J-A28042-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JACQUELINE S. WAGNER & THOMAS 

WAGNER,

IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellants

v.

STANDARD STEEL, LCC,

Appellee No. 850 EDA 2016

Appeal from the Order Entered February 18, 2016

in the Court of Common Pleas of Philadelphia County

Civil Division at No.: 140703015

BEFORE: PANELLA, J., SHOGAN, J., and PLATT, J.*

MEMORANDUM BY PLATT, J.: FILED JANUARY 26, 2017

Appellants, Jacqueline S. and Thomas Wagner, appeal from the order 

of February 18, 2016, which granted the motion of Appellee, Standard Steel, 

LCC, for summary judgment in this tort action arising out of Appellant Mrs. 

Wagner’s alleged exposure to asbestos. On appeal, Appellants claim that 

the trial court erred in finding that a bankruptcy court order acted as a bar 

to the instant action and in finding that Appellee did not owe a duty of care 

to Appellant Mrs. Wagner. For the reasons discussed below, we affirm.

____________________________________________

* Retired Senior Judge assigned to the Superior Court.
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We take the underlying facts and procedural history in this matter 

from the trial court’s April 20, 2016 opinion and our independent review of 

the certified record.

[Appellants] commenced this suit against [Appellee] by 

way of [c]omplaint on July 2[5], 2014, alleging [Appellant] 

Jacqueline Wagner was injured through exposure to asbestos in 

her household from fibers brought home on the asbestoscontaminated clothing of her husband, [Appellant] Thomas 

Wagner, from 1970 to 1972. During this [ ] period, [Appellant] 

Mr. Wagner worked as a laborer (material handler) and as a 

crane operator at a wheel and axle manufacturing facility located 

in Burnham, Pennsylvania (“the Burnham Facility”). In 1989, 

Freedom Forge Corporation (“Freedom Forge”) acquired the 

Burnham facility by means of a leveraged buyout. [Appellee] is 

the current owner and operator of the Burnham Facility, which it 

purchased from Freedom Forge in 2002 through a bankruptcy 

court asset auction. [Appellants] contend [Appellee] is liable as 

a successor-in-interest to Freedom Forge for [Appellant] Mrs. 

Wagner’s alleged secondary or “take-home” exposure to 

asbestos.[a] More specifically, [Appellants’ c]omplaint asserts 

[Appellee] “failed to exercise reasonable care to protect 

[Appellant] Mrs. Wagner and others similarly situated from the 

hazardous, dangerous and harmful conditions that existed on its 

property.” ([Appellants’] Compl., at ¶ 13.)[b] [Appellant] Mrs. 

Wagner was diagnosed with malignant mesothelioma in 

September of 2013.[c] Her deposition was taken in connection 

with the instant matter on August 14, 2014. In addition, 

[Appellant] Mr. Wagner was deposed on January 28, 2015.

[a] Following the lead of the Third Circuit Court of 

Appeals for the United States in In re Trans World 

Airlines, Inc., 322 F.3d 283, 289 (3rd Cir. 2003), 

[the trial court] refrains from speculating as to 

whether there is a basis for such liability on the 

present record. See TWA, [supra] at [288 n. 4] 

(“Here we decline to speculate as to whether there is 

a basis for successor liability and, instead, assume 

for purposes of our analysis that but for the [s]ale 

[o]rder, [A]ppellants could have asserted viable 

successor liability claims against American.”).
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[b] This is not a “typical” asbestos appeal. In its 

motion papers, [Appellee] does not dispute that 

[Appellant] Thomas Wagner was regularly, 

frequently, and proximately exposed to asbestos at 

the Burnham facility. By the same token, [Appellee] 

does not appear to dispute that [Appellant] 

Jacqueline Wagner was exposed to and laundered 

her husband’s asbestos-laden work clothing for a 

period of two years.

[c] Mesothelioma is a rare form of cancer affecting 

“the mesothelial tissue surrounding the lung,” and 

few people develop the disease save for those who 

have been exposed to asbestos. Sporio v. 

