Crime Fighters Patrol v. Hiles, s. 86-SC-907-D

• Decision Date: 25 November 1987
• Docket Number: 86-SC-1068-DG and 86-SC-1073-DG,Nos. 86-SC-907-D,s. 86-SC-907-D
• Citation: 740 S.W.2d 936
• Parties: CRIME FIGHTERS PATROL, Appellant, v. Larry HILES, Gwendolyn Hiles, White Castle Systems, Inc. and Robert Cook, Appellees. Larry HILES and Gwendolyn Hiles, Cross/Appellants, v. CRIME FIGHTERS PATROL, Cross/Appellee. WHITE CASTLE SYSTEMS, INC., Cross/Appellant, v. CRIME FIGHTERS PATROL, Cross/Appellee.
• Court: United States State Supreme Court — District of Kentucky

Page 936

740 S.W.2d 936

CRIME FIGHTERS PATROL, Appellant, v. Larry HILES, Gwendolyn Hiles, White Castle Systems, Inc. and Robert Cook, Appellees.

Larry HILES and Gwendolyn Hiles, Cross/Appellants, v. CRIME FIGHTERS PATROL, Cross/Appellee.

WHITE CASTLE SYSTEMS, INC., Cross/Appellant, v. CRIME FIGHTERS PATROL, Cross/Appellee.

Nos. 86-SC-907-DG, 86-SC-1068-DG and 86-SC-1073-DG.

Supreme Court of Kentucky.

Nov. 25, 1987.

As Corrected Nov. 25, 1987.

Thomas R. Yocum, Benjamin, Sack, Yocum & Heather, Cincinnati, Ohio, for Crime Fighters Patrol.

Gregory N. Schabell, Florence, for Larry and Gwendolyn Hiles.

Thomas C. Smith, N. Jeffrey Blankenship, Covington, for White Castle Systems, Inc.

Larry Hicks, Florence, for Robert Cook.

LEIBSON, Justice.

The issue is whether the trial court, applying principles of indemnity, properly granted summary judgment in favor of the appellees.

Larry Hiles and Gwendolyn Hiles, his wife, filed suit against White Castle Systems, Inc. ("White Castle") alleging that on March 13, 1982, Larry Hiles was a customer in White Castle's business establishment when he was "viciously attacked and beaten by another guest." The assailant was Robert Cook. The gravamen of the claim against White Castle was that White Castle knew of the violent nature of the assailant prior to his assault and was negligent in failing to exercise reasonable care in preventing the assault. Larry Hiles sought damages for personal injuries, and Gwendolyn, his wife sought damages for loss of consortium.

White Castle filed a Third Party Complaint against the appellee, Crime Fighters Patrol, a security firm hired by White Castle to provide security guards. White Castle alleged these guards breached an agreement to maintain order at the restaurant. White Castle also filed a Third Party Complaint against the assailant, Robert Cook, seeking indemnity. Crime Fighters Patrol filed a cross-claim against Cook, also seeking indemnification.

Cook filed an Answer which included as a defense that appellee Hiles, for good and valuable consideration, had agreed to release and indemnify Cook against any further liability for this incident. The document in question was styled a "Partial Release" and attempted to reserve all claims against White Castle or other parties, but the indemnifying portion specified:

"I further hereby expressly stipulate and agree in consideration of the aforesaid payment to indemnify and hold forever harmless the said Robert Cook, ... against loss from any further claims ... that may hereafter at any time be made or brought against him by anyone for the purpose of enforcing a further claim for damages on account of my injuries sustained on or about March 13, 1982, specifically including any claims for contribution and/or indemnification."

This indemnifying agreement was the basis upon which the trial court granted summary judgment for White Castle Systems, Inc. and Crime Fighters Patrol. This Order is somewhat confusing for several reasons: (1) it was not clear whether the motion and order covered Gwendolyn Hiles' loss of consortium claim in addition to Larry Hiles' personal injury claim, although both have appealed from it; and (2) the indemnifying agreement to Cook was signed only by Larry Hiles and not by his wife, but the difference in her status, if any, has not been the subject of argument. We cannot decide from the record before us whether the summary judgment intended a final disposition of the loss of consortium claim.

However, it is abundantly clear from the record before us that the trial court has made a final disposition of appellant Larry Hiles' claim, applying three principles: (1) assuming all allegations against White Castle and Crime Fighters Patrol to be true, they were entitled to indemnity from Cook by operation of law; (2) Cook in turn had a binding contractual agreement from Hiles indemnifying Cook against any liability to White Castle and Crime Fighters Patrol; and (3) thus Hiles, himself, would be the responsible party for any judgment which might be rendered against White Castle or Crime Fighters Patrol.

