OPINION
This is а successor-liability case decided on cross-motions for summary judgment. Appellant, Lockheed Martin Corporation, challenges the summary judgment rendered in favor of appellees (the workers). The workers are members of a class of plaintiffs seeking damages for personal injuries resulting from exposure to silica and silica-containing dust. Lockheed claims the trial court misconstrued an agreement for the acquisition of corporate assets in ruling that Lockheed is contractually liable, as a successor to Wedron Silica Company of Delaware, for any damages adjudicated against Wedron for the workers’
Facts and Procedural History
The workers filed suit in 1995. They originally numbered 140 plaintiffs, who sued more than 80 defendants for injuries they claim resulted from exposure to silica compounds at foundries where the workers were employed. The defendants include manufacturers and suppliers of silica products and manufacturers and suppliers of safety equipment for the foundries. One of these defendants, Martin-Marietta Corporation, purchased the assets of Wedron Silica Company of Delaware in 1979. Wedron allegedly supplied silica compounds to the foundries. As a result of a series of corporate transactions, Lockheed succeeded Martin-Marietta as successor-in-interest to Wedron. The workers claim that Wedron supplied industrial silica sand to their factories, but the workers apparently did not timely sue the correct Wed-ron entity. 1 Lockheed was added as a defendant shortly before 10 of the workers went to trial in the first stage of the class-action litigаtion.
Lockheed’s liability for Wedroris alleged torts against the workers depends on whether Lockheed’s predecessor, Martin-Marietta, assumed liability for those torts when it purchased Wedroris assets in 1979. In keeping with its interpretation of the 1979 purchase and sale agreement, Lockheed answered the workers’ lawsuit with a verified denial that challenged its capacity to be sued. See Tex.R. Civ. P. 93(l)-(2), (4).
The parties filed cross-motions for summary judgment based on their interpretations of the 1979 purchase and sale agreement. In moving for summary judgment, the workers maintained that Maryland law governed interpretation of the agreement because Lockheed is a Maryland corрoration, and that Lockheed incurred successor liability for the workers’ alleged torts due to Martin-Marietta’s having expressly assumed liability for Wedroris torts under the 1979 purchase and sale agreement. Lockheed referenced Delaware choice-of-law provisions of the agreement in its motion for summary judgment, but claimed it was immaterial whether Texas, Maryland, or Delaware law controlled, because the law of each of these states established that Martin-Marietta had neither expressly nor impliedly assumed liability for Wedroris contingent torts, and that Lockheed therefore had no successor liability. Lockheed also moved to sevеr the successor-liability controversy for appeal.
The trial court’s order rendering summary judgment in favor of the workers states in part:
... [T]he Cross-Motion for Summary Judgment filed by the [workers] is GRANTED and this Court enters a final Judgment that Lockheed Martin Corporation is contractually liable for any damages adjudicated against Wedron Silica Company of Delaware with respect to [the workers’] alleged cause of action.
It is further ORDERED that all of the [workers’] causes of action against the Defendant Lockheed Martin Corporation be and the same are hereby SEVERED from the remainder of this suit and this judgment shall be final between said parties.
It is further ORDERED that the Clerk assign the cause оf action between[the workers] and the Defendant Lockheed Martin Corporation a separate cause number and that this Judgment be removed from the docket of the captioned case.
All relief not expressly granted herein is denied.
Although it specifies that Lockheed “is contractually liable” for any damages adjudicated against Wedron, the face of the order does not reflect whether the trial court concluded that Martin-Marietta had expressly assumed liability under the 1979 purchase and sale agreement, or merely impliedly assumed liability. The order clearly renders summary judgment in favor of the workers, however, who had premised their motion solely on Martin-Marietta’s having expressly assumed liability under the 1979 purchase and sale agreement. By granting the workers’ motion for summary judgment and rendering judgment in their favor, therefore, the trial court necessarily concluded that Martin-Marietta had expressly assumed liability for Wedron’s contingent torts under the 1979 purchase and sale agreement.
Following severance, the trial court entered a nunc pro tunc order that confirmed its earlier rulings and formally transferred specified documents to constitute this cause.
Is the Judgment Final?
The workers raise a preliminary, jurisdictional challenge, contending we must dismiss for lack of jurisdiction because the trial court resolved only the successor-liability issue and did not intend to dispоse of all issues and parties. To be final and appealable, a summary judgment must dispose of all parties and issues before the court.
