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Gallagher v. American Insulated Wire Corp.

Superior Court of Rhode Island

October 24, 2014


Providence County Superior Court.

For Plaintiff: Vincent L. Greene, Esq.

For Defendant: Lawrence G. Cetrulo, Esq. Stephen T. Armato, Esq.



The Plaintiff, Maureen Gallagher (Plaintiff or Mrs. Gallagher), Executrix for the Estate of Dennis Gallagher, by her agent, The Federal-Mogul Asbestos Personal Injury Trust, by and through her attorney of record, filed the above-entitled asbestos-related negligence claims against a number of defendants, including Turner & Newell (T&N or Defendant). Defendant moves for summary judgment pursuant to Super. R. Civ. P. 56 (Rule 56), and Plaintiff objects. Jurisdiction is pursuant to G.L. 1956 § 8-2-14. For the reasons set forth below, Defendant's Motion for Summary Judgment is denied.

I Facts and Travel

A Introduction

Dennis Gallagher was employed by Narragansett Electric from approximately November 1984 to April 2004. See Gallagher Compl., Def.'s Mem., Ex. B. Mr. Gallagher was diagnosed with mesothelioma on April 8, 2004 and died from the disease on July 13, 2005. See Gallagher Death Certificate, Def.'s Mem., Ex. C. After his death, Mrs. Gallagher was appointed the representative and executrix of his estate. See Gallagher Compl., Def.'s Mem., Ex. B. In 2005, Mrs. Gallagher commenced suit against a number of asbestos manufacturers in Rhode Island Superior Court alleging responsibility for Mr. Gallagher's injury. See Gallagher Compl., Def.'s Mem., Ex. B. In that action, Plaintiff did not sue T&N, which was protected from litigation by the automatic stay in its then-pending Chapter 11 reorganization case. Id. On September 14, 2011, the Federal-Mogul Asbestos Personal Injury Trust (the Trust) filed the instant Complaint against T&N entities. See the Trust Compl., Def.'s Mem., Ex. D. The Complaint alleges that Mr. Gallagher's mesothelioma and death were a result of exposure to the T&N entities' asbestos-containing products. Id.

B Federal-Mogul Global, Inc.'s Chapter 11 Case

On October 1, 2001, Federal-Mogul Global, Inc. and 157 domestic and foreign affiliates (the Debtors), including U.K.-based T&N, filed voluntary Chapter 11 petitions. In re Fed.-Mogul Global, Inc., 282 B.R. 301 (Bankr. D. Del. 2002). The Debtors emerged from bankruptcy on December 27, 2007, under a confirmed Chapter 11 plan. See Notice of Effective Date, Def.'s Mem., Ex. I. The Reorganization Plan (the Plan) created the Trust under section 524(g) to pay current and future asbestos claims against T&N from the Trust's assets and income. See Fourth Am. Joint Plan of Reorganization, Def.'s Mem., Ex. F. The Plan funded the Trust by issuing 50.1 million Class B shares of the reorganized Federal-Mogul Global, Inc. Id. In accordance with the Bankruptcy Code requirement that the Trust own or have a right to acquire at least 50% of the reorganized debtor's equity, the Trust received 42.5% of the shares in consideration for the Trust's assumption of asbestos claims and the remaining 57.5% of the shares in consideration for a subscription agreement obligation of £338 million, payable over twenty years. Id. Reorganized Federal-Mogul Global, Inc. immediately assigned to T&N its right to that payment obligation. Id.

C The Plan and Its Treatment of the Hercules Policy

In 1996, T&N purchased from its wholly-owned captive insurance subsidiary, Curzon Insurance, Ltd., a U.K. law-governed asbestos liability policy known as the "Hercules Policy" (the Policy or the Hercules Policy). See Disclosure Statement, Def.'s Mem., Ex. E (Part 1). The Hercules Policy's terms and U.K. law prohibited the Plan from assigning the Hercules Policy to the Trust—as the Plan did with domestic policies—as was done in other asbestos Chapter 11 cases in which the Bankruptcy Code overrides typical anti-assignment provisions. See In re Fed. Mogul Global, Inc., 684 F.3d 355 (3d Cir. 2012). Thus, in order to preserve the Policy's value, section 4.5.6 of the Plan deferred discharge of asbestos claims against T&N so that they could be asserted against T&N to reach the Hercules Policy. See Fourth Am. Joint Plan of Reorganization § 4.5.6, Def.'s Mem., Ex. F. Section 4.5 denied a discharge to reorganized Hercules-protected entities on the effective date, including the T&N entities, for a limited time period solely to allow the Trust to prosecute and establish Debtor HBE asbestos claims in the tort system up to the proceeds of the Hercules Policy. See § 4.5. The Plan provided, however, that when the Hercules Policy was exhausted, the Hercules-protected entities would automatically be discharged. See § 4.5.20.

