Rock v. Reed-Prentice Division of Package Machinery Co.

• Decision Date: 24 February 1976
• Docket Number: REED-PRENTICE
• Citation: 39 N.Y.2d 34,382 N.Y.S.2d 720,346 N.E.2d 520
• Parties: , 346 N.E.2d 520 David G. ROCK, Plaintiff, v.DIVISION OF PACKAGE MACHINERY CO., Defendant and Third-Party Plaintiff-Respondent. Westbury Plastics, Inc., Third-Party Defendant-Appellant, et al., Third-Party Defendant.
• Court: New York Court of Appeals Court of Appeals

Page 720

382 N.Y.S.2d 720

39 N.Y.2d 34, 346 N.E.2d 520

David G. ROCK, Plaintiff, v. REED-PRENTICE DIVISION OF PACKAGE MACHINERY CO., Defendant and Third-Party Plaintiff-Respondent Westbury Plastics, Inc., Third-Party Defendant-Appellant, et al., Third-Party Defendant.

Court of Appeals of New York.

Feb. 24, 1976.

Raymond C. Green, Herbert Lasky, Francis Hugh McDermott and Leonard M. Schnitzer, New York City, for third-party defendant-appellant.

William F. McNulty and Anthony J. McNulty, New York City, for defendant and third-party plaintiff-respondent.

WACHTLER, Justice.

Plaintiff David Rock was injured while operating a plastic molding machine at his place of employment. He sued the manufacturer of the machine, Reed-Prentice Division of Package Machinery Company, claiming (1) negligence in the manufacture of the machine and (2) breach of implied warranty. Reed-Prentice in turn brought a third-party action against plaintiff's employer, Westbury Plastics, seeking 'judgment over' on the ground that the injury was caused 'solely as a result of the primary, active and affirmative negligence of the third party defendant.'

At the trial, held in November of 1973, the jury was charged, without objection, that if they found both defendants were negligent they should 'then determine, on a percentage basis the proportionate share of liability.' The jury returned a verdict of $400,000 for plaintiff against Reed-Prentice and, on the cross complaint awarded Reed-Prentice $50,000 against Westbury. Both defendants appealed to the Appellate Division.

In September, 1974, before the case was argued at the Appellate Division, plaintiff settled with Reed-Prentice for $250,000. The appeal from the judgment in favor of the plaintiff was discontinued. However, since Westbury had declined to join in the settlement, both defendants proceeded with the appeal from the judgment on the third-party complaint. Westbury argued that the judgment should be set aside, and Reed-Prentice urged that it be enlarged to provide for full indemnification. The Appellate Division unanimously affirmed and we granted Westbury's motion for leave to appeal to this court.

The primary question is whether the settlement between the plaintiff and Reed-Prentice precludes Reed-Prentice from enforcing the judgment against Westbury. Westbury argues that there are two reasons why the settlement should have this effect.

First it is urged, that by settling with plaintiff for $250,000, Reed-Prentice has not paid, and never will pay, more than its $350,000 share of plaintiff's judgment and thus is not entitled to contribution pursuant to CPLR 1402.

Secondly, Westbury argues that after settling with plaintiff, Reed-Prentice's right to seek contribution from Westbury was extinguished by subdivision (c) of section 15--108 of the General Obligations Law.

Both of the statutes cited and relied upon by Westbury came into effect on September 1, 1974 (L.1974, ch. 742, §§ 3, 4) sometime prior to the date of the settlement. Nevertheless Reed-Prentice contends that they are not applicable here for the reason that its judgment against Westbury is one for 'partial indemnity', not contribution. There is no merit to this argument. It is true, of course, that these statutes have no application to a claim for indemnity (CPLR 1404, subd. (b); McLaughlin, Practice Commentary, McKinney's Cons.Laws of N.Y., Book 23A, General Obligations Law, § 15--108; see, also, Rogers v. Dorchester Assoc., 32 N.Y.2d 553, 564--566, 347 N.Y.S.2d 22, 30--32, 300 N.E.2d 403, 409--410), but Reed-Prentice's judgment against Westbury is founded on contribution within the meaning of the statutes.

' There is', we have noted, 'a fundamental distinction between contribution and indemnity' (McFall v. Compaignie Mar. Belge, 304 N.Y. 314, 327, 107 N.E.2d 463, 470). In an action for contribution 'ratable or proportional reimbursement is sought' (see, also, Prosser, Torts (4th ed.), p. 310; Note, 47 St. John's L.Rev. 185, 186). However, for policy reasons, the courts generally refused to 'make relative value judgments of degrees of culpability among wrongdoers' (Dole v. Dow Chem. Co., 30 N.Y.2d 143, 147, 331 N.Y.S.2d 382, 386, 282 N.E.2d 288, 291) and thus refused to recognize or allow any right to contribution. By statute a limited contribution was permitted in cases where the plaintiff obtained a joint money judgment against several tort-feasors and one defendant had paid more than his pro rata share (see former Civ.Prac.Act, § 211--a; former CPLR 1401; Fox v. Western N.Y. Motor Lines, 257 N.Y. 305, 178 N.E. 289). But that, of course, is not the case here.

Indemnity, on the other hand, 'is not dependent upon the legislative will. It springs from contract, express or implied, and full, not partial, reimbursement is sought' (McFall v. Compaignie Mar. Belge, supra, 304 N.Y. at p. 328, 107 N.E.2d at p. 471). Since indemnity involved a shifting rather than an apportionment 'of culpability among wrongdoers' (Dole v. Dow Chem. Co., supra, 30 N.Y.2d at p. 147, 331 N.Y.S.2d at p. 385, 282 N.E.2d at p. 290) the policy objections to contribution posed no bar to a suit for indemnity. Thus the courts would enforce a defendant's right to indemnity if it could be shown that the entire loss should be borne by another. In the absence of an express contractual agreement the courts recognized 'an implied contract of indemnity * * * in favor of the wrongdoer who has been guilty of passive negligence * * * against the one who has been actively negligent. The actively negligent tort-feasor is considered the primary or principal wrongdoer and is held responsible for his negligent act not only to the person directly injured thereby, but also to any other person indirectly harmed by being cast in damages by operation of law for the wrongful act' (McFall, supra, 304 N.Y. at p. 328, 107 N.E.2d at p. 471). But when, as here, the party seeking indemnification was himself partially at fault, the courts of this State, and throughout the Nation generally, refused to imply a right to partial indemnification against 'another who played an effective role in causing the damage' (Dole v. Dow Chem. Co., supra, 30 N.Y.2d at p. 148, 331 N.Y.S.2d at p. 386, 282 N.E.2d at p. 291).

Under the traditional rules then Reed-Prentice would have no right to recover against Westbury by way of contribution or indemnity since it had been found guilty of negligence in the manufacture of the machine which caused the plaintiff's injury. The claim in fact is based entirely on the right to apportionment announced in Dole v. Dow Chem. Co. (supra, pp. 148--149, 331 N.Y.S.2d pp. 386--387, 282 N.E.2d pp. 291--292) in which we held that 'where a third party is found to have been responsible for a part, but not all, of the negligence for which a defendant is cast in damages, the responsibility for that part is recoverable by the prime defendant against the third party'. There we suggested, analogically at most, that this was 'in effect a partial indemnification' (p. 147, 331 N.Y.S.2d at p. 386, 282 N.E.2d p. 291). However when the Legislature codified the apportionment rule announced in Dole they did so by expanding the statutory right to 'contribution' allowed by CPLR article 14 (see CPLR 1402 and McLaughlin, Summary Practice Commentary, McKinney's Cons.Laws of N.Y....