[CERTIFIED FOR PARTIAL PUBLICATION
Joel and Jovana Hernandezcueva asserted claims for negligence and strict products liability, together with several related claims, against respondent E.F. Brady Company, Inc. (E.F. Brady), alleging that asbestos-containing products it distributed caused Joel Hernandezcueva's mesothelioma. At trial, following presentation of the Hernandezcuevas' case-in-chief, the court granted E.F. Brady's motion for nonsuit on their claim for strict products liability and some related claims. After the jury returned special verdicts against the Hernandezcuevas on their negligence claim, they filed an unsuccessful motion for a new trial.
FACTUAL AND PROCEDURAL BACKGROUND
A. Pretrial Proceedings
E.F. Brady is a subcontractor engaged in drywall installation and plastering. During the mid-1970's, E.F. Brady participated in the construction of a complex of buildings in Irvine for the Fluor Corporation (Fluor). In the 1990's, Joel Hernandezcueva worked as a janitor in the Fluor complex. In or after 2011, he was diagnosed as suffering from mesothelioma, which is a cancer of the "pleura" of the lung.
In December 2011, the Hernandezcuevas initiated the underlying action against several defendants. In February 2013, E.F. Brady was added as a Doe defendant. The Hernandezcuevas' first amended complaint, filed May 6, 2013, asserted claims for negligence, strict liability, misrepresentation, intentional failure to warn, premises owner and contractor liability, and loss of consortium against numerous manufacturers, suppliers, and distributors of asbestos-laden products. The complaint alleged that Joel Hernandezcueva's mesothelioma resulted from his exposure to asbestos from defendants' products. The Hernandezcuevas sought compensatory and punitive damages.
By September 19, 2013, when the Hernandezcuevas began presenting their case-in-chief, only E.F. Brady and two other defendants remained in the action, Expo Industries (Expo) and Kaiser Gypsum Company (Kaiser).
1. Hernandezcuevas' Evidence
E.F. Brady was founded in 1946. As a subcontractor, it focused on plastering and the installation of drywall and fireproofing materials. By the
In the early 1970's, Fluor initiated the construction of a complex of buildings in Irvine to house the engineering facilities of its southern California division. The complex was to occupy approximately 600,000 square feet on a 104-acre lot in Irvine. C.L. Peck was the project's general contractor. In August 1974, construction of the Fluor complex commenced.
According to Vincenzo Lombardo, who testified as the person most knowledgeable regarding E.F. Brady, the company submitted a bid to install the fireproofing, metal stud framing, and drywall. Because subcontractors were ordinarily required to provide construction materials, the bid included labor and material. Although E.F. Brady's profits arose from its provision of labor, the bid included the costs E.F. Brady would incur in purchasing the materials, plus a "one or two percent" charge for "escalation of cost[s] of the material[s]." E.F. Brady generally bought the drywall and fireproofing materials it installed from supply houses.
E.F. Brady was engaged as the drywall subcontractor for the Fluor complex project. Under the contract, E.F. Brady was to be paid $2,024,272. The contract obliged E.F. Brady to select the drywall and related materials in accordance with the general contractor's plans and specifications. The specifications called for asbestos-free fireproofing and insulation, but contained no analogous requirement regarding the drywall material and joint compound (also called "taping mud").
E.F. Brady installed drywall made by Kaiser, and initially used Kaiser's "all purpose" joint compound to finish the drywall joints. When that joint compound proved to be ineffective, E.F. Brady substituted a joint compound made by Hamilton. E.F. Brady bought the drywall and joint compounds from Expo, which delivered those materials to the work site.
William Longo, a material scientist, testified that Kaiser drywall and the Hamilton joint compound installed by E.F. Brady in the Fluor complex contained asbestos. Neither the drywall nor the joint compounds were labeled as containing asbestos. Warren Bozzo, who supervised E.F. Brady's work on the Fluor complex, testified he was unaware that the drywall and joint compounds used in the project contained asbestos.
Joel Hernandezcueva was born in 1968. From 1992 or 1993 to 1995, he worked as a janitor at the Fluor complex. During that period, areas of the
Hernandezcueva's duties included cleaning up drywall debris and other rubbish from areas where E.F. Brady had installed the original drywall and fireproofing. While performing those duties, he inhaled dust. In or about 2011, he was diagnosed as suffering from mesothelioma.
