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Breach of Contract - Indemnity, Equitable Relief, Declaratory Judgment

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April 30, 2007

BREACH OF CONTRACT
Indemnity - Equitable Relief - Declaratory Judgment

Company sought indemnity from predecessor firm

DECISION Defense

CASE Price Pfister Incorporated v. TriMas Corporation, No. 05CC02302
COURT Superior Court of Orange County, Orange, CA
JUDGE Andrew Banks
DATE 3/6/2007

PLAINTIFF

ATTORNEY(S) Edward R. Hugo, Brydon, Hugo & Parker, San Francisco, CA
James C. Parker, Brydon, Hugo & Parker, San Francisco, CA

DEFENSE

ATTORNEY(S) Mark B. Wilson, Klein & Wilson, Newport Beach, CA

FACTS & ALLEGATIONS Since its inception in the early 1900's, plaintiff Price Pfister, a plumbing fixtures manufacturer, was owned by a variety of companies.

On Jan. 1, 1983, NI Industries Inc. acquired the Price Pfister business.

On June 24, 1983, NI Industries sold Price Pfister to several of its employees, who incorporated and named the business Price Pfister, Inc. In the contract between NI Industries and Price Pfister, NI Industries agreed to "indemnify and save harmless Price Pfister from all judgments, settlements, court costs and reasonable attorney's fees arising out of any occurrence whereby a product manufactured by NI Industries was the proximate cause of death, personal injury and/or property damage..."

About 20 years later, some 11 lawsuits were brought against Price Pfister, where plaintiffs alleged asbestos exposure from the early 1940s to the present. Price Pfister obtained dismissals of all the lawsuits and paid the plaintiffs nothing.

Price Pfister sued TriMas Corp. (NI Industries' alleged successor), for breach of contract, implied indemnity and declaratory relief.

Price Pfister contended that TriMas was responsible to indemnify all costs defending lawsuits where plaintiffs alleged injury from products manufactured before 1983.

The defense countered that the contract between NI Industries and Price Pfister means exactly what it says, that Price Pfister failed to prove NI Industries manufactured any products which injured anyone. Therefore, Price Pfister did not suffer any damages because it obtained dismissals of all the cases without paying any money and Price Pfister's parent corporation, Black and Decker, paid the defense costs, not Price Pfister.

INJURIES/DAMAGES Price Pfister sought $960,000 from the costs it incurred in the lawsuits.

The company additionally sought declaratory relief that neither Price Pfister nor its predecessors assumed any of NI Industries' liabilities for the historical Price Pfister business. It also sought a declaration as to when and how Price Pfister can recover from TriMas for expenses incurred defending lawsuits involving NI Industries' products.

RESULT Regarding Price Pfister's declaratory relief claim, Judge Andrew Banks ruled as follows: "The Court further declares that neither the Plaintiff nor its predecessor assumed any of NI (Industries) or its predecessor's existing liabilities with respect to product liability claims as a result of entering into the agreement." The court also declared the circumstances under which Price Pfister may recover from TriMas. In addition, the Court ruled that the contract means what it says - that Price Pfister can only recover from TriMas if Price Pfister proves there were "judgments, settlements, court costs and reasonable attorney's fees arising out of any occurrence whereby a product manufactured by NI Industries was the proximate cause of death, personal injury and/or property damage..."

The Court did not award Price Pfister any damages.

OFFER $10,000

PLAINTIFF

EXPERT(S) Thomas Malcolm, attorney fees, Orange County, CA
Sarah Turnipseed, attorney fees, Atlanta, GA

DEFENSE

EXPERT(S) Andre E. Jardini, attorney fees, Glendale, CA

POST-TRIAL Plaintiff will appeal the Court's decision not to award monetary damages.

EDITOR'S NOTE This report includes information that was provided by plaintiff's and defense counsel.

-- Michael Rehak

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