Rebecca Woody v. A.W. Chesterton Company ( 2008 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
December 11, 2007 Session
REBECCA WOODY v. A.W. CHESTERTON COMPANY ET AL.
Appeal from the Circuit Court for Hamilton County
No. 06CI520 Jackie Schulten, Judge
No. M2007-01210-COA-R9-CV - Filed March 13, 2008
An insulator and his wife sued multiple corporate defendants for damages related to his development
of mesothelioma from exposure to asbestos. Most of the defendants filed motions for summary
judgment based upon a release agreement signed by the plaintiffs in 1980 in settlement of another
lawsuit concerning asbestos exposure. The trial court denied the motions for summary judgment.
We have concluded that, except as to any claims arising from post-release asbestos exposure, the
trial court erred in denying the motions for summary judgment.
Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Circuit Court Affirmed in Part,
Reversed in Part
ANDY D. BENNETT, J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J., and
JON KERRY BLACKWOOD , SP.J., joined.
Dwight E. Tarwater, Thomas A. Bickers, John W. Elder, and Joshua R. Walker, Knoxville,
Tennessee, for the appellants, Bayer CropScience, Inc., Certain Teed Corporation, General Electric
Company, Georgia-Pacific LLC, Industrial Holdings Corporation, and Union Carbide Corporation.
Michael J. King and M. Denise Moretz, Knoxville, Tennessee, for the appellants, National Service
Industries, Inc., Mobil Corporation, and CBS Corporation.
Jimmy F. Rodgers, Jr., Chattanooga, Tennessee; John E. “Rett” Guerry, III, and Robert J. Klug, Sr.,
Mt. Pleasant, South Carolina, for the appellee, Rebecca Woody.
OPINION
Wayne Woody, a member of the Asbestos and Insulators Workers Union, and his wife,
Rebecca Woody, filed suit in federal district court in June 1979 against 25 corporations that
allegedly “caused asbestos and asbestos insulation materials to be placed in the stream of interstate
commerce.”1 Mr. Woody had been diagnosed with asbestosis, a non-malignant, asbestos-related
lung disease. He and his wife sought damages for his asbestos-related illness, which they alleged
to be caused by occupational exposure to the defendants’ asbestos and insulation materials. They
were represented by counsel and settled the lawsuit in September 1980 for a lump sum payment of
$35,000.00. As part of the settlement, Mr. Woody and his wife signed a Complete Release of All
Claims (“release”), the effect of which is at issue in the present case.
In September 2006, Mr. Woody was diagnosed with pleural mesothelioma, a malignant,
asbestos-related lung disease. The present lawsuit was filed by Mr. Woody and his wife in
November 2006 shortly before his death as a result of mesothelioma.2 The complaint named 37
defendant corporations; only one of the corporations, CertainTeed Corporation, was a party to the
1979 lawsuit. According to the complaint, Mr. Woody was exposed, in both occupational and non-
occupational settings, to “asbestos related materials and other asbestos containing products mined,
or manufactured, processed, imported, converted, compounded, sold, distributed or installed” by the
defendants. As a result of these exposures, the complaint alleges, Mr. Woody developed
mesothelioma. Although the complaint does not specify exposure dates, Mr. Woody continued to
work as an insulator after signing the 1980 release, and the plaintiff’s claims are broad enough to
include post-release exposures. Causes of action for negligence, strict liability, breach of warranty,
civil conspiracy, and loss of consortium are asserted.
After filing answers pleading release as a defense, 27 of the defendants3 either filed or joined
in motions for summary judgment, asserting that the 1980 release barred all of the Woodys’ claims.
On April 12, 2007, the trial court entered an order ruling on 21 motions for summary judgment, one
of which was granted on the basis that the named company had “never been in the asbestos business,
has never employed [Mr. Woody], and in no respect has had any contact with any of the issues
involved in the case.” The court denied the other 20 motions for summary judgment based on its
conclusion that “the prior release does not bar the Plaintiff’s later claim based upon subsequently
diagnosed mesothelioma.” In agreed orders entered on May 7, 2007, the same ruling was applied
to the other summary judgment motions.
