Case Number: 78774-3

Judge: Chambers

Court: Supreme Court of Washington on appeal from the Superior Court of King County

Plaintiff's Attorney:

Janet L Rice, Seattle, Washington and William Joel Rutzick of Schroeter Goldmark & Bender, Seattle, Washington

Defendant's Attorney:

Walter Eugene Barton, Seattle, Washington and Philip Albert Talmadge, Talmadge Law Group PLLC, Tukwila, Washington

Description:

During the 1960s and early 1970s, Roger Herring, a member of the Asbestos Workers Union Local 7, worked for subcontractors of Todd Shipyards at Todd's work sites. Herring's asbestos exposure ultimately caused fatal mesothelioma. Before Herring died he sued Todd.

In the years between the time Herring was exposed to asbestos and when he developed mesothelioma, Todd declared bankruptcy. The main issue for our review is whether Todd's bankruptcy discharged Herring's claim. Specifically, Herring argues that Todd should have given actual notice of its bankruptcy to Herring's union. We conclude that under controlling federal law, Todd had no obligation to give actual notice of the bankruptcy to Herring's union. We accordingly reverse the Court of Appeals and reinstate the trial court's dismissal.

I

This is a tragic case. After working with asbestos for at least 20 years, Herring was diagnosed with pleural thickening in 1986. Three years later, he developed asbestosis, a scarring of his lungs. In 1989, Herring sued several manufacturers of asbestos-containing products. Todd was not among the defendants.

In 1987, after Herring's diagnosis, Todd filed a voluntary petition for chapter 11 reorganization in the United States Bankruptcy Court for the District of New Jersey. At the time, Todd likely knew it was at risk for asbestos-related claims. At least Todd knew about several asbestos-related employee claims that had been filed against it in New Orleans. The bankruptcy court issued a bar claims date for filing proofs of claims in 1988.1

Opinion in PDF Format Supreme Court of the State of Washington Opinion Information Sheet Docket Number: 78774-3 Title of Case: Herring v. Texaco, Inc. File Date: 08/09/2007 Oral Argument Date: 05/17/2007 SOURCE OF APPEAL ---------------- Appeal from King County Superior Court 02-2-28063-3 Honorable Linda Lau JUSTICES -------- Gerry L. Alexander Signed Majority Charles W. Johnson Signed Majority Barbara A. Madsen Signed Majority Richard B. Sanders Signed Majority Bobbe J. Bridge Signed Majority Tom Chambers Majority Author Susan Owens Signed Majority Mary E. Fairhurst Signed Majority James M. Johnson Signed Majority COUNSEL OF RECORD ----------------- Counsel for Petitioner(s) Walter Eugene Barton Attorney at Law 1201 3rd Ave Ste 2900 Seattle, WA, 98101-3284 Philip Albert Talmadge Talmadge Law Group PLLC 18010 Southcenter Pkwy Tukwila, WA, 98188-4630 Counsel for Respondent(s) Janet L Rice Attorney at Law 500 Central Bldg 810 3rd Ave Seattle, WA, 98104-1693 William Joel Rutzick Schroeter Goldmark & Bender 810 3rd Ave Ste 500 Seattle, WA, 98104-1657 View the Opinion in PDF Format IN THE SUPREME COURT OF THE STATE OF WASHINGTON EDWIN HERRING, for himself and ) as personal representative of the estate of ) Roger Herring, ) ) Respondent, ) No. 78774-3 ) v. ) En Banc ) TEXACO, INC.; GEORGIA-PACIFIC ) CORPORATION; INTALCO ALUMINUM ) CORPORATION; SABERHAGEN ) HOLDINGS, INC.; METROPOLITIAN ) LIFE INSURANCE COMPANY; CROWN ) CORK & SEAL COMPANY, INC.; SHELL ) OIL COMPANY; ARCO OIL & GAS ) COMPANY; LOCKHEED ) SHIPBUILDING COMPANY, ) ) Defendants, ) ) TODD SHIPYARDS CORPORATION, ) Filed August 9, 2007 ) Petitioner. ) ____________________________________) CHAMBERS, J. -- During the 1960s and early 1970s, Roger Herring, a member of the Asbestos Workers Union Local 7, worked for subcontractors Herring (Edwin) v. Texaco, Inc., et. al., No. 78774-3 of Todd Shipyards at Todd's work sites. Herring's asbestos exposure ultimately caused fatal mesothelioma. Before Herring died he sued Todd. In the years between the time Herring was exposed to asbestos and when he developed mesothelioma, Todd declared bankruptcy. The main issue for our review is whether Todd's bankruptcy discharged Herring's claim. Specifically, Herring argues that Todd should have given actual notice of its bankruptcy to Herring's union. We conclude that under controlling federal law, Todd had no obligation to give actual notice of the bankruptcy to Herring's union. We accordingly reverse the Court of Appeals and reinstate the trial court's dismissal. I This is a tragic case. After working with asbestos for at least 20 years, Herring was diagnosed with pleural thickening in 1986. Three years later, he developed asbestosis, a scarring of his lungs. In 1989, Herring sued several manufacturers of asbestos-containing products. Todd was not among the defendants. In 1987, after Herring's diagnosis, Todd filed a voluntary petition for chapter 11 reorganization in the United States Bankruptcy Court for the District of New Jersey. At the time, Todd likely knew it was at risk for asbestos-related claims. At least Todd knew about several asbestos-related employee claims that had been filed against it in New Orleans. The bankruptcy court issued a bar claims date for filing proofs of claims in 1988.1 2 Herring (Edwin) v. Texaco, Inc., et. al., No. 78774-3 As a precondition to the court ordering a discharge of all potential claims, Todd sent written notice of its bankruptcy to all known creditors, stockholders, and noteholders. According to Michael Marsh, in-house counsel for Todd,

