Reeser v. Ngk North Am. Inc.

• Decision Date: 24 January 2011
• Citation: 2011 PA Super 17,14 A.3d 896
• Court: Pennsylvania Superior Court
• Parties: Sharon REESER and L. Scott Reeser w/h, Appellantsv.NGK NORTH AMERICAN, INC. and NGK Insulators, Ltd. and NGK Metals Corporation and Yasuhito Niwa and Len Velky, Cabot Corporation, Individually and Successor in Interest to Cabot Berylco, Inc., Kawecki Berylco, Inc., a/k/a KBI Kawecki Berylco Industries, Inc. and the Beryllium Corporation and Spotts, Stevens & McCoy, Inc., Appellees.

14 A.3d 896

2011 PA Super 17

Sharon REESER and L. Scott Reeser w/h, Appellants

v.NGK NORTH AMERICAN, INC. and NGK Insulators, Ltd. and NGK Metals Corporation and Yasuhito Niwa and Len Velky, Cabot Corporation, Individually and Successor in Interest to Cabot Berylco, Inc., Kawecki Berylco, Inc., a/k/a KBI Kawecki Berylco Industries, Inc. and the Beryllium Corporation and Spotts, Stevens & McCoy, Inc., Appellees.

Superior Court of Pennsylvania.

Argued July 28, 2010.Filed Jan. 24, 2011.

Ruben Honik, Philadelphia, for appellants.Neil S. Witkes, Bala Cynwyd, for Cabot, appellee.James C. Stroud and Douglas E. Ress, Philadelphia, for NKG, appellee.Stephen J. Imbriglia, Philadelphia, for Spots, appellee.BEFORE: MUSMANNO, FREEDBERG, and FITZGERALD ^*, JJ.OPINION BY FREEDBERG, J.:

This matter is before the Court on Sharon Reeser's appeal ¹ from the order entered by the Court of Common Pleas of Philadelphia County on September 29, 2008, granting summary judgment in favor of AppelleeSpotts, Stevens & McCoy, Inc(“SSM”).We affirm.

This matter arises in relation to the operation of a beryllium ² plant in Reading, Pennsylvania.Appellant lived in locations between .16 and 5.5 miles from the plant for over fifty years.She contends that she developed chronic beryllium disease (“CBD”) as a result of exposure to beryllium particulate emitted from the plant.CBD is a largely untreatable, granulomatous lung disorder.It is caused by an immunologic response to beryllium in the lung.Only individuals who have been exposed to beryllium and have a specific immune response to it, similar to an allergy, can develop CBD.SeePohl v. NGK Metals Corp.,936 A.2d 43, 45(Pa.Super.2007), petition for allowance of appeal denied,597 Pa. 733, 952 A.2d 678(2008).

SSM is an engineering firm that was retained by co-defendants who owned the plant, NGK North American, Inc.; NKG Insulators, Ltd.; NGK Metals Corp.; and Cabot Berylco, Inc., to perform “stack testing.”In 1971 and 1982, SSM conducted testing at the plant, which included measuring the amount of beryllium particulate being discharged into the air.Both tests showed that the beryllium emissions at the plant significantly exceeded the allowable limit set by the United States Environmental Protection Agency.SSM informed co-defendants of the test results.It did not report the findings to any government agency or to the community.

On September 29, 2008, the trial court granted summary judgment in favor of SSM and dismissed all claims against it.One issue is raised on appeal: “Whether Spotts, Stevens, & McCoy, Inc. had a legal duty to Plaintiffs under Section 324A of the Restatement Second of Torts which makes the Trial Court'[s] grant of summary judgment reversible?”Brief for the Appellant, at 3.

When reviewing a grant of summary judgment, the appropriate scope and standard of review are as follows:

In reviewing an order granting summary judgment, our scope of review is plenary, and our standard of review is the same as that applied by the trial court.Our Supreme Court has stated the applicable standard of review as follows: [A]n appellate court may reverse the entry of a summary judgment only where it finds that the lower court erred in concluding that the matter presented no genuine issue as to any material fact and that it is clear that the moving party was entitled to a judgment as a matter of law.In making this assessment, we view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.As our inquiry involves solely questions of law, our review is de novo.

Thus, our responsibility as an appellate court is to determine whether the record either establishes that the material facts are undisputed or contains insufficient evidence of facts to make out a prima facie cause of action, such that there is no issue to be decided by the fact-finder.If there is evidence that would allow a fact-finder to render a verdict in favor of the non-moving party, then summary judgment should be denied.

Jones v. Levin,940 A.2d 451, 452–454(Pa.Super.2007)(internal citations omitted).

