Heco v. Foster Motors, 2015 VT 3 (Filed January 9, 2015)
SKOGLUND, J. Auto dealer appeals from a superior court judgment in favor a component manufacturer on dealer's scross-claim for indemnification of compensation paid to plaintiff in settlement of a personal-injury action. We affrim.
Plaintiff was severely injured when a vehicle she was driving was struck from behind by another vehicle. She filed a personal-injury action against Midstate, the automobile dealer that sold her the vehicle, Chrysler Group LLC, successor-in-interest to the company that manufactured the vehicle, and JCI, the manufacturer of the vehicle’s driver’s seat. The complaint alleged Midstate sold a vehicle that was not “crashworthy” not only because of a defective and inadequate seat system, but also because of defective design and inadequate warning. Plaintiff thus alleged not only that Midstate was vicariously liable for the allegedly defective seating system supplied by JCI, but was also vicariously liable for Chrysler's role in selling a vehicle that was not crashworthy.
Plaintiff’s settled, releasing Midstate from "any and all claims, demands, damages and causes of action under any state or federal law whatever the nature, which are known or unknown, foreseeable or unforeseeable, past, present or future, arising directly or indirectly out of the Vehicle, the Incident or the Lawsuit.” After trial and judgment for plaintiff and against JCI in the amount of $36,948,123, the trial court also entered a final judgment in favor of JCI and against Midstate on the cross-claim for indemnity. This appeal by Midstate is of that judgment.
Plaintiff was severely injured when a vehicle she was driving was struck from behind by another vehicle. She filed a personal-injury action against Midstate, the automobile dealer that sold her the vehicle, Chrysler Group LLC, successor-in-interest to the company that manufactured the vehicle, and JCI, the manufacturer of the vehicle’s driver’s seat. The complaint alleged Midstate sold a vehicle that was not “crashworthy” not only because of a defective and inadequate seat system, but also because of defective design and inadequate warning. Plaintiff thus alleged not only that Midstate was vicariously liable for the allegedly defective seating system supplied by JCI, but was also vicariously liable for Chrysler's role in selling a vehicle that was not crashworthy.
Plaintiff’s settled, releasing Midstate from "any and all claims, demands, damages and causes of action under any state or federal law whatever the nature, which are known or unknown, foreseeable or unforeseeable, past, present or future, arising directly or indirectly out of the Vehicle, the Incident or the Lawsuit.” After trial and judgment for plaintiff and against JCI in the amount of $36,948,123, the trial court also entered a final judgment in favor of JCI and against Midstate on the cross-claim for indemnity. This appeal by Midstate is of that judgment.
In support of its motion for summary judgment on the cross claim JCI asserted that the settlement agreement with plaintiff discharged Midstate from potential vicarious liability quite separate and independent from JCI's potential liability, and that Midstate could not therefore compel JCI to compensate it for the Midstate's "own vicarious liability for the conduct of Chrysler Group and Chrysler" in no way attributable to JCI. We agree.
It is axiomatic that a party seeking implied equitable indemnity may recover only where its potential liability is vicariously derivative of the acts of the indemnitor and it is not independently culpable. Gen. Motors Corp. v. Hudiburg Chevrolet, Inc., 199 S.W.3d 249, 255 (Tex. 2006) ("Under the common law, a person is entitled to indemnity for products liability only if his liability is entirely vicarious and he is not himself independently culpable.") This principle is carried forward in the current Restatement, which allows for noncontractual indemnity only where the indemnitee is "not liable except vicariously for the tort of the indemnitor," or where the indemnitee sells a product supplied by the indemnitor and the indemnitee is "not independently culpable." Restatement (Third) of Torts: Apportionment of Liability § 22(a)(2)(i) & (ii) (emphases added).
Such independent culpability need not arise exclusively from the primary or active negligence of the indemnitee. See, e.g., Hudiburg, 199 S.W.3d at 260. Midstate was sued based on its vicarious liability for the acts of both JCI and Chrysler Corporation, and it chose to settle and compensate plaintiff in exchange for the discharge of any potential vicarious liability "arising directly or indirectly out of the Vehicle." Midstate's settlement discharged its potential vicarious liability not only for the acts of JCI, but also Chrysler, and as such Midstate may not assert equitable indemnity to compel JCI to reimburse it.
[SCOVT note: see also Restatement (Third) of Torts: Apportionment of Liability § 22, comment e (A vicariously liable person can obtain indemnity from the person whose negligence was imputed only if the vicariously liable person is not independently liable.)]
[SCOVT note: see also Restatement (Third) of Torts: Apportionment of Liability § 22, comment e (A vicariously liable person can obtain indemnity from the person whose negligence was imputed only if the vicariously liable person is not independently liable.)]
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