Satterfield v. Crown Cork & Seal Co., Inc.

Citation268 S.W.3d 190
Decision Date29 August 2008
Docket NumberNo. 03-04-00518-CV.,03-04-00518-CV.
PartiesRosemarie SATTERFIELD, as Representative of the Estate of Jerrold Braley, Deceased, Appellant, v. CROWN CORK & SEAL COMPANY, INC., Individually and as Successor to Mundet Cork Corporation, Appellee.
CourtCourt of Appeals of Texas

Deborah G. Hankinson, Elana S. Einhorn, Law Offices of Deborah Hankinson, P.C., Dallas, Jeffery Mundy, Michael Singley, Mundy & Singley, L.L.P., Austin, for appellant.

Thomas R. Phillips, Baker Botts, L.L.P., Austin, David Lyman Crump, University of Houston Law Center, Kimberly Stuart, Frank G. Harmon III, Crain, Caton & James, P.C., Houston, for appellee.

Before Chief Justice LAW, Justices PATTERSON and HENSON.

OPINION

JAN P. PATTERSON, Justice.

The issue presented is whether a statute that extinguishes a litigant's right to pursue an accrued and pending common law cause of action—without providing a grace period—transcends the legislature's power. Within that context, does the presumption of a statute's constitutionality survive an express prohibition of the Texas Constitution? Appellant Rosemarie Satterfield, representative of the Estate of Jerrold Braley, seeks damages for injuries that Braley sustained by his exposure to asbestos-containing products. In this appeal, we review the judgment of the district court granting summary judgment to appellee Crown Cork & Seal Company, Inc., pursuant to a newly enacted statute that limits the asbestos-related liabilities of certain successor corporations. See Tex. Civ. Prac. & Rem.Code Ann. §§ 149.001.006 (West 2005) (hereinafter "the Statute").

After Braley sued Crown Cork and others for damages caused by his exposure to asbestos-containing products, the trial court granted partial summary judgment in Braley's favor. Within days, the Texas Legislature enacted—and made immediately effective—the Statute, which effectively barred any recovery from Crown Cork.1 Crown Cork then filed a motion for summary judgment based on its new statutory affirmative defense under the Statute, arguing that, because it had already paid successor asbestos claims in excess of the liability limit under the Statute, it had no further liability in any asbestos case, including Braley's. The district court granted the motion and severed Braley's claims against Crown Cork from those against the other defendants. This appeal followed.

In three issues, Satterfield contends that Crown Cork was not entitled to summary judgment because: (i) the Statute, which imposes certain limits on the liability of corporations that became successors to corporations that were involved in the asbestos-insulation business, violates the Texas Constitution's prohibition on retroactive laws as applied because it deprives her of all remedy for an accrued and pending cause of action, thereby extinguishing a vested right; (ii) the Statute, on its face, violates the Texas Constitution's prohibition on special laws because it grants special privileges to a particular class for the advancement of private, rather than public, interests; and (iii) Crown Cork failed to conclusively establish as a matter of law the elements of its newly created affirmative defense under the Statute and, therefore, is not entitled to summary judgment. Because the Legislature may not make a law that the Texas Constitution prohibits and the Constitution expressly forbids retroactive laws that impair vested rights, the question presented is whether an accrued and pending common law cause of action is a vested right and thus protected by the Texas Constitution. We conclude that it is a vested right and that therefore the Statute is unconstitutional as applied to Braley's claim because, in the absence of a grace period, the Statute is a retroactive law impairing his vested rights.2

Accordingly, we sustain Satterfield's first issue, and we reverse the trial court's summary judgment granted in favor of Crown Cork and remand for further proceedings.

BACKGROUND
The Parties

After receiving an honorable discharge from the United States Army in 1956, Jerrold Braley returned to his home in Wyoming but then moved his family to Texas to work as an industrial laborer at an oil refinery near Monahans. Acquiring skills to become a pipefitter and welder's helper, over the next several years Braley worked at refineries, chemical plants, gas plants, and at other industrial job sites in Texas, Wyoming, Oklahoma, Kansas, New Mexico, Florida, and Louisiana. These jobs involved working with pipes, boilers, compressors, and other machinery requiring insulation, which routinely involved asbestos insulation, including asbestos-containing insulation products manufactured by Crown Cork's predecessor—Mundet Cork Corporation. Braley worked until he retired in 1996.