We granted the defendants’ application for interlocutory appeal pursuant to Tenn. R. App.
P. 9.
1
Wayne S. Woody v. Johns-Manville Sales Corp., No. CIV-1-79-158 (E.D. Tenn.), dismissed Sept. 30, 1980.
2
Ms. Woody filed an amended complaint after her husband’s death substituting herself as plaintiff, individually
and as the surviving spouse of Wayne Woody.
3
The defendants involved in this appeal are A.W. Chesterton Company; Advance Auto Parts, Inc.; Bayer
CropScience, Inc.; Borg Warner Morse TEC, Inc.; Breeding Insulation Company, Inc.; Breeding Insulation Company,
Chattanooga, Inc.; CBS Corporation; CertainTeed Corporation; Crane Company; Ford Motor Company; Foster Wheeler
Corporation; General Electric Company; General M otors Corporation; Georgia-Pacific, LLC; Goodyear Tire & Rubber
Company; Goulds Pumps; Industrial Holdings Corporation; Ingersoll-Rand Corporation; Maremont Exhaust Products,
Inc.; Mobil Corporation; National Service Industries, Inc.; Pharmacia Corporation f/k/a Monsanto Company; Pneumo
Abex LLC, as successor in interest to Alex Corporation; Riley Power, Inc.; and Union Carbide Corporation.
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ANALYSIS
In this interlocutory appeal, we are asked to determine whether the trial court erred in
denying the defendants’ motions for summary judgment.
Summary judgments do not enjoy a presumption of correctness on appeal. BellSouth Adver.
& Pub. Co. v. Johnson, 100 S.W.3d 202, 205 (Tenn. 2003). This court must make a fresh
determination that the requirements of Tenn. R. Civ. P. 56 have been satisfied. Hunter v. Brown,
955 S.W.2d 49, 50 (Tenn. 1997). We consider the evidence in the light most favorable to the
non-moving party and resolve all inferences in that party's favor. Godfrey v. Ruiz, 90 S.W.3d 692,
695 (Tenn. 2002). Pursuant to Tenn. R. Civ. P. 56.04, summary judgment shall be granted “if the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue of any material fact and that the moving party
is entitled to judgment as a matter of law.” In the present case, the relevant facts are not in dispute;
therefore, we must determine the legal effect of the 1980 release on the undisputed facts.
The following provisions of the 1980 release are essential to determining its effect on the
Woodys’ claims in this case:
For the sole and only consideration of Thirty-Five Thousand Dollars
($35,000.00), to the undersigned in hand paid, receipt of which is hereby
acknowledged, we hereby release and discharge [names of defendants in federal
district court case], their agents, servants, successors and predecessors and any
corporation acquired by, associated with or affiliated with each as parent or
subsidiary, and further release all of the respective officers, directors, agents, servants
and employees of said companies, and further release any other persons,
corporations, or entities, even though not named herein, involved in the distribution,
sale, production, manufacturing, mining, or processing of any insulation product,
from any and all claims, actions, causes of action, demands, rights, damages, costs,
loss of services or consortium, expenses and compensation whatsoever, which the
undersigned now have or which may hereafter accrue on account of or in any way
growing out of all known and unknown, foreseen and unforeseen,bodily and personal
injuries and property damage, and the consequences thereof, resulting or to result
from exposure to any insulation material, any asbestos-containing material or any
alleged dust-producing material on the part of the undersigned Wayne S. Woody,
including all claims for loss of consortium by the undersigned Rebecca Woody, or
any other claim she might have arising out of her husband’s alleged personal injuries.
....
The undersigned hereby declare and represent that the injuries sustained are
or may be permanent or progressive and that recovery therefrom is uncertain and
indefinite, and in making this Release it is understood and agreed that the
undersigned rely wholly upon their judgment, belief, and knowledge of the nature,
extent, effect, and duration of said injuries and liability therefor and is made without
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reliance upon any statement or representation of the party or parties hereby released
or their representatives or by any physician or surgeon by them employed. This
Release is intended to cover any and all injuries of any nature, including the possible
sequelae thereof, including but not limited to asbestosis, cor pulmonale, lung cancer,
and other form[s] of cancer, or mesothelioma.
