{
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  "name": "GARY RAY SCHENK, SR., Plaintiff v. HNA HOLDINGS, INC., also known as TREVIRA, INC. formerly HOECHST CELANESE, INC. and FIBER INDUSTRIES, INC., Defendant; DONALD LEE BELL, Plaintiff v. HNA HOLDINGS, INC., also known as TREVIRA, INC. formerly HOECHST CELANESE, INC. and FIBER INDUSTRIES, INC., Defendant",
  "name_abbreviation": "Schenk v. HNA Holdings, Inc.",
  "decision_date": "2005-06-07",
  "docket_number": "No. COA03-1094-2; No. COA03-1095-2",
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    "judges": [
      "Judges WYNN and McGEE concur."
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      "GARY RAY SCHENK, SR., Plaintiff v. HNA HOLDINGS, INC., also known as TREVIRA, INC. formerly HOECHST CELANESE, INC. and FIBER INDUSTRIES, INC., Defendant DONALD LEE BELL, Plaintiff v. HNA HOLDINGS, INC., also known as TREVIRA, INC. formerly HOECHST CELANESE, INC. and FIBER INDUSTRIES, INC., Defendant"
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        "text": "MARTIN, Chief Judge.\nPlaintiffs\u2019 appeals in these cases present to this Court identical questions of law; therefore, we have consolidated the appeals pursuant to Rule 40 of the North Carolina Rules of Appellate Procedure. N.C. R. App. P. 40 (2005). The appeals arise from lawsuits in which plaintiffs sought compensatory and punitive damages from defendant, HNA Holdings, Inc., for alleged occupational exposure to asbestos dust and fibers at defendant\u2019s polyester manufacturing plant.\nSummarized only to the extent necessary for an understanding of the issues raised on appeal, the evidence at trial tended to show that defendant, HNA Holdings, Inc., or its predecessors in interest, owned the Celanese Fiber Plant (\u201cCelanese\u201d), located in Salisbury, North Carolina, since operations began in 1966. Like many industrial plants built in the 1960\u2019s and 1970\u2019s, the Celanese plant was constructed with insulation containing asbestos.\nDaniel Construction Company built the Celanese plant and then provided maintenance for the company in specialty areas such as welding, pipe fitting, rigging and insulation. Daniel Construction Company and its successor in interest, Fluor Daniel (\u201cDaniel\u201d), employed plaintiff Schenk as a pipe fitter/welder beginning in 1975. Plaintiff Schenk worked for Daniel periodically until 1992, when Becon Construction Company (\u201cBecon\u201d) assumed Daniel\u2019s maintenance contract. Plaintiff Schenk continued to work for Becon at Celanese until 1995. As a pipe fitter/welder, plaintiff Schenk was exposed to asbestos-containing insulation both through his work handling pipes and from being around people working with the insulation.\nDaniel employed plaintiff Bell as an insulator for Celanese intermittently between 1973 and 1981, and then from 1988 until 1992. In 1992, when Daniel lost the overall maintenance contract to Becon, plaintiff Bell began working as an insulator for Becon and continued until 1995. At trial, plaintiff Bell testified he was exposed to asbestos dust in his work insulating pipes at Celanese while cutting the insulation on a band saw, \u201crasping\u201d or smoothing the rough edges of the insulation, and while removing asbestos \u201cin every facet of the plant.\u201d\nPlaintiffs offered the testimony of James Whitlock (\u201cWhitlock\u201d), an asbestos handling and removal specialist who worked for SOS, a subsidiary of Daniel. Whitlock, who was hired to oversee the removal of asbestos material at Celanese, testified at trial that prior to his arrival in 1990, insulators for Daniel were removing asbestos from the Celanese plant. During his first walk-through of the plant after he was hired, Whitlock observed areas where the asbestos insulation was in a \u201cdilapidated condition and was hanging from the pipes,\u201d areas where insulation was on the floor, and areas where insulation was \u201cin piles.\u201d He also saw non-authorized individuals \u201chandling and removing asbestos.\u201d\nWhitlock testified he informed by memorandum the plant industrial hygienist, Dave Smith, the resident engineer, John Winter (\u201cWinter\u201d), and others that \u201cthere was a lot of maintenance people that were doing removal of asbestos-containing insulation and that they were leaving the insulation lying around in the areas, and this' was cause for concern because it was causing exposure.\u201d The next day, Winter asked Whitlock to \u201ccollect those letters and rip them up, take the letter out of [his] computer, off [his] hard drive, get it off floppy disk, and do away with it.\u201d\nFor asbestos removal, Whitlock recommended Celanese use a \u201cglobal abatement procedure.\u201d In this procedure, a large area is contained and asbestos is totally removed from the entire area without other workers present. However, Whitlock\u2019s recommendation was rejected in favor of a \u201cglove bagging\u201d technique, in which only a small area is contained for removal of a small bit or piece of pipe insulation, rather than abatement of the whole area. Other workers were often present during the glove-bagging method.