Amerada Hess Corp. v. Owens-Corning Fiberglass Corp.

• Decision Date: 14 May 1993
• Docket Number: OWENS-CORNING
• Citation: 627 So.2d 367
• Parties: , 61 USLW 2745, Prod.Liab.Rep. (CCH) P 13,553 AMERADA HESS CORPORATION, et al. v.FIBERGLASS CORPORATION. AMERICAN TRADING TRANSPORTATION COMPANY, INC., et al. v.FIBERGLASS CORPORATION. 1911251, 1911252.
• Court: Alabama Supreme Court

Page 367

627 So.2d 367

1993 A.M.C. 2513, 61 USLW 2745, Prod.Liab.Rep. (CCH) P 13,553

AMERADA HESS CORPORATION, et al. v. OWENS-CORNING FIBERGLASS CORPORATION.

AMERICAN TRADING TRANSPORTATION COMPANY, INC., et al. v. OWENS-CORNING FIBERGLASS CORPORATION.

1911251, 1911252.

Supreme Court of Alabama.

May 14, 1993.

As Modified on Denial of Rehearing

Aug. 27, 1993.

Joseph M. Allen, Jr. and Gregory C. Buffalow of Johnstone, Adams, Bailey, Gordon & Harris, Mobile, for Amerada Hess Corp., American Trading Transp. Co., Inc., Arco Marine, Inc., Bermuth Lembcke Co., Inc., Chevron U.S.A., Inc., Chiquita Brands Intern., Inc., formerly United Brands Co. and United Fruit Co., Isbrandtsen Co., Inc., Keystone Shipping Co., Chas. Kurz & Co., Inc., Lykes Bros. S.S. Co., Inc., Marine Navigation Co., Marine Transport Lines, Marine Transport Management Co., Inc., Nat. Bulk Carriers, Paco Tankers, Inc., Red Hills Corp., United Brands Co., Unocal and Warren Petroleum Co.

Jon A. Green and Jack B. Hood of Crosby, Saad, Beebe, Cavender & Crump, P.C., Mobile, for appellee.

Allan Wheeler of Starnes & Atchison, Birmingham, and Michael B. Kinnard and Melissa B. Isaacs of Baker, Worthington, Crossley, Stansberry & Woolf, Knoxville, TN, for amici curiae Owens-Illinois, Inc. and Keene Corp.

ADAMS, Justice.

Amerada Hess Corporation; American Trading Transportation Company, Inc.; ARCO Marine, Inc.; Bermuth Lembcke Company, Inc.; Chevron U.S.A., Inc.; Chiquita Brands International, Inc.; Isbrandtsen Company, Inc.; Keystone Shipping Company; Marine Transport Lines; Marine Transport Management Company, Inc.; National Bulk Carriers; PACO Tankers, Inc.; Red Hills Corporation; United Brands Company; Unocal; and Warren Petroleum Company (all hereinafter referred to as the "shipowners") are defendants and third-party plaintiffs in an action by former seamen alleging asbestos injuries. The shipowners appeal from summary judgments in favor of Owens-Corning Fiberglass Corporation ("OCF") on their third-party claims seeking indemnity or contribution from OCF, whose asbestos products, it is alleged, were aboard the shipowners' vessels and injured the seamen. We affirm.

This case represents another installment in the ongoing maritime asbestos litigation addressed previously by this Court in Foster Wheeler USA Corp. v. Owens-Illinois, Inc., 595 So.2d 439 (Ala.1992), and Sheffield v. Owens-Corning Fiberglass Corp., 595 So.2d 443 (Ala.1992). Personal representatives of the estates of Thomas Shepherd and James L. Burnett Sr. ("plaintiffs") sued OCF in the District Court of Dallas County, Texas, in 1987 and 1988, respectively, alleging that asbestos products manufactured by OCF had caused the deaths of their decedents, former seamen. These personal representatives, on February 8, 1990, and February 24, 1989, respectively, also filed actions against the shipowners in the Mobile County, Alabama, Circuit Court. In the Alabama actions, the plaintiffs alleged, inter alia, that the ships on which the seamen worked had been unseaworthy because of asbestos fibers aboard them. The shipowners, seeking indemnity or contribution, impleaded OCF and numerous other manufacturers of asbestos-containing products, which, they alleged, were responsible for the deaths of the plaintiffs's decedents.

Subsequently, OCF obtained agreements with the plaintiffs settling their claims against OCF and purporting to release OCF from any further liability arising out of the plaintiffs' claims. OCF then moved for summary judgments in the Mobile County Circuit Court, contending that the settlements with the plaintiffs barred the shipowners' claims against OCF for indemnity or contribution. In February 1991, the trial court entered summary judgments in favor of OCF in both cases. These judgments were subsequently certified as final judgments, pursuant to Ala.R.Civ.P. 54(b). The shipowners appealed. On July 15, 1992, this Court granted the shipowners' motions to consolidate the appeals of the summary judgments for briefing and oral argument. On August 12, 1992, the trial court granted motions filed by the shipowners to dismiss the plaintiffs' claims against them on the basis of the actions pending in Texas. In Shepherd v. Maritime Overseas Corp. 614 So.2d 1048 (Ala.1993), we reversed the judgments dismissing the plaintiffs' claims against the shipowners and remanded their causes for further proceedings.

