Opinion
Civil Action No. 02-2632-CM.
February 17, 2005
MEMORANDUM AND ORDER
On December 18, 2002, plaintiff Robert J. Pound brought several claims against several defendants regarding the sale and distribution of a pesticide called Black Knight. In one such claim, plaintiff brought suit under the citizen suit provision of the Clean Air Act, 42 U.S.C. § 7604(a)(1), alleging violations of emissions standards set forth under the Clean Air Act, 42 U.S.C. § 7401 et seq. On March 10, 2004, the court granted plaintiff's Motion for Partial Summary Judgment against defendants Airosol Company, Inc. ("Airosol") and Chad Brown, Robyn Markland, Pro Exotics, Inc., and Pro Exotics Reptiles, Inc. ("Separate Defendants") finding that, as a matter of law, these defendants' sale and distribution of Black Knight violated the Clean Air Act. Subsequent to the court's ruling, Separate Defendants brought a cross-claim against Airosol seeking indemnification from liability resulting from the court's Clean Air Act judgment. Pending before the court is Defendant Airosol Company, Inc.'s Motion for Summary Judgment Against Separate Defendants (Doc. 206) governing Separate Defendant's cross-claim for indemnification.
I. Standard
Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact" and that it is "entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). An issue of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Id. (citing Anderson, 477 U.S. at 248).
The moving party bears the initial burden of demonstrating an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Id. at 670-71. In attempting to meet that standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence for the other party on an essential element of that party's claim. Id. at 671 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
Once the movant has met this initial burden, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256; see Adler, 144 F.3d at 671 n. 1 (concerning shifting burdens on summary judgment). The nonmoving party may not simply rest upon its pleadings to satisfy its burden. Anderson, 477 U.S. at 256. Rather, the nonmoving party must "set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Adler, 144 F.3d at 671. "To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein." Id.
Finally, the court notes that summary judgment is not a "disfavored procedural shortcut," rather, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action." Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).
II. Analysis
The court first notes that the scope of Airosol's summary judgment motion seems to govern all of plaintiff's claims against Airosol and Separate Defendants. However, Separate Defendants' cross-claim sought indemnity from Airosol for Clean Air Act violations, but did not seek indemnity on any other basis. Therefore, the court finds that the scope of Airosol's summary judgment motion is limited to Separate Defendants' cross-claim against Airosol for indemnity from liability for Clean Air Act violations.
Separate Defendants' cross-claim against Airosol requested indemnification generally. The Kansas Supreme Court has clearly set forth the law in Kansas regarding indemnification:
There are two traditional situations in which claims of indemnity are allowed. The first occurs where there is an expressed contract of indemnity, such as a "hold harmless" agreement. The second occurs where a contract of indemnity may be implied when one is compelled to pay what another party ought to pay. The implied or constructive liability usually arises when one personally, without fault, is made to pay for a tortious act of another. The person paying has a right of action against the person at fault.Haysville U.S.D. No. 261 v. GAF Corp., 233 Kan. 635, 642, 666 P.2d 192 (1983). Because neither party has alleged an express indemnification agreement, Separate Defendants must rely on the theory of implied contractual indemnification.
In order to succeed in its claim for implied contractual indemnity, Separate Defendants must prove that they (1) suffered an actual loss and (2) were completely without fault in their Clean Air Act violation pursuant to this court's March 10, 2004 ruling. See Med James, Inc. v. Barnes, 31 Kan. App. 2d 89, 99, 61 P.3d 86 (Kan.App. 2003) (finding that the statute of limitations on an implied contractual indemnity claim does not arise until the indemnitee suffers an actual loss, and that implied contractual indemnity requires the indemnitee to be without fault); U.S. Fidelity Guar. Co. v. Sulco, Inc., 1997 WL 94221 (D. Kan. Feb. 13, 1997) (stating that in a claim for implied contractual indemnity, "Kansas law requires the plaintiff to be faultless in order to recover"). Under the theory of implied contractual liability, an actual loss is not triggered until "the indemnitee becomes obligated to pay, whether by judgment or settlement." Med James, Inc., 31 Kan. App. 2d at 100.
In support of its summary judgment motion, Airosol first argues that Separate Defendants are not without fault, citing Separate Defendants' advertisements promoting improper use of Black Knight as evidence that Separate Defendants failed to heed warnings from Airosol that Black Knight should not be used on animals. In its response, Separate Defendants argue that they sold Black Knight in reliance on Airosol's representations that Black Knight was a legal product and was thus not in violation of the Clean Air Act.
Significantly, Airosol failed to discuss Separate Defendants' role in the Clean Air Act violations, and also failed to discuss whether Separate Defendants did, in fact, rely on Airosol's alleged representations that Black Knight was a legal product. In fact, in its analysis of Separate Defendants' fault, Airosol does not mention the Clean Air Act. Instead, Airosol focused its arguments regarding Separate Defendants' alleged fault on other claims not encompassed in Separate Defendants' cross-claim.
Furthermore, Separate Defendants included additional facts regarding Separate Defendants' reliance on Airosol's representations that Black Knight complied with the EPA and Clean Air Act in their Response to Airosol's Motion for Summary Judgment, and Airosol did not reply to dispute them. Therefore, the court will view these facts as uncontroverted. See Fed.R.Civ.P. 56. Viewing the facts in the light most favorable to Separate Defendants, Airosol failed to demonstrate that it is entitled to judgment as a matter of law on the issue of whether Separate Defendants were at fault for their Clean Air Act violation.
Airosol also argues that Separate Defendants have not suffered any loss because, although summary judgment was entered against them, Separate Defendants have yet to become obligated to pay a monetary judgment. Separate Defendants argue that their claim for indemnification is timely and cite the Federal Rules of Civil Procedure, which allow for a claim of indemnification to be asserted at the time of the action out of which the cause for indemnification arises. Fed.R.Civ.P. 13(g). The court finds that, while Separate Defendants' claim for indemnification was timely, the issue of indemnification is not yet ripe because Separate Defendants have not suffered an actual loss. However, should Separate Defendants suffer an actual loss in the future, Separate Defendants may renew their request for indemnification with the court at that time. IT IS THEREFORE ORDERED that Defendant Airosol Company, Inc.'s Motion for Summary Judgment Against Separate Defendants (Doc. 206) is denied because the issue of indemnification is not yet ripe for review.