Cortez v. Lamorak Insurance Company

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

CALLEN J. CORTEZ, ET AL. CIVIL ACTION

VERSUS NO. 20-2389

LAMORAK INSURANCE COMPANY, SECTION “R” (1)

ET AL.

ORDER AND REASONS

Before the Court is the motion of defendant Hopeman Brothers, Inc.

(“Hopeman”) for partial summary judgment on the issues of whether

Hopeman was a manufacturer or professional vendor of asbestos-containing

products.1 Plaintiffs and Huntington Ingalls, Inc. (“Avondale”) oppose the

motion.2 For the following reasons, the Court grants in part and denies in

part Hopeman’s motion.

I. BACKGROUND

This is an asbestos exposure case. Plaintiffs allege that Callen Cortez

contracted mesothelioma as a result of exposure to asbestos over the course

1 R. Doc. 494.

2 R. Docs. 666 & 691.

of his career,3 as well as take-home exposure resulting from his father’s4 and

brothers’ work when the family shared a home.5

Hopeman is a subcontractor that performed marine carpentry or

“joiner” work at Avondale Shipyards during the period in which Callen

Cortez and his brother, Daniel Cortez, worked at Avondale.6 Under its

contracts with Avondale, Hopeman provided both marine carpentry services

and the materials necessary to perform the work.7 Wayne Manufacturing

Corporation (“Wayne”), a now-dissolved Virginia corporation,8 was a

wholly-owned subsidiary of Hopeman during the relevant period.9

Hopeman regularly purchased and supplied to Wayne Micarta laminate

manufactured by Westinghouse and Marinite boards manufactured by

Johns-Manville, both of which contained asbestos.10 Wayne glued the

Micarta laminate to the Marinite boards and sent the composite wallboards

3 R. Doc. 1-1 at 3-6 (Complaint ¶¶ 3, 8).

4 Id. at 7-9 (Complaint ¶¶ 11-16).

5 R. Doc. 149 at 1-2 (Second Amended Complaint ¶¶ 94-95).

6 R. Doc. 494-1 at 1 (Hopeman’s Statement of Uncontested Material

Facts ¶ 4).

7 R. Doc. 666-15 at 2 (Deposition of John Baker at 78:17-22).

8 R. Doc. 498-15 (Wayne Articles of Incorporation).

9 R. Doc. 498-1 at 2 (Hopeman’s Statement of Uncontested Material

Facts ¶ 17).

10 R. Doc. 494-2 at 2 (Deposition of Charles Johnson at 115:17-22).

to Hopeman at Avondale for installation on vessels.11 Hopeman worked on

about 72 vessels constructed at Avondale shipyards during the twelve-year

period it supplied asbestos wallboards to Avondale.12

Callen Cortez lived in his family home in Kraemer, Louisiana, starting

from his birth in 1951 until he married and moved out in May of 1972.13

Daniel Cortez also lived in the home. Daniel began working at the Avondale

Shipyards on August 29, 1967,14 and lived with Callen Cortez until Daniel

moved out in July of 1968.15 Daniel testified that he was exposed to asbestos

at Avondale when he worked around Hopeman’s employees while they were

cutting asbestos-containing wallboards.16 He further testified that fibers

released from the wallboards likely got onto his work clothes.17 He also

11 R. Doc. 498-1 at 3 (Hopeman’s Statement of Uncontested Material

Facts ¶ 10).

12 R. Doc. 494-1 at 1-2 (Hopeman’s Statement of Uncontested Material

Facts ¶ 4 n.4).

13 R. Doc. 499-4 at 17-18 (Discovery Deposition of Callen Cortez at

100:11- 101:8).

14 R. Doc. 499-6 at 13 (Deposition of Daniel Cortez at 12:3-13).

15 Id. at 12-13 (Deposition of Daniel Cortez at 11:21-12:2).

16 Id. at 58-63 (Deposition of Daniel Cortez at 57:23-62:18).

17 Id. at 37 (Deposition of Daniel Cortez at 36:6-13).

testified that when he came home from work each day, he removed his

clothes, and, with Callen Cortez’s help, beat the fibers off of them.18

From March 6, 1969 until May 31, 1974, Callen Cortez worked for

Avondale as a welder and tacker helper, primarily at Avondale’s Westwego

Yard.19 Cortez testified that when he worked at Avondale, he was exposed to

asbestos dust generated by Hopeman’s employees while they were cutting

wallboards in his vicinity in ships’ galleys, living quarters, and other areas.20

