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Hammond v. North American Asbestos Corp.





Appeal from the Appellate Court for the Fourth District; heard in that court on appeal from the Circuit Court of McLean County, the Hon. James Knecht, Judge, presiding.


Rehearing denied September 30, 1983.

Plaintiff, Charlotte Hammond, the wife of an asbestos worker who contracted asbestosis, brought an action against defendant, North American Asbestos Corporation, for loss of consortium based on theories of strict liability in tort and wilful and wanton negligence. After a jury trial, the circuit court of McLean County entered judgment on the verdict awarding plaintiff $125,000 in compensatory and $375,000 in punitive damages. The appellate court affirmed the compensatory damages, but reversed the punitive damages, reasoning that such an award is not recoverable in a loss-of-consortium action. (105 Ill. App.3d 1033.) Both parties petitioned for leave to appeal, and we granted both petitions.

While the parties raise numerous questions for review, only four need be addressed: (1) Did the appellate court err in holding plaintiff had proved a cause of action sounding in strict liability? (2) Was plaintiff's action barred by the statute of limitations? (3) Did plaintiff waive the sufficiency of defendant's post-trial motion by not objecting to this issue when raised in the appellate court? (4) Should punitive damages have been awarded in this case?

In 1953, defendant was organized as a wholly owned subsidiary of Cape Asbestos Company, Ltd. (Cape), a British corporation which mined, milled and packaged raw asbestos fiber in South Africa for sale worldwide. That same year, plaintiff's husband, Charles Hammond, was employed by Union Asbestos and Rubber Company (UNARCO) at its Bloomington, Illinois, plant. UNARCO purchased and processed raw asbestos fiber into various insulating products containing asbestos.

In April of 1971, a physician diagnosed Hammond as having asbestosis and recommended he stop working at the UNARCO plant. Plaintiff filed her loss-of-consortium action in March of 1975. She voluntarily dismissed the case on March 3, 1980, but refiled on March 14, 1980, pursuant to section 24 of the Limitations Act (Ill. Rev. Stat. 1979, ch. 83, par. 24a). Count I was based on strict liability in tort, alleging defendant sold an unreasonably dangerous product without providing a warning of the dangers associated with its use. Count II alleged defendant wilfully and wantonly failed to provide such warning. The complaint averred that defendant sold raw asbestos fiber and certain asbestos products to UNARCO; that defendant knew the dangers associated with exposure to asbestos; that asbestos workers at UNARCO lacked knowledge of the potential dangers of asbestos; and that defendant failed to warn of such danger.

At trial, Charles Hammond and two of his co-workers testified that they handled, opened and processed bags of raw asbestos, thereby generating asbestos dust. They stated there were no printed warnings of the detrimental effects of asbestos dust either on the bags or in the plant and that they never knew of the danger. The testimony of a former UNARCO director of personnel confirmed the lack of warnings on the bags and in the plant.

Numerous documents were admitted into evidence. Minutes of the 1954-55 meetings of an asbestos manufacturer's trade association showed that studies of asbestosis and related diseases had been conducted and knowledge of the dangers of asbestos dust existed as early as 1930. Representatives from both UNARCO and defendant had attended these meetings. Defendant's annual reports to the Secretary of State of Illinois from 1955 to 1961 listed defendant's business as the manufacture and sale of asbestos.

Many of the documents were submitted by plaintiff to prove that defendant sold large quantities of raw asbestos to Calabrian Industries (Calabrian), a barter corporation. Calabrian traded the asbestos to the United States government for other commodities through barter contracts. By the terms in a letter of agreement between defendant and Calabrian, defendant agreed to deliver to the Commodity Credit Corporation (CCC) of the United States government, for Calabrian's account, all of the asbestos required under Calabrian's barter contracts. Millions of pounds of defendant's asbestos were delivered to the United States for its critical materials stockpile under these contracts. Several years later, the government decided to reduce its asbestos stockpile. General Service Administration (GSA) reports indicate large portions of raw asbestos from the stockpile which had originated from Cape's mines were sold to UNARCO's Bloomington plant for its use.

Plaintiff called a former UNARCO employee who testified she was familiar with UNARCO purchasing and receiving orders. She identified orders indicating purchase of asbestos from both defendant and the stockpile and receipt of the asbestos at the UNARCO Bloomington plant. On cross-examination, she was shown certain documents and from them could only identify 12,500 pounds of raw amosite asbestos delivered directly to the UNARCO Bloomington plant from defendant.

Joan Holtze, a former employee of defendant from 1953 until 1978, testified defendant was incorporated to be a contact point in North America for Cape customers. While admitting defendant made a few direct sales of asbestos, she said it primarily functioned as a message relay center between Cape and Cape's North American asbestos customers. She acknowledged defendant received 2 1/2% commission on all of the Cape's asbestos fiber contract sales in North America. She also stated that Robert Cryor was defendant's president from 1953 until his death in 1970 and that Cryor had worked for UNARCO prior to 1953. Plaintiff then submitted several of UNARCO's occupational disease files from approximately 1939 until 1953 which revealed that Cryor had been involved in the disposition of many of UNARCO's asbestos-related claims.

Portions of the deposition testimony of Dr. Richard Gaze, Cape's chief scientist, were read to the jury. He was employed by Cape in 1943, was later promoted to chief scientist, and became an executive director in 1961. He was also a member of defendant's board of directors. On the day he was employed at Cape, he became aware that asbestos, in its various forms, was dangerous to human health. He stated there was nothing preventing placing a label on the asbestos bags, that he could have recommended it, but that it was just not done. He also testified defendant participated in the sale of asbestos from the South African mines. On cross-examination, he said the incidents of asbestosis from 1940 until about 1960 were thought to be related to the higher dust concentrations found in asbestos plants prior to 1940. He stated it was thought that reduced concentrations of dust would decrease the dangers of working with asbestos.

Plaintiff also read portions of the former testimony of Dr. Geritt Sheppers, who had testified at a previous trial in this case. Dr. Sheppers had studied and examined workers at the South African asbestos mines in 1949 and found nearly all had asbestosis. He indicated asbestosis was well known in the medical and scientific community throughout Europe and the United States as early as 1940. On cross-examination, he admitted a study in 1949 had concluded that lower levels of asbestos-dust exposure were thought to be safe and would not lead to asbestos disease.

Defendant's expert testified there was knowledge in the asbestos industry since 1920 that high concentrations of asbestos dust caused asbestosis. However, he stated that threshold dust levels were established in the industry subsequent to that time which were thought to be safe. He indicated the industry thought these levels would diminish the incidence of asbestosis.

One of defendant's former presidents testified that defendant neither accepted any orders or contracts for asbestos on behalf of Cape nor had authority to do so. He acknowledged, though, that he represented defendant as its attorney in the preparation and negotiation of the agreement with Calabrian to supply asbestos under the barter contracts. He indicated defendant never had physical possession of the asbestos fiber that was delivered pursuant to those contracts.

On cross-examination, when asked if the government specifications in the barter contracts prevented defendant from placing a warning label on the bags, he stated "it might have." He admitted, though, that defendant never inquired of the government if it could place warnings on the asbestos bags, and never placed warnings on bags sold to non-government purchasers.

Defendant contends plaintiff failed to prove a cause of action in strict liability. In Suvada v. White Motor Co. (1965), 32 Ill.2d 612, 621, this court adopted strict liability in tort as expressed in the Restatement (Second) of Torts, section 402A (1965):

"(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ...

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