Skinner v. Reed-Prentice Division Package MacHinery Co.

374 N.E.2d 437, 70 Ill. 2d 1, 15 Ill. Dec. 829

• Court: Illinois Supreme Court
• Decided: March 1, 1978
• Docket: 48757
• Status: Published

Opinions

MR. JUSTICE GOLDENHERSH

delivered the opinion of the court:

Plaintiff, Rita Rae Skinner, a minor, by Virginia Skinner, her mother and next friend, filed this action in the circuit court of Cook County seeking to recover damages for personal injuries suffered as the result of the alleged malfunction of an injection molding machine manufactured by defendant, Reed-Prentice Division Package Machinery Co. (hereafter manufacturer). The manufacturer filed a third-party complaint seeking contribution from the third-party defendant, Hinckley Plastic, Inc. (hereafter employer), by whom plaintiff was employed at the time of her injuries. The circuit court allowed the employer’s motion to dismiss the third-party complaint, the appellate court affirmed (40 111. App. 3d 99), and we allowed the manufacturer’s petition for leave to appeal. The pleadings are adequately reviewed in the appellate court opinion, and it suffices here to state that plaintiff seeks to recover on the basis of strict liability in tort while the third-party complaint alleges negligence on the part of the employer. The relief asked by the manufacturer in its third-party complaint is “that if judgment be entered in favor of the plaintiff and against it that judgment be entered against the third party defendant and in favor of third party plaintiff in such amount, by way of contribution, as would be commensurate with the degree of misconduct attributable to the third party defendant in causing plaintiff’s injuries.”

In its dismissal order the circuit court observed that in Gertz v. Campbell, 55 Ill. 2d 84, this court “indicated that it might adopt the New York rule, because it stated, citing the Dole case [Dole v. Dow Chemical Co. (1972), 30 N.Y.2d 143, 282 N.E. 286, 331 N.Y.S.2d 382] ‘to illustrate, there can and should be a continuing search for better solutions. The Court of Appeals of New York has recently supplanted this active-passage negligence criteria from indemnitee with one founded on equitable principles.’ ” It concluded, however, “that there is no decision in this state allowing contribution under the facts pleaded in the third party complaint.” In affirming the judgment, the appellate court concluded that “a decision to apply theories of contribution in the instant case would require substantive and procedural formulations beyond the authority of this court” and that the issue presented was “the type of issue which should be decided by the highest court of this State ***.” 40 Ill. App. 3d 99, 104.

The manufacturer argues that no decision of this court prohibits contribution between tortfeasors; that where the tort was not intentionally committed, sound public policy requires that contribution between tortfeasors be permitted; that a manufacturer held liable on the basis of strict liability in tort should have a right of contribution against others who contributed to cause the injuries; and that if this court should adopt a rule of contribution, it should be based on the relative degree of fault rather than on the basis of equal apportionment among the number of wrongdoers. The employer argues that the long-established rule in this State is that there is no right of contribution among tortfeasors; that the only exception to the general rule is that a “passive” tortfeasor may obtain indemnity from an “active” tortfeasor; and that a manufacturer held strictly liable in tort cannot seek indemnity from the employer for the reason that public policy requires that the manufacturer’s liability be considered “active.”

This court’s holdings concerning indemnity and contribution and the allocation among tortfeasors of the economic loss resulting from injuries have been much discussed by the bench and bar. (See, e.g., Study Committee Report on Indemnity, Third Party Actions and Equitable Contributions, 1976 Report of the Illinois Judicial Conference; Report of Committee on Comparative Negligence, 1964 Report of the Illinois Judicial Conference 110; Moroni v. Intrusion-Prepakt, Inc., 24 Ill. App. 2d 534; Sargent v. Interstate Bakeries, Inc., 86 Ill. App. 2d 187; Zaremski, Expansion of Third Party Recovery: Common Law Indemnity, Contribution, Or ?, 63 Ill. B.J. 684 (1975); Kissel, Theories of Indemnity As Related to Third Party Practice, 54 Chi. B. Rec. 157 (1973); Polelle, Contribution Among Negligent Joint Tortfeasors in Illinois: A Squeamish Damsel Comes of Age, 1 Loy. Chi. L.J. 267 (1970); Feirich, Third-Party Practice, 1967 U. Ill. L.F. 236.) In its report submitted at the 1976 Judicial Conference, the Study Committee on Indemnity, Third Party Actions and Equitable Contributions presented a comprehensive review of the historic development of the law and its application to various types of litigation and concluded that the present rule “is harsh and inequitable in operation” and “has resulted in a great deal of judicial effort in expanding the concept of indemnity creatively in order to avoid the harsh result inherent in the rule.” It unanimously recommended the adoption of the principle of contribution among joint tortfeasors and recommended that liability among joint tortfeasors “be apportioned on the basis of their pure relative fault.”

