Promaulayko v. Johns Manville Sales Corp.

CourtUnited States State Supreme Court (New Jersey)
Writing for the CourtPOLLOCK
Citation116 N.J. 505,562 A.2d 202
Parties, 58 USLW 2129 Marie PROMAULAYKO, as Administratrix and Administratrix ad Prosequendum of the Estate of John Promaulayko, Plaintiff, v. JOHNS MANVILLE SALES CORPORATION, Johns Manville Sales Corporation, successor to and in lieu of Johns Manville Products Corporation; Johns Manville Canada, Inc., formerly known as Canadian Johns Manville Co., Ltd., Canadian Johns Manville Amiante Ltd., formerly Canadian Johns Manville Asbestos Ltd.; Johns Manville Corporation; John Doe Trade Association; John Doe Corporation; Asbestos Corporation Ltd.; York Industries; Celotex Corp.; Cape Asbestos Ltd.; North American Asbestos Corp.; National Gypsum; Vermont Asbestos Group; A.N. Deringer Inc.; Cary Canadian Mines; Kenneth Smith, M.D.; and the Associated Ore and Metal Corporation Ltd., Defendants, v. LEONARD J. BUCK, INC., Defendant, Cross-Claimant-Respondent, and Amtorg Trading Corporation, Defendant, Cross-Claimant-Appellant.
Decision Date08 August 1989

Page 505

116 N.J. 505
562 A.2d 202, 58 USLW 2129
Marie PROMAULAYKO, as Administratrix and Administratrix ad
Prosequendum of the Estate of John Promaulayko, Plaintiff,
v.
JOHNS MANVILLE SALES CORPORATION, Johns Manville Sales
Corporation, successor to and in lieu of Johns Manville
Products Corporation; Johns Manville Canada, Inc., formerly
known as Canadian Johns Manville Co., Ltd., Canadian Johns
Manville Amiante Ltd., formerly Canadian Johns Manville
Asbestos Ltd.; Johns Manville Corporation; John Doe Trade
Association; John Doe Corporation; Asbestos Corporation
Ltd.; York Industries; Celotex Corp.; Cape Asbestos Ltd.;
North American Asbestos Corp.; National Gypsum; Vermont
Asbestos Group; A.N. Deringer Inc.; Cary Canadian Mines;
Kenneth Smith, M.D.; and the Associated Ore and Metal
Corporation Ltd., Defendants,
v.
LEONARD J. BUCK, INC., Defendant, Cross-Claimant-Respondent,
and
Amtorg Trading Corporation, Defendant, Cross-Claimant-Appellant.
Supreme Court of New Jersey.
Argued Feb. 28, 1989.
Decided Aug. 8, 1989.

Page 506

John C. Kennedy argued the cause for appellant (O'Donnell, Kennedy, Vespole & Piechta, attorneys; Francis J. Panzini-Romeo, West Orange, on the brief).

Arthur D. Bromberg argued the cause for respondent (Budd, Larner, Gross, Picillo, Rosenbaum, Greenberg & Sade, attorneys; Richard D. Picini, Short Hills, on the brief).

The opinion of the Court was delivered by

POLLOCK, J.

The sole issue on this appeal is whether an intermediate distributor in a chain of distribution should indemnify the ultimate distributor when both are strictly liable in tort to the injured plaintiff. The Law Division granted indemnification to the ultimate distributor, but the Appellate Division reversed, 224 N.J.Super. 391, 540 A.2d 893 (1988). We granted certification, 113 N.J. 338, 550 A.2d 453 (1988), and now reverse the judgment of the Appellate Division.

-I-

The underlying facts are that the decedent, John Promaulayko (Promaulayko), contracted asbestosis while working for [562 A.2d 203] Ruberoid Corporation from 1934 to 1978 at its South Bound Brook plant. During that period, Ruberoid purchased asbestos from Leonard J. Buck, Inc. (Buck), Asbestos Corporation Limited

Page 507

(Asbestos), and various other suppliers. Included in the asbestos sold by Buck to Ruberoid's South Bound Brook plant was 96.5 tons of Soviet asbestos, which Buck purchased from Amtorg Trading Corporation (Amtorg). The asbestos was packaged in 100-pound bags that did not warn of the dangers of asbestosis. Apparently neither Amtorg nor Buck ever took possession of the bags, which were shipped from the Soviet Union to the United States where Ruberoid took possession of them.

