Sydenstricker v. Unipunch Products, Inc.

Decision Date09 March 1982
Docket NumberNo. CC923,CC923
Citation288 S.E.2d 511,169 W.Va. 440
CourtWest Virginia Supreme Court
PartiesJohn C. SYDENSTRICKER, et al., Plaintiffs, v. UNIPUNCH PRODUCTS, INC., et al., Defendants. UNIPUNCH PRODUCTS, INC., et al., Defendants and Third Party Plaintiffs, v. TERRELL TOOL AND DIE CORP., Third Party Defendant.

Jenkins, Fenstermaker, Krieger, Kayes & Farrell and Michael J. Farrell, Huntington, for Unipunch, et al., defendants and third party plaintiffs.

Love, Wise, Robinson & Woodroe and John C. Palmer, IV, Charleston, for Niagara.

Jackson, Kelly, Holt & O'Farrell, Robert L. Elkins and Michael L. Minsker, Jackson, Kelly, Holt & O'Farrell, Charleston, for Terrell Tool, third party defendant.

Syllabus by the Court

1. "The general principle of implied indemnity arises from equitable considerations. At the heart of the doctrine is the premise that the person seeking to assert implied indemnity--the indemnitee--has been required to pay damages caused by a third party--the indemnitor. In the typical case, the indemnitee is made liable to the injured party because of some positive duty created by statute or the common law, but the actual cause of the injury was the act of the indemnitor." Syllabus Point 2, Hill v. Joseph T. Ryerson & Son, Inc., W.Va., 268 S.E.2d 296 (1980).

2. Implied indemnity is based upon principles of equity and restitution and one must be without fault to obtain implied indemnity.

3. In a products liability case where the third party is the manufacturer, he is not accorded a right of implied indemnity against the employer because, having made a defective product, he is not fault free.

4. The doctrine of contribution has its roots in equitable principles. The right to contribution arises when persons having a common obligation, either in contract or tort, are sued on that obligation and one party is forced to pay more than his pro tanto share of the obligation. One of the essential differences between indemnity and contribution is that contribution does not permit a full recovery of all damages paid by the party seeking contribution. Recovery can only be obtained for the excess that such party has paid over his own share.

5. In Haynes v. City of Nitro, W.Va., 240 S.E.2d 544 (1977), we extended a right of contribution to a tortfeasor to bring in as a third-party defendant a fellow joint tortfeasor to share by way of contribution on the verdict recovered by the plaintiff.

6. Where the right of contribution is initially grounded in common liability in tort, courts have held that a joint tortfeasor employer is immune from a third-party contribution suit because he is initially immune from tort liability to his injured employee by virtue of the workmen's compensation statutory bar of such tort actions.

7. Where the Workmen's Compensation Act provides an express exception from immunity against suits by an employee in a tort area, it follows that a suit grounded on this exception would enable a third party to maintain an action in contribution.

8. The deliberate intent exception contained in W.Va.Code, 23-4-2, permits a defendant to bring a third-party action in contribution against the employer of the injured plaintiff.

MILLER, Chief Justice:

We have accepted this certified question from the United States District Court for the Southern District of West Virginia pursuant to the provisions of W.Va.Code, 51-1A-1, et seq. 1 We consider in this question 2 whether a manufacturer, who has been sued by a plaintiff injured while using the manufacturer's product, may bring a third-party action against the injured plaintiff's employer. The manufacturer's third-party complaint alleges the employer by his "deliberate intent" rendered the manufacturer's product dangerous resulting in the plaintiff employee's injuries. The manufacturer seeks compensation from the employer based on a theory of implied indemnity and/or contribution. The employer contends that our workmen's compensation law precludes the third-party action.

The parties have stipulated to the following statement of facts as set out in the Certification Order:

"This is an action for the recovery of damages for personal injuries by a plaintiff employee, who alleges that certain products used by him in the course of his employment were negligently designed, manufactured and distributed. Plaintiffs, husband and wife, have sued four defendants in their several capacities as manufacturer of a punch press or component parts thereof, and a press, and two of the defendants, Unipunch Products, Inc. (hereinafter 'Unipunch'), and Niagara Machine & Tool Works (hereinafter 'Niagara'), have by separate third-party complaints brought an action against a third-party defendant, Terrell Tool and Die Corporation (hereinafter 'Terrell'), which was the employer of the plaintiff, John C. Sydenstricker.