The Pennsylvania Supreme Court has stated:

Generally, a party to a contract does not become liable for a breach thereof to one who is not a party thereto.However, a party to a contract by the very nature of his contractual undertaking may place himself in such a position that the law will impose upon him a duty to perform his contractual undertaking in such manner that third persons—strangers to the contract—will not be injured thereby;Prosser, Torts (end ed. 1955), § 85, pp. 514–519.It is not the contract per se which creates the duty; it is the law which imposes the duty because of the nature of the undertaking in the contract.

Farabaugh v. Pennsylvania Turnpike Commission,590 Pa. 46, 911 A.2d 1264, 1283(2006), reargument denied,2007 Pa. LEXIS 762(Pa.2007), quotingEvans v. Otis Elevator Co.,403 Pa. 13, 168 A.2d 573, 575(1961).

Section 324A of the Restatement (Second) of Torts, entitled “Liability to Third Person for Negligent Performance of Undertaking,” provides:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if

(a) his failure to exercise reasonable care increases the risk of such harm, or

(b)he has undertaken to perform a duty owed by the other to the third person, or

(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Appellant asserts that SSM knew the purpose of the testing was to investigate compliance with regulatory emission standards designed to protect public health.To demonstrate SSM was aware of the issue of community safety, Appellant relies on the following testimony of an SSM engineer who conducted the 1982 stack testing:

Q.When you undertook that project, on behalf of SSM of course, did you understand or recognize that in evaluating that effluent material that its evaluation had something to do with protecting, in this case, the surrounding community or public?

A.My understanding was that the company, the Reading plant, engaged us to measure what's coming off of the stacks to determine how much was coming off.

Q.Right.

And did you understand, and did SSM understand, that knowing how much was coming off was a matter of ensuring the safety and health of those that might come in contact with the public?

....

A.Yes, that's an assumption, sure.

....

Q: In fact, you were aware, were you not, that there were regulations promulgated by the Federal Government concerning the threshold above which effluent from a stack emitting beryllium could not or should not legally occur, correct?

A: Yes, sir.

Deposition of John Oransky, 7/31/07, at 56–58.Thus, Appellant contends that SSM was aware it had a duty to inform the public of significant health risks, and that “the only question for summary judgment analysis is whether there are facts of record that show a breach of the duty created under the Restatement as adopted in Pennsylvania.”Brief for the Appellant, at 11.

SSM contends that to be held liable under § 324A, it must have expressly undertaken a duty to protect the public, and it must have performed that duty negligently.SSM argues it did not undertake such a duty, and it did not perform its contractual obligations negligently.

In Sheridan v. NGK Metals Corp.,2008 WL 2156718, 2008 U.S. Dist. LEXIS 40926(2008), a persuasive, though non-binding opinion,³plaintiffs brought medical monitoring claims against SSM based on its failure to report the stack test findings at the Reading plant.The trial court, applying § 324A, stated that to be liable, a defendant“must specifically have undertaken to perform the task that he is charged with having performed negligently, for without the actual assumption of the undertaking there can be no correlative legal duty to perform that undertaking carefully.”Id. at *3, 2008 U.S. Dist. LEXIS 40926 at *9(internal quotations and citations omitted).The court added that there was no support for the proposition“that Section 324A gives rise to an ‘implicit’ or ‘derivative’ duty that stems from another, related duty undertaken by the defendant.”Id. at *5, 2008 U.S. Dist. LEXIS 40926 at *15.Thus, because the district court found that SSM did not undertake a duty “to perform any corrective action to ensure that the level of beryllium emitted from the Reading plant met the [federal] standards,” it granted SSM's motion to dismiss.Id. at *7, *8, 2008 U.S. Dist. LEXIS 40926 at *25, *29.

In affirming the trial court, the Third Circuit Court of Appeals explained that “[f]or liability to be imposed under § 324A, the defendant specifically [must have] undertaken to perform the task that [it] is charged with having performed negligently.”Sheridan v. NGK Metals Corp.,609 F.3d 239, 263(3rd Cir.2010)(quotations and citations omitted).Further, the Court noted that the scope of the rule “is measured by the scope of the defendant's undertaking.Even if a particular injury is foreseeable ... a defendant must still have a specific duty to prevent the injury.”Id.Thus, the Third Circuit concluded:

[F]or Spotts, Stevens & McCoy to be liable under § 324A, plaintiffs must prove [the contractual] duty was performed negligently.If plaintiffs had asserted that Spotts, Stevens & McCoy negligently performed the tasks it actually undertook—that is, testing, analyzing, and monitoring the levels of beryllium, and reporting those tests to the owner and operator of the facility—then the assertions would sufficiently establish a claim under § 324A.But plaintiffs' Amended Complaint makes no such allegations.In order for Spotts,...