Podvin v. Jamar Co.

• Decision Date: 14 January 2003
• Docket Number: No. C5-02-1184, No. C1-02-1182, No. C0-02-1075, No. C3-02-1183, No. C7-02-1185.
• Citation: 655 N.W.2d 645
• Parties: Joseph PODVIN, et al., Respondents, v. The JAMAR COMPANY, et al., Appellants, A.H. Bennett Company, et al., Defendants.
• Court: Minnesota Court of Appeals

655 N.W.2d 645

Joseph PODVIN, et al., Respondents, v. The JAMAR COMPANY, et al., Appellants, A.H. Bennett Company, et al., Defendants.

Nos. C0-02-1075, C1-02-1182, C3-02-1183, C5-02-1184 and C7-02-1185.

Court of Appeals of Minnesota.

January 14, 2003.

Michael R. Strom, Sieben, Polk, LaVerdiere, Jones & Hawn, P.A., Hastings, MN, for respondents.

Richard J. Leighton, Downs Reyelts Leighton Bateman & Hylden, Ltd., Duluth, MN, for appellants.

Considered and decided by SHUMAKER, Presiding Judge, LANSING, Judge, and MINGE, Judge.

O P I N I O N

LANSING, Judge.

This appeal involves personal-injury litigation against two related corporations that voluntarily dissolved in 1985. The corporations moved to dismiss for insufficiency of process, arguing that service of process under Minn.Stat. § 5.25, subd. 5 (2000), could not be accomplished because the claims against the dissolved corporations were barred by Minn.Stat. §§ 302A.729, .781 (1984). The district court denied the motion to dismiss, holding that the personal-injury claims came within the exception created by Minn.Stat. § 302A.781 for liabilities incurred during dissolution proceedings. Because we conclude that the plain meaning of "liabilities incurred during dissolution proceedings" constrains its application to debts or obligations that a corporation is legally obligated to pay at the time of the dissolution proceedings, rather than unmatured tort or contract claims, we reverse.

F A C T S

Walker Jamar Company (Walker Jamar), a closely held Minnesota corporation established in 1913, sold and installed ventilation systems, industrial roofing, and insulation. Some of these products contained asbestos. Joseph Podvin and the other respondents whose cases are consolidated in this appeal (collectively referred to as Podvin) are individuals who were exposed to asbestos in their work at refineries, power plants, processing plants, and other facilities that used asbestos-containing products. They have contracted asbestos-related diseases and have sued, among others, Walker Jamar and the Jamar Company (the companies) for installing or distributing asbestos-containing products at their worksites.

Walker Jamar reorganized in 1981 following a favorable letter ruling from the Internal Revenue Service on the tax consequences of its proposed restructuring. Although the record is not fully developed on this point, the companies maintain that the purpose for the reorganization was to insulate the construction activities of the company from potential liabilities stemming from the distribution of Walker Pug Mill, a product unrelated to this litigation. The restructuring included the formation of a different company, the Jamar Company (Jamar I), to take over most of the business of Walker Jamar and a holding company, Norwalk, Inc., to hold the stock of both Walker Jamar and Jamar I.

Jamar I and Norwalk, Inc., filed their articles of incorporation with the Minnesota Secretary of State in February 1982. In May 1982, Jamar I assumed all assets and liabilities of Walker Jamar except those associated with the Walker Pug Mill product. Jamar I continued all other aspects of the original business, including ventilation, air conditioning, and insulation work.

In 1983, the president and chairman of the board of Jamar I decided to sell the companies and retire. Initially he was unable to negotiate a successful sale and decided to dissolve the companies at the end of the fiscal year on January 31, 1985. But shortly before the proposed dissolution date, Jamar I instead sold its assets, including its name, to API, Inc., an existing Minnesota company specializing in industrial insulation, piping, sheet metal work, and energy conservation construction and materials distribution. As part of the asset purchase agreement, Jamar I agreed to indemnify and hold harmless API against any known or unknown liability of Jamar I not specifically assumed by API in the asset purchase agreement. Although API purchased the right to use the name "The Jamar Company," the cash-for-assets transaction involved no sale of stock.

When API purchased the assets of Jamar I, Jamar I merged into the parent company, Norwalk. A few months later, Norwalk merged into Walker Jamar. Walker Jamar's only remaining operation, the production and marketing of the Walker Pug Mill, had been discontinued for economic reasons in 1983. On July 17, 1985, Walker Jamar filed its notice of intent to dissolve. On August 12, 1985, Walker Jamar filed its articles of dissolution in accordance with Minn.Stat. § 302A.733 (1984); the same day, the secretary of state issued Walker Jamar's certificate of dissolution. After this date only the new Jamar (Jamar II), operated by API, remained a going concern.

