Owings v. Rose

• Decision Date: 01 June 1972
• Citation: 262 Or. 247,497 P.2d 1183,94 Adv.Sh. 1718
• Parties: , 57 A.L.R.3d 821 Nathaniel A. OWINGS et al., Respondents and Cross-Appellants, v. Rowland S. ROSE et al., Appellants and Cross-Respondents.
• Court: Oregon Supreme Court

Page 1183

497 P.2d 1183

262 Or. 247, 57 A.L.R.3d 821

Nathaniel A. OWINGS et al., Respondents and Cross-Appellants, v. Rowland S. ROSE et al., Appellants and Cross-Respondents.

Supreme Court of Oregon.

Argued and Submitted Jan. 28, 1972.

Decided June 1, 1972.

Stewart M. Whipple, Portland, argued the cause for appellants and cross-respondents. On the briefs were Seitz, Whipple & Johansen, Portland.

Lamar Tooze, Jr., Portland, argued the cause for respondents and cross-appellants. With him on the briefs were Tooze, Kerr & Peterson, Stephen R. Frank, E. Richard Bodyfelt, and Michael J. Gentry.

Before O'CONNELL, C.J., and McALLISTER, HOLMAN, TONGUE, and HOWELL, JJ.

McALLISTER, Justice.

This is an action for indemnity. The plaintiffs are architects, who employed the defendants as consulting engineers on two construction projects and contend that on both jobs they had to pay damages on account of the negligence of defendants in the performance of their engineering services. The jury found for plaintiffs on their first cause of action and defendants appeal. The trial court sustained a demurrer to plaintiffs' second cause of action and plaintiffs cross-appeal.

Plaintiffs' first cause of action arises out of plaintiffs' employment by Omark Industries to design and oversee the construction of a manufacturing plant in Milwaukie. The new plant was to replace older buildings in which Omark had carried on its manufacturing business. The floors in the old buildings were cracked, eroded, uneven in spots, and highly unsatisfactory. Omark emphasized to plaintiffs its need for a 'superior floor' in the new plant.

Plaintiffs had no structural engineers on their staff and hired defendants, who are structural engineers, as consultants on the Omark job. Defendants were responsible for designing the floor as well as the other structural parts of the building. Defendants inspected Omark's older plants and were made fully aware of Omark's desire to have a 'superior floor' in its new plant and the reasons therefor.

Plaintiffs designed a building with a floor area of approximately 350 feet by 390 feet. Defendants' Mr. Breedlove designed the concrete floor for the new plant. The floor he designed consisted generally of slabs or panels of concrete six inches thick and thirty feet square. The concrete slabs were reinforced by one-half inch steel bars spaced twelve inches apart running both ways through the slabs. Each slab was joined to the adjacent slabs by 'Keycold' joints, which are designed to prevent vertical displacement of the slabs. Through these joints the reinforcing bars each extended twelve inches into the adjoining slabs.

About the time Omark moved into the new building cracks began to appear in the floor and soon thereafter the floor surface began to erode. The cracking and erosion soon became serious and the floor continued to deteriorate. The cracks were large enough to interfere with Omark's production and in the movement of machinery and materials throughout the plant.

Omark sued the architects, the general contractor, and the testing laboratory which it had hired to test the quality of the concrete. The damages claimed by Omark totaled $344,296. The action was settled for $145,000, of which the architects, plaintiffs in this case, contributed $108,200. Plaintiffs then sought indemnity from defendants for the amount plaintiffs contributed to the settlement plus their other costs incurred in defending against Omark's claim, totaling $125,659.24. Plaintiffs alleged that the excessive cracking and deterioration of the floor was caused by the negligence of defendants in designing the floor. Defendants denied that they were negligent and alleged that the negligence of plaintiffs contributed to the defective floor.

The ingredients of a successful action for indemnity were stated in Fulton Ins. Co. v. White Motor Corp., 94 Or.Adv.Sh. 213, 493 P.2d 138, 140--141 (1972) as follows:

