Introduction. On June 29, 2018, the New Jersey Appellate Division issued its unpublished decision in Rowe v. Bell & Gossett, Docket No. A-4530-14T2 (App. Div. 2018) where, in response to Plaintiffs’ appeal, it reversed the April 27, 2015 judgment of $304,152.70, plus interest, against the lone defendant at trial, Universal Supply. The Court remanded the case for new trial as to apportionment of liability among Universal and the eight settled Defendants.
The Opinion, if followed, would require fundamental changes in substantive and evidential requirements to prove allocation of fault against settled Defendants at trial. The evidential changes will impose greater burdens on Defendants in proving allocations of fault against one another at trial. The substantive changes appear to raise the standard of proof necessary for trial Defendants to prove a prima facie case against settled Defendants in order to obtain an allocation of fault. However, if Defendants can use that same standard to measure the sufficiency of a Plaintiff’s proofs against them, it may make it easier for Defendants to obtain summary judgment.
Procedural Background and Trial Court Rulings on Appeal. Ronald and Donna Rowe, filed suit against approximately 27 defendants after Mr. Rowe was diagnosed with pleural mesothelioma (Mr. Rowe did not testify live at trial due to poor health). There was only one Defendant remaining at trial, Hilco Inc., the successor-in- interest to Universal Engineering Co., Inc. (Universal). A number of Defendants were dismissed by summary judgment or stipulation; eight defendants settled before trial. Universal pursued an allocation of fault against the settled Defendants to obtain “credit” against any verdict according to the total percentages allocated against the settled Defendants. The total award to Plaintiffs was $1,500,000. The jury allocated twenty percent of the damages to Universal and apportioned the remaining eighty percent to the settled Defendants. Judge Viscomi denied Plaintiff’s post-trial motions, and Plaintiffs appealed.
Universal, following “standard” asbestos-defense practice, served Notices in Lieu of Subpoena on all Defendants prior to any settlements. Notices in lieu of Subpoena permits New Jersey Defendants to secure one another’s witnesses’ appearance at trial through notices served on counsel without the having to serve an actual trial Subpoena on the settled Defendant. As trial approached, Universal’s counsel followed-up with counsel for the eight settled Defendants as to the “availability” of their respective corporate witnesses for trial testimony and each stated their witness was “unavailable”. Universal made no formal applications to the Court to challenge those representations and/or obtain a formal adjudication as to their stated “unavailability”.
Judge Viscomi denied Plaintiffs’ trial motion to prevent Universal from proving allocations of fault against settled Defendants through introduction of their respective Answers to Interrogatories and Deposition Transcripts from prior cases in New Jersey and elsewhere. For the most part, Her Honor accepted Universal’s argument that the Defendants were “unavailable” at trial because of their respective counsel’s representations to Universal as to same. She also regarded their corporate representatives’ deposition testimony and answers to interrogatories as admissible statements by a party opponent. It was undisputed that Rowe was repeatedly exposed to asbestos-containing dry cement sold by Universal for nearly three decades as a residential boiler mechanic. Rowe generated dust when he mixed the cement he purchased from Universal and during regular cleaning and repair work, when he removed hardened cement which was also ascribed to Universal. During the course of replacing boilers, Rowe would sometimes disassemble an old unit which created dust. He did not know from where that asbestos dust originated. Rowe also testified to asbestos exposure through extensive automotive repair work he performed for himself, family and friends.
The trial included expert testimony from both sides where the parties disputed the sufficiency of various exposures to cause mesothelioma, as well as the carcinogenicity of chrysotile asbestos in Universal’s furnace cement versus amosite asbestos found in, among other things, other cement and insulation products. Notably, Plaintiffs’ medical causation expert, Dr. Jacqueline Moline, testified that while Mr. Rowe’s exposure to asbestos from the cement supplied by Universal was his most significant exposure, all exposures, including those from the products of settled Defendants, were also substantial contributing causes.
The Court’s Reversal of the Admission of Defendants’ Previous Discovery In Support of Proof of Universal’s Crossclaims. In overruling Judge Viscomi on the evidence issues, the Court dismissed any focus on whether the settled Defendants remained “parties” at the time of trial. Rather, the Court focused on whether the evidence was admissible as hearsay. The hearsay rules were drafted to allow in court, only those out-of-court statements which could be deemed trustworthy..
