Superior Court of California, County of Los Angeles

In this asbestos action, defendant Rheem Manufacturing Company filed a motion for summary judgment, and alternatively summary adjudication, arguing that the plaintiffs do not have evidence that the relevant plaintiff was exposed to asbestos from Rheem products.

To show that a plaintiff cannot establish an element of a cause of action, a defendant must make the initial showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. A plaintiff’s deposition testimony that he has no knowledge of any exposure to the defendant’s products may be sufficient to shift the burden to the plaintiff to demonstrate the existence of triable issues of fact, unless the plaintiff is able to prove his case by another means.

Rheem argued that the plaintiffs’ discovery responses show they have no evidence that Rheem products contained asbestos. The plaintiffs alleged that the relevant plaintiff had installed, removed and repaired water heaters made by Rheem, which contained asbestos flange gaskets and flues pipes. In support of their claims against Rheem, the plaintiffs referred generally to medical and employment records and unspecified depositions. However, the plaintiffs did not cite to any specific evidence in support of their claims against Rheem.

Rheem also cited the deposition of a witness who testified that the plaintiff worked with Rheem water heaters in the late 1970s, although he did not know the year the products were made or installed or whether they contained asbestos. Rheem further referenced a Declaration stating that Rheem stopped using asbestos-containing components in water heaters in about 1970 and did not use transite/asbestos flue pipes with its water heaters. This adequately shifted the burden to the plaintiffs.

The plaintiffs objected to this declaration as hearsay, claiming the declarant did not have personal knowledge of the matters to which he testified. Under California law, a declaration by a corporate witness about activities before they started working at the corporation cannot be based on his personal knowledge and must be hearsay. This declarant began working at a different company in 1974, and his employer was purchased by Rheem in 1985. The declarant did not state that he knew about Rheem’s pre-1970 product line of water heaters from personal knowledge. Therefore, the court found that there was no reason for him to have personal knowledge of the components of Rheem water heaters before 1970 and in the 1970s.

Further, the declarant learned about Rheem’s earlier water heaters from unidentified Rheem historical documents, technical drawings, promotional data, parts lists, specifications, component materials and the operational characteristics of various Rheem products. Because Rheem did not identify or seek to admit those documents into evidence, their contents are hearsay, and the witness cannot testify about the contents of those documents.

In addition, the declarant reviewed former deposition transcripts from Rheem’s corporate representative in prior cases. The plaintiffs object to the declarant’s testimony based on these former deposition transcripts as hearsay. Under Evidence Code sections 1291 and 1292, evidence of former testimony is not inadmissible hearsay if the declarant is unavailable and the party against whom the former testimony is offered was a party to the action or proceeding in which the testimony was given and had the right and opportunity to cross-examine the declarant with an interest and motive similar to that which he has at the hearing, or the party in the prior proceeding had the right and opportunity to cross-examine the declarant with an interest and motive similar to that which the party against whom the testimony is offered has at the hearing. Rheem did not show that the witness who testified in the former depositions is unavailable or that the other prerequisite of sections 1291 and 1292 are satisfied. Therefore, the court sustained the plaintiffs’ objections to the declaration because it is based on hearsay and lacked personal knowledge.

The plaintiffs submitted their own declaration of a different witness, who stated that until the late 1980s, gaskets used in water heaters contained asbestos. Rheem objected to the declaration as irrelevant, hearsay, and lacking foundation because the witness did not describe knowing about Rheem products in particular. However, the declarant established the non-hearsay basis for his opinion that water heater gaskets contained asbestos until the late 1980s, and so Rheem’s objections were overruled.

The plaintiffs have shown the existence of disputed issues concerning whether the water heaters that the plaintiff worked with came from Rheem and whether they contained asbestos parts. Rheem’s motion for summary judgment was therefore denied.

Further, Rheem moved for summary adjudication of the third cause of action for negligent misrepresentation, which alleges in very vague terms that Rheem made false representations to the public, purchasers and users of products, and others including the plaintiff. Rheem argued that the plaintiffs do not have evidence of any misrepresentation by Rheem to the plaintiff, citing to two depositions and discovery responses. Two deponents both testified that they have no knowledge of any communication from Rheem to the plaintiff. Further, in response to an interrogatory that sought details about any alleged misrepresentations made by a manufacturer or supplier of an asbestos-containing product, the plaintiffs responded that the interrogatory was not applicable. Further, the complaint does not specify a single communication or representation from Rheem to the plaintiff. Rheem has shown the plaintiffs do not have, and cannot obtain, evidence of a misrepresentation from Rheem to the plaintiff, thus shifting the burden.

