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Courtroom News
by Harris Martin Publishing
JAMAICA, N.Y. — A state court judge in New York has ruled that plaintiffs may sue Pulmosan Safety Equipment Corp. for injuries caused by exposure to silica, provided their claims arose prior to the company’s dissolution in 1986. Ford v. Pulmosan Safety Equipment Corp., No. 8409/06 (N.Y. Supreme Ct., Queens Cty.).
Judge Peter J. Kelly of the Queens County Supreme Court issued the ruling Oct. 25, rejecting Pulmosan’s contention that numerous Texas silica cases filed after the dissolution and notice dates were barred by New York Business Corporation Law.
The special proceeding from which Judge Kelly’s decision arose was filed in New York earlier this year after Texas State Silica MDL Judge Tracy Christopher abated a proceeding in which Pulmosan sought to have the claims filed against them in Texas thrown out for lack of jurisdiction.
Plaintiffs and several of the co-defendants named in the Texas litigation, petitioned the Queens County Court for a declaration that Pulmosan continued to exist for the purpose of winding up its affairs, and remained subject to suit, long after its 1986 dissolution.
According to the petitioners, Pulmosan failed to adequately notify creditors and potential claimants of their impending dissolution in 1986 and skirted New York law by similarly failing to publish its notice of dissolution in a publication of general circulation.
Pulmosan moved pre-answer to dismiss the petition, claiming that it failed to state a valid claim and that a prior action for the same relief was pending between the parties. The defendant further claimed that it had successfully asserted the dissolution defense in more than a dozen cases since 1988.
However, Judge Kelly held that Pulmosan’s assertion that the claims of silica plaintiffs were barred upon its filing of a certificate of dissolution is erroneous.
'All that is necessary for a tort claim to survive a corporation’s dissolution is for the claim to have ‘arose’ prior to the dissolution,' Judge Kelly wrote.
The judge stopped short of finding that Pulmosan is completely precluded from asserting its dissolution defense, opining that the viability of the plaintiffs’ claims and co-defendants’ cross-claims against Pulmosan in Texas will hinge upon when the plaintiffs were first exposed to silica or, 'more accurately, upon the initial use of Pulmosan’s defective safety equipment.'
Judge Kelly further ruled that Pulmosan’s notice of dissolution, by way of its notices to creditors and claimants and its publication of dissolution in a Queens-based newspaper, was wholly inadequate under New York business law.
'The publication, while technically compliant with the statute, in actuality failed to provide notice to anyone,' the judge wrote. 'Indeed, … at that time of the dissolution the majority of silicosis cases pending against Pulmosan were venued in Texas and Louisiana, Consequently, publication in a weekly newspaper with circulation limited to a location easily over one thousand miles from the situs of the litigation at issue can not be considered reasonable or justifiable notice.'
The court, therefore, directed that Pulmosan’s dissolution be suspended as to the Texas petitioners whose first use of Pulmosan’s products predates the August 1, 1986, filing of the company’s dissolution certificate. A subsequent hearing to resolve factual queries regarding the initial use of Pulmosan’s products by the moving plaintiffs was also ordered.
This breaking news story will be updated throughout the day at www.harrismartin.com and will appear in the November issue of COLUMNS-Silica.
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