Court Opinion

ID: 4588220
Source: CourtListenerOpinion
Date Created: 2020-11-20 00:01:57.484585+00
Date Added: 2024-06-11T13:50:45.550541
License: Public Domain

Filed 11/19/20 Mata v. Liberty Utilities (Park Water) Corp. CA2/3
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                          SECOND APPELLATE DISTRICT

                                        DIVISION THREE

 ALFRED MATA et al.,                                               B293479

           Plaintiffs and Appellants,                              (Los Angeles County
                                                                   Super. Ct.
           v.                                                      Nos. BC655564)

 LIBERTY UTILITIES (PARK
 WATER) CORP,

           Defendant and Appellant.

      APPEALS from a judgment of the Superior Court of Los
Angeles County, Michele E. Flurer, Judge. Affirmed.
      Weitz & Luxenberg, Benno Ashrafi and Josiah Parker for
Plaintiffs and Appellants.
      Greines, Martin, Stein & Richland, Robert A. Olson,
Geoffrey B. Kehlmann; Lewis Brisbois Bisgaard & Smith and
Jeffry A. Miller for Defendant and Appellant.
      Fred J. Hiestand for The Civil Justice Association of
California as Amicus Curiae on behalf of Defendant and
Appellant.
      In this negligence and loss-of-consortium action brought by
Alfred Mata and Leticia Mata1 (collectively plaintiffs) against
several defendants, a jury found that Alfred developed
mesothelioma from secondary or take-home exposure to asbestos
on the uniform that his father, Francisco Mata, wore as an
employee of Liberty Utilities (Park Water) Corp. (hereafter Park
Water). The jury found that Park Water was liable for a slight
majority of plaintiffs’ $6.3 million in damages and imposed
$5 million in punitive damages on that defendant. The trial court
granted Park Water’s motion for judgment notwithstanding the
verdict (JNOV) and vacated the punitive damages award.
Plaintiffs appeal from the ensuing modified judgment and Park
Water filed a protective appeal. We hold that plaintiffs failed to
adduce evidence from which the jury could find by clear and
convincing evidence that Park Water’s management acted with
malice as required by Civil Code section 3294.2 Accordingly, we
affirm the judgment.
                        BACKGROUND
I.    The parties
       Park Water was founded in 1936 and incorporated in 1937.
Headquartered in Downey, California, the company is a for-profit
utility, regulated by the Public Utilities Commission (PUC).
Park Water provides water to customers in cities in southern Los
Angeles County. In the 1970’s, it had about 90 to 100 employees.

      1We refer to members of the Mata family by their first
names for the sake of clarity; we intend no disrespect.
      2All further statutory references are to the Civil Code
unless otherwise indicated.

                                2
      Francisco was employed at Park Water from 1970 until
1989. During his tenure, he worked in the construction, service,
and gardening departments, where his duties involved installing
and repairing meters, hydrants, and pipes, and reading meters.
His job included cutting or milling the water pipes. When he cut
pipes, Francisco used a power saw that created a lot of visible
dust, which he inhaled, and which got on his clothing.
      Francisco’s son, Alfred, who was age 66 at the time of trial,
was diagnosed with mesothelioma in early 2017. He lived with
Francisco during Francisco’s entire tenure at Park Water.
II.   Water main installation and repair at Park Water
       In the 1970’s and 1980’s, Park Water used both asbestos
cement (A/C) pipes and nonasbestos pipes that were made of cast
iron, ductile iron, steel, and polyvinyl chloride. The A/C pipe
contained both chrysotile and the most toxic form, crocidolite,
asbestos. Mesothelioma can result from very little exposure to
crocidolite asbestos fibers.
       Water mains were installed and repaired by Park Water’s
construction and service departments where Francisco worked.
There were two ways to repair A/C pipe: sawing it and putting a
clamp on it. Park Water provided power saws and so-called snap
cutters to cut A/C pipe. Cutting pipes was not a daily occurrence
on job sites. There were approximately two to three leaks a year
on Park Water’s A/C pipe. The crew cut pipes about every other
day, although there would be days that the crew might cut them
three or four times. It took roughly one minute to cut the pipe
and the crew member cutting it would do so outside, alone, and
away from the pipe’s trench and other crew members. Repairing
existing pipe was not a dusty process because the water pipes
were already wet and muddy.

