Coca-Cola Bottling Co.-Goshen, Ind. v. Vendo Co.

• Decision Date: 25 October 1983
• Docket Number: COCA-COLA,INDIAN,COMPANY-GOSHE,No. 3-682A115,A,3-682A115
• Parties: BOTTLINGppellant (Third-Party Plaintiff below), v. VENDO COMPANY and Tecumseh Products Company, Appellees (Third-Party Defendants below).
• Court: Indiana Appellate Court

Page 370

455 N.E.2d 370

COCA-COLA BOTTLING COMPANY-GOSHEN, INDIANA, Appellant (Third-Party Plaintiff below), v. VENDO COMPANY and Tecumseh Products Company, Appellees

(Third-Party Defendants below).

No. 3-682A115.

Court of Appeals of Indiana,

Third District.

Oct. 25, 1983.

Rehearing Denied Jan. 20, 1984.

Joseph Stalmack, Jr., James W. Roehrdanz, Galvin & Galvin, P.C., Hammond, for appellant.

Edward L. Murphy, Jr., Livingston, Dildine, Haynie & Yoder, Fort Wayne, John E. Doran, Doran, Manion, Boynton, Kamm & Esmont, South Bend, for appellees.

GARRARD, Judge.

After a fire occurred in their warehouse, Space Assemblies, Inc. and SAI Partnership (lessees) brought suit for damages against Coca-Cola Bottling Company of Goshen (lessor). The suit alleged that the fire was caused by the malfunction of a soft drink vending machine that had been leased by the lessee. The complaint contained counts based upon strict liability, negligence and breach of warranty.

The lessor then filed third-party complaints asserting a right to indemnity against Vendo Company (Vendo), the manufacturer of the vending machine, and against Tecumseh Products Company (Tecumseh), manufacturer of the compressor used in the vending machine.

After hearing on motions for summary judgment the court ruled that the lessor was entitled to judgment on the strict liability claim against it under the Indiana Products Liability Act, IC 33-1-1.5-5. The court also determined that Vendo and Tecumseh were each entitled to summary judgment on the lessor's claims against them for indemnity.

The undisputed facts disclose that Vendo manufactured and sold the vending machine in 1961. Pursuant to a "Cooler Rental Agreement" ¹ the lessor leased the machine to the lessee in 1978. The fire occurred May 3, 1979. There is no contention that either Vendo or Tecumseh had a written indemnity contract with the lessor.

The lessor now appeals from the adverse summary judgments entered on its third party claims for indemnity.

I.

The lessor first argues simply and forthrightly that the time has come for Indiana to overturn its adherence to the long-established rule barring contribution among joint tortfeasors. In support of this contention it points to the "illogical" extension of the rule in this country to situations involving merely negligence on the part of each of the tortfeasors, ² and to the fact that forty-two states now provide some system for contribution by specific statute, as a part of a comparative negligence system, or by judicial decision.

Vendo and Tecumseh remind us of Professor James' arguments presented more than forty years ago urging that as a practical matter adopting contribution to provide justice for the uninsured "little guy" is an illusion because the situation it envisions practically never exists. He argued that the rule against contribution should be maintained because contribution (a) makes it harder for plaintiffs to settle their claims, (b) tends to favor the large and wealthy defendant thereby making a less effective social distribution of the loss, and (c) confers no substantial countervailing benefits since in operation contribution is generally sought by the "constant" litigants so that the long run effect may be merely one of cancelling out. James, Contribution Among Joint Tortfeasors: A Pragmatic Criticism, 54 HARV.L.REV. 1156 (1941).

We are also aware that Indiana's prospective comparative negligence statute, which was enacted after appellant's brief was written, does not provide for contribution among joint tortfeasors, but instead limits recovery against each primary tortfeasor to a percentage of the damages corresponding to that defendant's degree of fault. ³

While it may be that the time is near at hand for Indiana to assess its position on contribution among joint tortfeasors, that is more properly a task for the legislature or our Supreme Court. We decline appellant's invitation as we are bound by the traditional Indiana rule set forth in Barker v. Cole (1979), Ind.App., 396 N.E.2d 964. See also Jackson v. Record, Admr. (1937), 211 Ind. 141, 5 N.E.2d 897; The American Express Co. v. Patterson (1881), 73 Ind. 430.

II.

Lessor next argues that regardless of the rule against contribution it is entitled to seek indemnity from Vendo and Tecumseh for any recovery the lessee may secure against it.