As the court, quoting from Prosser, Torts 278 (3d ed. 1964), observed in Suvada v. White Motor Co., 32 Ill. 2d 612 , 624: “There is an important distinction between contribution, which distributes the loss among the tortfeasors by requiring each to pay his proportionate share, and indemnity, which shifts the entire loss from one tort feasor who has been compelled to pay it to the shoulders of another who should bear it instead.” In Nelson v. Cook, 17 Ill. 443, an action by a sheriff against a judgment creditor to recover the sum he was compelled to pay for the conversion of another’s property, this court, considering the distinction for the first time, said: “The principle laid down in Merryweather v. Nixan [(1799), 101 Eng. Rep. 1337], 8 Term R. 186, that there is no right of contribution as between tort-feasors, or trespassers, has been, and still is, recognized as unquestionable law. But this does not affect the right of indemnity where a right of indemnity exists.” (17 Ill. 443, 449.) Based on the facts before it the court held that the sheriff had no right of implied indemnity.

Concerning Merryweather, the English authority upon which the court relied, the author of a frequently cited law review article said:

“It is singularly unfortunate, and has led to misunderstanding, that Merryweather v. Nixan should have been continually treated as stating the ‘general rule.’ As a matter of fact that case states not the rule, but the exception. The general rule is that among persons jointly liable the law implies an assumpsit either for indemnity or contribution, and the exception is that no assumpsit, either express or implied, will be enforced among wilful tort-feasors or wrongdoers.

* * *

In considering the facts in Merryweather v. Nixan, and in applying that decision, it is important to bear in mind that the meaning of the word ‘tort’ at the time of the decision in 1799 was limited and narrow. None of the early writers, such as Bacon, accurately defined torts, but the actions which they treat as torts are practically all actions such as batteries, slanders, etc., which were, of course, wilful or intentional wrongs. At that time the word ‘tort’ had not come to be applied to the vast number of quasi delicts now known and classified as actions sounding in tort and arising out of mere negligence or unintentional injury. The classification of such actions as technical torts is of comparatively recent date. It is, therefore, vital to a correct understanding of the decision, that this limited meaning of the word ‘tort’—i.e., a wilful or intentional wrong—be remembered.” Reath, Contribution Between Persons Jointly Charged for Negligence—Merryweather v. Nixan, 12 Harv. L. Rev. 176, 177-78 (1898).

In Johnson v. Chicago & Pacific Elevator Co., 105 Ill. 462, in which it next considered contribution among tortfeasors, the court affirmed the denial of an application to be joined as a defendant made by an individual who alleged an interest in the action because he would be liable to contribute to the judgment if the defendant were held liable. The court, without citation of authority, said: “ [T] here is no right of contribution between wrongdoers.” 105 Ill. 462, 468.

In Farwell v. Becker, 129 Ill. 261, the court was presented for the first time, and until this case the only time, with the precise question whether there is a right of contribution among tortfeasors. In Farwell a number of creditors, by attachment, without knowledge of any wrongdoing, converted the chattels of a third person. One creditor, who was forced to pay the entire claim, was held entitled to contribution in equal shares from the other creditors. In its opinion the court reviewed Merryweather and the decisions of other State courts and concluded that the rule prohibiting contribution among tortfeasors was confined to intentional wrongdoers, or wrongdoers presumed to know that their act was unlawful. Farwell has not been cited, followed or overruled in subsequent decisions of this court.