Todd made diligent efforts to identify and notify potential creditors of its bankruptcy. Such efforts included notifying individuals on its accounts receivable and accounts payable registers, notifying everyone who conducted business with Todd, and notifying all unions representing Todd's employees. In addition, I recall that Todd Shipyards identified its subcontractors as entities to whom it would send actual notice.

Clerk's Papers (CP) at 48. Todd did not give actual notice to the unions of its subcontractors,2 but it did publish notice of the bankruptcy and the bar date in several newspapers, including The Seattle Times, Seattle Post-Intelligencer, and the national editions of The New York Times and The Wall Street Journal. Todd emerged from bankruptcy in 1989. In 2002, Herring was diagnosed with mesothelioma, which ultimately caused his death two years later. He filed a lawsuit based on that diagnosis, and his estate is continuing this suit. Sometime after Herring's suit was filed, Todd was added as a defendant. Todd was unaware of Herring and his claims until about that time.

Neither Herring nor his union has received actual notice of Todd's bankruptcy. Officers of Herring's union have submitted declarations asserting that if they had received notice, they would have passed it on to their members.3 It appears that the union itself was not one of Todd's creditors.

In March 2004, Todd successfully moved for summary judgment on the ground that Herring's claims had been discharged in the earlier bankruptcy. The Court of Appeals reversed, holding due process required Todd to give actual notice of its bankruptcy to Herring's union before Herring's claims could have been discharged. Herring v. Texaco, Inc., 132 Wn. App. 479, 132 P.3d 1102 (2006). The divided Court of Appeals below found that it was "reasonably ascertainable" that Todd would be liable to Asbestos Workers Union members who worked on its site for asbestos- related claims since it knew that similar claims against it were escalating and concluded that the bankruptcy did not discharge Herring's claim. Id. at 486. We accepted review, Herring v. Texaco, Inc., 153 P.3d 196, 2007 Wash. LEXIS 72, and now reverse.

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Outcome: Accordingly, we reverse the Court of Appeals and remand to the trial court for further proceedings consistent with this opinion.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None