Which Corporate Survival Statute Controls?

By Robyn Hagan Cain on September 21, 2012 | Last updated on March 21, 2019

Many California lawyers make their living trying mesothelioma cases. One factor an asbestos lawyer should consider when reviewing a prospective client's claim against a defunct asbestos-product manufacturer is the applicable corporate survival statute.

Douglas G. Robinson, a California resident, died of mesothelioma in 2005. On November 1, 2006, Robinson's wife, Carolyn, and their three children filed a complaint for wrongful death and survival. The lawsuit alleged that Robinson's death was caused by his occupational exposure to asbestos.

The complaint, which was later amended, alleged in particular that Robinson was harmed by asbestos-containing boilers or boiler components manufactured, distributed or sold by Nebraska Boiler Company, Inc. (Nebraska Boiler). Nebraska Boiler, in turn, was a division of National Dynamics Corporation, which later became known as SSW, Inc.

But there was a problem with the Robinsons' claim: SSW was only added as a defendant in a Doe amendment filed on February 18, 2009, and the company dissolved in 2002, over five years before it was brought into this lawsuit.

The trial court granted summary judgment to SSW, Inc., a Nebraska company, finding that the Robinson's were barred from suing SSW under the Nebraska corporate survival statute.

The trial court rejected the plaintiffs' argument that California's corporate survival statute controlled in this case. Here, the court ruled that the California statute applies only to domestic corporations, not to foreign corporations like SSW.

The appellate agreed, noting that Restatement Second of Conflict of Laws echoes that point. The Restatement states, "Whether the existence of a corporation has been terminated or suspended is determined by the local law of the state of incorporation," and "termination or suspension of a corporation's existence by the state of incorporation will be recognized for most purposes by other states."

Don't depend solely on the California corporate survival statute to preserve your claim. If you're suing an out-of-business foreign defendant, check the survival statute in the defendant's state.

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