Thompson v. Stearns Chemical Corp.

• Decision Date: 15 February 1984
• Docket Number: No. 83-918,83-918
• Citation: 345 N.W.2d 131
• Parties: David E. THOMPSON and Marty R. Thompson, Plaintiffs, v. STEARNS CHEMICAL CORPORATION, Defendant. STEARNS CHEMICAL CORPORATION, Third-Party Plaintiff, v. OSCAR MAYER & COMPANY, Third-Party Defendant.
• Court: Iowa Supreme Court

Page 131

345 N.W.2d 131

David E. THOMPSON and Marty R. Thompson, Plaintiffs, v. STEARNS CHEMICAL CORPORATION, Defendant.

STEARNS CHEMICAL CORPORATION, Third-Party Plaintiff, v. OSCAR MAYER & COMPANY, Third-Party Defendant.

No. 83-918.

Supreme Court of Iowa.

Feb. 15, 1984.

Richard J. Sapp, Gary D. Stump and Jerry E. Williams of Nyemaster, Goode, McLaughlin, Emery & O'Brien, P.C., Des Moines, for third-party plaintiff.

David H. Luginbill and Richard G. Santi of Ahlers, Cooney, Dorweiler, Haynie & Smith, Des Moines, for third-party defendant.

Considered by HARRIS, P.J., and McGIVERIN, LARSON, SCHULTZ and CARTER, JJ.

SCHULTZ, Justice.

The ripple effect from our recent adoption of comparative negligence ¹ presents us with the question of whether a manufacturer has a right of contribution from an employer for damages sustained by an injured employee through the joint fault of a manufacturer and the employer. Although we previously approved an action for indemnity by a third party tortfeasor against an employer for damages suffered by an injured employee, we denied similar claims if they were based on contribution. Iowa Power and Light Co. v. Abild Construction Co., 259 Iowa 314, 144 N.W.2d 303 (1966). In particular, we reasoned that since common liability forms the basis for recovery in a claim for equitable contribution between joint tortfeasors and the employer's liability by virtue of the Iowa Workers' Compensation Act is statutorily limited and not dependent on negligence, no common liability exists between an employer and a third party tortfeasor allowing contribution. Id. 259 at 319, 144 N.W.2d at 306. We decline to abandon our holding in Abild.

On June 27, 1980, David E. Thompson, his wife and his children, by their next friend, commenced an action for damages against Stearns Chemical Corporation (Stearns) on theories of negligence, strict liability and breach of warranty. The action, originally filed in the Iowa District Court for Dallas County, was removed after a motion by Stearns, a Wisconsin corporation, to the United States District Court, Southern District of Iowa, Central Division, on the basis of diversity jurisdiction. Stearns filed a third-party complaint against Thompson's employer, Oscar E. Mayer Company (Oscar Mayer), also a Wisconsin corporation. This multicount complaint requested contribution in the first two counts and sought indemnity in count three.

In September 1982, the federal district court dismissed the two counts grounded on contribution, leaving only the indemnity claim against Oscar Mayer. Earlier, Stearns had settled with the Thompsons who then dismissed their action. This settlement, however, did not affect the pending third-party complaint against Oscar Mayer. After our ruling in Goetzman, Stearns moved the court to reconsider its dismissal of the contribution claims or, in the alternative, to certify questions to this court. Oscar Mayer resisted the motion for reconsideration, but did not object to Stearns' request for certification. Pursuant to Iowa Code chapter 684A (1983), and Iowa Rules of Appellate Procedure 451-461, the district court certified two questions of law and provided us with a statement of fact.

David E. Thompson was injured on March 29, 1980, while attempting to unplug a drain at the Oscar Mayer plant in Perry, Iowa, with a substance known as "Experimental Cleaner 3013." When Thompson poured the cleaner into the drain, there was a reaction, and the product backed up and "exploded" in his face seriously injuring him. These injuries occurred in the course of his employment with Oscar Mayer. Although the chemical cleaner was prepared and packaged by Stearns and technically sold to Oscar Mayer, Mayer developed and formulated the substance and gave express contractual instructions on product content, labeling, and packaging. Oscar Mayer had its own research personnel and laboratory facilities and has long been involved in the development of chemical cleaners for use in its plants. Stearns is in the business of mixing and selling chemical products. The formula for this cleaner belonged solely to Oscar Mayer, and Stearns cannot and does not sell the product to any other person or entity.