The Court first referred to R. 4:16-1(b) which permits the use of pretrial discovery, whether in the pending case or from another case “by an adverse party for any purpose against” the person who had earlier provided the discovery in question. N.J.R.E. 803(b) (1), similarly permits admission of the statement of a “party opponent….offered against a party….” In offering the prior discovery against settled Defendants, the Court reasoned that Universal was not “adverse” to them and was not offering those responses “against” the settled defendants, but, rather, against the plaintiff (by seeking a reduction in Universal’s percentage of liability). The Court said:
…at the time of trial, the settling defendants’ claims were fully resolved. They had nothing to gain or lose from the outcome of the trial or any possible apportionment of liability. Universal had no right to any possible future recovery from the settling defendants, regardless of how well it carried its burden of proof. Rather, Universal stood to gain only a reduction in the damages it might ultimately owe as a result of the trial of plaintiffs’ claims against it.
The Court emphasized that while introduction of the prior discovery would have no impact on the settled Defendants, it would have a significant impact on Plaintiffs, who would have no opportunity to challenge the statements. It felt that the rationale of the Rules is to allow the prior discovery evidence to be admitted when the person who made the statement is present at trial and is adverse to the party who offered it. Only then would the party who made the prior statements have the incentive and the opportunity to explain the statement. The Court reasoned that permitting Universal to offer the settled Defendants’ prior discovery responses and testimony turned these statements into “unrebuttable admissions to be used against a party that did not make those admissions” (i.e. Plaintiffs).
The Court also rejected application of the “catch-all” hearsay exception of N.J.R.E. 803(c)(25), that allows the admission of statements where the overall facts and circumstances surrounding the statement are indicative of it being “trustworthy”. Universal argued that a Defendant’s admission it sold asbestos-containing products without a warning was sufficiently prejudicial to that Defendant to qualify for admission under this hearsay exception. The Court said that such a proposition was so well-established that admission of the evidence was not necessary to establish it. This holding, that a party’s admission of a fact that establishes its liability as a matter of law is not contrary to its interest, frankly, would appear to eliminate the very rationale for the catch-all exception.
The Court also overlooked the reality of mass tort litigation, where Defendants produce discovery with the expectation that their responses will follow them through every case. The “Standard” Middlesex County Interrogatories were intended to be just that, “standard” in a way that would not require replication in every case. Similarly, when Defendants produce representative witnesses for depositions, they also expect that testimony to be binding upon them in the instant case and subsequent cases. There is actually a practice that has developed that Plaintiffs’ counsel deposing corporate witnesses generally agree to limit their questioning so as to not re-plough ground covered in earlier depositions.
The Court held that Judge Viscomi also erred when she failed to require Universal to establish that it did its “due diligence” to establish the true “unavailability” of the settling defendants under N.J.R.E. 804(a) for the admission of their prior discovery. The Rule requires the proponent of the prior testimony demonstrate that the witness is actually unavailable due to: (1) a prior court order; (2) a persistent refusal to testify despite an order to compel; (3) a demonstrated lack of memory; or (4) the fact that it will not appear despite the use of process or other reasonable means. Prior cases demonstrate that the effort to obtain the testimony must include a “good faith effort” using all reasonable means to identify the location of the witness and obtain appropriate process to secure the witnesses’ appearance at trial.
As noted, Universal served Notices in Lieu of Subpoena on the settled Defendants. The Court held that because Universal failed to exercise “due diligence” to follow-up on the informal assurances of the settled Defendants’ respective counsel as to their unavailability in a meaningful way, it could not demonstrate that the Defendants were “unavailable.” The Court said:
Universal’s communications with their counsel “did not advise the settling defendants that their appearances continued to be required or again allude to their continuing duty to appear and testify. Universal did not request witness names or schedules or otherwise attempt to actually procure a live witness. Rather, Universal essentially inquired whether the settling defendants planned to voluntarily appear at trial and then confirmed that they did not.
The Court brushed aside concerns that its ruling would have a deleterious impact in the asbestos litigation in favor of strict adherence to the Rules. This will undoubtedly make it more difficult to pursue crossclaims against settled Defendants and may require case-specific corporate representative depositions where admissible crossclaim proofs may be lacking against a particular defendant.
