Guy F. Atkinson Co. v. Merritt, Chapman & Scott Corp.

• Decision Date: 20 June 1956
• Docket Number: 34333.,No. 33585,33585
• Citation: 141 F. Supp. 833
• Court: U.S. District Court — Northern District of California
• Parties: GUY F. ATKINSON COMPANY, a corporation, Plaintiff, v. MERRITT, CHAPMAN & SCOTT CORPORATION, a corporation, et al., Defendants. WINSTON BROS. COMPANY, a corporation, et al., Plaintiffs, v. UNITED STATES of America, Defendant.

141 F. Supp. 833

GUY F. ATKINSON COMPANY, a corporation, Plaintiff, v. MERRITT, CHAPMAN & SCOTT CORPORATION, a corporation, et al., Defendants.

WINSTON BROS. COMPANY, a corporation, et al., Plaintiffs, v. UNITED STATES of America, Defendant.

Nos. 33585, 34333.

United States District Court N. D. California, S. D.

June 20, 1956.

Johnson & Stanton and John A. Sproul, San Francisco, Cal., for Guy F. Atkinson Co.

Bronson, Bronson & McKinnon and Kirke La Shelle, San Francisco, Cal., for Merritt, Chapman & Scott Corp.

Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., for Winston Bros. Co.

Lloyd H. Burke, U. S. Atty., James B. Schnake, and Wm. B. Spohn, Asst. U. S. Attys., San Francisco, Cal., for United States.

OLIVER J. CARTER, District Judge.

The basic question considered in this Memorandum is whether the United States, a defendant in both of these consolidated actions, should be permitted to inject into this litigation its claim for indemnity against Merritt, Chapman & Scott Corporation and the Savin Construction Corporation.

On two separate occasions during the time that the United States was constructing Folsom Dam under contract with Merritt, Chapman & Scott and Savin Construction Corporation, a coffer-dam built in connection with that project collapsed, causing damage to the plaintiffs. The Guy F. Atkinson Company brought suit against the United States under the Federal Tort Claims Act, 28 U.S.C.A. §§ 1346(b), 2671 et seq., and against the Government's general contractors, Merritt, Chapman & Scott Corporation and the Savin Construction Corporation, basing federal jurisdiction over the latter defendants on a diversity of citizenship between the plaintiff and those defendants. In that suit the United States filed a cross-complaint against its general contractors and co-defendants, claiming a right of indemnity against them.

In another action, Winston Bros. Company and Al Johnson Construction Company brought suit against the United States under the Tort Claims Act, but could not join the Government's general contractors as defendants because complete diversity of citizenship between those contractors and the plaintiffs would be lacking. In that suit the United States filed a third party complaint against its general contractors, based on the same claim of indemnity raised in the Atkinson case.

In the Winston case the plaintiff moves to strike or in the alternative to dismiss the Government's third party complaint, and the third party defendants move to dismiss the third party complaint on the ground that it fails to state a claim for relief; the third party defendants also move to vacate the order permitting the filing of the third party complaint, or in the alternative to strike the third party complaint, on procedural grounds. In the Atkinson case the Government's general contractors who are defendants and cross-defendants, move to dismiss the Government's cross-complaint on the ground that it fails to state a claim for relief. These motions are the subject of this Memorandum.

The Government claims a common law right to indemnity and it also claims that its general contractors assumed the obligations of indemnitors by their contract with the Government. At the outset this Court must decide what law to apply to the solution of the problem before it. The Government's general contractors contend that California law is applicable; the Government contends that federal common law principles should be applied. Both contentions are partly correct, since this Court is of the opinion that state law should be applied to the Government's claim to common law indemnity, and that federal common law must be applied to the construction of the Government contract on which the United States bases its claim to contractual indemnity. Turning first to the authorities on the question of whether federal or local law controls a claim to common law indemnity, guidance is found in a statement by the Supreme Court which indicates that local law applies to a claim for contribution by or against the Government. In United States v. Yellow Cab Co., 340 U.S. 543, 552, 71 S.Ct. 399, 405, 95 L.Ed. 523, the Court said:

"However, if the Act is interpreted as now urged by the Government, it would mean that if an injured party recovered judgment against the Government, the Government then could sue its joint tort-feasor for the latter's contributory share of the damages (local substantive law permitting). On the other hand, if the injured party recovered judgment against the private tort-feasor, it would mean that (despite local substantive law favoring contributory liability) that individual could not sue the Government for the latter's contributory share of the same damages."

The Government concedes here that the Yellow Cab case establishes that state law controls claims by or against the Government for contribution, but the argument is made that a different rule should be applied to claims for indemnity. The cases cited in support of this proposition generally involve a peculiarly federal matter, such as the relationship between the United States and its employees, Gilman v. United States, 347 U.S. 507, 74 S.Ct. 695, 98 L.Ed. 898, or between the United States and its military personnel, United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067, or questions arising from the issuance by the United States of commercial paper, Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838; National Metropolitan Bank v. United States, 323 U.S. 454, 65 S.Ct. 354, 89 L.Ed. 383. But this issue has been settled for our purposes by the opinions of the Court of Appeals for the Ninth Circuit in United States v. State of Arizona, 9 Cir., 214 F.2d 389, subsequent opinion, 216 F.2d 248. The court there said 216 F.2d at page 249:

"* * * to this court the intendment of the case of United States v. Yellow Cab Co., 340 U.S. 543, 71 S.Ct. 399, 95 L.Ed. 523, is that state law will apply on contribution or indemnity unless the internal management of the government is involved in some special way. Such a way is not to be found in this case."

Similarly in the case at bar, the Government's claim to common law indemnity does not involve the internal management of the Government, nor does it present a peculiarly federal question. Therefore this Court will apply California law to that claim.

In California the courts do not weigh the relative culpability of joint tort-feasors; accordingly there is no contribution or indemnity between them: in Dow v. Sunset Telephone & Telegraph Co., 162 Cal. 136, 139, 121 P. 379, 381, the court said, quoting from Fowden v. Pacific Coast Steamship Co., 149 Cal. 151, 157, 86 P. 178, 180:

"`Each of the joint tort-feasors being liable for all the damage, without regard to their different degrees of culpability, when the plaintiff's cause of action is satisfied as to one, it is satisfied as to all.'"

And in Adams v. White Bus Line, 184 Cal. 710, 714, 195 P. 389, 390, the court said:

"Under this state of facts it is clear that neither could recover in an independent action against the other, as the negligence of each contributed to the damages resulting from the collision."

It is true that where liability is imposed upon one purely by operation of law, that individual may be entitled to indemnity from the actual wrongdoer, as in the case of an employer who pays for damages caused by the negligent unauthorized act of his employee. Johnston v. City of San Fernando, 35 Cal.App.2d 244, 95 P.2d 147; Myers v. Tranquility Irr. Dist., 26 Cal.App.2d 385, 79 P.2d 419. But the complaints in the cases at bar allege affirmative acts of negligence...