Brochner v. Western Ins. Co.

• Decision Date: 02 September 1986
• Docket Number: No. 84SC55,84SC55
• Citation: 724 P.2d 1293
• Parties: Ruben BROCHNER, Petitioner, v. WESTERN INSURANCE COMPANY, a Kansas Corporation, and the Community Hospital Association, a Colorado Corporation, Respondents.
• Court: Colorado Supreme Court

Page 1293

724 P.2d 1293

55 USLW 2162

Ruben BROCHNER, Petitioner, v. WESTERN INSURANCE COMPANY, a Kansas Corporation, and the Community Hospital Association, a Colorado Corporation, Respondents.

No. 84SC55.

Supreme Court of Colorado En Banc.

Sept. 2, 1986.

Rehearing Denied Sept. 29, 1986.

Stevens & Littman, P.C., Andrew C. Littman, Boulder, for petitioner.

Cooper & Kelley, P.C., Paul D. Cooper, Kim B. Childs, Denver, for respondents.

KIRSHBAUM, Justice.

We granted certiorari to review the opinion of the Colorado Court of Appeals in Western Insurance Co. v. Brochner, 682 P.2d 1213 (Colo.App.1983), in which the Court of Appeals concluded that a joint tortfeasor whose negligence was the primary cause of a plaintiff's personal injuries was liable in indemnity to a second joint tortfeasor. The court also concluded that the primarily liable tortfeasor was obligated to pay the attorney fees and costs incurred by the secondarily liable tortfeasor in defending the original action. We reverse.

The Community Hospital Association (the hospital), which operates Boulder Community Hospital, granted staff privileges to Dr. Ruben Brochner in October 1964. Brochner performed numerous craniotomies ¹ at the hospital over the next few months. In 1965, after reviews of those craniotomies indicated that tissue samples from many of the patients appeared normal, the hospital's executive committee orally required Brochner to obtain consultations before performing craniotomies if the relevant radiographic evidence did not clearly establish pathology. In 1966, the executive committee recommended to Brochner that he should obtain additional outside consultation on surgical pathological specimens.

In March 1968, the hospital's tissue committee received a report that fourteen of twenty-eight tissue samples taken from Brochner's neurosurgery patients were completely normal and that nine of the remaining fourteen samples indicated only low grade disease. An expert testified at trial that one normal tissue of 100 tissue samples was an acceptable ratio and that two normal tissues out of twenty-eight samples would require investigation.

On November 9, 1968, Brochner performed a craniotomy on Esther Cortez which resulted in injury to Cortez. Cortez later filed a civil action against Brochner and the hospital. She alleged that Brochner negligently diagnosed her need for a craniotomy, that the hospital negligently continued Brochner's staff privileges when it knew or should have known that he was incompetent, and that the hospital negligently allowed Brochner to perform unnecessary surgery. The claim against Brochner was severed, and trial of the claims against the hospital commenced April 3, 1978. Prior to the conclusion of that trial, Cortez and the hospital agreed to a settlement of $150,000. Some time later, Cortez reached a settlement of her suit against Brochner, who was uninsured, for an undisclosed sum.

In 1979, the hospital and its subrogee, Western Insurance Company (Western), filed this indemnity action against Brochner, alleging that Brochner's negligence was the active and primary cause of Cortez' injuries while the hospital's negligence was passive and secondary. On September 15, 1982, the trial court entered judgment for Western and the hospital against Brochner as follows: (1) $150,000 as the sum paid by Western on behalf of the hospital to Cortez in settlement of her claim against the hospital; and (2) $10,000 to the hospital for expenses incurred in connection with the Cortez lawsuit not reimbursed by insurance. The trial court found that Brochner had breached a pre-existing duty to the hospital to abide by its rules and regulations, that Brochner's negligence was the primary cause of Cortez' injuries, that the hospital was independently negligent toward the plaintiff, and that the hospital's negligence was only a secondary cause of those injuries. The trial court also awarded Western its attorney fees and costs incurred in defending the original lawsuit. The Court of Appeals affirmed the trial court's judgment.

I

Brochner first argues that the adoption of the Uniform Contribution Among Tortfeasors Act, §§ 13-50.5-101 to -106, 6 C.R.S. (1985 Supp.) (the Act) abrogated the Colorado common law rule of indemnity to the extent such rule is based upon distinctions between primary and secondary fault. We do not agree that the statute per se altered the common law doctrine of indemnity. However, we conclude that existence of the Act sufficiently undermines the historical basis for the rule to require its modification.