The Hernandezcuevas' experts testified that Joel Hernandezcueva's exposure to asbestos released from the products installed by E.F. Brady caused his mesothelioma, which was well advanced at the time of trial. Longo stated that Hernandezcueva was exposed to asbestos from those products when he worked at the Fluor complex. Arnold Brody, a research scientist, testified that by 1974, it was well established that asbestos caused mesothelioma. According to Brody, there is no minimal threshold of exposure to asbestos below which the exposure is "safe." He opined that Hernandezcueva's exposure to asbestos from products installed by E.F. Brady significantly contributed to his risk of mesothelioma. Dr. William Salyer, a pathologist, also opined that to a reasonable degree of medical certainty, Hernandezcueva's mesothelioma was causally related to his exposure to asbestos. Dr. Reginald Abraham, a cardiovascular surgeon, testified that Hernandezcueva was likely to die within a year.
2. Motion for Partial Nonsuit
Following the completion of the Hernandezcuevas' case-in-chief, E.F. Brady filed a motion for partial nonsuit on their claims for strict liability, misrepresentation, and intentional failure to warn, as well as their request for punitive damages. The trial court granted the motion with respect to the claims for strict liability, misrepresentation, and intentional failure to warn, but denied it with respect to the request for punitive damages. The negligence claim remained.
3. E.F. Brady's Evidence
When E.F. Brady began presenting its evidence, it was the sole defendant participating in the trial. E.F. Brady presented testimony from Lombardo, who stated that during the pertinent period, the uniform building code did not prohibit the use of drywall and joint compounds containing asbestos.
E.F. Brady also presented testimony from Gary Paoli, who was employed by Raymond Interior Systems, which engaged in the installation of metal stud framing and installation in the Los Angeles area. In 1973, Raymond Interior Systems submitted an unsuccessful bid to perform the work on the Fluor
In view of the ruling on the motion for partial nonsuit, the jury was instructed to return special verdicts relating solely to the Hernandezcuevas' negligence claim and request for punitive damages. The jury found that although Joel Hernandezcueva had been exposed to asbestos from a product installed by E.F. Brady, the company was not negligent regarding that exposure.
C. Judgment and Motion for a New Trial
On October 9, 2013, the trial court entered a judgment in favor of E.F. Brady and against the Hernandezcuevas on their claims. The Hernandezcuevas filed a motion for a new trial predicated on judicial misconduct, which the trial court denied.
Appellant challenges the grant of nonsuit with respect to the claim for strict liability, and the denial of the motion for a new trial.
We begin with appellant's contention regarding the grant of nonsuit on the Hernandezcuevas' strict liability claim. Relying primarily on Monte Vista Development Corp. v. Superior Court (1991) 226 Cal.App.3d 1681 [277 Cal.Rptr. 608] (Monte Vista), E.F. Brady argued that it was entitled to a nonsuit because the Hernandezcuevas' evidence showed only that it was a subcontractor that had installed asbestos-containing products bought from other parties. The trial court agreed. Appellant contends that strict liability is properly imposed on E.F. Brady for injuries arising from asbestos released from the products it purchased and installed.
1. Standard of Review
"`A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a
2. Governing Principles
The key question before us concerns the application of the doctrine of strict products liability under the circumstances established by the Hernandezcuevas' evidence. That doctrine is traceable to Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 59-60 [27 Cal.Rptr. 697, 377 P.2d 897], in which our Supreme Court held that manufacturers of defective products are subject to strict liability for injuries to consumers arising from their products. The court explained that "[t]he purpose of such liability is to insure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market[,] rather than by the injured persons who are powerless to protect themselves." (Id. at p. 63.) Thereafter, the doctrine was extended to other parties involved in the vertical distribution of products such as retailers, wholesalers, and developers of mass-produced homes. (Bay Summit Community Assn. v. Shell Oil Co. (1996) 51 Cal.App.4th 762, 772-773 [59 Cal.Rptr.2d 322] (Bay Summit).) Although not necessarily involved in the manufacture or design of the final product, those parties were subject to liability for "passing the product down the line to the consumer" because they "were `able to bear the cost of compensating for injuries' [citation] and `play[ed] a substantial part in insuring that the product [was] safe or . . . [were] in a position to exert pressure on the manufacturer to that end.' [Citation.]" (Id. at p. 773.)
