Kemper National P & C Companies v. Smith

• Decision Date: 20 October 1992
• Citation: 419 Pa.Super. 295,615 A.2d 372
• Court: Pennsylvania Superior Court
• Parties: KEMPER NATIONAL P & C COMPANIES and American Motorists Insurance Company as Subrogees of Rick Boyd and U.S. West Information Systems Inc., Appellants v. Kevin C. SMITH, D.C. and Kathy O. Smith, D.C. and the Ashton Village Chiropractic Health Center.

Page 372

615 A.2d 372

419 Pa.Super. 295

KEMPER NATIONAL P & C COMPANIES and American Motorists

Insurance Company as Subrogees of Rick Boyd and U.S. West Information Systems Inc., Appellants v. Kevin C. SMITH, D.C. and Kathy O. Smith, D.C. and the Ashton

Village Chiropractic Health Center.

Superior Court of Pennsylvania.

Argued June 17, 1992.

Filed Oct. 20, 1992.

Leslie Martinelli-Cyr, Philadelphia, for appellants.

Alan S. Gold, Jenkintown, for appellees.

Before ROWLEY, President Judge, and HUDOCK and BROSKY, JJ.

BROSKY, Judge.

This is an appeal from the order of the lower court which sustained appellees' preliminary objections in the nature of a demurrer and dismissed appellants' complaint.

Before proceeding to address the issues raised by appellant, it is necessary to recount the relevant facts of this case. Craig Garsed and Rick Boyd, both residents of Arizona, were involved in an automobile accident on October 30, 1986 near Phoenix, Arizona. At the time of the collision, Mr. Boyd was employed by U.S. West Information Systems, Inc. and was insured under policies provided by appellants, Kemper National P & C Companies and American Motorists Insurance. Mr. Garsed sustained neck and back pain as a result of the accident and was treated by an Arizona chiropractor, Dr. Jeffrey Lowy, for these injuries. Mr. Garsed planned a trip to Philadelphia, Pennsylvania in December, 1986 and apprised Dr. Lowy of this event. Dr. Lowy advised Mr. Garsed that he should seek chiropractic treatment if he experienced pain while on vacation. Mr. Garsed heeded this advice and sought treatment from appellees, Kevin Smith, D.C., Kathy Smith, D.C. and/or the Ashton Village Chiropractic Health Center in Philadelphia. After receiving chiropractic treatment from appellees, Mr. Garsed suffered a stroke that has left him permanently disabled.

Mr. Garsed instituted suit against Rick Boyd for all of his injuries, including those allegedly caused by appellees, in December, 1987. Appellants entered into a structured settlement agreement and release with Mr. and Mrs. Garsed in 1990. ¹ The agreement provides that the Garseds will receive an immediate payment of $345,000.00 and periodic payments until October 1, 2015. In exchange for these payments, the Garseds completely released Mr. Boyd and appellants from all past, present and future claims attributable to the accident. ² The agreement additionally provides that appellants reserved any rights of contribution and/or indemnity which they may have against appellees.

Appellants instituted suit against appellees on July 1, 1991 pursuant to which they sought contribution and/or indemnity for that portion of the Garseds' injuries which were allegedly caused by appellees. Appellees filed preliminary objections in the nature of a demurrer. In response to appellees' objections, appellants expressly indicated that the contribution claims were withdrawn. See Brief of Appellants in Opposition to Preliminary Objections of Appellees, at 3. Appellees' preliminary objections were sustained by the trial court which directed that the complaint be dismissed. ³ This timely appeal followed.

Appellants present the following questions for review: (1) whether an insurer, who is a subrogee of the original tortfeasor and who settles with the injured plaintiff for all injuries arising out of an accident, is entitled to maintain an action for indemnification from a second or successive tortfeasor whose actions allegedly aggravated or caused additional harm to the injured plaintiff; and (2) whether appellees waived additional objections to the complaint which were raised in their reply brief but which were not set forth in the preliminary objections. For the reasons set forth below, we affirm the order of the lower court.

In reviewing the trial court's grant of preliminary objections in the nature of a demurrer,

[a]ll material facts set forth in the complaint as well as all inferences reasonably deducible therefrom are admitted as true for [the purpose of this review.] The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it.

Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 526 Pa. 541, 547, 587 A.2d 1346, 1349 (1991), cert. denied, 502 U.S. 867, 112 S.Ct. 196, 116 L.Ed.2d 156 (1991) (citations omitted). Accord Vattimo v. Lower Bucks Hospital, Inc., 502 Pa. 241, 244, 465 A.2d 1231, 1232-1233 (1983).

