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Supplier Defendant Succeeds in Opposing Punitive Damages

Superior Court of California, County of Los Angeles

In this asbestos action, the court considered various defense motions.

Defendant Western Auto Supply company filed a request opposing punitive damages, arguing that the plaintiffs cannot prove that it acted with oppression, malice or fraud. Summary judgment or summary adjudication on the issue of punitive damages is proper only when no reasonable jury could find the plaintiff’s evidence to be clear and convincing proof of malice, fraud or oppression.

For a corporate defendant, the oppression, fraud or malice must be on the part of an officer, director, or managing agent of the corporation. A plaintiff also can satisfy the ‘managing agent’ requirement through evidence showing the information in the possession of the corporation and the structure of management decision making that permits an inference that the information in fact moved upward to a point where corporate policy was formulated. Punitive damages may be available when a defendant knows the dangers of asbestos, took action to protect its own employees, knew that its products were likely to pose a danger to users, and did not warn them.

In response to an interrogatory asking for all facts supporting the claim for punitive damages, the plaintiffs failed to provide any specific evidence of Western Auto Supply’s knowledge about the danger of asbestos in its products. Therefore, the burden shifts to the plaintiffs.

The plaintiffs cited to the deposition from a prior case of an employee of Western Auto Supply, in which that employee testified he saw training videos about the hazards of asbestos in brake dust in 1986 and was not aware of any warnings on products sold by Western Auto Supply. Western Auto Supply objected to this deposition testimony as hearsay under Evidence Code sections 1291 and 1292 and Berroteran v. Superior Court.

The Berroteran court outlined the following factors to consider in determining whether former deposition testimony is admissible under section 1291: (a) whether the parties intended at the outset that the deposition serve as trial testimony; (b) whether the parties subsequently reached agreement to use the deposition at the trial in that earlier case or in other cases; and (c) other practical considerations such as the timing of the deposition in the earlier litigation, whether a mediation or settlement conference was scheduled for after the deposition, the closeness in relationship between the opposing party and deponent, the anticipated availability of the deponent in the earlier case, whether a statutory rule allowed the parties to use the deposition at the earlier trial, the extent of cross-examination in the deposition, the particular designated testimony, and the similarity of the lawsuits. However, the plaintiffs did not show the witness is unavailable or provide evidence of the Berroteran factors.

The plaintiffs’ counsel argued that the former testimony is admissible under Evidence Code section 1222, which provides that a statement is not inadmissible hearsay if there is evidence to sustain a finding that it was made by a person authorized by the party to make a statement concerning the subject matter of the statement. Further, for policy reasons, automatically allowing the admission of prior corporate representative depositions would substantially expand and complicate deposition practice.

The plaintiffs did not show the topics about which the witness was authorized to testify at the prior deposition or that Western Auto Supply had authorized the witness to make statements to be used in unknown future lawsuits, and so the hearsay objection was sustained. Without this former testimony, the plaintiffs do not have evidence showing disputed facts about Western Auto Supply’s knowledge of the dangers of asbestos and malice, oppression, and fraud in failing to warn customers. Western Auto Supply’s request opposing punitive damages was granted.

Defendant The Pep Boys – Manny, Moe & Jack of California filed a motion for summary judgment, and in the alternative summary adjudication, of plaintiffs’ claims that plaintiff David Barton was exposed to asbestos from its products. The Pep Boys argued that the plaintiffs’ case is barred by the Workers’ Compensation Act because the plaintiffs allege that the decedent was exposed to asbestos while working for The Pep Boys. While the plaintiffs allege the decedent worked for The Pep Boys from 2001 to 2002, they also claim he was exposed to asbestos while doing personal work on his car from 1983 to 1991 and bought the defendant’s products during that time. Thus, the plaintiffs have shown the allegations regarding The Pep Boys are not limited to 2001 to 2002 and include the decedent’s personal auto work at an earlier time. During that early period, because the decedent was not working for the defendant, the Workers’ Compensation Act does not apply to that period. The motion for summary judgment was therefore denied.

The Pep Boys also sought summary judgment of the third cause of action for negligent misrepresentation because the plaintiffs have no evidence and cannot obtain evidence of any misrepresentation from The Pep Boys to the plaintiff. Citing the plaintiffs’ discovery responses, The Pep Boys convinced the court that the plaintiffs’ discovery responses were factually-devoid and shifted the burden.

