Case Notes

Settlements with Bankrupt Manufacturers Should
Reduce Asbestos Verdict

A Philadelphia judge has ruled that bankrupt manufacturers of asbestos products do not have to be listed on trial verdict sheets, but settlements with those manufacturers can reduce plaintiffs' judgments.

Defendant Honeywell International Inc., formerly known as Allied Signal Inc. and the successor to the Bendex Corp., argued in an asbestos case that other bankrupt manufacturers potentially liable for a plaintiff's injury also should have been listed on the verdict sheet, according a recent opinion from Philadelphia Common Pleas Judge Stephen E. Levin.

While the bankruptcy manufacturers could not be entered on the verdict sheet, and they cannot be included in a judgment as joint tortfeasors, Levin said a plaintiff's verdict could be reduced on a pro tanto, or partial, basis to reflect settlements with bankrupt asbestos manufacturers. Such settlements have to be disclosed because of an order by Judge Sandra Mazer Moss, the coordinating judge of Philadelphia's Complex Litigation Center.

In an opinion setting out his reasoning, Levin said that individual estates of asbestos plaintiffs can recover both from civil lawsuits and from bankruptcy trust administrative procedure. Asbestos-related bankruptcy trusts have seen strong growth ' “by some estimates to $30 billion,” Levin said. “This has led to the potential of double recovery, as there has been only haphazard reporting, if at all by plaintiffs of funds received by bankruptcy trusts, despite recoveries also received at trial,” he said. “Since juries as fact-finders determine asbestos-related damages in bifurcated trials in the Complex Litigation Center of Philadelphia County, the damages to a plaintiff can be determined as a sum certain. But since bankrupt companies, unlike settling defendants, may not be placed on the verdict sheet, the total recovery available to many plaintiffs exceeds the damage amount set by the jury.”

Levin said, in his opinion in Reed v. Allied Signal Inc., that he was correct to mold that verdict to reflect funds received by three trusts for bankrupt manufacturers: Armstrong World Industries Inc. Asbestos Personal Injury Settlement Trust, United States Gypsum Asbestos Personal Injury Trust and NGC Bodily Injury Trust.

There are cross-appeals pending in state Superior Court for both the plaintiffs and the defendant. '
Amaris Elliott-Engel, The Legal Intelligencer

Settlements with Bankrupt Manufacturers Should
Reduce Asbestos Verdict

A Philadelphia judge has ruled that bankrupt manufacturers of asbestos products do not have to be listed on trial verdict sheets, but settlements with those manufacturers can reduce plaintiffs' judgments.

Defendant Honeywell International Inc., formerly known as Allied Signal Inc. and the successor to the Bendex Corp., argued in an asbestos case that other bankrupt manufacturers potentially liable for a plaintiff's injury also should have been listed on the verdict sheet, according a recent opinion from Philadelphia Common Pleas Judge Stephen E. Levin.

While the bankruptcy manufacturers could not be entered on the verdict sheet, and they cannot be included in a judgment as joint tortfeasors, Levin said a plaintiff's verdict could be reduced on a pro tanto, or partial, basis to reflect settlements with bankrupt asbestos manufacturers. Such settlements have to be disclosed because of an order by Judge Sandra Mazer Moss, the coordinating judge of Philadelphia's Complex Litigation Center.

In an opinion setting out his reasoning, Levin said that individual estates of asbestos plaintiffs can recover both from civil lawsuits and from bankruptcy trust administrative procedure. Asbestos-related bankruptcy trusts have seen strong growth ' “by some estimates to $30 billion,” Levin said. “This has led to the potential of double recovery, as there has been only haphazard reporting, if at all by plaintiffs of funds received by bankruptcy trusts, despite recoveries also received at trial,” he said. “Since juries as fact-finders determine asbestos-related damages in bifurcated trials in the Complex Litigation Center of Philadelphia County, the damages to a plaintiff can be determined as a sum certain. But since bankrupt companies, unlike settling defendants, may not be placed on the verdict sheet, the total recovery available to many plaintiffs exceeds the damage amount set by the jury.”

Levin said, in his opinion in Reed v. Allied Signal Inc., that he was correct to mold that verdict to reflect funds received by three trusts for bankrupt manufacturers: Armstrong World Industries Inc. Asbestos Personal Injury Settlement Trust, United States Gypsum Asbestos Personal Injury Trust and NGC Bodily Injury Trust.

There are cross-appeals pending in state Superior Court for both the plaintiffs and the defendant. '
Amaris Elliott-Engel, The Legal Intelligencer