We often see cross-complaints filed amongst defendants in product liability cases asserting causes of action for contribution, equitable indemnity and declarative relief. They are rarely litigated and are almost never adjudicated.


In Jerry Bailey v. Safeway, Inc. (Case No. A131349 (CA Dist. 1 Ct. App., Sep. 15, 2011)), the California Court of Appeal explored the distinction between equitable indemnity and comparative equitable indemnity arising out of such a cross-complaint.
 
In 2006, Jerry Bailey suffered a severe eye injury while assembling a Cook's Champagne display at a Safeway store. Bailey sued Saint-Gobain containers, Inc. (Saint-Gobain) and Safeway for strict liability design defect under the consumer expectations theory. Bailey also sued Safeway for negligence. Bailey settled the case with Saint-Gobain for $1 million and an assignment of its equitable indemnity rights against Safeway.

The case then proceeded to trial against Safeway alone, under the strict product liability claim and negligence. The jury found Safeway liable under the strict product liability claim, awarding plaintiff $718,915.78. However, the jury found that Safeway "was not negligent or 'at fault'." Because the amount of the settlement exceeded the jury award, the court later entered judgment in favor of Safeway.

Bailey then filed a separate suit against Safeway based on the assigned equitable indemnity claim from Saint-Gobain. The trial court sustained Safeway’s demurrer without leave to amend, and an appeal followed.  Id. at p. 14109.

Equitable Indemnity vs. Comparative Equitable Indemnity
 
"Although product liability defendants are jointly and severally liable to the plaintiff, their liability as among themselves is determined according to comparative equitable indemnity principles. [citation omitted]"  Id. at p. 14110.  "'The doctrine of comparative equitable indemnity is designed to do equity among defendants.' [citation omitted.]"  Id.    

By contrast, "[t]he purpose of equitable indemnification is to avoid the unfairness, under the theory of joint and several liability, of holding one defendant liable for the plaintiff's entire loss while allowing another potentially liable defendant to escape any financial responsibility for the loss." Id. "[E]quitable indemnification is an extension of comparative fault principles which allows parties to seek a division of loss between the wrongdoers in proportion to their relative culpability. [citation omitted]" Id. at p. 14111.

Here, Bailey argued, unsuccessfully, that the jury's determination that Safeway was 100% responsible allowed him to recover, on an equitable indemnity action, all or a portion of Saint-Gobain’s $1 million settlement based on its assignment to him.

The Court Would Not Allow Bailey to Stand in Saint-Gobain’s Shoes

Ultimately, the Court of Appeal invoked the doctrine of collateral estoppel to bar Bailey’s indemnity action. While cautioning that this decision should not be interpreted as precluding an equitable indemnity claim based on strict liability, the court focused on the fact that the jury exonerated Safeway by finding that it was not negligent. This imperative fact, thus, precluded Bailey as Saint-Gobain's assignee from prevailing on an equitable indemnity claim. To hold otherwise would have given rise to an unfair result where the designer and manufacturer of a defective product could recover against a retailer who’s only "sin" was to sell the defective product.
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Consortium Without a Cause?

Posted on June 2, 2011 08:57 by Richard Crites

Can a spouse recover for loss of consortium if he testifies that the marital relationship actually improved after the accident?  He can in California.

On May 26, 2011, the California Court of Appeal issued its decision in Mealy v. B-Mobile, Inc. (2011 DJDAR 7497). 

Background

Plaintiffs Donald Mealy and Adelaide Mealy were born in 1925 and 1927, respectively.  In 1952, Adelaide suffered nearly complete paralysis in both legs and was confined to a wheelchair after battling polio. Nevertheless, she lived an active life, driving a car, working outside the home, and having five children with Donald.  Id.

Beginning in 2000, Adelaide used a lift system to transfer her between her bed, the bathroom, and her wheelchair.  She fell from the lift in 2006, suffering a broken hip.  After a year of recovery, she resumed an independent lifestyle including household chores, cooking, gardening, and travelling.  Id.

