Summary
In Hartman v Century Truss Co, 132 Mich. App. 661, 665-666; 347 N.W.2d 777 (1984), this Court held that no right to common-law indemnification had been established where a jury found that the alleged indemnitor was not liable for any wrongdoing.
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Docket No. 69774.
Decided March 6, 1984.
Sopt Gorny (by John F. Sopt), for Erb Lumber Company.
Harvey, Kruse, Westen Milan, P.C. (by Thomas R. Bowen), for Century Truss Company.
This appeal arises out of a suit by plaintiffs Mark and Nancy Hartman, not parties to this appeal, against defendant and cross-plaintiff Erb Lumber Company, and defendant and cross-defendant Century Truss Company. Plaintiff Mark Hartman, while working at a construction site, was blinded in one eye by a loose nail in a roof truss. Plaintiffs' complaint alleged that Century negligently manufactured the truss, that Erb negligently failed to properly inspect the truss, and that both Century and Erb were liable for breach of warranty of merchantability. Erb filed a cross-complaint against Century, claiming that Erb acted only as a broker for the sale of the truss manufactured by Century and seeking common-law indemnification. After all the proofs were in, but before the jury had reached a verdict, the court granted Erb a directed verdict for indemnification "together with any costs or attorney fees allowed to be taxed". The jury then returned a verdict of no cause of action in favor of both Erb and Century. Subsequently, Erb moved for taxation of costs and attorney fees, which the court denied in the order from which Erb now appeals.
The sole question before us is whether Erb is entitled to tax costs and attorney fees against Century based on the directed verdict for indemnification granted Erb, despite the fact that ultimately the jury returned a verdict of no cause of action as to both Erb and Century. We find that the court properly denied Erb's motion to tax costs and attorney fees.
Indemnification may be based on three possible sources: an express contract, an implied contract, or the common law. Skinner v D-M-E Corp, 124 Mich. App. 580, 584; 335 N.W.2d 90 (1983). In the instant case, Erb relied on the common-law right to indemnification. A party seeking common-law indemnity must show freedom from personal fault, that is, freedom from active or causal negligence; it must show that the active negligence is attributable solely to another whereas its own liability arises by operation of law, thus making it only passively negligent. Langley v Harris Corp, 413 Mich. 592, 597-598; 321 N.W.2d 662 (1982); Dale v Whiteman, 388 Mich. 698, 705-706; 202 N.W.2d 797 (1972); Peeples v Detroit, 99 Mich. App. 285, 292; 297 N.W.2d 839 (1980).
A party entitled to common-law indemnification is, as part of that right, entitled to recover costs and attorney fees incurred in its defense of the primary litigation, although it is not entitled to recover those expenses incurred in establishing its right to indemnification. Warren v McLouth Steel Corp, 111 Mich. App. 496, 507-509; 314 N.W.2d 666 (1981), lv den 417 Mich. 941 (1982); Hayes v General Motors Corp, 106 Mich. App. 188, 200-201; 308 N.W.2d 452 (1981). Thus, in the instant case, if Erb is entitled to indemnification, it is entitled, as a corollary to that right, to the costs and attorney fees incurred in defending the suit brought by plaintiffs. We will assume that Erb did satisfy the prerequisite of showing that it was free from active or causal negligence, since Century does not argue otherwise on appeal. Even so, however, we find that any right to indemnification which Erb may have had on the basis of the court's directed verdict, granted before the jury's verdict was taken, vanished when the jury subsequently returned its verdict of no cause of action as to Century.
Common-law indemnity "rests upon the equitable principle of a right to restitution". Peeples, supra, p 292. The theory underlying common-law indemnity has been summarized as follows:
"`It is a well-recognized rule that an implied contract of indemnity arises in favor of a person who without any fault on his part is exposed to liability and compelled to pay damages on account of the negligence or tortious act of another, the former having a right of action against the latter for indemnity * * *.' (42 CJS, § 21, p 596.)
"This right of indemnity is based on the principle that everyone is responsible for his own negligence * * *. It exists independently of statute, and whether or not contractual relations exist between the parties, and whether or not the negligent person owed the other a special or particular legal duty not to be negligent.' (42 CJS, § 21, p 597)." Dale, supra, pp 705-706. (Emphasis added.)
As reflected in the above, indemnification is proper only where the alleged indemnitor is found to have engaged in some wrongdoing. Here, the jury found that Century was not liable for any wrongdoing. Also, it would contravene notions of equity to hold Century responsible for payment of Erb's costs and attorney fees given the jury's determination that plaintiffs' suit against Century was without merit. Erb was forced to defend against plaintiffs not because of any wrongful conduct on Century's part, but rather simply because plaintiffs filed suit.
Although Erb claims that Century was responsible for wrongdoing in that Century failed to take on Erb's defense against plaintiffs' suit, this contention is groundless since Century had no duty to defend Erb. Erb points to no implied or express contractual promise by Century to defend Erb in a suit such as that brought by plaintiffs. Finally, although Erb suggests that the court violated its own order directing a verdict for Erb, that order provided that Erb was entitled to "any costs or attorney fees allowed to be taxed" as part of its right to indemnification. Since Erb ultimately failed to establish any right to indemnification, given the verdict of no cause of action against Century, there are no costs and attorney fees which Erb is allowed to tax against Century.
Affirmed. Costs to appellee.