Blackburn, Inc. v. Harnischfeger Corp., 91-1031-K.

• Decision Date: 29 August 1991
• Docket Number: No. 91-1031-K.,91-1031-K.
• Citation: 773 F. Supp. 296
• Court: U.S. District Court — District of Kansas
• Parties: BLACKBURN, INC., Plaintiff, v. HARNISCHFEGER CORPORATION, Defendant.

773 F. Supp. 296

BLACKBURN, INC., Plaintiff, v. HARNISCHFEGER CORPORATION, Defendant.

No. 91-1031-K.

United States District Court, D. Kansas.

August 29, 1991.

Richard Honeyman of Kahrs, Nelson, Fanning, Hite & Kellogg, Wichita, Kan., for plaintiff.

Nicholas S. Daily, Depew, Gillen & Rathbun, Wichita, Kan., for defendant.

MEMORANDUM AND ORDER

PATRICK F. KELLY, District Judge.

The present case arises from events occurring October 8, 1986 at the Texaco refinery in El Dorado, Kansas. The general background of the case is neither complex nor the subject of dispute. While being lowered to the ground in a manbasket, four workers were dropped 40 feet to the ground. The manbasket was attached to a crane manufactured by defendant Harnischfeger Corporation and owned and operated by plaintiff Blackburn, Inc.

On August 9, 1988, the workers filed suit in state court against Blackburn and Texaco, Inc. The plaintiffs in the state action later added claims against Harnischfeger as the manufacturer of the crane, additional Texaco corporations, and the manufacturer of the crane winch. Except for Blackburn, the plaintiffs raised only claims of negligence and strict liability. The plaintiffs' claims against Blackburn, while including claims for negligence and strict liability, also included a claim for willful, gross, and wanton negligence, and a prayer for punitive damages as well as compensatory damages.

On April 7, 1989, the state court upheld the amendment to the complaint by which the workers sought to add their punitive damage claim against Blackburn. The court held, pursuant to K.S.A. 60-3703, that the plaintiffs had demonstrated a "probability" of prevailing on the punitive damages claim at trial. In the pretrial questionnaire, the plaintiffs advanced a prayer for $1 million in punitive damages from Blackburn.

After the dismissal of the claims against the other defendants, only Blackburn and Harnischfeger remained as defendants in the state litigation. For its part, Blackburn advanced in the pretrial questionnaire a claim for negligence in which it alleged that Harnischfeger had "failed to warn against lifting personnel with the crane."

After the initial pretrial conference, Blackburn settled the claims advanced by the plaintiffs for $660,000.00. At the same time, Blackburn informed the court that it would advance a claim for proportional contribution against Harnischfeger to recover that portion of the settlement amount representing Harnischfeger's alleged fault.

The state court held supplemental pretrial conferences on February 12, February 21, and March 8, 1990. In the course of these pretrial conferences the court ruled that Blackburn could proceed with the claim for proportional contribution. Under proportional contribution, or "comparative implied indemnity" as the action was termed in the leading Kansas case, Kennedy v. City of Sawyer, 228 Kan. 439, 618 P.2d 788 (1980), a tortfeasor settling the entire claim advanced by the plaintiff is entitled to proportionate contribution from other tortfeasors, with the contribution to be determined by a comparison of the respective fault of the tortfeasors.

However, the state court also ruled that in advancing its proportional contribution claim, Blackburn would have to establish the actual damages suffered by the plaintiffs. The court also denied Blackburn's request to modify its claims against Harnischfeger to product defect and failure to recall or retrofit its cranes.

On Blackburn's motion, the state case was dismissed without prejudice. In granting the motion, however, the court ruled that its rulings, as reflected in the pretrial order, were to be the law of the case, and that the discovery conducted to that time should constitute the entire discovery in the case.

Blackburn filed a new action in Sedgwick County District Court on December 19, 1990. The action was removed to this court by defendant Harnischfeger. Blackburn has now moved for a review of the earlier rulings by Judge Royce in the state action. Upon removal of an action, prior rulings by the state court are reviewable "de novo" by the federal court hearing the matter. 14A Wright & Miller, Federal Practice & Procedure, § 3738 (1985).

There are three general issues presented by Blackburn's motion to reconsider, and three raised in a separate motion by Harnischfeger to reconsider rulings by the state court. In addition to these issues, Harnischfeger advances an additional discussion relating to punitive damages in its response to Blackburn's motion, which the court finds premature in the context of the present motions to reconsider.

1. Proportionate Contribution

In its arguments in response to Blackburn's motion to reconsider, Harnischfeger generally supports the rulings of the state court. However, it also advances three subjects which it requests the court to review. The first concerns the very existence of the claim for relief advanced herein by Blackburn. Harnischfeger argues that subsequent to its decision in Kennedy, the supreme court has narrowed the action for proportional contribution to the extent that such claims are valid only to the extent the party seeking contribution enjoys an explicit contractual right of indemnity or contribution.

