Preview:

04/03/02 "See News Release 028 for any concurrences and/or dissents."

SUPREME COURT OF LOUISIANA
No. 01-C-1530 RICHARD A. BERLIER Versus A. P. GREEN INDUSTRIES, INC., ET AL.
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FOURTH CIRCUIT, PARISH OF ST. BERNARD
JOHNSON, Justice* We granted a writ in this case involving a settlement of an asbestos-related personal injury and wrongful death claim to determine whether the four settling defendants are solidarily liable. After reviewing the record and the applicable law, we find that the settlement constitutes a joint and indivisible obligation, and each of the defendants are bound for the full $450,000.00. FACTS AND PROCEDURAL HISTORY On November 12, 1998, Richard Berlier filed a petition for damages for personal injuries resulting from occupational exposure to asbestos products. After his death on January 30, 1999, his surviving spouse and five adult children amended the petition to assert a wrongful death and survival action, as well as loss of consortium claims. On December 13, 1999, the day the case was set for trial, the plaintiffs agreed

Retired Judge Robert L. Lobrano, assigned as Associate Justice Pro Tempore, participating in the decision.

*

to settle their claims against four of the defendants, GAF Corporation ("GAF"),1 Turner & Newell, PLC ("T&N"), Union Carbide Corporation ("Union Carbide"), and Asbestos Claims Management Corporation ("ACMC"), for a lump sum total of $450,000 to be paid on or before March 13, 2000. At the time of the settlement, all four defendants were members of the Center for Claims Resolution ("CCR"), an organization established in 1988 to handle asbestos claims on behalf of its twenty-one member companies.2 The relationship among the various members of the CCR is controlled by the "Provider Agreement Concerning Center for Claims Resolution (the "Provider Agreement")," which was executed on September 28, 1988. The CCR is administered by a Board of Directors, and the Provider Agreement authorizes the CCR "to administer and arrange for the evaluation, settlement, payment, or defense of all asbestos-related claims." By becoming a member the CCR, the member "designates the [CCR] as its sole agent to administer and arrange on its behalf for the evaluation, settlement, payment or defense of all asbestos-related claims against [it]." The Provider Agreement, further provides that liability payments shall be apportioned to each member according to a specific share allocation matrix, that such apportionment shall establish the responsibility of each [member] for a percentage share of liability payments, and that each member shall pay in a timely manner the percentages of liability payments involved. Any disputes between the CCR and the members regarding the allocation or payment of a member's percentage of liability are to be

1

GAF is now known as "G-I Holdings, Inc.

The CCR is not now, and never has been, a defendant in this or any other asbestos personal injury claims, but is simply an agent charged with defending such claims against its members. In its brief, plaintiffs' counsel analogizes the CCR to that "of large corporation's in-house legal counsel, who may hire outside firms . . . to actually litigate claims brought against the corporation subject to in-house counsel's direction." 2

2

resolved through alternative dispute resolution. The settlement reached by the parties was announced on the record as follows: William Harrison for Turner and Newell [T&N plc], GAF Corporation, National Gypsum [which later became ACMC], together with my partner, Janet McDonell for Union Carbide, put on the record on behalf of those four defendants, we have reached a full settlement with all the plaintiffs in this matter, in Berlier versus A.P. Green and that we have discussed this matter with Frank Swarr and Mr. Diaz as well as attorney for Maples and LeBlanc. We understand Your Honor will be signing an order as to the funds and we'll have the check made payable to both law firms, Mr. Diaz, and to LeBlanc, Maples. We'll give it to Mr. Diaz to be deposited and subject to the Court's order. At that point -MR. DIAZ [Attorney for plaintiffs]: Your Honor, that is correct. I understand what I'm going to do is take the check. I'm going to deal with my opponent here. He's going to see that it gets signed on behalf of Maples and LeBlanc right away, negotiate with the plaintiffs what their costs and attorney's fees are, disburse that to them, subject to his prior approval, and take residue of that in a separate trust account and keep it there until further orders of the Court. THE COURT: So talking about the costs, you said attorney fees, costs, and their settlement proceeds, so attorneys fees will be held in trust. MR. SWARR [Attorney for plaintiffs]: The intervention will be tried before you as a bench trial. On the settlement, I don't mind the settlement as long as any and all rights are reserved against any other defendant known or unknown; it will be fine. MR. HARRISON: That's acceptable.

