Bill Loeper Ford v. Hites

• Decision Date: 30 April 1975
• Citation: 121 Cal.Rptr. 131,47 Cal.App.3d 828
• Court: California Court of Appeals Court of Appeals
• Parties: BILL LOEPER FORD, a corporation, Plaintiff and Appellant, v. Robert HITES, Defendant and Respondent. Civ. 44387.

Page 131

121 Cal.Rptr. 131

47 Cal.App.3d 828

BILL LOEPER FORD, a corporation, Plaintiff and Appellant, v. Robert HITES, Defendant and Respondent.

Civ. 44387.

Court of Appeal, Second District, Division 5, California.

April 30, 1975.

Dryden, Harrington & Swartz, Raphael Cotkin, Peter Abrahams, Los Angeles, for plaintiff and appellant.

Cummins, White & Breidenbach, Donald Way, Los Angeles, for defendant and respondent.

STEPHENS, Associate Justice.

This is an appeal from an order dismissing plaintiff Bill Loeper Ford's complaint for indemnity against defendant Robert Hites. The complaint alleged that defendant had purchased a 1967 Ford Falcon sedan from plaintiff and that on or about February 2, 1968 the Falcon was involved in an automobile accident. As a result of the accident, two lawsuits were instituted against Loeper Ford and other defendants. ¹ The pleadings in these lawsuits indicate that the injured parties, Danelaki and Antonopoulou, were sitting in the rear seat of defendant's automobile when it was struck from the rear by another automobile driven by Barris. From what we can glean from the record of these cases, Hites was driving in the lane next to the 'fast lane' on the Ventura Freeway at a speed of approximately 20 miles per hour when his car was struck by the car driven by Barris at a speed of approximately 55 miles per hour. As a result of the impact, the gasoline tank of the Falcon exploded, causing serious injuries to both passengers. They subsequently brought separate suits alleging negligence, breach of warranty, and strict liability in tort against the manufacturer of the Falcon, Ford Motor Company, the dealer who sold the automobile to Hites, Bill Loeper Ford, Henry S. Barris, the driver of the vehicle which struck the Falcon, and other defendants whom we need not be concerned with here. ² The two lawsuits were consolidated for trial. Prior to trial, Loeper Ford dismissed with prejudice its cross-complaint for indemnity against Ford Motor Company. The jury returned a verdict in favor of both plaintiffs against defendants Barris, Loeper Ford, and Ford Motor Company. ³ Defendants' motions for new trial were denied, and they appealed from the judgment. Two of the defendants, Loeper Ford and Ford Motor Company, settled the case prior to a determination of the appeal. The terms of the settlement called for a stipulated reversal of the judgment against Leoper Ford and Ford Motor Company.

Subsequently, Loeper Ford filed a complaint against Hites for indemnity. It alleged that by virtue of the settlement it had entered into, it was obligated to pay the plaintiffs in the prior lawsuits $222,500. It further alleged that the 'sole basis of claimants' recovery was that the Falcon had been defectively designed'; that it was a mere 'conduit of the vehicle' and its liability was of a 'passive, secondary' nature. It also alleged that Hites was actively negligent in the operation of the Falcon and caused it to be involved in the accident. Hites' demurrer to the complaint on the basis that it failed to state facts sufficient for a cause of action was sustained by the trial court. (Code Civ.Proc., § 430.10, subd. (c).) Loeper Ford then filed an amended complaint. The first cause of action for indemnity was identical to the cause of action alleged in the original complaint. The second cause of action alleged an oral agreement whereby Hites 'orally agreed' to indemnify Loeper Ford for any liability imposed on it by virtue of its passive liability and Hites' active liability. The third cause of action alleged that Hites 'impliedly agreed' that he would indemnify Loeper Ford on the same basis as the previous causes of action. Hites' demurrer to the first and third causes of action was sustained without leave to amend. The demurrer to the second cause of action was also sustained, but the court granted plaintiff leave to amend the amended complaint to set forth the terms of the alleged oral agreement and the consideration therefor. Loeper Ford failed to do so, and Hites moved for dismissal, pursuant to Code of Civil Procedure section 581, subdivision (3). ⁴ The trial court then dismissed the action, and Loeper Ford (hereinafter, plaintiff) appeals from the order of dismissal. ⁵

Discussion

The question presented is whether or not the trial court properly dismissed plaintiff's complaint for indemnity. Plaintiff in the instant case is seeking reimbursement from Hites on the basis of the doctrine of implied indemnity for the alleged $222,500 it paid to the plaintiffs in the prior case by virtue of the settlement.

