Hawkeye-Security Ins. Co. v. Ford Motor Co.

Decision Date10 February 1970
Docket NumberKELSEY-HAYES,HAWKEYE-SECURITY,No. 53572,53572
Citation174 N.W.2d 672
PartiesINSURANCE COMPANY, Appellant, v. FORD MOTOR COMPANY, Cross-Petitioner-Appellee, v.COMPANY, Cross-Petition-Appellee.
CourtIowa Supreme Court

Patterson, Lorentzen, Duffield, Timmons & Irish, Des Moines, for appellant.

Jones, Cambridge, Carl & Feilmeyer, Atlantic, for cross-petitioner-appellee.

Ahlers, Cooney, Dorweiler, Allbee & Haynie, Des Moines, for cross-petition-appellee.

BECKER, Justice.

In this case plaintiff seeks indemnity or contribution for a loss incurred by reason of a truck-farm-tractor accident. Plaintiff, Hawkeye-Security Insurance Company, was the liability insurer of the truck involved in the accident. The injured farm-tractor operator, Mr. Koppold, sued the Tri-B Corporation and Tom Kolby, the owner and driver of the truck. Plaintiff-insurer conducted the defense, eventually settled the case for $17,500 and then brought action against Ford Motor Company as manufacturer of the offending truck. Ford Motor Company cross-petitioned and interpleaded Kelsey-Hayes Company as the company from which Ford claims to have purchased a brake drum alleged to have been defectively furnished. 1

Plaintiff alleges and defendant admits that on August 15, 1962, Tri-B Corporation purchased a new truck from Ford Motor Company through its Iowa based dealer. Defendant Ford Motor Company also admits the accident happened, subsequent legal action by Koppold, a jury verdict against Tri-B Corporation in the amount of $20,902.30, eventual settlement by payment of $17,500, plus costs of $249.13 and that plaintiff thereby obtained an assignment by Thomas Y. Kolby and Tri-B Corporation for all their interest in such judgment, if any.

As the case reaches us, plaintiff has four theories in separate divisions in its petition. Three divisions seek indemnity on grounds of implied warranty of witness, strict liability in tort and active negligence by Ford as against passive negligence by Tri-B Corporation and its employee-driver. The fourth division seeks contribution on the theory the negligence of defendant Ford concurred with the negligence of Tri-B Corporation to cause the resulting damages for which Tri-B was eventually held liable.

The theories of strict liability in tort and active versus passive negligence were rejected by the court on motion to dismiss and will be considered infra. As to the other two theories a motion to direct a verdict at the close of plaintiff's case was sustained. The oral motion to direct was bottomed on the following grounds:

1. Division I, implied warranty of fitness, does not state a cause of action against defendant because plaintiff-insurer is not within the class of persons to which implied warranty is applicable, there being no showing of privity of contract between the parties.

2. There is no substantial evidence of breach of implied warranty of fitness, or of proximate cause.

3. Division II, contribution based on concurrent negligence, must fail because there is no substantial evidence of negligence on the part of defendant.

Plaintiff's assignments of error cover all four dismissed divisions; i.e., dismissal of the implied warranty of fitness-indemnity theory and the concurrent negligence-contribution theory, both of which were dismissed at the close of plaintiff's evidence; and dismissal of the strict liability in tortindemnity theory and dismissal of the active versus passive negligence theory, both of which were dismissed at the pleading stage as contra to present Iowa law.

I. We first determine whether the principles applicable to implied warranty of fitness extend to this plaintiff and can be applied to the present controversy. Defendant vigorously contends plaintiff insurance company is a member of the general public; as such, it is not protected by the implied warranty and strict liability principles, citing Hahn v. Ford Motor Company, 256 Iowa 27, 126 N.W.2d 350.

Plaintiff claims defendant owes it an independent duty as implied warrantor. We need not extend the doctrine of implied warranty so far as to hold the vendorwarrantor owes a direct duty to the insurer of its vendee. Such a direct duty would make the subrogee independent of the obligations, duties and defenses of its subrogor. Thus the subrogee's rights might well, under certain circumstances, rise higher than those of its subrogor. We do not go so far.

But this does not mean plaintiff is a mere member of the general public who cannot plead and prove breach of implied warranty under the doctrine of Hahn v. Ford Motor Company, supra. There we dealt with the rights of a member of the public who was injured when a truck owned by Ford's vendee struck plaintiff's car. Here we deal with the rights of the vendee itself which are passed on to the subrogee. The vendee-subrogor was within the class protected by the principles of implied warranty. Its subrogee was also in the same class.

