California Court of Appeals, Second District, Fourth Division
ANNE PFEIFER, Individually and as Personal Representative, etc., Plaintiff and Appellant,
JOHN CRANE, INC., Defendant and Appellant.
APPEAL from an order of the Superior Court of Los Angeles, No. BC416536 Amy Hogue, Judge.
Simon Greenstone Panatier Bartlett and Brian P. Barrow for Plaintiffs and Appellants William Pfeifer and Anne Pfeifer.
Farella Braun & Martel, John L. Cooper, Racheal Turner and Deborah K. Barron for Defendant and Appellant John Crane, Inc.
William and Anne Pfeifer asserted claims for negligence, strict liability, and loss of consortium against John Crane, Inc. (JCI), alleging that its asbestos-laden products caused William Pfeifer’s mesothelioma. During the trial, the court rejected JCI’s proffered instructions regarding its “sophisticated user” defense, and directed a verdict on the defense. After the jury returned a verdict in the Pfeifers’ favor, a judgment was entered awarding them compensatory and punitive damages. The trial court subsequently entered orders, inter alia, crediting JCI with an offset for pre-verdict settlements, and awarding expert fees to the Pfeifers. JCI appealed from the judgment and certain related orders, and the Pfeifers cross-appealed.
Regarding JCI’s appeal, we conclude that the trial court correctly declined to give JCI’s requested instructions on its “sophisticated user” defense, which stated that employees of a sophisticated user are deemed to be sophisticated users. We hold that when a manufacturer provides hazardous goods to a “sophisticated” intermediary that passes the goods to its employees or servants for their use, the supplier is subject to liability for a failure to warn the employees or servants of the hazards, absent some basis for the manufacturer to believe the ultimate users know or should know of the hazards. With respect to JCI’s other contentions, we conclude there was sufficient evidence to support the jury’s findings regarding comparative fault, and that the award of punitive damages was supported by the evidence and was not excessive in amount. We dismiss JCI’s appeal insofar as it challenges an award of expert fees to the Pfeifers, as JCI filed no notice of appeal from the award. Regarding the Pfeifers’ cross-appeal, we affirm the trial court’s determination of JCI’s credit for the pre-verdict settlements.
We otherwise find no error in the judgment and related orders, with the exception of an error both sides acknowledge regarding the determination of the Pfeifers’ net recovery of economic damages. We therefore dismiss JCI’s appeal in part, modify the judgment to reflect the correct determination of the Pfeifers’ net economic damages, and affirm the judgment and related orders, as modified.
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
A. Pretrial Proceedings
Beginning in 1917, JCI manufactured and sold packing used in valves and pumps, and distributed gaskets used in flanges and pipe systems. Some of these products contained asbestos. JCI sold packing and gaskets containing asbestos to the United States Navy and to the United States government. From 1963 to 1971, William Pfeifer served in the Navy. After leaving the Navy, he worked for the United States government as a boiler technician until 1982. In 2009, he was diagnosed with pleural mesothelioma, a type of cancer usually caused by exposure to asbestos.
On June 25, 2009, the Pfeifers filed their complaint for negligence, strict liability, and loss of consortium against approximately 31 suppliers of asbestos-laden products. The complaint alleged that William Pfeifer’s mesothelioma resulted from his exposure to asbestos from the defendants’ products. The Pfeifers sought compensatory and punitive damages.
Prior to trial, the Pfeifers entered into settlements with several defendants. At a result of the settlements and other dispositions, on November 1, 2010, at the commencement of jury selection, JCI was the sole remaining defendant in the action. Trial was bifurcated with respect to punitive damages.
1. First Phase of Trial
a. The Pfeifers’ Evidence
William Pfeifer testified that after he entered the Navy in August 1963, he served as an apprentice fireman and boiler tender aboard destroyers. His responsibilities included removing and replacing gaskets and packing containing asbestos. The air he breathed often became dusty when he scraped away old gaskets and packing and replaced them. The Navy neither supplied him with a respirator nor provided training regarding dusty environments. From 1971 to 1982, after leaving the Navy, Pfeifer worked as a boiler technician at several land-based United States government sites. During that period, he replaced gaskets and packing; in addition, he sometimes repaired boilers with an asbestos-based JCI product that he did not encounter in the Navy, namely, a rope-like gasket that released dust when he put it in place. In May or June 2009, he learned that he had mesothelioma.
