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William B. Webb et al v. Special Electric Company

March 14, 2013

WILLIAM B. WEBB ET AL., PLAINTIFFS AND APPELLANTS,
v.
SPECIAL ELECTRIC COMPANY, INC., DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County. John Shepard Wiley, Judge. (Los Angeles County Super. Ct. No. BC436063)

The opinion of the court was delivered by: Rothschild, J.

CERTIFIED FOR PUBLICATION

Reversed and remanded with directions.

In this action for strict liability and negligence (among other causes of action) plaintiffs William Webb (Webb) and Jacqueline Webb (collectively the Webbs) sought damages for personal injuries arising from conduct of defendant Special Electric Company, Inc. (Special Electric) (among others) in supplying and marketing products containing asbestos.*fn1 A trial resulted in a jury verdict against the Webbs and for Special Electric on the Webbs' product liability claim, and for the Webbs against Special Electric on the Webbs' claims for failure to warn and negligence. The verdict found damages of more than $5 million, holding Special Electric responsible to the Webbs for 18 percent of them.

After the verdict was rendered and the jury was discharged, but before judgment was entered, the court heard and granted Special Electric's pending pre-verdict motions for non-suit and for directed verdict, and--deeming those motions to be a motion for judgment notwithstanding the verdict (judgment NOV or JNOV)--entered judgment for Special Electric. The Webbs appeal from the judgment. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant, William Webb, was diagnosed with mesothelioma, which he attributed to his exposure to asbestos products during various periods in his life.*fn2 His evidence showed that during his employment at Pyramid Pipe & Supply in Canoga Park, California (Pyramid), from 1969 through the late 1970s he regularly handled Transite pipe, an asbestos product manufactured by Johns-Manville at its plant in Long Beach, California, which contained a certain type of asbestos supplied to it by Special Electric (among other suppliers). Transite pipe was four inches in diameter, and came in five-foot and sometimes ten-foot lengths. It was typically used for water-heater venting. Webb had used no gloves or respiratory protection when handling the pipe. Pyramid bought its Transite pipe from Familian, a pipe supply company.

From approximately 1974 through 1980, Special Electric supplied to Johns-Manville about 7,000 tons of crocidolite (or "blue") asbestos, a particularly dangerous type of asbestos. Although crocidolite asbestos was not part of the formula for Johns-Manville's manufacture of Transite pipe, there was evidence that crocidolite asbestos from discarded or scrap pipe was added to the mix for Johns-Manville's Transite pipe.

The Webbs' Complaint

The Webbs' complaint alleged causes of action against Special Electric (among other defendants) for damages and loss of consortium. So far as is relevant here, Webb claimed liability for negligence and strict liability, alleging that Special Electric was aware of the risks of injury and disease presented by use and handling of its asbestos, that Webb was unaware of those risks, and that Special Electric had failed to warn Webb or his employer of those risks. The Webbs also alleged Special Electric's liability on theories other than strict liability and negligent failure to warn, including "researching, manufacturing, fabricating, designing, . . . distributing, . . . supplying, selling, . . . marketing, . . . and advertising asbestos and asbestos-containing products" with knowledge of the resulting foreseeable risks of injury and death.

Motion for Non-suit

After the close of the Webbs' evidence Special Electric moved orally for non-suit, supporting its motion with a brief filed a few days later. The motion targeted only "the failure to warn cause of action, which runs across both strict liability failure to warn as well as any theory under a negligence or common law negligence theory of a failure to warn." It asserted two grounds for non-suit: Undisputed evidence showed that all the asbestos shipped to Johns-Manville under Special Electric's auspices had been packaged with a printed warning about the hazards of asbestos, fulfilling its duty to warn. And Special Electric's only relevant customer was Johns-Manville, undisputedly "one of the most sophisticated companies in the U.S. when it came to asbestos and asbestos-related products"; the sophisticated user doctrine therefore "absolves Special Electric of a duty to warn."