The jury determined in answer to a special interrogatory that Amtorg had supplied all of the Soviet asbestos that caused Promaulayko's injuries. After Promaulayko's death, his wife, plaintiff, Marie Promaulayko, instituted wrongful death, N.J.S.A. 2A:31-1 to -6, and survivor's, N.J.S.A. 2A:15-3, actions, naming as defendants, among others, Amtorg, Buck, and Asbestos. Only Buck and Amtorg are involved in the present appeal.

Buck, a corporation of the State of Delaware, is a broker of mineral products, whose brokerage of asbestos at the time of its sales to Ruberoid accounted for less than one percent of its business. Amtorg is a New York corporation founded in 1924 to promote trade between the United States and the Soviet Union. Its employees are Soviet citizens, the majority of whom remain in the United States for three or four years before returning to jobs in the Soviet Ministry of Foreign Trade. By 1930, Amtorg served as broker for eighty-six percent of the Soviet products entering the United States. At present, Amtorg serves as a direct agent for Soviet business interests and channels the majority of Soviet trade to the United States.

At the conclusion of the trial, the jury dismissed plaintiff's wrongful-death claim, apparently because Promaulayko died from a heart attack unrelated to his asbestosis. The jury awarded $60,000 to Promaulayko's estate on the survivor's action, and $40,000 to plaintiff on her per quod claim. In

Page 508

reaching that result, the jury provided the following answers to special interrogatories:

6. Considering that all of the fault that proximately

contributed to John Promaulayko's asbestosis is 100%,

what percentage of that total fault is attributable to:

(a) Leonard J. Buck, Inc. 25%
                (b) Amtorg Trading Corp. 10%
                (c) Asbestos Corp. Ltd. (also known as Johnson's
                 Company Ltd.) 65%
                TOTAL 100%
                

7a. Was all (100%) of the asbestos fiber sold by Leonard

J. Buck, Inc., which proximately contributed to

John Promaulayko's asbestosis sold to Buck by Amtorg

Trading Corp.?

Yes X No__

-

Based on the jury's answer that Amtorg had supplied Buck with all of the asbestos that had caused Promaulayko's asbestosis, the trial court granted Buck indemnification from Amtorg. The court rejected Amtorg's argument that Buck was not entitled to indemnification because the jury's answer to interrogatory 6 indicated that Buck was more at fault than Amtorg. Although the court acknowledged the inconsistencies in the answers to interrogatories 6 and 7a, it concluded that if the jury made a mistake, it was in answer to interrogatory 6, which dealt with the difficult issue of the allocation of fault. By contrast, the answer to the simple factual issue posed by interrogatory 7a established that Amtorg had supplied all the Soviet asbestos that Buck sold to Ruberoid's South Bound Brook plant.

The Appellate Division reversed, ruling that one in the position of a retailer, such as Buck, could obtain indemnification only from the manufacturer who produced the defective product and not from an intermediate distributor such as Amtorg. Underlying that determination was the court's conclusion that indemnity is based on the difference between the primary liability of the manufacturer and the secondary liability of

Page 509

distributors lower in the chain of distribution. The court reasoned that the

trial court's order requiring Amtorg to indemnify Buck is not based on any primary fault of Amtorg. Instead, it is based on Amtorg's proximity to the manufacturer. [562 A.2d 204] The jury's finding that Amtorg sold to Buck all of the asbestos fiber Buck sold Ruberoid placed Amtorg closer to the manufacturer in the chain of distribution than was Buck. Both Amtorg and Buck, however, were blameless in terms of conduct that created the defect in the product. The fact that Amtorg supplied Buck with all of the asbestos Buck distributed to Ruberoid does not change the kind or character of Amtorg's liability from secondary to primary. Here, it is clear that the manufacturer, a Russian Company, created the defect by not placing a warning on the product. Common law indemnification is based on equitable principles designed to further the ends of justice by allowing a party whose liability is merely constructive, technical, imputed or vicarious to be indemnified by the party who caused the defect. A retailer or distributor is permitted to be indemnified by the manufacturer because the manufacturer created the defect and the distributor or retailer is generally blameless.

The purpose of indemnification is restitution to prevent an active wrongdoer from being unjustly enriched by having another party discharge the obligation of the active wrongdoer. * * * Where, as here, the distributors' liability is based upon a common failure to detect the defect in the product and this failure merely continued the defect created by the manufacturer, we perceive of no valid reason to shift the liability of one distributor to another distributor through common law indemnification. Because Buck and Amtorg were both without personal fault, indemnification would create, rather than prevent, unjust enrichment. [224 N.J.Super. at 396-97, 540 A.2d 893 (footnote omitted).]

