First Appellate District Court affirms setting aside default judgments in asbestos injury suits

By Charmaine Little | Dec 18, 2018

SAN FRANCISCO – The 1st Appellate District Court of the California Court of Appeal, Division Five affirmed an order that set aside default judgments in asbestos injury cases that were served on a company that ceased operating in the 1970s.

The Appeals Court agreed on Dec. 11 with the San Francisco City and County Superior Court's ruling in the four consolidated cases that set aside the default judgments against Associated Insulation of California. Presiding Judge Barbara J.R. Jones authored the opinion.

“In our view, this case presents exceptional circumstances warranting equitable relief,” Jones wrote. "Fireman’s Fund was denied an opportunity to present its case in court because it was not served with any of the relevant pleadings, did not have notice of two of the lawsuits, and did not believe it had a duty to defend Associated. We conclude the trial court did not abuse its discretion by granting Fireman’s Fund (Insurance Co.)’s motion for equitable relief."

Plaintiffs William Mechling, James Greely, Omar Barstad and Alexander Corns and filed personal injury lawsuits against Associated Insulation of California and a handful of other companies over allegations they experienced injuries after being exposed to asbestos. While the plaintiffs served Associated, it never responded since it stopped doing business in 1974. 

A lower court entered default judgments against Associated for $350,000 to $1.9 million. Fireman’s Fund stepped in and was able to locate insurance policies proving it provided coverage for Associated. It asked the court to vacate the default judgments on equitable relief, stating this was all “a classic case of extrinsic mistake” as the plaintiffs did not provide notice to it. 

Fireman’s Fund also pointed out that it couldn’t defend itself in the early stages of the case because it wasn’t named as a defendant. Once it discovered the case, it went into action hoping to set aside the judgments.

The Appeals Court ruled Fireman’s Fund was able to prove it had a “meritorious case” and that the Superior Court did not abuse its discretion by setting aside the default judgments.

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