Siebe, Inc. v. Louis M. Gerson Co., Inc.

908 N.E.2d 819

74 Mass. App. Ct. 544

SIEBE, INC. v. LOUIS M. GERSON CO., INC.

No. 07-P-1500.

Appeals Court of Massachusetts, Norfolk.

Argued October 3, 2008.

Decided June 30, 2009.

Jeffrey B. Renton, Andover (Matthew J. Ginsburg with him) for the plaintiff.

John M. Connolly, Boston, for the defendant.

Present: TRAINOR, KATZMANN, & VUONO, JJ.

KATZMANN, J.

Plaintiff-appellant Siebe, Inc. (Siebe), is appealing a Superior Court judge's grant of summary judgment to defendant-appellee Louis M. Gerson Co., Inc. (Gerson), and the denial of partial summary judgment to Siebe. The primary question presented is whether under an agreement between them Gerson had a duty to defend Siebe in connection with three product liability lawsuits brought against Siebe. We also consider whether Siebe's cause of action was barred under the applicable statute of limitations.

Background. Gerson and North Safety Products (North), the predecessor of Siebe,¹ entered into a product sales agreement (PSA), effective May 1, 1996, for Siebe's distribution and resale of certain dust mist respirator masks manufactured by Gerson. The masks were approved by the National Institute for Occupational Safety and Health (NIOSH). The NIOSH approval regulations are codified in 42 C.F.R. §§ 84.1 et seq. (2008), providing, among other things, detailed instructions with respect to testing and inspection of respiratory devices such as the masks at issue.² After a respiratory device is approved and registered with NIOSH, the manufacturer must comply with ongoing inspection, testing, and quality control requirements, and if it fails to do so, NIOSH may revoke its approval. 42 C.F.R. §§ 84.42(c), 84.43(c).

The PSA contained the following provisions relating to warranty, cross-defense, and indemnification:

8c.(1): "Gerson warrants the masks to be (i) in compliance with the requirements of the applicable NIOSH and CEN³ approvals, and (ii) free from defects in materials and workmanship as defined by Gerson's quality specifications detailed in its Quality Plan (which quality specifications have been accepted by North and will not be changed therefrom by Gerson without North's prior written consent, which will not be unreasonably withheld). Gerson makes this warranty in lieu of the implied warranties of merchantability and fitness for particular purpose, and all other warranties, express or implied (except the implied warranties of title and against patent infringement, which are not disclaimed) and Gerson disclaims any warranty with respect to the adequacy of the instructions or warnings accompanying these masks. Gerson makes no warranties beyond those set forth in the Paragraph 8c.(1)."

8d.(1): "Gerson will defend, indemnify and hold harmless North, its affiliated companies and its distributors, from and against all claims, liabilities, demands, damages, losses, costs, expenses, reasonable attorneys' fees, awards, fines and judgments, at law or in equity, for personal injury, death, property damage and patent infringement, (collectively the `Claims') arising out of any breach of any of the warranties specified in Paragraph 8c.(i) above. North will give Gerson prompt written notice of any Claim, and will give Gerson full authority, information and assistance (at Gerson's expense) for the defense and settlement of any Claim. North may, at its own cost and expense, participate in any suits defense, or compromise or settlement effort with respect to any Claim."

8d.(2): "North will defend, indemnify and hold harmless Gerson and its affiliated companies from and against all Claims arising from any alleged inadequacy of the warnings or instructions accompanying the mask. Gerson will give North prompt written notice of any Claim, and will give North full authority, information and assistance (at North's expense) for the defense and settlement of any such claim. Gerson may, at its own cost and expense, participate in any suits, defense, or compromise or settlement effort with respect to any Claim."

Gerson manufactured and supplied masks to Siebe from late 1996 to early 2002. Between 2002 and 2004, Siebe was a subject of three separate product liability lawsuits (underlying lawsuits) brought by plaintiffs in Texas who alleged that they had been exposed to harmful substances in the workplace and had developed silicosis despite using the masks. All three lawsuits contained similar claims for, among other things, manufacture and sale of defective respiratory equipment by Siebe and other companies (underlying lawsuit defendants)⁴; failure to properly test and inspect said equipment; and failure to issue proper warnings with respect to the equipment.⁵ However, in none of these lawsuits did the plaintiffs specifically allege that the masks failed to conform to the NIOSH standards or to Gerson's quality plan specifications.