The common law of Colorado has consistently followed the majority common law rule prohibiting contribution among joint tortfeasors. Hamm v. Thompson, 143 Colo. 298, 353 P.2d 73 (1960); see Ringsby Truck Lines, Inc. v. Bradfield, 193 Colo. 151, 563 P.2d 939 (1977). Recognizing that strict application of this rule sometimes produces unjust results, a rule permitting indemnity between tortfeasors in certain limited circumstances was also incorporated into this jurisdiction's panoply of common law principles. Parrish v. DeRemer, 117 Colo. 256, 187 P.2d 597 (1947); Otis Elevator Co. v. Maryland Casualty Co., 95 Colo. 99, 33 P.2d 974 (1934); Colorado & Southern Ry. v. Western Light & Power Co., 73 Colo. 107, 214 P. 30 (1923); see Laugesen, Colorado's Contribution Among Tortfeasors Act, 6 Colo.Law. 1485 (1977).

Contribution and indemnity are analytically quite distinct concepts. The former is based on the equitable notion that one tortfeasor should not be required to pay sums to an injured party in excess of that tortfeasor's proportionate share of the responsibility for the injuries. The latter is grounded in the legal principle that one joint tortfeasor, as indemnitor, may owe a duty of care to another joint tortfeasor, which duty is unrelated to any duty of care owed by the tortfeasors to the injured party. ² Ringsby, 193 Colo. 151, 563 P.2d 939. When such duty is established, the indemnitor tortfeasor may be liable to the indemnitee tortfeasor for the entire loss experienced by the latter as the result of payments made to the injured party. See Public Service Co. v. District Court, 638 P.2d 772 (Colo.1981).

Although the concept of indemnity liability is grounded in the nature of the relationship between joint tortfeasors, it is further defined by analysis of the conduct of such tortfeasors in regard to the damages suffered by the injured party. As initially adopted, our rule required the indemnitor's conduct to be the "sole, proximate and primary cause" of the damages suffered by the injured party. Parrish, 117 Colo. at 271, 187 P.2d at 605; see Otis Elevator Co., 95 Colo. 99, 33 P.2d 974; Colorado & Southern Ry., 73 Colo. 107, 214 P. 30. However, in Jacobson v. Dahlberg, 171 Colo. 42, 464 P.2d 298 (1970), this court modified the test for indemnity by eliminating the requirement that the indemnitor's conduct be the sole cause of the injured party's damages and adopting a broader standard requiring only that the indemnitor's conduct be the primary cause of such damages. In Ringsby, we emphasized the point that this primary/secondary test of indemnity was not based on the principle of comparative fault:

The distinction between primary and secondary negligence does not mean that the "less negligent" defendant may recover from the "more negligent" defendant.... It has not been the policy of this state to distribute the loss between joint tortfeasors according to their degree of fault. This would amount to a form of contribution.

Ringsby, 193 Colo. at 155, 563 P.2d at 942 (citations omitted).

Our comment in Ringsby was necessary, of course, because of the historical prohibition of any form of contribution among joint tortfeasors. However, when the requirement of sole cause was abolished in Jacobson, the line separating contribution from indemnity, never firm in the best of circumstances, became even more difficult to fix. Indeed, difficulties with definitions and applications of the concepts of active, passive, primary and secondary negligence have been the subject of critical discussion by numerous courts and commentators. E.g., Tolbert v. Gerber Industries, Inc., 255 N.W.2d 362 (Minn.1977); Missouri Pacific R.R. v. Whitehead & Kales Co., 566 S.W.2d 466 (Mo.1978); Dole v. Dow Chemical Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972); Pachowitz v. Milwaukee & Suburban Transport Corp., 56 Wis.2d 383, 202 N.W.2d 268 (1972); Jensvold, A Modern Approach to Loss Allocation Among Tortfeasors in Products Liability Cases, 58 Minn.L.Rev. 723 (1974); Walkowiak, Implied Indemnity: A Policy Analysis of the Total Loss Shifting Remedy in a Partial Loss Shifting Jurisdiction, 30 U.Fla.L.Rev. 501 (1978); Woods, Some Observations on Contribution and Indemnity, 38 Ark.L.Rev. 44 (1984); see Annot., 53 A.L.R.3d 184 (1973). These difficulties inevitably have produced great variations in judicial decisions, resulting in a severe lack of predictability and often causing as much inequity as the rule was designed to prevent. As the court in Missouri Pacific R.R., 566 S.W.2d 466, observed:

The elucidation of the distinction between concurrent tortfeasors as to their relative fault has spawned a series of court-coined terms which is "bewildering, to say the least." Davis, Indemnity Between Negligent Tortfeasors: A Proposed Rationale, 37 Iowa L.Rev. 517, 536 (1952). We ourselves have criticized them as unworkable and unsatisfactory.... In reality, these are all methods of weighing the degree of negligence ... used as the basis or test determining whether a moving party may be indemnified. Among them have been the distinction between "active and passive" negligence ... "primary and secondary" duty ... a combination of "primary and active" and "secondary and passive" roles in the "negligent situation"....

....

We have worked ourselves into a situation where indemnity as between tortfeasors is decided on the basis of which...