Skip to Content
  • In Hernandezcueva v. E.F. Brady Company, Inc. (2015) 243 Cal.App.4th 249, the California Second District Court reversed a jury finding that a drywall subcontractor was not negligent, and held for the first time that under the “stream-of-commerce theory,” a contractor who uses, installs or furnishes defective products is subject to “strict products liability” even if the product is merely incidental to its work. E.F. Brady was a drywall subcontractor who bid to install drywall. Only 25% of its bid was allocated to materials and 75% was allocated to labor. Unknown to the subcontractor, the joint compound contained asbestos. The subcontractor was held liable under “strict products liability” law based on exposure occurring in 1995 for a mesothelioma diagnosis in 2011, since it had a “participatory connection” to the stream of commerce. 

    Almost all major manufacturers of asbestos containing products have filed for bankruptcy and established “trusts” to compensate persons suffering from mesothelioma, but under California law, partial payment by a manufacturer’s trust as a joint tortfeasor does not relieve the subcontractor from strict products liability for the unpaid balance of plaintiff’s total personal injury claim. Under strict products liability, joint and several liability still applies. 

    The 25% allocation to material costs is not a bright line which will cutoff potential strict products liability. The Hernandezcueva decision is not limited to asbestos litigation, and the decision is a reminder that contractors and subcontractors should carry increased liability limits with policies that afford completed operations and products coverage. The increased risk exposure can be expected to increase insurance costs and the costs of construction, and may put small subcontractors at risk of insolvency since the average mesothelioma case can be in multiples of a million dollars.

    For more information about this topic please contact:

    Michael B. Geibel, Esq.
    Partner
    Gibbs Giden Locher Turner Senet & Wittbrodt LLP
    1880 Century Park East, 12th Floor
    Los Angeles, California 90067
    Phone: (310) 552-3400
    email: mgeibel@gibbsgiden.com

    The content contained herein is published online by Gibbs Giden Locher Turner Senet & Wittbrodt LLP (“Gibbs Giden”) for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. For specific questions about any of the content discussed herein or any of the content posted to this website please contact the article attorney author or send an email to info@gibbsgiden.com. The transmission of information on this, the Gibbs Giden website, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. For a complete description of the terms of use of this website please see the Legal Disclaimer section at /legal-disclaimer. This publication may not be reproduced or used in whole or in part without written consent of the firm.
    Copyright 2016 Gibbs Giden Locher Turner Senet & Wittbrodt LLP