Otero v. Jordan Restaurant Enterprises

• Decision Date: 25 July 1996
• Docket Number: No. 22841,22841
• Citation: 1996 NMSC 47,922 P.2d 569,122 N.M. 187
• Parties: John OTERO, Plaintiff-Respondent, v. JORDAN RESTAURANT ENTERPRISES, a New Mexico Corporation, Defendant-Petitioner.
• Court: New Mexico Supreme Court

Page 569

922 P.2d 569

122 N.M. 187

John OTERO, Plaintiff-Respondent, v. JORDAN RESTAURANT ENTERPRISES, a New Mexico Corporation,

Defendant-Petitioner.

No. 22841.

Supreme Court of New Mexico.

July 25, 1996.

[122 N.M. 188] Wycliffe V. Butler, Butler & Butler, P.A., Albuquerque, for Respondent.

Donald C. Schutte, Schutte & Associates, P.C., Albuquerque, for Petitioner.

OPINION

RANSOM, Justice.

1. John Otero sued Jordan Restaurant Enterprises for personal injuries he suffered in the collapse of metal bleachers on which he was seated. The bleachers had been assembled by Gary Marquart, doing business as Desert Hawk, Inc., an independent contractor hired by Jordan to make improvements to its restaurant and sports bar. Prior to trial the district court granted Otero's motion for partial summary judgment against Jordan on the issue of its liability for Marquart's negligence. At a trial on the issue of damages, Jordan requested instructions which would have allowed the jury to compare Jordan's fault with that of the project's architect, who failed to provide specifications for the bleachers, and the City of Albuquerque, which issued a building permit to Marquart even though he was not properly licensed to perform renovations on commercial premises. The district court refused these instructions, and the jury returned a verdict in favor of Otero for $47,000.

2. Jordan appealed to the Court of Appeals, arguing that the trial court erroneously entered summary judgment on the issue of Jordan's liability for Marquart's acts and that the court erred by not instructing the jury on comparative fault. The Court of Appeals adopted Restatement (Second) of Torts Section 422(b) (1965) and held that Jordan had a nondelegable duty to maintain its business premises in a reasonably safe condition, which made Jordan liable to Otero to the same extent as Marquart and the architect. Otero v. Jordon Restaurant Enters., 119 N.M. 721, 723, 895 P.2d 243, 245 (Ct.App.), cert. denied, 119 N.M. 617, 894 P.2d 394, and cert. granted, 119 N.M. 810, 896 P.2d 490 (1995).¹ Because Jordan would be liable for the negligence of the architect to the same extent as it would be liable for the negligence of Marquart, see Section 422 cmt. d, Jordan could not have its liability to Otero reduced in proportion with the fault of the architect. Otero, 119 N.M. at 725, 895 P.2d at 247.

3. The Court of Appeals also held that it was not error to refuse Jordan's tendered instructions on comparative fault of the City because, had the City been sued by Otero and found liable, it would be entitled to indemnification from Jordan for any damages awarded against it. Id. at 725-26, 895 P.2d at 247-48. We granted certiorari to consider whether the City arguably would have been entitled to such indemnification and any effect that would have on comparative fault. Questions regarding the adoption of Section 422(b) and Jordan's nondelegable duty are not before this Court. We hold that the City would not be entitled to indemnification from Jordan. Nevertheless, we affirm the trial court because, for purposes of determining liability to Otero, Jordan stands in the shoes of Marquart, and Marquart would not be entitled to an instruction on comparative fault.²

4. Facts and Proceedings. Jordan operates a restaurant in Albuquerque formerly known as Champion's Sports Bar and Grill and now known as Spectators. In July 1989 Jordan entered into a contract with Marquart for the construction of certain tenant improvements to the restaurant. Among these improvements was a set of metal bleachers to be used by patrons while watching sporting events on a big screen television in the sports bar. After the bleachers had been installed, employees of Jordan had been on the bleachers and observed no structural weaknesses. Approximately four months after the improvements were completed, the metal bleachers collapsed. Otero, who was then sitting at or near the top of the bleachers, fell and injured his back. Jordan conceded that the bleachers collapsed because they were negligently installed by Marquart. Testimony showed that the bleacher manufacturer's assembly instructions called for metal cross-bracing to be installed across the back of the bleachers in an "X" and that the metal supports were instead fastened in a vertical position.

5. During a jury trial on the issue of damages, Jordan presented evidence that, had the City investigated Marquart's permit application, it would have discovered that Marquart was licensed to conduct residential installations but not commercial installations such as the one contracted for by Jordan. Based on this evidence Jordan tendered an instruction that would have allowed the jury to compare Marquart's negligence and the City's negligence in issuing a permit to Marquart. The trial court refused this instruction.

