National Service Industries, Inc. v. B.W. Norton Mfg. Co., Inc.
| Decision Date | 24 April 1997 |
| Docket Number | No. 960653-CA,960653-CA |
| Citation | 937 P.2d 551 |
| Court | Utah Court of Appeals |
| Parties | Prod.Liab.Rep. (CCH) P 14,931, 315 Utah Adv. Rep. 30 NATIONAL SERVICE INDUSTRIES, INC., Plaintiff and Appellant, v. B.W. NORTON MANUFACTURING COMPANY, INC.; and International Machine & Tool Works, Inc., Defendants and Appellee. |
Todd S. Winegar and Wade S. Winegar, Salt Lake City, for Plaintiff and Appellant.
Paul M. Belnap, Robert L. Janicki, and Michael S. Johnson, Salt Lake City, for Defendants and Appellees.
Before BILLINGS, GREENWOOD and JACKSON, JJ.
Appellant National Service Industries (NSI) appeals the trial court's summary judgment in favor of appellee Norton Manufacturing (Norton). NSI claims the trial court erred by ruling that (1) NSI's apportionment claims against alleged joint tortfeasor Norton, brought after resolution of the underlying tort action, were essentially claims for contribution which are barred by Utah's Liability Reform Act, and (2) NSI's claims for indemnity were barred by res judicata. In addition, NSI requests that this court adopt a cause of action for "comparative implied indemnity." We affirm.
Sherman Packer's eye was injured when he opened a pressurized container of degreaser soap and its contents struck him in the face. Packer purchased the product from NSI, and NSI had purchased the container from Norton. Accordingly, Packer sued both NSI and Norton for his injuries (Packer litigation). In that action, NSI and Norton were codefendants, but neither filed a cross-claim against the other.
Norton filed a motion for summary judgment, claiming it bore no liability for Packer's injuries. Packer did not oppose this motion. Instead, NSI sought to oppose the motion, and Norton objected, claiming NSI lacked standing. Although skeptical that NSI had standing, the trial court considered the motion, heard arguments, and granted summary judgment in favor of Norton on the merits (the Packer judgment). Because Norton had been found, as a matter of law, not liable for any of Packer's injuries, the trial court advised NSI that Norton's fault could not be considered by the jury at trial between Packer and NSI. NSI appealed to this court, and while that appeal was pending, settled the case with Packer.
On appeal, this court held that NSI lacked standing to challenge Norton's summary judgment against Packer. See Packer v. National Serv. Indus., Inc., 909 P.2d 1277, 1278 (Utah.Ct.App.1996). The court noted that NSI could have "protected its potential claim against Norton under Utah Rule of Civil Procedure 13(f)." Id. Because NSI had no right to oppose Norton's summary judgment motion, the court concluded NSI similarly had no standing to appeal the grant of that motion. Id. Therefore, the court refused to address the merits of NSI's appeal and dismissed the case. Id.
After this court dismissed NSI's appeal of Norton's summary judgment against Packer, NSI filed a separate action against Norton. This action was assigned to a different trial judge than had presided over the Packer litigation. NSI asserted four causes of action, labeled as follows: (1) "Tort Reform Act, Proportionate Fault"; (2) "Negligence"; (3) "Breach of Warranty"; and (4) "Strict Liability." Norton filed a motion to dismiss, arguing that NSI's first and second causes of action essentially requested contribution; that contribution was barred by the Utah Liability Reform Act; and that, therefore, these causes of action failed to state claims for which relief could be granted. Furthermore, Norton argued that NSI's third and fourth causes of action essentially requested indemnification and that res judicata barred any indemnification claims because of the Packer judgment in favor of Norton.
After hearing arguments on these issues, the trial court treated Norton's motion as one for summary judgment and granted judgment in favor of Norton. The trial court agreed with Norton that NSI's contribution claims failed to state an appropriate claim for which relief could be granted. It also agreed that res judicata barred NSI's indemnification claims. The trial court did not consider the merits of NSI's potential claims against Norton. This appeal followed.
We address the following dispositive issue: After having settled a tort action with the plaintiff, can NSI bring a separate action to recover an amount it alleges represents Norton's proportion of fault as a joint tortfeasor? 1
"A trial court's decision to grant or deny a motion for summary judgment is a legal one and will be reviewed for correctness." Salt Lake City v. Silver Fork Pipeline, 913 P.2d 731, 733 (Utah 1995). Accordingly, this court will grant no deference to the trial court's legal conclusions. See id.