The Court Reverses and Require a New Trial of the Apportionment Issues. Plaintiffs argued that Judge Viscomi erred by not granting their post-trial motions that allocating fault to any Defendant other than Universal was “against the weight of the evidence”. The Court affirmed because Plaintiff testified as to his use of the settled Defendants’ products and Plaintiffs’ medical expert testified that each exposure contributed to his injuries. However, the Court remanded because Judge Viscomi “failed to undertake a specific evaluation of the proofs as to each settling defendant in turn to determine whether Universal’s proofs established a prima facie case against that Defendant.”
In order to satisfy its burden as to the settled Defendants, the Court repeated “settled law” that Universal had to prove a prima facie case of both “medical causation” and “product defect causation” against each of them. Medical causation required proof of “frequency, regularity and proximity” of exposure to friable asbestos from the Defendants’ products. Sholtis v. Am. Cyanamid Co., 238 N.J. Super. 8 (App. Div. 1989). The Court emphasized that mere presence of the Defendants’ product in a Plaintiffs’ workplace or home was not sufficient to find liability, and cited its holding in Estate of Brust v. ACF Indus., LLC, 443 N.J. Super. 103, 126 (App. Div. 2015). The Court held that even including the excluded evidence from Defendants’ prior discovery, Universal could not prove a case against certain settled Defendants.
As to Defendant Trane, for example, Plaintiff testified he removed dozens of its predecessor, American Standard’s, boilers. The Court said:
It was also not clear if the dust generated by removal came from the boiler components as opposed to the old, dried Universal cement. American Standard’s [otherwise inadmissible] interrogatory responses simply said that some of its boilers “may have contained components manufactured by third parties” that “may have” contained asbestos, but they also stated that American Standard boilers were specially machined so that they did not require asbestos rope or gaskets to seal the cast iron sections. From this limited evidence, no reasonable fact-finder could conclude that Rowe’s toxic exposure to asbestos came from an American Standard boiler. Therefore, although we reject plaintiff’s contention, we caution the trial court to separately examine the sufficiency of proofs as to each settling defendant on remand.
(Note that the jury in Rowe allocated 10% of the liability to Trane). At least in Judge Viscomi’s courtroom, proofs such as those Universal presented would normally allow a Plaintiff to reach the jury in a mesothelioma case against Trane because there was some evidence that American Standard supplied boilers with asbestos-containing components with which plaintiff worked. Admittedly, Defendants’ counsel would argue that was unjust because it would require sheer speculation to determine whether Plaintiff was exposed to American Standard-sold asbestos components with the requisite “frequency, proximity and regularity” to cause disease. In adopting what would have been the Defense position had a Plaintiff offered the same proofs as Universal did against Trane, the Court appears to call for a “higher” standard in future cases.
Further Appeals. There is no appeal as of right to the New Jersey Supreme Court from this decision. The parties have until July 19, 2018 to file a notice of petition for certification upon all parties which may be affected by the proceeding. R.2:12-3. Within 10 days after filing the notice of petition for certification or 30 days after entry of the final judgement (whichever is later), the notice has to be perfected, i.e. briefs in support of the notice of petition need to be filed. R.2:12-7.
Status As An “Unpublished” Opinion. Parties are permitted to cite unpublished opinions, but they are not binding outside of the case wherein they were decided. Judge Viscomi depending on the case cited, has found unpublished opinions to be persuasive and followed the ruling in same. It remains to be seen whether Her Honor will follow the ruling in Rowe.
Conclusion. The Rowe Opinion presents significant challenges for Defendants which wish to preserve their right to allocation at trial. New case management techniques could be instituted if Judge Viscomi is willing to acknowledge the import of the Opinion and work with counsel to develop alternative strategies. The Asbestos Bar recognizes that one of Her Honor’s complaints has been the length of asbestos trials. The Court’s implicit requirement of live (or even videotaped) testimony from Defendants’ witnesses at trial will increase that length significantly. However, we should not ignore the “positive” impact of the Opinion. The Court may be signaling a greater willingness to dismiss claims against Defendants where Plaintiff has not been able to definitively state how often he or she was exposed to asbestos from a product.