Haney v. International Harvester Co.

• Citation: 201 N.W.2d 140,294 Minn. 375
• Decision Date: 22 September 1972
• Docket Number: No. 43111,43111
• Parties: John HANEY, Respondent, v. INTERNATIONAL HARVESTER COMPANY, defendant and third-party plaintiff,Appellant, v. Marvin STAMNESS, third-party defendant, Respondent, Douglas County Coop, third-party defendant, Respondent, George Torgerson, d.b.a. West Side Machine Shop, third-party defendant, Respondent.
• Court: Supreme Court of Minnesota (US)

Page 140

201 N.W.2d 140

294 Minn. 375

John HANEY, Respondent, v. INTERNATIONAL HARVESTER COMPANY, defendant and third-party plaintiff,Appellant, v. Marvin STAMNESS, third-party defendant, Respondent, Douglas County Coop, third-party defendant, Respondent, George Torgerson, d.b.a. West Side Machine Shop, third-party

defendant, Respondent.

No. 43111.

Supreme Court of Minnesota.

Sept. 22, 1972.

Syllabus by the Court

Plaintiff sued defendant truck manufacturer for injuries arising out of an accident allegedly caused by a defect in a truck manufactured by defendant and owned by plaintiff's employer. The injuries were received by plaintiff within the scope and course of his employment. The trial court on motion before trial dismissed defendant's claim for contribution or indemnity on the theory that it was barred by the Workmen's Compensation Act. Issues involving strict liability, breach of warranty, comparative negligence, and due process were raised on appeal. The case is reversed and remanded, but without prejudice, in order that a factual setting may be had before these issues, all in a developing field of law, are determined.

Castor, Stich & Ditzler, Minneapolis, for appellant.

Quarnstrom, Doering & Leary, Marshall, for Haney.

Rufer, Hefte, Pemberton, Schulze & Sorlie, Fergus Falls, for Stamness.

Joseph G. Thornton, Alexandria, for Douglas County Coop.

I. L. Swanson, Elbow Lake, for Torgerson.

Heard before KNUTSON, C.J., and OTIS, KELLY, and GUNN, JJ.

KELLY, Justice.

Defendant, International Harvester Company, appeals from a district court order dismissing with prejudice its third-party claim against Marvin Stamness, employer of plaintiff. Reversed and remanded but without prejudice. ¹

Plaintiff, John Haney, brought this action to recover damages suffered by him in a one-vehicle (truck) accident on April 5, 1969, in Grant County, claiming defendant was negligent in the manufacture, design, and assembly of the truck. He also claimed breach of warranty as well as strict liability for an alleged defect in the vehicle at the time of manufacture. The truck plaintiff was operating was owned by Marvin Stamness, plaintiff's employer at the time the accident occurred. The truck apparently went out of control and left the road.

Defendant filed a third-party complaint against Marvin Stamness, the Douglas County Co-op, and George Torgerson, d.b.a. West Side Machine Shop. Stamness counterclaimed against International Harvester for damages to the truck. The gist of International Harvester's claim against Stamness is that, if any defect existed, it was caused to exist by him and that, if any warranty was breached, such breach was by him. The trial court dismissed the claim against Stamness on the grounds that any liability of Stamness is exclusively under the provisions of the Workmen's Compensation Act, citing Minn.St. 176.061, subd. 10.

The sole issue is whether the third-party action against plaintiff's employer should have been dismissed where plaintiff-employee, who has received workmen's compensation benefits, has sued defendant for common-law negligence and defendant has brought the employer in as a third-party defendant for contribution or indemnification and where the employer has counterclaimed against defendant.

Minn.St. 176.061, subd. 10, provides:

'If an action as provided in this chapter prosecuted by the employee, the employer, or both jointly against the third person, results in judgment against such third person, or settlement by such third person, the employer shall have no liability to reimburse or hold such third person harmless on such judgments or settlements in absence of a written agreement to do so executed prior to the injury.'

This statute has no application in the instant case because it was not effective until September 1, 1969. Cooper v. Watson, 290 Minn. 362, 187 N.W.2d 689 (1971). The accident took place on April 5, 1969. The language contained in § 176.061, subd. 10, before 1969 was part of § 176.061, subd. 2, but at that time, as at the present, subd. 4 limited subd. 2 to certain situations not applicable here. Thus, in this case no specific statute actually controls the rights of International Harvester to proceed against the employer.