It is certainly correct that since Kennedy, the court has shown a general restriction on the claim for proportional contribution recognized in that case. However, the court has yet to entirely disavow the cause of action. The latest case to address the issue, Teepak, Inc. v. Learned, 237 Kan. 320, 699 P.2d 35 (1985), recognized that Kennedy included "some overly broad language" which might authorize proportional contribution beyond its legitimate scope. In Teepak, the court held that a settling tortfeasor could not seek proportional contribution from the plaintiff's physician for malpractice, where the plaintiff had advanced no such claims against the physician.

Teepak does not appear to require an explicit contract of contribution or indemnity as a prerequisite to an action for proportional contribution. Rather, the court in Teepak evidenced its intent to limit the cause of action to cases in which contribution is sought from other parties "in the chain of distribution." 237 Kan. at 328, 699 P.2d 35. There is no indication in the case that an explicit contract of contribution is required. Rather, the cause of action, at least where the plaintiff has made no direct claims against other parties, is to be limited to "`other parties in the manufacturer's chain of distribution and supply.'" Id., at 328, 699 P.2d 35 (quoting Ellis v. Union Pac. RR. Co., 231 Kan. 182, 184, 643 P.2d 158, aff'd on rehearing, 232 Kan. 194, 653 P.2d 816 (1982)).

In the present case, although Blackburn and Harnischfeger share no explicit contract of indemnification or contribution, they are both in the same chain of distribution of the product allegedly causing the injuries to the state plaintiffs. Under Kansas law as it currently stands, Blackburn has a claim for proportional contribution against Harnischfeger. Accordingly, Harnischfeger's motion for reconsideration of the issue will be denied.

2. Willful and Wanton Conduct

Defendant Harnischfeger argues in its response to the motion for reconsideration that Blackburn's claim for proportional contribution must fail because contribution is not allowed where the settling tortfeasor was guilty of willful or wanton conduct, or where the settlement reflects the settlement of punitive damages claims. As noted earlier, the plaintiffs in the state action advanced a punitive damages claim against Blackburn only. The plaintiffs contended that Blackburn knew of the dangers of using the crane manbasket to carry workers, yet willfully and wantonly continued the use of the manbasket.

A settling tortfeasor who has engaged in willful or wanton conduct is not entitled to proportional contribution from other, negligent tortfeasors. Cage v. New York Cent. R. Co., 276 F.Supp. 778, 791 (W.D.Pa.), aff'd, 386 F.2d 998 (3d Cir.1967); Bresland v. Ideal Roller & Graphics Co., 150 Ill.App.3d 445, 103 Ill.Dec. 513, 522, 501 N.E.2d 830, 839 (1986); Hardware Mut. Cas. Co. v. Danberry, 234 Minn. 391, 48 N.W.2d 567, 570 (1951); Fox v. Mercer, 109 A.D.2d 59, 489 N.Y.S.2d 792, 799 n. 5 (App.1985); Jacobs v. General Accid. Fire & Life Ass. Corp., 14 Wis.2d 1, 109 N.W.2d 462, 464 (1961). See Restatement (Second) of Torts § 866A, comment k (1979). Nor are punitive damages recoverable in an action for contribution. Pyramid Condominium Ass'n v. Morgan, 606 F.Supp. 592, 599 (D.Md.1985); Alabama Power v. Marine Builders, 475 So.2d 168, 180 (Ala. 1985); Reimers v. Honeywell, Inc., 457 N.W.2d 336, 339 (Iowa 1990); Exxon Corp. v. Yarema, 69 Md.App. 124, 516 A.2d 990, 997 (1986), cert. denied, 309 Md. 47, 522 A.2d 392 (1987); State ex rel. Hall v. Cook, 400 S.W.2d 39, 42 (Mo.1966).

Of course, the mere existence of a claim for punitive damages should not deprive the settling tortfeasor of the opportunity to seek proportional contribution. The claim for punitive damages may turn out to be wholly without merit. If on the other hand, the claim was merited, that party does and should lose the equitable right to impose a share of the costs of settlement on other, less culpable parties. Under Kennedy, the party seeking proportional contribution is required "to establish the reasonableness of the amount of the settlement, and that he or she had an actual legal liability he or she could not be expected to successfully resist." 228 Kan. at 461, 618 P.2d 788.

In the case of a settling tortfeasor who is alleged by the original plaintiff to have engaged in willful or wanton conduct, the party from whom contribution is sought may demonstrate that the legal liability which it faced and extinguished by settlement rose no higher than negligence. In other words, proof of willful or wanton conduct is a complete defense to the claim for proportional contribution. Of course,...