Schneider Nat., Inc. v. Holland Hitch Co.

• Decision Date: 09 December 1992
• Docket Number: No. 91-44,91-44
• Citation: 843 P.2d 561
• Parties: SCHNEIDER NATIONAL, INC., a Nevada Corporation; and Schneider National Carriers, Inc., a Nevada Corporation, Appellants (Defendants--Third-Party Plaintiffs), v. HOLLAND HITCH CO., a Michigan Corporation and Rissler & McMurry Co., a Wyoming Corporation, Appellees (Third-Party Defendants).
• Court: Wyoming Supreme Court

Page 561

843 P.2d 561

SCHNEIDER NATIONAL, INC., a Nevada Corporation; and Schneider National Carriers, Inc., a Nevada Corporation, Appellants (Defendants--Third-Party Plaintiffs), v. HOLLAND HITCH CO., a Michigan Corporation and Rissler & McMurry Co., a Wyoming Corporation, Appellees (Third-Party Defendants).

No. 91-44.

Supreme Court of Wyoming.

Dec. 9, 1992.

Larry B. Kehl and George J. Argeris of Guy, Williams, White & Argeris, Cheyenne, for appellants.

Thomas G. Gorman, John J. Metzke and Steven K. Sharpe of Hirst & Applegate, Cheyenne, for appellee Holland Hitch Co.

Richard Barrett of Hathaway, Speight, Kunz, Trautwein & Barrett, Cheyenne, for appellee Rissler & McMurry Co.

George Santini of Graves, Santini & Villemez, Cheyenne, for the Wyoming Trial Lawyers Ass'n, amicus curiae.

Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT ^* and GOLDEN, JJ.

URBIGKIT, Justice.

In the legal aftermath of a deadly accident along southern Wyoming's Interstate 80, the United States Court of Appeals for the Tenth Circuit certified a number of questions of law to the Wyoming Supreme Court. Complex questions of the interrelationship between comparative negligence tort reform legislation, Wyo.Stat. § 1-1-109 (1988), and indemnity, an area of common law which the United States Court of Appeals considered nebulous, are before the court.

Initially, the questions presented require application of the controlling decision found in Phillips v. Duro-Last Roofing, Inc., 806 P.2d 834 (Wyo.1991). Phillips was published following the certification order of the Tenth Circuit in this present case. Ultimately, the answers to the certified questions require policy choices about principles of indemnity under common law allocating liability to the actor most able to prevent future occurrences. We adopt a system of comparative partial indemnity for equitable implied indemnity actions premised on negligence. Traditional equitable implied indemnity rules are stated for products liability actions based on strict liability or breach of warranty.

Specifically, the questions certified to this court inquire:

A. Does Wyoming's current comparative negligence statute, W.S. § 1-1-109 (1988), which requires that damages in an action "to recover damages for negligence" be allocated according to the "percentage of fault attributable to each actor," permit strict liability and breach of warranty to be considered and weighed in the same manner as negligence in determining each actor's "percentage of fault" for the plaintiff's injuries and their corresponding liability for the plaintiff's damages?

B. If Wyoming's current comparative negligence statute does permit equal consideration of negligence, strict liability and breach of warranty in allocating fault and determining each actor's share of damages, does an actor have a right of indemnity against another responsible actor, in the absence of an express contract of indemnity, in the following circumstances:

i. The party seeking indemnity was passively or secondarily negligent while the alleged indemnitor was actively or primarily negligent;

ii. The party seeking indemnity was either passively/secondarily or actively/primarily negligent while the alleged indemnitor was strictly liable to the injured party; or

iii. The party seeking indemnity was either passively/secondarily or actively/primarily negligent while the alleged indemnitor was liable on a breach of warranty grounds?

C. If Wyoming's current comparative negligence statute does not negate any right to indemnity in all of the above situations, and in the absence of an express contract of indemnity:

i. Does Wyoming law permit a "passively" or "secondarily" negligent actor whose failure to inspect contributed to a third party's injuries to obtain indemnity from the "actively" or "primarily" negligent actors who created or were otherwise directly responsible for the conditions that caused the third party's injuries?

ii. Does Wyoming law grant either "actively" or "passively" negligent actors a right of indemnity against another actor who was liable for the third party's injuries on strict liability or breach of warranty grounds?

I. FACTS

Schneider National, Inc. and Schneider National Carriers, Inc. (Schneider) ¹ operate an interstate trucking firm. On July 10, 1987, a Schneider semi-tractor and trailer traveled into a construction zone on Interstate 80 near Rawlins, Wyoming. Traffic in the area had been channeled into single lanes traveling in opposite directions on a shared roadbed. At some point, the Schneider trailer separated from the semi-tractor. The trailer veered into the oncoming traffic lane, struck several vehicles, including one containing four members of an Englewood, Colorado family, the Horowitz's. Bruce S. Horowitz, Catherine O. Horowitz and Michael Brandon Horowitz were all killed. Only one son, Brian Scott Horowitz, survived.