Imposition of strict liability under the stream-of-commerce theory is not limitless. (Arriaga v. CitiCapital Commercial Corp. (2008) 167 Cal.App.4th 1527, 1535 [85 Cal.Rptr.3d 143] (Arriaga).) To be subject to strict liability, a party must "play more than a random and accidental role in the overall marketing enterprise of the product in question." (Garcia v. Halsett (1970) 3 Cal.App.3d 319, 326 [82 Cal.Rptr. 420] (Garcia).) "[S]trict liability is not imposed even if the defendant is technically a `link in the chain' in getting the product to the consumer market if the judicially perceived policy considerations are not satisfied. Thus, a defendant will not be held strictly liable unless doing so will enhance product safety, maximize protection to the injured plaintiff, and apportion costs among the defendants. [Citations.]" (Arriagaa, supra, 167 Cal.App.4th at p. 1537.)
In contrast, parties involved in passing a defective component to the ultimate user or consumer are not subject to strict products liability when their sole contribution to the pertinent transaction was a service, namely, the installation of the component into the pertinent final product. (Pierson, supra, 216 Cal.App.3d at p. 345 [discussing cases].) In Endicott v. Nissan Motor Corp. (1977) 73 Cal.App.3d 917, 925-926 [141 Cal.Rptr. 95], an automobile manufacturer hired an independent contractor to install seat belts in the cars it sold in California. The manufacturer supplied the disassembled seat belts to
When an employee of the floor maintenance equipment company suffered injuries from an accident due to a defective replacement tire, he asserted a strict liability claim against the dealer that had installed the tire. (Barth, supra, 265 Cal.App.2d at p. 233.) In reversing a judgment in favor of the dealer, the appellate court rejected the dealer's contention that it was not a seller of the tire within the meaning of section 402A. In support of that contention, the dealer had argued that the underlying transaction was "analogous to [one] where [it] merely installed a tire ordered by a customer from another retailer or wholesaler" because it had installed the tire for a minor fee and realized no profit on the transaction. (Barth, at pp. 251-252.) The court concluded that the dealer was "[c]learly" part of the marketing enterprise for the tire, noting that the dealer benefited from servicing the manufacturer's national accounts (in addition to its wholesale and retail business), that it obtained the tire from its own inventory, that it had received a credit for the tire in addition to the installation fee, and that it had placed its name on the tire's warranty form. (Id. at p. 252, italics deleted.)
In Monte Vista, supra, 226 Cal.App.3d 1681, the appellate court reached a contrary conclusion regarding the imposition of strict liability on a subcontractor that had supplied and installed a defective product. There, a developer
After a purchaser of one of the homes was injured when a soap dish broke, she asserted a strict liability claim against the tiling firm; the court granted summary adjudication on the claim. (Monte Vista, supra, 226 Cal.App.3d at p. 1684.) The appellate court affirmed, concluding that the tiling firm was not a "seller" of the soap dishes for purposes of section 402A. (Monte Vista, supra, at pp. 1687-1688.) The court stated: "[The tiling firm] was not in the business of selling soap dishes or any other fixtures. It purchased the soap dish that injured plaintiff, as well as other fixtures, in order to complete its subcontract. . . . Obviously, it mattered not to [the tiling firm] whether [the developer] or someone else supplied the tile fixtures. [The tiling firm's] job was to do the tile work." (Id. at p. 1687.)
We turn to the Hernandezcuevas' evidence regarding E.F. Brady's role in the transaction concerning the pertinent asbestos-containing products, namely, Kaiser drywall and Hamilton joint compound. According to Lombardo, who testified on behalf of E.F. Brady, in the late 1960's, E.F. Brady began performing work on "heavy commercial" projects such as high-rise office buildings and major shopping malls. By the mid-1970's, E.F. Brady's contract for the Fluor project, valued at more than $2 million, was "a common job" for E.F. Brady. As E.F. Brady's operations manager at the time, Lombardo was responsible for the principal aspects of the Fluor project.
E.F. Brady's bids for work—including its bid regarding the Fluor project— always encompassed the materials necessary for the project. Lombardo stated: "You couldn't get a job unless . . . your bid included labor and material." Generally, 75 percent of the amount of a bid—which became the contract, if accepted—was allocated to labor, and the remaining 25 percent was allocated to materials. E.F. Brady's profits arose from the provision of labor. In determining the amount of the bid reflecting the provision of materials, E.F. Brady ordinarily included the costs of the materials it bought, including the sales tax, plus a 1 or 2 percent markup to cover "escalation of the costs of the materials."