W.C.A.B., 717 A.2d 525, 527 (Pa. 1998). Moreover, 

the disease has been medically linked to exposure to 

asbestos or asbestine products. Gutteridge v. A.P. 

Green Services, Inc., 804 A.2d 643, 652 (Pa. 

Super. 2002)[, appeal denied, 829 A.2d 1158 (Pa. 

2003)].

On December 15, 2015, [Appellee] filed two (2) separate 

[m]otions for [s]ummary [j]udgment. [Appellants] filed 

[a]nswers to [Appellee’s] [m]otions for [s]ummary [j]udgment 

on January 8, 2016. [Appellee] filed [r]eplies to [Appellants’] 

[a]nswers on January 15, 2016. [Appellants] filed [s]ur-[r]eplies 

to [Appellee’s] [r]eplies on January 21, 2016. Subsequently, the 

[trial c]ourt held oral argument on both [m]otions for [s]ummary 

[j]udgment on February 16, 2016. Following oral argument, the 

[trial c]ourt granted [Appellee’s] [m]otions for [s]ummary 

[j]udgment on February 18, 2016.[d] This appeal followed.[1]

[d] The [trial c]ourt agrees with [Appellee] that the 

June 28, 2002 Order of the United States Bankruptcy 

Court for the District of Delaware effectively 

extinguished [Appellants’] successor tort claims. 

That issue disposes of the case. As such, the [trial 

____________________________________________

1 The trial court did not order Appellants to file a concise statement of errors 

complained of on appeal. See Pa.R.A.P. 1925(b). The trial court filed an 

opinion on April 20, 2016. See Pa.R.A.P. 1925(a).
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c]ourt’s [o]pinion will not address the viability of 

Appellee’s other argument that a Pennsylvania

premises owner does not owe a legal duty to warn a 

third-party of potential asbestos exposure not 

occurring on its premises.

Freedom Forge’s Bankruptcy Proceedings ([Appellants’] 

Exhibits D & E)

In 1989, Freedom Forge . . . acquired the Burnham Facility

through a leveraged buyout. Just as its predecessors had, 

Freedom Forge operated the plant under the “Standard Steel” 

name. In general terms, Freedom Forge was engaged in the 

business of “manufacturing and selling railway wheels, railway 

axles and other forged metal products from various facilities and 

locations in the United States.” ([Appellants’] Ex. E, ¶14, at 

8[])[.]

In 2001, Freedom Forge filed for protection under Chapter 

11 of the United States Bankruptcy Code (“The Code”) in the 

United States Bankruptcy Court for the District of Delaware (“the 

Bankruptcy Court”) under Case No. 01-02399-01. 

Consequently, in 2002, Freedom Forge marketed the sale of 

substantially all its assets to potential purchasers, including the 

Burnham Facility, free and clear of all liens, interests, 

encumbrances and claims of third parties (the “Freedom Forge 

[a]ssets”). On April 27, 2002, Standard Steel, Inc. (“SS Inc.”) 

was formed as a Delaware corporation by a group of investors 

interested in purchasing the Freedom Forge [a]ssets pursuant to 

the Code. The same pool of investors then formed [Appellee] as 

a Delaware limited liability company on June 12, 2002. 

On June 13, 2002, SS Inc. and Freedom Forge entered into 

an [a]sset [p]urchase [a]greement (the “[a]sset [p]urchase 

[a]greement”) through which Freedom Forge agreed to sell, and 

SS Inc. agreed to purchase, the Freedom Forge [a]ssets. On 

July 22, 2002, SS Inc. assigned and transferred to [Appellee] all 

of SS Inc.’s rights and interests in the purchase of the Freedom 

Forge Assets under the terms detailed in the [a]sset [p]urchase 

[a]greement. 

