manufacturers Ass'n.

Edward F. Houff, Carolyn J. Moses, Church & Houff, PA, Baltimore, amicus for Center for Claims Resolution.

James R. Eyler, John P. Sweeney, Gregory L. Lockwood Miles & Stockbridge, Baltimore, amicus for Owens-Corning Fiberglas Corp.

Clifford C. Cuniff, Baltimore, for respondents/cross petitioners.

Peter G. Angelos, Patricia J. Kasputys, Timothy J. Hogan, Law Offices of Peter G. Angelos, Baltimore, amicus for Law Offices of Peter G. Angelos.

Argued before MURPHY, C.J., ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI and ROBERT M. BELL, JJ.

ELDRIDGE, Judge.

We issued a writ of certiorari in these cases to consider several important questions relating to a strict products liability cause of action based on failure to warn of the dangerousness of the products, and to reconsider some of the principles governing awards of punitive damages in tort cases.

The plaintiffs Louis L. Dickerson and William L. Zenobia filed in the Circuit Court for Baltimore City separate complaints seeking damages for injuries resulting from exposure to asbestos, and the complaints were consolidated for purposes of trial and appeal. Both plaintiffs have pleural and parenchymal asbestosis. At the time of the trial, the plaintiffs abandoned all theories of liability except for strict liability under § 402A of the Restatement (Second) of Torts.

The plaintiff Dickerson sought damages from Owens-Illinois, Inc., Eagle-Picher Industries, Inc., and Celotex Corp., all of which manufactured products containing asbestos, and from MCIC, Inc., and Porter Hayden Company, both of which supplied and installed products containing asbestos. Dickerson claimed that he was exposed to asbestos from 1953 to 1963 when he worked as a laborer both at the shipyard and at the steel mill owned and operated by the Bethlehem Steel Corporation at Sparrows Point, Maryland.

The plaintiff Zenobia sought damages from the manufacturer Owens-Illinois, Inc., and the suppliers/installers MCIC, Inc., Porter Hayden Co. and Anchor Packing Co. 1 Zenobia alleged that he was exposed to asbestos while working as a painter for four months at the Bethlehem Steel Sparrows Point shipyard in 1948, while working as a pipe fitter for eighteen months at the Maryland Shipbuilding and Drydock shipyard in 1951 and 1952, and while employed as a cleanup man at the Carling Brewery for three months in 1968.

The jury awarded compensatory damages to the plaintiff Dickerson in the amount of $1,300,000 against all five defendants. In addition, the jury initially determined that punitive damages were warranted against certain defendants, and, subsequently the jury awarded punitive damages against Owens-Illinois in the amount of $235,000, against Porter Hayden in the amount of $2,500, and against Celotex in the amount of $372,000. The jury awarded to the plaintiff Zenobia compensatory damages in the amount of $1,200,000 against all four defendants; subsequently it awarded punitive damages against Owens-Illinois in the amount of $235,000 and against Porter Hayden in the amount of $2,500.

Pursuant to a stipulation, each of the defendants was deemed to have cross-claimed for contribution or indemnity against all other defendants prior to trial. Anchor Packing Co., a supplier and installer of products containing asbestos, sought in the Zenobia case indemnity against Raymark, Inc., a manufacturer, asserting that Raymark was Anchor's primary source of asbestos containing products. Raymark, Inc., had settled with both plaintiffs before trial. The cross-claims were tried separately, after the verdicts for the plaintiffs. At the time of the cross-claim trial, Raymark, Inc., was under the exclusive jurisdiction of the bankruptcy court. The circuit court granted the defendants' cross-claims for contribution against all settling defendants including Raymark, Inc. The compensatory damages verdicts were reduced proportionally in light of the releases between the plaintiffs and the settling defendants. In addition, the trial court held that Anchor Packing Co. was entitled to indemnity against Raymark, Inc., in the Zenobia case. Thus, because of the plaintiff Zenobia's settlement with and release of Raymark, the trial court struck the jury's award against Anchor Packing.