\nPrior to trial, the court denied defendant\u2019s motion to strike the punitive damages claim but allowed an alternative motion to exclude any reference to punitive damages or defendant\u2019s financial worth until the court determined that plaintiffs had presented sufficient evidence to submit an issue of punitive damages to the jury. At the close of plaintiffs\u2019 evidence, after hearing arguments, the trial court granted defendant\u2019s motion for directed verdict on the issue of punitive damages.\nThe jury returned verdicts in favor of plaintiffs, finding the maintenance and construction work performed by plaintiffs was an inherently dangerous activity. The jury also found plaintiffs were injured as a direct result of defendant\u2019s negligence. Plaintiffs were awarded compensatory damages for personal injuries. The trial court then conducted a \u201cset-off\u2019 hearing and reduced the awards by the amount each plaintiff had recovered as a result of prior settlements from other sources. Plaintiffs appeal.\nI.\nPlaintiffs first assign error to the trial court\u2019s granting of defendant\u2019s motion for directed verdict on the issue of punitive damages. They argue there was sufficient evidence that defendant acted recklessly, willfully or intentionally to withstand defendant\u2019s motion. We do not agree.\n\u201cThe standard of review of directed verdict is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury.\u201d Davis v. Dennis Lilly Co., 330 N.C. 314, 322, 411 S.E.2d 133, 138 (1991). Our North Carolina statutes establish the requirements for punitive damages as follows:\nPunitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:\n(1) Fraud.\n(2) Malice.\n(3) Willful or wanton conduct.\nN.C. Gen. Stat. \u00a7 1D-I5(a) (2003). The existence of the aggravating factor must be proved by clear and convincing evidence. N.C. Gen. Stat. \u00a7 1D-I5(b) (2003). Willful and wanton conduct is defined by statute as \u201cthe conscious and intentional disregard of and indifference to the rights and safety of others, which the defendant knows or should know is reasonably likely to result in injury, damage, or other harm.\u201d N.C. Gen. Stat. \u00a7 lD-5(7) (2003). To award punitive damages against a corporation, \u201cthe officers, directors, or managers of the corporation [must have] participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.\u201d N.C. Gen. Stat. \u00a7 1D-I5(c) (2003). The jury awarded plaintiffs compensatory damages; therefore, the issue on appeal is whether there was sufficient evidence that the officers, directors, or managers of defendant, HNA Holdings, Inc., participated in or condoned willful or wanton conduct. See id.\nPlaintiffs contend Winter\u2019s order to destroy Whitlock\u2019s memorandum constituted willful and wanton conduct by defendant. However, plaintiffs have not proved by clear and convincing evidence that destruction of the memorandum constituted \u201cconscious and intentional disregard of and indifference to the rights and safety of others.\u201d N.C. Gen. Stat. \u00a7 lD-5(7). Whitlock testified Winter told him \u201che wanted to know about these things, to never put anything like that in writing again.\u201d Asking to be advised of improper handling of asbestos verbally rather than in writing does not demonstrate an intentional disregard to the safety of others. Furthermore, Winter was a resident engineer for Celanese; plaintiffs did not offer evidence that he was an officer, director or manager as required to award punitive damages against defendant.\nIn addition, there is no evidence that the destruction of the memorandum was related to the injuries suffered by plaintiffs, as the underlying conduct alleged in the memorandum was not necessarily connected to asbestos. See Paris v. Kreitz, 75 N.C. App. 365, 376-77, 331 S.E.2d 234, 243, disc. review denied, 315 N.C. 185, 337 S.E.2d 858 (1985). Whitlock admitted at trial that in each instance where he pointed out loose insulation on the floor, \u201cit was taken care of.\u201d He also admitted the loose insulation was never tested, and thus he was unsure if any or all of this insulation contained asbestos. Although Whitlock observed non-authorized workers removing insulation, he had no knowledge that they were actually removing insulation that contained asbestos. When asked if he could remember specific occasions when plaintiffs were near loose insulation, Whitlock replied, \u201cI\u2019d say probably . . . .\u201d\nThe clear and convincing evidence standard is greater than a preponderance of the evidence standard required in most civil cases, In re Montgomery, 311 N.C. 101, 109-10, 316 S.E.2d 246, 252 (1984), and requires \u201cevidence which should \u2018fully convince.