Dean Prosser, in discussing the application by courts in this country of the rule of Merryweather v. Nixan states: “The early American cases applied the rule against contribution to cases of wilful misconduct, but refused to recognize it where the tort committed by the claimant was a matter of negligence or mistake. But once the door was thrown open to joinder in one action of those who had merely caused the same damage, the origin of the rule and the reason for it were lost to sight. The great majority of our courts proceeded to apply it generally, and refused to permit contribution even where independent, although concurrent, negligence had contributed to a single result.” Prosser, Torts sec. 50, at 306 (4th ed. 1971).

In Consolidated Ice Machine Co. v. Keifer, 134 Ill. 481, the court joined “the great majority” of courts described by Dean Prosser that, while permitting joinder of alleged joint tortfeasors, continued to proscribe contribution. In Consolidated, holding that two corporations whose concurrent negligence had caused the death of a laborer were properly joined as defendants, the court, without citation of authority, said: “There can, in such case, be no apportionment of damages as between the several parties whose negligent acts and conduct have contributed to the injury. Nor can one of the wrongdoers compel contribution from the other.” (134 Ill. 481, 493.) Except for Wanack v. Michels, 215 Ill. 87, and Skala v. Lehon, 343 Ill. 602, the court has not qualified the statement that there is no right of contribution among tortfeasors. (See John Griffiths & Son Co. v. National Fireproofing Co., 310 Ill. 331, 339; Chicago & Illinois Midland Ry. v. Evans Construction Co., 32 Ill. 2d 600, 603; Miller v. DeWitt, 37 Ill. 2d 273, 289) Muhlbauer v. Kruzel, 39 Ill. 2d 226; Reese v. Chicago, Burlington & Quincy R.R. Co., 55 Ill. 2d 356; Carver v. Grossman, 55 Ill. 2d 507, 510.) In Wanack, which involved an intentional tort, the court stated that the noncontribution rule applied only to intentional wrongdoing. (215 Ill. 87, 94.) In Skala the court said: “It is true, as a general rule, that the right of contribution does not exist as between joint tort feasors where there is concerted action in the commission of the wrong. Where, however, there is no concerted action the rule does not apply, as the parties in such case are not in pari delicto as to each other, and as between themselves their rights may be adjusted in accordance with the principles of law applicable to the relation in fact existing between them.” 343 Ill. 602, 605.

Distinguishable from the case before us in that the alleged misconduct of the third-party defendant was subsequent to, rather than concurrent with, that of the third-party plaintiff, but illustrative of the “continuing search for better solutions,” is the case of Gertz v. Campbell, 55 Ill. 2d 84. Plaintiff Gertz, a minor, filed suit against Campbell alleging that he was injured by reason of Campbell’s negligent operation of an automobile. Campbell filed a third-party action against Dr. H. M. Snyder, the physician who treated Gertz, alleging malpractice in the treatment and seeking indemnity for any damages which might be assessed against Campbell under Gertz’ complaint but which were attributable to the doctor’s malpractice. Relief sought in the third-party action was “indemnity and judgment against Dr. Snyder for the amount of damages caused to the plaintiff as the result of the new injury or aggravation of the plaintiff’s existing injuries caused by the neglect and failure of Dr. Snyder.” The court, after noting the distinction between contribution and indemnity, and recognizing that under Illinois case law there was no contribution between tortfeasors, concluded that Campbell did not seek indemnity for the total recovery for the plaintiff, but sought indemnity for the damages attributable to the fault of Snyder, and held that Campbell “had a right to bring the action to be indemnified for the damages to the plaintiff attributable to the malpractice.” 55 111. 2d 84, 92.

Although this court has earlier recognized that under appropriate circumstances there existed the right of indemnification among tortfeasors (Nelson v. Cook, 17 Ill. 443), in John Griffiths & Son Co. v. National Fireproofing Co., 310 Ill. 331, it was presented, for the first time, the question whether a written indemnification agreement between two parties, both liable under the Structural Work Act, was against public policy. In holding that the agreement was not against public policy, the court, at some length, discussed the concept of active-passive negligence as applied in other jurisdictions as the basis for the right of implied indemnity between tortfeasors.

