Opinion
Cause No. IP 00-1378-C H/G
April 17, 2001
ENTRY ON DEFENDANT BUDDY GREGG MOTOR HOMES' MOTION TO DISMISS PREVOST CAR'S CROSS-CLAIM
Plaintiff Chubb Group of Insurance Companies, as subrogee of its insureds, George and Murial Mickelson, has sued three defendants: Buddy Gregg Motor Homes, Inc. ("Buddy Gregg"), Monaco, Inc., and Prevost Car, Inc. ("Prevost"). Buddy Gregg sold a motor coach to the Mickelsons. Three days after the sale the motor coach was destroyed by fire. The complaint identifies Prevost as the manufacturer of the motor coach and Monaco, Inc. as the customizer of the motor coach. Chubb Group asserts product liability claims, as well as claims for negligence and breach of warranties. Chubb Group seeks damages in the amount it paid the insureds under the policy insuring the motor coach.
Defendant Prevost has filed a cross-claim against defendant Buddy Gregg. Prevost's cross-claim alleges that, in the event Prevost is found jointly liable to the plaintiff, Prevost is entitled to indemnification from Buddy Gregg. Buddy Gregg has moved to dismiss Prevost's cross-claim pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted.
Standard for Dismissal
A court considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted must accept as true the complaint's (here the cross-claim's) well-pleaded factual allegations and draw all reasonable inferences in the plaintiff's (or cross-claimant's) favor. E.g., Chakonas v. City of Chicago, 42 F.3d 1132, 1134 (7th Cir. 1994). A defendant is entitled to dismissal of a claim only if it appears beyond doubt that the plaintiff would not be entitled to relief under any set of facts that might be proven within the scope of the complaint's allegations. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Chaney v. Suburban Bus Div. of Regional Transp. Auth., 52 F.3d 623, 626-27 (7th Cir. 1995).
Discussion
Under Indiana law, it is well established that in the absence of an express indemnification agreement, indemnification claims among joint tortfeasors lie only in cases of derivative liability ( e.g., respondeat superior liability) or in cases of constructive liability (by operation of a statute or rule that imposes a non-delegable duty on a third-party). The definitive statement of Indiana law on this question remains Judge Dillin's opinion in McClish v. Niagara Mach. Tool Works, 266 F. Supp. 987 (S.D.Ind. 1967), which granted an employer's summary judgment motion on claims for indemnity and contribution brought by an equipment manufacturer that had been sued by an injured employee. See Sprigler v. Osnabrucker Mettallwerke, 761 F. Supp. 86, 88-90 (S.D.Ind. 1991) (following McClish in similar case governed by comparative fault legislation); Indianapolis Power Light Co. v. Brad Snodgrass, Inc., 578 N.E.2d 669, 670-71 (Ind. 1991) (citing McClish with approval).
Prevost asserts in its brief that McClish has not been "expressly overruled" but that it "has come under sharp criticism." Prevost Br. at 7. In support of this surprising assertion, Prevost has cited only Coca-Cola Bottling Co. — Goshen v. Vendo Co., 455 N.E.2d 370, 373 (Ind.App. 1983). In fact, contrary to Prevost's assertion, the Coca-Cola court did not criticize McClish, but expressly followed and applied the reasoning and holding of McClish on this topic. McClish remains good law, and Prevost has offered no reason to expect Indiana courts do depart from that rule in the foreseeable future.
Since there is no allegation here of an express indemnification agreement between Prevost and Buddy Gregg, indemnification could arise only by implication. In Indiana, the right to indemnity may be implied at common law only in favor of one whose liability to another is solely derivative or constructive, and only against one who caused the party seeking indemnification to become liable. Elcona Homes Corporation v. McMillan Bloedell, Limited, 475 N.E.2d 713, 715 (Ind.App. 1985), citing McClish, 266 F. Supp. at 991; see also Indianapolis Power Light Co., 578 N.E.2d at 671. This case does not involve derivative liability since the doctrine of respondeat superior is not relevant to these parties — a manufacturer seeking indemnification from a downstream retail seller.
