Also known as:rights of indemnity · indemnity right
Written by attorneys — see sources below.
A right that permits one party to recover the full amount of a loss from another party that bears ultimate responsibility for that loss. The right arises by contract or by operation of law when the relationship between the parties requires one to bear the entire burden. When the right exists between two tortfeasors, neither may obtain contribution from the other for the same harm.
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How its tested
Common Examples
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Contractual Indemnity Bars Contribution
Rising Sun Electronics supplied safety guards to Riverstone Manufacturing under a contract requiring Rising Sun to indemnify Riverstone for any injuries caused by the guards. A worker lost a hand on a press and recovered a joint judgment against both companies. Riverstone paid the full judgment and then sued Rising Sun for contribution. Because the contract gave Riverstone a right of indemnity against Rising Sun for the same harm, the court denied the contribution claim.
Comparative Indemnity Among Tortfeasors
Rajesh Rao organized a motorcycle event and hired Ralph Richardson to provide safety services. A spectator was injured and obtained a joint judgment against both men. Rao paid the entire judgment and sought partial indemnity from Richardson based on their relative degrees of fault. The court allowed the indemnity claim to proceed because the common-law right of indemnity operates independently of the contribution statute.
American Motorcycle Association v. Superior Court20 Cal.3d 578, 590, 578 P.2d 899, 906, 146 Cal.Rptr. 182, 189
On April 22, 1974, Glen Gregos, a teenage boy, was injured while participating in a cross-country motorcycle race for novices sponsored by the American Motorcycle Association and the Viking Motorcycle Club. Glen's second amended complaint alleged that the American Motorcycle Association and Viking negligently designed, managed, supervised, and administered the race and negligently solicited entrants. Such negligence was a direct and proximate cause of his injuries, including a crushed spine resulting in permanent loss of the use of his legs.
Glen's parents, acting as guardians ad litem, filed the underlying action against the American Motorcycle Association, the Viking Motorcycle Club, and the Los Angeles Coliseum Commission. The American Motorcycle Association answered the complaint, denying the charging allegations and asserting affirmative defenses that included a claim that Glen's own negligence was a proximate cause of his injuries.
Thereafter the American Motorcycle Association sought leave of court to file a cross-complaint against Glen's parents. The first cause of action alleged that the parents knew motorcycle racing is dangerous, were knowledgeable about Glen's training, directly participated in his decision to enter the race by signing a parental consent form, and negligently failed to exercise their power of supervision over their minor child. The second cause of action sought declaratory relief. It asked for a declaration of the allocable negligence of Glen's parents so that any damages awarded against the American Motorcycle Association could be reduced by the percentage allocable to the parents' negligence.
The trial court denied the American Motorcycle Association's motion for leave to file the cross-complaint. The American Motorcycle Association petitioned the Court of Appeal for a writ of mandate to compel the trial court to grant the motion. The Court of Appeal issued an alternative writ. Ultimately the court granted a peremptory writ of mandate. Because of the statewide importance of the questions presented, the Supreme Court ordered a hearing in the case on its own motion.
Renee Rogers, a civilian employee, was injured by a military helicopter door manufactured by Riverfront Developments under a government contract. She sued the manufacturer, which raised a defense based on its compliance with federal specifications. The court considered whether any indemnity obligation arising from the government-contractor relationship affected liability allocation between the parties.
Boyle v. United Technologies Corp.487 U.S. 500 (1988)
On April 5, 1983, David A. Boyle, a United States Marine helicopter copilot, was killed when the CH-53D Sea Stallion helicopter he was flying crashed into the ocean off the coast of Virginia Beach, Virginia, during a training exercise. Boyle and one other crew member were trapped inside the sinking helicopter and drowned, while three others escaped. His father, the petitioner, brought a diversity action against the helicopter's manufacturer, respondent United Technologies Corporation (Sikorsky Division), in the United States District Court for the Eastern District of Virginia.
The petitioner alleged under Virginia tort law that the manufacturer had defectively designed the copilot's emergency escape system because the hatch opened outward rather than inward and its release mechanism was obstructed. The petitioner also alleged that the manufacturer had negligently failed to warn the Navy of dangers in the escape hatch and system. The jury returned a general verdict in the petitioner's favor and awarded $725,000. The District Court denied the manufacturer's motion for judgment notwithstanding the verdict.
The Court of Appeals for the Fourth Circuit reversed and remanded with directions to enter judgment for the manufacturer. It held that the state-law tort action was barred by the government contractor defense it had recognized in McKay v. Rockwell International Corp., under which a contractor is not liable for design defects if the United States approved reasonably precise specifications, the equipment conformed to those specifications, and the supplier warned the United States about dangers known to the supplier but not to the United States. The court concluded that the evidence was insufficient as a matter of law to establish a violation of the third condition.
The Supreme Court granted certiorari to consider the propriety of the government contractor defense and to resolve a conflict among the Courts of Appeals. The case reached the Court after the Fourth Circuit's 1986 decision in 792 F.2d 413, following the 1983 crash and the subsequent district court trial.
Does the existence of a right of indemnity between two tortfeasors eliminate any right of contribution between them?
Yes. When one tortfeasor holds a right of indemnity against another for the same harm, the law treats indemnity as displacing contribution entirely. The indemnitor must bear the whole loss as between the two parties, leaving no room for contribution to apportion the burden.
Supporting sources
How does a contractual indemnity clause affect a later contribution claim between the contracting parties?
A contractual promise of full indemnity governs the allocation of loss between the parties and bars either from seeking contribution for the same harm. The indemnitee can enforce the indemnity obligation directly, but the contribution framework does not apply once indemnity rights exist.
Supporting sources
20 Cal. 3d 578, 578 P.2d 899, 146 Cal. Rptr. 182
…we recognize today is simply an evolutionary development of the common law equitable indemnity doctrine, the primacy of such right of indemnity is expressly recognized by the statutory provisions. In addition, the equitable nature of the comparative indemnity doctrine does not thwart, but enhances, the basic objective of the…
TortsNegligence · Problems relating to causationUBEFoundational