Sayler v. Holstrom

• Decision Date: 11 February 1976
• Docket Number: No. 9144,9144
• Citation: 239 N.W.2d 276
• Parties: Walter A. SAYLER, Plaintiff and Appellee, v. J. D. HOLSTROM and the Hartford Steam Boiler Inspection and Insurance Company, Defendants, Third-Party Plaintiffs, and Appellants, v. DICKINSON CHEESE CO., INC., Third-Party Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 276

239 N.W.2d 276

Walter A. SAYLER, Plaintiff and Appellee, v. J. D. HOLSTROM and the Hartford Steam Boiler Inspection and Insurance Company, Defendants, Third-Party Plaintiffs, and Appellants, v. DICKINSON CHEESE CO., INC., Third-Party Defendant and Appellee.

Civ. No. 9144.

Supreme Court of North Dakota.

Feb. 11, 1976.

Rehearing Denied March 12, 1976.

Syllabus by the Court

1. On appeal from summary judgment, the Supreme Court must determine if the information available to the trial court, when viewed in the light most favorable to the opposing party, precluded a genuine issue as to any material fact and entitled the movant to summary judgment as a matter of law. Rule 56(c), N.D.R.Civ.P.

2. A third party may not recover contribution from an employer who has complied with the Workmen's Compensation Act.

3. The right of a person who is exposed to liability and compelled to pay damages because of the negligent or tortious act of another to indemnity does not apply where both parties are joint tortfeasors or are in pari delicto, as where the act of each of the parties contributed to cause the injury.

4. For purposes of indemnity a joint tortfeasor is without personal fault when he has not participated in the commission of the tort and his liability arises by operation of law.

5. Where there is no explicit contractual duty to indemnify another, an independent duty to indemnify will not be inferred unless the party seeking indemnity clearly shows a well-settled duty running from the other party to it.

6. The relationship of insurer and insured, alone, is insufficient to find an implied duty of indemnity in favor of the insurer.

Niles, Hansen, Selbo, Magill & Davies, Ltd., Fargo, for defendants, third-party plaintiffs, and appellants; argued by John Rowell, Moorhead, Minn.

Conmy, Rosenberg & Lucas, Bismarck, for third-party defendant and appellee; argued by A. William Lucas, Bismarck.

Reichert, Howe, Hardy, Moench, Galloway & Jorgensen, P.C., Dickinson, for plaintiff and appellee.

ERICKSTAD, Chief Justice.

Walter A. Sayler alleges that as a result of a boiler explosion at Dickinson Cheese Co., Inc. on June 20, 1971, he suffers from certain chronic and progressive maladies. At the time of the explosion Dickinson Cheese was a complying employer under the Workmen's Compensation Act and Sayler's injury entitled him to benefits of the Act.

By complaint dated September 30, 1974, Sayler alleges that J. D. Holstrom in his capacity as employee and agent of the Hartford Steam Boiler Inspection and Insurance Company either failed to inspect or negligently inspected the boiler; that Hartford owed him a duty to inspect the boiler in order to insure its safe condition and operation as well as its being free from defects; that a report of the inspection was filed with the North Dakota Workmen's Compensation Bureau and did not represent the true condition and operation of the boiler; that, as a result of the report, Dickinson Cheese was issued a Certificate of Inspection by the Bureau and was allowed to continue to operate the boiler in a defective and unsafe condition and manner until it exploded.

On behalf of its agent Holstrom, Hartford denies that the inspection was negligent; asserts that its negligence, if any, was merely passive and secondary, while the negligence of Dickinson Cheese was primary and active; and contends that Dickinson Cheese had warranted to Hartford that it would maintain and operate the boiler in a careful and safe manner and in accordance with applicable law (Chapter 65--12, N.D.C.C.) and regulations. Hartford's third-party complaint prays for judgment against Dickinson Cheese 'for all sums that may be adjudged against the Defendants and Third-Party Plaintiffs (Holstrom and Hartford) in favor of the Plaintiff herein (Sayler).'

Dickinson Cheese responded by petitioning the Burleigh County District Court to dismiss the third-party complaint upon grounds that Section 65--01--08, N.D.C.C., provides a complying employer with immunity from liability in situations of this type. The trial court determined that 'the only relationship that conceivably could exist between the third party plaintiffs and the third party defendant would be that of joint tortfeasors.' Relying on the United States District Court case of White v. McKenzie Electric Cooperative; Inc., 225 F.Supp. 940 (D.N.D.1964), to the effect that neither contribution nor indemnity is available to a third party from a complying employer in the absence of a direct contractual relationship, the trial court concluded that 'the decision laid down in Boettner (v. Twin City Construction Company, 214 N.W.2d 635 (N.D.1974)) demonstrates to this Court that immunity from direct or indirect action is still the rule in North Dakota for causes of action arising prior to the enactment of our Comparative Negligence Statute when related to employers.'