Delaware Bankruptcy Court Order ([Appellee’s] Exhibit B1)
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On June 28, 2002, the [b]ankruptcy [c]ourt entered an 

[o]rder approving the terms of the [a]sset [p]urchase 

[a]greement as well as the sale of Freedom Forge [a]ssets.2 The 

[b]ankruptcy [c]ourt sitting in Delaware made the following 

findings and determinations in regards to this transaction:

• The sale price was fair and reasonable, and 

the transaction was undertaken at arm’s length. 

• The sale agreement and the transactions 

contemplated pursuant to the agreement were 

negotiated by the parties without collusion and in 

____________________________________________

2

 The order provided in pertinent part:

20. All persons and entities (including, without limitation, any 

federal, state or local governmental agency, department or 

instrumentality) holding Liens or Claims against the Debtors’ 

assets or the [p]urchased [a]ssets hereby are barred on and 

after the Closing from asserting such Liens and Claims of any 

kind and nature against the Buyer, its successors or assigns, of 

the [p]urchased [a]ssets, except as provided in the [[a]sset 

[p]urchase [a]greement] and the [modified labor agreement].

21. To the greatest extent allowed by applicable law, the 

Buyer is not assuming nor shall it in any way whatsoever be 

liable or responsible, as successors or otherwise, for any 

liabilities, debt or obligations of the Debtors [Freedom Forge and 

the other bankruptcy debtors] (other than the [a]ssumed 

[l]iabilities as and to the extent expressly provided in the 

[[a]sset [p]urchase [a]greement]) or any liabilities, debts or 

obligations in any way whatsoever relating to or arising from the 

[p]urchased [a]ssets or the Debtor’s operations or use of the 

[p]urchased [a]ssets by virtue of the transfer or assignment of 

the [p]urchased [a]ssets, except as provided in the [[a]sset 

[p]urchase [a]greement] and the [term sheet describing the 

claims to be allowed and paid pursuant to the Freedom Forge 

[b]ankruptcy [c]ourt [o]rder.

(Order Pursuant to Section 1129 of the Bankruptcy Code, 6/28/02, at 14). 
J-A28042-16

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good faith within the meaning of Section 363(m) of 

the Code. 

• Save for the assumed liabilities expressly 

outlined in the sale agreement, the assets purchase 

was effectuated “free and clear” of all interests and 

claims. 

• “A sale of the [p]urchased [a]ssets other 

than one free and clear of all claims . . . or interests 

would (i) materially and adversely impact Debtors’ 

estates, and (ii) yield substantially less value for the 

. . ., estates with less certainty than the available 

alternatives.” 

• Sufficient due notice of the sale confirmation 

hearing was provided in accordance with the Code 

and all Bankruptcy Rules. 

(Trial Court Opinion, 4/20/16, at 1-4) (some record citations omitted).

On appeal, Appellants raise the following questions for our review:

[1] When the evidence is viewed in accordance with the 

applicable standards, did the trial court err in granting 

[Appellee’s] [m]otion for [s]ummary [j]udgment [b]ased on 

Bankruptcy Court [o]rder (Control No. 15122118) on the 

grounds that, as a matter of law, [Appellee’s] purchase of 

certain assets through a sale conducted pursuant to Section 363 

of the United States Bankruptcy Code (“the Bankruptcy Code”), 

11 U.S.C. § 363, acted as a complete bar to the claims of 

[Appellants] against [Appellee], even though, at the time of the 

sale, [Appellants] did not have any legal claims that could have 

been asserted against either the selling debtor or [Appellee], and 

[Appellee] is, as a matter of law, the successor-in-interest to the 

selling debtor?