The plaintiffs did not identify any misrepresentation from The Pep Boys to the decedent. Instead, the plaintiffs contend the third cause of action is actually brought under section 402B of the Restatement Second of Torts. However, a cause of action under this section requires “false advertising,” i.e., “a misrepresentation of a material fact.” The plaintiffs’ complaint, discovery responses, and opposition to this motion do not identify any misrepresentation of a material fact by The Pep Boys. Therefore, the plaintiffs could not show a disputed issue of fact, and The Pep Boys’ motion for summary adjudication of the third cause of action was granted.

Additionally, The Pep Boys sought summary judgment of the fourth cause of action, which alleges fraud by nondisclosure, specifically that The Pep Boys sold its products directly to the decedent and intentionally failed to disclose that the products were not safe. The elements of a cause of action for fraud based on concealment are (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. When a fiduciary duty does not exist, a duty to disclose arises only when the defendant had exclusive knowledge of material facts not known to the plaintiff, or when the defendant actively conceals a material fact from the plaintiff, or when the defendant makes partial representations but also suppresses some material facts.

Because The Pep Boys did not cite evidence showing that the plaintiffs do not have and cannot obtain evidence supporting this cause of action, The Pep Boys did not shift the burden, and their motion as to this cause of action was denied.

Further, The Pep Boys contends that the plaintiffs cannot prove The Pep Boys acted with oppression, malice or fraud and so the request for punitive damages must be denied. The Pep Boys cited to the plaintiffs’ discovery responses. In response to an interrogatory asking for all facts supporting the claim for punitive damages, the plaintiffs incorporated a prior answer, which stated that The Pep Boys did not test its products for asbestos or research the hazards of asbestos, knew asbestos was a risk, and received information from manufacturers that should have been (but was not) passed on to customers. The plaintiffs cited evidence supporting those assertions, and The Pep Boys did not show this response is factually devoid. The Pep Boys therefore did not shift the burden, and so the motion was denied.

Defendant Clark’s Discount, Inc. filed a motion for summary judgment, and in the alternative summary adjudication of the plaintiffs’ claims that the decedent was exposed to asbestos from Clark’s Discount’s products. Clark’s Discount argued the plaintiffs cannot obtain evidence that the plaintiff was exposed to an asbestos-containing product from Clark’s Discount. Clark’s Discount cited the testimony of the plaintiffs’ product identification witness that the decedent worked with several specific brands of brakes and clutches and shopped at certain stores, including Clark’s Discount. However, for the most part, that witness could not identify a brand of products that the decedent bought at Clark’s Discount.

With the exception of the two products identified by that witness (one of which was erroneous and the other was in the late 1990s), the court held that the plaintiffs do not have evidence of buying particular products from Clark’s Discount. However, Clark’s Discount did not show that the brakes it sold in the 1980s into the 1990s did not contain asbestos. Here, the plaintiffs showed that the decedent bought clutches and brakes from Clark’s Discount, but Clark’s Discount did not either (1) conclusively negate the possibility those products contained asbestos, or (2) show the plaintiffs have no evidence and cannot obtain evidence that those products contained asbestos. Without more, Clark’s Discount did not shift the burden.

Even assuming the defendant shifted the burden, the plaintiffs showed the existence of disputed facts, submitting evidence that most aftermarket brakes in the 1980s contained asbestos, to which Clark’s Discount did not respond. Thus, the plaintiff showed the existence of disputed facts concerning whether the aftermarket brakes the plaintiff obtained from Clark’s Discount, regardless of their brand name, contained asbestos. Clark’s Discount’s motion for summary judgment was denied.

Finally, Clark’s Discount contended that the plaintiffs cannot prove they are entitled to punitive damages because they cannot identify a single asbestos-containing product to which the decedent was exposed that was supplied by, or purchased from Clark’s Discount. As discussed above, this argument fails. Clark’s Discount asserted that the plaintiffs cannot prove it acted in conscious disregard of the rights and safety of the decedent, and further has neither evidence of misconduct, ratification, or authorization by a Clark’s Discount officer, director, or managing agent. Clark’s Discount further contends the plaintiffs have no proof that Clark’s Discount acted with fraud, oppression, or malice. However, Clark’s Discount cited no evidence supporting these assertions, and so the motion was denied.

Read the full decision here.