On these appeals of the summary judgments in favor of OCF, the shipowners contend that they are entitled to recover from OCF their attorney fees or damages in the event of a damages award, under (1) an indemnity theory or (2) a rule allowing contribution from a joint tort-feasor notwithstanding that tort-feasor's settlement with, and release by, the plaintiff.

I. Indemnity

The shipowners contend that OCF's conduct in supplying asbestos-containing products for shipboard use was "actively" wrongful, while their fault consisted, they contend, only in failing to discover the danger of asbestos--conduct that they insist was only "passively" wrongful. See Wedlock v. Gulf Mississippi Marine Corp., 554 F.2d 240, 243 (5th Cir.1977) ("the classic case of passive negligence occurs ... when one joint tortfeasor creates a danger that the other (passive) tortfeasor merely fails to discover or to remedy"); Avondale Shipyards, Inc., v. Vessel Thomas E. Cuffe, 434 F.Supp. 920, 928 (E.D.La.1977) ("breach [of] an absolute duty to provide a seaworthy vessel" constitutes passive fault). They contend that maritime law accords them a right to recoup their attorney fees from OCF pursuant to a theory of "active" versus "passive" fault.

Preliminarily, we note that the procedural posture of the shipowners in this case renders their claims for indemnity particularly unpersuasive. Specifically, the shipowners are nonsettling, third-party plaintiffs seeking indemnity from third-party defendant OCF, following OCF's settlement with the plaintiffs.

"The basis for indemnity is restitution, and the concept that one person is unjustly enriched at the expense of another when the other discharges liability that it should be his responsibility to pay." Restatement (Second) of Torts § 886B (1977), comment c. "The unexpressed premise has been that indemnity should be granted in any factual situation in which, as between the parties themselves, it is just and fair that the indemnitor should bear the total responsibility, rather than to leave it on the indemnitee...." Id.

At this stage, the shipowners have satisfied no obligation. Nor has OCF, which was impleaded by the shipowners, been unjustly enriched by the shipowners' litigation. This case thus involves none of the traditional elements necessary to trigger a right to indemnity. On a more general ground, however, recent developments in maritime law render misplaced an admiralty defendant's reliance on the active-passive fault doctrine.

In 1975, the United States Supreme Court abrogated the "divided damages" rule set forth in The Schooner Catharine v. Dickinson, 58 U.S. (17 How.) 170, 15 L.Ed.233 (1855), which required joint maritime tort-feasors to share damages equally, regardless of their relative degrees of fault. United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975). In so doing, it established in maritime law the concept of comparative fault, that is, a "rule requiring, when possible, the allocation of liability for damages in proportion to the relative fault of each party." Id. at 398, 95 S.Ct. at 1709.

After Reliable Transfer, a number of admiralty courts concluded that maritime law no longer recognized a right to indemnity based on the active-passive fault distinction. Hardy v. Gulf Oil Corp., 949 F.2d 826 (5th Cir.1992); Self v. Great Lakes Dredge & Dock Co., 832 F.2d 1540 (11th Cir.1987), cert. denied, 486 U.S. 1033, 108 S.Ct. 2017, 100 L.Ed.2d 604 (1988); Bass v. Phoenix Seadrill/78, Ltd., 749 F.2d 1154 (5th Cir.1985); Loose v. Offshore Navigation, Inc., 670 F.2d 493 (5th Cir.1982). In this connection, Loose offered the following pertinent comments:

"The introduction of the rule of comparative fault to maritime torts requires reconsideration of the active-passive negligence doctrine. The common law courts were at first unwilling 'to make relative value judgments of degrees of culpability among wrongdoers.' The principle that an actively negligent tortfeasor should be required to indemnify a tortfeasor only passively negligent was developed to alleviate the harsh rule that prohibited apportionment among tortfeasors. In a sense, then, the indemnity rule was a precursor of modern systems of comparative fault because it attempted to transfer ultimate legal liability to the defendant truly in the wrong. Comparative fault seeks the same objective both more persuasively and more accurately. A comparative fault system not only eliminates the doctrine of contributory negligence but also apportions fault among joint tortfeasors in accordance with a precise determination, not merely equally or all-or-none.

"It is difficult to see the need for the active-passive indemnification rule in a comparative fault system. While the active-passive concept is more equitable than strict nonapportionment, there have never been satisfactory distinctions between the definition of 'active' and 'passive.' The district court in this case did not attempt to define these terms, but left it to the jury to define them from their everyday significance. As the district judge pointed out, however, it would have been difficult on the authority of decided cases to phrase a charge that would have been instructive and clear. There is, therefore, all the more reason to determine the degree of responsibility of each tortfeasor on the facts as presented at trial, and then to apportion damages among the tortfeasors on that basis. Leger [v. Drilling Well Control, Inc., 592 F.2d 1246 (5th Cir.1979) ,] has already extended the Reliable Transfer concept of...