The certified questions arise from Stearns' third-party complaint. In count one, Stearns alleged that if plaintiff's injuries were due to negligence, a proximate cause of the injuries was Oscar Mayer's negligence and that Stearns was entitled to contribution from Mayer for a prorated share in the event judgment was rendered in Thompson's favor. In count two, the same claim was made; but there, Stearns alleged that Oscar Mayer had a right of subrogation for its workers' compensation payments and requested that contribution be granted against Mayer to the extent of benefits paid Thompson pursuant to the Iowa Workers' Compensation Act. The U.S. District Court certified the following questions:

(1) After adoption of comparative negligence, does Iowa law permit consideration of comparative fault of the injured employee's employer so as to allow a third-party manufacturer or seller who is sued by an injured employee under theories of negligence and strict products liability, for an injury covered by the Iowa Workers' Compensation Act, to seek contribution from the injured employee's employer where that employer is alleged to have designed and formulated the product and provided all specifications for packaging, labeling and warnings for the product?

(2) If such contribution is allowed under Iowa law, is the amount of the contribution claim limited to the extent of the employer's workers' compensation lien?

Stearns' request for certification and the arguments advanced in this court are premised on our recent adoption of comparative negligence. While denying any relevancy between our decisions in Abild and Goetzman, Oscar Mayer suggests we fully address and answer the issue of contribution between an employer and third party tortfeasor. Consequently, we will not limit our discussion to the effect of the comparative negligence doctrine on our no-contribution rule.

Basically, Stearns misperceives the effect of comparative negligence. The adoption of comparative negligence does not constitute legitimate reason to overturn the rule announced in Abild denying contribution against an employer who is liable under the Workers' Compensation Act. In particular, the adoption of comparative negligence was limited to those cases "in which contributory negligence has previously been a complete defense...." Goetzman, 327 N.W.2d at 754. Although we reserved various collateral issues for future cases so the salient facts could be fully developed and the issues thoroughly briefed, our contribution rule no more turns on the doctrine of comparative negligence than it did on the displaced doctrine of contributory negligence.

Nevertheless, Stearns elaborately has pieced together its own perception of the changes wrought by comparative negligence and argues that these changes logically should result in an abandonment of the Abild rule. Specifically, it argues that most states adopting comparative negligence have extended its principles in some form to strict liability actions and this, in turn, provides the impetus for allowing third-party contribution claims by manufacturers against an employer. We do not agree.

We conclude that the adoption of comparative negligence is of little aid to Stearns. The issue of whether we should extend the comparative negligence doctrine to strict liability cases is not before us; thus we do not address this question. Any impact on strict liability by comparative negligence would have minimal effect on a denial of contribution based on the lack of common liability between a third party and an employer. A manufacturer's liability, whether premised on grounds of negligence, strict liability or implied warranty, is still established by showing a breach of legal duty. Adoption of comparative negligence principles, while possibly mitigating the defense available to a tortfeasor, does not change that legal duty. On the other hand, an employer's liability to an employee is not dependent on a breach of legal duty, but is governed exclusively by statute under our Workers' Compensation Act. Jansen v. Harmon, 164 N.W.2d 323, 326-27 (Iowa 1969). The real issue is whether we wish to cast out or redefine our rule conditioning contribution on the common liability of joint tortfeasors.

Stearns argues strenuously that we should abandon Abild. It notes that under Abild a third party bears full liability for injuries suffered by an employee, even when the employer shares in the causation of the injuries. It further points out that the underpinning of the Goetzman decision is clearly one of "fairness" and quotes our statement that "the main reason for changing the doctrine of contributory negligence as a complete bar to recovery to one of comparative negligence is fairness...." Goetzman, 327 N.W.2d at 754. Stearns argues that it is only logical and fair that the employer should shoulder its own fair share of...