The compensatory and punitive damages awards were appealed to the Court of Special Appeals by Owens-Illinois, Inc., MCIC, Inc., Porter Hayden, Co., Eagle-Picher Industries Inc., and Anchor Packing, Co. 2 The plaintiffs appealed from the cross-claim determinations. The Court of Special Appeals affirmed all aspects of the awards for compensatory damages and affirmed the awards in the cross-claim trial. The award of punitive damages against Owens-Illinois was affirmed, and the award of punitive damages against Porter Hayden was reversed. See MCIC, Inc. v. Zenobia, 86 Md. App. 456, 587 A.2d 531 (1991).

Thereafter petitions and cross-petitions for a writ of certiorari were filed in this Court. The only manufacturer which filed a certiorari petition was Owens-Illinois. Owens-Illinois argued that it was entitled to a new trial because certain depositions were improperly admitted into evidence, and because the trial court gave an erroneous jury instruction that Owens-Illinois had a duty to warn of the hazards of asbestos after it had stopped manufacturing products containing asbestos. Owens-Illinois also challenged the award of punitive damages. MCIC, Inc., and Porter Hayden Co., which supplied and installed products containing asbestos, also filed certiorari petitions which raised a single issue, namely whether certain deposition testimony was erroneously admitted against them.

The plaintiffs filed a conditional cross-petition for a writ of certiorari, asking that the Court address the issues raised in the cross-claims trial if the Court granted the defendants' petitions. Specifically, the plaintiffs requested this Court to decide whether the bankrupt debtor Raymark, Inc., can be adjudicated a joint tortfeasor without leave of the bankruptcy court. If so, the plaintiffs argued that Raymark was not properly adjudicated a joint tortfeasor, and that, therefore, contribution, as well as indemnity in favor of Anchor Packing Co., should not have been awarded with regard to Raymark.

In response to the plaintiffs' conditional cross-petition for certiorari, the defendant Anchor Packing Co. filed a conditional cross-petition for certiorari. In the event that this Court granted the plaintiffs' conditional cross-petition, Anchor Packing Co. requested that the Court address the following contentions: (1) certain deposition testimony was erroneously admitted; (2) an instruction that Anchor had a continuing duty to warn of the hazards of asbestos after the plaintiffs' last exposure to asbestos containing products was improper; (3) the plaintiff Zenobia failed to show that the products which Anchor supplied and/or installed contained asbestos or that the plaintiff Zenobia was exposed to Anchor's products; and (4) because the verdict for compensatory damages was excessive and against the weight of the evidence, Anchor's motion for a new trial or remittitur should have been granted.

This Court granted all of the petitions and cross-petitions. Additional facts will be set forth in the particular parts of this opinion to which the facts relate. 3

I.

The defendants' initial argument is that certain deposition evidence should not have been admitted because it was irrelevant and because these defendants were not present at the depositions and thus were unable to cross examine the deponents. 4 The depositions were admitted into evidence for the limited purpose of proving what the defendants should have known concerning the dangers of asbestos. Such knowledge is often referred to as "state of the art." The defendants do not argue that "state of the art" or an element of knowledge is not relevant in this strict liability case; rather they insist that these depositions, because they pertain to what other companies knew about asbestos, are not proper "state of the art" evidence. In order to resolve these arguments, it is necessary to discuss briefly why any element of knowledge is relevant in this strict liability case.

A.

Section 402A of the Restatement (Second) of Torts, adopted by this Court in Phipps v. General Motors Corp., 278 Md. 337, 344, 363 A.2d 955, 958 (1976), requires that, in order to recover under a theory of strict liability, a plaintiff must show:

"(1) [that] the product was in a defective condition at the time it left the possession or control of the seller,

(2) that it was unreasonably dangerous to the user or consumer,

(3) that the defect was a cause of the injuries, and

(4) that the product was...

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