3

(UNIDENTIFIED ATTORNEY): Just for the record, this will be committed to a separate writing in the form of a receipt and release. On December 17, 1999, James McFadden of the CCR sent a letter to plaintiffs' counsel confirming the settlement, noting the lump sum amount of the settlement at the top of the letter, and providing as follows: This letter confirms settlement of the above-referenced matter. It is agreed and understood that this settlement fully releases all members whether or not such members are parties to these lawsuits. Furthermore, it is understood that this settlement includes any and all companion actions in this or any jurisdiction for these plaintiffs. Payment will be made in accordance with the terms of the settlement, providing a release has been executed properly and returned to the CCR. Please have the enclosed release request form completed and returned to Denise Loughran at the Center. We, in turn, will prepare the release from the information provided on the release form and send it to you for execution by your clients. The release, executed by the plaintiffs on January 28, 2000, provided in pertinent part as follows: For and in consideration of the sum of One Dollar ($1.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, we [plaintiffs] . . . release and forever discharge: Amchem Products, Inc.; Armstrong World Industries, Inc.; The Asbestos Claims Management Corporation (formerly known as National Gypsum Company) and The NGC Asbestos Disease and Property Damage Settlement Trust; CertainTeed Corporation; C.E. Thurston & Sons, Inc.; Dana Corporation; Ferodo America, Inc.; Gasket Holdings, Inc. (f/k/a Flexitallic, Inc.); GAF Corporation, J.U. North America, Inc.,; Quigley Company, Inc.; Shook & Fletcher Insulation Co.; T&N, plc; Union Carbide Corporation (f/k/a Union Carbide Chemicals & Plastics Company, Inc.); and United States Gypsum Company . . . from any and all rights, . . . which Releasors now have or may have in the future for personal injuries, disability, pain and suffering or death . . . or any other asbestos-related diseases or
4

condition suffered by RICHARD A. BERLIER, SR., . . .. *** The parties understand and agree that nothing contained in this agreement shall be construed or deemed an admission of wrongdoing or of liability by any party as to any of the claims or counter-claims which have been made in the litigation. . . . On March 8, 2000, the CCR sent plaintiffs' counsel a check for $250,028.46, along with a letter containing the following: Pursuant to the CCR's settlement with you, enclosed is a check for $250,028.46. This check represents the total of the amounts due for each of the claims in the attached listing, subject to payment at this time under the terms of the settlement agreement, less the amounts payable for each of these claims by GAF Corporation -- which total $199,971.54. The CCR has billed GAF Corporation for these amounts, but GAF has to date refused to pay such billings.3 The plaintiffs refused to cash the check and on March 17, 2000, filed a Motion to Enforce Settlement against all four defendant companies. At the hearing on the motion, GAF was represented by its own counsel. During the course of the hearing, the trial judge inquired about the settlement: THE COURT: In the settlement. Each defendant entered into a settlement. When it was being put on the record, at that point, I said unless I have an amount I can't enforce the settlement. And it was agreed between counsel that there would be a written document transferred back and forth which would then make it an enforceable settlement because the amount would be contained in the written document. Did that occur? MR. SWARR:
Apparently, GAF has failed to fulfill its settlement obligations in numerous cases throughout the country, that were entered into by the CCR before GAF's membership in the CCR was terminated sometime between December 17, 1999 and April 27, 2000. 5
3