In Gulf, Mobile & Ohio R.R. Co. v. Arthur Dixon Transfer Co., 343 Ill. App. 148, citing John Griffiths & Son Co. as authority, the appellate court expanded the concept of implied indemnification among tortfeasors by applying the active-passive negligence doctrine. The rule as discussed and applied by many appellate court opinions was finally recognized by this court in Chicago & Illinois Midland Ry. Co. v. Evans Construction Co., 32 Ill. 2d 600, and later in Miller v. DeWitt, 37 Ill. 2d 273,Muhlbauer v. Kruzel, 39 Ill. 2d 226, Carver v. Grossman, 55 Ill. 2d 507, and Harris v. Algonquin Ready Mix, Inc., 59 Ill. 2d 445.

This court has candidly recognized that the concept of implied indemnity, based on the active-passive negligence doctrine, “has been utilized to mitigate the harsh effects that could result from an inflexible application of this judicially created bar to contribution.” (Muhlbauer v. Kruzel, 39 Ill. 2d 226, 230.) The application of this all or nothing liability based on terms of active-passive negligence, which “have not obtained precise judicial definition” (see Carver v.Grossman, 55 Ill. 2d 507, 511), to the ever increasing situations where there is some fault attributable to both parties produces harsh effects without uniformity of result.

A technique recently employed by the bar to circumvent the noncontribution rule has been the use of the loan receipt, approved by this court in Reese v. Chicago, Burlington & Quincy R.R. Co. 55 Ill. 2d 356. This, too, involves the application of an all or nothing rule of liability to situations where some fault is attributable to both parties, and also raises other problems. See Harris v. Algonquin Ready Mix, Inc., 59 Ill. 2d 445; Gatto v. Walgreen Drug Co., 61 Ill. 2d 513; Michael, “Mary Carter” Agreements in Illinois, 64 Ill. B.J. 514 (1976);Duree, Has The Loan Receipt Agreement Established Reverse Comparative Negligence Or Indemnity Among Active Tortfeasors In Illinois?, 64 Ill. B.J. 236 (1975); Freedman, The Expected Demise of “Mary Carter”: She Never Was Well!, 1975 Ins. L.J. 602; Note, The Mary Carter Agreement-Solving the Problems of Collusive Settlements in Joint Tort Actions, 47 S. Cal. L. Rev. 1393 (1974).

Having recognized that the application of the no-contribution rule causes unjust results and having stated that the active-passive theory of indemnity was designed to mitigate the harsh effects of its application, the only reason found in the opinions of this court for its continued existence appears in Reese, where it was said that “the principal objection to contribution [is] use of the courts for relief of wrongdoers” (55 Ill. 2d 356, 363-64). As noted earlier in this opinion, when Merryweather was decided, the term “tortfeasors” meant intentional wrongdoers, not the negligent and “strict liability” tortfeasors of today. One of the findings of the Study Committee on Indemnity, Third Party Actions and Equitable Contributions in its report presented to the 1976 Judicial Conference is that the no-contribution rule does not save judicial time and energy in defining the degree of culpability of joint tortfeasors because the court must search for a “qualitative distinction between the negligence of the two tortfeasors” (see Chicago & Illinois Midland Ry. Co. v. Evans Construction Co., 32 Ill. 2d 600, 603) under the active-passive doctrine. It also presents opportunity for fraud and collusion among the parties, necessitating further judicial efforts in monitoring their out-of-court behavior. Other objections to contribution have been rejected by almost every writer on the subject. See Comment, The Allocation of Loss Among Joint Tortfeasors, 41 S. Cal. L. Rev. 728 (1968), and cases and law review articles cited therein.

We are of the opinion that there is no valid reason for the continued existence of the no-contribution rule and many compelling arguments against it. We agree with Dean Prosser that “ [t] here is obvious lack of sense and justice in a rule which permits the entire burden of a loss, for which two defendants were equally, unintentionally responsible, to be shouldered onto one alone, according to the accident of a successful levy of execution, the existence of liability insurance, the plaintiff’s whim or spite, or his collusion with the other wrongdoer, while the latter goes scot free.” Prosser, Torts sec. 50, at 307 (4th ed. 1971).

