Florida Supreme Court Holds Celotex Liable for Predecessor Philip Carey's Asbestos Conduct in Jacksonville Shipyard Case

For three years in the 1960s, a Jacksonville man named Pickett worked as an insulator at a local shipyard, spending his days aboard ships and in the carpenter's shop and machine department. By his own account, roughly 95 percent of the asbestos cement he used on the job came from the Philip Carey Manufacturing Company. Philip Carey had long marketed its asbestos-containing insulation products while its executives knew, or recklessly disregarded, that inhaling asbestos fibers caused grave and often fatal lung disease.

Pickett developed severe pulmonary disease as a result of that exposure. He and his wife brought suit in Duval County against Celotex Corporation, which had acquired Philip Carey through a statutory merger and thereby stood as the legal successor to all of Philip Carey's liabilities. The plaintiffs alleged negligence and strict product liability.

Wayne Hogan of the firm then known as Brown, Terrell, Hogan, Ellis tried the case. The jury found Philip Carey had acted with the recklessness required to support punitive damages and returned a verdict of $500,000 in compensatory damages to Mr. Pickett, $15,000 to his wife, and $100,000 in punitive damages assessed against Celotex as successor, for a combined total of $615,000.

Celotex appealed, challenging most prominently whether a successor corporation that absorbed a predecessor through merger could be held responsible for punitive damages tied to the predecessor's misconduct. Florida's First District Court of Appeal, in Case No. AW-264 decided December 17, 1984, affirmed the verdict in full.

Celotex pressed the punitive-damages question to the Florida Supreme Court. In Celotex Corp. v. Pickett, 490 So.2d 35 (Fla. 1986), the court affirmed once more. Citing Section 607.231(3) of the Florida Statutes, the court held that a corporation surviving a statutory merger inherits all liabilities of the absorbed corporation, including exposure to punitive damages for the predecessor's pre-merger recklessness. The full $615,000 verdict stood without reduction.

The ruling became a foundational precedent in Florida asbestos litigation. Because Celotex had factories and distribution reaching across the country and had absorbed several asbestos manufacturers, the decision had practical significance well beyond a single Jacksonville case: courts and practitioners now had a clear statement from Florida's highest court that a buyer of a corporation through merger could not escape responsibility for the human cost of that predecessor's decisions.