                                 3
       Dennis Brooks started at Park Water in 1972. He worked
in the construction and service departments and knew Francisco
in the 1980’s. According to Brooks, Francisco did not like to cut
pipe. Brooks never saw Francisco cut A/C pipe the entire time
Francisco worked at Park Water. Plaintiffs’ and Park Water’s
industrial hygiene experts agreed that during his work at Park
Water, “unless he had an odd day,” Francisco’s exposure to
asbestos would not have exceeded state or federal Occupational
Safety and Health Administration (OSHA) limits.
       Park Water provided laundry service, showers, and locker
rooms during Francisco’s tenure. The company neither
discouraged nor required use of these facilities, although it
charged employees to wash their uniforms until 1974.
       In the 1970’s, Park Water began using outside contractors
to fix pipes, and by 1985 or 1990 the contractors were the only
workers handling pipes. The company stopped installing A/C
pipe by 1985. At a meeting in 1986 or 1987 (the meeting), Park
Water’s management, Tom Snodgrass, Ted May, and the
company’s owner in the 1970’s and 1980’s, Sam Wheeler, told
employees to stop installing or touching previously installed A/C
pipe.
III.   Asbestos regulations
     In 1936, the year Park Water was created, the California
Industrial Accident Commission issued safety orders establishing
the maximum permissible toxic threshold for asbestos fibers.
Known as order 1910, it required in subdivision (c) that
employers provide “a change room, shower baths and lavatories,
having hot and cold running water, in every place of employment
where the lack of such facilities would constitute a health
hazard.”

                                4
      In 1972, two years after Francisco began working at Park
Water, the federal OSHA promulgated regulations addressing the
standards for all workplaces exposed to any kind of asbestos.
(37 Fed.Reg. 11318 (June 7, 1972).) Effective July 1, 1976, the
regulations established the permissible limits for exposure to
airborne concentrations of asbestos (29 C.F.R. § 1910.93a(b)
(1972)) and provided for regular monitoring and medical
examinations of all employees exposed to such limits (29 C.F.R.
§ 1910.93a(f) & (j) (1972)). Employers were required to maintain
their monitoring and medical examination records. (29 C.F.R.
§ 1910.93a(h) (1972).) The regulations also established methods
of compliance and work practices. Among other things,
employers were legally mandated to provide employees with
personal protective equipment, showers, changing rooms, lockers,
and laundry facilities. (29 C.F.R. § 1910.93a(d) (1972).) The
regulations required that all asbestos be wet when handled, the
so-called wet-down method for working with the substance.
(29 C.F.R. § 1910.93a(c) (1972).) Additionally, the regulations
directed employers to affix caution labels to products containing
asbestos, to post caution signs where concentrations of airborne
asbestos fibers exceeded the established exposure limits, and to
inform employees of the fact they were working with asbestos.
(29 C.F.R. § 1910.93a(g) (1972).)
      In 1977, the State Department of Public Health notified
employers who used asbestos that the Occupational Safety and
Health Standards Board had adopted regulations requiring
employers using cancer-causing substances, such as asbestos, to
submit written reports about their asbestos use and about any
release of potentially hazardous amounts of such substances
where employees could be exposed.

                               5
IV.   Manufacturers’ information
      Park Water purchased A/C pipes from Johns Mansville and
CertainTeed. A representative at CertainTeed confirmed that
the company started issuing booklets about safe work practices
for A/C water pipes in 1977, and first attached asbestos warnings
to the pipes themselves in 1979. However, there is no such
booklet in the Park Water files and no evidence that CertainTeed
sent the booklet to Park Water. Brooks did not remember seeing
cancer warning labels on A/C pipes.
      Johns Manville’s technical data sheet, exhibit 50, was
found in an historic Park Water job file. The technical data sheet
did not warn of the risks from cutting A/C pipe. Instead,
section 2.1, entitled “Installation” (capitalization omitted)
provided that all “pipe, couplings, fittings and rubber rings shall
be installed in accordance with contract plans and specifications
and the ‘[American Water Works Association] Standard for
Installation of Asbestos Cement Water Pipe.’ ” In turn, the
American Water Works Association (AWWA) standard, dated
1977, described the use of power-driven saws with abrasive discs
to dry cut or bevel A/C pipe as being a “non-recommended work
practice.” The AWWA standard explained that abrasive disc
cutters produced concentrations of airborne dust that exceeded
OSHA’s permissible levels. Park Water did not have the AWWA
standard, exhibit 53, in its files. Park Water was a member of
the AWWA at some point but there is no indication that anyone
at Park Water was a member of AWWA or read the AWWA
standard at any time that Francisco worked there.

