Farrall v. Armstrong Cork Co.

Citation: 457 A.2d 763

Court: Superior Court of Delaware; January 28, 1983; Delaware; State Appellate Court

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In the case of Farrall v. Armstrong Cork Company, the plaintiffs, James and Leota Farrall, are seeking damages for health issues stemming from James's exposure to asbestos during his employment. The primary defendants include Armstrong Cork Company, Atlas Asbestos Corporation, and Gale Corporation. Leota claims loss of consortium and damages due to asbestos contamination from handling James's clothing. 

Gale and Armstrong have added third-party defendants, including A.C.S. Inc., Catalytic, Inc., and Babcock and Wilcox, who are former employers of James. These third-party defendants have filed for summary judgment, asserting that their liability is barred by the exclusive remedy provision of the Delaware Workmen's Compensation Act. The facts of James's employment, spanning from 1962 to 1971, are largely undisputed, revealing that he worked with asbestos products from multiple employers, with A.C.S. serving as both employer and supplier.

The third-party defendants argue that they share immunity from tort claims with Allied Insulation Company, the employer who paid workers' compensation benefits. Gale and Armstrong counter that such immunity applies only to the employer that pays the benefits and challenge A.C.S.'s claim to immunity due to its dual role. They also assert that Leota Farrall's claim should not be limited by the workmen's compensation exclusive remedy. The court will evaluate these arguments separately.

Under Delaware law, a tortfeasor cannot seek contribution from an employer if the injured employee could not directly sue the employer due to the exclusivity of the workmen's compensation remedy. This principle is supported by case law, including Diamond State Tel. Co. v. University of Delaware and Kofron v. Amoco Chemicals Corp. However, third-party claims against employers may proceed based on contractual indemnification rather than tort. The current third-party complaints do not assert any indemnification relationship, thus they must adhere to traditional tort principles for contribution.

The defendants, Armstrong and Gale, do not contest the immunity of the employer, Allied, who provided workmen's compensation benefits but argue that previous employers should not share this immunity if they did not respond to a compensation claim, despite the employee's occupational exposure. The Delaware Workmen's Compensation Act does not explicitly address issues of successive employment but allows for the apportionment of benefits among multiple employers based on their wage liabilities.

In a prior case, Lee v. A.C.S. et al., the court ruled that all employers involved in a worker's employment history are granted immunity, not just the last employer to respond to a claim. The rationale is that the exclusivity of the workmen's compensation remedy is part of the exchange for coverage provided by all employers during the employment relationship. Thus, the immunity of employers is based on the availability of full compensation benefits rather than their individual responses to claims. The Act mandates participation in the workmen's compensation process, which establishes a status that confers statutory immunity regardless of actual benefit disbursement.

Employer immunity under the Pennsylvania Act is not dependent on liability under the compensation act, as established in Ryden v. Johns-Manville Products and Shultz v. Bell, Howard. The Act does not clarify whether multiple compensation carriers must share liability for benefits when a disability develops over time with successive carriers. In Alloy Surfaces Co. v. Cicamore, the court ruled that the last carrier is solely responsible for compensation, reflecting a majority rule, which similarly suggests that liability should also be limited to the last employer, preserving the immunity of prior employers.

Complications arise when occupational diseases develop over extended periods, making it challenging to assign proportional liability. Claims against former employers often emerge through common law actions against third parties and may be time-barred. Employers participate in the workmen's compensation scheme with the understanding of fixed benefits, and altering liability years later could lead to chaotic outcomes. If employers face claims long after employment ends, they risk lacking liability coverage, as current workmen's compensation carriers may refuse coverage under Cicamore, while general liability insurers might decline due to the workmen's compensation context.

Armstrong contends that employer immunity should be limited to those providing benefits, referencing Dickinson v. Eastern R.R. Builder, Inc., where the court denied immunity to a contractor for a subcontractor's employee injury because the subcontractor's carrier had provided compensation. Dickinson's ruling was based on the statutory definition of "employer," which did not extend to the contractor in that case. Each prior employer in Farrall's employment chain had a clear employer relationship and statutory obligations to provide compensation. A further issue arises if prior employers could be subjected to contribution claims by third parties sued by injured employees. Under 19 Del.C. 2363, employers or their carriers have subrogation rights to recover from third parties for benefits paid to the injured employee, which can be pursued independently if the employee does not assert a claim.

Primary defendants may require contribution from prior employers or carriers; however, this would undermine the last carrier rule established in Cicamore, which allows the last carrier to seek contribution from prior carriers exclusively through subrogation. The Delaware Uniform Contribution Among Tort-Feasors Act necessitates a common liability to the plaintiff for contribution to be applicable. The case law indicates that joint or several negligence does not establish such liability if the legal relationship between the plaintiff and all defendants is not uniform. In this instance, former employers Catalytic and Babcock lack common liability with any primary defendant and are therefore immune from common law suits under 2304, regardless of claims for benefits. Summary judgment is granted in favor of these employers.