According to Pfeifer, JCI was a key supplier of the gaskets and packing he encountered in the Navy and as a boiler technician. Among the JCI products he frequently used were “2150 sheet gaskets.” Pfeifer estimated that JCI supplied 75 percent of the gaskets he removed, 70 percent of the materials from which he made replacement gaskets, and 90 to 95 percent of the packing he removed and replaced.
James R. Millette, an environmental scientist, testified that he examined JCI products identical or similar to those William Pfeifer encountered. According to Millette, JCI’s products showed exposed asbestos fibers, even though the products embedded the fibers in graphite or other materials. In addition, Millette opined that the cutting, scraping, and other operations that Pfeifer performed on the products released asbestos fibers into the air.
Dr. Carl Andrew Brodkin, a specialist in asbestos-related diseases, opined that Pfeifer’s exposure to asbestos substantially contributed to his mesothelioma. Brodkin further testified regarding the evolution of medical knowledge concerning asbestos-related diseases. According to Brodkin, as early as 1927, researchers knew that exposure to asbestos dust caused the noncancerous lung disease called “asbestosis.” In the 1940’s, 1950’s, and 1960’s, research studies linked asbestos to certain cancers, namely, lung cancer and mesothelioma. By 1960, it was generally accepted that exposure to asbestos caused mesothelioma. At the time, the hazards of asbestos were reported in medical journals and the popular media, including magazines such as Newsweek.
George Springs, a retired JCI vice president, testified as JCI’s designated representative regarding its response to the hazards of asbestos. He stated that from 1931 to 1985, JCI sold gaskets and packing containing asbestos. During that period, JCI conducted no research into whether its asbestos-laden products were hazardous.
Springs further testified that JCI first became aware of asbestos’s health hazards in 1970, when it learned that handling raw asbestos enhanced the risk of lung problems for workers who smoked. In 1975, to comply with regulations propounded by the federal Occupational Safety and Health Administration (OSHA), JCI began monitoring the air in its factories for asbestos particles, and used engineering controls to help keep dust levels down. In 1981, pursuant to the OSHA regulations, JCI created a safety data sheet regarding the 2150 gaskets, which stated that overexposure to asbestos caused asbestosis and cancer. Because JCI prepared the safety data sheet for the benefit of its employees, customers received a copy only when they asked for it. In 1983, JCI began placing warnings on its products regarding the hazards of asbestos.
According to Springs, the absence of warnings on JCI’s products was consistent with the then-effective OSHA regulations, which required no labels when the asbestos fibers in a product were encased in bonding materials such as graphite, grease, oil, or rubber, unless it was reasonably foreseeable that their use would release concentrations of asbestos fibers exceeding certain defined limits. Springs acknowledged that JCI knew that its customers sometimes replaced gaskets using methods that created asbestos dust or fragmented old gaskets. He stated that JCI recommended other methods which, if properly applied, released little dust. Springs also acknowledged that JCI never tested its products to determine whether the bonding agents prevented the release of asbestos fibers.
David Todd Fractor, an economist, estimated that William Pfeifer’s lost earnings, benefits, and household services totaled $1, 508, 335. The parties stipulated that William Pfeifer’s past medical expenses were $1, 054, 469.47, and Dr. Robert Cameron, a thoracic surgeon who treated William Pfeifer, opined that asbestos exposure caused Pfeifer’s mesothelioma, and that his future medical expenses ranged from $500, 000 to “several” million dollars. Anne Pfeifer testified regarding the Pfeifers’ non-economic injuries.
b. JCI’s Evidence
James Paul Delaney, who served as an apprentice fireman and machinist’s mate in the Navy, testified regarding the Navy’s procedures for replacing gaskets and packing. He stated that the Navy required personnel to wear respirators in dusty environments, that the Navy began an asbestos abatement program in the 1970’s, and that warning labels first appeared on asbestos-laden products bought by the Navy in the 1980’s. According to Delaney, the Navy’s specifications for a product regulated the words placed on the product.
Dr. Allan Feingold, a lung specialist, opined that William Pfeifer’s mesothelioma arose from his exposure to specific types of asbestos fibers not found in significant quantities in the relevant JCI products. According to Feingold, those types of asbestos fibers were present in thermal insulation and other items the Navy bought from other suppliers.