                                 6
V.   Park Water’s asbestos-safety history
       Gregory S. Sorensen became president of Park Water in
2016 when the company was purchased by Liberty Utilities. He
testified, and Dennis Brooks agreed, that historically Park Water
and its owner Wheeler were safety conscious and would try to
stay as up to date as possible on state and federal safety
regulations applicable to the company’s workforce.
       As Park Water’s person most qualified to testify about the
company, Sorensen testified he did not see documents or hear
from employees indicating that Park Water warned its workers
in the 1970’s and 1980’s about the cancer risk of exposure to
asbestos. He saw no study done by the company to determine
whether there was an increased risk to employees of asbestos-
related disease. Park Water had no documents confirming that it
discussed with employees the best and safest work practices with
A/C pipe, although it was not the sort of documentation the
company would typically retain. The file contained no directive
from Park Water to its employees in the 1970’s or 1980’s
mandating that those who worked with A/C pipe shower at the
company’s facility before leaving work. Sorensen saw no
documentation that Park Water offered its laundry service
specifically for safety reasons.
       As a highly regulated public utility, Sorensen explained,
Park Water had no financial incentive to economize on safety
because the PUC sets Park Water’s rates and safety costs are
passed onto the ratepayers.
       Park Water held safety meetings every two weeks.
California OSHA conducted inspections of Park Water. There
was no record in the files indicating, and Francisco never heard,
that the company was ever cited for a California OSHA safety

                                7
violation, or ever received a worker’s compensation or other claim
from any former employee for illness as the result of exposure to
asbestos during the relevant period.
       Brooks could not recall seeing written instructions about
safety measures when handling A/C pipe, or being told to stop
using the power saws before 1985. Brooks did not recall seeing
instructions about how to cut the mains properly, or directives to
wear masks. Before 1980, Brooks never saw anyone at Park
Water use the wet-down method to abate the problem of
excessive dust during the cutting process. There was no hood or
exhaust device to collect dust coming off saws cutting asbestos in
the field, or any physical separation between those handling A/C
pipe and other employees. Between 1972 and 1985, Brooks
remembered seeing workers with handkerchiefs, but not masks,
covering their noses and mouths when sawing pipes. He did not
know whether that was by choice or on orders from management.
Brooks testified that the first time he recalled Park Water’s
management informing employees to use precautionary measures
when installing, repairing, handling, or cutting A/C pipe was at
the meeting in 1985 or 1986. Park Water told employees at the
meeting that they had to wear special equipment when handling
A/C pipe such as respirators and masks, and to use the wet-down
method to avoid making dust. That is when Brooks decided not
to touch A/C pipe and when the company told employees simply
not to handle A/C pipe at all.
VI.   The procedural background
      Plaintiffs’ complaint sought damages on theories of
negligence, strict liability, premises liability, loss of consortium,
and sought punitive damages against several defendants,
including Park Water. At the close of trial against Park Water

                                  8
only, the jury returned a verdict finding that Alfred was exposed
to asbestos that Francisco took home from work, and that Park
Water’s negligence was a substantial factor in causing Alfred’s
mesothelioma. The jury awarded plaintiffs $6,376,500 in
economic and noneconomic damages, for which amount it found
Park Water 54 percent responsible. It also found that an officer,
director, or managing agent of Park Water acted with malice.
After the punitive damages phase of the trial, the jury imposed
$5 million in punitive damages against Park Water.
       Park Water moved for JNOV and for new trial. The JNOV
motion was based on an asserted absence of evidence of the
willful, conscious disregard for safety that is required for malice,
or that any officer or managing agent knew of the danger and
consciously disregarded it, or later ratified an employee’s
malicious conduct. Park Water also argued that the amount of
punitive damages was excessive in light of the evidence of the
company’s financial condition, and that Public Utilities Code
section 2106 gave the trial court, not the jury, the authority to
determine whether punitive damages were warranted.
       The trial court granted the JNOV motion with respect to
the malice and authorization elements of punitive damages, and
the amount of the award.3 The court ruled that there was no
evidence from which the jury could have concluded by clear and
convincing proof that Park Water was aware of the probable

      3 Park Water’s motion for new trial mimicked its motion for
JNOV. After granting the JNOV with respect to the punitive
damages award, the trial court denied as moot the portion of the
new trial motion involving the punitive damages award. The
court then denied the balance of the new trial motion involving
issues other than punitive damages.

