New Trial for Damages in Metalclad Case

SAN FRANCISCO, CA — June 4, 2008 — In the case of Maxlyn Cadlo v. Metalclad Insulation Corp., the San Francisco First District Court of Appeals vacated a summary judgment in favor of Metalclad Insulation Corp. and remanded the case to the lower court for trial on the issue of damages.

This was the second action filed by the Cadlos against Metalclad. The first (Cadlo 1), was a personal injury action with a verdict found in Mr. Anthony Cadlo’s favor and appealed by Metalclad. The second (Cadlo 2), was a wrongful death action filed by Mrs. Cadlo and other heirs against Metalclad after Mr. Cadlo’s passing. With the appeal from Cadlo 1 still pending, the trial court decided for Metalclad in Cadlo 2, stating there was insufficient evidence to prove causation. Mrs. Cadlo appealed the decision.

Due to the complex nature of this appeal, the history of the two actions is included to provide a basis for the appeal.

Overview of the Personal Injury Action (Cadlo 1)

Anthony Cadlo sued Metalclad and others for personal injuries as a result of exposure to asbestos. In March 2005, a jury returned a special verdict in Mr. Cadlo’s favor, finding that:

• There were design defects in Metalclad’s asbestos-containing products.
• There was a failure to warn defect in Metalclad’s asbestos-containing products, causing legal harm to Mr. Cadlo.
• Mr. Cadlo’s injury, caused by the use of Metalcald’s products, was reasonably foreseeable to Metalclad.

After the verdict, Mr. Cadlo died of his asbestos-related injuries on March 24, 2005. The judgment was entered nunc pro tunc (“now for then”—something that is done at one time which ought to have been performed at another) as of March 23, 2005.

Metalclad appealed, claiming that the evidence of causation was insufficient. They claimed there was no foundation for the testimony of specialist Charles Ay, who stated that Mr. Cadlo was exposed to Metalclad’s insulation while onboard the USS Black. The court disagreed with Metalclad’s appeal and affirmed the judgment that Ay’s testimony was sufficient to infer causation.

Overview of the Wrongful Death Action (Cadlo 2)

After the judgment in Cadlo 1 and Mr. Cadlo’s death, but before the Cadlo 1 judgment had become final, Mrs. Cadlo filed a wrongful death suit against Metalclad. While the appeal for Cadlo 1 was pending, Metalclad moved for summary judgment in Cadlo 2, stating there was insufficient evidence of causation (for Mr. Cadlo’s asbestos-related illness). This was the same position that Metalclad took in the appeal of Cadlo 1. The trial court ruled in favor of Metalclad, stating there was not sufficient evidence to create a triable issue linking Metalclad as the cause of Mr. Cadlo’s asbestos disease. Mrs. Cadlo appealed the decision.

The Appeal of Cadlo 2

Mrs. Cadlo appealed the summary judgment of Cadlo 2, on the basis that Metalclad cannot relitigate the issue of the legal cause of Mr. Cadlo’s disease (which was decided in Cadlo 1). The court agreed that the issue, Metalclad’s design defect and failure to warn as the legal cause of Mr. Cadlo’s mesothelioma, was the same in Cadlo 2 as decided in Cadlo 1.

Richard Grant of Brayton Purcell’s appellate department appeared on behalf of Maxlyn Cadlo and the Cadlo estate.