Document e7oDoGMJX8K1ED01op22MrYGp

FILE NAME: WR Grace (WRG) DATE: February 22, 1968 DOC#: WRG052 DOCUMENT DESCRIPTION: 1968 Letter to Maryland American General Group regarding workmen's compensation claim February ,2 2 1963 Maryland American General Group '15 Fas i Aukey Street Portland, Oregon ATTENTION John Hopkins Ret Your Claim Not 750 C 890 Insuredt V. R. Grace & Co. Zonolite Division Claimant LILAS D. WELCH Polioyi R 001598 [oar Mr. Hopkins l'hia letter will serve to oonfirm our several most reoent telephone conversations concerning this particular matter, and to provide you with a general suaaary of events leading up to final settlement. As you are of course aware, trial of the Issues involved was conducted before the Chairman of the Industrial Acoident Board in Kalispell, on November 29, 1967. Ve had discussed the matter shortly before the Hearing, and I had Informed you of the developments that had ooourred and information whloh had beooae available a few days prior to the date set for trial, which information was confirmed tn our letter of November 25, 1967. Information then available had led me to believe that we might well wish to attempt to dispose of the case by way of settlement, rather than proceeding on through trial and faoing the possibility of the admission of a great deal of very damaging evidence which might have a grave effeot on any future claims of this nature arising through employment by the company in Libby. Settlement of course could not be effected at that late date, and consequently the matter was heard at the time set. The employer itself was of course quite conoerned with the general situation, as well aa with the particular case with which we are conoerned, and the general counsel of the divisiou conducting the Zonolite operations, Mr. Charles Bugan, traveled from Cambridge, Massaohueetts to Kalispell in order to attend trial. - 2- i Counsel repreeeuting claimant had subpoenaed several Tallow employe, as well as Mr. Kujawa, Safety Engineer for the company, and of course the looal Zonoilte raiuiageaent was present. In addition, the oase had apparently aroused considerable Interest, and there were several spectators, including counsel representing still another claimant whose physical difficulties aross prior to the time coverage was provided by Maryland Casualty Company. In general, the testimony of ihs fsllow workers indicated that they encountered a dust problem at many points through out the Zonoilte plant facilities, and a great deal of testimony was Introduced with respect to dust conditions ex istent in the yard area itself. It is of course at this point that the warehouse, where claimant was employed for many years prior to his retirement, is located. It was further developed that the main exhaust system of the mill had been so constructed as to allow the intense mill dust to pervade the yard area. It was further developed that claimant was required to sweep the warehouse as well as travel from point to point throughout the yard area in performing his general duties. Another party who had been employed In the warehouse testified to the extreme dust conditions whloh arose while sweeping, and employees working in a machine shed some distance from the mill testified that the oonditlon at that point at times beoaae extremely severe. It was also developed that complaints had been registered by union representatives in a meeting with the Zonoilte manager some months prior to claimant's retirement, and it was alleged that certain concessions or admissions had been made by the management at that time. It waa however established that neither the management nor the employees or union representatives were actually aware of the severity of the considions, or of the degree of exposure to harmful substance until very recently, and of course thie information ie pretty well documented in our own file*. \ The hazard we faced particularly at the timo did of course Involve the numerous written reports submitted by the State Hoard of lieulth which through the years indicate that the State Board had become more and more concerned with the problem of asbestosis. '.'hile no state Board representative had been subpoenaed or was present at the Tearing, counsel attempted to bring in informal ion contained within such reports through the testimony of the employer's Safety Engineer and manager. - 3- v'* registered an objection on several grounds, Including a claim that all such information was lncludsd undsr a statute relating to the privileged nature of information developed by the State hoard of Health. A rather heated argument arose at that tiae, with the Chairman of the hoard at first Indicating that he was not aware of any suoh statutory privilege, and indioating that be intended to allow in evidence all suoh information which might be relevant to the ieeuee. A noon recess was called at this time, and we were able to convince the Chairman that such privilege did exist, further pointing out that the best evldenoe of oourse would be the reports themselves or the aotual findings of the State hoard representative admitted through his own testi mony. The Chairman finally sustained our objection, and I believe tne entire matter was conduoted in a manner which made it evident that while we were not attempting to stifle or exclude relevant testimony, ws simply had no intention of allowing hearsay evidencs in the record. The Hearing consumed the entire day, and 1 actually believe the record would Indicate little aotual evldenoe establishing claimant's condition to have been proxlmately connected with his employment in the warehouse was presented. The general picture however would of course neoessarily reflect the dust conditions existent at the plant, and further the existence of asbestos fiber in the aill dust ould not be denied. The hearing was continued at the conclusion of the