"Defendant and third-party plaintiff, Niagara, asserts in each of two counts of its third-party complaint, liability on Terrell's part for contribution and indemnity: in the first, alleging Terrell's 'negligence and carelessness' in failing to provide a safe place to work, in failing to adopt and furnish adequate safety devices, each of which is required by West Virginia Code, Chapter 21, Article 3, Section 2, and 29 U.S.C. Section 651 et seq. and regulations thereunder, and in further failing to take certain specified steps to protect its employee; and in the second, alleging that the aforementioned statutory and regulatory breaches together with other failures, constitute a 'willful, wanton and wrongful misconduct[.]' Indemnity appears to be also asserted in each count upon the ground that, as between Niagara and Terrell, the latter was the more active and thus the ultimately culpable tort-feasor.

"Unipunch asserts against Terrell three indemnity claims in the three counts of its third-party complaint: the first is based on an ostensible independent duty owed to Unipunch by Terrell to follow certain written instructions supplied with the punch press in question; the second, on Terrell's alleged 'willful, wanton, reckless and intentional misconduct' with respect to the use of the punch press; and the third, upon the ground that, as between Unipunch and Terrell, the latter was the more active, and thus ultimately culpable tort-feasor. Unipunch alleges that Terrell misused the product by disregarding written recommendations provided by Unipunch at the time of sale. Unipunch also alleges that Terrell utilized the punch beyond its capacity and modified it by adding a component part."

We answer the certified question in the affirmative but because we have been presented only conclusory facts, we do not pass upon the evidentiary sufficiency of the third-party claims. We state in this opinion only an answer to the abstract certified question posed: "[Whether an employer under our Workmen's Compensation Act] may be held liable as a third-party defendant to such defendant manufacturers as third-party plaintiffs, upon the theory of contribution and/or implied indemnity based upon allegations in the third-party complaint that such employer was guilty of willful, wanton and reckless misconduct or intentional tort toward the plaintiff employee resulting in plaintiff employee's personal injuries?"

I. The Indemnity Theory

There are two basic types of indemnity: express indemnity, based on a written agreement, and implied indemnity, arising out of the relationship between the parties. One of the fundamental distinctions between express indemnity and implied indemnity is that an express indemnity agreement can provide the person having the benefit of the agreement, the indemnitee, indemnification even though the indemnitee is at fault. Such result is allowed because express indemnity agreements are based on contract principles. Courts have traditionally enforced indemnity contract rights so long as they are not unlawful. Sellers v. Owens-Illinois Glass Company, 156 W.Va. 87, 191 S.E.2d 166 (1972). See also Eastern Gas and Fuel Associates v. Midwest-Raleigh, Inc., 374 F.2d 451 (4th Cir. 1967), cert. denied, 389 U.S. 951, 88 S.Ct. 333, 19 L.Ed.2d 360; Eley v. Brunner-Lay Southern Corporation, Inc., 289 Ala. 120, 266 So.2d 276 (1972); City of Borough of Juneau v. Alaska Electric Light & Power Company, 622 P.2d 954 (Alaska 1981); Christy v. Menasha Corporation, 297 Minn. 334, 211 N.W.2d 773 (1973); Waggoner v. Oregon Automobile Insurance Co., 270 Or. 93, 526 P.2d 578 (1974); Di Lonardo v. Gilbane Building Company, 114 R.I. 469, 334 A.2d 422 (1975); Herchelroth v. Mahar, 36 Wis.2d 140, 153 N.W.2d 6 (1967). No claim of an express indemnity agreement is made in this case.

On the other hand, the concept of implied indemnity is based on equitable principles arising from the special nature of the relationship between the parties. In Syllabus Point 2 of Hill v. Joseph T. Ryerson & Son, Inc., W.Va., 268 S.E.2d 296 (1980), we stated in regard to implied indemnity:

"The general principle of implied indemnity arises from equitable considerations. At the heart of the doctrine is the premise that the person seeking to assert implied indemnity--the indemnitee--has been required to pay damages caused by a third party--the indemnitor. In the typical case, the indemnitee is made liable to the injured party because of some positive duty created by statute or the common law, but the actual cause of the injury was the act of the indemnitor."

We also explained in Hill that the person claiming implied indemnity in order to recover had to be without fault in regard to the incident that created the plaintiff's injuries. This is because a cause of action for implied indemnity rests on principles of restitution which permit a recovery against the indemnitor for all damages that the indemnitee has been required to pay to the injured party. We summarized this point in Hill as follows:

"The remedy of implied indemnity is an independent cause of action based primarily on...

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