Sears, Roebuck & Co. v. International Harvester Co.

• Decision Date: 30 June 1978
• Citation: 82 Cal.App.3d 492,147 Cal.Rptr. 262
• Court: California Court of Appeals Court of Appeals
• Parties: SEARS, ROEBUCK & CO. and Armstrong Rubber Company, Cross-complainants and Appellants, v. INTERNATIONAL HARVESTER COMPANY, Cross-defendant and Respondent. Civ. 50374.

Page 262

147 Cal.Rptr. 262

82 Cal.App.3d 492

SEARS, ROEBUCK & CO. and Armstrong Rubber Company, Cross-complainants and Appellants, v. INTERNATIONAL HARVESTER COMPANY, Cross-defendant and Respondent.

Civ. 50374.

Court of Appeal, Second District, Division 1, California.

June 30, 1978.

Hearing Denied Aug. 24, 1978.

Stearns & Nelson, and Bruce L. Nelson, Hollywood, for cross-complainants and appellants.

Dryden, Harrington & Swartz, and Peter Abrahams, Los Angeles, for cross-defendant and respondent.

THOMPSON, Associate Justice.

In Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226, the California Supreme Court replaced the doctrine of contributory negligence, incorporated in the California statutes since the Field Code, with the principle of "pure" comparative negligence. (13 Cal.3d at pp. 814, 827, 119 Cal.Rptr. 858, 532 P.2d 1226.) In American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 146 Cal.Rptr. 182, 578 P.2d 899, the California high court explicated the application of the Li principle to the multi-party situation retaining the rule of joint liability of concurrent tortfeasors to the injured party but adopting the doctrine of equitable partial indemnity among concurrent tortfeasors on the basis of their comparative fault. (20 Cal.3d at p. 599, 146 Cal.Rptr. 182, 578 P.2d 899.) In Safeway Stores v. Nest-Kart (1978) 21 Cal.3d 322, 146 Cal.Rptr. 550, 579 P.2d 441, the Supreme Court extended the doctrine of equitable partial indemnity to the situation of concurrent tortfeasors held liable on the theory of products liability or on a combination of strict products liability and negligence. This appeal presents an issue not considered in Li, American Motorcycle, or Safeway. We are required to decide whether a settling concurrent tortfeasor may continue to pursue his right of partial indemnity asserted by a presettlement cross-complaint against a party not named by the plaintiff.

Based upon the policy considerations which we view as underlying American Motorcycle, we conclude that the settling tortfeasor has that right. We therefore reverse a trial court judgment on the pleadings which dismisses a cross-complaint.

Robbie Evelyn Nairn, Linda Lou Absher, and George W. Nairn sued Sears, Roebuck & Co. for the wrongful death of George A. Nairn. Their complaint asserts the theories of products liability, breach of warranty, and negligence. The theories are interrelated and all assert liability of Sears for a defective tire which caused the decedent's death in a truck accident. International Transport, Inc., sued Sears for property damage resulting from the same accident.

Sears filed its cross-complaint against International Harvester Company seeking indemnity from the manufacturer of the truck to which the tire was affixed. The cross-complaint asserts the theories of product liability and negligence contributing to the accident. The trial court granted a judgment on the pleadings. Sears appealed from the resulting dismissal of its cross-complaint. International Harvester resists the appeal on the merits and contends also that because Sears settled the lawsuit against it with the plaintiffs while this appeal was pending, Sears is barred from seeking indemnity. Sears admits the fact of settlement in its closing brief.

We note at the outset that Sears was entitled to bring International Harvester into the action by cross-complaint although the cross-defendant was not named by the plaintiffs. (American Motorcycle Assn. v. Superior Court, supra, 20 Cal.3d 578, 607, 146 Cal.Rptr. 182, 578 P.2d 899.) ¹ Hence, the trial court erroneously granted the cross-defendant's motion for judgment on the pleadings.

There remains the issue of the right of Sears to pursue the cross-complaint, and hence this appeal, after it settled with plaintiffs. We conclude that it has that right.

American Motorcycle Assn. clearly and specifically delineates the limitations upon liability of a settling concurrent tortfeasor against claims of other concurrent tortfeasors. The settling tortfeasor is "discharged from any claim for partial or comparative indemnity" so long as the settlement is in " 'good faith.' " (20 Cal.3d at p. 604, 146 Cal.Rptr. at p. 198, 578 P.2d at p. 925.) By reason of the principle of joint liability declared in American Motorcycle, a nonsettling defendant remains liable for the plaintiff's entire damage, reduced only by the percentage of the plaintiff's negligence compared with the total of that of all concurrent tortfeasors, whether parties to the action or not, and the amount of the good faith settlement. (Id., at p. 590, fn. 2, 146 Cal.Rptr. 182, 578 P.2d 899.)

Conversely, American Motorcycle and related cases are silent on the rights of the settling concurrent tortfeasors against other concurrent tortfeasors. We must, therefore, determine the quantum of those rights on the policy underpinnings of Li, American Motorcycle, and Safeway.

We analyze the Supreme Court decisions as creating a hierarchy of interests. First in the hierarchy is maximization of recovery to the injured party for the amount of his injury to the extent fault of others has contributed to it. (See Li v. Yellow Cab Co., supra, 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226, eliminating the bar to recovery of contributory negligence, and American Motorcycle Assn. v. Superior Court, supra, 20 Cal.3d 578, 146 Cal.Rptr. 182, 578 P.2d 899, retaining the rule of joint liability of concurrent tortfeasors and holding named defendants liable for damage assessable against unnamed persons.) ² Second is encouragement of settlement of the injured party's claim. (American Motorcycle Assn. v. Superior Court, supra, 20 Cal.3d at p. 604, 146 Cal.Rptr. 182, 578 P.2d 899.) Third is the equitable apportionment of liability among the tortfeasors. (Id., 20 Cal.3d at pp. 604-605, 146 Cal.Rptr. 182, 578 P.2d 899.)

The hierarchy of policies dictates the result which we reach in the case at bench. In no way does a rule permitting assertion by a settling defendant of his right of comparative indemnity impinge upon the maximization of recovery to the injured person. Permitting the recovery encourages settlement. If recovery were barred, a named defendant would be inhibited in effectuating a settlement where he believes that he has a right of indemnity against a solvent person or corporation, particularly...