Crown Cork is a manufacturer and distributor of packaging products for consumer goods. In 1963, Crown Cork, then a New York corporation, was the nation's largest producer and seller of metal bottle caps, known in the industry as "crowns." Mundet was also a large producer and seller of crowns and consisted of two divisions: the "closure" division, which manufactured crowns, and the "thermal insulation" division, which manufactured, sold, and installed insulation products, some of which contained asbestos. Seeking to acquire the assets of Mundet, in November 1963, Crown Cork purchased the majority of Mundet stock. Approximately three months later, on February 8, 1964, Mundet sold its insulation division to Baldwin-Ehret-Hill ("B-E-H"). It is undisputed in the summary judgment proof that B-E-H expressly agreed to assume only the liabilities of Mundet's thermal insulation division arising after February 8, 1964. Mundet thus retained all liability arising from any exposure to its asbestos-containing products before the date of the asset sale. Crown Cork acquired the remainder of Mundet stock, and the remaining assets of Mundet were transferred to Crown Cork by merger in 1966. In 1989, Crown Cork merged into a new Pennsylvania corporation of the same name.

The Lawsuit

In July 2002, Braley was diagnosed with mesothelioma, a fatal form of cancer associated with exposure to asbestos. On October 1, 2002, Braley sued Crown Cork and others3 for damages caused by his exposure to asbestos-containing products. In his live pleading at the time—Plaintiffs' Fourth Amended Petition and Jury Demand—Braley asserted common law causes of action for negligence and strict products liability. Braley's petition also sought to impose liability against Crown Cork as successor to Mundet. In November, Braley moved for partial summary judgment to establish Crown Cork's liability for Mundet's asbestos-containing products as a result of Crown Cork's acquisition and merger. Arguing that Pennsylvania law controls because it has the most significant relationship to the issue of whether Crown Cork should be liable for Mundet's liabilities, Crown Cork asserted that Texas "has nothing but a tenuous relationship."4 Crown Cork did not dispute that it was the successor by merger to Mundet and, therefore, liable for Mundet's tortious conduct under Texas law,5 nor did it dispute that it was liable for actual and compensatory damages attributable to Braley's exposure to Mundet's products.6

On May 29, 2003, the trial court entered an order granting Braley's motion for partial summary judgment on the successor liability issue, finding that Crown "is liable for injuries, actual and punitive damages, as may be proven at trial, caused by the asbestos-containing products manufactured, sold or distributed by Mundet[ ] before February 8, 1964, as a result of Crown Cork's[ ] acquisition and merger of Mundet[] into Crown Cork." The trial court further found that the judgment "only determines that in the event the jury finds Mundet Cork was negligent, grossly negligent, acted with malice, or its products were defective that Crown Cork is liable and bears the responsibility for the findings against Mundet Cork." Issues of negligence, product defect, gross negligence, and damages remained to be determined by the jury.7

The Statute

Four days after the trial court granted Satterfield's motion for partial summary judgment, ruling that Crown Cork was liable as successor to Mundet, the Legislature passed House Bill 4. Act of June 2, 2003, 78th Leg., R.S., ch. 204, 2003 Tex. Gen. Laws 847. Section 17 of House Bill 4—the Statute—created an affirmative defense to successor liability for asbestos claims by limiting cumulative successor liability to the fair market value of the predecessor company as of the time of the merger or consolidation. Id. § 17.01, 2003 Tex. Gen. Laws at 892-95 (codified at Tex. Civ. Prac. & Rem.Code Ann. §§ 149.001-.006 (West 2005)).

The Legislature also specified that the Statute would become "effective immediately" in all cases commenced on or after June 11, 2003, or in all pending cases in which trial, or any new trial or retrial after motion, appeal or otherwise, has not begun.8 The Statute was the only section of House Bill 4 to be made immediately effective. See id. § 23.02(b), 2003 Tex. Gen. Laws at 898; H.J. of Tex., 78th Leg., R.S. 6041-042 (2003); S.J. of Tex., 78th Leg., R.S. 5008 (2003). The Statute was also the only section of House Bill 4 made retroactively applicable to all cases pending on its effective date. See id. § 17.02(2), 2003 Tex. Gen. Laws at 895. Codified at Chapter 149 of the Texas Civil Practice & Remedies Code, the Statute is entitled "Limitations in Civil Actions of Liabilities Relating to Certain Mergers or Consolidations." See Tex. Civ. Prac. & Rem.Code Ann. §§ 149.001-.006.9 Because this suit was pending on June 11, 2003, and the trial had not started, the Statute applied to it.

The stated purpose of the Statute is to limit cumulative "successor asbestos-related liabilities"10 in Texas. Id. §§ 149.001.002. A successor corporation is liable for asbestos claims11 only up to the total...

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