Cortez was diagnosed with mesothelioma on June 2, 2020.21 On July

1, 2020, he sued Hopeman and approximately thirty-four other defendants,

including former employers, manufacturers, and insurance companies.22 In

his petition, plaintiff brought various negligence, products liability, and

18 Id. at 18-19 (Deposition of Daniel Cortez at 17:16-18:17).

19 Id. at 26-27 (Discovery Deposition of Callen Cortez at 108:25-109:9).

20 R. Doc. 666-4 at 2-3 (Discovery Deposition of Callen Cortez at 120:20-

121:2); see also R. Doc. 494-2 at 2.

21 R. Doc. 1-1 at 10 (Complaint ¶ 17).

22 Id. at 1-3, 11-13 (Complaint ¶¶ 1-2, 25-29).

intentional tort claims against defendants.23 He additionally asserted that

Wayne was the alter ego of Hopeman during the relevant period.24

Callen Cortez passed away on May 26, 2022.25 Cortez’s surviving

spouse and children filed an amended complaint on June 6, 2022,26

substituting themselves as plaintiffs in a survival action and seeking

additional damages arising from Cortez’s alleged wrongful death.27

Hopeman is sued by plaintiffs in its capacity as a supplier of asbestos-

containing wallboards.28 Plaintiffs allege that Hopeman was a

manufacturer, or alternatively, a professional vendor, of asbestos-containing

wallboards.29 Hopeman now moves for partial summary judgment on

manufacturer and professional vendor liability.30 Plaintiffs and Avondale

oppose the motion.31 The Court considers the motion below.

II. LEGAL STANDARD

23 R. Doc. 1-1.

24 Id. at 43 (Complaint ¶ 90).

25 R. Doc. 1026 at 2 (Fourth Amended Complaint ¶ 111).

26 Id.

27 Id. at 2-3 (Fourth Amended Complaint ¶¶ 111-114).

28 R. Doc. 1-1 at 11-12 (Complaint ¶ 25-29).

29 Id.

30 R. Doc. 493.

31 R. Docs. 666 & 691.

Summary judgment is warranted when “the movant shows that there

is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v.

Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,

1075 (5th Cir. 1994) (en banc) (per curiam). “When assessing whether a

dispute to any material fact exists, [the Court] consider[s] all of the evidence

in the record but refrain[s] from making credibility determinations or

weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness

Ins., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are

drawn in favor of the nonmoving party, but “unsupported allegations or

affidavits setting forth ‘ultimate or conclusory facts and conclusions of law’

are insufficient to either support or defeat a motion for summary judgment.”

Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting

10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure

§ 2738 (2d ed. 1983)); see also Little, 37 F.3d at 1075. “No genuine dispute

of fact exists if the record taken as a whole could not lead a rational trier of

fact to find for the nonmoving party.” EEOC v. Simbaki, Ltd., 767 F.3d 475,

481 (5th Cir. 2014).

If the dispositive issue is one on which the moving party will bear the

burden of proof at trial, the moving party “must come forward with evidence

which would ‘entitle it to a directed verdict if the evidence went

uncontroverted at trial.’” Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,

1264-65 (5th Cir. 1991) (quoting Golden Rule Ins. v. Lease, 755 F. Supp. 948,

951 (D. Colo. 1991)). “[T]he nonmoving party can defeat the motion” by

either countering with evidence sufficient to demonstrate the “existence of a

genuine dispute of material fact,” or by “showing that the moving party’s

evidence is so sheer that it may not persuade the reasonable fact-finder to

return a verdict in favor of the moving party.” Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear

the burden of proof at trial, the moving party may satisfy its burden by

pointing out that the evidence in the record is insufficient with respect to an

essential element of the nonmoving party’s claim. See Celotex, 477 U.S. at

325. The burden then shifts to the nonmoving party, who must, by

submitting or referring to evidence, set out specific facts showing that a

genuine issue exists. See id. at 324. The nonmovant may not rest upon the

pleadings, but must identify specific facts that establish a genuine issue for

resolution. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 ‘mandates the entry

of summary judgment, after adequate time for discovery and upon motion,

against a party who fails to make a showing sufficient to establish the

existence of an element essential to that party’s case, and on which that party

will bear the burden of proof at trial.’” (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION

A. Manufacturer Liability

Plaintiffs argue that Hopeman is a manufacturer by attributing

Wayne’s assembly of the asbestos wallboards to Hopeman.32 They contend

that Wayne’s actions are attributable to Hopeman because Wayne was the

alter ego of Hopeman or that they were a single business enterprise.33 The

Court has already rejected liability for Hopeman under alter ego or single

business enterprise theories in its August 10, 2022 Order and Reasons, which

granted summary judgment to Hopeman against plaintiffs on these issues.

