Fairbanks North Star Borough v. Kandik Construction, Inc. & Associates

823 P.2d 632, 1991 Alas. LEXIS 150, 1991 WL 275185

• Court: Alaska Supreme Court
• Decided: December 27, 1991
• Docket: S-2772
• Status: Published

Opinions

MATTHEWS, Justice,

with whom RABINOWITZ, Chief Justice, joins, dissenting.

A rule of comparative fault should govern this case under which the Borough may obtain partial indemnity from Roen if Roen’s negligence and the Borough’s fault jointly caused the Borough to suffer liability to Kandik. In such case the jury should apportion liability between the Borough and Roen according to their relative degrees of fault.

In Kaatz v. State, 540 P.2d 1037 (Alaska 1975), we rejected the rule of contributory negligence in favor of comparative negligence. Contributory negligence, like the rule adopted by the majority today, is an all or nothing rule. Any fault on the part of the claimant will bar any recovery against another party even though the claimant’s fault might be relatively slight, while the fault of the other party is great. What we said in Kaatz about contributory negligence seems equally applicable to the all or nothing rule adopted by the majority in the present opinion:

[T]he doctrine is inequitable in its operation because it fails to distribute responsibility in proportion to fault.... The basic objection to the doctrine — grounded in the primal concept that in a system in which liability is based on fault, the extent of fault should govern the extent of liability — remains irresistible to reason and all intelligent notions of fairness.

Id. at 1048 (quoting Li v. Yellow Cab Co., 13 Cal.3d 804, 119 Cal.Rptr. 858, 862-63, 532 P.2d 1226, 1230-31 (1975)).

The hardship of the doctrine ... is readily apparent. It places upon one party the entire burden of a loss for which two are, by hypothesis, responsible. The negligence of the defendant has played no less a part in causing the damage; the plaintiff’s deviation from the community standard of conduct may even be relatively slight, and the defendant’s more extreme;....

Id. at 1048 (quoting W. Prosser, Handbook on the Law of Torts § 433 (4th ed. 1971)).

The rule that any degree of fault bars all recovery is an anachronism. Comparative negligence has been in effect in this state since the Kaatz decision. No special problems have been encountered. In the context of joint tortfeasors, the all or nothing common law rule which forbade one joint tortfeasor from obtaining contribution from another was abolished by statute in 1970 with the enactment of the Alaska Uniform Contribution Among Joint Tort-feasors Act. AS 09.16.010-.060 (repealed eff. 3/5/89). Although under this act joint tortfeasors share equally in the common liability rather than according to the comparative fault of each, this system was nonetheless clearly preferable to the all or nothing common law rule.¹ Under current law, joint tortfeasors are liable for that percentage of total damages which accords to the percentage of fault of each. AS 09.17.080(d). The rule that partial fault of a party precludes all loss shifting has thus been clearly rejected by this court and by the Alaska Legislature in the context of tort law. To announce such a rule in the closely related area of implied contracts is to ignore the legal developments of the last two decades.

We have recognized that in certain cases, especially those involving the performance of professional services, identical claims may reasonably be said to arise both in tort and in implied contract. Lee Houston & Associates, Ltd. v. Racine, 806 P.2d 848, 853-54 (Alaska 1991). “ ‘This court should avoid applications of the law which lead to different substantive results based upon distinctions having their source solely in the niceties of pleading and not in the underlying realities.’ ” Id. at 853 (quoting Higa v. Mirikitani, 55 Haw. 167, 517 P.2d 1, 4-5 (1973)). It is therefore appropriate, so far as is possible, to apply rules of law to implied contractual indemnity claims which are similar to those applied to indemnity claims sounding in tort.

If one accepts the conclusion that implied contract claims seeking to shift all or part of a loss to another wrongdoer should be treated similarly to tort claims having the same objective, it is immediately apparent that loss shifting proportional to fault should be allowed under current law because currently a tortfeasor may not suffer a loss which is disproportionate to its fault. AS 09.17.080(d). In my view, loss shifting proportional to fault should also apply to cases, such as the present one, which arose when the Alaska Uniform Contribution Among Joint Tortfeasors Act was in effect, because, as noted, loss shifting proportional to fault is closer to the statutory contribution remedy than no loss shifting at all.

The rule that there can be no partial non-statutory indemnity between concurrently negligent tortfeasors was adopted by this court in Verteos Corp. v. Reichhold Chemicals, Inc., 661 P.2d 619, 626 (Alaska 1983).² It was largely based on the rationale that since the contribution act allowed a partial loss-shifting remedy among joint tortfeasors, any other partial loss-shifting remedy would necessarily conflict with the statutory remedy. This rationale, however, does not apply to partial indemnity claims based on implied contracts since the contribution act has never applied to implied contract cases. The majority opinion’s reliance on the Verteos rule is thus difficult to justify. To repeat, the Verteos rule barred partial non-statutory loss shifting in tort cases because there was a partial statutory loss-shifting remedy. There has never been a partial statutory loss-shifting remedy in implied contract cases, and therefore the rationale of the Verteos rule does not apply to such cases.

In summary, where two parties are at fault and are responsible for an indivisible loss, any rule that provides that one of them must bear the entire loss without the opportunity to shift part of the loss to the other is manifestly unjust. What should happen is that the loss should be shared in proportion to the fault of each party. In accord with this, the trial court should be directed on remand to instruct the jury to apportion the damages which the Borough must pay between the Borough and Roen according to the comparative degree of fault of each.

1 . " 'This act would distribute the burden of responsibility equitably among those who are jointly liable and thus avoid the injustice often resulting under the common law.’" House Judiciary Committee Report, 1970 House Journal 437 (quoting the National Conference’s prefatory note to the Uniform Contribution Among Tortfeasors Act). "[S]haring equally, furnished a rough approximation of a just result. For example, it was certainly preferable when two joint tort-feasors were liable, for them to share equally in paying the damages, than for one to go free simply because the plaintiff elected to recover from the other.” Arctic Structures, Inc. v. Wedmore, 605 P.2d 426, 441 (Alaska 1979) (Boochever, C.J., dissenting).

2 . Vertecs has since been followed in other tort cases. Koehring Mfg. v. Earthmovers of Fairbanks, 763 P.2d 499, 503-04 (Alaska 1988); D.G. Shelter Prods, v. Moduline Indus., 684 P.2d 839, 842 (Alaska 1984).