In their opposition, the plaintiffs argued there was no warning on the water heaters. However, the lack of a warning is not a misrepresentation. Because the plaintiffs did not show the existence of disputed facts concerning misrepresentations to the plaintiff, Rheem’s motion was granted as to the third cause of action.

Rheem also moved for summary adjudication of the fourth cause of action for fraudulent nondisclosure, which alleges that Rheem sold its products directly to the plaintiff, Rheem directly advertised its products to the plaintiff, and Rheem failed to disclose the hazard of asbestos in the products. Rheem argued that the plaintiffs do not have evidence of any communication by Rheem to the plaintiff or any duty to disclose, citing the same evidence as in its motion regarding the third cause of action.

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.” This type of relationship can only come into being as a result of some sort of transaction between the parties and must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large. Evidence that the defendant was involved in retail sales of the disputed product to consumers and profited from them can satisfy the Bigler requirement.

Rheem attached the plaintiffs’ response to an interrogatory, in which the plaintiffs stated that the relevant plaintiff installed water heaters made by Rheem containing asbestos parts, that there were no warnings, and that Rheem knew of the dangers of asbestos. The response did not identify any evidence of any direct dealings between Rheem and the plaintiff, nor any evidence of that Rheem sold and advertised its products directly to the plaintiff. Therefore, Rheem shifted the burden with the factually-devoid discovery responses.

In opposition, the plaintiffs presented no evidence of any duty Rheem had to make disclosures to the plaintiff. Therefore, the plaintiffs failed to show the existence of disputed issues, and Rheem’s motion was granted.

Defendant J.A. Sexauer Inc. also filed a motion for summary judgment, and alternatively summary adjudication, arguing that the plaintiffs do not have evidence that the plaintiff was exposed to asbestos from its products. The defendant claimed that the plaintiffs’ discovery responses show they have no evidence that the defendant’s products contained asbestos. The defendant served special interrogatories asking for all facts, the identification of documents, and the identification of people with information supporting the contention that the defendant’s products exposed the plaintiff to asbestos. In response, the plaintiffs restated their allegation that the plaintiff was exposed to washers, gaskets, packing materials, and other sealing products from the defendant when he worked as a plumber, without citing specific evidence. The plaintiffs identified themselves, unnamed friends, unnamed co-workers, and unnamed personnel at the defendant as having information. The plaintiffs did not identify any specific documents.

The defendant also cited to the plaintiffs’ depositions, as multiple of the plaintiffs had no information about the relevant plaintiff being exposed to the defendant’s products. A third plaintiff testified that the relevant plaintiff worked with the defendant’s products such as repair parts and packing parts in the late 1970s, but did not know whether the products contained asbestos, although he did testify that some products contained material they called Teflon or graphite. Another plaintiff testified that the relevant plaintiff worked with the defendant’s parts but did not remember many specific parts and did not know whether the parts contained asbestos.

The defendant submitted a declaration stating that, while it sold various types of gaskets and packing materials, the vast majority did not contain asbestos. This evidence is sufficient to show that the plaintiffs do not have and cannot obtain evidence that the relevant plaintiff was exposed to asbestos via the defendant’s products, thereby shifting the burden.

In opposition, the plaintiffs cited depositions from different cases, including testimony that the defendant sold Teflon asbestos and graphite asbestos gaskets, graphited asbestos stem packings, asbestos wicking, treated asbestos yarn, Teflon asbestos packing, sheet packing and gaskets from the 1960s through the 1980s. This evidence shows the existence of disputed issues concerning whether the relevant plaintiff used asbestos-containing parts from the defendant, because one witness established the use of Teflon and graphite products from the defendant and the plaintiffs’ evidence establishes the defendant sold Teflon and graphite products containing asbestos. The motion was therefore denied.

Finally, defendant J.A. Sexauer Inc. argued that the plaintiffs cannot prove 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. 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.

The defendant served an interrogatory asking for all facts supporting the request for punitive damages. The plaintiffs responded that the relevant plaintiff worked as a plumber using the defendant’s asbestos-containing products, the defendant had a duty to warn about the asbestos, the defendant knew about the dangers of asbestos, and the defendant failed to warn. The response describes a letter the defendant sent in the 1970s to vendors and manufactures of asbestos products asking about the effects of asbestos-containing products on its employees, and the response notes the defendant’s employees raised issues about asbestos in the products they were handling in the 1970s. Yet, the defendant did not test its products or follow up regarding the dangers of asbestos. The defendant’s motion does not discuss these facts set out in the interrogatory response. This response is not factually-devoid, and so the burden did not shift. The defendant’s motion was therefore denied.

Read the full decision here.