Ferrel v. Vegetable Oil Products Co.

• Decision Date: 09 December 1966
• Citation: 247 Cal.App.2d 117,55 Cal.Rptr. 589
• Court: California Court of Appeals Court of Appeals
• Parties: Elmer L. FERREL, Plaintiff and Respondent, v. VEGETABLE OIL PRODUCTS COMPANY, Inc., a corporation, Defendant, Cross-Complainant and Appellant, and R. O. Stephens, dba Bay View Welding Works, Cross-Defendant and Respondent. Civ. 28926.

Page 589

55 Cal.Rptr. 589

247 Cal.App.2d 117

Elmer L. FERREL, Plaintiff and Respondent, v. VEGETABLE OIL PRODUCTS COMPANY, Inc., a corporation, Defendant, Cross-Complainant and Appellant and R. O. Stephens, dba Bay View Welding Works, Cross-Defendant and Respondent.

Civ. 28926.

Court of Appeal, Second District, Division 3, California.

Dec. 9, 1966.

As Modified on Denial of Rehearing Jan. 6, 1967.

Hearing Denied Feb. 7, 1967.

Schell & Delamer, Lee A. Solomon and Abe Mutchnik, Los Angeles, for appellant.

Edgar Simon, Beverly Hills, for respondent Elmer L. Ferrel.

James V. Brewer, Los Angeles, for respondent R. O. Stephens.

SHINN, Presiding Justice.

Vegetable Oil Products Company, Inc., appeals from a judgment awarding Elmer L. Ferrel damages for personal injuries sustained while working as an employe of R. O. Stephens, an independent contractor doing business as Bay View Welding Works, which judgment also denied the claim of Vegetable Oil to be indemnified by Bay View for the amount of any judgment that might be rendered against it in favor of Ferrel, resulting from the negligence of Bay View.

In 1957 Vegetable Oil was a processor of vegetable oils with a plant in Wilmington. R. O. Stephens, doing business as Bay View Welding Works was a worker in metals. Plaintiff Ferrel was an employe of Bay View. Fire and an explosion damaged one of Vegetable Oil's tanks; Vegetable Oil decided that the tank was reparable, sought bids, accepted the bid of Bay View and entered into a contract with Bay View for the repair work. The tank was 40 feet high and 40 feet in circumference; Safway Steel Scaffolds furnished a scaffold which Bay View erected inside the tank; the scaffold had levels upon which planks could be placed to make a platform. Ferrel was knocked from a platform while working on the job; he sued Safway and Vegetable Oil and received a verdict against Vegetable Oil of $275,000; Vegetable Oil moved for judgment notwithstanding the verdict and for a conditional new trial; both motions were granted and Ferrel appealed. The Supreme Court reversed the judgment and affirmed the order granting a new trial. The ground of the reversal was that upon the facts proved Vegetable Oil could have been found guilty of negligence which contributed to Ferrel's accident. Before the case went to retrial Vegetable Oil filed a cross-complaint against Bay View alleging that the accident to Ferrel was caused by Bay View's negligence and seeking to have established a right to be indemnified by Bay View for the amount of any judgment that might be rendered against it in Ferrel's suit. Bay View answered, denying that it had been negligent and alleging that its insurance carrier had paid to Ferrel in workmen's compensation (found to be $80,616.15) $80,016.46 for which amount it claimed a lien upon any judgment that might be rendered against Vegetable Oil in favor of Ferrel. It was also alleged that Vegetable Oil had been guilty of active negligence which contributed to Ferrel's injury and for that reason should be denied the right to indemnification.

Upon a retrial verdict and judgment were rendered against Vegetable Oil upon Ferrel's complaint in the sum of $500,000 and in favor of Bay View on the cross-complaint. Upon the motion of Vegetable Oil for judgment n.o.v. or for a new trial the judgment was reduced to $425,000.