The court concluded that the proper method ameliorating its otherwise "harsh" result was to modify the award based on the Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to -5.3. Id. at 398-99, 540 A.2d 893. Consequently, it molded the verdict in accordance with the jury's answer to interrogatory 6, the result of which is that Asbestos would pay sixty-five percent; Buck,...

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41 practice notes
  • Yarchak v. Trek Bicycle Corp., CIVIL ACTION NO. 00-5540(JEI).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • June 25, 2002
    ...was merely an "innocent conduit" in the sale of the allegedly defective product, see, e.g., Promaulayko v. Johns Manville Sales Corp., 116 N.J. 505, 562 A.2d 202 (1989) (recognizing a claim for common law indemnification by one distributor against another distributor higher in the chain "ne......
  • In the Matter of Curriden, Case No. 05-38352/JHW (D.N.J. 6/25/2008), Case No. 05-38352/JHW.
    • United States
    • U.S. District Court — District of New Jersey
    • June 25, 2008
    ...parties who are found to be only secondarily or vicariously liable for the plaintiff's damages. Promaulayko v. Johns Manville Sales Corp., 116 N.J. 505, 511, 562 A.2d 202, 205 (1989). "`The right to common-law indemnity arises "without agreement, and by operation of law to prevent a result ......
  • Mettinger v. Globe Slicing Mach. Co., Inc.
    • United States
    • United States State Supreme Court (New Jersey)
    • May 14, 1998
    ...down the chain of distribution to distributors and retailers. Promaulayko v. Johns Manville Sales Corp., 116 N.J. Page 380 505, 510-11, 562 A.2d 202 (1989). A consumer injured by a defective product may bring a strict liability action against any business entity in the chain of distribution......
  • Sholtis v. American Cyanamid Co.
    • United States
    • New Jersey Superior Court – Appellate Division
    • December 22, 1989
    ...as a distributor even though it may also be entitled to indemnification from the manufacturer. Promaulayko v. Johns-Manville Sales Corp ., 116 N.J. 505, 571, 562 A.2d 202 (1989); Cartel Capital Corp. v. Fireco of New Jersey, 81 N.J. 548, 566, 410 A.2d 674 8 This statement would appear to qu......
  • Request a trial to view additional results
41 cases
  • Yarchak v. Trek Bicycle Corp., CIVIL ACTION NO. 00-5540(JEI).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • June 25, 2002
    ...was merely an "innocent conduit" in the sale of the allegedly defective product, see, e.g., Promaulayko v. Johns Manville Sales Corp., 116 N.J. 505, 562 A.2d 202 (1989) (recognizing a claim for common law indemnification by one distributor against another distributor higher in the chain "ne......
  • In the Matter of Curriden, Case No. 05-38352/JHW (D.N.J. 6/25/2008), Case No. 05-38352/JHW.
    • United States
    • U.S. District Court — District of New Jersey
    • June 25, 2008
    ...parties who are found to be only secondarily or vicariously liable for the plaintiff's damages. Promaulayko v. Johns Manville Sales Corp., 116 N.J. 505, 511, 562 A.2d 202, 205 (1989). "`The right to common-law indemnity arises "without agreement, and by operation of law to prevent a result ......
  • Mettinger v. Globe Slicing Mach. Co., Inc.
    • United States
    • United States State Supreme Court (New Jersey)
    • May 14, 1998
    ...down the chain of distribution to distributors and retailers. Promaulayko v. Johns Manville Sales Corp., 116 N.J. Page 380 505, 510-11, 562 A.2d 202 (1989). A consumer injured by a defective product may bring a strict liability action against any business entity in the chain of distribution......
  • Sholtis v. American Cyanamid Co.
    • United States
    • New Jersey Superior Court – Appellate Division
    • December 22, 1989
    ...as a distributor even though it may also be entitled to indemnification from the manufacturer. Promaulayko v. Johns-Manville Sales Corp ., 116 N.J. 505, 571, 562 A.2d 202 (1989); Cartel Capital Corp. v. Fireco of New Jersey, 81 N.J. 548, 566, 410 A.2d 674 8 This statement would appear to qu......
  • Request a trial to view additional results

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