See generally Cortez v. Lamorak Ins. Co., No 20-2389, 2022 WL 2714111

(E.D. La. July 13, 2022). That ruling forecloses plaintiffs’ arguments here.

Plaintiffs make the same arguments that the Court rejected in its August 10,

2022 Order. Accordingly, the Court holds that Wayne’s assembly of the

wallboards did not render Hopeman a manufacturer of these asbestos-

containing products.

32 R. Doc. 666 at 3.

33 Id. at 1-3.

Next, plaintiffs assert that Hopeman is liable under the Louisiana

Products Liability Act’s definition of a manufacturer.34 But the “Louisiana

Supreme Court has held that the LPLA does not apply retroactively because

it is substantive.” Moore v. BASF Corp., No. 11-1001, 2011 WL 5869597, at

*2 (E.D. La. Nov. 21, 2011) (internal quotation marks removed); see Gilboy

v. Amer. Tobacco Co., 582 So.2d 1263, 1264-65 (La. 1991) (explaining that

the LPLA “alters substantive rights” and “[a] statute that changes settled law

relating to substantive rights only has prospective effect.”); Brown v. R.J.

Reynolds Tobacco Co., 52 F.3d 524, 527 (5th Cir. 1995) (“[T]he LPLA applies

only to those causes of action that accrued on or after September 1, 1988.”).

Plaintiffs cite no authority that the LPLA’s manufacturer definition is

retroactive, and concede that the LPLA does not apply to this case because

Cortez’s toxic exposures occurred before its enactment.35 Plaintiffs

nevertheless argue that the LPLA’s definition is germane here because the

portion of the LPLA at issue merely restates preexisting law. And, plaintiffs

contend, Hopeman satisfies that definition.

The Court need not decide whether the LPLA provision at issue merely

restates preexisting law or otherwise applies retroactively, because the

34 Id.

35 R. Doc. 666 at 3 n.17.

provision in question would not render Hopeman a manufacturer in any

event. Plaintiffs rely on language in the LPLA that states that the term

manufacturer includes a “manufacturer of a product who incorporates into

the product a component or part manufactured by another manufacturer.”

La. Rev. Stat. § 9:2800.53(1)(b). Plaintiffs contend that Hopeman falls

within this definition because it manufactured (at least, partially) the vessels

at Avondale by virtue of installing the walls that separated various quarters

in the vessels, and Hopeman incorporated another’s product (the wallboard)

into the vessels. The Court will not adopt the strained interpretation

plaintiffs propose. The cited provision of the LPLA applies when a firm that

manufactures a final product incorporates others’ goods into it. Here,

Hopeman was a subcontractor that merely furnished a component to

Avondale, which was responsible for the final product, i.e., the vessels. Other

courts agree that Hopeman was not a manufacturer of asbestos products.

Numerous Louisiana courts have granted summary judgment or directed

verdicts in Hopeman’s favor on the issue of manufacturer liability. See, e.g.,

Buqoui v. Huntington Ingalls, Inc., No. 11-7786 (La. Civ. D. Ct. Apr. 2, 2012)

(granting Hopeman’s motion for summary on the issue of whether it was a

manufacturer of asbestos-containing products); Becnel v. Am. Motorists

Ins. Co, No. 12-6486 (La. Civ. D. Ct. May 9, 2013) (likewise); Cagle v.

Huntington Ingalls, Inc., No. 16-1875 (La. Civ. D. Ct. Jan. 25, 2017) (same);

Jones v. Am. Emp. Ins. Co., No. 14-6711 (La. Civ. D. Ct. Feb. 2, 2016)

(granting Hopeman’s motion for a directed verdict on whether it was a

manufacturer of asbestos-containing products).

Additionally, none of the cases Hopeman points to is apposite.