Your Honor, yes. MR. HARRISON: Your Honor, I believe that there is a letter from the CCR shortly after the December 13 settlement that was placed on the record. It's attached as an exhibit. It's from a gentleman named Mr. Jim McFadden and sets out the cumulative amount for the four members, one of which is GAF. MR. DUVAL [Attorney for GAF]: Your Honor, as follow-up to that, I think you just touched on the heart of the whole matter. On April 27, 2000, the trial court entered a judgment in favor of plaintiffs, finding that GAF, ACMC, Union Carbide, and T&N are liable, in solido, to plaintiff in the sum of $450,000.00. All four defendants appealed. However, after filing its appeal, GAF filed a voluntary Petition for Bankruptcy Relief under Chapter 11, and the United States Bankruptcy Court for the District of New Jersey issued an automatic stay all proceedings against GAF/G-I. The court of appeal granted the plaintiffs' motion to sever GAF's appeal. Berlier v. A.P. Green Industries, 00-2215 (La. App. 4 Cir. 4/25/01), 787 So. 2d 1054, 1058. Thus, GAF is not a party to the appeal. Additionally, after the appeals were filed, counsel for the remaining three CCR defendants (ACMC, Union Carbide, and T&N) moved to withdraw as counsel for ACMC, alleging that CCR was no longer authorized to act on ACMC's behalf because ACMC's membership in CCR was terminated effective August 19, 2000. Subsequently, counsel pro hac vice for ACMC advised the court that all proceedings against ACMC were enjoined by virtue of a March 1993 "Confirmation Order" of the United States Bankruptcy Court for the Northern District of Texas, which contained an exception that allowed proceedings against ACMC to continue as long as ACMC
6

was a member of the CCR. Thus, when ACMC's membership in CCR was terminated, the order stayed all proceedings against ACMC. In light of this, the court of appeal determined that it was "not prohibited by the injunction prohibiting proceedings against ACMC from deciding the issues raised by the appeal filed by the CCR defendants--now only T&N and Union Carbide." Id. at 1059. The appellate court then set out to decide "only the single issue presented by the appeal filed by the CCR defendants--whether the trial court properly entered judgment against all four settling defendant companies in solido, rather than entering judgment against GAF/G-I Holdings alone, as the Berliers orally requested at the hearing on the matter." Id. The court of appeal affirmed the trial court's judgment, finding that the four settling defendants were solidarily liable for the settlement as a matter of law, as expressed in Cole v. Celotex Corp., 599 So. 2d 1058 (La. 1992). Id. at 1060. This court granted the writ application filed by T&N and Union Carbide. Berlier v. A.P. Green Industries, Inc., 01-1530 (La. 9/14/01). DISCUSSION The sole issue before us is whether the four defendants are solidarily obligated to pay the $450,000.00 lump sum settlement. The Louisiana Civil Code provides the framework for analyzing the types of obligations involving multiple persons recognized under Louisiana law, which are several, joint, and solidary obligations. LSA-C.C. art. 1786. In this case, the lower courts found that the four defendants are solidarily liable under the terms of the settlement. Solidary Liability LSA-C.C. art. 1796 provides: Solidarity of obligation shall not be presumed. A solidary obligation arises from clear expression of the parties' intent
7

or from the law. The court of appeal found that a solidary obligation arose in this case from the law, relying on Cole v. Celotex, supra, in which "the Louisiana Supreme Court held that various asbestos defendants are solidarily liable for damages suffered by plaintiffs." 787 So. 2d at 1060. However, the court of appeal erred in relying on Cole, a delictual action wherein certain defendants were found liable after a two-week trial for failing to provide a safe workplace, and the liability of the manufacturers of asbestos containing products, who settled before trial, was stipulated at trial. In this case, there was no trial on plaintiffs' tort claim as the parties settled before trial, and, the release expressly states that "nothing contained in this agreement shall be construed or deemed an admission of wrongdoing or of liability by any party . ..." Except for the settlement, there would be no liability at all, since this case has not been tried. Whether the defendants in this case would have been solidarily liable in tort has not been, and may never be, determined. Therefore, Cole is inapplicable to the instant case. Thus, as solidary liability does not arise in this case from law, the only remaining issue is whether it arises from a "clear expression of the parties' intent." A solidary obligation may arise even though the words "solidarity" or "in solido" are not used, as long as the parties' intent to be solidarily liable is clearly expressed. La. C.C. art. 1796, Official Comment (b). In resolving this issue in a case involving the joint or solidary liability of six makers of a promissory note, this Court explained: When several persons join in the same contract to do the same thing, it produces a joint obligation on the part of the obligors. However, where several persons obligate themselves to the obligee by the terms In solido or use any other expressions that clearly show that they intend that each one shall be separately bound to perform the whole of the obligation, it is called an obligation in Solido on the part of the obligors. An obligation In solido is not presumed; it must be expressly stipulated.
8