[2] When the evidence is viewed in accordance with the 

applicable standards, did the trial court err in granting the 

[m]otion for [s]ummary [j]udgment of [Appellee] [r]e: [n]o 

[l]egal [b]asis for [a]ny [c]laim (Control No. 15121988) on the 

grounds that, as a matter of law, [Appellee] did not owe any 

duty of care to persons outside its premises (such as [Appellant] 
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Jacqueline Wagner) with respect to activities conducted by 

[Appellee] on its premises where (a) [Appellee] knew, or with 

the exercise of reasonable care should have known, that such 

activities involved an unreasonable risk of harm to persons 

outside its premises and (b) the risk of injury to persons such as 

[Appellant] Jacqueline Wagner as a result of such activities was 

foreseeable by [Appellee]?

(Appellants’ Brief, at 5-6) (emphasis and citations omitted).

On appeal, Appellants challenge the trial court’s grant of summary 

judgment in favor of Appellee. (See Appellant’s Brief, at 21-48). We briefly 

note our scope and standard of review. 

Our scope of review of an order granting summary 

judgment is plenary. We apply the same standard as the trial 

court, reviewing all the evidence of record to determine whether 

there exists a genuine issue of material fact. We view the record 

in the light most favorable to the non-moving party, and all 

doubts as to the existence of a genuine issue of material fact 

must be resolved against the moving party. Only where there is 

no genuine issue as to any material fact and it is clear that the 

moving party is entitled to a judgment as a matter of law will 

summary judgment be entered.

Motions for summary judgment necessarily and directly 

implicate the plaintiff’s proof of the elements of his cause of 

action. Thus, a record that supports summary judgment will 

either (1) show the material facts are undisputed or (2) contain 

insufficient evidence of facts to make out a prima facie cause of 

action or defense and, therefore, there is no issue to be 

submitted to the fact-finder. Upon appellate review, we are not 

bound by the trial court’s conclusions of law, but may reach our 

own conclusions. The appellate court may disturb the trial 

court’s order only upon an error of law or an abuse of discretion.

Dibish v. Ameriprise Financial, Inc., 134 A.3d 1079, 1084-85 (Pa. Super. 

2016), appeal denied, 141 A.3d 481 (Pa. 2016) (citation omitted).
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The dispositive issue in the instant matter is whether the trial court 

erred in finding that Appellants’ claims against Appellee are barred under the 

United States Bankruptcy Code and, specifically, the bankruptcy court’s June 

28, 2002 order. Appellants argue that,

the trial court erred as a matter of law in its analysis of the 

controlling authorities relating to the extinguishment of claims by 

way of a Section 363 bankruptcy sale where the claim that is 

sought to be barred had not ripened and did not exist, as a 

matter of bankruptcy law, at the time of the asset sale.

(Appellants’ Brief, at 22-23). Conversely, Appellee maintains that,

[Appellants’] tort action is barred by [Section] 363 of the 

Bankruptcy Code and the [B]ankruptcy [C]ourt order approving 

the “free and clear” sale of [Freedom Forge’s] assets. The 

parties agree that Third Circuit precedent controls, and the Third 

Circuit precedent has held that a bankruptcy court’s [Section] 

363 sale order cuts off third-party claims against an asset 

purchaser. [Appellants’] reliance on other Third Circuit 

precedent is unavailing because none of those cases examined 

the viability of a tort action against an asset purchaser following 

a bankruptcy court approved [Section] 363 asset sale.

(Appellee’s Brief, at 9). After a thorough review of the relevant cases from 

the United States Court of Appeals for the Third Circuit,3 we agree with the 

trial court that Section 363(f) of the Code bars Appellants’ claims. 

____________________________________________

3 We note “decisions of the federal district courts . . . are not binding on 

Pennsylvania courts, even when a federal question is involved. 

Nevertheless, these decisions are persuasive authority and helpful in our 

review of the issue presented.” Dietz v. Chase Home Finance, LLC, 41 

A.3d 882, 886 n.3 (Pa. Super. 2012); see also Kleban v. Nat. Union Fire 

Ins. Co. of Pittsburgh, 771 A.2d 39, 43 (Pa. Super. 2001) (“While we 

(Footnote Continued Next Page)
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Section 363(f) of the Code in relevant part provides: 

(f) The trustee may sell property under subsection (b) or (c) of 

this section free and clear of any interest in such property of an 

entity other than the estate, only if—

(1) applicable nonbankruptcy law permits sale of 

such property free and clear of such interest;

(2) such entity consents;

(3) such interest is a lien and the price at which 

such property is to be sold is greater than the 

aggregate value of all liens on such property;

(4) such interest is in bona fide dispute; or

(5) such entity could be compelled, in a legal or 

equitable proceeding, to accept a money satisfaction 

of such interest.

