U.S. District Court for the Eastern District of Louisiana, March 31, 2021
In October 2019, Plaintiff Stephen Legendre, filed a lawsuit alleging that he contracted mesothelioma in September 2019. He alleged that his mesothelioma was caused by take-home exposure to asbestos from his father who worked at Avondale from 1943 to 1945.
Avondale removed the case to federal court, and thereafter filed a third-party claim against Mestek, Inc, as the successor corporation to L.J. Wing Manufacturing Company, which had allegedly supplied forced draft blowers and turbines to Avondale during the relevant time period. In its Answer, Mestek, Inc., denied it had acquired liability for L.J. Wing’s products. Instead, Mestek averred that Tutco, LLC f/k/a Tutco, Inc.had acquired such assets and liabilities. Based upon the foregoing, Avondale filed a third-party Complaint adding Tutco as a third-party defendant.
Thereafter, Mestek filed a motion for summary judgement arguing it is not the successor to Wing Industries, Inc., formerly known as L.J. Wing Manufacturing Company, for liabilities related to turbines and forced-draft blowers manufactured by Wing, as alleged by Avondale in its third-party complaint against Mestek. Mestek argued that “there is no credible evidence that Mestek is the successor-in-interest to [Wing] and so cannot be responsible or liable for the alleged asbestos-containing products allegedly sold by [Wing] to Avondale.”
Summary judgment is proper where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” All reasonable inferences are drawn in the favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.” The party seeking summary judgment bears the burden of demonstrating the absence of a genuine issue of material fact. “Once the movant does so, the burden shifts to the nonmovant to establish an issue of fact that warrants trial.”
In its motion, Mestek argued that it has no corporate relationship with L.J. Wing Company or its successors, and therefore, it is not the corporate successor of L.J. Wing Company. Mestek provided the 1987 Asset Purchase Agreement which detailed Mestek’s purchase of assets from Wing Industries, the apparent corporate successor to L.J. Wing Company, was limited to two specific product lines. The seller, Wing Industries, retained other product lines including specifically, “Seller’s Heat Recovery Wheel business and assets and Seller’s Draft Inducer business and assets.” As explained in a client Affidavit attached to the motion, forced draft blowers, one of the products allegedly sold to Avondale by L.J. Wing Company, fell into the category of equipment as “draft inducer business.” Accordingly, Mestek asserted it did not and could not have, acquired turbines or a turbine manufacturing business from Wing Industries and was therefore not responsible for turbines sold to Avondale.
In its opposition, Avondale noted one specific asset that was transferred to and accepted by Mestek as part of the Asset Purchase Agreement was the Wing trademark for steam turbines, as well as all applications for the same. Avondale pointed out the Asset Purchase Agreement stated, with regard to future product liability claims not set forth on Wing’s Balance Sheet that Mestek agreed to discharge all such liabilities relating to the Acquired Business. Specifically, Avondale noted, the Asset Purchase Agreement stated that Mestek accepted “product liability claims relating to the [Acquired] Business…arising from products shipped and/or services performed by [Wing] prior to the date of Closing….” Therefore, Avondale argued, steam turbines were included in the assets acquired by Mestek. Accordingly, Avondale argued that, under the clear and unambiguous terms of the Asset Purchase Agreement, Mestek assumed all liabilities arising out of product liability claims for Wing steam turbines shipped by Wing prior to June 23, 1987, which would include those shipped to Avondale during the relevant time period.
This court found genuine issues of material fact existed as to what assets and liabilities Mestek acquired from Wing. Accordingly, Mestek’s motion was denied.