The jury returned special verdicts in favor of the Pfeifers on their claims for negligence, strict liability, and loss of consortium. The jury found that William Pfeifer had suffered $3, 203, 580.47 in economic damages, including $1, 054, 469.47 in past medical expenses, and $4, 000, 000 in noneconomic damages. The jury also found that Anne Pfeiffer had suffered $1, 050, 000 in noneconomic damages for loss of past and future consortium. The jury allocated JCI a 70 percent share of comparative fault, and found that it had acted with malice, oppression, or fraud.
2. Second Phase of Trial
Pursuant to a stipulation, the Pfeifers’ counsel presented information to the jury regarding JCI’s assets and liabilities for the 2009 and 2010 fiscal years derived from JCI’s annual report and financial statement. The jury awarded the Pfeifers $14, 500, 000 in punitive damages.
C. Judgment and Post-Judgment Orders
On February 3, 2011, a judgment was entered in favor of the Pfeifers awarding damages totaling $21, 238, 580.47. The trial court deferred determining the extent to which the Pfeifers’ pre-verdict settlements required an adjustment of the jury’s award of economic damages to William Pfeifer.
In early March 2011, Anne Pfeifer became the personal representative for William Pfeifer, who died on February 22, 2011. On March 9, 2011, the trial court granted JCI’s motion to reduce the award to William Pfeifer for his past medical expenses from $1, 054, 469.47 (the amount stipulated at trial) to $545, 703.29. The court later awarded JCI a settlement-based offset of $1, 320, 192 against the award of economic damages to William Pfeifer, as adjusted by its March 9 ruling, and denied JCI’s motions for a new trial and judgment notwithstanding the verdict.
On April 13, 2011, JCI appealed from the judgment and certain related orders. On April 21, 2011, the Pfeifers noticed their cross-appeal from the judgment and the related orders. On the same date, the trial court granted in part and denied in part JCI’s motion to tax costs, insofar as the Pfeifers sought an award of expert fees under Code of Civil Procedure section 998.
I. JCI’s Appeal
JCI contends (1) there was insufficient evidence to support the jury’s findings regarding comparative fault; (2) the trial court erred in rejecting JCI’s proffered instructions regarding its “sophisticated user” defense, and directing a verdict on the defense; (3) the award of punitive damages is unsupported by the evidence and is excessive in amount; and (4) the court erred in issuing an award of expert fees to the Pfeifers. For the reasons explained below, we reject JCI’s first three contentions, and conclude that we lack jurisdiction to examine the remaining contention.
A. Comparative Fault
JCI contends that the jury’s findings regarding comparative fault fail for want of substantial evidence. The immediate targets of JCI’s challenge are the findings regarding JCI, William Pfeifer, the United States Navy, and Flexitallic, which manufactured a type of gasket known as a “spiral-wound” gasket. JCI further argues that because those findings are interwoven with the jury’s other findings regarding liability, a new trial is necessary.
1. Governing Principles
The comparative fault doctrine “is designed to permit the trier of fact to consider all relevant criteria in apportioning liability. The doctrine ‘is a flexible, commonsense concept, under which a jury properly may consider and evaluate the relative responsibility of various parties for an injury (whether their responsibility for the injury rests on negligence, strict liability, or other theories of responsibility), in order to arrive at an “equitable apportionment or allocation of loss.”’ [Citation.]” (Rosh v. Cave Imaging Systems, Inc. (1994) 26 Cal.App.4th 1225, 1233 (Rosh), quoting Knight v. Jewett (1992) 3 Cal.4th 296, 314.) For this reason, comparative negligence “does not lend itself to ‘the exact measurements of a micrometer-caliper.’” (Rosh, supra, at p. 1233, quoting Daly v. General Motors Corp. (1978) 20 Cal.3d 725, 736.) Generally, a defendant has the burden of establishing that some nonzero percentage of fault is properly attributed the plaintiff, other defendants, or nonparties to the action. (See Sparks v. Owens-Illinois, Inc. (1995) 32 Cal.App.4th 461, 476 (Sparks).)
Here, the special verdict form asked the jury to determine whether William Pfeifer was “negligent in his work with [JCI’s] gaskets or packing, ” and if so, whether his negligence was a substantial factor in causing his harm. The special verdict form also requested findings regarding the percentage of fault attributable to JCI, Pfeifer and several other parties, including the United States Navy, the manufacturers and suppliers of thermal insulation that Pfeifer encountered, and two manufacturers of asbestos-laden gaskets, namely, Garlock and Flexitallic. The jury found that although Pfeifer was negligent, his conduct was not a substantial factor in the causation of his injuries. The jury allocated fault as follows: 70 percent to JCI, 0 percent to Pfeifer, 12.5 percent to the Navy, 12.5 percent to the manufacturers and suppliers of thermal insulation, 5 percent to Garlock, and 0 percent to Flexitallic.