In White Chief Judge Register distinguished the cases cited by McKenzie Electric in support of its third-party complaint against White's employer on the basis that there existed in those cases 'either directly or impliedly, an independent contractual relationship between the employer and third party.' White v. McKenzie Electric Cooperative, Inc., supra, 225 F.Supp. at 946.

In Boettner we addressed ourselves to the question 'whether an employee of one contractor . . . may sue the employee of another contractor of the same status for negligently causing injuries arising during the employment.' Boettner v. Twin City Construction Company, supra, 214 N.W.2d at 637. After noting the trial court's interpretation of Section 65--01--01, N.D.C.C., as an indication that workmen's compensation laws are designed for the welfare of the workman, we concluded that Section 65--01--08, N.D.C.C. '. . . grants immunity from suit, if the conditions prescribed therein are met, only to the employer and fellow employees of the employee who was injured, and to no one else--not to other 'employers,' whether general contractors, independent contractors, or other subcontractors, or the employees of any of the. See State v. E. W. Wylie Co., 79 N.D. 471, 58 N.W.2d 76 (1953).' Id., at 640.

Hartford contends herein that Sections 65--01--01, 65--01--08, 65--04--28, and 65--05--06, N.D.C.C., are not intended to preclude its action in indemnity against Dickinson Cheese and that, insofar as indemnity is precluded, those sections violate Section 22 of the North Dakota Constitution and Section 1 of the Fourteenth Amendment to the United States Constitution.

On this appeal from summary judgment in favor of Dickinson Cheese, we must determine if the information available to the trial court, when viewed in the light most favorable to Hartford, precluded a genuine issue as to any material fact and entitled Dickinson Cheese to summary judgment as a matter of law. Rule 56(c), N.D.R.Civ.P.; Farmers Elevator v. David, 234 N.W.2d 26 (N.D.1975).

Because we conclude that the third-party action for indemnity does not lie, we reach neither the issue involving the extent to which the Workmen's Compensation Act precludes indemnity against a complying employer nor the constitutional issues asserted.

Indemnity is often compared with contribution. The two

'* * * are variant remedies used to secure restitution. Although similar in nature, they differ in the relief afforded. Contribution rests upon common liability, not joint negligence or joint tort. (Citations omitted.) Common liability exists when two or more actors are liable to an injured party for the same damages, even though their liability may rest on different grounds. (Citations omitted.) Thus, if, as a matter of law, the concurring negligence of the party from whom contribution is sought gives the injured party no cause of action against him, the claimant cannot recover contribution, even though such concurring negligence was a proximate cause of the injury. (Citations omitted.) The right of contribution does not exist in such circumstances because there is no common liability.' Guillard v. Niagara Machine & Tool Works, 488 F.2d 20, 22--23 (8th Cir. 1973).

A year after Guillard, the Minnesota Supreme Court, speaking of indemnity, noted an interpretation of its earlier opinion in White v. Johnson, 272 Minn. 363, 137 N.W.2d 674 (1965):

'As pointed out in 53 Minn.L.Rev. 1078, 1082, '(t)his language seems to indicate the essentially equitable nature of indemnity, which precludes the use of strict standards and which requires courts to examine carefully both parties' conduct in light of general notions of justice." Hillman v. Wallin, 298 Minn. 346, 215 N.W.2d 810, 813 (1974).

The focus on conduct of the parties has been directed by other courts. Indemnity has been described as tne remedy which secures 'the right of a person to recover reimbursement from another for the discharge of a liability which, as between them, should have been discharged by the other.' Guillard v. Niagara Machine & Tool Works, supra, 488 F.2d at 23.

The Seventh Circuit Court of Appeals has indicated its belief that

'* * * under Carver v. Grossman (55 Ill.2d 507, 305 N.E.2d 161 (1973)) the proper focus is on whether the conduct of the party seeking indemnification significantly contributed to the harm caused so as not to warrant shifting the entire burden of damages, and therefore is active negligence prohibiting indemnification.' Lorance v. Marion Power Shovel Company, Inc., 520 F.2d 737, 740 (7th Cir. 1975).

Finally, a recent California decision, after noting that a right to indemnity may arise from contract or 'from the equities of a given situation,' declares that indemnity 'applies in cases in which one party pays a debt for which another is primarily liable and which in equity and good conscience should have been paid by the latter party.' Aetna Life & Casualty Co. v. Ford Motor Co., 50 Cal.App.3d 49, 122 Cal.Rptr. 852, 854 (1975).

From this focus on conduct of the parties Hartford urges us to adopt...