During the mid-1970's, E.F. Brady did not buy products directly from manufacturers, but ordered them through supply houses. Although E.F. Brady ordinarily preferred to use drywall made by U.S. Gypsum, it used Kaiser drywall when necessary. E.F. Brady generally obtained Kaiser products from Expo or another supplier. The supplier was responsible for delivering the ordered products to the jobsite.
In the case of the Fluor project, E.F. Brady used Kaiser drywall, and thus initially selected Kaiser joint compound.
Shortly after E.F. Brady began installing drywall at the Fluor construction site, it discovered that Kaiser joint compound was not performing properly. E.F. Brady contacted Kaiser, which sent a representative to the jobsite for a meeting with Lombardo. Also present at the meeting was a Hamilton representative with whom E.F. Brady had a lengthy relationship. The Kaiser representative acknowledged that the Kaiser joint compound was ineffective, and recommended that E.F. Brady use Hamilton joint compound. E.F. Brady accepted the recommendation, and secured the architect's and the general contractor's approval of the change.
Because E.F. Brady supplied and installed asbestos-containing products, our inquiry requires a fact-sensitive examination into whether the "service aspect predominate[d] and any product sale [was] merely incidental to the provision of the service." (Pierson, 216 Cal.App.3d at p. 344.) We assess E.F. Brady's role in providing the products in light of the policy considerations underlying the imposition of strict liability, namely, whether E.F. Brady was in a position to enhance product safety or exert pressure on the manufacturer to promote that end, and bear the costs of compensating for injuries. (Bay Summit, supra, 51 Cal.App.4th at p. 773; Barth, supra, 265 Cal.App.2d at p. 253.) As explained below, we conclude the trial court erred in granting nonsuit on the Hernandezcuevas' strict liability claim.
E.F. Brady's role in the stream of commerce relating to the products was significant in other respects. As in Barth, E.F. Brady's contract for the Fluor project was structured to recoup or defray the costs of the materials—without necessarily ensuring a profit regarding those costs—while providing for payment for the installation services. For E.F. Brady, however, those costs were substantial, as they ordinarily constituted 25 percent of the amount of a bid. Accordingly, in the case of E.F. Brady's $2,024,272 Fluor project contract, the costs of the materials passed through to Fluor approximated $500,000. Furthermore, although E.F. Brady had no dealership contract with Kaiser and Hamilton, E.F. Brady used their products when necessary to fulfill its contracts. That ongoing relationship was sufficient to command the personal attention of Kaiser's and Hamilton's representatives to E.F. Brady's concerns regarding the products. Thus, when Kaiser joint compound proved to be ineffective during the Fluor project, those representatives went to the jobsite to address the problem.
Viewed in light of the policies underlying the doctrine of strict liability, the Hernandezcuevas' evidence sufficed to show that E.F. Brady was involved in the stream of commerce relating to the defective products. E.F. Brady was capable of bearing the costs of compensating for injuries due to the products, as it was a subcontractor specializing in heavy commercial projects, made sizeable purchases of the defective products, and always arranged to pass its material costs through to the ultimate user. Moreover, due to E.F. Brady's relationship with Kaiser and Hamilton, it was "`in a position to exert pressure on the manufacturer'" to improve product safety. (Bay Summit, supra, 51 Cal.App.4th at p. 773.)
Monte Vista, upon which E.F. Brady and amici curiae rely, is distinguishable.
Pointing to La Jolla Village Homeowners' Assn. v. Superior Court (1989) 212 Cal.App.3d 1131 [261 Cal.Rptr. 146] (La Jolla Village), amici curiae contend that considerations of public policy dictate that subcontractors involved in construction projects should not be subject to strict liability when
We decline to follow La Jolla Village, as the broad per se immunity it proposes is inconsistent with existing law, which predicates the imposition of strict liability on a party's "participatory connection"—rather than its "precise legal relationship"—to the stream of commerce. (Kasel, supra, 24 Cal.App.3d at p. 725.) That principle dictates a fact-sensitive inquiry into the party's activities relating to the defective product, with due attention to the policies underlying the doctrine of strict liability. As explained above, the circumstances surrounding E.F. Brady's provision of the defective products are materially similar to those surrounding the dealer in Barth, which provided the defective tire in accordance with its dealership agreement with the tire manufacturer.
