Case Title: Nicolet, Inc. v. Nutt

Citation: 525 A.2d 146

Docket Number: 

State: delaware

Court: Delaware Supreme Court

Date: 1987-04-30T00:00:00Z

Document:
525 A.2d 146 (1987)
NICOLET, INC., Defendant Below, Appellant,
v.
Earl R. NUTT, et al., Plaintiffs Below, Appellees.

Supreme Court of Delaware.
Submitted: September 30, 1986.
Decided: April 28, 1987.
Revised: April 30, 1987.
Jeffrey M. Austin (argued) and Howard M. Berg, Howard M. Berg & Associates, P.A., Wilmington, for appellant.
Thomas C. Crumplar (argued), Mary Ann Matuszewski, Robert Jacobs and Douglas B. Canfield, Jacobs & Crumplar, P.A., Wilmington, for appellees.
Before CHRISTIE, C.J., HORSEY and MOORE, JJ.
*147 MOORE, Justice.
Plaintiffs[1] have sued various asbestos manufacturers seeking damages for injuries caused by exposure to asbestos at the E.I. DuPont de Nemours & Co., Inc., plant located in Newport, Delaware. The appellant, Nicolet, Inc., is the only defendant involved in this interlocutory appeal. Plaintiffs allege that Nicolet participated in an industrywide conspiracy with other asbestos manufacturers to intentionally misrepresent and suppress information concerning the health hazards of asbestos and thus is liable for the asbestos-related injuries sustained by the various plaintiffs.[2]
The sole issue here, and a matter of first impression, is whether a cause of action exists against a party whose asbestos products did not cause the purported injury, but who allegedly conspired with other asbestos manufacturers to actively suppress and intentionally misrepresent medical evidence warning of the health hazards of asbestos. The Superior Court denied Nicolet's motion for summary judgment on this point, and recognized such a cause of action. See In re Asbestos Litigation, Del.Super., 509 A.2d 1116 (1986). We affirm that ruling. Thus, if competent medical evidence as to the dangers of asbestos was intentionally misrepresented and suppressed in order to cause plaintiffs to remain ignorant thereof, coupled with proof that such suppression caused injury to a plaintiff, the alleged tort is established. Therefore, we conclude that under the well-settled law of civil conspiracy, Nicolet may be jointly and severally liable for damages caused by the acts of co-conspirators if such acts were committed in furtherance of the scheme.
The issue before us arises from plaintiffs' allegations that the defendants, including Nicolet, "knowingly and willfully conspired and agreed among themselves" to:
Nicolet moved for summary judgment, (1) alleging that plaintiffs could not show the required nexus between it and the injury-causing asbestos products, and (2) on the conspiracy claim for plaintiffs' failure to state a cause of action. The Superior Court granted partial summary judgment *148 in favor of Nicolet on the product nexus issue, but denied the motion as to the conspiracy count. The only issue on appeal is whether denial of summary judgment on the conspiracy claim was erroneous.
In examining the plaintiffs' allegations, the trial court summarized them as follows:
While the trial court's published opinion states that Nicolet did not dispute the fact that the members of QAMA and ATI intentionally suppressed information on the dangers of working with asbestos from the 1930's up to and including the 1970's, we have learned that the trial judge orally acknowledged on a motion for reargument that there was such a dispute. In re Asbestos Litigation, Del.Super., 509 A.2d 1116, 1120-21 (1986). This latter circumstance was not called to our attention in the briefs, but it underscores a disputed material fact upon which summary judgment was properly denied.
However, the trial court correctly noted that:
Id. at 1120-21.
There are several items of evidence supporting the plaintiffs' claims and giving rise to triable issues of fact. A letter from M.Q. Scowcroft of Raybestos-Manhattan, sent to Johns-Manville, copying members of ATI's Board of Governors, dated May 28, 1969, stated in part:
On May 26, 1969, the president of Nicolet responded to a Navy inquiry about asbestos dangers with the following letter:
The trial judge noted the following excerpts from a learned treatise by Barry I. Castleman, in considering the allegations that QAMA, ATI and Nicolet actively suppressed relevant medical evidence:
B. Castleman, Asbestos: Medical and Legal Aspects 31, 102-03 (1984).
When viewing all of this evidence in the light most favorable to the non-moving party, for summary judgment purposes, the trial court concluded that the record contained some evidence from which a jury could reasonably find that the alleged conspiracy existed.
To establish a prima facie case of intentional misrepresentation (fraudulent concealment), the following elements must be proven:
See Stephenson v. Capano Development, Inc., Del.Supr., 462 A.2d 1069, 1074 (1983). Generally, there is no duty to disclose a material fact or opinion, unless the defendant had a duty to speak. However, where one actively conceals a material fact, such person is liable for damages caused by such conduct.
In Stephenson, this Court outlined the different theories upon which a tort action for fraud may be based: "... [F]raud does not consist merely of overt misrepresentations. It may also occur through deliberate concealment of material facts, or by silence in the face of a duty to speak ..." Id. at 1074 (emphasis added). Further, one who actively and fraudulently conceals information is liable for the physical harm caused by such conduct. Thus, it has also been said that:
