RT Vanderbilt Co., Inc. v. Franklin

Citations: 290 S.W.3d 654; 2009 Ky. App. LEXIS 16; 2009 WL 276734Docket: 2007-CA-002103-MR

Court: Court of Appeals of Kentucky; February 6, 2009; Kentucky; State Appellate Court

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R.T. Vanderbilt Company, Inc. appealed a judgment of $4,090,000 awarded to Johnny Franklin, both individually and as administrator of Flora Franklin's estate, for her death due to asbestos exposure. Flora was diagnosed with malignant mesothelioma in June 2004, leading her and her husband to file a complaint in September 2004 against thirty-one defendants, alleging asbestos exposure from various sources, including Mr. Franklin's work clothes and Flora's employment at Florida Tile and General Electric Plastic. Vanderbilt, implicated for supplying talc used in Florida Tile's products, was added as a defendant in May 2006.

During a three-week jury trial, damages were initially assessed at $5,200,000, with Vanderbilt found seventy percent at fault and $450,000 awarded in punitive damages. The appeal raised several issues, including the timeliness of the amended complaint against Vanderbilt, the propriety of sanctions for discovery violations, the inclusion of disputed facts in jury instructions, and the admissibility of expert testimony and certain documents. Franklin argued that he acted diligently in seeking discovery from Florida Tile, which had denied using asbestos in its manufacturing process. Vanderbilt contended that the complaint was untimely, asserting Franklin did not exercise reasonable diligence to identify the asbestos source. The case involved an extensive record, including over 15,000 pages of documents and three weeks of trial testimony.

Jefferies acknowledged that his response to Florida Tile regarding asbestos in talc was based on a fax from Vanderbilt, which confirmed that its talc did not contain asbestos. Franklin became aware of Vanderbilt's potential liability after a tissue analysis by Dr. Ronald Dodson revealed the presence of talc and asbestos types, including tremolite and anthophyllite. Following this report, Franklin's counsel learned from Florida Tile that Vanderbilt's talc was used in their products. The trial court found a factual question regarding Franklin's diligence in discovering the claim.

During trial, testimony from Thomas Rogers, a former employee of Vanderbilt's subsidiary, indicated that management was aware of asbestos in their mine and that Vanderbilt had connections to prevent regulation. Paul Vanderbilt, a company officer, admitted that while mine workers wore respirators, Florida Tile was not informed of the need for respiratory protection when handling Vanderbilt's products. A National Institute for Occupational Health and Safety study confirmed the presence of harmful minerals in the mine, and there were documented cases of mesothelioma deaths among mine workers.

Dr. Barry Castleman testified that Vanderbilt concealed the presence of asbestos in its talc, noting that tremolite asbestos had been recognized in the area since 1925. Expert testimonies supported the claim that Flora's asbestos exposure led to her mesothelioma. The jury was asked whether Franklin exercised reasonable diligence in discovering her injury related to Vanderbilt's talc, to which they affirmed.

Additionally, the jury concluded that Vanderbilt had fraudulently concealed information about asbestos in its talc, and Franklin had relied on this misrepresentation. Consequently, the trial court determined that the statute of limitations did not bar the action against Vanderbilt, as timely filing against earlier defendants did not affect the limitations period for Vanderbilt. The applicable statute requires that actions for personal injuries from asbestos exposure be filed within one year of the cause of action accruing. The key dispute was whether Franklin's cause of action had accrued, recognizing that latent diseases like mesothelioma develop gradually and may not have an identifiable cause until advanced stages.