11 U.S.C. § 363(f). In determining that Section 363(f) bars Appellants’ 

claim, the trial court relied on the Third Circuit’s decision in TWA, supra. 

(See Trial Ct. Op., at 6-9). 

The trial court cogently summarized TWA, supra, as follows:

In TWA, the United States Court of Appeals for the Third 

Circuit carefully examined whether successor tort claims could 

properly be regarded as extinguished following a § 363(f) asset 

sale. [See] TWA, supra at 288-93. There, at the conclusion of 

a bankruptcy auction on February 28, 2001, American Airlines 

(“American”) tendered an offer to purchase substantially all of 

financially troubled Trans World Airlines, Inc.’s (“TWA”) assets 

for $742 million. [See] [i]d. at 286. TWA’s Board of Directors 

voted in favor of the sale. [See] id. But employment 

(Footnote Continued) _______________________

recognize that federal court decisions are not binding on this court, we are 

able to adopt their analysis as it appeals to our reason.”) (citation omitted). 
J-A28042-16

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discrimination claims were still pending against TWA before the 

EEOC at the time of the sale. [See] [i]d. In addition, TWA had 

previously settled a class action with roughly 2,000 of its flight 

attendants by offering them travel vouchers. [See] [i]d. at 285. 

Both the EEOC and the class action litigants lodged objections to 

the sale. [See id.] at 286-87. After holding an evidentiary 

hearing concerning those objections, the [b]ankruptcy [c]ourt 

approved the sale. [See] [i]d. at 287. The [b]ankruptcy 

[c]ourt’s [Section] 363 sale order expressly enjoined all persons 

from taking any action to recover against American as a 

successor-in-interest for TWA’s tortious conduct. [See] [i]d.

Both the EEOC and the class action litigants appealed, 

arguing that the [b]ankruptcy [c]ourt sale order improperly 

extinguished their claims. [See] [i]d. at 287-88. More 

particularly, the EEOC and the class action litigants argued 

before the Third Circuit that the phrase “interests in property” as 

used in § 363(f) of the Code has a narrow or limited meaning. 

[See] [i]d. According to the appellants, such interests refer only 

to “liens, mortgages, money judgments, writs of garnishment 

and attachment, and the like, and cannot encompass successor 

liability claims arising under federal antidiscrimination statutes 

and judicial decrees implementing those statutes.” [Id.] at 288. 

The airlines, by contrast, maintained that, “while Congress did 

not expressly define ‘interest in property,’ the phrase should 

be broadly read to authorize a bankruptcy court to bar any 

interest that could potentially travel with the property being sold, 

even if the asserted interest is unsecured.” Id. (emphasis 

added). The airlines’ argument ultimately prevailed. [See] [i]d.

at 288-93[.]

The Third Circuit in TWA determined American could not 

be held liable for the undischarged employment discrimination 

claims of former TWA employers or for the travel vouchers 

awarded to TWA’s flight attendants. [See] [i]d. at 293. Its 

holding was based on the fact that § 363(f) expressly authorizes 

the sale of a bankruptcy estate’s assets free and clear of “any 

interest” whatever in the property, as opposed to merely “in 

rem” interests or liens. The TWA court noted that, if Congress 

intended to limit the reach of Section 363(f) to monetary claims, 

security interests and similar obligations, it could have easily 

selected more restrictive terminology: “Since ‘lien’ is a defined 

term under the Bankruptcy Code, it stands to reason that 
J-A28042-16

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Congress would have used the term ‘lien’ instead of ‘interest,’ 

had it intended to restrict the scope of § 363(f) to liens.” [Id.] 