While both contribution and indemnity are included under the general term of restitution and are based on equitable principles, they are different in their specific applications. Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 104 N.W.2d 843 (1960). In Hendrickson, this court defined and distinguished these two remedies as follows (258 Minn. 370, 104 N.W.2d 846):

'Contribution is the remedy securing the right of one who has discharged more than his fair share of a common liability or burden to recover from another who is also liable the proportionate share which the other should pay or bear. Contribution rests upon principles of equity. Indemnity is the remedy securing the right of a person to recover reimbursement from another for the discharge of a liability which, as between himself and the other, should have been discharged by the other. Indemnity is generally said to rest upon contract, either express or implied. However, there are numerous exceptions and situations in which a contract is implied by law, and contract, therefore, seems to furnish too narrow a basis. In the modern view, principles of equity furnish a more satisfactory basis for indemnity.

'Contribution and indemnity are variant remedies used when required by judicial ideas of fairness to secure restitution. Although similar in nature and origin and having a common basis in equitable principles, they differ in the kind and measure of relief provided. Contribution requires the parties to share the liability or burden, whereas indemnity requires one party to reimburse the other entirely. Differing thus in their effect, these remedies are properly applicable in different situations. Contribution is appropriate where there is a common liability among the parties, whereas indemnity is appropriate where one party has a primary or greater liability or duty which justly requires him to bear the whole of the burden as between the parties.

'At common law joint or concurrent tortfeasors had no right as against each other to secure either contribution or indemnity. However, Minnesota, and a growing minority of other states, have extended the right of contribution to joint tortfeasors by common law in cases where the one seeking contribution was not guilty of intentional wrong. The basis for contribution, nevertheless, remains the fact that there was a common liability, and that one has discharged more than his just share. Accordingly, a person who discharges a liability for a tort cannot recover contribution from a joint tortfeasor who is immune from action with respect to such tort because of some personal defense. The right does not exist in such circumstances because there is no common liability.

'Although the modern view, prevailing in this state, does not preclude indemnity among joint tortfeasors, the situations in which it is allowed are exceptional and limited. A joint tortfeasor may generally recover indemnity only in the following situations:

'(1) Where the one seeking indemnity has only a derivative or vicarious liability for damage caused by the one sought to be charged.

'(2) Where the one seeking indemnity has incurred liability by action at the direction, in the interest of, and in reliance upon the one sought to be charged.

'(3) Where the one seeking indemnity has incurred liability because of a breach of duty owed to him by the one sought to be charged.

'(4) Where the one seeking indemnity has incurred liability merely because of failure, even though negligent, to discover or prevent the misconduct of the one sought to be charged.

'(5) Where there is an express contract between the parties containing an explicit undertaking to reimburse for liability of the character involved.

'It is argued on behalf of defendant Gabrielson that having paid workmen's compensation benefits to dependents of decedent he is exonerated by the Workmen's Compensation Act from liability to any other person arising out of the injury or death of his employee. However, this court has long held that the Workmen's Compensation Act is intended to control only the rights between employer and employee and does not by its terms prevent contribution or indemnity where appropriate. This also seems to be the general rule. Nevertheless, the act does affect the right to contribution where the concurrent negligence of the employer and a third party causes injury to an employee. Since workmen's compensation statutes provide that the obligations thereunder are the only liability of the employer to the employee, or his representatives, there is no common liability involving the employer and third party in such situations; and, therefore, there is no ground for allowing contribution.'

Thus, under the rationale of Hendrickson, it appears that neither contribution nor indemnity are applicable in this case. Indemnity should not apply because the defendant's situation does not fit any of the five situations spelled out in Hendrickson, and contribution should not apply because there is no common liability between employer Stamness and International Harvester.

International Harvester argues that Hendrickson and all other Minnesota cases with issues similar to those in the instant case arose prior to the adoption of the doctrine of comparative negligence. Minn.St. 604.01. As a part of its argument, it points out that the former inflexible contributory negligence rule might give rise to inequities if the employer is subjected to the remedies of contribution or indemnification, whereas the comparative negligence rule would preclude these inequities. It also contends that fairness and equity require that it should be liable, if at all, under the comparative negligence rule and that the liability...