NSI seeks to bring suit against Norton to recover a portion of the tort settlement NSI paid to Packer. NSI argues it may recover from Norton an amount which allegedly represents Norton's proportion of fault through an action either for "reimbursement" or for "comparative implied indemnity," or in the alternative, that it may recover the entire amount paid to Packer, through an action for implied indemnity. Norton concedes NSI could have cross-claimed to have Norton's proportion of fault determined while NSI and Norton were codefendants in the original suit with Packer. Norton maintains, however, that the Utah Liability Reform Act (the Act) specifically prohibits actions for "contribution," and accordingly, NSI may not sue to recover for damages it has already paid since that would essentially amount to a contribution claim. Thus, the parties here do not dispute that an "apportionment" claim existed between them at some point. Cf. Sullivan v. Scoular Grain Co., 853 P.2d 877, 884 (Utah 1993) (). Rather, they dispute when such an apportionment claim may be brought.
At common law, multiple tortfeasors were jointly and severally liable. See, e.g., Cruz v. Montoya, 660 P.2d 723, 728 (Utah 1983); W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 50, at 336 (5th ed.1984). As such, a tortfeasor was potentially liable for the entire amount of a plaintiff's damages, irrespective of what proportion of fault was actually attributable to that individual tortfeasor as opposed to another joint tortfeasor. See, e.g., Brunyer v. Salt Lake County, 551 P.2d 521, 523-24 (Utah 1976) (Ellett, J., dissenting); Keeton et al., supra, § 50, at 336-38.
"Contribution" is a method for tortfeasors forced to pay damages greater than their proportion of fault to recover from other joint tortfeasors in a separate action. See, e.g., Brunyer, 551 P.2d at 522; Restatement (Second) of Torts § 886A (1977); Keeton et al., supra, § 50, at 336-38. However, at common law, contribution suits were barred, thus making tortfeasors potentially liable for all of a plaintiff's damages--through joint and several liability--with no recourse for redistributing their loss among other joint tortfeasors. See, e.g., Brunyer, 551 P.2d at 522-23 (Ellett, J., dissenting); Keeton et al., supra, § 50, at 336.
The doctrine of "implied indemnity" arose from judicial efforts to ameliorate the harsh effects of the rule prohibiting contribution among joint tortfeasors. See, e.g., American Nat'l Bank & Trust Co. v. Columbus-Cuneo-Cabrini Med. Ctr., 154 Ill.2d 347, 181 Ill.Dec. 917, 919, 609 N.E.2d 285, 287 (1992); Kennedy v. City of Sawyer, 228 Kan. 439, 618 P.2d 788, 800 (1980); Restatement (Second) of Torts § 886B cmt. l (1977). Implied indemnity is a branch of the doctrine of "indemnity," a doctrine which requires "another to reimburse in full one who has discharged a common liability." Keeton, et al., supra, § 51, at 341 (emphasis added); see also Restatement (Second) of Torts § 886B & cmt. a (1977). A right to indemnification may arise from a number of sources, including express contract or statute. See, e.g., Hanover Ltd. v. Cessna Aircraft, Co., 758 P.2d 443, 445-46 (Utah.Ct.App.1988). An implied right to indemnity arises by operation of law. See, e.g., id. Thus, traditionally, "indemnity" involved full reimbursement whereas "contribution" involved splitting the damages among the joint tortfeasors. See, e.g., Restatement (Second) of Torts § 886B cmt. a (1977).
As noted by one commentator, however, "[b]ecause of either confusion or deliberate departure from prevailing usage, ... there are decisions in which full reimbursement has been allowed under the name of contribution, or some form of distribution has been allowed under the name of indemnity." Keeton et al., supra, § 51, at 341. Moreover, the doctrine of indemnity has branched into various, apparently inconsistent lines of cases such that "it is extremely difficult to state any general rule or principle as to when indemnity will be allowed and when it will not." Id. § 51, at 343 (footnotes omitted).
The important, common foundation of both contribution and implied indemnity principles, however, is that they attempt to ensure that parties are not held unfairly liable to an extent greater than their degree of fault. Because tortfeasors were jointly and severally liable, joint tortfeasors could achieve fair distribution of loss, in many cases, only through separate suits among themselves for contribution or implied indemnity.
In 1986, the Utah Legislature passed the Liability Reform Act, which abolished joint and several liability by providing that "[n]o defendant is liable to any person seeking recovery for any amount in excess of the proportion of fault attributed to that defendant." Utah Code Ann. § 78-27-38 (1996) (). One primary driving force behind the Liability Reform Act was ...
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