                                 9
dangerous consequences of its conduct and willfully failed to
avoid them.
      Plaintiffs timely appealed from the ensuing modified
judgment that eliminated the punitive damages award. Park
Water filed a protective appeal in the event we do not affirm the
JNOV.
                          DISCUSSION
I.    Standard of review of a JNOV
      We independently review an order granting JNOV. We
determine whether substantial evidence supports the verdict,
considering the evidence in the light most favorable to the party
obtaining it. (Cooper v. Takeda Pharmaceuticals America, Inc.
(2015) 239 Cal. App. 4th 555, 573.) We resolve conflicts in the
evidence, and we draw all reasonable inferences, against the
moving defendant. (Id. at pp. 572–573.) If “ ‘ “ ‘ “there is any
substantial evidence, or reasonable inferences to be drawn
therefrom, in support of the verdict, the motion should be
denied” ’ ” ’ ” (Fountain Valley Chateau Blanc Homeowner’s Assn.
v. Department of Veterans Affairs (1998) 67 Cal. App. 4th 743,
751.)
II.   Standard of proof
      Section 3294, subdivision (a) requires proof by clear and
convincing evidence. The clear and convincing standard
“demands a degree of certainty greater than that involved with
the preponderance standard, but less than what is required by
the standard of proof beyond a reasonable doubt. This
intermediate standard ‘requires a finding of high probability.’ ”
(Conservatorship of O.B. (2020) 9 Cal. 5th 989, 998, italics added.)
Clear and convincing means evidence that is “ ‘ “ ‘ “so clear as to

                                10
leave no substantial doubt” ’ ” ’ and ‘ “ ‘ “sufficiently strong to
command the unhesitating assent of every reasonable
mind.” ’ ” ’ ” (Butte Fire Cases (2018) 24 Cal. App. 5th 1150, 1158.)
      When “reviewing a finding that a fact has been proved by
clear and convincing evidence, the question before the appellate
court is whether the record as a whole contains substantial
evidence from which a reasonable fact finder could have found it
highly probable that the fact was true.” (Conservatorship of O.B.,
supra, 9 Cal.5th at pp. 995–996 & 1011.) JNOV is proper if no
reasonable jury could find plaintiffs’ evidence provided clear and
convincing proof of malice. (See Johnson & Johnson Talcum
Powder Cases (2019) 37 Cal. App. 5th 292, 332.)
III.   Section 3294
      Punitive damages serve the dual public purposes of
punishment and deterrence. (Stevens v. Owens–Corning
Fiberglas Corp. (1996) 49 Cal. App. 4th 1645, 1658; see § 3294,
subd. (a) [punitive damages awarded “for the sake of example and
by way of punishing the defendant”].) Such damages are
authorized “where it is proven by clear and convincing evidence
that the defendant has been guilty of oppression, fraud, or
malice.” (§ 3294, subd. (a).) Plaintiffs proceeded under the
malice prong.
      Malice, as defined by the punitive damages statute, is
“despicable conduct which is carried on by the defendant with a
willful and conscious disregard of the rights or safety of others.”
(§ 3294, subd. (c)(1), italics added.) “ ‘ “Despicable conduct” is
conduct that is “ ‘so vile, base, contemptible, miserable, wretched
or loathsome that it would be looked down upon and despised by
ordinary decent people.’ ” [Citation.] Such conduct has been
described as having the character of outrage frequently

