McCain Mfg. Corp. v. Rockwell Intern. Corp.

• Decision Date: 14 December 1981
• Docket Number: Civ. A. No. 80-1266-1.
• Citation: 528 F. Supp. 524
• Parties: McCAIN MANUFACTURING CORP., Plaintiff, v. ROCKWELL INTERNATIONAL CORPORATION, Defendant.
• Court: U.S. District Court — District of South Carolina

528 F. Supp. 524

McCAIN MANUFACTURING CORP., Plaintiff, v. ROCKWELL INTERNATIONAL CORPORATION, Defendant.

Civ. A. No. 80-1266-1.

United States District Court, D. South Carolina, Charleston Division.

December 14, 1981.

Susan M. Smythe, Buist, Moore, Smythe & McGee, Charleston, S. C., for plaintiff.

Robert A. Patterson, Thomas J. Wills, IV, and M. Dawes Cooke, Jr., Barnwell, Whaley, Stevenson & Patterson, Charleston, S. C., for defendant.

ORDER

HAWKINS, District Judge.

I. THE FACTS:

The defendant in this case has moved for summary judgment. This is an action for indemnification of expenses incurred in litigation and settlement of an earlier lawsuit, entitled Dale A. Morris v. McCain Manufacturing Corporation and Rockwell International Corporation, C/A No. 78-715 (D.S. C.). That case arose out of an accident in which Dale Morris' hand was severed while he was operating a machine known as a "bracket trimmer," which was manufactured by Rockwell International Corporation (hereinafter Rockwell) more than thirty years ago and sold by McCain Manufacturing Corporation (hereinafter McCain) in 1975 to Morris' employer. The action was brought in this court against both McCain and Rockwell, alleging negligence, breach of warranty, and strict liability in tort.

The case was tried before the Honorable Sol Blatt, Jr., on September 10 and 11, 1979. The testimony revealed that McCain bought the used machine from a printing company located in California and, finding that the machine was in need of substantial refurbishing, requested a wiring diagram from Rockwell. The testimony further reflected that Rockwell sent a technical representative to assist McCain in rewiring the machine. After refurbishing the machine, McCain sold it to Dale Morris' employer in Charleston, South Carolina. McCain sent a representative to Charleston to install the machine and to instruct personnel, including Dale Morris, how to operate it. It appears undisputed that no representative of Rockwell was ever present in Charleston when the machine was installed and the operators instructed on its use. Dale Morris contended that he was injured when the cutting blade of the bracket trimmer cycled spontaneously after the main power switch was turned on, a propensity of the machine of which he was unaware.

Rockwell settled with Dale Morris for Seventy-five Thousand ($75,000.00) Dollars at the close of the plaintiff's case. The most significant feature of this settlement, for the purpose of the present action, was that Dale Morris agreed to abandon his strict liability and breach of warranty causes of action and proceed against McCain in negligence alone. McCain had crossclaimed against Rockwell, and Judge Blatt dismissed the cross-claim without prejudice in order to allow Rockwell to withdraw from the case. Judge Blatt then charged the jury that it must no longer consider Rockwell's role, if any, in injuring Dale Morris. "You are solely concerned now in this particular case, your concern is, is the plaintiff going to carry the burden of proof to prove that the defendant McCain was negligent and/or reckless; that if he was negligent and/or reckless, was that conduct a contributing cause?"¹ This court finds that Judge Blatt's charge effectively removed from the case any issue pertaining to Rockwell's conduct and left for the jury's consideration only the question of McCain's negligence towards Dale Morris.

The trial continued, and McCain presented its defense. Before the case was submitted to the jury, however, McCain settled with Morris for Sixty-four Thousand ($64,000.00) Dollars.

The present action was instituted by the plaintiff herein, McCain Manufacturing Corporation, to recover indemnification against the defendant Rockwell International for the amount that McCain paid to Dale Morris, together with all costs of defending the earlier lawsuit. McCain's complaint alleges negligence, breach of contract, and breach of warranty by Rockwell, all of which caused McCain to become liable to Dale Morris in the amount of Sixty-four Thousand ($64,000.00) Dollars. Under the warranty theory McCain claims to be a third party beneficiary of an implied warranty of fitness for the bracket trimmer. It is undisputed that the machine was manufactured and sold by Rockwell more than thirty years ago, and was substantially rewired after it left Rockwell's hands. In any event, McCain has not urged the breach of warranty theory before this court, and has cited no authority that would render it an intended beneficiary of any warranty under the circumstances of this case, but rather has relied upon the breach of contract and negligence theories. The factual basis for both of these theories is McCain's claim that it relied upon Rockwell's expertise in rewiring the bracket trimmer and that it was Rockwell's negligence in providing a defective wiring diagram and the negligence of the Rockwell technician in failing to correct the defective condition in the machine that caused McCain to become liable in damages to Dale Morris. These negligent acts also constitute a breach of a contract of workmanlike performance implicit in Rockwell's agreement to assist McCain in refurbishing the machine. For the purpose of the defendant's motion for summary judgment, McCain's allegations are taken as true. See Van Horn v. Gulf Atlantic Towing Corp., 388 F.2d 636 (4th Cir. 1968).