We agree that whether a claim for indemnity be characterized as a species of contribution or not really contribution at all, in the appropriate circumstances the claim will lie despite the general rule against contribution among joint tortfeasors. ⁴ In Indiana in the absence of an express contractual or statutory obligation to indemnity, the action will lie only where the party seeking indemnity is without actual fault but has been compelled to pay damages because of the wrongful conduct of another for which he is constructively liable. Bituminous Casualty Corp. v. Hedinger (7th Cir.1969), 407 F.2d 655, 656. Thus, the claim may apply in tort claims involving such liabilities as respondeat superior, Indiana Nitroglycerin & Torpedo Co. v. Lippincott Glass Co. (1905), 165 Ind. 361, 75 N.E. 649, or in breach of warranty situations where the retailer is sued upon implied warranties which are identical to those imposed upon the manufacturer's sale to him. Frank R. Jelleff, Inc. v. Pollak Bros. (N.D.Ind.1957), 171 F.Supp. 467.

On the other hand, because of the equitable nature of such indemnity claims and the rule against contribution among tortfeasors who are in pari delicto indemnity will not be allowed where the party claiming indemnity is guilty of actual negligence, whether malfeasance, misfeasance or nonfeasance. Silvers v. Nerdlinger (1868), 30 Ind. 53; Vernon Fire & Casualty Ins. Co. v. Graham (1975), 166 Ind.App. 509, 336 N.E.2d 829; City of Gary v. Bontrager Const. Co. (1943), 113 Ind.App. 151, 47 N.E.2d 182. This is true in Indiana because we recognize no degrees of negligence. McClish v. Niagara Machine & Tool Works (S.D.Ind.1967), 266 F.Supp. 987; Indiana St. Hwy. Comm. v. Thomas (1976), 169 Ind.App. 13, 346 N.E.2d 252.

Similarly where the claim for indemnity is based upon the manufacturer's breach of identical warranties, indemnity will be denied if the claimant breached a duty to inspect the article and inspection would have revealed the defect, Grummons v. Zollinger (N.D.Ind.1960), 189 F.Supp. 64, or if claimant fails to demonstrate that there was no material change or alteration in the condition of the article between the date of his purchase and the date of his subsequent resale. Frank R. Jelleff, Inc. v. Pollak Bros. (N.D.Ind.1959), 171 F.Supp. 467; Uniroyal, Inc. v. Chambers Gasket & Mfg. Co. (1978), 177 Ind.App. 508, 380 N.E.2d 571.

Additionally, it must be noted that one of the elements of a claim for indemnity is that the claimant has paid or been compelled to pay a judgment recovered by the injured person. ⁵ Dipple v. Douglas (1860), 14 Ind. 535; Ozark Airlines, Inc. Fairchild-Hiller Corp. (1979), 71 Ill.App.3d 637, 28 Ill.Dec. 277, 390 N.E.2d 444; Hager v. Brewer Equip. Co. (1973), 17 N.C.App. 489, 195 S.E.2d 54. See also Annot., 57 A.L.R.3d 867.

There are two significant consequences in recognizing this as an element of the claim. First, as the cited A.L.R. annotation points out, the statute of limitations on the claim for indemnity will not commence to run until the indemnity claimant's liability has been fixed.

Secondly, however, for purposes of considering motions to dismiss or for summary judgment, disputed factual questions in the litigation which may preclude or defeat the liability of the indemnity claimant to the party actually injured, will not prevent the court from disposing of the indemnity claim. If the indemnity claimant is not liable to the original plaintiff, a fortiori he has no claim for indemnity. McClish, supra; Dipple, supra.

While our analysis differs to some extent from that of the trial court, we note that it is our duty on summary judgment to affirm the trial court if its judgment is correct for any reason. Havert v. Caldwell (1983), Ind., 452 N.E.2d 154.

The trial court entered its findings and conclusions concerning the lessor's indemnity claims based upon the theories of liability asserted by the lessee against the lessor.

It found that the lessee's claim against the lessor for strict liability was barred by the ten year limitation provision contained in the Indiana Products Liability Act, IC 33-1-1.5-5. ⁶ It found that as a consequence the lessor's indemnity claims based upon strict liability were also barred. We agree, but believe some explanation of our analysis is in order.

Indiana's products liability statute, IC 33-1-1.5-1 et seq. provides that the act "shall govern all products liability actions, including those in which the theory of liability is negligence or strict liability in tort" but that it does not apply to actions "arising from or based upon any alleged breach of warranty." IC 33-1-1.5-1. Section 3 of the act then limits application of strict liability to the sellers of products. IC 33-1-1.5-3.

It must also be observed that Section 6 of the act provides,

"Nothing contained herein shall affect the right of any person found liable to seek and obtain indemnity from any other person whose actual fault caused the product to be defective."

IC 33-1-1.5-6. While this section by its plain language does not purport to create new rights to indemnity, with equal plainness it expresses the intent that the various limitations contained therein shall not bar an otherwise valid claim to indemnity.

Moreover, under the traditional analysis of indemnity rights in Indiana, we have no doubt that a "mere" seller under the act can claim indemnity against the previous seller who actually caused the product to be in "a defective condition unreasonably dangerous to any consumer." ⁷

Our analysis proceeds then in the same manner as that of McClish v. Niagara Machine & Tool Works ...