Maflige v. Ross,
It is undisputed that Lockheed did not manufacture or supply any product used at the foundry, that any liability assessed against Lockheed for Wedron’s torts requires a determination that Martin-Mariettа assumed liability for those torts when it purchased Wedron’s assets in 1979, and that the amount of liability would be the amount of damages adjudicated against Wedron. Lockheed’s liability as successor is the only issue presented by the ^parties’ pleadings, the only issue presented by the cross-motions for summary judgment, and the only issue resolved by the summary judgment order, which recites, several times, that it is a final judgment. The same order denied Lockheed’s motion for summary judgment and denied all relief not expressly granted.
We conclude the judgment is final and overrule the workers’ jurisdictional challenge.
Standard of Review
We follow the usual standard of review for traditional summary judgments granted under rule 166a(c) of the Rules of Civil Procedure: A party seeking summary judgment must establish each element of its claim or defense, as a matter of law, or negate an element of each claim or defense of the opposing party, as a matter of law. Tex.R. Crv. P. 166a(a)-(b) (comment). This standard is well-established in cases construing written agreements.
Coker v. Coker,
When a motion for summary-judgment raises multiple grounds, we may affirm if any ground is meritorious.
Cincinnati Life Ins. Co.,
Successor Liability by Express or Implied Assumption
Lockheed’s first point of error challenges the summary judgment rendered in the workers’ favor and the denial of its own motion for summary judgment. Lockheed contends that, in ruling that Lockheed is contractually liable as Martin-Marietta’s successor for any damages awarded to the workers, the trial court misconstrued the terms of the 1979 agreement by which Martin-Marietta purchased Wedron’s assets. Lockheed maintains it cannot be contractually liable for Wedron’s alleged torts against the workers because Martin-Marietta neither expressly nor impliedly assumed liability for those torts. As in the trial court, the workers contend Martin-Marietta expressly assumed Wed-ron’s torts under the 1979 purchase and sale agreement.
A. Choice of Law
The 1979 agreement formаlizing Martin-Marietta’s purchase of Wedron’s assets specifies that Delaware law controls the validity, interpretation and performance of the agreement. Determining which state’s law applies is a question of law.
Gutierrez v. Collins,
Lockheed relies on the Delaware choice-of-law provision in the 1979 purchase and sale agreement to contend Delaware law controls whether Martin-Marietta assumed liability for Wedron’s contingent torts. Lockheed also claims Delaware law controls under the “most significant relationship” test because Wedron is incorporated in Delaware, which therefore has a reasonable rela
We conclude that Delaware law controls because it is specified in the 1979 purchase and sale agreement.
4
As already noted, no one disputes the validity of the Delaware choice-of-law provisions, and Delaware has a reasonable relationship to the sale of Wedron’s assets.
See DeSantis,
1. Majority Rule — Successor Not Liable
The Third Restatement of the Law of Torts for Products Liability states the majority rule: a successor business that purchases only the assets of another business is not subject to liability for harm caused by defective products sold commercially by the predecessor unless:
(1) in acquiring the assets, the successor agrees to assume liability;
(2) the acquisition results from a fraudulent conveyance to escape liability for the debts or liabilities of the predecessor;
(3) the acquisition constitutes a consolidation or merger with the predecessor; or
(4) the acquisition results in the successor beсoming a continuation of the predecessor.
See Restatement (Thied) of the Law of Torts, PRODUCTS Liability § 12 (1998). 5 The rule of non-liability for asset acquisitions is frequently the reason why parties choose that option in acquiring a business, as opposed to a merger or stock acquisition, in which the predecessor’s obligations and liabilities continue in the surviving entity. James Ryan & Robert Beasley, Asset Acquisitions: Caveat Emptor, 53 Tex. B.J. 1221,1221 (1990).
Delaware and Maryland recognize all four exceptions to the rule of non-liability by case law.
Elmer v. Tenneco Resins,
2. Exception for Liability Assumed in Acquiring Assets
Texas, Delaware, and Maryland precedents all recognize the first exception, but differ in applying it. James Ryan & Robert Beasley,
Asset Acquisitions: Caveat Emptor,
58 Tex. B.J. 1221, 1221 (1990). The successor may expressly or impliedly assume contingent liability in Delaware and Maryland.
See Elmer,
B. Lockheed Did Not Incur Successor Liability by Express or Implied Assumption
Lockheed and the workers premise their express assumption arguments exclusively on the 1979 purchase and sale agreement by which Martin-Marietta acquired Wed-ron’s assets. Lockheed’s contentions against implied assumption likewise center on the agreement itself, rather than on the conduct of any party. Neither party contends this agreement is ambiguous.