                                11
associated with crime.’ ” (Johnson & Johnson Talcum Powder
Cases, supra, 37 Cal.App.5th at pp. 332–333.) “ ‘Conscious
disregard’ means ‘ “that the defendant was aware of the probable
dangerous consequences of his conduct, and that he willfully and
deliberately failed to avoid those consequences.” ’ [Citation.] Put
another way, the defendant must ‘have actual knowledge of the
risk of harm it is creating and, in the face of that knowledge, fail
to take steps it knows will reduce or eliminate the risk of harm.’ ”
(Butte Fire Cases, supra, 24 Cal.App.5th at p. 1159, italics
omitted.)
       Punitive damages are typically awarded for intentional
torts such as assault and battery, false imprisonment, intentional
infliction of emotional distress, defamation, nuisance
intentionally maintained, fraud, trespass, conversion, civil rights
violations, insurer’s breach of covenant of good faith, wrongful
termination and job discrimination, and products liability cases
(Butte Fire Cases, supra, 24 Cal.App.5th at p. 1161), i.e., cases
where the requisite intent to harm is present.
       Nonintentional conduct can fall within the definition of
malicious acts punishable by the imposition of punitive damages.
(Gawara v. United States Brass Corp. (1998) 63 Cal. App. 4th
1341, 1361.) But such conduct must be more than negligent,
grossly negligent, or even reckless. (Ibid.) To support a punitive
damage award, a nonintentional tort must involve a “conscious
disregard of the rights or safety of others.
[Citation.] . . . [Citation.] ‘ . . . There must be evidence that
defendant acted with knowledge of the probable dangerous
consequences to plaintiff’s interests and deliberately failed to
avoid these consequences.’ ” (Ibid.) Hence, when “there is no
evidence the defendant intended to harm the plaintiff, there must

                                12
be evidence of conduct that is both willful and despicable.”
(Johnson & Johnson Talcum Powder Cases, supra,
37 Cal.App.5th at p. 332.) As recently noted, “ ‘cases involving
unintentional torts are far fewer and the courts have had to
consider various factors in determining whether the defendant’s
conduct was despicable. Thus, punitive damage awards have
been reversed where the defendant’s conduct was merely in bad
faith and overzealous [citations], or the defendant took action to
protect or minimize the injury to the plaintiff.’ ” (Butte Fire
Cases, supra, 24 Cal.App.5th at p. 1161.)
       To impose punitive damages on a corporation, the statute
additionally requires that the requisite malice occur “among
corporate leaders: the ‘officer[s], director[s], or managing
agent[s].’ ( . . . § 3294, subd. (b).) This is the group whose
intentions guide corporate conduct. By so confining liability, the
statute avoids punishing the corporation for malice of low-level
employees which does not reflect the corporate ‘state of mind’ or
the intentions of corporate leaders. This assures that
punishment is imposed only if the corporation can . . . fairly be
viewed as guilty of the evil intent sought to be punished.” (Cruz
v. HomeBase (2000) 83 Cal. App. 4th 160, 167.) Managing agents
are “those corporate employees who exercise substantial
independent authority and judgment in their corporate
decisionmaking so that their decisions ultimately determine
corporate policy.” (White v. Ultramar, Inc. (1999) 21 Cal. 4th 563,
566.) Thus, plaintiffs seeking punitive damages
“must . . . present evidence that ‘permits a clear and convincing
inference that within the corporate hierarchy authorized persons
acted despicably in “willful and conscious disregard of the rights

                                13
or safety of others.” ’ ” (Butte Fire Cases, supra, 24 Cal.App.5th
at p. 1173.)
IV. The trial court properly granted JNOV on the issue of
malice.
      A. No evidence that Park Water’s management actually
         knew of the risk to the safety of its employees or their
         families
      Plaintiffs contend that the evidence is clear and convincing
that Park Water’s management was conscious of the danger to
workers from exposure to asbestos and did nothing to test for, or
to protect its employees from, that exposure. Plaintiffs reason
that Sorensen admitted that Wheeler, who owned the company in
the 1970’s and 1980’s, was “safety conscious” and tried to comply
with safety regulations. This corporate admission combined with
the existence of federal and state health and safety regulations
warning of the risk of cancer from employees’ exposure to
asbestos, lead to the reasonable inference that Wheeler knew
that his employees were being exposed to asbestos, plaintiffs
argue. Thus, plaintiffs assert that Park Water’s violation of
OSHA’s asbestos regulations—by, inter alia, failing to test and
monitor the air, to warn employees, or to report asbestos use to
OSHA—constituted a conscious disregard for the safety of
others.4

