Appeal from the Superior Court of the District of Columbia (CA4626-05) (Hon. Frederick H. Weisberg, Trial Judge).
The opinion of the court was delivered by: Washington, Chief Judge
Before WASHINGTON, Chief Judge, GLICKMAN, Associate Judge, and KING, Senior Judge.
The trial court granted summary judgment in favor of Appellee, the Crane Company ("Crane"), in this wrongful death lawsuit brought by Appellant, the Estate of Plummer Debnam ("Debnam"), for injuries suffered as a result of asbestos poisoning that was allegedly caused by boilers that were manufactured by National-U.S. Radiator Corporation ("National"), a company that had sold its property and assets to Crane as part of an asset purchase agreement. The trial court determined that no reasonable person could find that Crane's agreement with National included an agreement that Crane would assume liability for the types of injuries Appellant complains of here. Because we find the wording of the agreement to be ambiguous on that point, we reverse and remand this case for trial.
Plummer Debnam died of lung cancer and asbestosis. While employed with the District of Columbia Public Schools ("DCPS") from 1964 through 1998, Mr. Debnam worked with and around boilers that contained, and were covered with, asbestos materials. Among these boilers were two Pacific brand boilers that were acquired from National in 1948. In 1959, Crane and National executed a Purchase Agreement ("1959 Agreement"), whereby Crane purchased virtually all of National's property and assets, and assumed National's warranty liabilities with respect to its products, including warranties associated with the boilers that were sold to DCPS.
Paragraph 17 of the 1959 Agreement ("Paragraph 17") between Crane and National addresses the two companies' obligations to each other regarding warranties issued by National for its products. Paragraph 17 reads, in pertinent part:
Crane agrees that, on and after the date of closing, it will assume, take over and perform all obligations of every kind whatsoever of National under warranties of products sold by National in the usual and ordinary course of business, prior to the date of closing, except that National shall reimburse Crane on demand for the actual direct cost, including factory overhead, to Crane in honoring such warranties during the period of five months, commencing on the date of closing, not exceeding in the aggregate the sum of $20,000.00 plus the actual direct cost including factory overhead of meeting the claim relating to the electro-hydraulic crane on USNS Point Barrow.
To induce Crane to assume such liability, National hereby warrants and represents that it does not know of or have any reason to anticipate any prospective abnormal or extraordinary warranty claims, other than warranty claims in the ordinary course of business. This warranty shall survive settlement for twelve months.
Paragraph 29 of the 1959 Agreement states that the contract shall be construed and enforced in accordance with the laws of New York.
On October 11, 1961, Crane and National entered into a second agreement ("1961 Agreement"), the purpose of which was to "revise," "clarify," and "ratify" issues pertaining to the 1959 Agreement. The 1961 Agreement explicitly states that the obligations of Crane referenced in Paragraph 17 were "reacknowledged, ratified and confirmed by Crane."
In December 2003, Mr. Debnam first asserted his claim against Crane, as well as defendants AVCO, Thos. Somerville Co., and Sid Harvey Industries, Inc. The complaint alleged, inter alia, that Mr. Debnam was in frequent contact with the defendants' asbestos products and that this exposure caused Mr. Debnam to contract asbestosis, lung cancer, and other pulmonary-related problems. On the eve of trial, Mr. Debnam, AVCO, Thos. Somerville Co., and Sid Harvey Industries, Inc., agreed to submit their controversy to binding arbitration.*fn1 Soon after the arbitration took place, Mr. Debnam passed away and Mrs. Mildred Debnam, individually and as Mr. Debnam's personal representative, filed a wrongful death and survival complaint against defendant Crane, the only party to the original complaint that did not participate in the arbitration. Appellant sought damages under theories of negligence, strict liability, and breach of warranty.
Crane moved for summary judgment asserting that its agreement to assume National's liability for "warranties of product" did not encompass the claims presented in this case. The trial court granted Crane's Motion for Summary Judgment, holding, inter alia, that the language used in Paragraph 17 appeared only to "contemplate the traditional obligation a products seller owes to the buyer to repair or replace a defective product." Accordingly, the trial court held that, drawing all reasonable inferences from the evidence in Appellant's favor, there was no evidence upon which a jury could reasonably interpret Paragraph 17 "to include an assumption by Crane of National's liability for any of the [third-party] claims in the complaint."
The trial court found additional support for its determination in the Agreement's choice of New York law provision and the fact that, in 1959, New York courts had not yet recognized third-party claims for injuries suffered as a result of manufacturer defects.*fn2 Based on these findings, the trial court concluded that to "reasonable businessmen engaged in an asset sale in 1959," Paragraph 17 is ...