Howard P. Foley Co. v. Cox, s. C14-83-420C

• Decision Date: 02 August 1984
• Docket Number: Nos. C14-83-420C,A14-83-421CV,s. C14-83-420C
• Citation: 679 S.W.2d 58
• Parties: HOWARD P. FOLEY CO., Appellant, v. Richard A. COX, et al, Appellees. WESTINGHOUSE ELECTRIC CORPORATION, Appellant, v. Richard A. COX, et al, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 58

679 S.W.2d 58

HOWARD P. FOLEY CO., Appellant, v. Richard A. COX, et al, Appellees.

WESTINGHOUSE ELECTRIC CORPORATION, Appellant, v. Richard A. COX, et al, Appellees.

Nos. C14-83-420CV, A14-83-421CV.

Court of Appeals of Texas,

Houston (14th Dist.).

Aug. 2, 1984.

John L. McConn, Jr., Butler, & Binion, Todd M. Lonergan, John D. Ellis and Associates, Houston, Otto D. Hewitt, McLeod, Alexander, Powel & Apffel, Galveston, for appellant.

Richard Warren Mithoff, Jamail, Kolius & Mithoff, Houston, Samuel B. Kent, Jad Stepp, Royston, Rayzor, Vickery & Williams, Galveston, for appellees.

Before JUNELL, MURPHY and SEARS, JJ.

OPINION

SEARS, Justice.

This is a consolidated appeal from a judgment awarding damages to Richard Cox in a personal injury suit. Appellants, Howard P. Foley Company (Foley) and Westinghouse Electric Company (Westinghouse), challenge the manner in which the trial court allocated damages in this case. We affirm.

Appellee Cox was injured while he was working on a piece of electrical equipment at a plant owned by Appellee Amoco Chemicals Corporation (Amoco). The piece of electrical equipment was an "Ampgard" starter manufactured by Westinghouse and sold to C.F. Braun & Company (Braun) for installation at Amoco's plant. Braun was hired by Amoco in 1975 to be general contractor for some construction work at the plant. During this time several of the Ampgard units were installed at the plant, although not all of the units were activated during the initial installation. Foley was hired by Braun in 1975 as a subcontractor to perform some of the work at the plant. In 1976, Sargeant Electrical Company (Sargeant) was hired by Braun as a subcontractor to do work related to the Ampgard units. In 1979, after the initial installation of the Ampgard units, Foley was hired by Amoco to do additional electrical work at the plant. Cox was an employee of Foley.

Cox was injured on October 10, 1980, when he reached into the high voltage section of one of the Ampgard starters. The Ampgard units were designed with separate high voltage and low voltage sections. The units were designed to have a protective barrier between the two sections to prevent contact with the high voltage section. This protective barrier was not in place when Cox was working on the low voltage section and his hand came in contact with the high voltage.

Cox filed suit against Westinghouse, Braun, Sargeant, Amoco and two Amoco employees to recover for his injuries. Cox's suit was based upon negligence and strict products liability. Amoco filed a third party action against Foley based upon an indemnity provision contained in the contract between Amoco and Foley. All the defendants filed cross-actions for contribution or indemnity against each other on contractual and common law theories.

The jury found that Braun and Westinghouse were both liable to Cox on the basis of strict products liability. The jury also returned findings that Amoco, Westinghouse and Foley were negligent. Although Cox's petition alleged that two Amoco employees, Brian Ballance and Sam Strickland, were also negligent, there was no jury issue submitted or finding as to their negligence. The jury assessed damages at $400,000. No issue of comparative causation was submitted to the jury.

On the basis of the jury's findings, the trial judge entered judgment in favor of Cox against Amoco, Braun and Westinghouse, jointly and severally, for the full amount of damages. The trial court then allocated the damages according to the various claims for contribution and indemnity. The court divided the verdict equally among Amoco, Braun and Westinghouse. The trial judge then awarded Amoco indemnity against Foley based upon the contract between the parties. Braun, as the innocent distributor of a defective product, was awarded indemnity from Westinghouse, the manufacturer of the Ampgard unit. The result is that Foley is required to pay one-third of the damage award and Westinghouse must pay two-thirds.

Both Foley and Westinghouse appeal. Westinghouse, in three points of error, does not attack any of the liability findings but rather argues that the trial judge improperly allocated the damage award among the defendants. Foley raises thirteen points of error which challenge the allocation of the damages, the sufficiency of the evidence to support certain findings of fact, and alleged inconsistencies between the findings of fact.