It is understood and agreed that this settlement is the compromise of a
doubtful and disputed claim and that liability on the part of the party or parties
hereby released, and that said releasees deny liability therefor.
(emphasis added).
(1)
Ms. Woody argues that the 1980 release cannot properly shield from liability defendants not
named in the release due to the absence of consideration from those defendants.
A release is a contract; therefore, the rules of construction applicable to contracts apply in
construing the terms of a release. Richland Country Club, Inc. v. CRC Equities, Inc., RCC, 832
S.W.2d 554, 557 (Tenn. Ct. App. 1991). By its terms, the release purports to release from liability
the named corporations and their agents as well as “any other persons, corporations, or entities, even
though not named herein, involved in the distribution, sale, production, manufacturing, mining, or
processing of any insulation product, asbestos-containing product, or alleged dust-producing
product.” There appears to be no dispute between the parties in the present case that the appellants
fit within this category of released entities. The question is whether these defendants can properly
benefit from the release when they were not named in or a party to the release and gave no
consideration to the Moodys for release from liability.
In interpreting this release provision, it is important to note that the release was executed
prior to the Tennessee Supreme Court’s decision in McIntyre v. Balentine, 833 S.W.2d 52 (Tenn.
1992), in which the court adopted modified comparative fault. Under the principles of contributory
negligence and joint and several liability, an injured party could seek full compensation from one
among multiple tortfeasors, and that tortfeasor could then seek contribution from other tortfeasors.4
The Uniform Contribution Among Tort-feasors Act, codified at Tenn. Code Ann. § 29-11-101 et
seq., provides that a release given to one of two or more tortfeasors “does not discharge any of the
other tort-feasors from liability for the injury or wrongful death unless its terms so provide.” Tenn.
Code Ann. § 29-11-105(a)(1) (emphasis added). Furthermore, “A tort-feasor who enters into a
settlement with a claimant is not entitled to recover contribution from another tort-feasor whose
liability for the injury or wrongful death is not extinguished by the settlement.” Tenn. Code Ann.
§ 29-11-102(d). Under this system, a settling defendant could, in essence, buy its right to seek
4
By contrast, under modified com parative negligence, a defendant is “liable only for the percentage of a
plaintiff’s damages occasioned by that defendant’s negligence.” McIntyre, 833 S.W.2d at 58.
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contribution from other tortfeasors by including those other tortfeasors in the release. See Evans v.
Tillett Bros. Const. Co., Inc., 545 S.W.2d 8, 11-12 (Tenn. Ct. App. 1976); Ballinger v. Owens-
Illinois, Inc., 829 F.2d 38, No. 86-5755, 1987 WL 44451, at *1 (6th Cir. Sept. 14, 1987) (no petition
for cert. filed).
The 1980 release was supported by consideration in that the settling defendants paid
$35,000.00 to the plaintiffs and the defendants received a release of their liability as well as the
liability of other possible tortfeasors, against whom the defendants now had the right to seek
contribution. There is no requirement that each released tortfeasor provide its own consideration,
just that the promise is supported by consideration. Burchell Ins. Svcs., Inc. v. Western Sizzlin
Steakhouse of Dyersburg, No. E2003-01001-COA-R3-CV, 2004 WL 1459398, at *2 (Tenn. Ct. App.
June 29, 2004) (no Tenn. R. App. P. 11 application filed); see also Morison v. General Motors
Corp., 428 F.2d 952, 953-54 (5th Cir. 1970).
In Ballinger, a case interpreting Tennessee law, the releases from liability for asbestos
exposure contained language covering the named defendants as well as all other persons or
corporations who might be liable. Ballinger, 1987 WL at *1. The court upheld the application of
the releases to other alleged tortfeasors. Id.; see also Morison, 428 F.2d at 952; Peters v. Butler, 251
A.2d 600, 602 (Md. 1969); Hasselrode v. Gnagey, 172 A.2d 764, 765 (Pa. 1961).