Opposing non-suit, the Webbs' brief argued that conflicting evidence indicates that not all the asbestos delivered to Johns-Manville bore the printed warnings; that the printed warnings did not sufficiently identify the dangers of handling asbestos; that non-suit can be justified only by a failure of the evidence to support the plaintiff's case, not by its failure to refute Special Electric's affirmative "sophisticated user" defense; and that the sophistication of Johns-Manville, an intermediary user, cannot absolve Special Electric of its duty to warn Webb, a foreseeable downstream user of its asbestos. The trial court did not rule on the non-suit motion.

Instructions to the Jury*fn3

The jury was instructed that Webb claimed he was harmed by a product "distributed, manufactured, or sold" by Special Electric, that was defectively designed or did not include sufficient instructions or warning of potential safety hazards. The court instructed the jury as to the factual elements required to find Special Electric liable under four legal theories: strict product liability for design defect,*fn4 strict liability failure to

warn,*fn5 negligent design, manufacture, or supply of the asbestos,*fn6 and negligent failure to warn.*fn7

Motion for Directed Verdict

On February 8, 2011, Special Electric filed a motion for directed verdict raising only liability based on a strict liability theory. The motion argued that strict liability theory was conclusively negated because the evidence showed that Special Electric had acted only as a broker, outside of the chain of distribution of the asbestos supplied to Johns-Manville.*fn8 The Webbs filed their opposition to the motion during the jury's deliberations. The trial court did not rule on the directed-verdict motion.

The Verdict

On February 17, 2011, the jury returned its verdict. By special verdict, it found that Special Electric's products suffered from no design defect. However, it also found that Webb was exposed to asbestos products sold or supplied by Special Electric, which had potential risks that were known or knowable to Special Electric, which presented a substantial danger that would not have been recognized by ordinary consumers; that Special Electric failed to adequately warn consumers of its products' potential risks; and that both Special Electric's failure to warn, and its negligence, were substantial factors in causing the Webbs' harm.

The jury found that the Webbs had suffered economic and non-economic damages resulting from mesothelioma totaling $5,004,695, of which it attributed 18 percent to Special Electric, 49 percent to Johns-Manville, 0 percent to Webb, and 33 percent to third parties. The jury was discharged.

Renewed Motions for Non-suit and Directed Verdict

The next day, February 18, 2011, the trial court suggested it would deny Special Electric's outstanding motions for non-suit and directed verdict without hearing argument. Its minute order for that date indicates that in fact it did deny the motions.

But contrary to the minute order, the reporter's transcript shows that the court instead deferred ruling on those motions at Special Electric's request, while suggesting that Special Electric "wrap the whole thing into one" with motions for new trial and judgment NOV. When Special Electric said it would not move for new trial and judgment NOV until after the non-suit and directed-verdict motions had been denied and judgment had been entered, the court scheduled a hearing on the pending motions.

On March 10, 2011, the Webbs moved ex parte for entry of judgment. The court signed the judgment favoring the Webbs, but withheld its entry pending hearing on the pre-verdict motions.

At the March 16, 2011 argument on the pre-verdict motions, the grounds argued by Special Electric for its non-suit and directed-verdict motions were not the same as those stated in its initial briefs. Unlike the motions it had earlier filed, it explained that its non-suit motion challenged its potential liability for failure to warn, based on the evidence that the asbestos shipped to Johns-Manville all bore warnings of asbestos's dangers in terms that were adequate as a matter of law according to OSHA regulations approving them. And unlike its earlier directed-verdict motion, it contended that a directed verdict was justified because "both failure to warn and negligence don't exist as against Special Electric in this case because there's no legal duty to have warned whatsoever." Thus according to Special Electric, both its motions contended that Special Electric had no duty to warn Johns-Manville of the dangers of asbestos, either because Johns-Manville had been warned of those dangers, or because the dangers were obvious and known to Johns-Manville, a sophisticated user of asbestos. Special Electric argued also that it had no duty to take measures to warn unsophisticated downstream users of products containing its asbestos, such as Webb, because Special Electric could rely on Johns-Manville to provide those warnings.