\u2019 \u201d In re Smith, 146 N.C. App. 302, 304, 552 S.E.2d 184, 186 (2001) (quoting Williams v. Blue Ridge Bldg. & Loan Ass\u2019n, 207 N.C. 362, 364, 177 S.E.2d 176, 177 (1934)). Plaintiffs did not present clear and convincing evidence of the connection between the destruction of the memorandum and plaintiffs\u2019 alleged harm.\nPlaintiffs further argue defendant\u2019s express rejection of Whitlock\u2019s recommendation to use the global method of asbestos removal demonstrates willful and wanton behavior. Whitlock admitted at trial, however, that no state or federal regulation requires use of the global method. Furthermore, he agreed that the asbestos removal was \u201cdone properly and within the regulations.\u201d\nPlaintiffs contend defendant\u2019s violation of Occupational Safety and Health Act (\u201cOSHA\u201d) standards was sufficient evidence of willful and wanton conduct to allow the question of punitive damages to go to the jury. OSHA regulations are evidence of custom and can be used to establish the standard of care required in the industry. Sawyer v. Food Lion, Inc., 144 N.C. App. 398, 401, 549 S.E.2d 867, 869 (2001); Cowan v. Laughridge Construction Co., 57 N.C. App. 321, 325, 291 S.E.2d 287, 290 (1982). However, a violation of OSHA regulations is not negligence per se under North Carolina law. See Cowan, 57 N.C. App. at 324-25, 291 S.E.2d at 289-90; accord Geiger v. Guilford Coll. Comm. Volunteer Firemen\u2019s, 668 F.Supp. 492, 497 (M.D.N.C. 1987). Assuming arguendo that defendant violated OSHA standards, this evidence goes only to the issue of defendant\u2019s negligence and does not, by itself, provide sufficient evidence of willful and wanton conduct to present the issue to the jury.\nRelying on Rowan County Bd. of Education v. U.S. Gypsum Co., 103 N.C. App. 288, 407 S.E.2d 860 (1991), aff\u2019d in part and review improvidently granted in part, 332 N.C. 1, 418 S.E.2d 648 (1992), plaintiffs argue that defendant willfully concealed the risks of asbestos exposure, rendering punitive damages appropriate. In Rowan, this Court affirmed the trial court\u2019s denial of the defendant\u2019s motion for directed verdict and judgment notwithstanding the verdict on the issue of punitive damages because the defendant defrauded the plaintiff by concealing the hazards of asbestos. Id. at 299, 407 S.E.2d at 866. Although this case is similar in that it involves third-party asbestos claims in the premises liability context, the evidence at trial does not support a finding that Celanese willfully concealed information about the risks of asbestos exposure. The evidence tended to show that OSHA regulations were posted on a bulletin board in the main hall at the entrance into Celanese. Clyde Miller, assistant to the safety superintendent from 1969 to 1980, testified that neither he, nor anyone in his department, ever deliberately withheld any information that impacted workers\u2019 safety.\nAccording to the testimony of Dow Perry (\u201cPerry\u201d), Environmental Health and Safety Superintendent for Celanese from 1978 to 1990, the corporate office specified asbestos-free insulation for all their locations in 1973. He also testified that dust masks were available to maintenance workers in the 1970\u2019s. Celanese issued a standard practice document entitled \u201cControl and Disposal of Asbestos Material\u201d beginning in 1976 requiring, among other things, asbestos to be thoroughly wet before it was removed. Although Perry updated written procedures when he arrived in the department in 1978, the proper methods of removal were already in use.\nThe 1979 revision of \u201cControl and Disposal of Asbestos Material\u201d contained a section that required workers to \u201ctreat insulation as if it contained asbestos.\u201d Perry testified this meant workers were to prepare the work area, use personal protection and use work methods based on the OSHA regulations for asbestos removal, regardless of whether the insulation actually did contain asbestos. At least by 1979, air monitoring was implemented in Celanese, including air sampling and the monitoring of Celanese and Daniel workers. Celanese had annual asbestos-training sessions that were presented to all maintenance supervisors and mechanics. In addition, asbestos information was shared with Daniel, and Daniel developed its own asbestos-training program for its workers. To make certain the established procedures were followed, Celanese supervisors performed weekly safety inspections to ensure the mechanics complied with procedures. These policies and procedures do not demonstrate a \u201cconscious and intentional disregard of and indifference to the rights and safety of others\u201d by Celanese as required by statute to award punitive damages. N.C. Gen. Stat. \u00a7 lD-5(7) (2003).