Gibbons v. Brandt, 170 F.2d 385, 391 (7th Cir.1948), cert. denied, 336 U.S. 910, 69 S. Ct. 511, 93 L. Ed. 1074, reh'g denied, 336 U.S. 929, 69 S. Ct. 643, 93 L. Ed. 1090 (1949).
Here, plaintiffs claim that the conspiracy, which allegedly included Nicolet, caused "to be positively asserted to plaintiffs in a manner not warranted by the information possessed by said defendants, that which was and is not true ... that it was safe for plaintiffs to work in close proximity to such [asbestos] materials" and that the conspiracy suppressed "medical and scientific data and other knowledge, causing plaintiffs to be and remain ignorant thereof." The complaint clearly alleges scienter in that the participants "knowingly and willfully conspired" in the scheme. Finally, the complaint alleges an intent by the alleged conspirators to induce plaintiffs' reliance on false or incomplete material facts. In our opinion these allegations are sufficient to state a tort claim based on a theory of fraudulent concealment.
The complaint clearly charges Nicolet with membership in the conspiracy, and if supported by a preponderance of the evidence at trial, Delaware law imposing liability for civil conspiracy is well settled. Plaintiffs must prove:
McLaughlin v. Copeland, 455 F. Supp. 749, 752 (D.Del.1978), aff'd, 595 F.2d 1213 (3d Cir.1979).
Under Delaware law, a conspirator is jointly and severally liable for the acts of co-conspirators committed in furtherance of the conspiracy. Laventhol, Krekstein, Horwath & Horwath v. Tuckman, Del. Supr., 372 A.2d 168, 170 (1976). Thus, Nicolet is subject to liability if plaintiffs establish that: (1) Nicolet was a member of a conspiracy consisting of asbestos manufacturers; (2) a member of the conspiracy, acting in furtherance of the conspiracy, actively suppressed data on the harmful effects of asbestos with the intent to hide such information from plaintiffs in order to induce them to continue their exposure (i.e., committed the tort of intentional misrepresentation); and, (3) plaintiffs were injured as a result of the unlawful acts of Nicolet's co-conspirator(s).
Nicolet contends that there is no independent tort here to support conspiracy liability. We disagree. The independent tort supporting this conspiracy is intentional misrepresentation. Nicolet errs in its legal analysis of the issues. Nicolet argues that it had no duty to warn the customers of other asbestos manufacturers regarding the hazards of exposure to asbestos. That is a correct statement of the law, but it is irrelevant here. We distinguish between circumstances where a party fails to speak, and the allegations here, that a party actively suppressed and concealed material information. In the former situation, there is no duty to speak absent a fiduciary or contractual relationship. In the latter, liability attaches as a result of the active misconduct of intentionally suppressing material information. Should plaintiffs establish that Nicolet was a member of a conspiracy which actively suppressed and concealed material facts, with the intent to induce plaintiffs' continued exposure to asbestos, Nicolet would be jointly and severally liable with its co-conspirators for resulting damages.[3]
As noted, the only issue on this interlocutory appeal is the existence of a cause of action for intentional misrepresentation absent a contractual or fiduciary relationship between the plaintiffs and the defendant. We do not consider the quantum of proof at trial necessary to sustain the conspiracy claim against Nicolet. That issue was not briefed by the parties and we do not address it.[4]
For the foregoing reasons, the Superior Court's order denying Nicolet's motion for summary judgment on the conspiracy issue is
AFFIRMED.
[1]  The eleven plaintiffs in this action are: Earl and Gladys Nutt, Richard and Betty Taylor, Horace and Charlotte Taylor, Oscar and Cleta Hardy, the Estate of George Ward (represented by decedent's wife, Louise), Louise Ward, individually, and Edward Perkins.
[2]  This is one of over 100 such lawsuits currently pending in Delaware courts. The different actions all allege that the defendants participated in an industrywide conspiracy to suppress information concerning the health hazards of asbestos.
[3]  Nicolet cites Burnette v. Nicolet, Inc., No. 84-2063 (4th Cir. July 25, 1986) (Phillips, J.) for the proposition that a cause of action does not exist for fraudulent concealment absent a contractual or fiduciary duty. Burdette, slip. op. at 6. We decline to adopt the limitations imposed under the Fourth Circuit's interpretation of North Carolina law. We believe that the more reasoned approach is to recognize a cause of action for fraudulent concealment wherever plaintiff can establish active, rather than passive, concealment. In our opinion there is active concealment where members of an association participate in acts found to constitute the tort of fraudulent concealment. See Marshall v. Celotex, Corp., 652 F. Supp. 1581 (E.D.Mich.1987) ("if manufacturers cooperate to conceal product risk, and if the concealed risk subsequently causes injury, justice demands a remedy").
[4]  Nicolet's reply brief clearly states that they are not appealing this question:

Obviously, the lower court's rulings which address the issue of whether the Nutt plaintiffs have proffered the minimum amount of evidence necessary to pursue a conspiracy claim against Nicolet is beyond the scope of this appeal.