Oakfabco Got Asbestos Liability In Boiler Buy: Court - Law360

Oakfabco Got Asbestos Liability In Boiler Buy: Court

Law360 (April 7, 2010, 1:41 PM EDT) -- New York's top court has ruled Oakfabco Inc. assumed the liability for certain asbestos-related claims under a sale contract when it bought the boiler business of American Standard Inc. in 1970.

The New York Court of Appeals issued the ruling Tuesday, ending a four-year legal battle over whether Oakfabco is responsible for injuries that occurred after it bought the business but stemmed from asbestos-insulated boilers that were sold under American Standard.

The court's ruling affirmed the decisions of two lower courts, though the top court vacated an injunction that prevented Oakfabco from taking American Standard to court again over the liabilities. The court noted, however, that its ruling might render any future proceedings futile for Oakfabco.

"It may well be that our decision today will preclude Oakfabco from relitigating the issue we decide, in the sense that any attempt to relitigate it should be rejected," the court said. "But Oakfabco should not be enjoined from arguing otherwise."

American Standard sought the injunction after it alleged in its complaint that despite previous rulings that established Oakfabco retained all boiler liabilities under the 1970 agreement, Oakfabco continued to litigate the issue in other cases.

For example, Oakfabco won a ruling from a Washington state court that it was not responsible for the asbestos claims because the liabilities had been discharged during Oakfabco's bankruptcy proceedings in the 1980s. But American Standard — which was not a party to the case — alleged Oakfabco submitted an incomplete record to the court.

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