We review these findings for the existence of substantial evidence. (Sparks, supra, 32 Cal.App.4th at p. 476; Rosh, supra, 26 Cal.App.4th at p. 1234.) On review for substantial evidence, we “consider the evidence in the light most favorable to the prevailing party, giving that party the benefit of every reasonable inference and resolving conflicts in support of the judgment. [Citation.]” (Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 561.) Under this standard, “‘the appellate court may not substitute its judgment for that of the jury or set aside the jury's finding if there is any evidence which under any reasonable view supports the jury’s apportionment. [Citation.]’” (Rosh, supra, at p. 1234, quoting Hyatt v. Sierra Boat Co. (1978) 79 Cal.App.3d 325, 346.) For this reason, courts rarely disturb the jury’s apportionment of fault. (Ibid.)
2. Finding Regarding JCI
JCI challenges the finding allocating it a 70 percent share of fault for William Pfeifer’s cancer, arguing that there was undisputed evidence that Pfeifer was exposed to asbestos from numerous sources, many of which were not listed in the special verdict form. Pfeifer testified that from 1963 to 1982, he encountered 800 to 1000 gaskets, 70 percent of which were made by JCI, and 600 to 800 valve packings, 90 to 95 percent of which were made by JCI. However, Pfeifer also acknowledged that in 1987, he sued numerous manufacturers and suppliers of asbestos-based products other than JCI, and received compensation through settlements. In addition, the jury heard certain interrogatory responses from the Pfeifers listing the suppliers of asbestos-laden products that William Pfeifer had encountered. JCI contends this evidence required the jury to allocate a smaller share of comparative fault to it. We disagree.
Aside from the evidence regarding the potential comparative fault of the suppliers named in the special verdict, the record discloses no evidence quantifying Pfeifer’s exposure to asbestos from the other sources identified in his 1987 complaint and the Pfeifers’ interrogatory responses. In the absence of such evidence, the jury reasonably allocated a 70 percent share of comparative fault to JCI. (Stewart v. Union Carbide Corp. (2010) 190 Cal.App.4th 23, 33 (Stewart) [despite plaintiff’s admission that he was exposed to asbestos from many sources, jury reasonably allocated 85 share of comparative fault to asbestos product manufacturer that submitted no evidence detailing plaintiff’s exposure from other sources]; Sparks, supra, 32 Cal.App.4th at pp. 477-479 [jury reasonably found that defendant’s asbestos-based product was sole cause-in-fact of plaintiff’s mesothelioma when defendant submitted no evidence specifying extent of plaintiff’s exposure to asbestos from other manufacturers’ products].)
3. Findings Regarding William Pfeifer
JCI maintains the jury was required to find that William Pfeifer’s share of fault exceeded zero percent. Regarding this contention, the record establishes that Pfeifer sometimes removed JCI gaskets and packing with power wire brushes or compressed air. Those practices were contrary to JCI’s recommendations and the Navy’s training, as they increased the risk of damage to valves and eye injuries to workers. As JCI further notes, the Pfeifers’ experts testified that the use of power wire brushes released far more asbestos dust that ordinary scraping, and that mesothelioma is a “cumulative dose-response disease, ” that is, each exposure to asbestos increases the risk of mesothelioma.
JCI argues that this evidence compelled the jury to find that Pfeifer’s share of fault for his injuries was greater than zero percent. We reject this contention. Under the principles of comparative fault, a person’s negligent conduct may be assigned a share of fault greater than zero percent only when the conduct was a substantial factor in the causation of the pertinent injuries. (Stewart, supra, 190 Cal.App.4th at p. 33; Chakalis v. Elevator Solutions, Inc. (2012) 205 Cal.App.4th 1557, 1572-1573.) As explained below, the trial evidence does not compel a finding that Pfeifer’s conduct was a substantial factor in the causation of his cancer.