The right to noncontractual implied indemnity rests upon equitable considerations, impelled by a contrast between the secondary, passive role of one tortfeasor and the primary, active role of the other. (Atchison, T. & S.F. Ry. Co. v. Franco, 267 Cal.App.2d 881, 886--887, 73 Cal.Rptr. 660; Molinari, Tort Indemnity in California, 8 Santa Clara Lawyer, 159, 166). When applicable, the doctrine permits one of two tortfeasors to shift the entire loss to the other when, without active participation in the wrong on the former's part, he has been compelled by some legal obligation to pay damages occasioned by the acitive negligence of the latter tortfeasor which was the proximate cause of the loss. (Muth v. Urricelqui, 251 Cal.App.2d 901, 908--909, 60 Cal.Rptr. 166). As reiterated by the court in Ford Motor Co. v. Robert J. Poeschl, Inc., 21 Cal.App.3d 694, 696--697, 98 Cal.Rptr. 702, 703:

'. . . 'The right of Indemnity rests upon a difference between the primary and secondary liability of two persons each of whom is made responsible by the law to an injured party. . . . The difference between primary and secondary liability is not based on a difference in Degrees of negligence or on any doctrine of Comparative negligence . . .. It depends on a difference in the Character or Kind of the wrongs which cause the injury and in the nature of the legal obligation owed by each of the wrongdoers to the injured person. . . . But the important point to be noted in all the cases is that the secondary as distinguished from primary liability rests upon a fault that is imputed or constructive only, being based on some legal relation between the parties, or arising from some positive rule of common or statutory law or because of a failure to discover or correct a defect or remedy a dangerous condition caused by the act of the one primarily responsible. " (Fn. omitted; citation omitted.)

Plaintiff contends that strict liability for selling a defective product was imposed upon it by operation of law solely by reason of its position as a retailer. (Vandermark v. Ford Motor Company, 61 Cal.2d 256, 37 Cal.Rptr. 896, 391 P.2d 168.) It claims that it was a mere conduit of the Ford Falcon and '(a) cting solely as a retailer of the automobile, . . . (its) negligence, if any, in failing to discover the . . . (design) defect would be 'passive negligence,' and as such, would not defeat its right to indemnity.' (Pearson Ford Company v. Ford Motor Company, 273 Cal.App.2d 269, 276, 78 Cal.Rptr. 279, 284; Rossmoor Sanitation, Inc. v. Pylon, Inc., 13 Cal.3d 622, 630, 179 Cal.Rptr. 449, 532 P.2d 97.) Therefore, it argues that since its fault, if any, in failing to discover the design defect is 'passive,' it is entitled to implied indemnification from Hites, whose negligent operation of the vehicle caused the accident. The plaintiff misreads the principle expressed in Vandermark. (See also Fred E. Hauter, Jr., a minor, etc., et al. v. Rudy C. Zogarts, et al., 14 Cal.3d 104, 120 Cal.Rptr. 681, 534 P.2d 377 (1975).

Plaintiff relies on the decision in Ford Motor Co. v. Robert J. Poeschl, Inc., Supra, 21 Cal.App.3d 694, 697, 98 Cal.Rptr. 702 for support of its position that the doctrine of implied indemnity is applicable in a products liability suit. In Poeschl, Ford Motor Company brought suit against a dealer, seeking implied indemnification for a personal injury settlement made by Ford in connection with an accident caused by a defect in an automobile sold by the dealer. Ford had earlier requested the dealer to recall the automobile for servicing. The court held that Ford's production of the defective automobile, coupled with its failure to directly notify the customer of the potential danger, breached a direct obligation it owed to the latter. Thus, it concluded that Ford's fault was primary, not secondary, and not imputed to it solely as a consequence of the dealer's fault. The dealer was held not liable for indemnification. ⁶ The court noted that '(w)rongs other than negligence may create dual liability to the third party and produce the claim of indemnity. In products liability cases . . . a manufacturer's or retailer's strict liability in tort may form the springboard for the indemnity claim.' (Id., at 697--698, 98 Cal.Rptr. at 704.)

It is necessary to review the tort of strict liability before determining whether or not implied indemnification should be allowed between the retailer (plaintiff) and the driver. In Justice Traynor's concurring opinion in Escola v. Coca Cola Bottling Co., 24 Cal.2d 453, 462, 150 P.2d 436, 440, he urged: '(P)ublic policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot. . . . (T)he risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business.' Subsequently, in Greenman v. Yuba Products, Inc., 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897, the court held that a manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. Strict liability for defective products was...