In 2008, Adelaide fell from the sling of a replacement lift system.  Unfortunately, her recovery was not as successful as it was in 2006.  Thereafter, Adelaide was unable to perform household services or enjoy leisure activities, and her husband became her fulltime caretaker.  Id.

Trial

During trial, Donald testified that he spent more time with his wife after the accident.  He testified that they love each other even more than they did before the accident.  Finally, he testified that the accident did not hurt his relationship with his wife—“Not a bit.”  Id. at 7497-7498.

Based on this testimony, defendants moved for entry of judgment.  In deciding the issue, the court examined whether partial loss of consortium was a recognized legal theory (discussing Park v. Standard Chem. Way Co. (1976) 60 Cal.App.3d 47, 50-51).  Id. at 7498-7499.  After a brief discussion, the court ruled that partial loss of consortium was like “being a little bit pregnant.”  Finding that plaintiff did not establish complete loss of consortium, judgment was entered in defendants’ favor.  Id.

Analysis on Appeal

The Court of Appeal dismissed the Park Court’s statement regarding partial loss of consortium as dicta.  The court instead relied on the California Supreme Court’s holding in Rodriguez v. Bethlehem Steel Corp. (1974) 12 Cal.3d 382 which “expressly recognized the right to recover damages for the ‘loss or impairment’ of the plaintiff’s rights of consortium, and we see no basis to conclude that a loss of consortium must be so extensive as to be considered complete in order to be compensable.”  Id. at 7499.  

As for Donald’s trial testimony that he and his wife loved each other more after the accident, the Court of Appeal concluded that they were understandable comments of a loving husband.  “Those supportive comments do not negate the tangible impact of his wife’s injury on Donald Mealy and the inevitable loss of conjugal society, comfort, affection, moral support and other noneconomic elements of the marital relationship resulting from his becoming virtually a full-time caregiver for his wife.”  Id.  As such, the trial court was overturned and the case was remanded for a limited trial on damages for loss of consortium.  

About the author, Richard Crites.

 

 

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Personal Jurisdiction Going Nationwide?

Posted on March 10, 2011 03:50 by Richard Crites

On January 11, 2011, the US Supreme Court heard oral arguments in J. McIntyre Machinery v. Nicastro, a case on appeal from the New Jersey Supreme Court, which could have a profound impact on personal jurisdiction analysis. 

In Nicastro, the New Jersey Supreme Court ruled that the state had personal jurisdiction over a foreign product manufacturer with no direct contacts with the state.  Despite the lack of contacts, the court reviewed the US Supreme Court’s last major decision in this area—Asahi Metal Industry Co. v. Superior Court of California 107 S.Ct. 1026 (1987).  In doing so, it focused on Justice Brennan’s liberally construed stream-of-commerce test.  [See this article for a more in depth examination of Nicastro and Asahi.]

Because Asahi was a plurality decision, it raised more questions than it answered with respect to personal jurisdiction analysis.  This lack of clarity allowed the Nicastro court to make statements that should trouble foreign manufacturers who have previously been shielded from liability in many US courts.  For example, the court noted that “the foreign manufacturer knew or reasonably should have known that by placing a product in the stream of commerce through a distribution scheme that targeted a fifty-state market, the product might be purchased by a New Jersey consumer.  (emphasis added.)”  Id. 201 N.J. 48, 52.  As we wait for clarity from the Supreme Court, foreign product manufacturers should be on notice that a powerful defense to being forced to litigate in US courts is under attack. 

For more information on this subject, you are invited to attend Saul Wilensky’s presentation:  “Obligations of and Jurisdiction over Foreign Manufacturers” on April 7, 2011, at the Recreational Products SLG meeting.  If you have not yet done so, please register for DRI’s Product Liability Conference, scheduled for April 6-8, 2011, at the Hilton New Orleans Riverside, New Orleans, Louisiana. 

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Categories: Product Liability | Seminar

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