By letter and at the time of the oral argument the court was informed by counsel for Vegetable Oil that after the appeal was taken Ferrel's judgment had been compromised and settled by Vegetable Oil. Bay View expresses neither agreement nor disagreement with this statement. It was quite proper for the court to be so informed. We therefore proceed upon the assumed fact that the judgment has been satisfied. This being the fact the only remaining question is whether Vegetable Oil was entitled to be indemnified by Bay View. Satisfaction of the judgment removes the question on the appeal whether the liability of Vegetable Oil to Ferrel has been reduced by the amount of workmen's compensation, amounting to $80,616.15, paid to Ferrel by Bay View.

Under applicable California decisions Vegetable Oil had a right to be indemnified by Bay View unless Vegetable Oil, itself, was guilty of active negligence which contributed to the injury to Ferrel, or of any breach of duty toward Bay View.

The basis of Vegetable Oil's right to be indemnified was the duty of Bay View to conduct its operations in a careful and prudent manner and the breach of that duty, from which a right to indemnification is implied. (Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491; Ryan Stevedoring Co. v. Pan-Atlantic Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133; San Francisco Unified School Dist. v. California Bldg. Etc. Co., 162 Cal.App.2d 434, 328 P.2d 785; De La Forest v. Yandle, 171 Cal.App.2d 59, 340 P.2d 52; Alisal Sanitary Dist. v. Kennedy, 180 Cal.App.2d 69, 4 Cal.Rptr. 379; Montgomery Ward & Co. v. KPIX Westinghouse Broadcasting Co., 198 Cal.App.2d 759, 18 Cal.Rptr. 341.)

It is well settled that where the right to indemnification otherwise exists it can be defeated by the active negligence of the indemnitee as distinguished from passive negligence, and the jury was so instructed.

It was stated in Builders Supply Co. v. McCabe, 366 Pa. 322, 325, 77 A.2d 368, 370, 24 A.L.R.2d 319, that the right of one secondarily liable to indemnification from one primarily liable for damages 'enures to a person who, without active fault on his part, has been compelled by reason of some legal obligation, to pay damages occasioned by the initial negligence of another, and for which he is only secondarily liable.' This principle was expressly approved and applied in American Can Co. v. City & County of San Francisco, 202 Cal.App.2d 520, 21 Cal.Rptr. 33; Alisal Sanitary Dist. v. Kennedy, supra and Cahill Bros. Inc. v. Clementina Co., 208 Cal.App.2d 367, 25 Cal.Rptr. 301.

The court instructed: 'In this action a cross-complaint has been filed, wherein Vegetable Oil Products Company is named cross-complainant and R. O. Stephens, dba Bay View Welding Works is named cross-defendant. As to the issues tendered by the cross-complaint and the answer to it, the parties therein named stand in the same relation one to another as do a plaintiff and a defendant under a complaint. Therefore, as the instructions given you apply to the plaintiff and defendant under the complaint, so they apply with like effect to the cross-complainant and cross-defendant, respectively, in their capacities as such, under the cross-complaint. Under the cross-complaint, the cross-complainant has the burden of proving the following issues: (1) That cross-defendant agreed to do the repair work on the copra tank in a safe and careful manner. (2) That cross-defendant breached said agreement by not doing the repair work in a safe or careful manner, resulting in injury to plaintiff. (3) The amount of damages which cross-complainant has suffered as a result of cross-defendant 's breach of said agreement. And cross-defendant has the burden of proving the following issues: (1) That cross-complainant was guilty of active negligence. (2) That said negligence helped to bring about plaintiff's injury.' The portion of the instruction stating the burden of proof resting upon the respective parties was added of the court's own motion.

The court also instructed as follows: 'The evidence in this case establishes that prior to the time of the accident, R. O. Stephens, doing business as Bay View Welding Works, was an independent contractor and had taken complete control of the tank where the accident occurred, and that defendant Vegetable Oil Products Company, the owner thereof, did not participate in the work being done, and retained no control of the tank (except to the extent of determining whether the work was completed according to the contract).' The instruction correctly states the substance of the evidence.

There was no evidence that Vegetable Oil was...