We find additional support for our conclusion from Jimenez, in which our Supreme Court criticized the broad immunity proposed in La Jolla Village. Although the issues before the court concerned the imposition of strict liability on the manufacturers of defective windows used in mass-produced homes, the court examined the then-existing case authority regarding the imposition of strict liability on subcontractors, including La Jolla Village. (Jimenez, supra, 29 Cal.4th at pp. 477-479.) The Supreme Court observed that later decisions had rejected the broad immunity proposed in La Jolla Village, including the Court of Appeal in the underlying case, which also decided La Jolla Village. The Supreme Court noted with apparent approval that the underlying Court of Appeal had concluded that strict liability may be imposed on subcontractors providing products in mass-produced homes, subject to "the limitation, consistent with established law, that persons providing only services are not subject to strict products liability." (Id. at p. 479, italics added.) The Supreme Court also disapproved La Jolla Village, supra, 212 Cal.App.3d 1131 to the extent it was inconsistent with the imposition of strict liability on manufacturers of components installed in mass-produced homes. (Id. at p. 481, fn. 1.)
B. Motion for a New Trial *
The judgment is reversed solely with respect to appellant's claim for strict products liability against respondent, and affirmed in all other respects. The matter is remanded for further proceedings in accordance with this opinion. Appellant is awarded her costs on appeal.
Epstein, P. J., and Collins, J., concurred.
In one of the cases, our Supreme Court declined to impose strict liability for defective drugs on pharmacies, even though they sell drugs and provide related professional services, because the statutory scheme regulating pharmacies shields them from such liability. (Murphy v. E. R. Squibb & Sons, Inc. (1985) 40 Cal.3d 672, 679-681 [221 Cal.Rptr. 447, 710 P.2d 247].) No analogous statutory scheme applies here.
The remaining decisions involve doctrines not related to the issues presented. E.F. Brady and amici curiae purport to find support from O'Neil v. Crane Co. (2012) 53 Cal.4th 335, 342-347 [135 Cal.Rptr.3d 288, 266 P.3d 987], in which the family of a deceased United States Navy seaman asserted claims for negligence and strict liability against manufacturers of pumps and valves used on warships, alleging that the serviceman's exposure to asbestos dust from asbestos-containing materials used in connection with the pumps and valves caused his fatal mesothelioma. (Ibid.) The court rejected the claims, concluding that "a product manufacturer may not be held liable in strict liability or negligence for harm caused by another manufacturer's product unless the defendant's own product contributed substantially to the harm, or the defendant participated substantially in creating a harmful combined use of the products." (Id. at p. 342.) Here, E.F. Brady provided the defective drywall and joint compound, rather than some other product used in connection with them.
Amicus curiae Coalition for Litigation Justice, Inc., also argues that Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 66 [74 Cal.Rptr.3d 108, 179 P.3d 905] supports its claim that a plaintiff's status as a "sophisticated user" of product shields the products' supplier from liability. However, the record contains no evidence that Joel Hernandezcueva constituted a sophisticated user of the defective products at issue here.
Generally, when a complaint's allegations are ambiguous or uncertain, a defendant must raise the defect by demurrer. (Stockton Newpapers, Inc. v. Redevelopment Agency (1985) 171 Cal.App.3d 95, 104 [214 Cal.Rptr. 561].) Failure to do so works a forfeiture of contentions based on the defect. (Ibid.) For that reason, such contentions may not be raised for the first time on appeal. (Fenton v. Groveland Community Services Dist. (1982) 135 Cal.App.3d 797, 810 [185 Cal.Rptr. 758], disapproved on another ground in Katzberg v. Regents of University of California (2002) 29 Cal.4th 300, 328-329, fn. 30 [127 Cal.Rptr.2d 482, 58 P.3d 339].)
Here, the preliminary allegations of the Hernandezcuevas' original complaint identified a group of "manufacturing defendants," including Does 1 through 299. Although the caption of the strict liability claim states that it is asserted against that group of defendants, the claim's underlying allegations identify the pertinent defendants as those listed on exhibit "B," which contains no reference to any Doe defendants. After amending the original complaint to identify E.F. Brady as "Doe-14," the Hernandezcuevas filed a materially similar first amended complaint.
The record reflects no demurrer by E.F. Brady based on uncertainty regarding its status as a defendant with respect to the strict liability claim. Instead, E.F. Brady answered the first amended complaint, and later filed its motion for partial nonsuit, which encompassed the strict liability claim. In the section of that motion entitled "Procedural History," E.F. Brady noted a potential deficiency in the first amended complaint distinct from the defect it asserts on appeal, but stated: "E. F. Brady makes this motion as though it is a generally named defendant." Because E.F. Brady first raised the pertinent pleading defect on appeal, its contention has been forfeited.