In support of its motion for summary judgment, the defendant Rockwell asserts that in conditioning its settlement with Dale Morris upon Morris' agreement to proceed against McCain in negligence only, Rockwell successfully foreclosed any liability that McCain might have to Morris except such as resulted from McCain's own negligence, for which there could be no right to indemnity. This court initially denied the motion for summary judgment due to the complexity of the factual and legal issues involved and the court's unfamiliarity with the lengthy history of this case. Through numerous pretrial proceedings, however, the court has had an opportunity to study the transcript and pleadings from the prior proceeding and has been fully briefed by counsel for both sides as to the pertinent legal issues and material facts in this case. Upon the defendant's motion for reconsideration of its motion for summary judgment, the court now finds that the plaintiff's action for indemnification must fail as a matter of law under any set of facts that the plaintiff could prove at trial.

II. APPLICATION OF THE LAW TO THE FACTS:

This case cannot be disposed of by the simple recitation of the well-known maxim that no right to contribution or indemnity exists among joint tortfeasors. This rule has been judicially and legislatively modified in most jurisdictions, and any generalization is thus certain to be overbroad. See Texas Industries, Inc. v. Radcliffe Materials, 451 U.S. 630, 634, 101 S.Ct. 2061, 2063, 68 L.Ed.2d 500 (1981). The jurisdiction of this court is founded upon diversity of citizenship, and the court must therefore look to the law of the forum state (here, South Carolina) for the resolution of the issues before it. See Erie R. R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

The clearest case for allowing indemnification is where there is an express contract of indemnification. See, e.g., Southern Ry. v. Springs Mills, Inc., 625 F.2d 496 (4th Cir. 1980); Prosser, Handbook of the Law of Torts 310 (4th Ed. 1971). It is undisputed that there was no express contract of indemnification between McCain and Rockwell; the contract upon which McCain relies is the agreement between the parties under which Rockwell would assist in the refurbishing of the bracket trimmer. This action, whether viewed as sounding in negligence or breach of contract, must therefore be viewed as a claim for common-law noncontractual indemnity.

The general rule regarding noncontractual indemnity is that a restitutionary principle is applied:

to the situation where one person discharges a liability that has been imposed on him by operation of law, but which — because of another's `primary' fault — should have been discharged by the other. The distinction between primary and secondary liability for this purpose is not based on a mere difference in degrees of fault but rather on a `difference in the character or kind of the wrongs which caused the injury and in the nature of the legal obligation owed by each of the wrongdoers to the injured person.' Where the indemnitee's liability is merely constructive, vicarious or derivative, the burden for the entire loss may be shifted to the indemnitor whose actual fault caused the injury.

White v. Johns-Manville Corp., 662 F.2d 243 at 249 (4th Cir. 1981). (Citations omitted). The law in South Carolina has been stated as follows:

Ordinarily, if one person is compelled to pay damages because of negligence imputed to him as the result of a tort committed by another, he may maintain an action over for indemnity against the person whose wrong has thus been imputed to him; but this is subject to the proviso that no personal negligence of his own has joined in causing the injury.

Addy v. Bolton, 257 S.C. 28, 34, 183 S.E.2d 708, 710 (1971), quoting Atlantic Coast Line R. R. v. Whetstone, 243 S.C. 61, 70, 132 S.E.2d 172, 176 (1963). The right to indemnification is well recognized in South Carolina where, for example, an employer seeks indemnification from an employee whose negligence has been imputed to the employer under the doctrine of respondeat superior, causing the employer to be liable to a third person. See Sky City Stores, Inc. v. Gregg Security Services, Inc., S.C., 280 S.E.2d 807 (1981); Bell v. Clinton Oil Mill, 129 S.C. 242, 124 S.E. 7 (1924).

To avail itself of the right to noncontractual indemnity, the plaintiff McCain must make essentially two showings: first, that McCain was under a legal compulsion to pay Dale Morris and was therefore not a volunteer in doing so, see, e.g., Travelers...