      4 Plaintiffs’
                  opening brief asserts that Park Water
“regularly employed work practices from 1970 until
approximately 1990, which generated dangerous amounts of
asbestos dust from the cutting of asbestos-containing cement pipe
with power saws.” However, plaintiffs’ record citations do not
support this assertion. Plaintiffs’ citations are to testimony about

                                 14
       In personal injury and product liability cases affirming
punitive damages awards, the malice finding, or the punitive
damages instruction, was supported by evidence that the
defendant had knowledge of a danger or potential danger, and
failed to take steps to assess and respond. Thus, the appellate
court in Pfeifer v. John Crane, Inc. (2013) 220 Cal. App. 4th 1270,
1300 to 1301, held that the defendant manufacturer of asbestos-
containing products acted with malice when it failed to warn
users of the dangers from handling its product. The defendant
knew that asbestos dust was harmful because it took action to
protect its own employees from the harm and issued a safety data
sheet. The defendant was also inferentially aware that its
products were likely to pose a danger to users. The defendant’s
retired vice president testified that the defendant’s management
knew that customers used methods on the defendant’s products
that created asbestos dust but never tested its product to
ascertain whether those methods generated concentrations of
fibers in excess of the regulatory limits and hence required
warning its customers. (Ibid.)
       In Hasson v. Ford Motor Co. (1982) 32 Cal. 3d 388, 402, a
former Ford engineer and manager testified that Ford knew of
the problem with the brakes on its Continental models because
Ford had received customer and dealer complaints. In the face of
this knowledge, Ford deliberately failed to adequately test to
define the nature of the problem, failed to install a fix, and failed
to warn its customers of the problems with its own products. The

the company’s failure to comply with the OSHA regulations.
Such evidence does not establish the level of asbestos dust at
Park Water or that such levels were dangerous.

                                 15
Ford witness opined that Ford consciously disregarded safety.
(Id. at pp. 402–403.)
       In West v. Johnson & Johnson Products, Inc. (1985)
174 Cal. App. 3d 831, 868 to 870, the evidence supported a
punitive damages instruction where the testimony was that the
defendant had received continuing customer complaints about
vaginal infection but inadequately tested its own product. As
adequate testing would have revealed an association between use
of its product and vaginal infection, there was substantial
evidence that the defendant had acted in conscious disregard of
the safety of others. (Id. at p. 869.)
       Here, viewing the evidence as favorably as possible to
plaintiffs and indulging in every conceivable inference in
plaintiffs’ favor, the record contains no evidence indicating that
Park Water’s management knew its employees were working
with asbestos such that managers trying to comply with safety
regulations would have been aware of the asbestos-related laws
and tested the air to establish whether their employees were in
danger. The record is devoid of testimony from anyone in
management in the 1970’s and 1980’s about what the corporation
knew. Sorensen’s connection with Park Water began decades
later. Neither Brooks nor Francisco testified about what
information decisionmakers had before 1985 or 1986, and no
evidence suggests an employee made a decision that Park Water
ratified. Park Water is in the business of supplying water; it
neither manufactures nor supplies asbestos products, which
would prompt the company to test its own equipment. Plaintiffs
argue CertainTeed and Johns Manville warned Park Water about
the presence of asbestos in their pipes. But there is no evidence
that a manager saw CertainTeed’s warnings and Brooks, who

                               16
worked on the pipes, did not recall seeing them. Johns Manville’s
technical data sheet did not warn of the risks from cutting A/C
pipe. It simply referred to the AWWA standard, which document
was not in the Park Water files. While at some point Park Water
was a member of the AWWA, there was no indication that any
decisionmaker read the AWWA standard, or was a member of
AWWA any time that Francisco worked at Park Water. Finally,
plaintiffs adduced no evidence of acts or conduct on the part of
management, such as in Pfeifer where the company protected its
own employees and issued a safety data sheet, that would lead to
a reasonable inference that Park Water knew of the presence of
asbestos before 1985 or 1986, when it banned its employees from
handling A/C pipe.
      Nor have plaintiffs adduced evidence that Park Water
received complaints of asbestos-related harm. Unlike Pfeifer,
Hasson and West, where the defendants did receive complaints
that gave them notice of a potential risk of harm, there is no
evidence that Park Water ever received a citation from California
OSHA, who conducted inspections at Park Water, or that any
worker’s compensation or other asbestos claim was made against
the company that would have indicated to management that it
should test for the presence of asbestos and comply with the
regulations.
      The same result obtains with respect to the danger posed
by take-home asbestos exposure. Plaintiffs insist that Park
Water should have known in the 1970’s that take-home asbestos
exposure posed a risk to its employees’ families. Plaintiffs quote
from Kesner v. Superior Court (2016) 1 Cal. 5th 1132, 1145 to
1146, that reasonably thoughtful employers making industrial
use of asbestos in the mid-1970’s would consider the possibility of

