Causes of Action: Third party indemnity

Third party indemnity is always a bothersome concept with terms such as active-passive, primary-secondary, etc. entering into the lexicon.  Recent nonpublished decision entitled Greenwell v. Lowes Home Centers, COA, NPO, 7/27/2012, wrestles with this issue within the context of a collision in the parking lot and third-partying the parking lot owner for contributing to the collision because of the negligent installation of the traffic light (failure to have tether on light which was swinging in the wind at time of collision).

Basic facts is Barlow was injured in collision and sued Greenwell nearly 25 months after the collision.  No indication in decision whether complaint included Lowes, but since this was a third-party claim one can expect Lowes was now added as a party.  Trial court dismissed indemnity claim which was affirmed on appeal.  Greenwell also raised issue of error relating to apportionment and contribution, but these issues were not addressed by the judge in his order which will now be addressed when returned to the trial court.

Greenwell contends that the circuit court erred by dismissing his third-party indemnity claim against Lowe’s. Specifically, Greenwell contends that Lowe’s negligently installed the traffic light by failing to install a tether thereupon and that the wind caused the signal heads on the traffic device to swing, resulting in the obstruction of the traffic light from his view at the time of the accident. Under these facts, Greenwell maintains that Lowe’s was the active tortfeasor, and he was the passive tortfeasor. Thus, Greenwell claims entitlement to indemnity from Lowe’s.

Indemnity is a firmly entrenched principle in our common law and “is available to one exposed to liability because of the wrongful act of another with whom he/she is not in pari delicto [in equal fault].” Degener v. Hall Contracting Corp., 27 S.W.3d 775, 780 (Ky. 2000). Indemnity is an equitable principle and is based upon the theory “that where one party, whose fault is passive or secondary, incurs liability because of another party, whose fault is active or primary, the passive party should be allowed to recover from the active party for the liability paid.” 1 Comparative Negligence Manual § 9:14 (3d ed. 2012). In Kentucky, common law indemnity has been recognized under two “classes of cases”:

The cases in which recovery over is permitted in favor of one who has been compelled to respond to the party injured are exceptions to the general rule, and are based upon principles of equity. Such exceptions obtain in two classes of cases: (1) Where the party claiming indemnity has not been guilty of any fault, except technically, or constructively, as where an innocent master was held to respond for the tort of his servant acting within the scope of his employment; or (2) where both parties have been in fault, but not in the same fault, towards the party injured, and the fault of the party from whom indemnity is claimed was the primary and efficient cause of the injury.

Degener, 27 S.W.3d at 780 (quoting Louisville Ry. Co. v. Louisville Taxicab & Transfer Co., 256 Ky. 827, 77 S.W.2d 36, 39 (1934)).

In this appeal, Greenwell asserts he is entitled to indemnity under the second class as “both parties have been in fault … and the fault of the party from whom indemnity is claimed was the primary and efficient cause of the injury.” See Degener, 27 S.W.3d at 780. Greenwell asserts that both he and Lowe’s are atfault or were negligent in causing Barlow’s injury but that Lowe’s negligence is the primary cause of the injury. Consequently, Greenwell alleges that the circuit court improperly rendered summary judgment dismissing his claim of indemnity against Lowe’s. For the foregoing reasons, we are compelled to disagree.

* * *

In this case, if we view the facts most favorable to Greenwell, it appears that Lowe’s contracted with others to construct the traffic light. Despite plans providing for a tether wire on the traffic light, no tether was fixed to the traffic light. On the day of the accident, there was evidence the wind was blowing the traffic light back and forth. Greenwell testified that he never saw the traffic light before the accident. The accident occurred at a four-way intersection which was heavily traveled. Immediately before the accident, Greenwell admitted to seeing the intersection and the traffic in the intersection but asserts he did not see Barlow’s vehicle before he hit it. Greenwell’s brother, a passenger in the vehicle, spotted the traffic light and Barlow’s vehicle seconds before the accident.

Viewing the facts most favorable to Greenwell, the absence of a tether on the traffic light may have been a contributing cause of the accident, and Lowe’s may have been negligent in so constructing the traffic light. If so, both Lowe’s and Greenwell could be considered tortfeasors in pari delicto or active tortfeasors. See City of Louisville v. Louisville Ry. Co., 156 Ky. 141, 160 S.W. 771 (1913). However, under no scenario of provable facts would Greenwell’s purported negligence be degraded to passive thus entitling him to indemnity. See id.

Accordingly, we are of the opinion that the circuit court properly rendered summary judgment dismissing Greenwell’s indemnity claim against Lowe’s.

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