Tolbert v. Gerber Industries, Inc.

• Decision Date: 22 April 1977
• Docket Number: No. 45290,45290
• Citation: 255 N.W.2d 362
• Parties: Norman TOLBERT, Respondent, v. GERBER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant, and VOLDCO, INC., defendant and third-party plaintiff, Respondent, v. SCHULER GRAIN COMPANY, third-party defendant, Respondent.
• Court: Minnesota Supreme Court

Page 362

255 N.W.2d 362

Norman TOLBERT, Respondent, v. GERBER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant, and VOLDCO, INC., defendant and third-party plaintiff, Respondent, v. SCHULER GRAIN COMPANY, third-party defendant, Respondent.

No. 45290.

Supreme Court of Minnesota.

April 22, 1977.

Syllabus by the Court

Where a manufacturer negligently furnishes a defective product to an installer, who negligently fails to inspect the product or detect the potential hazard which it presents, and a third party is thereby injured the liability of the manufacturer and the installer to one another as joint tortfeasors for compensating the injured party is determined by their relative culpability and not by principles of indemnity.

The statement of law adopted in Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 373, 104 N.W.2d 843, 848 (1960), which holds that joint tortfeasors may generally recover indemnity:

"(4) Where the one seeking indemnity has incurred liability merely because of failure, even though negligent, to discover or prevent the misconduct of the one sought to be charged,"

is hereby overruled.

Field, Arvesen, Donoho, Lundeen & Hoff and Norman D. Arvesen, Fergus Falls, for appellant.

Rufer, Hefte, Pemberton, Schulze & Sorlie and Richard C. Hefte, Fergus Falls, Jardine, Logan & O'Brien, St. Paul, for Tolbert.

Clemmensen & Robertson, Breckenridge, Bey, Ochs & Klimek, Minneapolis, Dosland, Dosland, Nordhaugen & Mickelberg and J. R. Dosland, Moorhead, for Voldco.

Korbel & Gospodar and Anthony C. Gospodar, Breckenridge, for Schuler.

Heard before OTIS, PETERSON, and SCOTT, JJ.; reheard, considered, and decided by the court en banc.

OTIS, Justice.

This is an action brought by Norman Tolbert against Gerber Industries, Inc. (Gerber), the manufacturer, and Voldco, Inc. (Voldco), the installer of defective equipment which caused plaintiff's injury. Schuler Grain Company (Schuler), Tolbert's employer, was made a third-party defendant. The jury found that Gerber and Voldco were negligent and that the negligence of each was a direct cause of Tolbert's injury and awarded Tolbert $60,572. Pursuant to our comparative negligence statute, Minn.St. 604.01, the jury was instructed to attribute a percentage of negligence to each tortfeasor. They attributed 100 percent of the negligence to Gerber and Voldco jointly and did not apportion percentages between them. The trial court, relying upon our recent decisions in Hillman v. Ellingson, 298 Minn. 346, 215 N.W.2d 810 (1974), and Sorenson v. Safety Flate, Inc., 298 Minn. 353, 216 N.W.2d 859 (1974), thereupon awarded Voldco 100-percent indemnity from Gerber. We reverse and remand for further proceedings.

The issue presented is one which prompts us to re-evaluate well-established common-law rules in light of recently adopted principles of comparative negligence. Specifically, the question is whether a negligent installer of defective equipment is entitled to 100-percent indemnity from the negligent manufacturer because the negligence of the former was "passive" or "secondary," or whether the joint tortfeasors should be responsible for the loss in accordance with their respective degrees of culpability.

In 1968, Schuler, a corporation operating a grain-and-seed elevator, contracted with Voldco, a corporation engaged in the construction of grain elevators and the installation of grain-handling equipment, to design and install a trackside loading leg to permit gravity loading of grain hopper cars on a railroad siding immediately adjacent to one of Schuler's plants.

Schuler outlined its requirements, and Voldco determined what equipment was needed, selected a supplier, and obtained and installed the equipment.

Voldco gave Gerber the basic information concerning the type of system required, and Gerber determined what specific components would be needed. Gerber prepared a sketch showing the height of the leg and the length of the transfer spout necessary to reach the open-top hatches of hopper cars. In addition, it determined the angles of an A-valve and a metal elbow. Gerber then shipped all component parts, separately and unassembled, to Voldco and received payment.

