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Mohn v. International Vermiculite Co.





Appeal from the Circuit Court of Macoupin County; the Hon. John W. Russell, Judge, presiding.


This cause involves an attempt to use offensive, nonmutual collateral estoppel to prevent defendant from litigating an issue in an Illinois court. Plaintiff, Lynette Mohn, appeals an order of the circuit court of Macoupin County which granted Charter Consolidated, PLC's (Charter's) motion to quash summons and dismiss for lack of personal jurisdiction. Plaintiff contends that the trial court erred when it failed to give collateral-estoppel (estoppel by verdict) effect to Barber v. Pittsburgh Corning Corp. (1983), 317 Pa. Super. 285, 464 A.2d 323, cert. denied (1984), 467 U.S. 1205, 81 L.Ed.2d 346, 104 S.Ct. 2387. The Barber court held that Charter had sufficient contacts with Pennsylvania to be subject to personal jurisdiction under its long-arm statute. In reaching this determination, the Barber court disregarded the corporate structure of Cape Asbestos Fibres, Ltd. (Cape), and attributed its actions to Charter.

We affirm.

The factual context of the cause will be related only as necessary to an understanding of our disposition.

Everett Heaton, an employee of International Vermiculite Company in Girard, Illinois, filed a multicount complaint in McLean County naming Charter and a number of other defendants. Heaton alleged that they were involved in the mining, sale, and distribution of asbestos and asbestos products. Heaton also alleged that he contracted lung cancer as a result of work-related exposure to asbestos fiber and dust. Heaton died. Mohn was substituted as plaintiff.

On the motion of a defendant not involved in this appeal, the cause was transferred to Macoupin County. A second amended complaint, a wrongful-death action, was filed alleging that Charter and Cape were in the business of distributing asbestos and asbestos products to which Heaton was eventually exposed. The complaint also alleged that they knew exposure to asbestos dust could cause asbestosis and related diseases.

Charter, a holding company based in England, entered a special and limited appearance. It moved to quash service of summons and dismiss the complaint as to it for lack of personal jurisdiction. The affidavits and record before the trial court reveal the following facts. Charter is an investment holding company incorporated under the laws of the United Kingdom. Its stock is publicly traded. Charter has a wholly owned subsidiary, Charter Consolidated Investments Limited (CCI). CCI currently owns 67.3% of the stock in Cape.

Neither Charter nor its wholly owned subsidiary directly engaged in mining, production, marketing, or shipping of asbestos or asbestos products. Charter is not qualified to do business in Illinois. It does not: sell products, purchase goods or services, lease or own property, maintain a post office box, or have directors, officers, or employees in Illinois. It does not: pay taxes or franchise fees, have an Illinois bank account, or advertise in the State. It has never brought suit in Illinois.

Cape is also a publicly held company incorporated under the laws of the United Kingdom. Until 1979, it owned companies which mined and marketed asbestos. North American Asbestos Corporation, an Illinois corporation which voluntarily dissolved in 1978, was a wholly owned subsidiary of Cape. North American Asbestos Corporation sold asbestos products to plaintiff's employer.

From 1965 to 1969, while Charter's subsidiaries held a minority interest in Cape's stock, Charter nominated two directors to Cape's board of directors. During this time, Cape's board had 11 to 14 members. Since attaining majority interest, Charter has nominated three directors to Cape's board.

The companies maintain separate locations, bank accounts, and records. Under English law, their incomes are consolidated for statutory accounting purposes. Francis Howard, one of Charter's executive directors and a member of Cape's board of directors, stated that Charter is not involved in Cape's day-to-day operations nor with the day-to-day operation of Cape's subsidiaries.

Plaintiff argued below that Charter was Cape's alter ego. Therefore, the court should pierce the corporate veils of the subsidiary corporations and assert personal jurisdiction over Charter through Cape. Plaintiff also asserted Charter was collaterally estopped from relitigating the alter-ego issue.

The trial court found Charter was not Cape's alter ego and granted Charter's motion. It found that there was no just reason to delay enforcement or appeal of its order. In this court, plaintiff does not question the trial court's factual assessment but argues the trial court erred in addressing the alter-ego issue ...

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