at 290 (citations omitted). The TWA court further reasoned that 

the claims at issue qualify as “interests in property within the 

meaning of section 363(f) in the sense that they arise from the 

property being sold.” Id. It elaborated that: “[T]he assets of 

the debtor . . . gave rise to the claims. Had TWA not invested in 

airline assets, which required the employment of the EEOC 

claimants, those successor liability claims would have not have 

arisen.” Id. Accordingly, the TWA court concluded that the 

discrimination and voucher claims were extinguished by virtue of 

the assets sale. [See] [i]d. at 293.[e]

[e] In addition, the TWA court found that, even 

assuming these claims did not qualify as “interests in 

property,” the [b]ankruptcy [c]ourt’s order would not 

be disturbed because “the priority scheme of the . . . 

Code supports the transfer of TWA’s assets free and 

clear of the claims.” [Id.] at 291. It explained that: 

“[V]arious classes of creditors [are] . . . entitled to 

satisfaction before general unsecured creditors may 

access the pool of available assets.” Id. The EEOC 

and class action claimants would be treated or 

regarded as general unsecured creditors. [See] [i]d. 

By virtue of their low priority in the context of a 

bankruptcy, the TWA court concluded that “[t]o 

allow the claimants to assert successor liability 

claims against American while limiting other 

[secured] creditors’ recourse to the proceeds of the 

asset sales would be inconsistent with the . . . Code’s 

priority scheme.” Id. at 292.

(Trial Ct. Op., at 6-7).

If one examines the facts in the instant matter, there is little to 

distinguish this case from TWA.

4

 Appellants’ claim arose out Freedom 

____________________________________________

4 Appellants attempt to distinguish TWA by asserting that it only deals with 

claims that were present at the time of the asset sale, while the instant 

(Footnote Continued Next Page)
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Forge’s allegedly negligent conduct in the early 1970s. In 2002, prior to the 

initiation of the instant action, Appellee purchased almost all of Freedom 

Forge’s assets through a Section 363 asset purchase agreement. The 

bankruptcy court approved the sale and specifically found that Appellee: 

paid a reasonable price in an arm’s length transaction; the sale and 

agreement were negotiated without collusion and in good faith; the sale was 

free and clear of all interests and claims; to do otherwise would impact the 

debtor’s estates and result in less value for the estate; and there was 

sufficient notice of the sale. (See Order Pursuant to Section 1129 of the 

Bankruptcy Code, 6/28/02, at 2-3, 7, 12-14, 20-23, 27). 

Further, because all of the allegedly negligent conduct occurred at the 

Burnham site, Appellants’ tort action against Appellee “is connected to or 

arises from” the assets that Appellee purchased from Freedom Forge in 

2002. TWA, supra at 290. As the TWA court reasoned, if Freedom Forge 

had declined to invest in factories which employed workers such as 

Appellant, Thomas Wagner, and if Freedom Forge had not used asbestos in 

(Footnote Continued) _______________________

matter deals with future claims. (See Appellants’ Brief, at 31-32). This is 

not correct. While the travel voucher settlement was a present claim, the 

EEOC claims had not been filed in court and it was unclear at the time of the 

TWA decision if any of the claims would be filed in court. See TWA, supra 

at 285-86. The TWA court particularly noted that because the EEOC claims 

were future claims, they were more likely than the travel voucher settlement 

to cause a diminution in the value of TWA’s assets because the buyer would 

be unable to estimate the “magnitude of the damages” in such claims. Id. 

at 292-93. 
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such sites, Appellants’ successor tort claims would not exist. See id. 

Section 363(f) of the Code allows the sale of such assets “free and clear” of 

interests like Appellants’ successor tort claims. See id. at 293. Thus, the 

trial court did not abuse its discretion or commit an error of law in finding 

that TWA bars Appellants’ successor tort claims.

