Berger v. Aerco Intl., Inc. (N.Y. Sup. Ct., Mar. 10, 2021)

Our plain-English summary of Berger v. Aerco Intl., Inc. (New York Supreme Court, March 10, 2021).

Stanley Berger sued as administrator of the estate of his wife, Lorraine Berger, and individually, after she was diagnosed with mesothelioma in June 2018 and died in April 2019. The plaintiffs alleged her disease was connected to asbestos in products made by Gare. She had used Gare slips and glazes in ceramics work from the mid-to-late 1970s until June 1983, at home, in her own ceramics company and at Camp Venture. Gare Incorporated moved for summary judgment, arguing it was not liable for events before July 21, 1983. It showed that the current Gare bought select assets of the older company (Old Gare) on that date and did not assume liabilities for claims based on earlier events. The court applied the general rule that a company buying another's assets is not liable for the seller's torts, and found the plaintiffs did not show any exception applied. It granted summary judgment, dismissed the complaint and cross-claims against Gare, and continued the case against the remaining defendants.

We wrote this summary from the court's opinion with the help of AI. It is not the court's wording, and it is not legal advice. The full opinion is below.

The decision

• Court: New York Supreme Court
• Decided: March 10, 2021
• Citation: 2021 NY Slip Op 30742(U)
• Docket: Docket No. 190376/2018, Motion Seq. No. 002
• Stage: Summary judgment
• State: New York

Outcome. The trial court granted defendant Gare Incorporated's motion for summary judgment and dismissed the plaintiffs' complaint and all cross-claims against Gare, because Gare did not assume the liabilities of its predecessor, Old Gare.

What the court held. A corporation that acquires another's assets is generally not liable for the predecessor's torts unless an exception applies (assumption of liability, merger, mere continuation, or fraud), and the plaintiffs bore the burden of showing one.

Issues decided: Successor Liability.

The people and their exposure

• Lorraine T. Berger: mesothelioma; died

The defendants

• Gare Incorporated (manufacturer)
• Aerco International, Inc.

Other decisions in this case

Other rulings from the same court in the same case, in our library:

• Berger v. Aerco Intl., Inc. (March 11, 2021). The court denied Vanderbilt Minerals' motion for summary judgment seeking dismissal of all claims for lack of causation, but granted partial summary judgment dismissing claims relating to AMACO products under the bulk supplier doctrine.

Decisions this opinion cites

Earlier decisions in our library that the court cited:

• Reid v. Georgia-Pac. Corp. (New York Supreme Court, Appellate Division, 1st Dept., 1995). The Appellate Division affirmed the denial of Rapid-American Corporation's motion for summary judgment, so plaintiff Kenneth Reid's claim against it continues.

The court's opinion

The text below is Google Scholar's copy of the court's opinion, a public record. Numbers in brackets, such as [*921], mark where each page of the printed reporter begins.

2021 NY Slip Op 30742(U)

STANLEY BERGER, as Administrator for the Estate of LORRAINE T. BERGER and STANLEY

BERGER, Individually, Plaintiff,

v.

AERCO INTERNATIONAL, INC., et. Al., Defendants.

Docket No. 190376/2018, Motion Seq. No. 002.

Motion November 23, 2020.

March 10, 2021.

Supreme Court, New York County.

DECISION + ORDER ON MOTION

ADAM SILVERA, J.S.C.

The following e-filed documents, listed by NYSCEF document number (Motion 005) 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210 were read on this motion to/for DISMISS.

Before the Court is defendant Gare Incorporated's ("Gare") motion for summary judgment, pursuant to CPLR 3212, granting summary judgment in favor of Gare dismissing plaintiffs' Complaints and all cross-claims against Gare. Plaintiffs oppose the motion.

The case at issue stems from plaintiff Lorraine Berger's ("Decedent") June 22, 2018 diagnosis of mesothelioma that led to her death on April 30, 2019. Plaintiffs allege that Decedent's disease was causally connected to her asbestos exposure from Gare asbestos-containing products. Gare's motion contends that Gare has no liability for claims or litigation based on events occurring before July 21, 1983.