The only remaining theory under which Prevost could be entitled to indemnification is by constructive liability. A party is said to be constructively liable when that party is otherwise without fault but a non-delegable duty is imposed upon it by operation of a special statute or rule. In other words, constructive liability may occur only when a statute or rule triggers a party's liability solely by the independent wrongful acts of another party. See Elcona Homes Corp., 475 N.E.2d at 715, citing McClish, 266 F. Supp. at 991; Sprigler, 761 F. Supp. at 89; Indianapolis Power and Light Co., 578 N.E.2d at 671.
Prevost could not become constructively liable to plaintiff Chubb Group unless some statute or rule of law operated to impose liability on Prevost due solely to the wrongful acts of Buddy Gregg. Prevost has pointed to no such statute or rule of law. No rule of law places a non-delegable duty of care on Prevost by which it could be subjected to liability by the independent acts of Buddy Gregg. See Sprigler, 761 F. Supp. at 89, citing McClish, 266 F. Supp. at 991. While each co-defendant may be held liable for its own tortious acts or omissions, there is no basis in this case for holding one defendant liable for the acts or omissions of a co-defendant. Prevost could be found liable under either a negligence or strict liability theory regardless of Buddy Gregg's negligence. Additionally, if Prevost's cross-complaint simply alleges that Buddy Gregg's or Monaco, Inc.'s negligence is the sole cause of plaintiff's injury, such a complaint would not support a claim for indemnity. That argument would be a complete defense to the original action and should be treated as a general denial of liability. See generally McClish, 266 F. Supp. at 989.
In support of its claim for indemnification, Prevost also cites two provisions of Indiana's products liability statute. Despite the lack of any common law right to indemnification, Prevost argues that Indiana Code § 34-20-9-1 creates a right of indemnification. The statute provides: "This article does not affect the right of any person who is found liable to seek and obtain indemnity from any other person whose actual fault caused a product to be defective."
An earlier version of this provision was addressed in Coca Cola Bottling Co. — Goshen v. Vendo Co., 455 N.E.2d 370 (Ind.App. 1983). There, the court affirmed summary judgment dismissing claims for indemnification. The Court of Appeals explained: "While this section by its plain language does not purport to create new rights to indemnity, with equal plainness it expresses the intent that the various limitations contained therein shall not bar an otherwise valid claim to indemnity." 455 N.E.2d at 374 (analyzing products liability statute in context of indemnification and citing McClish analysis with approval). This interpretation applies to the recodified version in Ind. Code § 34-20-9-1. If Prevost had an independently valid indemnification claim, then this statute would simply permit Prevost to proceed with such a claim but the statute does not create any new indemnification rights.
The Coca-Cola court interpreted former Ind. Code § 33-1-1.5-6. Technical differences between the current language of § 34-20-9-1 and old § 33-1-1.5-6 do not affect the court's analysis.
Prevost also relies on Indiana Code § 34-20-7-1, which provides that when multiple defendants are found liable in a product liability action, one defendant is not liable for more than its amount of fault. Additionally, once liability has been apportioned between multiple defendants, one defendant may not be held jointly liable for any damages that were attributed to another defendant. Prevost claims that this provision also supports an independent right to indemnification in this case. However, Prevost's reliance on Indiana Code § 34-20-7-1 is misplaced. In fact, this provision could serve to protect Prevost in the event that each defendant is found liable to the plaintiff.
If Prevost and Buddy Gregg are both found liable to the plaintiff and fault is apportioned between them, then Prevost could not be held jointly liable for those damages attributed to Buddy Gregg. Therefore, this statute in no way holds Prevost responsible for any of Buddy Gregg's liability. In fact, it ensures that such a result will not occur.
Conclusion
Absent an express contract, Indiana common law permits implied indemnification between joint-tortfeasers only under narrow exceptions. Prevost's claim does not qualify for an exception because there is no state of facts under which Prevost's liability to the plaintiff could be due solely to the independent acts of Buddy Gregg. Furthermore, the statutes invoked by Prevost do not create a new right to indemnification among joint tortfeasors. Prevost's cross-claim against Buddy Gregg is hereby dismissed for failure to state a claim upon which relief can be granted.
So ordered.