teetlaony, and arrangements were made to obtain the deposition of Dr. Harry rower, of Groat Palls, Montana. In addition of course, counsel Indicated hie intention of continuing with an attempt to obtain the State Doard of FTealth records and place them in evidence, aud discussion was had relative to obtaining such testimony at a Hearing to be conduoted in Heleue, Montana, the State Capitol. \ further problem presented to us, as you and I have dlsussed bv telephone, was the possibility thAt the Industrial Accident Hoard might in faot find the olaia to be entirely uncompensAble, as net within The Ocoupatlonal Disease Aot as su<'h, which in turn opened up the possibility of /.onolits being faced with n civil suit for damages in an employer's :lability s;luaiion. This particular situation has in fact arisen in Montana in the past in a case involv in* inhalation of ceaent dust, and m that case, the employee obtained a judgment in excess of $50,000,00 iu a suit conducted in the Montana Federal district Court. Vhile thie particular facet of the case might not be considered to be actually an aleaent in the occupational dlsaase Haarlng, still the exposure that sight be enoountered by the employer under sueh cireusetanoee could not be ignored. After considering tue situation as it stood at the olose of the Hearing, Mr. Dugan, oounsel for Zonoiite, indicated that he felt settlement attempt was definitely indicated, and he did in turn assure those concerned that ha intandad to present all of the problems existent at th# Libby plant to the Division aanagaaant as soon as he returned. A few days after the Hearing, we had a discussion with the Chairman of the Industrial Aooldent Board in an attempt to ascertain his view of the proceedings up to that tims. Hs indicated that he felt that while the reoord before him could not be said to establish with osrtainty that claimant had been injuriously exposad to asbsstos fibers during his employment at the warehouse, which of course had continued for many years prior to his final disability, he did feel that there could be no question but that Mr. sloh had contracted the disease while in the employment of the Zonoiite company, and that he felt under such oirooastanoea he should extend the benefit of any doubt to the employee and allow us to contest auoh decision through tha Courts if we felt necessary. This information of course aarely confirmed the opinion we all held at that time, to the effect that some compromise settlement should be entered into without delay. As you will recall, you and I discussed the situation and decided to open negotiations with an offer in an area undsr $5,000.00 with the indication that we felt under any ciroumstanoes, the extent of liability was statutorily llmitsd to that amount. I might say in this particular respect:, that the Chairman of tha Board had agreed that our views might be correct in this regard, but had further indicated that if he ruled the matter to be compensable, lie intended to allow the olalm in its sntirety which of course presented us with total exposure of around $19,000.00. - 5- At any rate, we did commence negotiations, and after several discussions, were presented with what we were infomed to be the final minimum figure of 312,000.00. I discussed the natter with you again at that tine, and authority in that aaount was extended. we then oonduoted further negotiations, and in addition called upon the Chairman of the Board to exert whatever pressure he oould toward settlement at a figure of $ 10,000.ou, and after a good deal of disouaalon, agreement was finally reached at this figure. As I hare infomed you, The Occupational Disease Aot of Montana sitsply nakes no provision for a ooaproaise lunp sua settlement suoh as is included within the Vorkaen's Compensation Aot. uur own situation is of course unique in this Jurisdiction, and we really have little preoedent to follow in concluding, the aatter in the aanner In which we did. It appears that the only aethod of disposing of such a olaia acceptable to the industrial Aocident Board Involves the withdrawal of the clala presented by the injured eaployee, ooupled with a full and final release, and we have so proceeded. Withdrawal of Clala, properly subscribed by Mr. Welch has been forwarded along to the Industrial Aocident Board, and in addition we drafted a Release whioh we feel will adequately protect the employer and insurer's position, which has been subscribed by Lilas D. Welch and Christine Welch, his wife, and we are at this tiae forwarding oopiea of Withdrawal of Clala, together with original and copy of Release. You will note that the Release does contain a hold harmless and indemnification provision, and as in the instant case there are uo minor beneficiaries, it would appear that no further action need be taken, however in the event a oase of this type is disposed of in a similar manner In the future, and minor beneficiaries are involved, further thought most certainly should be given to tl.s proper method of disposing of any possible claims of such minors. raft earlier forwarded along has been delivered, and as all phases of this matter are now dlopoood of, we are at this time closing our filo and submitting statement for services, together with itemization of time and expense incurred. - 6- of..d'ulsatirinnwilAlccibdeenitssuHeodardlaOrddueer coaucrksneo,wleadndginwge Withdrawal will forward it illone to you at that time. e are certainly pleased to have had tho opportunity to be of service to you in the defense of this extremely interesting case, and are happy the natter could he dis posed of on an equitable basis. Sincerely, SVL/nk Enclosures: S. Y. Larrlck Statement for Services, with Itemization of Time and Gxpeuse Copies, Withdrawal of Claim original and copy, Release a r t Mr. Robert Conley Your File: 1 C 3<-0l6l60 Enclosuresi Copy, withdrawal of Claim Release