Numerous potential defendants may exist in cases involving complex products, making it difficult to determine the specifics until extensive discovery is conducted. The discovery rule applies to personal injury claims from asbestos exposure, allowing claims to be filed more than one year after the exposure if the injury and its cause were unknown. A cause of action accrues only when the plaintiff discovers or should have discovered, through reasonable diligence, both the injury and its cause linked to the defendant's conduct. The definition of reasonable diligence is based on what a majority of individuals would do in similar circumstances. The statute of limitations is not tolled by the discovery rule unless there is evidence of fraudulent concealment or misrepresentation by the defendant. In the cited case, the court found no evidence of concealment by the defendants, allowing summary judgment in their favor. If factual disputes arise regarding the plaintiff's diligence, the jury must resolve these issues. On appeal, the court must uphold the jury's findings unless there is a clear error indicating bias. The jury reasonably concluded that the plaintiff exercised due diligence in linking the disease to the defendant's product after extensive discovery efforts post-complaint.

Franklin was unaware of talc in Flora's tissue until her death and subsequent analysis, despite inquiries into Vanderbilt's claims that its talc was asbestos-free, which concealed Vanderbilt's identity as a defendant. Evidence suggested Vanderbilt misrepresented its product, justifying the jury's finding against them. During discovery, disputes arose over Vanderbilt's failure to produce various records despite repeated court orders. Franklin moved to compel production four times, with the court consistently supporting these motions. Vanderbilt ignored these orders, prompting Franklin to seek a default judgment or to strike Vanderbilt's defenses regarding the non-asbestiform nature of its talc. The trial court opted not to impose a default judgment but limited Vanderbilt's defenses instead. Vanderbilt failed to produce crucial documents, including a lung tissue digestion study and workers' compensation records, and defied orders to schedule depositions. Despite Vanderbilt's claims of irrelevance, the court maintained that the documents were necessary. Ultimately, Vanderbilt provided some records shortly before trial, but their responses were incomplete. The trial court, acknowledging Vanderbilt's willful non-compliance and the prejudice to Franklin, concluded that Vanderbilt's late compliance did not negate the consequences of their actions.

Vanderbilt demonstrated a lack of willingness to comply with court orders rather than an inability to do so. The court noted that Franklin had only about two weeks before trial to review critical documents, which led to the decision to strike Vanderbilt’s defenses due to the prejudicial impact on Franklin, who was at risk of unfair surprise in court. Vanderbilt's failure to disclose financial expenditures related to its talc classification and delays in providing relevant records hindered Franklin's case, particularly in establishing causation and countering Vanderbilt's claims regarding the non-asbestiform nature of its talc. Consequently, the court barred Vanderbilt from arguing its medical defenses and claiming that its product did not cause asbestos-related diseases.

The court's authority to impose sanctions for non-compliance with discovery rules is derived from CR 37.02, which allows for various sanctions, with the most severe being default judgment or dismissal, applicable only in extreme cases. Although the court did not impose the harshest sanction, it nonetheless significantly limited Vanderbilt's defenses, highlighting five factors to consider regarding the imposition of sanctions: 1) the willfulness of Vanderbilt's non-compliance, 2) the prejudice faced by Franklin, 3) whether Vanderbilt was warned of potential consequences, 4) the consideration of less drastic sanctions, and 5) the proportionality of the sanction to the seriousness of the non-compliance. The trial court was required to substantiate its decision-making process. Vanderbilt's claim of error lacked substantial explanation for its non-compliance, and it contested the trial court's findings regarding Franklin's prejudice, all within the context of complex asbestos litigation involving multiple defendants and extensive expert testimony.

Causation was a significant issue in the litigation, with disputes surrounding the withholding of financial documents, prior asbestos claims information, and an expert witness report until shortly before trial, which disadvantaged Franklin. Vanderbilt claimed that its non-compliance with a court order was not prejudicial, asserting it had provided necessary materials to its expert, yet failed to produce a fiber burden analysis. The relevance of the withheld documents was debated; however, discoverable information can lead to admissible evidence. Franklin's requests were legitimate and connected to the litigation, countering Vanderbilt’s claims that they exceeded the discovery scope.