6. The Court of Appeals held that the trial court did not err by refusing the tendered instruction, adopting the following chain of reasoning.³ First, the Court reasoned, under our decision in Amrep Southwest, Inc. v. Shollenbarger Wood Treating, Inc. (In re Consolidated Vista Hills Retaining Wall Litigation), 119 N.M. 542, 893 P.2d 438 (1995), the City would be entitled to indemnification from Marquart for any damages awarded to Otero because the City's minimal negligence in issuing a permit to Marquart was passive while Marquart's disproportionately greater degree of negligence in installing the bleachers was active. Second, based upon a nondelegable duty to maintain its premises in a safe condition, Jordan would be liable to the City for indemnification to the same extent as Marquart. Finally, because Jordan would bear ultimate responsibility for all damages awarded to Otero based upon the fault of the City, Otero should be permitted to proceed directly against Jordan without need to apportion fault to the City.

7. The Court of Appeals' conclusion that Marquart would have to indemnify the City is based upon its interpretation of Amrep to the effect that "[t]he Supreme Court did note that an independent, preexisting legal relationship between indemnitor and indemnitee is sometimes necessary to support a claim for indemnification, but suggested that such a relationship is not necessary where there are exceptional circumstances." Otero, 119 N.M. at 726, 895 P.2d at 248. Based on this interpretation of Amrep, the Court concluded that such exceptional circumstances exist here because "the City's negligence in this case, if any, was entirely passive and minimal in degree compared to the negligence of [Marquart]." Id. Under the facts of Amrep, however, it was not necessary for this Court to decide whether a claim for traditional indemnification would lie in the absence of an independent, preexisting relationship between indemnitor and indemnitee. As we observed, "an independent, preexisting legal relationship between Amrep and Shollenbarger is established by their respective positions in the chain of distribution of a product." Amrep, 119 N.M. at 546, 893 P.2d at 442.

8. Amrep does not give the City a right of indemnification against Jordan. In cases which involve concurrent tortfeasors, such as this one, the general rule is that an action for traditional indemnification does not lie in favor of either tortfeasor in the absence of some preexisting relationship between them that gives rise to an independent duty flowing from the putative indemnitor to the putative indemnitee. See, e.g., Atkinson v. Berloni, 23 Conn.App. 325, 580 A.2d 84, 85 (Conn.App.Ct.1990) (affirming dismissal of indemnification claim because no independent legal relationship existed between two motorists whose separate negligent acts had united to injure the driver and passenger of a motorcycle); Builders Supply Co. v. McCabe, 366 Pa. 322, 77 A.2d 368, 371 (1951) (holding that building supply company whose employee's negligence in avoiding automobile contributed to accident between two trucks could not recover indemnification from automobile driver). However, as we noted in Amrep, 119 N.M. at 545 n. 1, 893 P.2d at 441 n. 1, some courts have permitted an action for traditional indemnification when there is a great difference in the degree of fault between concurrent tortfeasors, see, e.g., Missouri, K & T Ry. Co. v. Missouri Pac. Ry. Co., 103 Kan. 1, 175 P. 97, 104 (1918) (holding that employer of train engineer who was negligent could recover indemnification from employer of another engineer who was wanton and reckless), and some have permitted an action for indemnification when the character of the duties owed to the plaintiff by the tortfeasors is vastly different or disproportionate, see, e.g., Burbage v. Boiler Eng'g & Supply Co., 433 Pa. 319, 249 A.2d 563, 567 (1969) (noting that right to indemnification arises from "difference in the character or kind of the wrongs which cause the injury," and holding that boiler manufacturer had indemnification claim against valve manufacturer (quoting McCabe, 77 A.2d at 370)).

9. After examining the origins and evolution of the action for traditional indemnification, we conclude that exceptions to the general rule are a byproduct of a system which prohibited contribution among jointly and severally liable tortfeasors.⁴ The common law did not permit either pro rata or fault-based contribution among tortfeasors, see Rio Grande Gas Co. v. Stahmann Farms, Inc., 80 N.M. 432, 434, 457 P.2d 364, 366 (1969), and courts early on realized that the bar against contribution often worked inequities. This led to the recognition of actions for indemnification which "provided for a complete shifting of liability from one party to another in cases where a party was held only vicariously liable." Vertecs Corp. v. Reichhold Chems., Inc., 661 P.2d 619, 621 (Alaska 1983) (emphasis added). As the action was originally formulated, the one seeking indemnification had to be entirely free from fault. This too worked inequities under the facts of some cases,...