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Marinelli v. Mitts & Merrill

July 3, 1997

EDWARD H. MARINELLI, JR., JOHN J. PANARELLO, BARBARA L. PANARELLO, AND BARBARA DAIUTOLO, PLAINTIFFS-APPELLANTS,
v.
MITTS & MERRILL, A FOREIGN CORPORATION, MIL-PAC SYSTEMS, INC., A NEW JERSEY CORPORATION, ACCURATE INDUSTRIES, INC., A NEW JERSEY CORPORATION, AEROSOL TECHNIQUES, INC., A FOREIGN CORPORATION, ATLANTIC SYSTEMS SALES, INC., A NEW JERSEY CORPORATION, AND JOHN DOES 3 THROUGH 100, INCLUSIVE, FICTITIOUS NAME DEFENDANTS, JOINTLY, SEVERALLY, AND IN THE ALTERNATIVE, DEFENDANTS, AND WHITEHALL LABORATORIES, INC., A FOREIGN CORPORATION, DEFENDANT-RESPONDENT.



On Appeal from the Superior Court of New Jersey, Law Division, Camden County.

Before Judges Dreier, D'Annunzio and Villanueva. The opinion of the court was delivered by VILLANUEVA, J.A.D.

The opinion of the court was delivered by: VILLANUEVA

The opinion of the court was delivered by

VILLANUEVA, J.A.D.(retired and temporarily assigned on recall).

Plaintiffs appeal from a summary judgment dismissing their negligence claim against their employer, Whitehall Laboratories, Inc., (Whitehall), brought under the intentional injury exception to the Workers' Compensation immunity, N.J.S.A. 34:15-8. They also appeal from a summary judgment on their claim of spoliation of evidence. They further claim that they were entitled to the production of employee interviews secured by the Personnel Department at the behest of their employer's attorney. Lastly, they appeal from an earlier order denying them leave to file a third amended complaint against related corporate entities and their employees in which plaintiffs claim those other entities and employees were also responsible for the explosion and fire that injured them while they *fn1 were working at the defendant Whitehall's premises in Hammonton, New Jersey.

On Friday, July 14, 1989, plaintiff, Edward H. Marinelli, Jr., had originally been instructed to shred pallets of "Sudden Beauty" hair spray. Marinelli had noticed strong fumes coming from the cans and had complained about the possible toxic effect of the fumes. The exhaust fans were inoperable or inadequate at the time, and Marinelli was told to wear a face mask. Nevertheless, Marinelli continued to experience problems breathing because of the high heat and humidity. He sought to examine the "right to know" books to determine the toxic effect of the fumes, but the material safety data sheet ("MSDS") was not in the book. Although he was temporarily taken off of this duty, he was sent back to the compactor room and continued to shred the canisters.

Marinelli continued this work on the following Monday and inserted numerous cans of the hair spray into the compactor. At some time between 3:00 p.m. and 3:10 p.m., Barbara Daiutolo approached the doorway where Marinelli was working and told Marinelli that it was time to start cleaning up. Marinelli pressed the button to initiate the compactor and attempted to leave the area, but was unable to do so before an explosion occurred. John J. Panarello was nearby. All three were injured and severely burned.

The three were employees of Whitehall Laboratories, Inc., a subsidiary of American Home Products Corporation. Counsel for American Home Products Corporation immediately came to the scene and directed the plant manager, Anthony Romano, to investigate the incident under the attorney's direction. Romano, in turn, referred the matter to the personnel director to interview the employees who could give information; ten employees were interviewed, and written summaries of the interviews were prepared. According to the attorney, the purpose of the investigation was "providing legal advice and assistance and preparing for potential litigation."

The Hammonton Fire Company was the first governmental agency to arrive at the scene. According to the report of the Hammonton Fire Marshal, the investigator observed "three subjects standing at the entrance of the [receiving] department, located on the east side of the building. After contact with the subjects it appeared that they were victims burned from the explosion. A strong odor that was believed to be hair spray was in the immediate area." The investigator also noted "a forklift...with a pallet of approximately fifteen cases of aerosol hair spray cans in front of the feed conveyor. Approximately four cases of aerosol spray [were] found under the feed conveyor and in the feed hopper." Finally, the report described that the contents of each case were "one dozen (12) of (10) oz of aerosol hair spray (SUDDEN BEAUTY). Ingredients: SD alcohol 40, Methylene (Choride), Isbutane, Propane, Vinyl Acetate, Crotonic Acid, Copolymer, Aminomethyl Propanol, Perfume Oil, Benzyl Alcohol, PG-75 Lanolin."

On November 14, 1989, as a result of investigations, defendant Whitehall was issued five citations from the Department of Labor Occupational Safety and Health Administration ("OSHA"). Whitehall was determined to have committed the following violations: (1) using trucks and other equipment which were not permitted for a hazardous location; (2) failing to have material safety data sheets for "Sudden Beauty" hair spray at the facility; (3) failing to include the methods that may be used to detect the presence and release of hazardous chemicals in the workplace in their employee training; (4) failing to include the physical and health hazards of the chemicals present in the workplace in their employee training; and (5) failing to train their employees in specific hazards of their work areas, including fire/explosion hazards.