Dr. Irving J. Horowitz, the appointed administrator of the estates, instituted a wrongful death proceeding against Schneider on behalf of Brian Scott Horowitz (Horowitz). Filed on April 5, 1988, the action was brought in the United States District Court for the District of Wyoming under federal diversity jurisdiction, 28 U.S.C. § 1332. The complaint, seeking actual and punitive damages, alleged Schneider's negligence or negligent entrustment in: (1) operating the tractor and trailer in an unsafe and dangerous condition; (2) failing to inspect the tractor and trailer; (3) hiring an unfit employee; (4) failing to supervise employees conducting inspections of the tractor and trailer; (5) failing to make and enforce company policies for the safe operation of vehicles and; (6) entrusting the tractor and trailer to an unfit driver. The allegations state a mixture of "active" and "passive" forms of negligence.

Schneider responded to the wrongful death action by filing a third-party complaint against Holland Hitch Company (Holland) and Rissler & McMurry Company (Rissler). Holland designed, manufactured and sold the "fifth wheel" device (hitch) that connected the Schneider semi-tractor to the trailer. Rissler was the contractor supervising the highway construction and traffic diversion at the time of the crash. As the third-party plaintiff, Schneider sought indemnity against the third-party defendants, Holland and Rissler, "for any and all sums and losses which they, or any of them, may be obligated to pay" Horowitz in the wrongful death action. Schneider denied all allegations of negligence, but pled in the alternative that if Schneider was negligent, its negligence was "secondary and/or passive" while Holland's and/or Rissler's negligence or liability was "primary and/or active." If indemnity was denied, Schneider argued the "negligence, fault, and/or liability" of the third-party defendants should be determined "pursuant to the laws of the State of Wyoming" because the third-party defendants were the "sole and direct proximate cause of the accident * * *."

Schneider advanced three theories of indemnity recovery against Holland. First, strict liability for the defective design and manufacture of a hitch that was unreasonably dangerous at the time it was sold. Second, breach of express and implied warranties that the hitch was safe, merchantable and fit for its ordinary use. Third, negligent design, manufacture, testing, inspection and supply of the hitch.

Schneider's theory of indemnity recovery against Rissler was negligence. Schneider alleged Rissler breached its duty to perform the construction work in a safe and prudent manner. Specifically, Schneider alleged Rissler failed in its duty to provide a "non-dangerous" traffic by-pass.

Holland and Rissler challenged the sufficiency of Schneider's allegations by filing a motion to dismiss for failure to state a claim upon which relief could be granted. F.R.C.P. 12(b)(6). Following briefing and a hearing, the United States District Court for the District of Wyoming granted the motion and dismissed the third-party action against Holland and Rissler. In its disposition order, the United States District Court stated its view of the issues which are now before this court:

Contrary to Rissler & McMurry Company's assertions, common law indemnity is still available in Wyoming despite the repeal of contribution in 1986. Session Laws of Wyoming, 1986, Ch. 24, Section 2. Wyoming law recognized implied indemnity at least 47 years before a right to contribution was created. Miller v. New York Oil, , 243 P. [ ] 118 (Wyo.1926). Nothing in the repeal of contribution indicates that implied indemnity was also "repealed." The court also disagrees with Rissler & McMurry Company's assertion that Convoy Company v. Dana, 359 P.2d 885, 887 (Wyo.1961), precludes recovery under a theory of implied indemnity. Even so, the court is convinced that the Schneider defendants are not entitled to assert implied indemnity in this case.

This accident occurred after the effective date for repeal of joint and several liability and adoption of a form of pure comparative negligence. As a result, the Schneider defendants can be liable only for their percentage of the fault. Wyo.Stat. § 1-1-109(c) (Supp. June 1988). The Schneider defendants will not be at fault if the accident resulted exclusively from a product defect. The fault of all actors, including those who are not parties, is included in the verdict form. Wyo.Stat. § 1-1-109(b)(1)(A) (Supp. June 1988). In such a circumstance, there is no need for indemnity.

Plaintiff alleges that the Schneider defendants are responsible for their own conduct. As bases for liability plaintiff alleges negligent entrustment and failure to inspect. These allegations are of active, not passive, negligence. The trucking companies point to no one who undertook to fulfill these responsibilities. Under Wyoming law, joint tortfeasors may not seek indemnity against each other. Convoy Company, 359 P.2d at 887.

The court is persuaded that this rule is not changed...