Gramex Corp. v. Green Supply, Inc.

• Decision Date: 12 November 2002
• Docket Number: No. SC 84146.,SC 84146.
• Citation: 89 S.W.3d 432
• Parties: GRAMEX CORPORATION, Respondent, v. GREEN SUPPLY, INC., Appellant.
• Court: Missouri Supreme Court

Page 432

89 S.W.3d 432

GRAMEX CORPORATION, Respondent, v. GREEN SUPPLY, INC., Appellant.

No. SC 84146.

Supreme Court of Missouri, En Banc.

November 12, 2002.

COPYRIGHT MATERIAL OMITTED

Mark E. Harris, Jack W. Green, Jr., Kansas City, for Appellant.

James E. Spain, Poplar Bluff, Hardy C. Menees, Clayton, for Respondent.

I.

WILLIAM RAY PRICE, JR., Judge

Green Supply, Inc., a wholesaler of hunting supplies, appeals a contribution judgment in the amount of $625,000 rendered against it in favor of Gramex Corporation. Gramex is a retailer who purchased a defective tree seat from Green Supply and resold it to William Dunn, a consumer severely injured when the tree seat collapsed during use. Gramex paid a settlement in the amount of $1.25 million to Mr. and Mrs. Dunn in exchange for a complete release of itself and Green Supply. The judgment is affirmed.

II.

A. The Initial Settlement

On October 12, 1996, William Dunn fell eighteen feet from a tree platform, upon which he had been using a tree seat for deer hunting, and was paralyzed from the waist down. The tree platform was a deer stand Mr. Dunn constructed himself earlier that spring and was approximately two and one-half feet wide and between two to three feet in depth. The stand was nearly eighteen feet off the ground, attached to the tree. Mr. Dunn accessed the tree platform by a metal ladder affixed to the tree. Mr. Dunn fell from this platform when the stitching of the strap that secures the tree seat to the tree tore loose, and the seat collapsed.

Mr. Dunn had purchased the tree seat approximately ten days earlier from a Gramex retail store, which had, in turn, purchased the tree seat from Green Supply. The tree seat was manufactured by Big Game Products Company, Inc., S.I.R. Webbing, Inc., and Jackster, Inc. Big Game produced the seat, S.I.R. Webbing provided Big Game with nylon straps used in the manufacture of the tree seat, and Jackster sewed the nylon straps provided to Big Game by S.I.R. Webbing. The stitching of these nylon straps failed and caused Mr. Dunn to fall from the deer stand. Mr. Dunn and his wife, Tomi Lyn Dunn, sued Big Game, S.I.R. Webbing, Jackster, Green Supply and Gramex on theories of negligence and strict liability.

John Cook, attorney for Mr. Dunn and Mrs. Dunn ("the Dunns"), testified at trial as to the underlying product liability action brought by the Dunns against Gramex, Green Supply, Big Game, S.I.R. Webbing, and Jackster, and the resulting settlements between the parties. In the original action, Mr. Cook determined that he "would never have asked a jury ... for less than six million dollars. And depending on what happened at trial, it could easily have ranged up to ten million dollars." Mr. Cook testified as to the effect of the doctrine of joint and several liability on such a verdict:

Joint and several liability means that, under the law, each defendant is jointly liable for the whole verdict. That is, even though they have various degrees of responsibility which a jury would have decided, any one defendant might have to pay it all and then be responsible for going to get the shares of the other defendants.

* * *

Gramex may have had to have paid much more than [$1.25 million] had it not settled the case[.]

The parties stipulated to the amount of insurance coverage each manufacturer, and Gramex, carried. Big Game had $1 million in insurance coverage, S.I.R. Webbing had $2 million insurance coverage, Jackster had $1 million insurance coverage, and Gramex had $11 million insurance coverage — each stipulated amount was applicable to the claim by Mr. and Mrs Dunn. No evidence was presented as to the manufacturers' assets above their insurance coverage that might have been available to satisfy a judgment in excess of $4 million.

Less than three weeks before the trial date, the parties (excepting Jackster) participated in court ordered mediation. Mr. Cook testified at trial as to the details of the mediation. During mediation, Mr. Cook was adamant that the parties "were going to reach an agreement that date or they were going to go to trial to conclusion." Mr. Cook grouped the defendants into two groups for purposes of the mediation: "the manufacturing Defendants — Jackster, S.I.R. [Webbing] and Big Game — on the one hand and the seller Defendants — Green Supply and Gramex — on the other hand." Mr. Cook offered to settle with both Gramex and Green Supply for $1.25 million, but Green Supply refused the offer. Gramex agreed to settle the Dunns' claims against both Gramex and Green Supply for the $1.25 million offered, but, in exchange, required the Dunns "to dismiss not only Gramex but ... to dismiss [the Dunns'] claims with prejudice against Green Supply as well." As Mr. Cook testified at trial, "[The Dunns] had to dismiss against Green Supply in order to allow Gramex to bring a contribution action against Green Supply." The Dunns agreed to Gramex's request, and executed a release. The release stated that "the sum of $1,250,000 is being paid to discharge and extinguish the liability of both Defendants, Gramex Corporation and Green Supply, Inc." The Dunns filed a memorandum with the trial court to dismiss with prejudice all claims against Green Supply, and Gramex paid the entire $1.25 million. Mr. Cook testified that in settling "[Gramex] got a bargain. It was reasonable."

