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Gray v. Badger Mining Corp.

July 15, 2003

LAWRENCE B. GRAY, RESPONDENT,
v.
BADGER MINING CORPORATION, INDIVIDUALLY AND AS SUCCESSOR-IN-INTEREST TO THE C.A. CHIER SAND COMPANY, APPELLANT, CARPENTER BROTHERS, INC., ET AL., DEFENDANTS.



Reversed Gordon W. Shumaker, Judge Hennepin County District Court File No. 99666

Considered and decided by Shumaker, Presiding Judge, Schumacher, Judge, and Halbrooks, Judge.

SYLLABUS BY THE COURT

When a bulk supplier of a dangerous material reasonably relies on a sophisticated purchaser to communicate warnings to the purchaser's employees, the supplier has no duty to warn the sophisticated purchaser's employees that the material is dangerous to employees' health. A bulk supplier has discharged its duty to warn the ultimate user if the supplier has taken some reasonable, affirmative steps to establish that the employer was a sophisticated purchaser.

The opinion of the court was delivered by: Gordon W. Shumaker, Judge

OPINION

Respondent Lawrence Gray developed silicosis and sued appellant Badger Mining Corporation and various other defendants in this personal-injury action. He claimed that the defendants were negligent and strictly liable for failing to warn him of the dangers of breathing silica dust, and that the defendants breached warranties of merchantability and fitness for intended purpose. After the district court denied the defendants' motions for summary judgment, all defendants settled with Gray, except Badger.

Badger renewed its motion for summary judgment on the legal issue that it had no duty to warn Gray. After the district court denied Badger's motion, Badger and Gray agreed to forego a trial on the disputed factual issues and stipulated to certain facts and to entry of judgment against Badger. But Badger also denied liability and preserved its right to appeal the legal issue of whether it had a duty to warn Gray. The parties thus agreed that if this court concluded that Badger had a duty to warn Gray, Badger's liability would remain at the judgment amount, but if Badger had no duty to warn, Badger's liability would be limited to a lesser amount. Badger filed this appeal after the entry of final judgment.

FACTS

For over four decades, respondent Lawrence Gray worked in a foundry where he was exposed to silica sand. He ultimately contracted silicosis. For part of Gray's work history, appellant Badger Mining Corporation supplied silica sand to the foundry.

Gray sued Badger, among others, alleging that Badger failed to warn of the dangers of inhaling silica. Badger contended in its defense that it had no duty to warn Gray of such dangers because Gray's employer was a sophisticated buyer of silica sand and was in the best position to warn and to protect its employees.

Badger twice moved for summary judgment on the issue of duty to warn. The district court denied the motions. Badger and Gray then stipulated to the entry of judgment against Badger and agreed that Badger would thereby preserve the duty-to-warn issue for appeal. The parties further stipulated that they would forego a trial on the facts and that if Gray prevails on appeal he will receive the stipulated judgment amount of $75,000, but if Badger prevails, Gray will accept $17,500 in satisfaction of the judgment.

In this unique procedural posture, and despite the likelihood of the existence of genuine issues of material fact, Badger appeals from the stipulated judgment and asks this court to decide whether Badger had a legal duty to warn Gray about potential hazards of inhaling silica.

Many significant facts are undisputed. Gray worked in various capacities at the Smith Foundry from 1951 to 1998. In the 1950s and 60s, he was exposed to silica dust, created when the foundry recycled sand. In those days, the foundry had no fans or exhaust systems to reduce the quantity of dust particles in the air, and employees did not have dust masks available for their protection. When protective masks became available in the early 1970s, Gray sometimes wore them. He wore masks continuously from 1993 until his retirement in 1998.

Badger was a supplier of sand in bulk to the foundry. Unquestionably, Badger supplied sand beginning in 1992, but there is evidence in the record that Badger shipped sand to the foundry before 1981. Prior to 1981, suppliers of silica sand provided no warnings of inhalation hazards. For shipments beginning in 1992, Badger gave ...


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