Westinghouse, in its first point of error, argues that the trial court erred when it awarded Braun both a right of contribution under Article 2212 and a right of indemnity under common law against Westinghouse. Since no issue on the comparative causation of injury between the negligent and strictly liable defendants was submitted, and the trial occurred prior to July 13, 1983, the doctrine of comparative causation is not in issue. See Duncan v. Cessna Aircraft Company, 665 S.W.2d 414 (Tex.1984). In addition, Westinghouse argues that since there were both negligent and strictly liable defendants, Article 2212a does not apply. General Motors Corporation v. Simmons, 558 S.W.2d 855 (Tex.1977). Westinghouse alleges the trial court erred in the manner in which it applied Article 2212.

Westinghouse believes that the trial court erred in its division of the verdict because where there exists a right of indemnity under the common law there is no right to contribution under Article 2212. In support Westinghouse cites Strakos v. Gehring, 360 S.W.2d 787 (Tex.1962); Renfro Drug Company v. Lewis, 149 Tex. 507, 235 S.W.2d 609 (1950); Traylor v. Gray, 547 S.W.2d 644 (Tex.Civ.App.--Corpus Christi 1977, writ ref'd n.r.e.); and Champion Mobile Homes v. Rasmussen, 553 S.W.2d 237 (Tex.Civ.App.--Tyler 1977, writ ref'd n.r.e.). There is language in the above cited cases which supports Westinghouse's position but we believe that the facts in those cases make them inapplicable here.

The Supreme Court expressly pointed out that the system of comparative causation, adopted in Duncan, does not affect the right of an innocent retailer of a defective product to obtain indemnity from the manufacturer of that product. Duncan v. Cessna Aircraft Company, 665 S.W.2d at 432. The Court continued by emphasizing that "each defendant member of the marketing chain remains liable to the plaintiff (emphasis added)." Id. If each member of the marketing chain is liable to the plaintiff, then a method for allocating the damages must exist. Prior to the Duncan opinion the only method of allocating the damages among the strictly liable defendants and the negligent defendants was the rough pro rata division mandated by Article 2212. This system of allocating the damages did not depend upon the "fault" of each liable defendant but rather upon the "number" of liable defendants.

In Mahan Volkswagen, Inc. v. Hall, 648 S.W.2d 324 (Tex.App.--Houston [1st Dist.] 1982, writ ref'd n.r.e.) the court was faced with claims for contribution and indemnity between negligent and strictly liable defendants. The defendants were all members of the chain of distribution of a defective product. The court stated that "each such defendant is liable for the full amount of actual damages found by the jury, and is entitled to one-third contribution from each of the other defendants." Id. at 333. On motion for rehearing the court considered Mahan's contention that it was entitled to full indemnity. Mahan's liability was found to be derivative through the manufacturer of the defective product and a negligent previous seller of the product. Upon that basis, Mahan was granted full indemnity from both of the other defendants. The Court of Appeals rendered judgment in favor of the plaintiff and against all three defendants, jointly and severally. The judgment entered on rehearing awarded Mahan indemnification resulting in each of the remaining defendants being liable for one-half of the actual damages.

We believe that in situations like this the retailer of the defective product should be included under the article 2212 formula regardless of the right to later indemnification. As the Supreme Court has pointed out, each defendant member of the marketing chain of a defective product remains liable to the plaintiff. Regardless of any right to contribution or indemnity, Braun is liable to Cox. If we were to exclude Braun from the article 2212 formula, prior to its indemnity claim, Braun would be liable for the full amount of damages found by the jury while Amoco and Westinghouse would each only be liable for one-half of the damages. The problem of allocating damages among two or more negligent defendants and two or more strictly liable defendants will be alleviated by the doctrine of comparative causation adopted by the Supreme Court in Duncan. However, we believe the best way to handle an innocent retailer of a defective product in a case not covered by Duncan is to include the retailer with the other liable defendants under article 2212 to determine the amount of each defendant's liability and then award the retailer indemnity against the manufacturer of the defective product. This is the method used by the trial court and we are unable to say the trial court erred. Westinghouse's first point of error is overruled.

In point of error two, Westinghouse argues that the trial court erred in awarding Braun indemnification from Westinghouse in violation of a provision contained in the contract between the parties. Westinghouse does not dispute that an innocent retailer has a right of indemnity against the manufacturer of a defective product. Thiele v. Chick, 631 S.W.2d 526 (Tex.App.--Houston [1st Dist.] 1982, writ ref'd n.r.e.). Rather, Westinghouse argues that the purchase order between the parties contractually precluded this claim for indemnity. The clause in question provides:

Westinghouse shall not be liable to Braun in contract or in tort for indirect, incidental, or consequential damages such as, but not limited to, loss of...