\nPlaintiffs also argue it was error for the trial court to prevent counsel from questioning prospective jurors on the issue of punitive damages during voir dire. However, there were no assignments of error in the record to support plaintiffs\u2019 arguments and the issue is not properly before us. N.C. R. App. P. 10(c)(1) (2005). We overrule plaintiffs\u2019 first assignment of error.\nII.\nIn their second assignment of error, plaintiffs argue the trial court erred by allowing defendant a full set-off for prior workers\u2019 compensation claim settlements and prior third-party settlement amounts paid to plaintiffs from other sources. Plaintiffs argue the workers\u2019 compensation claim settlements, which compensated plaintiffs for their inability to earn wages, were for a different injury, i.e., impairment to wage-earning capacity, than the jury award at trial, which compensated plaintiffs for their pain and suffering, future medical expenses and permanent injury. We do not agree.\n\u201cThe purpose of the North Carolina Workers\u2019 Compensation Act is not only to provide a swift and certain remedy to an injured worker, but also to ensure a limited and determinate liability for employers.\u201d Radzisz v. Harley Davidson of Metrolina, 346 N.C. 84, 89, 484 S.E.2d 566, 569 (1997). The Act, however, was \u201cnever intended to provide the employee with a windfall of a recovery from both the employer and the third-party tort-feasor.\u201d Id. Workers\u2019 compensation benefits provide for the employee\u2019s inability to earn wages and do not provide for \u201cphysical pain or discomfort.\u201d Branham v. Panel Co., 223 N.C. 233, 236, 25 S.E.2d 865, 867 (1943). Nevertheless,\nthe weight of both authority and reason is to the effect that any amount paid by anybody, whether they be joint tort-feasors or otherwise, for and on account of any injury or damage should be held for a credit on the total recovery in any action for the same injury or damage.\nHolland v. Utilities Co., 208 N.C. 289, 292, 180 S.E. 592, 593-94 (1935) (emphasis added); see Baity v. Brewer, 122 N.C. App. 645, 647, 470 S.E.2d 836, 838 (1996). Each plaintiff sued defendants to recover for one injury, i.e., asbestos damage to his lungs. \u201cWhere \u2018[t]here is one injury, [there is] still only one recovery.\u2019 \u201d Radzisz, 346 N.C. at 89, 484 S.E.2d at 569 (citation omitted). We overrule this assignment of error.\nIn their response to this Court\u2019s order upon rehearing, plaintiffs argue the trial court erred in reducing the jury awards by the amount each plaintiff had recovered as a result of prior settlements from other sources. Plaintiffs contend section 97-10.2 of the North Carolina General Statutes requires the third party, defendant, to allege negligence against the employer, Daniel, before a set-off may be imposed by the court.\nAlthough it is true that section 97-10.2 of the North Carolina General Statutes governs the \u201crights and remedies against third parties[,]\u201d see N.C. Gen. Stat. \u00a7 97-10.2 (2003); Jackson v. Howell\u2019s Motor Freight, Inc., 126 N.C. App. 476, 479, 485 S.E.2d 895, 898 (stating that, \u201c[t]he provisions of N.C.G.S. \u00a7 97-10.2(e) govern in all actions by a plaintiff employee against a third party.\u201d), disc. review denied, 347 N.C. 267, 493 S.E.2d 456 (1997), plaintiffs did not assert this statute, nor their present argument, to the trial court, nor did they assign the trial court\u2019s failure to apply section 97-10.2 before conducting the set-off hearing as error in the record on appeal. See N.C. R. App. P. 10(a) (2005) (noting that, \u201cthe scope of review on appeal is confined to a consideration of those assignments of error set out in the record on appeal\u201d); N.C. R. App. P. 10(b)(1) (2005) (stating that, \u201c[i]n order to preserve a question for appellate review, a party must have presented to the trial court a timely request, objection or motion, stating the specific grounds for the ruling the party desired the court to make ....\u201d). Plaintiffs made no argument regarding the trial court\u2019s failure to apply section 97-10.2(e) in their brief on appeal. See N.C. R. App. P. 28(a) (providing that, appellate \u201c[r]eview is limited to questions so presented in the several briefs.\u201d); N.C. R. App. P. 28(b)(6) (2005) (stating that, \u201c[assignments of error not set out in the appellant\u2019s brief, or in support of which no reason or argument is stated or authority cited, will be taken as abandoned.\u201d). \u201cIt is not the role of the appellate courts ... to create an appeal for an appellant. . . . [T]he Rules of Appellate Procedure must be consistently applied; otherwise, the Rules become meaningless, and an appellee is left without notice of the basis upon which an appellate court might rule.\u201d Viar v. N.C. Dep\u2019t of Transp., 359 N.C. 400, 402, 610 S.E.2d 360, 361 (2005). We therefore do not review the merits of plaintiffs\u2019 argument.\nIn conclusion, the judgment of the trial court is hereby\nAffirmed.\nJudges WYNN and McGEE concur.",
        "type": "majority",
        "author": "MARTIN, Chief Judge."