Radalec, Inc. v. Automatic Firing Corporation involved a defendant that

manufactured air conditioners composed of parts fabricated by other

concerns. 81 So. 2d 830, 833 (La. 1955). Unlike the present case, the

relevant issue there was whether defendant may still be liable as a

manufacturer when it did not manufacture the specific defective component

in the air conditioning unit. Id. at 833 n.3. Likewise, in Spillers v.

Montgomery Ward & Co., the defendant substantially modified a truck to

carry pulpwood, which is dissimilar to the work that Hopeman did here. 294

So. 2d 803 (La. 1974). Further, in Spillers, the defendant had actually

manufactured “the pulpwood loader and it did all the things necessary to

adapt Spillers’ truck for hauling pulpwood.” Id. at 807. Here, Hopeman did

not manufacture the wallboard, nor did it substantially modify the vessels it

worked on by merely installing wallboard pursuant to contract

specifications. For similar reasons, Winterrowd v. Travelers Indemnity Co.

is inapposite. 452 So. 2d 269 (La. App. 2 Cir. 1984). Hopeman did not

“substantially modif[y] or materially alter[] the product” at issue here. Id. at

273-74. LeBouef v. Goodyear Tire & Rubber Company is also

distinguishable, because it involved an automaker seeking to avoid liability

when one of the car’s tires, manufactured by a separate concern, failed. 623

F.2d 985, 990 (5th Cir. 1980). Finally, Rasmussen v. Cashio Concrete

Corporation is inapposite. 484 So. 2d 777, 779 (La. App. 1 Cir. 1986). In that

case, Cashio Concrete Corporation’s own president testified that the firm

had manufactured the product at issue. Id. Further, the Rasmussen court

found that “the components of the [product at issue] were purchased from

various suppliers and integrated into a single, concrete unit by defendant.”

Id. There is no analogous assembly of a complete unit by Hopeman here.

Accordingly, plaintiffs’ authorities do not support their claims of

manufacturer liability, and Hopeman is entitled to summary judgment on

this issue.

B. Professional Vendor Liability

Hopeman also moves for partial summary judgment on the issue of

whether it was a professional vendor of asbestos-containing wallboards.36

36 R. Doc. 493.

Under Louisiana law, a “professional vendor” is held to the same

standard of liability as a manufacturer. Chappuis v. Sears Roebuck & Co.,

358 So. 2d 926, 930 (La. 1978). In order to be held liable as a professional

vendor, a seller must: (1) hold a “product out to the public as its own” and (2)

operate with the requisite “size, volume, and merchandising practices,” such

that the firm is presumed to know the defects of its wares. Id. Hence, “a

professional vendor is a retailer who does more than simply sell a certain

product or products; it must engage in practices whereby it is capable of

controlling the quality of the product, such that the courts are justified in

treating the retailer like a manufacturer.” Nelton v. Astro-Lounger Mfg. Co.,

542 So. 2d 128, 132 (La. App. 1 Cir. 1989). Because of the scale and

merchandising requirements necessary for a finding that a firm is a

professional vendor, a seller does not become a professional vendor just

because it sells a product. Id. (“[W]e reject plaintiff’s contention that

Fraenkel is a professional vendor simply because it is in the business of

selling sofa beds.”).

The facts relevant to Hopeman’s sale of wallboards are as follows.

Hopeman was engaged as a subcontractor at Avondale to provide the

engineering services, labor, and materials necessary to install wallboards on

72 vessels constructed at the shipyard during the years 1961 and 1965 to

1976.37 Under its contracts, Hopeman furnished and installed asbestos-

containing wallboard in galleys and living quarters of the vessels.38 John

Baker, a former Hopeman executive, testified that Hopeman charged

Avondale for the materials it furnished under its joiner contracts.39 Bertram

Hopeman, a former officer for Hopeman, confirmed that Hopeman’s

contracts with Avondale were for both services and materials.40 Hopeman

purchased the components of the wallboards from Johns-Manville, which

sold a Marinite core, and from Westinghouse, which sold a Micarta veneer.

Hopeman supplied these materials to its subsidiary, Wayne, which glued the

two wallboard components together. Hopeman furnished the finished

wallboards to Avondale and installed them on vessels being constructed at

Avondale’s shipyard.