Moreover, we find Appellants’ contention that the instant matter is 

controlled by the Third Circuit’s decisions in Matter of Frenville Co., Inc., 

744 F.2d 332 (3d Cir. 1984), cert. denied, 469 U.S. 1160 (1985), and the 

subsequent cases interpreting it, In re: Grossman’s Inc., 607 F.3d 114 (3d 

Cir. 2010) (en banc), and Wright v. Owens Corning, 679 F.3d 101 (3d Cir. 

2012), cert. denied, 133 S.Ct. 1239 (2013), entirely misplaced. (See 

Appellants’ Brief, at 25-33). As discussed by both the trial court in its 

opinion (see Trial Ct. Op., at 10) and by Appellee in its brief (see Appellee’s 

Brief, at 15-19), the Frenville line of cases concern an entirely separate and 

distinct legal concept, the discharge of legal claims against a debtor, not 

successor liability following an asset purchase sale.

In Frenville, the creditors of the Frenville Company filed an 

involuntary bankruptcy petition against it. Frenville, supra at 333. 

Avellino and Bienes (A & B), was a certified public accounting firm, which 

had prepared certified financial statements for Frenville. See id. One year 

after the filing of the bankruptcy petition, two banks filed suit against A & B, 

claiming that the certified financial statements it prepared on behalf of 
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Frenville were fraudulent. See id. A & B sought relief from the automatic 

stay in order to bring a third-party complaint against Frenville. See id. 

In concluding that the automatic stay did not bar A & B’s complaint, 

the Third Circuit engaged in a detailed legal analysis of the Section 362(a), 

the automatic stay provision of the Code, as well as Congress’ intent in 

enacting it, and the social policy concerns underlying it. See id. at 334-35. 

Ultimately, the Court concluded that only “proceedings that could have been 

commenced or claims that arose before the filing of the bankruptcy petitions 

are automatically stayed.” Id. at 335. However, the Court concluded that 

there was no claim until there was a “right to payment.” Id. at 335-36. The 

Third Circuit found that, when applying the appropriate state law, A & B 

could not have filed a third-party complaint against Frenville until after the 

service of the answer in the underlying action. See Id. at 337. Thus, the 

Court held that A & B’s claim had not arisen pre-petition, and, therefore, 

could not be discharged in a Chapter 7 bankruptcy. See id. at 338.

Some twenty-six years after the Frenville decision, an en banc panel 

of the Third Circuit specifically over-ruled it. See Grossman’s, supra at 

121. In so doing, the Court noted the almost universal disapproval of 

Frenville by other federal courts of appeal and bankruptcy courts. See id. 

at 120. Like the instant matter, Grossman’s concerned the alleged 

exposure to asbestos, in this case by a consumer who purchased home 

remodeling products from Grossman’s, a home improvement store. See id. 
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at 117. Approximately twenty years after the appellee purchased the 

products, Grossman’s filed for Chapter 11 bankruptcy. In its reorganization 

plan, it purported to discharge all claims which arose before the plan’s 

effective date. See id. Roughly ten years later, appellee manifested 

symptoms of mesothelioma, and filed suit against Grossman’s successor-ininterest. See id. Following Frenville, the bankruptcy court found the 

reorganization plan did not discharge the appellee’s claim because, while her 

exposure pre-dated the plan, her claim did not arise under state law until 

“the injury manifests itself.” Id. at 118 (citation omitted). 

The Third Circuit overruled Frenville, holding that its “accrual test . . . 

imposes too narrow an interpretation of a ‘claim’ under the Bankruptcy 

Code.” Id. at 121. Instead, the Court held that a “claim arises when an 

individual is exposed pre-petition to a product or other conduct giving rise to 

an injury, which underlies a right to payment under the Bankruptcy Code.” 

Id. at 125 (citation and internal quotation marks omitted). In so doing, the 

Court specifically discussed Congressional concerns that “future claims by 

presently unknown claimants could cripple the debtor’s reorganization.” 