In December 2001, Podvin filed a complaint for negligence, products liability, and breach of warranty against Jamar II and Walker Jamar. The companies moved to dismiss the lawsuit for insufficiency of process, claiming that, as dissolved corporations, they could no longer be served. The trial judge appointed by the Minnesota Supreme Court to hear asbestos-related claims denied the motion to dismiss. The companies then moved for dismissal in similar cases brought by additional plaintiffs under the "deeming" order provisions of the trial judge's case management order. That order permitted any party to file an identical motion in a subsequent case and declare that the motion was deemed denied, thus preserving the moving party's rights to appeal without repetitive rehearings of previously denied motions. The companies appealed in each case, and we consolidated those appeals.

I S S U E

Did the district court err in denying the companies' motion to dismiss for insufficiency of process on the ground that Podvin's tort and contract claims were barred by Minn.Stat. §§ 302A.729 and .781 (1984)?

A N A L Y S I S

As a preliminary matter, we address the companies' motion to strike the entire contents of Podvin's appendix on the basis that it comprises material not contained in the district court record of this case. Generally, documents may not beincluded in a party's brief unless they are part of the appellate record. Fabio v. Bellomo, 489 N.W.2d 241, 246 (Minn.App. 1992), aff'd, 504 N.W.2d 758 (Minn.1993). Appellate courts may, however, consider cases, statutes, and other publicly available legal resources that were not presented to the district court. Fairview Hosp. v. St. Paul Fire & Marine Ins. Co., 535 N.W.2d 337, 340 n. 3 (Minn.1995).

The first challenged document is a district court order from a previous asbestos-related case, and the second is a series of excerpts from a deposition of the president of Jamar I taken in 1988 in a separate asbestos-related lawsuit. The district court order is a public record and is properly included in the appendix. The excerpts from the president's deposition were cited in Podvin's response to the companies' motion for summary judgment, which the companies included in their own appendix. In these limited circumstances the deposition excerpts may also be included in the appendix.

Sufficiency of process is a jurisdictional question that turns in this case on the interpretation of statutory provisions contained in Minn.Stat. § 5.25, subd. 5(b) (2000), and Minn.Stat. §§ 302A.729 and.781 (1984). A party may immediately appeal, as a matter of right, from the denial of a motion to dismiss for lack of jurisdiction. See Hunt v. Nevada State Bank, 285 Minn. 77, 88, 172 N.W.2d 292, 299-300 (1969). Jurisdiction is a legal question that we review de novo. Kellar v. Von Holtum, 605 N.W.2d 696, 700 (Minn.2000).

Minn.Stat. § 5.25, subd. 5(b), provides that if a business entity has voluntarily dissolved, or if a court has entered a decree of dissolution, service must be made according to the statute, "so long as claims are not barred under the provisions * * * that governed the business entity." In 1982, Walker Jamar amended its articles of incorporation, electing to be governed by chapter 302A of the Minnesota Statutes. In 1985, when API purchased the assets of Jamar I and took the name of The Jamar Company, Jamar II was incorporated under chapter 302A. Because both companies were governed by chapter 302A, we examine that statute as it existed in 1985 to determine whether the claims are barred, which in turn determines whether the companies may still be served. See Minn.Stat. § 5.25, subd. 5(b) (providing for service on dissolved business entity by serving secretary of state unless claims are barred under statutory provisions that governed that business entity).

The statute that governed the companies, Minn.Stat. § 302A.729, subd. 2 (1984), provided that claimants without notice of a corporation's dissolution, who failed to initiate legal proceedings on their claims within two years after the date of filing the notice of intent to dissolve, were subject to the provisions of Minn.Stat. § 302A.781. Jamar I merged into Norwalk in January 1985, and Norwalk merged into Walker Jamar in June 1985. Walker Jamar filed its notice of intent to dissolve with the Minnesota secretary of state on July 17, 1985. Because Podvin did not serve the claim within two years after the companies' filing of the notice of intent to dissolve, the claim is subject to the provisions of Minn.Stat. § 302A.781.

Section 302A.781, subd. 1, provided that a person who is a creditor or claimant "at any time before, during, or following the conclusion of dissolution proceedings" who "has not initiated a legal * * * proceeding before the commencement of the dissolution proceedings, * * * [is] forever barred from suing on that claim, * * * except as provided in this section." Subdivision 2 of section 302A.781 provided that within one year after corporate articles of dissolution had been filed, a corporate creditor or claimant who could show good cause for not having previously filed a claim could apply to the court to allow a claim against the...