We do not think Blackford v. Sioux City Dressed Pork, 254 Iowa 845, 118 N.W.2d 559 or Iowa Power and Light Co. v. Abild Construction Co., 259 Iowa 314, 144 N.W.2d 303, dictate a different result. In both cases we recognized the possibility of an independent duty growing out of claimed contractual rights between the parties. Here there is an independent duty but it runs to Tri-B Corporation. Plaintiff has the benefit of such duty as subrogee, not because of an implied promise running directly to it.

Plaintiff, both in its recast petition and in its argument here, shows the existence of its status as subrogee and assignee of the rights of its insured Tri-B Corporation. Defendant's answer admits that by payment of $17,500 and obtaining satisfaction of the judgment 'plaintiff thereby obtained an assignment by Thomas Y. Kolby and Tri-B Corporation of all their interests in said judgment, if any.' In its opening statement of facts in this court, plaintiff states: 'Appellant is an insurance company who insured Tri-B Corporation and Tom Kolby. This action is like a subrogation claim with Appellant standing in the same shoes of Tri-B Corporation and Tom Kolby. For ease of communication we will consider the Appellant as being Tri-B Corporation and Tom Kolby.'

In Hawkeye-Security Company v. Lowe Construction Co., 251 Iowa 27, 99 N.W.2d 421, 428, we said: 'Defendant has cited a few older precedents from states Where contribution is not allowed between joint tort-feasors which hold, in effect, that an indemnitor, subrogee or assignee of one of the tort-feasors acquires no greater right to contribution than the tort-feasor had. See, as to rights of an assignee, Manowitz v. Kanov, 107 N.J.Law 523, 154 A. 326, 75 A.L.R. 1464, and Annotation 1468, and, as to rights of an indemnitor of one of the tort-feasors, Royal Indemnity Co. v. Becker, 122 Ohio St. 582, 173 N.E. 194, 75 A.L.R. 1481 and Annotation 1486 (supplemented in 171 A.L.R. 271). If it be assumed there is no right of contribution between the tort-feasors these decisions are undoubtedly sound. A contrary holding would, in effect, circumvent the prohibition against contribution between tort-feasors.

'However, no reason occurs to us why plaintiff should not have the same right of contribution its insured had. It is an indemnitor and subrogee of Nickol and, in practical effect, his assignee. Certainly Nickol could legally assign his claim for contribution if he, rather than plaintiff, had paid the Leyendecker claims. Plaintiff's position is no less favorable than that of such an assignee. '* * * it seems manifest that a recognized common-law right of contribution among negligent joint tortfeasors will not be lost merely because of an assignment of that right.' Annotation 60 A.L.R.2d 1366, 1389. See also 13 Am.Jur., Contribution, section 109.'

In Peters v. Lyons (1969) (Iowa), 168 N.W.2d 759, the vendee's insurer settled the claim against vendee and intervened in the implied warranty action against defendant Kresge Company. It was assumed without argument that the insurer-subrogee acquired the rights of the insured-subrogor. State Farm Mut. Auto. Ins. Co. v. Anderson-Weber, 252 Iowa 1289, 110 N.W.2d 449, is also similar in this respect.

We hold the insurer-subrogee of the purchaser-user is not a mere member of the general public and may assert the claims of its subrogor.

II. The second major inquiry must concern itself with the sufficiency of the evidence to warrant submission of the implied warranty of fitness count. In considering the propriety of a motion for a directed verdict the evidence must be viewed in the light most favorable to the party against whom the motion was made. Rules of Civil Procedure, rule 344(f)(2).

The truck in question was manufactured on July 24, 1962. It was purchased by Tri-B Corporation on August 15, 1962. The accident occurred May 23, 1964, 21 months after purchase. The truck speedometer showed 31,602 miles of operation at the time.

While the truck was being driven at about 40 to 45 miles per hour on a downhill, concrete highway, it came upon a tractor-wagon unit operated by a local farmer. The driver slowed the truck by use of the brakes to 15 to 20 miles per hour and the brakes worked normally. Oncoming traffic prevented passing and at that time the brakes failed completely. The brake pedal just dropped to the floor. The driver shifted gears and set the emergency brake. The shoulder was wet. The truck struck the rear of the tractor-wagon unit, knocking it into the ditch, causing injuries for which settlement was eventually made.

The truck was licensed for a gross weight of 25,000 pounds. At the time of the accident it weighed 24,000 pounds. Inspection of the truck immediately after the accident, at the scene, indicated the brake pedal went right down to the floor and the right rear wheel on the inside was covered with brake fluid that had run down from the brake drum. The fluid was still dripping when one witness observed the condition. There was no noticeable fluid on...

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