Generally, California applies the substantial factor test to so-called “cause-in-fact” determinations. (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 968 (Rutherford).) Under this test, a force that plays only an “‘infinitesimal’” or “‘theoretical’” role in the causation of injury is not a substantial factor. (Id. at p. 969.) In the context of injury claims based on exposure to asbestos from multiple sources, plaintiffs may establish that asbestos from a specific defendant’s product was a “cause in fact” of their cancer by showing that the asbestos “was a substantial factor contributing to the... risk of developing cancer.” (Id. at pp. 969, 977.) To make this showing, plaintiffs need not demonstrate that the specific asbestos particles from the defendant’s products actually caused the cancer. Rather, the showing may be based on expert testimony regarding the size of the “dose” or the enhancement of risk attributable to exposure to asbestos from the defendant’s products. (Id. at p. 976, fn. 11.) Nonetheless, plaintiffs must demonstrate conduct that “was a substantial factor in contributing to the aggregate dose of asbestos the plaintiff... inhaled or ingested, and hence to the risk of developing asbestos-related cancer.” (Id. at pp. 976-977, italics omitted.)
Under these principles, JCI’s contention fails, as the trial evidence does not compel the inference that Pfeifer’s use of power wire brushes and compressed air was a substantial factor in causing his cancer. Pfeifer testified that the air became dusty when he used hand powered tools to make new gaskets and remove old gaskets and packing. According to Pfeifer, he used a power wire brush only when a gasket was difficult to remove, and “sometimes” resorted to compressed air.
Absent from the record is evidence establishing the extent to which Pfeifer’s use of power wire brushes and compressed air contributed to his “aggregate dose” of asbestos particles. (Rutherford, supra, 16 Cal.4th at pp. 976-978.) There is no evidence regarding how often Pfeifer resorted to power wire brushes or compressed air, and no expert opined that Pfeifer’s use of these tools was, by itself, a substantial factor in the causation of his cancer. The Pfeifers’ experts opined only that Pfeifer’s cumulative exposure to asbestos caused his cancer, and that his exposure to asbestos from JCI’s products “substantial[ly] contribut[ed]” to that illness.
Because JCI bore the burden of proof at trial regarding Pfeifer’s negligence and comparative fault, JCI was obliged to present evidence that the aggregate dose of asbestos particles arising from Pfeifer’s use of power wire brushes and compressed air constituted a substantial factor in the causation of his cancer. This JCI did not do. Accordingly, the jury was not required to find that Pfeifer’s share of fault exceeded zero percent. (See Stewart, supra, 190 Cal.App.4th at p. 33; Sparks, supra, 32 Cal.App.4th at pp. 477-479.)
4. Finding Regarding Flexitallic
Pointing to William Pfeifer’s testimony that Flexitallic supplied 20 percent of the gaskets he encountered, JCI contends the jury was obliged to find that Flexitallic’s share of fault was greater than 0 percent. We disagree.
The evidence at trial established that Flexitallic manufactured a type of gasket called a “spiral-wound gasket.” Unlike JCI’s gaskets, which were made from flat sheets containing asbestos and used in low pressure systems, Flexitallic gaskets were designed for use in high pressure systems. They consisted of a spiral of coiled metal containing asbestos fiber material as a filler. Their flexible metal construction permitted them to provide a seal while absorbing the shocks to which warships were subject.
The evidence further established that of the gaskets and packing that Pfeifer encountered, Flexitallic gaskets generated the least amount of asbestos dust. The Pfeifers’ expert witnesses testified that working with a coil-wound gasket released approximately 1/10 (or less) the number of fibers produced by scraping away a sheet gasket with a hand tool, and that other activities involving sheet gaskets produced even greater exposures to asbestos fibers.
In view of this evidence, the jury was not compelled to conclude that Flexitallic gaskets were a substantial factor in causing Pfeifer’s cancer. The testimony described above supported the reasonable inference that Pfeifer’s cumulative exposure to asbestos from Flexitallic gaskets was far less than his cumulative exposure to asbestos from JCI’s products. Moreover, JCI offered no expert testimony that Pfeifer’s aggregate dose of asbestos from Flexitallic gaskets constituted a substantial factor in causing his cancer. Accordingly, the evidence did not mandate a finding that Flexitallic’s share of fault exceeded zero percent. (Sparks, supra, 32 Cal.App.4th at pp. 477-479.)
5. Finding Regarding the Navy
JCI contends the jury’s allocation of a 12.5 percent share of fault to the Navy fails for want of substantial evidence, arguing that the Navy knew that JCI’s products endangered Pfeifer, yet exposed him to those products while he ...