Title: O'CONNELL v. Jackson

State: minnesota

Issuer: Minnesota Supreme Court

Document:

140 N.W.2d 65 (1966) Walter O'CONNELL, et al., Plaintiffs, v. Robert JACKSON, dba Bud Jackson Dairy Cattle Company, Respondent, and William Decker, Appellant. No. 39700. Supreme Court of Minnesota. January 21, 1966. *66 Wm. J. Nierengarten, Austin, for appellant. John J. McBrien, Farmington, for respondent. THOMAS GALLAGHER, Justice. These proceedings involve the right of defendant William Decker to recover from his codefendant, Robert Jackson, attorney's fees incurred in defending an action brought by plaintiffs, Walter O'Connell and Russell Stier. Under a cross-claim by Decker against Jackson, the court held that Decker was entitled to indemnity against Jackson for the judgment obtained against Decker in the action, but made no allowance for attorney's fees which he had incurred in defending it. This appeal is from that portion of the judgment which denied Decker's motion that such attorney's fees be added to his judgment against Jackson. The facts leading to the litigation are as follows: On or about August 1, 1963, Robert Jackson, doing business as Bud Jackson Dairy Cattle Company, sold and delivered to William Decker 22 head of Holstein heiferettes. At the time of this sale, Jackson warranted to Decker, on certain health sheets then handed to the latter, that such heiferettes had been pregnant for specified periods of time. On or about August 8, 1963, Decker sold these heiferettes to plaintiffs and delivered with them the same health sheets which he had received from Jackson. The health sheets purportedly had been signed by one David F. Long, a duly licensed veterinarian, but the evidence disclosed that this signature had been forged by Jackson. In a second transaction on or about August 10, 1963, Jackson sold to Decker 35 additional heiferettes with similar warranties as to their pregnancy on similar health sheets then delivered to Decker, which likewise purportedly had been signed by David F. Long and on which Long's signature had also been forged by Jackson. On or about August 15, 1963, Decker sold these heiferettes to plaintiffs, also warranting that they were pregnant. It is undisputed *67 that in all transactions both Decker and plaintiffs relied upon the warranties in the health sheets as they were made originally by Jackson. Later it was discovered by plaintiffs that the cattle were not pregnant as warranted in the health sheets, and they commenced the present action against Decker and Jackson for damages based upon breach of warranty. In their complaint they alleged that both Decker and Jackson had warranted and represented that the heiferettes were pregnant as described on the forged health sheets and that they had relied on such warranties in purchasing them. (An allegation to the effect that defendants had also warranted that the heiferettes had been tested for Bang's disease apparently was not an issue at the trial.) After service of the summons and complaint, Decker tendered defense of the action to Jackson by written notice as follows: This tender was refused by Jackson, and Decker thereupon proceeded to retain counsel to answer the complaint; to interpose a cross-claim therein against Jackson for indemnity; and to defend the action. In his cross-claim Decker alleged: *68 Subsequent to trial the court made findings as follows: Upon the jury's response to special interrogatories submitted to it the court determined that plaintiffs had sustained damages by reason of the aforesaid facts in the sum of $1,060 and ordered judgment for this amount plus costs against both defendants. It found that because of the described false warranties, Decker was entitled to indemnity from Jackson on account of the judgment ordered against him, but as indicated above made no allowance for attorney's fees. Subsequently, Decker moved for an order amending the findings by adding a finding that the reasonable value of his attorney's fees for defending the action was the sum of $500 which should be included in his judgment against Jackson. At the hearing on this motion, no evidence was presented as to the reasonable value of such fees, and the motion was denied. In a memorandum attached to the order denying it, the court stated: *69 The present appeal is from that portion of the judgment which denies Decker attorney's fees. 1. It is well settled that where a party has incurred liability for damages by the tortious act or breach of duty of another and is called upon to defend an action for such damages, he is entitled to indemnity against the one whose wrongful actions have created his liability. Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 104 N.W.2d 843; Daly v. Bergstedt, 267 Minn. 244, 126 N.W.2d 242. Likewise, it is well established that in such cases the party called upon to defend the action is entitled to be indemnified not only for any judgment obtained therein, but also for the reasonable value of attorney's fees incurred in defending the action, provided he has acted in good faith and with due diligence, and has notified the other of the action and has given him the opportunity to defend it. Hartford Acc. & Ind. Co. v. Dahl, 202 Minn. 410, 278 N.W. 591; Northern Welding Co. v. Jordan, 150 Minn. 12, 184 N.W. 39. In Restatement, Torts, § 914, the rule is expressed as follows: 2. Where such attorney's fees have been disallowed, the reason is usually that the person seeking attorney's fees has been required to defend not only claims arising out of the other's breach of warranty or tortious acts, but also allegations or accusations which encompass separate and independent charges of wrongful acts on his part. See, Fidelity & Cas. Co. of New York v. Northwestern Tel. Exch. Co., 140 Minn. 229, 167 N.W. 800; Inhabitants of Westfield v. Mayo, 122 Mass. 100, 23 Am.Rep. 292. But in the instant case it seems clear that in defending the action Decker was defending only charges based upon Jackson's original breach of warranty in the described health sheets, which Decker in turn had passed on to plaintiffs. The complaint sought damages primarily upon this claim and the evidence submitted established that plaintiffs' entire loss had come about through the false warranties and the misrepresentations originally made by Jackson to Decker and in turn by Decker to plaintiffs. Under the principles above expressed, it seems clear that Decker is entitled to full indemnity against Jackson including Decker's liability for the reasonable value of attorney's fees in defending the action. 3. On the record here this court cannot determine the reasonable value of such fees. This is primarily a question for the finder of facts and should be based upon evidence having reference to the issue as submitted in the trial court. Remanded with directions that evidence be received with respect to the reasonable value of Decker's attorney's fees and that the amount found due therefor be included in Decker's judgment of indemnity against Jackson.