The Webbs argued in response that Special Electric's duty to warn Johns-Manville was not fulfilled, because the evidence was conflicting about whether all the asbestos shipped to Johns-Manville was packaged with warnings, and whether those warnings were adequate. And they argued that Johns-Manville's sophistication with respect to asbestos could not absolve Special Electric of its duty to warn Webb, because the evidence did not show, and the jury did not find, that Special Electric had reasonably relied on Johns-Manville to undertake those warnings.

The Trial Court's Rulings

The court found tentatively that because Johns-Manville knew that asbestos is a dangerous product, Special Electric, a much smaller and less sophisticated entity, had no legal duty to warn Johns-Manville of those dangers. Warning Johns-Manville about asbestos, the court explained, is unnecessary, because "[t]elling Johns-Manville about asbestos is like telling the Pope about Catholicism."*fn9

At the close of the March 16 hearing the court announced its tentative intention to rule that Special Electric owed no duty to warn Johns-Manville about asbestos, and therefore had no liability to the Webbs. However, acknowledging its inability to find authority squarely supporting its intended rulings, the court acceded to the Webbs' request for an opportunity to further brief and argue the issues.

The court heard further argument on April 18, 2011, after which it granted Special Electric's motions, and entered judgment.*fn10 It identified two analytical grounds for its ruling: First, although it would have been relatively easy for Johns-Manville to provide warnings to users of its products such as Webb, it would be unreasonable to obligate Special Electric to require Johns-Manville to do so.*fn11 Alternatively, the court found that the bags in which the asbestos was transported to Johns-Manville all bore warnings that satisfied any duty to warn.*fn12 The court made its ruling with a conscious awareness of the procedural posture in which its ruling left the case: "I've sought in the procedure of this case to present this legal question for a clear appellate shot so that if I'm wrong, judgment is simply entered for Mr. Webb and he does not have to endure any further fact-finding."

The court confirmed that entry of a judgment consistent with the verdict must occur first, "and then there would be a judgment notwithstanding the verdict, which would come along after," adding "[t]hat's in the alternative, and I propose that that all happen today." The April 18, 2011 minute order recites that the non-suit and directed-verdict motions "are treated as a Motion for New Trial and Motion for Judgment Notwithstanding the Verdict"; that they "are granted"; and that "[j]udgment is entered as to the jury verdict and is entered this date."

Judgment and Appeal

The court's April 22, 2011 minute order recites that its "order on motions for judgment of non-suit and directed verdict and judgment on special verdict and for non-suit, directed verdict, and JNOV are signed and filed this date."*fn13 The formal Order On Motions For Judgment Of Non-suit And Directed Verdict was filed April 22, 2011, granting Special Electric's motions for non-suit and directed verdict, deeming those motions to be a motion for judgment notwithstanding the verdict, granting that motion, and ordering judgment to be entered accordingly. Also filed April 22, 2011, was the court's Judgment On Special Verdict And For Non-suit, Directed Verdict, and JNOV, incorporating the jury's special verdict, reciting the court's April 18, 2011 grant of the non-suit and directed-verdict motions, and, after deeming those motions to be a motion for judgment notwithstanding the verdict, then granting that motion as well.*fn14

The Webbs filed a timely appeal from the judgment on May 17, 2011. No protective cross-appeal was filed. (See Cal. Rules of Court, rule 8.108(g).)

DISCUSSION

Webb's appeal raises three primary contentions: (1) The trial court erred, both procedurally and substantively, by entering judgment for Special Electric on the Webbs' failure-to-warn claims notwithstanding the jury's verdict in the Webbs' favor. (2) Even if non-suit or JNOV were proper with respect to the failure-to-warn claims, the court erred in setting aside the verdict favoring the Webbs on their claim that Special Electric was negligent in designing, manufacturing, or supplying the asbestos, because Special Electric's motions and arguments addressed only the failure-to-warn claims, and the evidence supported the jury's general-negligence findings. (3) The verdict for Special Electric on the consumer-expectations product liability claim is inconsistent with the finding that ordinary consumers would not have recognized the potential risks of Special Electric's asbestos, and inconsistent with the only evidence on the subject, and therefore should be set aside.

