Judge: Laura A. Seigle, Case: 19STCV41833, Date: 2023-02-17 Tentative Ruling

Case Number: 19STCV41833    Hearing Date: February 17, 2023    Dept: 15

[TENTATIVE] ORDER RE MOTION FOR SUMMARY JUDGMENT

Defendant TDY Industries LLC moves for summary judgment on the ground that Wis-Con Corporation expressly assumed the tort liabilities of Teledyne Industries, Inc., and Teledyne Belgium, S.A under a July 31, 1992 Asset Purchase Agreement.

Plaintiffs’ objection No. 1 is sustained.  Plaintiffs’ objections 2-3 are overruled.  

A defendant seeking summary judgment must “conclusively negate[] a necessary element of the plaintiff’s case, or . . . demonstrate[] that under no hypothesis is there a material issue of fact that requires the process of trial.”  (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 334.)  To show that a plaintiff cannot establish an element of a cause of action, a defendant must make the initial showing “that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.)  “The defendant may, but need not, present evidence that conclusively negates an element of the plaintiff’s cause of action.  The defendant may also present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence – as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.”  (Id. at p. 855.)

Defendant takes the option of attempting to conclusively negate a necessary element of Plaintiffs case.  Defendant argues that Teledyne Industries, Inc. created Teledyne Total Power for the distribution of Continental Motors’ and Wisconsin Motors’ products.  (Motion at p. 4; Undisputed Material Fact (“UMF”) 5.)  On July 31, 1992, Teledyne Industries and Teledyne Belgium S.A. entered into the Asset Purchase Agreement to sell Continental Motors and Wisconsin Motors to Wis-Con Corporation.  (Motion at p. 4; UMF 7.)  The agreement contained an “Assumption of Liabilities” provision, stating Wis-Con Corporation assumed liability for any liabilities “resulting from or relating to (i) products recorded as a sale prior to the Closing (to the extent such liabilities result from claims made more than five years from the Closing), or (ii) products recorded as a sale subsequent to the Closing, regardless of when manufactured . . .”  (UMF 9.)  The Closing Date was August 28, 1992.  (UMF 8.)  Wis-Con Corporation did not assume liabilities “resulting from or relating to products recorded as a sale prior to the Closing, to the extent such liabilities result from claims made on or before five years from the Closing . . .”  (UMF 10.) 

“The rule ordinarily applied to the determination of whether a corporation purchasing the principal assets of another corporation assumes the other’s liabilities” is that “the purchaser does not assume the seller’s liabilities.”  (Ray v. Alad Corp. (1977) 19 Cal.3d 22, 28.  However, that general rule does not apply if “there is an express or implied agreement of assumption.”  Plaintiffs filed this action in 2019, long after the 1992 Closing Date.  Therefore, the potential liability from this action results from claims made more than five years after the Closing Date of August 28, 1992 and were assumed by Wis Con Corporation.

In opposition, Plaintiffs argue that Defendant fails to shift the burden because Defendant has not demonstrated that Plaintiffs cannot produce evidence of asbestos exposure.  (Opposition at p. 6.)  Specifically, Plaintiffs argue that Defendant does not demonstrate that Plaintiffs’ discovery responses are factually devoid.  (Id. at pp. 6-7.)  That is beside the point because Defendant’s motion is not based on an argument that the discovery responses are factually-devoid.

Plaintiffs also argue the Asset Purchase Agreement is redacted and so they cannot see the complete terms of the assumption of liability.  (Opposition at pp. 8-9.)  As discussed below, the court continues the hearing so that Defendant can file the entire unredacted Asset Purchase Agreement.

Plaintiffs argue the Asset Purchase Agreement is contrary to public policy and Civil Code section 1668 because it is a contract affecting the public interest.  The law is to the contrary.  In Westlye v. Look Sports, Inc. (1993) 17 Cal.App.4th 1715, cited by Plaintiffs, the court quoted a California Supreme Court case stating, “ ‘[N]o public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party, . . .’  [Citation.]”  (Id. at p. 1733.)  Plaintiffs did not show that the Asset Purchase Agreement concerned the public interest.  For example, Plaintiffs did not show that “[t]he party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public.”  (Id. at pp. 1733-1734.)  The other cases cited by Plaintiffs addressed sales contracts containing disclaimers.  (See, e.g., Seely v. White Motor Co. (1965) 63 Cal.2d 9.)  That is not the situation here.

Plaintiffs also contend that Defendant did not demonstrate the engine models that Decedent worked on were part of the “Assumed Liabilities” in the Asset Purchase Agreement.  (Opposition at p. 13.)  In reply, Defendant filed the Declaration of Scott Rantovich, who has worked at TDY Industries, LLC or its processor since 1992.  (Rantovich Decl., ¶ 2.)  He attaches a 1997 product catalog as Exhibit B, showing Wis-Con sold the products listed by Julius Gillum in his deposition as Continental engines he worked on.  (UMF 3; Rantovich Decl., Ex. B at p. 1.) 

“[T]he question whether it is fair to impose successor liability is exclusively for the trial court.”  (Rosales v. Themex-Thermatron, Inc. (1998) 67 Cal.App.4th 187, 196.)  Thus, it needs to be resolved either on summary judgment or in a bench trial.  The hearing on the motion for summary judgment is continued to March 13, 2023 at 9 a.m.  By February 22, 2023, Defendant is to file a supplemental brief of no more than three pages attaching the unredacted Asset Purchase Agreement and identifying the specific provisions in the Asset Purchase Agreement and/or its exhibits and attachments where the Continental engines listed by Julius Gillum are transferred to Wis-Con Corporation.  By March 8, 2023, Plaintiffs may file a brief of no more than ten pages responding to the Rantovich Declaration and Defendant’s February 22, 2023 filing.

The Final Status Conference is continued to March 13, 2023 at 9 a.m., as the court will be dark on March 6, 2023.

The moving party is to give notice.