Dr. Behzad Samimi and Dr. Yehia Hammad provided expert opinions in the underlying lawsuits with respect to the plaintiffs' allegations.⁶ Dr. Samimi testified at a deposition that the warnings on the masks were inadequate; that the usage of the masks was inappropriate, useless, and did not provide proper protection, given the plaintiffs' exposure to silica; that the masks were defective in that they could not be fit-tested properly.⁷ Dr. Hammad was designated to testify at trial regarding the underlying lawsuit defendants' lack of proper instructions and warnings with respect to proper use of the masks; lack of a proper quality control program on manufactured dust respirators; and the ineffectiveness of dust respirators in protecting workers from silica exposures due to their defective design.

Siebe timely informed Gerson concerning the pendency of the underlying lawsuits; in its notifications, Siebe contended that Gerson's obligations under paragraph 8d.(1) of the PSA had been triggered by the underlying lawsuits.⁸ Gerson never replied to any of the notices. On September 14, 2005, Siebe filed this action against Gerson seeking reimbursement of defense and indemnification costs it incurred in the underlying lawsuits. On June 19, 2007, the trial judge granted summary judgment to Gerson, and denied partial summary judgment to Siebe, concluding that the clear and unambiguous language of the PSA provisions at issue did not obligate Gerson to defend and indemnify Siebe in connection with the underlying lawsuits. On appeal, Siebe argues for reversal of the judgment as it applies to its claim that Gerson owed a duty to defend.

Discussion. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Community Natl. Bank v. Dawes, 369 Mass. 550, 553, 340 N.E.2d 877 (1976). The moving party bears the burden of proving that "there is no genuine issue of material fact on every relevant issue," even if it would not have that burden at trial. Pederson v. Time, Inc., 404 Mass. 14, 17, 532 N.E.2d 1211 (1989). Once the moving party satisfies its burden, the burden shifts to the nonmoving party to show with admissible evidence a dispute of material fact. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711, 575 N.E.2d 734 (1991).

In sum, "[t]he standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Nelson v. Salem State College, 446 Mass. 525, 530, 845 N.E.2d 338 (2006), quoting from Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117 120, 571 N.E.2d 357 (1991). Our review is de novo. See Kennie v. Natural Resource Dept. of Dennis, 69 Mass.App.Ct. 158, 161, 866 N.E.2d 983 (2007). See also Buchanan v. Contributory Retirement Appeal Bd., 65 Mass.App.Ct. 244, 247 n. 5, 839 N.E.2d 338 (2005) ("Because the interpretation of the terms of a contract or agreement is a pure question of law, we exercise de novo review over this issue").

1. Interpretation of the contractual provisions. The facts are not disputed; thus, we review the record to determine if either party is entitled to judgment as a matter of law. At issue is the application of paragraphs 8c.(1) and 8d.(1) of the PSA to the facts in light of the governing law. Pursuant to the choice of law clause in the PSA, we apply Rhode Island law to interpret the two provisions. We note that the relevant Rhode Island law does not differ in material respect from Massachusetts law.⁹

a. The plain meaning of the terms of the contractual provisions. It is a well-settled rule of contract interpretation that to determine "whether an agreement is clear and unambiguous, the document must be viewed in its entirety and its language be given its plain, ordinary and usual meaning." W.P. Assocs. v. Forcier, Inc., 637 A.2d 353, 356 (R.I.1994). Only when an agreement is "reasonably and clearly susceptible" to more than one interpretation is it deemed to be ambiguous.¹⁰ Ibid. See Rotelli v. Catanzaro, 686 A.2d 91, 94 (R.I.1996). "If the terms are found to be unambiguous, however, the task of judicial construction is at an end and the parties are bound by the plain and ordinary meaning of the terms of the contract." Zarrella v. Minnesota Mut. Life Ins. Co., 824 A.2d 1249, 1259 (R.I.2003). See Capital Properties, Inc. v. State, 749 A.2d 1069, 1081 (R.I.1999); Rivera v. Gagnon, 847 A.2d 280, 284 (R.I.2004).

In interpreting contractual terms, courts look at the intent of the parties. Capital Properties, Inc., supra. When the intentions of the parties can be clearly inferred from the terms of the contract, the court will enforce those intentions as long as they "can be fairly carried out consistent with settled rules of law." Ibid., quoting from Hill v. M.S. Alper & Son, Inc., 106 R.I. 38, 256 A.2d 10, 15 (1969).

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