We therefore find that, in accordance with its plain language, the release in this case properly
covers the appellants.
(2)
Ms. Woody further argues that Tennessee law does not allow the release of
“unaccrued/potential/future/prospective causes of action.”
As previously stated, a release is a contract and is subject to the rules of construction
applicable to contracts. Richland, 832 S.W.2d at 557. Any “[a]mbiguous language in a contract is
construed against the drafter.” Jackson v. Miller, 776 S.W.2d 115, 117 (Tenn. Ct. App. 1989). The
following principles apply when interpreting a release:
Generally speaking, the scope and extent of [a] release depends on the intent of the
parties as expressed in the instrument. A general release covers all claims between
the parties which are in existence and within their contemplation; a release confined
to particular matters or causes operates to release only such claims as fairly come
within the terms of the release.
Cross v. Earls, 517 S.W.2d 751, 752 (Tenn. 1974); see also Sherman v. Am. Water Heater Co., Inc.,
50 S.W.3d 455, 457 (Tenn. Ct. App. 2001). The following principles apply in determining the intent
of the parties:
“In interpreting a release to determine whether a particular claim has been
discharged, the primary rule of construction is that the intention of the parties shall
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govern and this intention is to be determined with a consideration of what was within
the contemplation of the parties when the release was executed, which in turn is to
be resolved in light of all of the surrounding facts and circumstances under which the
parties acted.”
Evans, 545 S.W.2d at 11 (quoting 66 AM .JUR.2D Release § 30); see also Jackson, 776 S.W.2d at
118.
In support of her argument that Tennessee law does not allow the release of future claims,
Ms. Woody cites Poster v. Andrews, 189 S.W.2d 580 (Tenn. 1943), and Cocke v. Stuart, 7 Tenn.
(Peck) 137 (1823). Both cases involved causes of action that did not exist at the time when the
plaintiffs signed the releases, and the releases did not expressly cover such claims. While some
language used by the court in Cocke and quoted by the court in Poster suggests that a prospective
claim cannot be released, subsequent cases have clarified the issue by indicating that claims arising
after the signing of a release may be released if the language of the release so provides. In Sherman,
the issue was whether a release signed by an employee at the time of her termination covered an
indemnification claim. Sherman, 50 S.W.3d at 456. Under the terms of the release, the employee
agreed not to file suit against the company “based on any matter occurring from the beginning of
time to the date this Agreement is signed.” Id. at 458. Interpreting the wording of the release to
impose temporal restrictions, the court ruled that the indemnification claim was not barred by the
release. The court made the following statement while discussing a similar Colorado case:
Colorado law, like Tennessee law, provides that a release ordinarily operates on
matters expressed therein which are already in existence at the time of the giving of
the release, and demands subsequently maturing are not as a rule discharged by the
release unless expressly embraced therein or falling within the fair import of the
terms employed.
Id. at 460 (emphasis added); see also Tierney & Black, Inc. v. Siemens Power Corp., 79 Fed. Appx.
740, 742 (6th Cir. 2003).
We return again to the proposition that it is the language of the release that determines
whether it covers injuries that arise prospectively. This is true even with respect to injuries resulting
from acts or omissions that had not occurred at the time of the release, if the release itself expressly
so provides. It is well-settled that “public policy of Tennessee favors freedom to contract against
liability for negligence.” Dixon v. Manier, 545 S.W.2d 948, 950 (Tenn. Ct. App. 1976) (upholding
a release from liability for negligence signed by a customer prior to application of a hair straightener
at a cosmetology school); see also Empress Health and Beauty Spa, Inc. v. Turner, 503 S.W.2d 188,
190 (Tenn. 1973) (upholding exculpatory clause in release used by health club). The courts have
invalidated some exculpatory contracts based upon public policy considerations. See Maggart v.
Almany Realtors, Inc., No. M2005-02532-COA-R3-CV, 2007 WL 2198204 at * 6 (Tenn. Ct. App.