1. Interpretation of an Unambiguous Written Instrument
We review an unambiguous written instrument as a matter of law; our focus is on ascertaining and effectuating the intent of the parties, as expressed in the instrument.
Coker,
2. Terms of the 1979 Purchase and Sale Agreement
The 1979 purchase and sale agreement indicates that Martin-Marietta acquired only Wedron’s assets and those liabilities disclosed on the balance sheet as of the date of closing. Section 4(B) of the agreement reflects the following concerning Martin-Marietta’s and Wedron’s understandings of the assets acquired and the liabilities incurred:
At the Closing Date ... all assets shall be at the June 2, 1979 levels as shown on the Balance Sheet ... and likewise that the liabilities shall nоt exceed the June 2, 1979 levels shown on the Balance Sheet....
A balance sheet certified by public accountants as “representing the financial position of [Wedron] at June 2, 1979,” is Exhibit C to the agreement. Neither the balance sheet nor the accompanying notes
Section 1 of the agreement contains 14 clauses that list and pertain to Wedron’s representations and warranties concerning its properties and liabilities. In Section 1(1), Wedron referred to Exhibits G and F of the agreement as identifying all known, pending, or threatened actions, suits, or proceedings in which Wedron was either a party or in which Wedron or its property might be affected. Section 1(1) specifically warranted, in addition, that there were no other known, pending, or threatened actions, suits, or proceedings. Concerning liabilities, Wedron stated, in Section 1(M) of the agreement:
To the best of Wedron’s knowledge and belief, there are no liabilities that might adversely and materially affect Wedron’s operations that would have to be required to be disclosed in a balance sheet prepared in accordance with generally accepted accounting principles consistently applied that have not been stated in the Balance Sheet or disclosed to [Martin-Marietta] under this Agreement. ,
In Exhibit G, which identifies thrеe pending lawsuits and one threatened lawsuit known to Wedron,. the agreement specified that Wedron and its insurers had undertaken the defense of the pending lawsuits and would undertake the defense of the threatened lawsuit if it materialized. In Exhibit F, which addressed environmental claims, Wedron identified an Illinois plant with possible violations of levels of silica dust and noise, and stated it was developing engineering and administrative measures and monitoring emissions, as requested by the Illinois Environmental Protection Agency.
. Section 5 of the 1979 purchase and sale agreement defined the terms of “Sale, Purchase and Assumption.” In addition to establishing the $33,000,000 purchase price and initial deрosit, this section outlined the liabilities of Wedron that Martin-Marietta assumed as part of the asset purchase.
D. Except as provided below, as of the Closing Date, Wedron shall assign to [Martin-Marietta] and [Martin-Marietta] shall assume all of the obligations and liabilities of Wedron on the Closing Date including:
(i) The liabilities and obligations of Wedron on the Balance Sheet, except to the effect such liabilities and obligations shall have been discharged or satisfied prior to the Closing Date;
(ii) The liabilities and obligations of Wedron that have arisen in the ordinary course of business prior to the Closing Date and have not been discharged or satisfied by Wedron prior to the Closing Date;
(iii) The liabilities and obligations of Wedron under the pension plans covering hourly, employees, labor agreements, employment contracts and future obligations in respect of Wedron’s employees set forth in Exhibits H and I;
(iv) The liabilities and obligations of Wedron under the Wedron Silica Company Retirement Plan for Salaried Employees (“Salaried Plan”) in respect of the participants under such Plan as of the Closing Date (other than those participants who terminated employment with Wedron prior to the Closing Date), it being understood that such liabilities and obligations will be transferred in accordance with the requirements of Federal law to a sеparate pension plan to be maintained by Martin Marietta, as set forth n Section ll.E; and
(v) The liabilities and obligations of Wedron under all leases of real property, or mining claims described in Exhibits A-l or A-2; leases of equipment, machinery and tangible personal property described in Exhibit B — 1; material contracts, agreements and commitments described in Exhibit D and any other agreements, contracts and commitments entered into by Wedron in the ordinary course of business;
provided, however, that [Martin-Marietta] shall not assume any other material obligation or liability of Wedron (i) that does not appear on the Balance sheet, (ii) that has not been disclosed to [Martin-Marietta] under this Agreement, or (iii) to which [Martin-Marietta] ha[s] not specifically consented in writing on or before the Closing Date to assume as of the Closing Date.
