Riblet Tramway Co., Inc. v. Marathon Electronics Avtek Drive Div.

• Citation: 621 A.2d 1274,159 Vt. 503
• Decision Date: 15 January 1993
• Docket Number: No. 91-239,ELECTRONICS--AVTEK,91-239
• Court: United States State Supreme Court of Vermont
• Parties: RIBLET TRAMWAY COMPANY, INC. v. MARATHONDRIVE DIVISION.

Page 1274

621 A.2d 1274

159 Vt. 503

RIBLET TRAMWAY COMPANY, INC. v. MARATHON ELECTRONICS--AVTEK DRIVE DIVISION.

No. 91-239.

Supreme Court of Vermont.

Jan. 15, 1993.

Lisa Chalidze of Hull, Webber & Reis, Rutland, for plaintiff-appellant.

John S. Liccardi and Martha A. Wieler of Harlow Liccardi & Crawford, P.C., Rutland, for defendant-appellee.

Before ALLEN, C.J., GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

ALLEN, Chief Justice.

Riblet Tramway Company appeals from an order in an indemnity action against Marathon Electronics-Avtek Division (Avtek) that dismissed the action on the ground that the claim had been previously adjudicated in a matter in which Riblet was the third-party plaintiff and Avtek had been the third-party defendant. We affirm.

In 1978 Riblet entered an agreement with the Mt. Mansfield Company to construct a chair lift, and in 1982 Mt. Mansfield sued Riblet in federal district court for alleged failure to conform to certain express and implied warranties with respect to the construction. In 1983 Mt. Mansfield and Riblet entered a stipulation of settlement under which Riblet would perform all work necessary to allow the chair lift to carry 1,200 persons per hour. This work was completed in 1984. In 1985, however, the chair lift failed to carry 1200 skiers per hour, and in 1986 Mt. Mansfield filed suit against Riblet in the Lamoille Superior Court ("1986 action") for breach of warranties and for breach of the settlement agreement reached in 1983. Riblet in turn filed a third-party complaint against Avtek pursuant to V.R.C.P. 14, alleging that Avtek had a duty to indemnify it, based on a warranty theory, in the event that judgment was entered in favor of Mt. Mansfield.

Prior to trial, the court struck the breach of warranty claims against Riblet because the applicable statute of limitations had expired. Avtek then moved to dismiss the third-party complaint because it was also based on warranty claims. The court granted Avtek's motion, and subsequently entered judgment for Mt. Mansfield against Riblet for $186,960.

Riblet appealed the judgment in favor of Mt. Mansfield, but the appeal was later dropped. Riblet did not appeal dismissal of its claim against Avtek. Instead, it brought the present action ("1990 action") against Avtek on a theory of indemnity, alleging that "[t]he reason the lift failed to carry 1200 skiers per hour was solely because of defects in the AVTEK motor and control, and breaches of express and implied warranties made by AVTEK in connection with its provision of the components to Riblet." The court granted Avtek's dismissal motion on res judicata grounds, and the present appeal followed.

Riblet argues first that its claim against Avtek did not accrue in the 1986 action because an action for indemnity does not accrue until the indemnitee (here, Riblet) has suffered an actual loss. Riblet reasons that since it had not suffered an actual loss in the Mt. Mansfield action at the time its claim against Avtek was dismissed, the court's prejudgment order dismissing Riblet's action against Avtek should not be given res judicata effect. We disagree.

The central purpose of Rule 14 is to permit "resolution in a single proceeding of common issues." Reporter's Notes to V.R.C.P. 14; see First National Bank of Strasburg v. Platte Valley State Bank, 107 F.R.D. 120, 123 (D.Colo.1985) (dispose of related claims in single suit; simplify and expedite litigation). A defendant may bring in a third party under V.R.C.P. 14(a) "who is or may be liable to such third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff." (Emphasis supplied.) If the third-party plaintiff prevails against the principal plaintiff and incurs no liability, the third-party defendant in turn incurs no liability to the third-party plaintiff. See Beights v. W.R. Grace & Co., 67 F.R.D. 81, 84 (W.D.Okla.1975) (defendant manufacturer was estopped to claim that a maker of an ingredient in its product was liable for any defect after jury found that product was not responsible for plaintiff's injuries).

Joinder of all interested parties under Rule 14 binds each to the resulting judgments in the matter, even though an independent action in place of the third-party action might have been premature. Jeub v. B/G Foods, Inc., 2 F.R.D. 238, 240 (D.Minn.1942). In Jeub, the defendant sought indemnity from the third-party defendant, who resisted impleader on grounds that, under state law, no indemnity right arose until after the defendant had suffered actual loss. The court allowed impleader and stated:

The fact that an independent action for money recovery could not be brought at this time does not militate against [third-party plaintiff's] right to invoke a procedure which will determine rights of the parties concurrently with that of the basic proceeding, and if and when any loss has been sustained as to which [third-party defendant] is liable over, the laws of this State in regard thereto may be made effective.

Id. at 240 (emphasis supplied); accord Holzhauser v. Container Corp. of America, 93 F.R.D. 837, 839 (W.D.Ark.1982). We hold that the third-party plaintiff's claim against the third-party defendant arises or accrues when the plaintiff files the complaint in the original action because, under Rule...