D The Center for Claims Resolutions, Inc. Tolling Agreement

In 1988, T&N became a member of the Center for Claims Resolutions, Inc. (CCR), a consortium of former asbestos manufacturers. Barraford v. T&N Ltd., 2014 WL 793567 (D. Mass. Feb. 25, 2014). In 1993, CCR, as T&N's agent, entered into a National Class Action Settlement Agreement that tolled the statute of limitations for all members of a purported class of persons who had been exposed to asbestos but had not yet filed a claim. Id. at *1. The district court conditionally certified an opt-out class and appointed Ness, Motley, Loadholt, Richardson & Poole (Ness Motley) as class counsel. Id. In 1996, the class certification was overturned, and the class was formally decertified in August 1997. Id. at *2.

In July 2000, CCR and Ness Motley—which represented a number of plaintiffs—entered into an agreement to extend the 1993 tolling agreement. Barraford, 2014 WL 793567, at *2. The extension was from May 5, 1996 to "until such time" as Ness Motley received "written notification from the CCR that the tolling agreement extension is terminated." Id. On October 1, 2001, Federal-Mogul Global, Inc. and its subsidiaries, which included T&N, filed a bankruptcy petition under Chapter 11. Id. The following day, Federal-Mogul Global, Inc. terminated its membership in the CCR. Id.

II Standard of Review

"[S]ummary judgment is an extreme remedy that warrants cautious application." Gardner v. Baird, 871 A.2d 949, 952 (R.I. 2005). Pursuant to Rule 56(c), "[s]ummary judgment is appropriate when, viewing the facts and all reasonable inferences therefrom in the light most favorable to the nonmoving party, the court determines that there are no issues of material fact in dispute, and the moving party is entitled to judgment as a matter of law." Delta Airlines, Inc. v. Neary, 785 A.2d 1123, 1126 (R.I. 2001).

Once a summary judgment motion is made, "[t]he burden rests upon the nonmoving party 'to prove the existence of a disputed issue of material fact by competent evidence; it cannot rest on allegations or denials in the pleadings or on conclusions or legal opinions.'" Mut. Dev. Corp. v. Ward Fisher & Co., 47 A.3d 319, 323 (R.I. 2012) (quoting Hill v. Nat'l Grid, 11 A.3d 110, 113 (R.I. 2011)). Thus, "by affidavits or otherwise[, opposing parties] have an affirmative duty to set forth specific facts showing that there is a genuine issue of material fact." Bourg v. Bristol Boat Co., 705 A.2d 969, 971 (R.I. 1998). Accordingly, in order for a plaintiff to survive a defendant's summary judgment motion as to a particular claim, the plaintiff must "produce evidence that would establish a prima facie case for [that] claim." DiBattista v. State, 808 A.2d 1081, 1089 (R.I. 2002). Conversely, summary judgment is proper where the plaintiff is unable to establish a prima facie case. Kelley v. Cowesett Hills Assocs., 768 A.2d 425, 430 (R.I. 2001).

III Analysis

Defendant first contends that Plaintiff cannot establish a prima facie case because all of the claims are time barred. In response, Plaintiff first asserts that the statute of limitations has not run because the Defendant was not provided with a discharge on December 27, 2007; rather, the Defendant was provided with a conditional discharge upon the exhaustion of the Hercules Policy. Second, Plaintiff asserts that the CCR tolling agreement is still in effect and applies to Mr. Gallagher. Lastly, Plaintiff contends that G.L. 1956 § 23-24.5-15 extended the statute of limitations.

Both parties agree that the relevant statute of limitations is three years, and that Mr. Gallagher died on July 13, 2005. Finally, it is undisputed that Plaintiff filed the instant action on September 14, 2011.

A. Defendant was Provided with a Conditional Discharge, Effective upon the Expiration of the ...

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