Finerty v. Abex Corp. (2015)

Our plain-English summary of Finerty v. Abex Corp. (New York Supreme Court, Appellate Division, February 26, 2015).

Raymond Finerty has peritoneal mesothelioma. He sued several companies, including Ford Motor Company (Ford USA) and its wholly owned subsidiary Ford Motor Company, Ltd. (Ford UK). He alleged he was exposed to asbestos while working as a mechanic in Ireland, replacing asbestos-containing brakes, clutches and engine parts on Ford tractors, cars and trucks. Ford USA sought summary judgment, arguing it could not be held liable for parts made and distributed by its subsidiary. The court agreed there was no basis for piercing the corporate veil. It found, however, that the record showed Ford USA acted as global guardian of the Ford brand, with a substantial role in designing and developing the parts and seeking worldwide standardization. So fact issues remained on whether Ford USA could be directly liable, and summary judgment was denied. Ford UK moved to dismiss for lack of personal jurisdiction. The court held that although the injury appeared in New York, Finerty did not show Ford UK should have expected his exposure in Ireland to have consequences in New York, so the complaint against Ford UK was dismissed.

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, Appellate Division, 1st Dept.
• Decided: February 26, 2015
• Citation: 2015 NY Slip Op 01709
• Stage: Appeal from summary judgment
• State: New York

Outcome. The Appellate Division affirmed the denial of Ford USA's motion for summary judgment, but reversed the denial of Ford UK's motion and dismissed the complaint against Ford UK for lack of personal jurisdiction.

What the court held. A parent company is not liable on a veil-piercing theory, but fact issues exist whether it may be directly liable for its role in standardizing and distributing a subsidiary's asbestos-containing parts. Personal jurisdiction over a foreign subsidiary under CPLR 302(a)(3)(ii) requires that it reasonably expected the out-of-state exposure to have consequences in New York.

Issues decided: Design Defect, Failure to Warn, Personal Jurisdiction, Successor Liability.

The people and their exposure

• Raymond Finerty: peritoneal mesothelioma

The defendants

• Ford Motor Company (Ford USA) (manufacturer)
• Ford Motor Company, Ltd. (Ford UK) (manufacturer)
• Abex Corporation (manufacturer)

Decisions this opinion cites

Earlier decisions in our library that the court cited:

• Penny v. United Fruit Co. (U.S. District Court, Eastern District of New York, 1994). The court dismissed the widow's asbestos claims against Cunard Steam, Elders, Royal Mail and Shaw Savill for lack of personal jurisdiction (and alternatively on forum non conveniens), and granted summary judgment to United Fruit, United Brands, Furness Withy Group and Furness Withy.

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.

2015 NY Slip Op 01709

RAYMOND FINERTY, ET AL., Plaintiffs-Respondents,

v.

ABEX CORPORATION, FORMERLY KNOWN AS AMERICAN BRAKE SHOE COMPANY, ET AL.,

Defendants,

FORD MOTOR COMPANY, LTD., Defendant-Appellant.

RAYMOND FINERTY, ET AL., Plaintiffs-Respondents,

ABEX CORPORATION, ET AL., Defendants,

FORD MOTOR COMPANY, Defendant-Appellant.

190187/10, 14344, 14343.

Decided February 26, 2015.

Appellate Division of the Supreme Court of New York, First Department.

Aaronson Rappaport Feinstein & Deutsch, LLP, New York (Elliott J. Zucker of counsel), for appellant. Levy Konigsberg LLP, New York (Amber R. Long of counsel), for respondents.

Before: Gonzalez, P.J., Mazzarelli, Acosta, Moskowitz, DeGrasse, JJ.

Order, Supreme Court, New York County (Sherry Klein Heitler, J.), entered on or about October 27, 2014, which denied defendant Ford Motor Company's motion for summary judgment dismissing the complaint and to dismiss for failure to state a cause of action, unanimously affirmed, without costs. Order, same court, Justice, and entry date, which denied defendant Ford Motor Company Ltd.'s motion to dismiss the complaint for lack of personal jurisdiction, unanimously reversed, on the facts, without costs, and the motion granted. The Clerk is directed to enter judgment dismissing the complaint as against Ford Motor Company Ltd.

Plaintiff Raymond Finerty suffers from peritoneal malignant mesothelioma, a disease whose primary cause is exposure to asbestos. He brought this action against, inter alia, the Ford Motor Company (Ford USA) and Ford Motor Company, Ltd. (Ford UK), alleging that he was exposed to asbestos while working as a mechanic in Ireland, replacing asbestos-containing brakes, clutches, and engine parts on Ford tractors, cars, and trucks.

Ford USA contends that it cannot be held liable for the asbestos-containing auto parts manufactured and distributed by Ford UK, its wholly owned subsidiary, and that there is no basis for piercing the corporate veil. We agree that there is no basis for piercing the corporate veil. However, the record demonstrates that Ford USA acted as the global guardian of the Ford brand, having a substantial role in the design, development, and use of the auto parts distributed by Ford UK, with the apparent goal of the complete standardization of all products worldwide that carried the signature Ford logo. Thus, issues of fact exist whether Ford USA may be held directly liable as a result of its role in facilitating the distribution of the asbestos-containing auto parts on the ground that it was "in the best position to exert pressure for the improved safety of products" or to warn the end users of these auto parts of the hazards they presented (see e.g. Godoy v Abamaster of Miami, 302 AD2d 57, 60-61 [2d Dept 2003] [internal quotation marks omitted], lv dismissed 100 NY2d 614 [2003]).

We have considered Ford USA's remaining arguments and find them unavailing.

Ford UK moved to dismiss the complaint on the ground of lack of personal jurisdiction. We find that, while plaintiff's injury occurred in New York, where his mesothelioma manifested itself (CPLR 302[a][3]), plaintiff failed to establish that Ford UK expected or should reasonably have expected that his exposure to asbestos in Ireland would have consequences in New York (CPLR 302[a][3][ii]; see e.g. Penny v United Fruit Co., 869 F Supp 122, 129 [ED NY 1994]; Waggaman v Arauzo, 117 AD3d 724 [2d Dept 2014], lv denied 24 NY3d 903 [2014]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST

DEPARTMENT.

Sources

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