                                17
secondary asbestos exposure. The Supreme Court explained that
the OSHA standards requiring precautions against take-home
exposure put employers on notice of the reasonable foreseeability
of such harm. (Id. at p. 1148.) Based on Kesner, plaintiffs argue
that Park Water was on notice in the 1970’s of the harm caused
by take-home exposure. We accept that by 1976 it was
foreseeable that workers who were exposed to asbestos could be
bringing its fibers home on their uniforms. However, the
foreseeability of take-home exposure in a vacuum does not
constitute clear and convincing evidence that Park Water’s
management was aware that it was “making industrial use” (id.
at p. 1145) of asbestos triggering the obligation to assess whether
its employees were exposed to illegal levels of airborne fibers, and
to consider the subsequent possibility that its employees might
risk taking that asbestos home.
       We assume for purposes of this opinion that in the 1970’s
and 1980’s it was a given that asbestos could cause cancer.
Certainly, it would be reasonable to infer that if Park Water
knew its employees worked with asbestos products and tried to
stay current with safety requirements applicable to its
employees, that decisionmakers would have known of the
asbestos-related regulations and the need to analyze the air and
protect employees. But, the record contains an evidentiary gap:
absent evidence from which an inference may be drawn that Park
Water management knew of the risk posed to its employees in
the construction and service departments working with asbestos,
it is not reasonable to infer from the company’s general safety
consciousness alone, that it is highly probable that the company
was aware of the specific risk to its own employees and their

                                18
families of asbestos, or that it should conduct testing to ascertain
the risk.
      B. No evidence that Park Water willfully and deliberately
         disregarded the risk of asbestos exposure.
       Plaintiffs address each OSHA safety requirement to argue
that Park Water’s failure to comply with many of them
constituted clear and convincing evidence of a conscious disregard
of the danger of exposure to asbestos fibers. Plaintiffs add that
even if the decision not to comply with the state and federal
regulations was made by a low level employee, it was ratified or
authorized by a corporate officer, director, or managing agent.
       The record here is devoid of evidence leading to an
inference about Park Water’s state of mind, i.e., why company
decisionmakers failed to abide by the regulations. First, there is
no indication about corporate motive. For example, in Hasson,
supra, 32 Cal.3d at page 403, Ford concealed the danger to
protect its reputation among its consumers. In Romo v. Ford
Motor Co. (2002) 99 Cal. App. 4th 1115, 1144 (cert. granted and
opinion vacated by Ford Motor Co. v. Romo (2003) 538 U.S. 1028),
policymakers were strongly motivated to bring the Bronco to
market in 1978 and knew they could not do so if they tested it. In
contrast, Park Water had no incentive to ignore the safety
violations where the PUC would allow it to recover the costs of
implementing safety measures from ratepayers.
       Second, the record is devoid of evidence supporting an
inference about corporate leaders’ objectives. Punitive damages
jurisprudence requires evidence both that the defendant had
actual knowledge of the risk of harm it was creating and that “ ‘in
the face of that knowledge,’ ” the defendant failed to take steps it
knows will reduce or eliminate that risk. (Butte Fire Cases,
19
supra, 24 Cal.App.5th at p. 1159.) But the record here contains
no evidence the company knew that asbestos was present in the
pipes and so Park Water’s mere failure to comply with asbestos
regulations does not mean ipso facto that management
consciously and intentionally decided to ignore them. It is not
reasonable to infer from Wheeler’s safety consciousness and
attempts to remain current with safety regulations, that the
company decided to knowingly disregard the asbestos
regulations. Stated otherwise, the abstract awareness that
asbestos causes cancer combined with the failure to observe
asbestos safety regulations, without knowledge that asbestos was
present at work, do not reasonably support an inference that it
was highly probable the failure to apply the regulations was the
result of a willful, deliberate decision to ignore the risk of harm.
“ ‘ “[P]unitive damages should not be allowable upon evidence
that is merely consistent with the hypothesis of malice,
fraud, . . . or oppressiveness. Rather some evidence should be
required that is inconsistent with the hypothesis that the tortious
conduct was the result of a mistake of law or fact, honest error of
judgment, over-zealousness, mere negligence or other such
noniniquitous human failing.” ’ ” (Food Pro Internat., Inc. v.
Farmers Ins. Exchange (2008) 169 Cal. App. 4th 976, 994.)
        In Butte Fire Cases, supra, 24 Cal. App. 5th 1150, one of the
plaintiffs’ contentions was that the defendant knew of the risk of
wildfire from the contact between trees and the defendant’s
power lines but demonstrated conscious disregard for the rights
and safety of others by failing to directly verify the proper
functioning of risk management controls and fire mitigation
measures (id. at p. 1166), and by policies that delegated
responsibility for managing wildfire risk to individual