The installation consisted of a hollow tube some 30 feet high, mounted vertically alongside the track on which railroad cars would be loaded. Inside the tube, which was supported by bracing to hold it upright, was a power-driven conveyor belt to which cups were attached to raise grain from the bottom of the column to other equipment at the top of the column. Grain was fed to the belt at the bottom of the column from storage bins in the Schuler structure.

At the top of the column the grain cups emptied into an A-valve which was to carry the grain out toward the hopper car at an angle below the horizontal. The grain then flowed by gravity to an elbow which changed its direction to the descending vertical. Bolted to the lower end of the elbow was a metal turnhead, so-called because, within a circular motion in the center of the upperplate bolted to the elbow, it was designed to turn 360 degrees in rotation. Below the circular turnplate, the turnhead, which consisted of a cast-metal pipe, sent the grain downward at an angle between the horizontal and the vertical into a metal transfer spout approximately 12 feet in length, having articulating segments just below its point of attachment to the transfer spout. Attached to the transfer spout was a metal sleeve which could be extended for another 12 feet, to produce a total spout length from the turnhead of about 24 feet. This sleeve could be retracted by a crank-operated cable and pulley with a ratchet release to permit extension from a retracted position without operation of the crank.

The hopper car was metal, its roof level being some 12 or 15 feet above track level. Down the center of the roof and running lengthwise was a three-segment open channel into which the transfer spout and its extension were to be placed to fill three separate bins, each open segment of the channel serving one bin and having a separate door segment which covered the channel segment when closed. The car was about 40 feet in length and, when spotted for loading, was centered on the loading-leg structure which loaded the grain.

The top segment of the transfer spout was attached to the turnhead by hooking a hole in the spout to a cast-metal lug on the turnhead. The turnplate was designed to be mounted in a level horizontal valve to the base of the elbow above it, and the angles of the A-valve and the elbow had to coincide for a level installation. If the turnplate was not installed in a level position, it permitted the hole in the transfer spout to slip off the lug on the turnhead, allowing the entire transfer spout and sleeve assembly to fall free from its point of suspension 30 feet above ground level.

In preparing its sketch, Gerber, the manufacturer, determined that the proper angle of the A-valve was 35 degrees. By mistake, its shipping department sent a 47-degree angle instead. As a result, the turnplate was tilted 12 degrees below the horizontal at its outer edge toward the hopper car. Voldco, the installer, had not ordered specific component parts but rather had ordered a complete system, leaving to Gerber the decision as to what parts were needed. Voldco has been in the business of installing systems such as this since 1947 or 1948, and had installed "quite a few" of them. It proceeded to install the equipment sent by Gerber without detecting its potentially dangerous propensities.

On January 8, 1972, Tolbert was on top of a hopper car extending the transfer spout and its sleeve to the west end of the car centered at the base of the loading leg on an east-west track. In this process, the hole in the head of the transfer spout disengaged from its point of suspension on the lug of the turnhead and fell to the ground, sweeping the plaintiff off the top of the hopper car, causing him severe injuries.

There were no safety devices on the transfer-spout suspension to prevent its falling in the event of disengagement. Gerber had never produced a system with any such safety device, Voldco had never installed one with safety devices, and Schuler had never seen such a device or ordered the installation of one. If a safety device were installed, it would have had the unwanted effect of making permanent that which was intended to be portable. The system was designed to move the transfer spout from turnhead to turnhead as different commodities were loaded into railroad cars. Gerber, Voldco, and Schuler had no knowledge of any occurrences of unintentional disengagements, although similar equipment had been installed in grain elevators throughout the country.

In Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 372, 104 N.W.2d 843, 848 (1960), we reviewed our decisions concerning indemnity between joint tortfeasors ¹ and adopted the following rules:

" * * * A joint tortfeasor may generally recover indemnity only in the following situations:

"(1) Where the one seeking indemnity has only a derivative or vicarious liability for damage caused by the one sought to be charged.

"(2) Where the one seeking indemnity has incurred liability by action at the direction, in the interest of, and in reliance upon the one sought to be charged.

"(3) Where the one seeking indemnity has incurred liability because of a breach of duty owed to him by the one sought to be charged.

"(4) Where the one seeking indemnity has incurred liability merely because of failure, even though negligent, to discover or prevent the misconduct of the one sought to be charged.

"(5) Where there is an express contract between the parties containing an explicit undertaking to reimburse for liability of the character involved." (Italics supplied.)

The instant case falls within Rule 4 of Hendrickson. In situations covered by Rules 1, 2, and 3, the party who seeks indemnity has been held...