July 26, 2007) (perm. app. granted Nov. 13, 2007). Thus, in determining the prospective application
of a particular release, a court must distinguish between two types of “future” claims: (a) claims for
injuries discovered post-release that resulted from pre-release occurrences (in this case, exposure to
asbestos); and (b) claims based upon injuries that resulted from post-release occurrences. A release
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covering the second category of claims is an exculpatory provision, contracting against liability for
future negligence. See Empress Health, 503 S.W.2d at 190-191.
Applying these principles to the case at bar, we have concluded that the 1980 release bars any
claims based upon injuries caused by Mr. Woody’s pre-release exposure to asbestos, including the
development of mesothelioma. The language of the release expressly states that it releases all claims
“which the undersigned now have or which may hereafter accrue on account of or in any way
growing out of all known and unknown, foreseen and unforeseen” injuries “resulting or to result
from” exposure to asbestos by Mr. Woody. The release further provides that it is intended to “cover
any and all injuries of any nature, including the possible sequelae thereof, including but not limited
to asbestosis, cor pulmonale, lung cancer, and other form[s] of cancer, or mesothelioma.” Thus, the
language of the release provides that it covers any injuries, including mesothelioma, that might later
develop as a result of Mr. Woody’s prior exposure to asbestos. This interpretation is consistent with
other cases interpreting similar asbestos releases. See Sheppard v. Acands, Inc., Nos.
CV950323560S, CV990368053S, 2005 WL 1433875 (Conn. Super. Ct. May 26, 2005); Spadaro
v. Abex Corp., 1993 WL 603378 (Del. Super. Ct. Sept. 9, 1993); Fisher v. Owens-Corning
Fiberglass Corp., 868 F.2d 1175 (10th Cir. 1989).
After careful review of the release language and the circumstances surrounding its signing,
as part of the settlement of a pending lawsuit, we have concluded that the release does not cover
claims as to injuries arising out of post-release asbestos exposure. The language of the release does
not expressly address liability for asbestos exposure occurring after the signing of the release, and
there is no indication that such injuries were within the contemplation of the parties at the time of
the release. We need not decide, therefore, whether an exculpatory provision in an asbestos release
such as that signed by Ms. Woody would violate public policy.
Ms. Woody argues that the Tennessee Supreme Court’s decision in Potts v. Celotex Corp.,
796 S.W.2d 678 (Tenn. 1990), necessitates a conclusion that mesothelioma is not covered by the
release. We must disagree. In Potts, the court concluded that asbestosis and mesothelioma are two
distinct diseases in the context of determining when a cause of action accrues for statute of
limitations purposes. Id. at 684-85. The two-disease analysis has no bearing on the scope of a
release, which is determined by the intent of the parties as expressed in the release. The following
analysis from a similar case, Sheppard v. Acands, Inc., likewise applies here:
The two disease rule, however, is a rule primarily related to the statute of limitations.
It does, in the context of asbestos litigation, recognize that the diagnosis of a non-
malignant asbestos related disease begins the running of the statute only for that
disease. The later diagnosis of a malignant related condition creates a new cause of
action with the commencement of the statute period being when the later diagnosis
was made. This rule does not affect the question of the validity of the release at
issue. The parties here, as they had a right to do, reached an agreement which
included a release of the defendant General Electric of any and all claims, present and
future, of and for all potential liabilities resulting or to result from exposure to an
asbestos-containing material. The plaintiffs’ exposure to asbestos had occurred and
was complete at the time the release is as [sic] executed and it was the manifestation
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of the disease which postdated the releases. The language of the release foresaw the
possibility that other diseases might manifest themselves in the future and provided
for and included such an event, should it occur.
Sheppard, 2005 WL at *3.
In conclusion, the 1980 release covers all claims arising out of Mr. Woody’s exposure to
asbestos prior to the signing of the release; this includes conditions, including mesothelioma,
discovered after the signing of the release that resulted from pre-release asbestos exposure. The
1980 release does not, however, bar any claims related to asbestos exposure that occurred after the
signing of the release.
Costs of appeal are assessed against the appellants, for which execution may issue if
necessary.
___________________________________
ANDY D. BENNETT, JUDGE
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