'In an action for indemnity, the claimant must plead and prove that (1) he has discharged a legal obligation owed to a third party; (2) the defendant was also liable to the third party; and (3) as between the claimant and the defendant, the obligation ought to be discharged by the latter. Restatement, Restitution § 76, 331 (1937); Nelson v. Sponberg, 51 Wash.2d 371, 318 P.2d 951, 954 (1957); Aetna Freight Lines, Inc. v. R. C. Tway Company, 352 S.W.2d 372, 373 (Ky.App.1961). The last requirement means that, although the claimant must have been legally liable to the injured third party, his liability must have been 'secondary' or his fault merely 'passive,' while that of the defendant must have been 'active' or 'primary.' Kennedy v. Colt, 216 Or. 647, 653--654, 339 P.2d 450 (1959); Astoria v. Astoria & Columbia River R. Co., 67 Or. 538, 547--548, 136 P. 645, 49 L.R.A.,N.S., 404 (1913); Jackson v. Associated Dry Goods Corp., 13 N.Y.2d 112, 242 N.Y.S.2d 210, 212, 192 N.E.2d 167, 169 (1963); Bush Term. Bldgs. v. Luckenbach S.S. Co., 9 N.Y.2d 426, 214 N.Y.S.2d 428, 430--432, 174 N.E.2d 516, 517--518 (1961). * * *' 94 Or.Adv.Sh. at 214--215, 493 P.2d at 140--141.

In Fulton, supra, we referred to the discussion of indemnity in General Insurance Co v. P. S. Lord, Or., 482 P.2d 709 (1971) and said that 'the traditional formulations of active and passive negligence, or primary and secondary liability, do not provide precise guidelines for deciding close cases'. We think those guidelines are still useful, however, in deciding whether a plaintiff's liability is based on conduct which ought to bar his recovery. 493 P.2d at 141.

Defendants first assign as error the trial court's denial of their motion for nonsuit and their motion for a directed verdict. The grounds for both motions were: (1) No evidence of defendants' negligence; (2) no evidence that any negligence of defendants was a proximate cause of the damage; (3) that plaintiffs were contributorily negligent as a matter of law; (4) that plaintiffs failed to prove that the settlement was either necessary or reasonable.

Whether defendants were negligent and whether that negligence was a proximate cause of the defective floor were clearly questions for the jury. Defendants do not seriously contend otherwise. For example, plaintiffs' expert Merrifield testified that the basic cause for the cracking in this case was the use of the continuously reinforced joint between the adjoining slabs. Another expert, Barneyback, testified that the cause of cracking in concrete is restraint of contraction during the drying or curing process. Of the Omark floor Mr. Barneyback said:

'You have a slab all tied together in one piece which can't move, and when it shrinks, it can't do anything but crack.'

Defendants' primary contention is that plaintiffs were also negligent and as active tortfeasors are barred from recovery of indemnity. They argue first that unless plaintiffs were negligent they were not liable to Omark and acted as volunteers in settling Omark's claim and thus are not entitled to indemnity. They next contend that there were other causes of the defective floor besides the design, that plaintiffs' negligence contributed to those other causes and consequently plaintiffs are not entitled to indemnity.

Under the evidence in this case the jury could properly find that plaintiffs were liable to Omark without also finding that any active negligence of plaintiffs contributed to the defective floor. In their contract with Omark plaintiffs agreed to render all architectural and engineering services necessary in the design of the new plant and were thus obligated to furnish Omark with engineering service of reasonable quality. Omark sued plaintiffs for a careless performance of the duty owing by plaintiffs under that contract. A finding that plaintiffs were liable to Omark did not require a finding that plaintiffs were personally negligent in the design of the floor, only that the engineering services were defective and that, as a consequence, the plaintiffs were vicariously liable.

In Scott and Payne v. Potomac Ins. Co., 217 Or. 323, 341 P.2d 1083 (1959) we held that an architect may be personally negligent even though he relies on the advice of a consulting engineer. We did not, however, hold that he is negligent in every such case. In the present case, there was evidence from which the jury could find that plaintiffs were entitled to rely on the judgment of the defendants. Mr. Martin, who was in charge of the Omark job for plaintiffs, testified that plaintiffs had no structural engineering experts or concrete experts on their staff and that in fact they relied on defendants' judgment in the design of the floor. He testified:

'The architect is not competent, just within his training to design structurally the type of building in which we act as architects--we are not competent to do the electrical engineering either, nor the mechanical engineering, nor the soil analyses. That is why we hire consultants.'

He also testified that he was not advised by defendants that their floor design presented any special risks or problems.

Mr. Breedlove testified that the structural engineer designs the floor system, and has the responsibility for the structure's integrity, including its load-bearing capacity. Strength, he testified, is an engineering decision. Both he and Mr. Rose testified that under their contract with plaintiffs, defendants had the primary responsibility for the structural aspects of the building, including the floor. Mr. Rose testified that the technical questions regarding the floor were entirely a structural problem, and that he knew plaintiffs relied on defendants' 'leadership and advice' on the structural problems.

The jury could find, based on the above evidence, that plaintiffs were not negligent in relying on defendants, whom they hired as experts to deal with the structural aspects of the building.

The relationship of defendants to plaintiffs is described in their contract as...