The issue before us on Discretionary Review is whether this is a proper case for application of the indemnity principle. The summary judgment was not proper unless, conceding all relevant facts and allegations of the Complaint to be true, White Castle and/or Crime Fighters Patrol are entitled to complete indemnity from Hiles, so Hiles could take nothing on his Complaint. Paintsville Hosp. Co. v. Rose, Ky., 683 S.W.2d 255 (1985).

The appellants have argued in the Court of Appeals, and in our Court, that White Castle and Crime Fighters Patrol were entitled to claim only contribution and not complete indemnity from Hiles; that White Castle, the named defendant, had "an affirmative duty to prevent the attack" on "its business patron," and that these parties were "in pari delicto--equal fault" with Cook. Both sides cite Brown Hotel Company v. Pittsburgh Fuel Company, 311 Ky. 396, 224 S.W.2d 165 (1949), as the leading Kentucky case on the subject. The Court of Appeals agreed with Hiles that summary judgment was improper, stating there was at least a jury issue as to "active negligence on the part of White Castle." We disagree, and reverse.

The issue in this case focuses upon the fundamentals of indemnity, and the use of that principle in Brown Hotel Company v. Pittsburgh Fuel Company, supra. In Brown Hotel, the claimant, Sizemore, had fallen over the cover to a coal chute located on the premises of the Brown Hotel which had been left unsecured by the Pittsburgh Fuel Company's employees. Sizemore sued Brown Hotel and Pittsburgh Fuel Company, and recovered against both, apportioned 50% each. Our Court held that, regardless of the apportionment, as a matter of law, Brown Hotel was entitled to complete indemnity from Pittsburgh Fuel Company for that portion of the verdict assessed against Brown Hotel because the parties were not "in pari delicto." We stated:

"The primary, efficient and direct cause of the accident was the positive antecedent negligence of the fuel company's employee in failing to replace the manhole lid securely. This exposed the hotel company to liability. Its fault was a negative tort in failing to check upon the act of the coal delivery man and in failing to observe its affirmative duty to the public to see that the way was free of obstruction or the pitfall. Both were at fault but not the same fault toward the party injured." 224 S.W.2d at 167.

Our courts have experienced much difficulty in applying the principle enunciated in the Brown Hotel case. That difficulty stems from a mistaken analytical approach, proceeding from labels, or pigeonholes, rather than from the underlying equitable principles and the operative facts behind those labels. We commented on a problem of similar nature in Gas Service Company v. City of London, Ky., 687 S.W.2d 144, 148 (1985):

"A variety of legalisms have been suggested as helpful.... These include duty/no duty and misfeasance/nonfeasance terminology.... These classifications ... in the long-run prove arbitrary pigeonholes for conclusions arrived at intuitively."

So, too, in this case, the parties have debated various opposing labels, "affirmative/negative," "active/passive," "misfeasance/nonfeasance," "omission/commission," "negligent/intentional," "primary/secondary." The problem is that these classifications are not in themselves definitive, but only conclusions which should be arrived at after analyzing the facts, and not intuitively. We cannot decide as an abstract proposition that White Castle's duty to protect its patrons should be labeled as affirmative rather than negative, or that its alleged negligence was active rather than passive. If anyone has doubt as to the confusion generated by reasoning backwards from labels in deciding whether the situation calls for complete indemnity or only contribution, they should read the conflicting opinions of able judges rendered in Lexington Country Club v. Stevenson, Ky., 390 S.W.2d 137 (1965).

The solution is the analysis of the facts using fundamental principles. To start with there are two different types of indemnity involved in this case: one is the obligation of indemnity assumed contractually, and the second is the obligation of indemnity imposed by law.

Appellants have not challenged the validity of the contractual obligation imposed upon Larry Hiles in the release which he executed to Robert Cook in consideration of the payment of $2,000. In this agreement Hiles obligated himself to pay any future liability that might be incurred by Cook as a result of this incident, from any source, which includes any valid claim against Cook by the appellants, White Castle and Crime Fighters Patrol, existing by operation of law.

Thus the dispute hinges upon the second type of indemnity: Is this a situation where the law entitles White Castle and Crime Fighters Patrol to complete indemnity against Cook--or only to contribution which provides partial indemnity? The appellees have characterized this decision as turning on court administered "public policy," but this is a mischaracterization. This decision does not involve making policy but applying principles of equity. It is grounded in the equitable principle of restitution. Eichberger...