(See id. at 126-27). However, the Third Circuit reiterated that before a 

court could decide that a pre-petition claim was barred by reorganization, 

the lower court must decide whether the claimant had adequate notice of 

the bankruptcy proceedings. See id. at 127-28.
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Approximately two years later, in Wright, supra, the Third Circuit 

again revisited the Frenville and Grossman’s cases. Noting that Frenville 

had been the law in the Third Circuit for a lengthy period, the Court found 

that bankruptcy notices sent out during the Frenville period were not 

adequate because, under Frenville, future plaintiffs did not have a claim at 

that time. See Wright, supra at 108. Thus, the Court concluded that the 

Frenville test should continue to apply to individuals who held claims based 

upon exposure to a product or conduct pre-petition if the reorganization plan 

was confirmed prior to the date of the decision in Grossman’s; and to 

individuals who held claims based upon conduct or exposure post-petition 

but pre-confirmation, if the reorganization plan was confirmed prior to the 

date that the Court decided Wright. See Wright, supra at 109.

Here, Appellants claim that because Freedom Forge’s liquidation plan 

was confirmed prior to the decisions in Grossman’s and Wright, “the 

Frenville test controls the issue of whether [Appellants’] claims are 

barred[.]” (Appellants’ Brief at 30; see also id. at 29-31). However, 

Appellants’ argument suffers from a fatal flaw. As discussed above, the 

Frenville line of cases arose out of debtor’s attempts to discharge claims, 

including future claims in bankruptcy. These decisions are wholly 

intertwined with those portions of the Code concerning discharge of claims 

and with the social policy issues that attempt to balance Congressional 
J-A28042-16

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concerns with allowing debtors to reorganize and make a fresh start, with 

the rights of future claimants to due process. 

Appellee is not a debtor and Appellants were not harmed by exposure 

to Appellee’s product or conduct. Appellants fail to cite to any case that has 

applied Frenville outside of the discharge context and fail to cite to any 

case that has even discussed Frenville as having any possible applicability 

to an asset purchase sale under Section 363(f). (See Appellants’ Brief, at 

25-35). Further, Appellants do not make any argument as to why we should 

take Frenville out of context and apply it to the instant situation. (See id.). 

Given this, and given the near-universal disapproval of Frenville, as 

discussed by the Third Circuit in Grossman’s, see Grossman’s, supra at 

120, we see no basis for importing the Frenville test into a case involving 

an asset purchase sale. Thus, the trial court did not abuse its discretion or 

commit an error of law in declining to apply the Frenville test to the instant 

matter.5 

____________________________________________

5 Appellants also contend, based on the Frenville line of cases, that they did 

not receive adequate notice of the bankruptcy proceedings. (See 

Appellants’ Brief, at 35-38). However, given that we have declined to apply 

Frenville to the instant matter and that, as the trial court correctly noted, 

(see Trial Ct. Op., at 9), the bankruptcy court found that there was 

adequate notice, and Pennsylvania courts must give federal judgment full 

faith and credit, we decline to address this issue. See Atiyeh v. Bear, 690 

A.2d 1245, 1249–50 (Pa. Super. 1997), appeal denied, 698 A.2d 63 (Pa. 

1997) (applying collateral estoppel doctrine to decision of bankruptcy courts, 

and precluding relitigation of same issue in this Court).
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Appellants also allege that the trial court erred finding that Appellee 

had no duty of care to Appellant Mrs. Wagner. (See Appellants’ Brief, at 38-

47). However, because our holding that the trial court was correct in finding 

that the asset purchase sale bars Appellants’ claims is dispositive, we need 

not address this issue.

For the reasons discussed above, we hold that the trial court neither 

abused its discretion nor made an error of law in granting summary 

judgment in this matter. See Dibish, supra at 1084-85. Accordingly, we 

affirm.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 1/26/2017
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