Degener v. Hall Contracting Corp., No. 1998-SC-0353-DG

• Decision Date: 26 October 2000
• Docket Number: 1998-SC-0506-DG.,No. 1998-SC-0353-DG
• Parties: Adam DEGENER, Appellant, v. HALL CONTRACTING CORPORATION, Appellee. Mauricio Salazar, M.D., Appellant, v. Korp II Limited Partnership d/b/a Dupont Surgery Center, Appellee.
• Court: United States State Supreme Court — District of Kentucky

27 S.W.3d 775

Adam DEGENER, Appellant, v. HALL CONTRACTING CORPORATION, Appellee.

Mauricio Salazar, M.D., Appellant, v. Korp II Limited Partnership d/b/a Dupont Surgery Center, Appellee.

Nos. 1998-SC-0353-DG, 1998-SC-0506-DG.

Supreme Court of Kentucky.

May 18, 2000.

Rehearing Denied October 26, 2000.

Lawrence Irwin Young, Louisville, for Appellant Adam Degener (1998-SC-0353-DG).

John W. Phillips, Boehl, Stopher & Graves, William P. Swain, Phillips, Parker, Orberson & Moore, P.L.C., Louisville, for Appellee Hall Contracting Corporation (1998-SC-0353-DG).

Alex Talbott, McMurry & Talbott, Louisville, for Appellant Mauricio Salazar, M.D. (1998-SC-0506-DG).

John O. Sheller, Smith & Smith, Louisville, for Appellee Korp II Limited Partnership d/b/a Dupont Surgery Center (1998-SC-0506-DG).

Opinion of the Court by Justice COOPER.

We granted discretionary review in each of the captioned cases primarily to address whether claims for common law indemnity have survived the advent of comparative negligence and apportioned liability under Orr v. Coleman, Ky., 455 S.W.2d 59 (1970), Hilen v. Hays, Ky., 673 S.W.2d 713 (1984), Dix & Assocs. Pipeline Contractors, Inc. v. Key, Ky., 799 S.W.2d 24 (1990), and KRS 411.182. Since the issue is common to both cases, we will address it in a single opinion. We will also address whether the indemnity claim asserted in Degener v. Hall Contracting Corp. is barred by limitations and whether the indemnity claim asserted in Salazar v. Korp II Ltd. Partnership, etc., is barred because the original complaint asserted only a cause of action under Kentucky's Civil Rights Act, which creates a right of action only against employers and not against non-employer perpetrators such as Salazar.

I. DEGENER v. HALL CONTRACTING CORP.

Adam Degener and Eagle Tye allegedly constructed a homemade bomb using dynamite stolen from Hall Contracting Corporation. On November 17, 1991, three police officers, Dawn Smith, Michael Johnson and Deborah Marasa, were injured when the bomb exploded while they were attempting to disarm it. On July 2, 1992, the officers filed suit against Hall Contracting in the Jefferson Circuit Court, alleging that Hall had "negligently, carelessly and recklessly stored dynamite in a container which failed to meet industry standards in that the container storing said dynamite was not theft proof." On February 25, 1994, Hall was granted a summary judgment premised upon the so-called "firefighter's rule." Sallee v. GTE South, Inc., Ky., 839 S.W.2d 277 (1992); Hawkins v. Sunmark Indus., Inc., Ky., 727 S.W.2d 397 (1986). The Court of Appeals reversed and remanded in an unpublished opinion which became final on December 14, 1995. On March 20, 1996, Hall Contracting filed a third-party complaint against Degener and Tye for indemnity for any amounts which it might be required to pay to the three injured officers. Tye was never served with process. Degener's subsequent motion to dismiss the third-party complaint was granted on the bases that: (1) the claim for indemnity was barred by the one-year statute of limitations applicable to personal injury actions, KRS 413.140(1)(a); and (2) the advent of comparative negligence and apportionment of fault has eliminated claims for common law indemnity except in a case of vicarious liability or where one party has contracted to be liable for the torts of another, citing Kevin Tucker & Assocs., Inc. v. Scott & Ritter, Inc., Ky.App., 842 S.W.2d 873 (1992). The Court of Appeals reversed as to both issues and remanded for a decision on the merits of Hall's indemnity claim. Hall has settled the claims filed against it by the three officers, so the only remaining issue is its indemnity claim against Degener.

II. SALAZAR v. KORP II LIMITED PARTNERSHIP, ETC.

Korp II Limited Partnership owns and operates an outpatient surgery clinic in Louisville, Kentucky. Appellant Mauricio Salazar is a licensed physician with staff privileges to perform surgeries at the clinic. Jill E. Townsend was employed by Korp II as a scrub technician and was assigned to assist Salazar in the performance of his surgeries. Townsend filed suit against Korp II in the Jefferson Circuit Court alleging a violation of the Kentucky Civil Rights Act and seeking damages for "hostile work environment" harassment alleged to have been perpetrated against her by Salazar.¹ KRS 344.040(1); KRS 344.450; Meyers v. Chapman Printing Co., Inc., supra n. 1, at 820-23. In her discovery deposition, Townsend described occasions when Salazar pulled her down on his lap, placed his hands on her breasts, placed his arm around her, touched her buttocks, rubbed his hand against her abdomen, and held her hand behind her back in such a fashion that she could not pull away from him.