Plaintiffs contend that, like the defendant in Chappuis who “was

deemed a ‘professional vendor’ due to the control it exercised over the design

of the product,” Shapiro v. Wal-Mart Stores, Inc., No. 93-3245, 1994 WL

577346, at *3 n.3 (E.D. La. Oct. 17, 1994), Hopeman exercised significant

control over the quality of the wallboards at issue and is therefore a

37 R. Doc. 494-1 at 1-2 (Hopeman’s Statement of Material Facts ¶ 4 n.4).

38 See R. Doc. 494-2 at 2.

39 R. Doc. 666-15 at 2 (Deposition of John Baker at 78:17-22).

40 R. Doc. 691-7 at 14 (Deposition of Bertram Hopeman at 336:10-21).

professional vendor.41 Hopeman does not contest that it selected and

purchased the components of the wallboards that Wayne regularly

assembled for Hopeman. Further, this Court previously deemed Hopeman

a sophisticated purchaser of Micarta, one of the two asbestos-containing

components of the wallboards.42 The Court finds that Hopeman’s familiarity

with the products and its control over the selection of the wallboard

components and its selection of the company that would assemble them raise

an issue of fact as to whether Hopeman exerted sufficient control over the

quality of the product for professional vendor liability.

The evidence also raises an issue of material fact as to whether

Hopeman held itself out as the supplier of the wallboard. First, Hopeman’s

contracts identified Hopeman as the supplier of the wallboard.43

Additionally, Hopeman purchased the wallboard components, directed

Wayne to assemble the wallboard, and had the wallboard sent to Avondale.

Further, Hopeman’s invoices to Avondale for the wallboards listed Hopeman

as the vendor.44 Finally, a number of individuals over the years, including

41 R. Doc. 666 at 6-8.

42 See Cortez v. Lamorak Ins. Co., No 20-2389, 2022 WL 2714111, at *8

(E.D. La. July 13, 2022).

43 See R. Doc. 691-7 at 14 (Deposition of Bertram Hopeman at 336:10-

21); R. Doc. 666-15 at 2 (Deposition of John Baker at 78:17-22); R. Doc.

691-17.

44 R. Doc. 691-17.

Callen Cortez and his brothers, associated the wallboards with Hopeman.45

In sum, Hopeman’s invoices, its contracts, and the identification of

Hopeman with the wallboards by the workers on-site together support an

inference that Hopeman held the wallboards out as its own.

Further, there is evidence supporting an inference that Hopeman’s

sales were on a scale sufficient to be deemed a professional vendor.

Hopeman admits that it performed joiner work at Avondale beginning in

1961 until the mid-1990s, with continuous operations from 1965 onward.46

Additionally, Hopeman furnished asbestos-containing products for

installation on approximately 72 vessels at Avondale until the mid-1970s.47

Callen Cortez testified that he also worked around Hopeman’s employees

who cut wallboards at Halter Marine’s Lockport shipyard in the mid-1970s.

This evidence, that Hopeman operated at multiple sites and furnished

asbestos wallboard for over a decade on 72 ships, creates an issue of material

45 See R. Doc. 691-15 at 2-3 (Deposition of Logan Lefort at 54:1-55:15) &

R. Doc. 691-16 at 3-5 (Deposition of Donald Rome at 64:1-66:16);

Avondale also asserts that the wallboard arrived in Hopeman’s trucks

with Hopeman’s logo displayed prominently on the vehicles, but there

is no mention of this in the exhibit to which Avondale points. See R.

Doc. 691-20 at 2 (Deposition of Jose Cochran at 35-36).

46 R. Doc. 494-1 at 1 (Hopeman’s Statement of Uncontested Material

Facts ¶ 4).

47 Id. (Hopeman’s Statement of Uncontested Material Facts ¶ 5).

fact as to whether Hopeman operated on the requisite scale to be a

professional vendor.

As plaintiffs have created material fact issues on whether Hopeman

had control over the quality of the product, held it out as its own, and

operated with the scale necessary to be deemed a professional vendor, the

Court denies summary judgment on whether Hopeman was a professional

vendor of asbestos-containing products.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS IN PART and DENIES

IN PART Hopeman’s motion for partial summary judgment.

New Orleans, Louisiana, this _29th_ day of August, 2022.

Lernk Varver

SARAH S. VANCE

UNITED STATES DISTRICT JUDGE

17