Regarding AC.S, a former employer, it also claims immunity, but third-party plaintiffs argue that their contribution claim targets AC.S's dual role as both employer and supplier of asbestos products. This raises a novel legal issue: whether an employer in dual capacities retains immunity from common law suits under the exclusivity of workers' compensation. Most jurisdictions hold that such employers, when also manufacturers or distributors of products used by employees, maintain immunity from common law actions. This is based on the principle that providing necessary tools and equipment is an essential part of the employment role. Although some cases have allowed for direct product liability claims by employees under certain conditions, these exceptions are viewed as distortions of the independent responsibilities of employers. The prevailing view maintains that if a product is integral to employment, the employer's obligations are fulfilled through the workers' compensation framework, regardless of product distribution.

The rejection of the dual capacity doctrine is supported as it presents a more reasoned approach, with its application deemed limited. Assigning separate employer liability for prolonged occupational diseases is complex and should be legislated rather than judicially determined. The dual capacity doctrine cannot serve as a basis for an injured employee to claim common law liability against former employers, which also means that employers are immune from third-party contribution claims. AC. S's motion for summary judgment regarding contribution claims based on its employer relationship with Farrall is granted. However, the status of AC. S as a supplier remains unclear. Gale claims Farrall used asbestos materials supplied by AC. S while employed at Catalytic in 1968 but has failed to provide direct evidence of such use outside his employment with AC. S. Although there was a delivery of an AC. S product shortly before Farrall left Catalytic, there is no proof that it was used by him or that it contained asbestos. Gale seeks more discovery but has not indicated potential avenues that could link AC. S as a supplier to Farrall’s asbestos exposure. Consequently, there are no material facts disputing the lack of connection between AC. S’s products and the plaintiff's condition, leading to AC. S being granted summary judgment as a supplier. Additionally, the conspiracy allegations against AC. S, which claim a collective effort to suppress asbestos hazard information, are barred concerning employer-defendants by the exclusivity principle. For the conspiracy claim as a supplier, there is insufficient evidence of exposure to link it to AC. S.

Absence of evidence undermines general conspiratorial claims for tort contribution. Contribution claims from Mrs. Farrall against primary defendants are categorized into three areas: loss of consortium, mental anguish from witnessing her husband's suffering, and a high-risk status for asbestos-related cancer due to handling contaminated clothing. Employer defendants assert they are not liable for tort contribution since these claims are not directly sustainable against them. Mrs. Farrall's loss of consortium claim is derivative, contingent upon her husband's valid physical injury claim. Previous rulings bar recovery for loss of consortium when the exclusive remedy is workers' compensation. Consequently, her claim cannot proceed against former employers, warranting summary judgment in their favor.

Remaining claims against AC. S, as a supplier, arise independently of her husband’s employment and are governed by tort law rather than workers’ compensation principles. The validity of her mental anguish claim is questionable under Delaware law if she was not in danger, and her high-risk claim presents an unresolved medical-legal issue. Counsel for Mrs. Farrall did not participate in the motions, and an adverse ruling may prompt further dismissal motions from primary defendants. As such, Mrs. Farrall deserves notice and a chance to present her case before any summary judgment is issued.

In conclusion, while summary judgment is appropriate against Catalytic and Babcock, it should not extend to the contribution claims involving Mrs. Farrall at this stage.

Partial summary judgment has been granted in favor of AC. S regarding all claims for contribution linked to its past employment of Farrall, its role as a supplier or supplier/employer, and Mrs. Farrall's claim for loss of consortium. However, summary judgment for the third-party complaint regarding Mrs. Farrall's direct claims has been denied, allowing for future renewal of the motion with proper notice and an expanded record.

Armstrong has requested reargument concerning the decision that granted complete summary judgment to Babcock and Catalytic regarding Mrs. Farrall’s direct claims, while not contesting the ruling on her derivative claim. Armstrong argues that the record's limitations on adjudicating Mrs. Farrall's direct claims for mental anguish and asbestos exposure against AC. S also limit the summary judgment granted to Babcock and Catalytic, which they assert is barred under the exclusivity provision of 19 Del.C. 2304.

The court acknowledges that the arguments presented were unclear, especially concerning the "zone of danger" test from Robb v. Pennsylvania Railroad Company, which may not be suitable for claims of prolonged exposure to industrial products. It recognizes that the claims may have merit and that Mrs. Farrall is entitled to an inference in her favor. The ruling in favor of Babcock and Catalytic is thus modified to limit it to Mr. Farrall’s direct claims and Mrs. Farrall’s derivative claims, deferring the adjudication of her claims for mental anguish and exposure until further proceedings. 

The excerpt also references 19 Del.C. 2304, which mandates employers and employees to accept compensation for injuries arising from employment, excluding other rights and remedies. A Pennsylvania case is cited to illustrate that the exclusivity claim was rejected in a similar context, emphasizing that the injury in question did not occur within the employment relationship.