Appellants contend that they are entitled to indemnification from appellees. We disagree. As explained by our Supreme Court:

'There is ... a fundamental difference between indemnity and contribution. The right of indemnity rests upon a difference between the primary and secondary liability of two persons each of whom is made responsible by the law to an injured party. It is a right which enures to a person who, without active fault on his own part, has been compelled, by reason of some legal obligation, to pay damages occasioned by the initial negligence of another and for which he himself is only secondarily liable. The difference between primary and secondary liability is not based on a difference in degrees of negligence or on any doctrine of comparative negligence.... It depends on a difference in the character or kind of the wrongs which cause the injury and in the nature of the legal obligation owed by each of the wrongdoers to the injured person. Secondary liability exists, for example, where there is a relation of employer and employee, or principal and agent.... Without multiplying instances, ... the important point to be noted in all the cases is that secondary as distinguished from primary liability rests upon a fault that is imputed or constructive only, being based on some legal relation between the parties, or arising from some positive rule of common or statutory law or because of a failure to discover or correct a defect or remedy a dangerous condition caused by the act of the one primarily responsible....' Thus, the rule is that where one's active negligence has been established in a prior action, and the record of that litigation is introduced in the present action for indemnity, indemnity is not available if the claimant's active fault has been established in the prior action.

Vattimo v. Lower Bucks Hospital, Inc., 502 Pa. at 250-251, 465 A.2d at 1236, quoting Builders Supply Co. v. McCabe, 366 Pa. 322, 325-328, 77 A.2d 368, 370, 371 (1951) (emphasis in original). Further:

Unlike comparative negligence and contribution, the common law right of indemnity is not a fault sharing mechanism between one who was predominantly responsible for an accident and one whose negligence was relatively minor. Rather, it is a fault shifting mechanism, operable only when a defendant who has been liable to a plaintiff solely by operation of law, seeks to recover his loss from a defendant who was actually responsible for the accident which occasioned the loss.

Walton v. Avco Corporation, 530 Pa. 568, 579, 610 A.2d 454, 460 (1992) (emphasis omitted), quoting Sirianni v. Nugent Brothers, Inc., 509 Pa. 564, 570-571, 506 A.2d 868, 871 (1986). We will evaluate appellants' arguments and the decision of the lower court in accordance with the above principles.

Appellants initially argue that they have set forth a cause of action for indemnity against appellees because they were compelled, by operation of law, to pay for that portion of the Garseds' injuries which were allegedly attributable to appellees. For support, appellants refer us to the rule set forth in the Restatement (Second) of Torts § 457 (1965) pursuant to which a negligent actor who is held liable for another's bodily injury will also be deemed responsible for any additional bodily harm which results from the normal efforts of third parties to treat the other's injury, regardless of whether the third parties' acts are done in a proper or negligent manner. See Corbett v. Weisband, 380 Pa.Super. 292, 319, 551 A.2d 1059, 1072 (1988), allocatur denied, 524 Pa. 607, 569 A.2d 1367 (1989) and 524 Pa. 620, 571 A.2d 383 (1989); Embrey v. Borough of West Mifflin, 257 Pa.Super. 168, 175, 390 A.2d 765, 769 (1978); Lasprogata v. Qualls, 263 Pa.Super. 174, 180, 397 A.2d 803, 806 (1979) and the cases cited therein (which note that Pennsylvania has followed the Restatement rule). Appellants thus urge us to construe § 457 as a positive rule of law.

As applied in the context of an indemnity action, liability imposed pursuant to a positive rule of law suggests that a defendant is deemed responsible because of his or her relationship, not because of any actual negligence. For example, principals may be held liable for the acts of their agents, employers for the acts of their employees, suppliers for the acts of the manufacturers, municipalities for the acts of landowners in failing to keep their property safe, etc. See Builders' Supply Co. v. McCabe, supra (citing examples). § 457 of the Restatement, however, does not impose liability merely because of the original tortfeasor's status or relationship. Rather, the comments make clear that liability is imposed for any additional injuries caused by the medical providers because it is foreseeable that one who is injured by an original tortfeasor will seek treatment for those injuries. Simply stated, but for the negligent actions of the original tortfeasor, the plaintiff would not have been injured and would not have been treated by the physician. It is for this reason that liability for any additional harm is imposed under § 457 and not because of any positive rule of law. Thus, appellants' liability for the Garseds' injuries, if any, stemmed from their own negligent conduct and not from a positive rule of law.

More importantly, appellants have failed to state a cause of action for indemnity because they...