Lockheed maintains the foregoing provisions, taken together as they must be as a matter of contract law, show that Martin-Marietta assumed only those limited liabilities specified in the balance sheet and purchase and sale agreement, but did not assume any tort liability, either expressly or impliedly. Lockheed argues that the limited liabilities Martin-Marietta assumed relate solely to day-to-day operating, and that nothing in the 1979 purchase and sale agreement contemplates, or can be construed as impliedly contemplating, an agreement to assume Wedron’s contingent tort liabilities. Lockheed contends its interpretation of the agreement is underscored by Wedron’s having specifically retained liability for its known and anticipated torts, by the agreement’s repeated references to the balance sheet as of the date of closing, which discloses no tort liabilities, and by Wedron’s disclosure and express assumption of all known tort liabilities, including contingent liabilities.
The workers defend the trial court’s ruling principally by relying on paragraph D of Section 5 of the 1979 purchase and sale agreement, which defines the terms of sаle, purchase and assumption. Paragraph D, excerpted in full above, lists five categories of “liabilities and obligations” of Wedron that Martin-Marietta assumed “on the Closing Date.” The workers rely on sub-paragraph (ii) of paragraph D, which includes, among the assumed obligations, “The liabilities and obligations of Wedron that have arisen in the ordinary course of business prior to the Closing Date and have not been discharged or satisfied by Wedron prior to the Closing
Date.” The workers claim that liability for their alleged injuries is liability that Wed-ron incurred in the ordinary course of its business of supplying sand to the foundries and that Martin-Marietta therefore assumed that liability by this sub-paragrаph.
Lockheed responds that the workers ignore the parameters under which Martin-Marietta assumed the five categories of liabilities and obligations in the subpara-graphs of paragraph D. These parameters appear in the introduction of paragraph D and in its concluding clause. Paragraph D begins by qualifying the obligations that Martin-Marietta undertook in acquiring Wedron’s assets with the following proviso: “Except as provided below, as of the Closing Date.... ” Paragraph D then lists the five following categories of liabilities and obligations: balance sheet, which, we have noted, reflects no tort liabilities; ordinary course of business; pension plans and other emplоyee agreements; retirement plans; and leases and other contractual commitments. But, as the concluding clause states:
provided, however, that [Martin-Marietta] shall not assume any other material obligation or liability of Wedron (i) that does not appear on the Balance sheet, (ii) that has not been disclosed to [Martin-Marietta] under this Agreement, or (iii) to which [Martin-Marietta] ha[s] not specifically consented in writing on or before the Closing Date to assume as of the Closing Date.
3. No Express or Implied Assumption under Delaware or Maryland Law
Lockheed and the workers each rely on
Elmer v. Tenneco Resins, Inc.,
a decision of the Unites States District Court for the District of Delaware.
Elmer
was a products liability actiоn brought by the surviv- or of a patient who died from deposits of an X-ray contrast material called Thoros-tat.
The district judge first recognized that, under Delaware law, a successor may incur liability for its predecessor’s torts by expressly or impliedly assuming liability. Id. at 540. In declining to grant summary judgment for the defendants, the court emphasized that while the liabilities assumed under asset acquisitiоn were those that existed “as of the closing date,” the plan also described those liabilities as “whether accrued, absolute, contingent, or otherwise.” Id. at 541 (emphasis added). By specifically contemplating contingent or potential liabilities, and not simply those disclosed by the balance sheet, summary judgment for the defendants was improper. Id. In this case, however, Wedron assumed its known tort and contingent liabilities, while Martin-Marietta assumed no tort liabilities whatsoever. Moreover, the balance sheet here disclosed no tort liabilities, and the “liabilities and obligations” Martin-Marietta did assume under Paragraph D of Section 5 of the agreement were neither potential nоr contingent. Rather, they pertained to the known, ordinary operating costs of the business, and responsibilities to the employees of the business.
Maryland, like Delaware, also recognizes express or implied assumption of liability as an exception to the general rule that a successor who purchases the assets of a business incurs no liability for the predecessor’s contingent torts.
Nissen Corp.,
In applying the general rule of non-liability to render summary judgment for the successor entity in
Smith,
the United States District Court for the District of Maryland concluded the first exception did not apply because the succеssor had not expressly assumed tort liability for the plaintiffs injuries. In contrast to this case, the successor expressly assumed some liabilities in
Smith.