Soon after the explosion, Whitehall and American Home Products destroyed and disposed of substantial property, including the compactor, shredders, fans, electrical engines, cartons of "Sudden Beauty" hair spray and various other tangible items. It was this action which plaintiffs contend constituted spoliation of evidence. Many pallets containing cases of "Sudden Beauty" were on the scene, but were disposed of quickly thereafter. Although plaintiffs contend that this deprived them of evidence, enough cans of the material remained for chemical analysis and for use in any trial. Also, the contents of the cans have been analyzed and the MSDS for the product is available. When Whitehall was advised that plaintiffs were represented by counsel and a restraining order was obtained, plaintiffs' attorney was told that the shredder had been removed to a recycling area four days after the explosion and the hair spray containers had been disposed of during the clean up operation. The remaining cases of "Sudden Beauty" were sold to employees for $1 a case and were no longer available.

Plaintiffs learned that there had also been an explosion at another plant operated by a different division of American Home Products as a result of puncturing hair spray cans, but no one where plaintiffs worked had been told not to shred the cans or not to puncture them. The company also allegedly knew that if too many cans were punctured in an area without proper ventilation there would be harmful escaping vapors which were volatile and flammable as well as toxic. As previously noted, the OSHA investigation listed five violations. The OSHA file noted that the product was highly flammable, a dangerous fire and explosion risk and toxic by inhalation or ingestion.

Plaintiffs' complaint included claims against Whitehall Laboratories, Inc. for intentional injury and intentional spoliation of evidence. Claims were later made against additional defendants or entities responsible for the explosion which were ultimately settled.

On May 14, 1993, plaintiffs filed a motion to compel defendant Whitehall to produce investigatory materials, including any witnesses statements taken. On May 27, 1993, defendant Whitehall filed a motion for summary judgment to dismiss plaintiffs' complaint. The motion was denied without prejudice pending the completion of discovery. On July 20, 1993, an order was entered requiring Whitehall to provide plaintiffs with the names, addresses, telephone numbers, and titles of employees interviewed by John Anderson, an employee of Whitehall, after the explosion. Because the statements therein were deemed privileged work product and/or attorney communications, the court denied that part of the motion.

On August 27, 1993, plaintiffs filed a motion for leave to file a third amended complaint which would have substituted American Home Products Corporation and Whitehall International, Inc. for John Doe defendants. Plaintiffs discovered that Anthony Romano, the plant manager at the plaintiffs' workplace, was actually employed by a Whitehall Laboratories Division, which is a subsidiary of American Home Products. Furthermore, plaintiffs had discovered that Richard Hill, the vice president of plant operations, also worked for American Home Products and that American Home Products and Whitehall Laboratories were legally separate entities from defendant, Whitehall Laboratories Inc., the company which employed the plaintiffs.

In addition, the third amended complaint also sought to add a seventh count alleging that Whitehall and other defendants fraudulently concealed another serious explosion which occurred at a facility owned by Whitehall's parent corporation, American Home Products. The court granted the motion to file the third amended complaint by order dated September 24, 1993. On November 30, 1993, the court entered an order vacating the September 24, 1993 order. On March 15, 1994, plaintiffs filed a motion for reconsideration of the November 30, 1993 order. At the time of the filing of the motion for reconsideration, Whitehall had already filed a new motion for summary judgment. Plaintiffs' motion for reconsideration was denied by order dated April 15, 1994.

Following years of discovery, Whitehall refiled its motion for summary judgment, as just noted, on March 1, 1994. Whitehall argued that plaintiffs' claims were barred by the exclusivity provision of the New Jersey Workers' Compensation Act since there were no facts to support a finding of a deliberate intent to injure by Whitehall, and that there were no facts to support plaintiffs' spoliation claim.

The trial court stated:

Millison *fn2 requires that there be a deliberate intention of a -- of doing harm, or that there be a substantial certainty that harm will result by reason of the act, and the proof here is completely devoid of anything that establishes -- in the court's opinion, anything that comes -- that would justify such a determination.

The court found that an examination of the factual record showed "nothing more than the fact that we have a situation that is appropriately a workers' compensation situation and doesn't go beyond that . . . ." With respect to plaintiffs' spoliation claims, the court found no facts to support plaintiffs' claims that Whitehall disposed of the severely damaged machinery after the accident for the purpose of disrupting or harming plaintiffs' case. An order memorializing this decision was entered April 15, 1994.

In April 1996, plaintiffs settled their claims with the remaining defendants. On May 2, 1996, a partial stipulation of dismissal was filed. In addition, plaintiffs have or will receive approximately $360,000 in Workers' Compensation benefits.

Plaintiffs' notice of appeal states that they are appealing from the May 2, 1996, order, but they are apparently appealing the following orders:

(1) A July 20, 1993 order with respect to ...


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