      }
    ],
    "attorneys": [
      "Wallace and Graham, P.A., by Mona Lisa Wallace, and Mauriello Law Offices, by Christopher D. Mauriello, for plaintiffs-appellants.",
      "Kasowitz, Benson, Torres & Friedman, by Michael E. Hutchins, and Parker Poe Adams & Bernstein, LLP, by Josephine H. Hicks, for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "GARY RAY SCHENK, SR., Plaintiff v. HNA HOLDINGS, INC., also known as TREVIRA, INC. formerly HOECHST CELANESE, INC. and FIBER INDUSTRIES, INC., Defendant DONALD LEE BELL, Plaintiff v. HNA HOLDINGS, INC., also known as TREVIRA, INC. formerly HOECHST CELANESE, INC. and FIBER INDUSTRIES, INC., Defendant\nNo. COA03-1094-2\nNo. COA03-1095-2\n(Filed 7 June 2005)\n1. Damages and Remedies\u2014 punitive damages \u2014 willful and wanton conduct \u2014 destruction of memorandum \u2014 clear and convincing evidence\nThe trial court did not err by granting defendant\u2019s motion for directed verdict on the issue of punitive damages in an action seeking compensatory and punitive damages for alleged occupational exposure to asbestos dust and fibers at defendant\u2019s polyester manufacturing plant, because: (1) plaintiffs have not proved by clear and convincing evidence that destruction of a memorandum about improper handling of removed insulation asking to be advised of improper handling verbally rather than in writing constituted conscious and intentional disregard of and indifference to the rights and safety of others; (2) there was no evidence that the destruction of the memorandum was related to the injuries suffered by plaintiffs when the underlying conduct alleged in the memorandum was not necessarily connected to asbestos; (3) although defendants expressly rejected the recommendation of an asbestos handling and removal specialist to use the global method of asbestos removal, no state or federal regulation requires use of this method and the specialist agreed that the asbestos removal was done properly and within the regulations; (4) assuming arguendo that defendant violated OSHA standards, this evidence goes only to the issue of defendant\u2019s negligence and does not, by itself, provide sufficient evidence of willful and wanton conduct to present the issue to the jury; (5) the evidence does not support a finding that defendant willfully concealed information about the risks of asbestos exposure; and (6) although plaintiffs contend it was error for the trial court to prevent counsel from questioning prospective jurors on the issue of punitive damages during voir dire, there were no assignments of error to support plaintiffs\u2019 arguments.\n2. Appeal and Error\u2014 preservation of issues \u2014 failure to argue \u2014 setoff\nAlthough plaintiffs contend the trial court erred by allowing defendant a full set-off for prior workers\u2019 compensation claim settlements and prior third-party settlement amounts paid to plaintiffs from other sources, this assignment of error is dismissed because: (1) plaintiffs did not assert N.C.G.S. \u00a7 97-10.2 nor their present argument to the trial court, nor did they assign the trial court\u2019s failure to apply N.C.G.S. \u00a7 97-10.2 before conducting the setoff hearing as error in the record on appeal; and (2) plaintiffs made no argument regarding the trial court\u2019s failure to apply N.C.G.S. \u00a7 97-10.2(e) in their brief on appeal.\nAppeal by plaintiffs from judgments entered 3 January 2003 by Judge Charles C. Lamm in Rowan County Superior Court. Heard in the Court of Appeals 30 August 2004. Opinion filed 16 November 2004. On 4 December 2004, plaintiffs filed a Petition for Rehearing. The petition was granted by order of this Court 20 December 2004, reconsidering the case with the filing of additional briefs only. The following opinion supersedes and replaces the opinion filed 16 November 2004.\nWallace and Graham, P.A., by Mona Lisa Wallace, and Mauriello Law Offices, by Christopher D. Mauriello, for plaintiffs-appellants.\nKasowitz, Benson, Torres & Friedman, by Michael E. Hutchins, and Parker Poe Adams & Bernstein, LLP, by Josephine H. Hicks, for defendant-appellee."
  },
  "file_name": "0555-01",
  "first_page_order": 585,
  "last_page_order": 594
}
