60 Cal.App.5th 1078
Cal. Ct. App.2021Background
- Norris Morgan worked as a construction superintendent (1972–1987) and was exposed on jobsites to asbestos‑cement ("J‑M Transite") pipe that was cut and beveled, producing respirable dust. He was diagnosed with mesothelioma in December 2017; he died during the case and his wife continued as successor‑in‑interest.
- Johns‑Manville Corporation (JMC) manufactured "J‑M Transite" pipe until it reorganized and sold the pipe business effective January 1, 1983, to two entities: J‑M A/C (manufacturing) and J‑M Manufacturing Company, Inc. (J‑MM) (selling). The bankruptcy order stated J‑MM’s acquired assets were free of JMC’s pre‑transfer liabilities.
- J‑MM sold asbestos‑cement pipe after 1983 that was materially similar and bore the same "J‑M Transite" stencil marking as earlier JMC pipe.
- Plaintiffs sued multiple defendants; at trial only J‑MM and Familian remained. Familian settled during trial; jury found J‑MM 45% at fault, awarded $15,270,501 compensatory damages and $15,000,000 punitive damages; judgment entered for $22,213,704.39 after offsets.
- J‑MM appealed, challenging (1) sufficiency of evidence that Morgan was exposed to J‑MM products, (2) denial of a requested instruction distinguishing J‑MM from JMC, and (3) sufficiency of evidence supporting punitive damages. The appellate court affirmed liability and the instruction ruling but reversed the punitive damages award for lack of clear and convincing evidence of corporate malice by an officer/directing managing agent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was substantial evidence Morgan was exposed to products supplied by J‑MM | Morgan testified he saw "J‑M Transite" pipe on jobsites through the 1980s and identified it by stencil and invoices; jury could credit this testimony | J‑MM argued the evidence was equally consistent with exposure to pre‑1983 JMC pipe (e.g., pipe length discrepancy), so no proof J‑MM products caused injury | Affirmed: viewing evidence favorably to verdict, substantial evidence supported exposure to J‑MM pipe; credibility/ inconsistencies were for jury to resolve |
| Whether trial court erred by refusing J‑MM’s special instruction stating J‑MM is not liable for pre‑1983 JMC conduct | Plaintiffs relied on testimony showing exposure to J‑M Transite during years when only J‑MM supplied the pipe | J‑MM sought a neutral, binding instruction that J‑MM is distinct from JMC and not liable for pre‑1983 JMC products | Affirmed: court properly rejected the argumentative, fact‑specific instruction; jury verdict form and allocation show jurors understood the distinction and no prejudice shown |
| Whether punitive damages were supported by clear and convincing evidence that an officer/directing managing agent acted with malice/ oppression/fraud | Plaintiffs argued corporate conduct and knowledge could be pieced together to show organizational malice without identifying a particular officer | J‑MM argued plaintiffs failed to show any officer, director, or managing agent had requisite state of mind during relevant period | Reversed as to punitive damages: record lacks substantial evidence that an officer/directing managing agent authorized or ratified despicable conduct by clear and convincing standard |
Key Cases Cited
- Rutherford v. Owens‑Illinois, Inc., 16 Cal.4th 953 (1997) (plaintiff bears burden to prove exposure to defendant’s product in asbestos cases)
- Garcia v. Joseph Vince Co., 84 Cal.App.3d 868 (1978) (reversal where evidence could not distinguish which of multiple manufacturers produced the offending product)
- Soule v. General Motors Corp., 8 Cal.4th 548 (1994) (party entitled to correct, nonargumentative instructions supported by substantial evidence; trial court must avoid argumentative/fact‑specific instructions)
- Romo v. Ford Motor Co., 99 Cal.App.4th 1115 (2002) (corporate malice may be inferred from pervasive organizational actions and knowledge, but proof must permit reasonable inference that information reached managing agents)
- Sweatman v. Department of Veterans Affairs, 25 Cal.4th 62 (2001) (standard of review for denial of judgment notwithstanding the verdict: substantial evidence supports jury)
- Conservatorship of O.B., 9 Cal.5th 989 (2020) (clear and convincing standard requires high probability; appellate review asks if substantial evidence supports that heightened standard)
- McGonnell v. Kaiser Gypsum Co., Inc., 98 Cal.App.4th 1098 (2002) (no causation if no exposure to defendant’s product)
- Webb v. Special Electric Co., Inc., 63 Cal.4th 167 (2016) (appellate review must view evidence in light most favorable to verdict; credibility is for jury)
- Douglas v. Fidelity Nat. Ins. Co., 229 Cal.App.4th 392 (2014) (refusal to instruct is reversible only if prejudice to verdict is probable)