Vertecs Corp. v. Reichhold Chemicals, Inc.

661 P.2d 619, 1983 Alas. LEXIS 401
CourtAlaska Supreme Court
DecidedMarch 25, 1983
Docket6566
StatusPublished
Cited by37 cases

This text of 661 P.2d 619 (Vertecs Corp. v. Reichhold Chemicals, Inc.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vertecs Corp. v. Reichhold Chemicals, Inc., 661 P.2d 619, 1983 Alas. LEXIS 401 (Ala. 1983).

Opinion

OPINION

MATTHEWS, Justice.

Vertecs Corporation (Vertecs) appeals from a judgment of dismissal following a grant of summary judgment on Vertecs’ crossclaim against co-defendant Reichhold Chemicals, Inc. (Reichhold). The crossclaim sought contribution and indemnity from Reichhold for any liability that Vertecs owed to the plaintiffs in a multi-party action stemming from a fire in Yakutat in 1977 that destroyed a fish processing and cold storage plant. This case squarely presents the issue whether Alaska law should recognize a claim for non-contractual implied indemnity between concurrently negligent tortfeasors. We conclude that it should not, and therefore affirm.

*620 In 1970, the City of Yakutat contracted to have a cold storage plant built at Yaku-tat, Alaska. Late that year, while the plant was still under construction, moisture was condensing on exposed steel portions of the interior of the roof of the building because of the cold weather outside and the heat inside the building. This condensation was hindering completion of the building’s interior. KPFF, the firm that designed the building, asked general contractor Chris Berg, Inc. to propose methods of alleviating the condensation problem. Architect Albert Kelly ultimately chose an interior application of polyurethane foam insulation from among the various alternatives, largely because foam insulation was the cheapest way to solve the problem. After a series of negotiations, Chris Berg subcontracted with Vertecs to install the needed foam insulation. Reichhold, a supplier of the components that are mixed and applied to form polyurethane foam insulation, provided a portion of the foam that Vertecs applied in Yakutat. Vertecs’ employees substantially completed the installation of the insulation by late January 1971.

Following the plant’s completion, the City leased it to various tenants. On May 13, 1977, while the Yakutat Fishermen’s Cooperative was the tenant, the plant was destroyed by a fire that followed the explosion of a boiler in the plant. The explosion caused the false plywood ceiling in the boiler room to part, exposing the foam insulation on the underside of the plant roof to the ensuing flames. The foam insulation on the interior of the roof allegedly enhanced the resulting fire damage.

On May 11, 1979, co-plaintiffs City of Yakutat and Yakutat Fishermen’s Cooperative filed an amended complaint in the superior court, Third Judicial District, naming fifteen defendants, including Vertecs and Reichhold. The complaint alleged that Ver-tecs had negligently applied foam insulation to the interior of the roof of the fish processing plant, and that it had negligently failed to warn Yakutat of the flammability dangers posed by the foam insulation. The plaintiffs alleged eight causes of action against Reichhold, including intentional and negligent misrepresentation regarding the flammability characteristics of the foam that Reichhold had supplied to Vertecs, negligent failure to warn of the foam’s flammability, and various strict liability in tort claims.

In March 1981, Reichhold settled with the plaintiffs for $275,000, plus a guarantee of an additional $475,000 if that much was not obtained from the remaining defendants. The plaintiffs released Reichhold and the action against it was dismissed with prejudice on April 18, 1981.

On March 3, 1981, Vertecs filed a cross-claim against Reichhold, seeking contribution and indemnity for- any liability of Ver-tecs to the plaintiffs. As grounds for indemnity, it alleged that its negligence, if any, was passive while Reichhold’s negligence was active. Vertecs also alleged purported independent causes of action against Reichhold for strict liability in tort, breach of warranty, negligent manufacture, and negligent and intentional misrepresentation; however, the claim for relief under each of these supposedly independent causes of action was for “indemnity” of all liability of Vertecs to the plaintiffs.

After answering the crossclaim, Reich-hold moved alternatively for dismissal or summary judgment. It contended that contribution was improper because it had settled and obtained a release, and that indemnity would not lie because any liability of Vertecs would be due to its own affirmátive negligent acts. Judge Milton M. Souter held a hearing on the motion on August 14, 1981. After holding that Alaska law controlled in the suit, 1 he determined that Alaska law did not provide for indemnity between concurrently negligent tortfeasors. Since only fault-based claims had been alleged against Vertecs, he ruled that it could not obtain indemnity, and therefore grant *621 ed summary judgment on the indemnity claim. In its Order Granting Summary Judgment, the superior court also determined that summary judgment on the contribution claim was proper since Reichhold had settled in good faith with the plaintiffs. 2 Judgment dismissing Vertecs’ cross-claim was entered on December 4,1981, and on December 24, 1981, Vertecs appealed.

I

The common law did not recognize contribution among tortfeasors. Courts would not reward a wrongdoer by allowing him to wholly or partially shift his loss to another. As between wrongdoers, each of whom was personally at fault for an injury, courts would not deign to measure degrees of fault with a concomitant sharing of losses among the tortfeasors. However, the parallel principle of indemnity arose early on in England. Indemnity provided for a complete shifting of liability from one party to another in cases where a party was held only vicariously liable. Thus, an employer who was held liable for the defalcation of an employee on the theory of respondeat superior could recover over against the employee via indemnity.

However, the courts began to discover that the bar to contribution among fault-bearing tortfeasors worked injustice in certain cases. Some courts thus expanded indemnity to include cases in which the in-demnitee, while to some degree personally at fault, was much less culpable than the indemnitor. Various appositive phrases arose to describe the situations in which indemnity would be allowed, including “primary-secondary negligence,” “misfeasance-nonfeasance,” and “active-passive negligence.” However, most authorities agree that these phrases were merely labels given to a fact-finding concept wherein courts allowed total loss-shifting because they felt that justice and fairness so required. 3 These concepts expanded indemnity beyond its narrow early common law confines, so that, despite their protestations to the contrary, courts were measuring relative degrees of fault among tortfeasors. When a court found a large enough moral disparity, it would shift the whole loss to the most morally culpable party. 4

Vertecs alleges that the common law would allow indemnity in any situation wherein one tortfeasor’s conduct was not as blameworthy as another’s and it would be just and fair as between the parties that the entire loss fall upon the indemnitor. Citing to the Restatement (Second) of Torts section 886B and comments thereto, 5 Ver- *622

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Bluebook (online)
661 P.2d 619, 1983 Alas. LEXIS 401, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vertecs-corp-v-reichhold-chemicals-inc-alaska-1983.