The Webbs' appeal challenges on both procedural and substantive grounds the order deeming Special Electric's motions for non-suit and directed verdict to be a motion for JNOV, and its order granting that motion (or any of them). We conclude that the trial court erred in granting judgment notwithstanding the verdict, on both procedural and substantive grounds. We will order reinstatement of the verdict and entry of judgment consistent with the verdict in the Webbs' favor.

The Trial Court Erred By Granting Judgment NOV

A defendant may move for non-suit after the plaintiff's opening statement or at the close of the plaintiff's evidence. (Code Civ. Proc., § 581c.)*fn15 After all parties have completed their presentation of evidence, any party may move for a directed verdict in its favor. (§ 630.) And either on the noticed motion of a party or on its own motion, the court is obligated to render judgment NOV whenever a directed verdict favoring the moving party would have been appropriate. (§ 629.)

Each of these motions tests the legal sufficiency of the evidence proffered or presented by the opposing party; each is governed in the trial court by the same evidentiary standard. (Elmore v. American Motors Corp. (1969) 70 Cal.2d 578, 583; Alpert v. Villa Romano Homeowners Assn. (2000) 81 Cal.App.4th 1320, 1328 [non-suit]; Estate of Easton (1931) 118 Cal.App. 659, 662 [directed verdict]; Hauter v. Zogarts (1975) 14 Cal.3d 104, 110 [JNOV]; Beavers v. Allstate Ins. Co. (1990) 225 Cal.App.3d 310, 327 [JNOV].) A motion for judgment NOV may be brought after a verdict has been rendered, but before judgment has been entered on the verdict. (§§ 629, 659.)

This court reviews trial court rulings on each of these motions by applying the same standard that governs a trial court's hearing of the motion. (Hauter v. Zogarts, supra, 14 Cal.3d at p. 110.) We evaluate the evidence for sufficiency in the light most favorable to the party opposing the motion, without consideration of conflicting evidence. (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830, 839 [non-suit]; Colbaugh v. Hartline (1994) 29 Cal.App.4th 1516, 1521 [directed verdict]; Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68 [JNOV].)

A. The Order Violated Statutory Procedural Requirements For A Motion For Judgment NOV.

Seeing that a post-verdict motion for judgment NOV could place before the court the same substantive issues as those raised by Special Electric's pre-verdict motions for non-suit and directed verdict, the trial court deemed these motions to be interchangeable. (See Beavers v. Allstate Ins. Co., supra, 225 Cal.App.3d at p. 328 [court's power to grant judgment NOV is the same as its power on motion for a non-suit or for a directed verdict].) The court reasoned that the substantive issues had been sufficiently aired in the post-verdict briefing and argument on the pre-verdict motions; it therefore could bypass further briefing and argument without prejudicing the Webbs' rights, conserving time and resources by simply treating the pre-verdict motions as though they were a post-verdict motion for judgment NOV, to which the same standards apply. Without a motion for judgment NOV having been interposed, the court entered judgment on the jury's verdict and ordered judgment NOV (and, somewhat inconsistently, non-suit and a directed verdict as well) in Special Electric's favor.

A trial court may grant judgment NOV on its own motion. (§ 629.) However, before it may do so, it must provide the parties with at least five days' notice of the motion, and of the grounds on which the motion is brought; it may not grant a court-initiated motion for judgment NOV before the expiration of 15 days after entry of judgment, the time within which a party may serve and file a new trial motion (§ 659); and it must grant judgment NOV, if at all, before expiration of its power to rule on a new trial motion (§ 660). (Sturgeon v. Leavitt (1979) 94 Cal.App.3d 957, 963-964; see 7 Witkin, Cal. Procedure (5th ed. 2008) Trial, § 442, p. 514.)

We conclude that the court's order for judgment NOV was procedurally impermissible, because the court lacked authority to grant judgment NOV when it did, and also because the court-initiated motion for judgment NOV lacked written notice of motion and notice ...


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