DRITSAS v. ITW LLC (2019)

Order, Supreme Court, New York County (Lucy Billings, J.), entered on or about May 7, 2018, which, to the extent appealed from as limited by the briefs, denied defendant ITW Food Equipment Group, LLC's motion for summary judgment dismissing as against it so much of the complaint as is predicated on a de facto merger, unanimously reversed, on the law, without costs, and the motion granted.

Plaintiff seeks to hold defendant liable, as a successor to the Vulcan–Hart Corporation, for the consequences of her decedent's exposure to asbestos between 1969 and 1988 arising from his work on ovens, grills and broilers manufactured by Vulcan–Hart.  Vulcan–Hart's assets were purchased in 1986 by Hobart Corporation pursuant to an asset purchase agreement, and defendant acquired Hobart Corporation's product lines and other assets in 2002.

Defendant established prima facie that there was no de facto merger between Hobart and Vulcan–Hart that would make Hobart responsible, contrary to the general rule, for Vulcan–Hart's preexisting liabilities (see Fitzgerald v. Fahnestock & Co., 286 A.D.2d 573, 574, 730 N.Y.S.2d 70 [1st Dept. 2001] ), because there was no continuity of ownership between the two corporations (see Matter of New York City Asbestos Litig., 15 A.D.3d 254, 258, 789 N.Y.S.2d 484 [1st Dept. 2005];  Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 150 A.D.3d 490, 57 N.Y.S.3d 111 [1st Dept. 2017];  New York v. National Serv. Indus., Inc., 460 F.3d 201, 215 [2d Cir.2006];  but see Lippens v. Winkler Backereitechnik GmbH, 138 A.D.3d 1507, 1509–1510, 31 N.Y.S.3d 340 [4th Dept. 2016] ).  The asset purchase agreement stated that Hobart purchased Vulcan–Hart's assets for cash (see Oorah, Inc. v. Covista Communications, Inc., 139 A.D.3d 444, 445, 30 N.Y.S.3d 626 [1st Dept. 2016] ).

In opposition, plaintiff failed to raise an issue of fact as to continuity of ownership.  There is no evidence in the record that any other transaction took place in which Vulcan–Hart's shareholders obtained an interest in Hobart (see Matter of New York City Asbestos Litig., 15 A.D.3d at 256, 789 N.Y.S.2d 484).

Plaintiff failed to show that discovery on continuity of ownership would be anything other than a fishing expedition (see Auerbach v. Bennett, 47 N.Y.2d 619, 636, 419 N.Y.S.2d 920, 393 N.E.2d 994 [1979];  Oorah, 139 A.D.3d at 445, 30 N.Y.S.3d 626).