The court had warned Vanderbilt about sanctions for non-compliance and only imposed them when continued disobedience persisted near the trial date. It determined that Vanderbilt’s failure to disclose critical information hindered Franklin’s ability to prove causation. Consequently, the court sanctioned Vanderbilt by prohibiting its defense regarding the non-asbestiform nature of its talc and its alleged lack of causation for mesothelioma. The findings of fact supporting the sanctions were deemed adequate, and the court suggested that Vanderbilt's non-compliance was a strategic choice that ultimately backfired, leading to severe consequences.

The court upheld a sanction against R.T. Vanderbilt, determining it was not an abuse of discretion. During pretrial discussions, Franklin indicated he would present evidence to demonstrate Vanderbilt's fraudulent concealment regarding asbestos in its talc, which was relevant to both the statute of limitations and punitive damages claims. Vanderbilt did not object to a proposed jury instruction reflecting the sanctions. At trial's conclusion, the court instructed the jury to assume that Vanderbilt's talc was asbestos-containing and capable of causing mesothelioma, prohibiting Vanderbilt from arguing otherwise. Vanderbilt claimed a lack of "fair warning" about the instruction but failed to specify how its defense would have differed had it known. The court noted that the pretrial discussions indicated Vanderbilt was aware of the potential consequences of the sanctions. Although the instruction was deemed prejudicial as it assumed a critical fact, the unavoidable nature of the prejudice due to the sanctions meant the jury instruction was proper. 

Regarding Dr. Jerrold Abraham's testimony, the court found it was admissible, aligning with the standard of discretion afforded to trial courts. Dr. Abraham, a certified expert, asserted that Vanderbilt's talc contained asbestos and was a significant factor in causing mesothelioma in Flora. His opinion relied on a tissue digestion study and a case study involving talc miners, which he co-authored. Vanderbilt’s request for a Daubert hearing to challenge the scientific reliability of Dr. Abraham's testimony was denied, as the court maintained its role as a gatekeeper for reliable scientific evidence.

Factors for determining the admissibility of expert testimony include: testing and testing history of a theory or technique; peer review and publication status; known or potential error rates and operational standards; and general acceptance within relevant scientific communities. A Daubert hearing is not mandatory if the record sufficiently evaluates the testimony's reliability and relevance. Vanderbilt's contention regarding reliance on the Hull paper was unfounded, as it was a single source used by Dr. Abraham, whose testimony was adequately supported by extensive pretrial hearings and previous case references. The lack of participant identities in the Hull paper did not hinder cross-examination or prejudice Vanderbilt's defenses. Dr. Abraham's methodologies, including the tissue digestion study, were accepted, and his opinions had been published and peer-reviewed, leading the trial court to correctly find his testimony reliable and relevant.

Regarding the Johns-Manville Corporation documents, Vanderbilt objected to their admission due to hearsay concerns, arguing no exceptions applied. However, these documents were timely disclosed, authenticated, and relevant to demonstrating industry knowledge about asbestos in talc, fitting into the business records exception to hearsay. 

John Pitcock, an industrial hygienist, testified about air samples taken at the Florida Tile plant, noting the presence of tremolite asbestos and the subsequent withdrawal of a citation after further testing. His testimony clarified that he did not assert the citation was wrongfully withdrawn, but rather that it was withdrawn without adequate justification.

Vanderbilt's argument that Pitcock's testimony improperly replaced the judgment of an administrative agency is rejected, as Pitcock's testimony was based on personal knowledge and thus admissible under KRE 602. The determination of post-judgment interest lies within the trial court's discretion, which may set an interest rate lower than twelve percent following a hearing if justified (KRS 360.040). The court denied Vanderbilt's motion to reduce the statutory interest rate after such a hearing, and the reviewing body found no abuse of discretion. Consequently, the Anderson Circuit Court's judgment is upheld. Additionally, it is noted that Senior Judge Daniel T. Guidugli served as a Special Judge, and that Johnny Franklin was substituted as a party after the death of Flora, while fault was assigned to five defendants, including Johns-Manville, who are no longer involved in the case.