The employer argues that the abolition of the no-contribution rule would produce substantial change in the fabric of tort law and substantial changes are best left to the General Assembly. Where this court has created a rule or doctrine which, under present conditions, we consider unsound and unjust, we have not only the power, but the duty, to modify or abolish it. For the purposes of the motion to dismiss, the allegations of fact in the third-party complaint must be taken as true (Acorn Auto Driving School, Inc. v. Board of Education, 27 Ill. 2d 93, 96), and on these facts the governing equitable principles require that ultimate liability for plaintiff’s injuries be apportioned on the basis of the relative degree to which the defective product and the employer’s conduct proximately caused them. Suvada v. White Motor Co., 32 Ill. 2d 612, 623; Molitor v. Kaneland Community Unit District No. 302, 18 Ill. 2d 11, 25.

Citing Texaco, Inc. v. McGrew Lumber Co., 117 Ill. App. 2d 351, Kossifos v. Louden Machinery Co., 22 Ill. App. 3d 587, and Burke v. Sky Climber, Inc., 57 Ill. 2d 542, the employer argues that a defendant held strictly liable in tort is precluded from seeking contribution “because public policy requires that its liability to an original plaintiff be considered active” and that the duty imposed in strict liability is more stringent than in cases involving negligence. We do not agree. The public policy considerations which motivated the adoption of strict liability (see Suvada v. White Motor Co., 32 Ill. 2d 612) were that the economic loss suffered by the user should be imposed on the one who created the risk and reaped the profit, including everyone from the manufacturer on through to the seller or any one of them. When the economic loss of the user has been imposed on a defendant in a strict liability action the policy considerations of Suvada are satisfied and the ordinary equitable principles governing the concepts of indemnity or contribution are to be applied. Thus, in Liberty Mutual Insurance Co. v. Williams Machine & Tool Co., 62 Ill. 2d 77, where the assembler of the product, who had settled strict liability actions against it, filed an indemnity action against the producer of the defective component part, the court adopted a rule for indemnification in the manufacturer-distributor-seller chain. After noting that the policy reasons for adopting strict liability in Suvada were not the same as those determining the ultimate liability in the manufacturer-distributor chain, the court, in effect, put the assembler in the shoes of the user and the producer into the shoes of the assembler in order for the assembler to shift the full economic loss to the producer. The court said: “In our judgment, the rule we are adopting is a logical and necessary [and equitable] extension of the principles enunciated in Suvada and Williams. It does not impose an undue burden on defendant and those similarly situated, for it is they who originated the defective product. Nor does it make them absolute insurers of the safety of their products. Plaintiffs in such indemnity actions must still prove the necessary elements of a strict liability action—that the product contained a defective condition which existed at the time it left defendant’s control, rendering the product unreasonably dangerous and proximately causing the injury resulting in plaintiff’s liability to the injured party. [Suvada theory of strict liability from seller through manufacturer.] And while proof of an indemnitee’s negligence will not serve to bar a strict liability indemnity claim, proof that he misused the product or assumed the risk of the defect will be an effective bar to recovery.” 62 Ill. 2d 77, 84-85.

Misuse of the product or assumption of the risk by a user will serve to bar his recovery (Williams v. Brown Manufacturing Co., 45 Ill. 2d 418), and indemnity is not available to one who misuses the product or assumes the risk of its use (Liberty Mutual Insurance Co. v. Williams Machine & Tool Co., 62 Ill. 2d 77). We are of the opinion that if the manufacturer’s third-party complaint alleges that the employer’s misuse of the product or assumption of the risk of its use contributed to cause plaintiff’s injuries, the manufacturer has stated a cause of action for contribution. The fact that the employee’s action against the employer is barred by the Workmen’s Compensation Act (Ill. Rev. Stat. 1975, ch. 48, pars. 138.5, 138.11) would not preclude the manufacturer’s third-party action against the employer for indemnification (Miller v. DeWitt, 37 Ill. 2d 273) and should not serve to bar its action for contribution.

We hold that the third-party complaint, although pleaded in terms of negligence, alleges misuse of the product and assumption of risk on the part of the employer and states a cause of action for contribution based on the relative degree to which the defective product and the employer’s misuse of the product or its assumption of the risk contributed to cause plaintiff’s injuries. For the reasons stated, the judgments of the appellate and circuit courts are reversed and the cause is remanded to the circuit court of Cook County for further proceedings consistent with this opinion.

Reversed and remanded.