Martin-Marietta’s and Wedron’s recitals in the 1979 purchase and sale agreement occur within the framework of the first exception to the general rule in both Delaware and Maryland: Martin-Marietta, and thus Lockheed, as Martin-Marietta’s successor, incurred no liability for Wedron’s torts unless Martin-Marietta expressly or impliedly assumed that liability in acquiring Wedron’s assets. In the 1979 purchase and sale agreement, Wedron stated there were no liabilities that might adversely affect Martin-Marietta, except those disclosed in the balance sheet оr in the agreement, as of the closing date. The balance sheet discloses no tort liabilities. Concerning the tort liabilities Wedron disclosed, both actual and contingent, Wedron and its insurers retained full responsibility. These recitals clarify Wedron’s and Martin-Marietta’s intent that the asset-acquisition agreement fall well within, rather than even marginally outside, the general rule of non-liability for the successor entity.
The workers dispute this interpretation of the concluding exception by claiming it modifies only the preceding subparagraph (v), which lists leases and other contractual commitments. This interpretation has no merit because it renders meaningless the introduction to Paragraph D, and thus violates basic rules of contract interpretation.
See Northwestern Nat’l Ins. Co.,
The workers also contend that the liability for their alleged injuries is liability that Wedron sustained in the ordinary course of its business, which Martin-Marietta expressly assumed under sub-paragraph (ii) of Paragraph D. Considering Paragraph D(ii) within the context of the entirety of Paragraph D, as well as the entirety of the agreement, this is not a reasonable interpretation. The liabilities and obligations that Martin-Marietta аssumed by paragraph D affect the day-today operation of the business. Moreover, the concluding exception specifically disclaims any other “material” liability or obligation, and Wedron also warranted, in Section 1(M) of the agreement, there were no other liabilities that “might adversely and materially affect” operations of its business than those it did disclose. That tort liabilities are not in the “ordinary course of business” is underscored by Wedroris having listed its known and contingent tort and environmental liabilities and obligations in separate exhibits to the sales agreement.
We conclude that Martin-Marietta did not expressly or impliedly assume liability for the workers’ alleged injuries and that Lockheed was therefore entitled to summary judgment under both Delaware and Maryland law.
4. No Express Assumption under Texas Law
As addressed above, Texas strongly embraces the non-liability rule. To impose liability for a predecessor’s torts, the successor corporation must have expressly assumed liability. Tex. Bus. CoRP. Act art. 5.10(B)(2). The statute protects both Texas corporations and foreign corporations like Lockheed, which is incorporated in Maryland. See id. We conclude there is no basis in Texas law for interpreting the 1979 purchase and sale agreement as encompassing an express assumption of liability for Wedroris alleged torts against the workers, for the same reasons that we rejected that interpretation under Delaware and Maryland law.
While we relied on the agreement itself, rather than case law, to conclude that, in expressly assuming “ordinary
We sustain Lockheed’s first point of error. Having determined that Lockheed established its right to summary judgment, as a matter of law, on the grounds that it was not contractually liable as a successor to Wedron for its contingent torts, we need not address Lockheed’s second point, which assigns error to the trial court’s having not rendered summary judgment in favor of Lockheed on limitations grounds.
Conclusion
We reverse the judgment of the trial court and render judgment that Lockheed is not contractually liable for any damages adjudicated against Wedron Silica Company of Delaware for the workers’ alleged causes of action.
Notes
. The record shows that the workers had initially sued an Ohio corporation, Wedron Silica Company. The Ohio Wedron corporation prevailed on a motion for summary judgment claiming it had ceased operations in 1980 and could not have furnished products to the workers’ factories.
. In contending that Delaware law controls, Lockheed has abandoned its trial-court reliance on the laws of Delaware, Texas, and Maryland.
. In contrast to Lockheed, which has narrowed its choice-of-law arguments, the workers have expanded theirs, by adopting Lockheed’s reliance on the laws of Delaware, Texas, and Maryland, albeit toward a different result. While we may not ordinarily consider arguments not presented to the trial court when reviewing a summary judgment, Tex.R. Civ. P. 166a(c), we consider the workers’ contentions here as raised by Lockheed's motion.
See Cincinnati Life Ins. Co.,
. Nevertheless, we will demonstrate how the result would be the same under Maryland and Texas law.
. The rationale for the rule of non-liability is that the successor did not sell or distribute the allegedly defective product, and therefore does not fall within the general rule by which commercial sellers and distributors of products incur liability. Restatement (Third) of Products Liability § 12 cmt. a (1998) (quoting from Restatement (Third) of Products Liability § 1 (1998) ("[0]ne ... who sells or distributes a defective product is subject to liability for harm ... caused by the defective product.”) (emphasis in original)).
. Article 5.10(B)(1) eliminates the "de facto merger” doctrine, the third exception under the Restatement. Tex. Bus. Corp. Act Ann. 5.10(B)(1) (Vernon Supp.2000).
See Mudgett
v.
Paxson Mach. Co.,