                                20
departments (id. at p. 1166). In holding there were no triable
issues precluding defendant’s summary adjudication motion on
the question of punitive damages, the appellate court explained it
had “no quarrel with the notion that an inference of corporate
malice can be based on the existence of a company policy that
willfully, consciously, and despicably disregards the rights and
safety of others” (id. at p.1173), or that “corporate malice can be
shown, in the case of a large corporation, ‘by piecing together
knowledge and acts of the corporation’s multitude of managing
agents’ ” (ibid.). However, the court in Butte Fire Cases explained
that the plaintiffs “would have us go one step further and hold
that a company policy that fails to protect against a known risk of
harm necessarily raises an inference of corporate malice, since
the existence of the policy establishes the company’s state of
mind with respect to the risk. Put another way, plaintiffs would
have us conclude that an unsuccessful risk management policy
necessarily reflects a conscious and willful company decision to
ignore or disregard the risk. This we decline to do.” (Ibid.)
       Here, plaintiffs’ argument is even more tenuous because
they adduced nothing to show that Park Water managers knew
that its employees were handling asbestos or had a policy for
mitigating the risk of that contact. Plaintiffs’ position then is
that management’s safety consciousness, in the context of
intellectual awareness that asbestos is toxic, coupled with
corporate inaction, necessarily reflects management’s knowing,
willful, deliberate, and despicable decision to ignore the danger to
employees and their families. To state the argument is to
demonstrate its weakness. If an unsuccessful policy does not
establish corporate state of mind, then a complete absence of

                                21
knowledge and lack of a policy cannot demonstrate clear and
convincing evidence of corporate intention.
       At best, plaintiffs have demonstrated that Park Water
violated federal and state regulations by failing to test for the
presence of asbestos and then by failing to abide by the safety
requirements had those tests revealed excessive asbestos levels.
But the violation of a statute is negligence per se, which is a
negligence doctrine (see Spates v. Dameron Hospital Assn. (2003)
114 Cal. App. 4th 208, 218), not willful conduct on which to base a
finding of malice. The lack of safety measures, absent evidence
that the company also knew it was putting others at risk of harm
by its inaction, does not constitute blatant disregard of the
statutes, plaintiffs’ assertion to the contrary notwithstanding.
       In sum, the record contains no evidence, let alone clear and
convincing evidence, that any officer, director, managing agent,
decisionmaker or responsible executive at Park Water knew its
employees were handling asbestos and hence that asbestos-
related regulations needed to be implemented to prevent harm to
its employees and their family members, but instead willfully and
deliberately spurned those measures. Park Water’s management
may have been negligent, even grossly negligent, in failing to
learn it was violating OSHA. Yet, without actual knowledge by a
decisionmaker of the presence of asbestos at work and the
consequential danger from failing to protect others from the risk
of harm caused by fibers, the mere failure to implement safety
measures does not equate with malice. As plaintiffs failed to
adduce clear and convincing evidence that the company acted
with malice, JNOV was properly entered. Given our conclusion,
we need not address plaintiffs’ remaining appellate contentions
or Park Water’s contentions in its appeal.

                                22
                         DISPOSITION
     The judgment is affirmed. Each party to bear its own costs
on appeal.
     NOT TO BE PUBLISHED.

                            DHANIDINA, J.

We concur:

             EDMON, P. J.

             LAVIN, J.

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