"The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case" (Winegrad v New York University Medical Center, 64 NY2d 851, 853 [1985]). A defendant seeking summary judgment in a products liability case involving asbestos must make a prima facie case that its product could not have contributed to the causation of the plaintiff's injury (Reid v Georgia-Pacific Corp., 212 AD2d 462 [1st Dept 1995]).

Here, Gare avers that it cannot be held liable for Decedent's exposure to Gare products because it was not incorporated until after Decedent stopped working with ceramics. Decedent testified that she began working with ceramics in the mid to later 1970s while taking ceramics classes in peoples' homes or in local ceramics shops (Aff in Op, Exh 3 at 81-118). Decedent testified that while working in her home she began to use Gare slips product (id. at 125-126; 137). In 1978 Decedent started her own ceramics company, "Ceramics by Lori, Inc." where she used Gare slips to make ceramic products until 1981 when she dissolved the company (id. at 163:21-164:4). Decedent worked from 1982 to 1983 as head of the ceramics department at Camp Venture, a home for adults with special needs, where she worked with Gare glaze (id. at 203:23; 205:8-206:9; 214:24-215:4; 216:23-217:1). After Decedent finished working at Camp Venture in June 1983 she ceased working with any ceramic materials, and thus stopped using Gare products, in any capacity (id. at 216:23-217:1). "It is the general rule that a corporation which acquires the assets of another is not liable for the torts of its predecessor" (Schumacher v. Richards Shear Co., 59 N.Y.2d 239 ([1983] [finding that "[a] corporation may be held liable for the torts of its predecessor if (1) it expressly or impliedly assumed the predecessor's tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling corporation, or (4) the transaction is entered into fraudulently to escape such obligations"]). In support of their motion Gare submits an Asset Purchase Agreement (the "Agreement") and the affidavit of David Alaimo, the President and Chief Operating Officer of Gare, which demonstrates that assets of Gare Incorporated, which later changed its name to Geeanna Incorporated ("Old Gare") were purchased by Pequot Acquisitions Company Inc. on July 21, 1983 (Mot, Exh L). Mr. Alaimo testified that his father

formed Pequot Acquisitions on July 19, 1983 in order to purchase assets from Old Gare (id.). Pursuant to the Agreement, Pequot Acquisitions, did not assume "[o]bligations and liabilities arising out of all claims or litigations now pending or threatened or which may be brought hereafter against Seller based upon events occurring prior to the Closing Date" (id. at 5:2.2(f)). After the Agreement was signed, Pequot Acquisitions changed its name to Gare Incorporated (id. ¶¶ 10-14). Defendant has demonstrated that Decedent alleged to have been exposed to asbestos from Old Gare products before Gare purchased select assets from Old Gare on July 21, 1983. Gare has demonstrated that it did not assume any of Old Gare's liabilities arising out of all claims or litigations which occurred prior to the closing date on July 21, 1983 and thus cannot be held liable for plaintiffs alleged injuries.

In opposition, plaintiffs fail to demonstrate that Gare assumed the liabilities of Old Gare. Plaintiffs have the burden to demonstrate that Gare is liable for the torts of its predecessor. Plaintiffs have failed to demonstrate that any exceptions to the general rule, which shield a corporation from the torts of its predecessor exist in the case at bar. As such, defendant's motion to dismiss is granted.

Accordingly, it is

ORDERED that defendant's motion for summary judgment, pursuant to CPLR 3212, granting summary judgment in favor of Gare dismissing Plaintiff's Complaints and all cross-claims against Gare is granted; and it is further ORDERED that the Complaint is dismissed in its entirety as against Gare with costs and disbursements to said defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly in favor of said defendant; and it is further

ORDERED that the action is severed and continued against the remaining defendants; and it is further

ORDERED that the caption be amended to reflect the dismissal and that all future papers filed with the court bear the amended caption; and it is further

ORDERED that within 30 days of entry, defendant Gare Incorporated shall serve a copy of this Decision/Order upon all parties with notice of entry.

This Constitutes the Decision/Order of the Court.

Sources

• The opinion on Google Scholar
• New York asbestos laws
• New York asbestos exposure sites