Korp II filed a third-party complaint for indemnity against Salazar. The trial judge dismissed the third-party complaint on grounds that KRS 344.450 creates a cause of action only against an employer and does not provide a civil remedy against an individual perpetrator who is not the plaintiff's employer. In a 2-1 decision, the Court of Appeals reversed and remanded, holding that while a claim for contribution has essentially been abolished by KRS 411.182, Korp II has a viable claim for common law indemnity against Salazar for any damages it might have to pay to Townsend. Like Hall Contracting, Korp II has settled the claim filed against it by Townsend, so the only remaining issue is Korp II's indemnity claim against Salazar.

* * *

While it is common practice for tort defendants to file third-party complaints seeking "indemnity and/or contribution," these two concepts represent separate and distinct remedies which have different historical origins and are applicable to completely different fact situations.

III. CONTRIBUTION AND APPORTIONMENT.

The right to contribution arises when two or more joint tortfeasors are guilty of concurrent negligence of substantially the same character which converges to cause the plaintiff's damages. In that scenario, the tortfeasors are said to be "in pari delicto." Lexington Country Club v. Stevenson, Ky., 390 S.W.2d 137, 143 (1965). The common law rule was that each joint tortfeasor was entirely responsible for the plaintiff's single indivisible injury "because it was thought that the injury could not be divided into parts to determine the responsibility of each negligent actor." Dix & Assocs. Pipeline Contractors, Inc. v. Key, supra, at 27. If the plaintiff sued all of the joint tortfeasors and each was found to be at fault and in pari delicto with the others, the plaintiff could recover the entire judgment against all or any one of them. 18 Am.Jur.2d Contribution § 40 (1985). If one defendant satisfied the entire judgment, he had no common law right to contribution from another jointly liable defendant. Id. Most jurisdictions, including Kentucky, have abrogated this unjust principle by statute. Kentucky has three statutes applicable to claims against or between joint tortfeasors, viz: KRS 454.040, KRS 412.030, and KRS 411.182.

KRS 454.040 provides:

In actions of trespass the jury may assess joint or several damages against the defendants. When the jury finds several damages, the judgment shall be in favor of the plaintiff against each defendant for the several damages, without regard to the amount of damages claimed in the petition, and shall include a joint judgment for the costs.

This provision was first enacted in 1839.² In Ferguson v. Terry, 40 Ky. (1 B. Mon.) 96 (1840), the statute was held to "authorize several verdicts to be found, and several judgments to be entered against each of several joint trespassers in a joint action." Id. (emphasis in original). In Central Passenger Ry. Co. v. Kuhn, 86 Ky. 578, 6 S.W. 441 (1888), the statute was recognized as a modification of the common law and was held to apply to all types of trespasses, including negligence actions. "This statute affords a remedy against all joint trespassers, with the right on the part of the jury to punish the wrong-doer to the extent of his participation in the wrongful act, and, if one is the more guilty than the other, to punish him the more severely." Id., 6 S.W. at 447. However, the statute only affected the plaintiff's right of recovery and did not purport to create a right of contribution between or among the joint tortfeasors.

In 1926, the General Assembly enacted what is now KRS 412.030,³ which permits contribution among wrongdoers "where the wrong is a mere act of negligence and involves no moral turpitude." The enactment of this statute permitted one who had satisfied a negligence claim to assert a claim for contribution in a separate action against a joint tortfeasor. Consolidated Coach Corp. v. Burge, 245 Ky. 631, 54 S.W.2d 16 (1932). The subsequent adoption of the Kentucky Rules of Civil Procedure allowed the claim to be presented in the same action by way of either a cross-claim, CR 13.07, or a third-party complaint, CR 14.01. Jackson & Church Div., York-Shipley, Inc. v. Miller, Ky., 414 S.W.2d 893 (1967); Elpers v. Kimbel, Ky., 366 S.W.2d 157, 161 (1963). The measure of contribution for a joint judgment was pro rata, or one-half of the amount of the judgment (or out-of-court settlement) in the case of two joint tortfeasors. Consolidated Coach Corp. v. Burge, supra, 54 S.W.2d at 18-19. Finally, a joint tortfeasor could not recover contribution from one against whom the person injured by the tort had no cause of action. Id., 54 S.W.2d at 17.

The first Kentucky case requiring apportionment of causation between or among joint tortfeasors was Orr v. Coleman, supra. There, the plaintiff settled with one joint tortfeasor for $19,000 and went to trial against the other. The jury returned a verdict for $22,000, but did not indicate whether the verdict represented the plaintiff's total damages against which the $19,000 would be credited pursuant to, e.g., McCallum v. Harris, Ky., 379 S.W.2d 438, 442, 444 (1964),...