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Domanske v. Rapid-American Corp.

April 24, 2000


Before Judges Stern, Wefing and Steinberg.

The opinion of the court was delivered by: Wefing, J.A.D.


Argued: February 16, 2000

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.

Plaintiff Josephene Domanske *fn1 appeals from the trial court's order granting summary judgment to defendant Rapid-American Corporation (Rapid). After a careful review of the record and consideration of the arguments advanced on appeal, we affirm.

In September 1993, Josephene began this suit for damages following the death of her husband Jesse from lung cancer. She joined only one defendant, Rapid. In 1998, Rapid filed a motion for summary judgment. It argued that her suit was barred under the terms of a release executed by Josephene and Jesse in 1990 in conjunction with the settlement of their claim for damages for Jesse's asbestosis. That release ran in favor of Celotex Corporation (Celotex) and "its successors and predecessors in interest, heirs, and assigns." Rapid argued that it was a predecessor to Celotex and entitled to the protection afforded by the release. Josephene maintained that Rapid was a stranger to the release and received no benefit from it. The trial court accepted Rapid's position and granted the motion. This appeal resulted.

Josephene presents two arguments on appeal: that summary judgment should not have been granted because she did not intend, in 1990, to release any claims against Rapid, and secondly, that summary judgment should not have been granted because Rapid does not fit within the scope of the release.

It is necessary to set forth in some detail the corporate transactions which are at the bottom of the parties' dispute. They do not disagree about the transactions themselves, which are, for the most part, a matter of corporate record. Rather, they disagree about the significance of those transactions in terms of this case.

The history begins with Philip Carey Manufacturing Corporation ("Old Carey"), incorporated in Ohio in 1888. For nearly eighty years, "Old Carey" was engaged in the mining of asbestos and the manufacture and sale of asbestos-related products. By a plan of merger dated December 28, 1966 and effective June 1, 1967, "Old Carey" merged with and into Glen Alden Corporation (Glen Alden) and Glen Alden, the surviving corporation, assumed all the liabilities of "Old Carey." Prior to the effective date of the merger, Glen Alden created a new corporation, a wholly-owned subsidiary, which became known as Philip Carey Manufacturing Corporation and later, Philip Carey Corporation ("New Carey"). When "Old Carey's" merger with Glen Alden was effective, Glen Alden immediately transferred to "New Carey" all the assets and liabilities it had received from "Old Carey." "New Carey," a wholly- owned subsidiary of Glen Alden, carried on the asbestos-related business of "Old Carey."

Several years later, in 1970, "New Carey" merged with Briggs Manufacturing Company (Briggs); Briggs, the surviving corporation, later changed its name to Panacon Corporation (Panacon) but remained a subsidiary of Glen Alden. In April 1972, Glen Alden sold all of its interests in Panacon to Celotex and in June 1972, Celotex merged Panacon into itself. As a result of the Panacon/Celotex merger, Celotex assumed all the liabilities of "Old Carey" that had been transferred to "New Carey" by Glen Alden in 1967.

Following the April 1972 sale to Celotex, Glen Alden had no further interest in "New Carey." Several months later, in October 1972, Glen Alden merged with an Ohio corporation named Rapid-American Corporation. Glen Alden was the surviving corporation but, concurrent with the merger, it changed its name to Rapid-American Corporation. The defendant to this action is a Delaware corporation and a successor to the survivor of the 1972 merger. We conclude by noting that this corporate history has been referred to in other New Jersey litigation. Brotherton v. Celotex Corp. 202 N.J. Super. 148 (Law Div. 1985).

Josephene's claims in this matter arise from the potential liabilities of "Old Carey." Josephene and Jesse lived in Millington, New Jersey, home to an asbestos-shingle plant at which Jesse worked from 1936 through 1939. They maintained that Jesse continued to be exposed to asbestos on a regular and continuous basis even after leaving that employment, both because of the manner in which scrap from the plant was utilized throughout the town and because of his ordinary day-to-day contact with people who were employed at the plant.

In 1986, Jesse was diagnosed with asbestosis and in 1987, together with fourteen other plaintiffs, Jesse and Josephene filed suit for damages; they joined nine named defendants in that lawsuit, including Celotex. Eventually, in 1990, Jesse and Josephene settled their claim for $65,000. A portion of the funds were contributed by Celotex and as part of that settlement, they executed the release in question here. Under the terms of that release, they specifically covenant[ed] and agree[d] forever to refrain from bringing any suit or proceeding at law or in equity against Releasee [Celotex], its successors and predecessors in interest, heirs, and assigns, arising from any and all claims that Releasor ever had, now has or may develop in the future as a result of any claimed injuries or damages resulting from alleged exposure to asbestos fiber or products containing asbestos or dust therefrom . . . .

Shortly after that settlement and release, Jesse was diagnosed with lung cancer. Josephene instituted this ...

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