Mr. Cook testified that after Gramex agreed to settle, but still during the course of the meeting, Big Game and S.I.R. Webbing also settled with the Dunns; Big Game agreed to pay the Dunns $900,000, and S.I.R. Webbing agreed to pay $1 million. Jackster settled with the Dunns six days later for $900,000. The Dunns' recovery from these settlements totaled $4,050,000.

B. The Contribution Action: Pleadings and Evidence

After settling with the Dunns, Gramex filed a cross-claim against Green Supply in the original lawsuit filed by Mr. Dunn and Mrs. Dunn. In its cross-claim, Gramex alleged:

Because the Defendant Green Supply, Inc. sold a defective product to Gramex Corporation, and thereby subjected Gramex Corporation to the [sic] liability to Plaintiffs, Gramex Corporation is entitled to be indemnified for all losses suffered by Gramex Corporation as a result of purchasing the defective product from the Defendant Green Supply, Inc.

To establish the liability of both Gramex and Green Supply to the Dunns, Gramex pleaded "that the tree seat was defective and unreasonably dangerous when put to an intended use." Gramex stated that the tree seat was "sold by Big Game Products Company, Inc. to the Defendant Green Supply, Inc., and that the Defendant Green Supply, Inc. sold the defective tree seat to Gramex Corporation, who in turn sold the defective tree seat to the Plaintiffs William Kent Dunn and Tomi Lyn Dunn." Gramex further alleged:

As a direct and proximate result of the manufacture and sale of the defective tree seat, the Plaintiff William Kent Dunn has suffered painful and permanent personal injuries as alleged in this lawsuit. Because the Defendant Gramex Corporation sold a defective and unreasonably dangerous product, it is liable to William Kent Dunn for the injuries suffered by William Kent Dunn.

Almost nine months later, Gramex amended its cross-claim by interlineation to include a claim for contribution, as well as indemnity, against Green Supply.

In response to the cross-claim, Green Supply claimed as an affirmative defense that in settling with the Dunns, Gramex acted as a volunteer under section 537.762, RSMo (2000), and thus has no right to indemnity or contribution from Green Supply, an innocent seller. Green Supply also claimed that as a seller it was not liable to the Dunns in the original action, and therefore has no liability to Gramex for contribution or indemnity. Green Supply filed a motion to dismiss the cross-claim pursuant to section 537.762, however, Green Supply never called up the motion for hearing. The case proceeded to trial.

At trial, Mr. Dunn testified that he purchased the tree seat from a Gramex retail store in early October 1996. Gramex's buyer of sporting goods, Ronald Perry, inspected a copy of the receipt issued to Mr. Dunn at the time of purchase and testified as to the same. Mr. Perry also stated that Green Supply was Gramex's "distributor/wholesaler for the fall hunting season 1996." While reviewing invoices bearing the Green Supply heading, Mr. Perry testified that as Gramex's distributor, Green Supply sold Gramex at least four Big Game tree seats prior to the purchase date printed on Mr. Dunn's receipt for the tree seat. Mr. Perry stated that these four tree seats were all delivered to the Gramex retail store from which Mr. Dunn bought his tree seat.

Mr. Dunn testified at trial as to his use of the tree seat. On the bottom of the tree seat was written the following warning: "Caution. The tree seat is to be used at a height that allows the feet to be on the ground when in use as a seat only." Although Mr. Dunn did not read the warning before using the tree seat, Mr. Dunn testified at trial that he understood this warning to mean that the tree seat could be safely used if his feet were on the floor of the platform. Mr. Dunn used the tree seat in conjunction with the tree platform he constructed, and sat in the tree seat only with his feet planted "firmly on the platform." Just before the seat collapsed, Mr. Dunn attempted to "ease down on the seat." Mr. Dunn testified that he "ease[d] down" on the seat because he did not want the tree seat to make "any creaking noise" that would scare the deer away. As Mr. Dunn attempted to sit, the tree seat "gave way all at once" and dropped him eighteen feet to the ground.

Duane Meeker was Gramex's expert witness. His deposition was read into evidence at trial. Mr. Meeker testified that he understood that "[Mr.] Dunn was injured and the injury was a result of the defect" in the stitching of the strap of the tree seat. Mr. Meeker testified:

Well, the failure was a...