It is well settled that, absent additional promissory language, the words `(w)e promise to pay' in a note signed by comakers are insufficient to constitute the express stipulation of liability In solido required by law. Johnson v. Jones-Journet, 320 So. 2d 533, 536-37 (La. 1975). Likewise, albeit in dicta, this Court explained: The coextensive obligations for the "same thing" create the solidarity of the obligations. When it is not clear that the parties are all obliged to the same thing (as in the case of an agreement by several parties to repay a loan), then an obligation in solido is not presumed and must be expressly stipulated. La. C.C. art. 2093 [now La. C.C. art. 1796]. However, when it is entirely clear that the parties are all obliged to the same thing (as when the law requires each of two or more parties to pay tort damages concurrently caused by each party), then there is an obligation in solido by definition, as a matter of law, and there is no need to presume solidarity. The presumption against solidarity is only designed to be of assistance when it is necessary to determine whether an obligation is joint or solidary. Narcisse v. Illinois Cent. Gulf R. Co., 427 So. 2d 1192, 1194 (La. 1983). In this case, there is no evidence of a "clear expression" of the defendants' intent to be solidarily bound. As stated above, at the hearing on December 13, 1999, when the settlement was announced, Mr. Harrison stated: "William Harrison for Turner and Newell [T&N plc], GAF Corporation, National Gypsum [later ACMC], together with my partner, Janet McDonell for Union Carbide, put on the record on behalf of those four defendants, we have reached a full settlement with all the plaintiffs in this matter." The plaintiffs argue that Mr. Harrison's statement that "we'll have the check made payable to both law firms" represents the defendants' intent to be bound in solido by issuing only one check. We disagree that the issuance of one check clearly indicates an expression of solidarity. Secondly, the confirmation letter from the CCR on behalf of the four defendants dated December 17, 1999, wherein a lump sum amount of the settlement was written at the top of the letter, does not contain a clear expression of the parties intent to be bound in solido. Instead, it is an agent's
9

agreement that his principals will pay the lump-sum of $450,000 to the plaintiffs conditioned upon the release of all CCR members from this lawsuit. There is no expression, clear or otherwise, that the four defendants will be solidarily bound to pay that amount. Finally, the release executed on January 28, 2000, contains only general release language in favor of all the defendants in the lawsuit, including the four CCR defendants, and can in no way be construed to contain a clear expression that the any of the defendants would be solidarily bound. Therefore, we find that the lower courts erred in holding that the defendants are solidarily liable for the amount of the settlement. Several Liability The second category of obligations is that of several liability. An obligation is several for the obligors "when each of different obligors owes a separate performance to one obligee,. . ." LSA- C.C. art. 1787. The comments to this article explain that "if the performance owed by each obligor has a different object, the obligation is several, as when one obligor owes delivery of a thing and another owes payment of a sum of money." LSA-C.C. art. 1787, Official Comment (b). For example, if through the same act, two persons each bind themselves to give a different sum of money to another, the obligation is several for the obligors. Litvinoff, Treatise supra

Download 2001-C-1530 RICHARD A. BERLIER v. A.P. GREEN INDUSTRIES, INC., ET AL..pdf

Louisiana Law