Opinion ID: 335104
Heading Depth: 1
Heading Rank: 3

Heading: Indemnity and Contribution

Text: 30 IPS contends that the District Court erred in (1) failing to grant it indemnity or contribution from Jensen Company; (2) failing to grant indemnity or contribution from Thurman Simpson; and (3) granting indemnity by IPS to Sioux City.Jensen Company
31 Iowa law recognizes several theories on which indemnity may be permitted: (1) express contract; (2) vicarious liability; (3) breach of an independent duty between the indemnitor and the indemnitee; and (4) the primary or active tortious conduct of the indemnitor as compared to the secondary or passive tortious conduct of the indemnitee. See Mayhew v. Iowa-Illinois Telephone Co., 279 F.Supp. 401, 403 (S.D.Iowa 1967); Iowa Power and Light Co. v. Abild Construction Co., 259 Iowa 314, 322-23, 144 N.W.2d 303, 308 (1966). See generally D. Furnish, Distributing Tort Liability: Contribution and Indemnity in Iowa, 52 Iowa L.Rev. 31, 34-35 (1966). Of these four grounds for indemnification, the first three are based upon a relationship existing between indemnitor and indemnitee, while the fourth ground is based solely on a common liability arising from the concurrent negligence of these parties. A claim for indemnity on this latter basis is subject to Section 85.20 of the Iowa Workmen's Compensation Act, Code of Iowa § 85.20 (1973), which, at the time of the injuries at issue, provided: 32 The rights and remedies provided in (the Iowa Workmen's Compensation Act) for an employee on account of injury shall be exclusive of all other rights and remedies of such employee, his personal or legal representatives, dependents, or next of kin, at common law or otherwise, on account of such injury. 33 The liability of Jensen Company to Hysell as its employee is governed by the Iowa Workmen's Compensation Act and is not dependent upon negligence. Jensen Company would thus have a special defense under Section 85.20 to an action by the injured employee, and this defense is equally available to a claim for indemnity by IPS, which is liable to Hysell for the same injuries. See Mayhew v. Iowa-Illinois Telephone Co., supra, 279 F.Supp. at 403, 405; Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 322-24, 144 N.W.2d at 308-09; Blackford v. Sioux City Dressed Pork, Inc., 254 Iowa 845, 850-55, 118 N.W.2d 559, 562-65 (1962). Cf. Blunt v. Brown, 225 F.Supp. 326 (S.D.Iowa 1963). Thus, if IPS is entitled to indemnity from Jensen Company, such indemnity must be based on some relationship between these parties in addition to the fact of negligence and proximate cause of Hysell's injuries. 4 34 In discussing the scope of the applicability of Section 85.20, the Iowa Supreme Court has stated: Indemnity is permissible when the right arises out of a separate duty due the third party from the employer. Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 323, 144 N.W.2d at 309. See Western Casualty and Surety Co. v. Grolier, Inc., 501 F.2d 434, 437 (8th Cir. 1974); Great Northern Ry. v. Bartlett & Co., Grain, 298 F.2d 90, 95 (8th Cir. 1962); Fairfield Engineering Co. v. Winger Construction Co., 309 F.Supp. 64, 66 (S.D.Iowa 1969). 35 IPS contends that Jensen Company, through its employees, breached such an independent duty to IPS not to come in contact with the transmission line and that indemnity should be awarded on the basis of this breach. In order for an independent duty to establish a basis for indemnity against an employer providing benefits under the Iowa Workmen's Compensation Act, however, the duty must be of a specific, defined nature. As this Court stated in Western Casualty and Surety Co. v. Grolier, Inc., supra, 501 F.2d at 438: 36 (The employer) owed (the third party) only the general duty that every member of society owes to every other member the duty not to harm him through tortious acts. Such a general duty does not support a right of indemnity in a case where the would-be indemnitor is an employer covered by the Workmen's Compensation law. 37 See Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 326-27, 144 N.W.2d at 310-11. 38 IPS did not prove that Jensen Company owed it any duty other than this general duty of care; nor was there any contractual relation between IPS and Jensen Company from which an indemnification agreement could be found. The District Court thus properly denied the claim of indemnity against Jensen Company.
39 Unlike certain states, Iowa recognizes an action for contribution between concurrent tortfeasors where they are commonly liable to the injured party for the same damages and there is no intentional wrong, moral turpitude, or concert of action. See Iowa Power and Light Co. v. Abild Construction Co.,supra, 259 Iowa at 318-19, 144 N.W.2d at 306; Best v. Yerkes, 247 Iowa 800, 810, 77 N.W.2d 23, 29 (1956). In the absence of a common liability, however, no right of contribution exists. Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 319, 144 N.W.2d at 306. See Chicago R.I. & Pac. R.R. v. Chicago & N.W. Ry., 280 F.2d 110, 115 (8th Cir. 1960), cert. denied, 364 U.S. 931, 81 S.Ct. 378, 5 L.Ed.2d 364 (1961). 40 Since the claims of the Hysells against Jensen Company are subject to the exclusive remedy of Section 85.20 of the Iowa Workmen's Compensation Act, Jensen Company has no liability common with that of IPS. See Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 319, 144 N.W.2d at 306. The District Court therefore properly denied IPS contribution from Jensen Company. Thurman Simpson A. 41 At early common law, the fellow servant rule would have precluded an action in tort between the Hysells and Simpson arising from Hysell's injuries and thus would have provided no common liability between IPS and Simpson. See W. Prosser, Handbook of the Law of Torts § 80, at 528 (4th ed. 1971). In Craven v. Oggero, 213 N.W.2d 678, 681-83 (Iowa 1973), the Supreme Court of Iowa held that a servant could in fact be held liable for injuries negligently inflicted on a fellow servant, even if occurring in the transaction of the master's business. Simpson thus cannot assert his status as a co-employee of Hysell as a special defense to indemnity or contribution. Moreover, the Iowa Supreme Court held in Price v. King, 259 Iowa 921, 924-27, 146 N.W.2d 328, 330-31 (1966), that the statutory immunity of the employer under Section 85.20 of the Iowa Workmen's Compensation Act does not extend to employees. See Craven v. Oggero, supra, 213 N.W.2d at 680-81. 42 Simpson, however, notes that an amendment to Section 85.20, effective July 1, 1974 (approximately one year after the occurrence of the injuries in question), requires that an employee who seeks to recover from a co-employee must show that the injury resulted from gross negligence amounting to such lack of care as to amount to wanton neglect for the safety of another. Acts 1974 (65 G.A.), ch. 1111, § 1. This amendment, Simpson contends, should apply retroactively to relieve him of liability for indemnity or contribution since there was no showing of gross neglect and, hence, no common liability for the injuries to Hysell. 43 The relevant rule of statutory construction is stated in Code of Iowa § 4.5 (1975), which provides: A statute is presumed to be prospective in its operation unless expressly made retrospective. The amendment to Section 85.20 contains no specific provision or implication as to the scope of its applicability. Therefore, since Section 4.5 requires a presumption of prospective application and since the Iowa Supreme Court has evolved a strict rule of construction against retrospective operation, see, e.g., City of Monticello v. Adams, 200 N.W.2d 522, 525 (Iowa 1972), the amendment must, in the absence of contrary indications, be held to have only prospective application. 5 It therefore does not operate to preclude the common liability of Simpson for the damages caused by his concurrent negligence. 44 The first basis of the IPS claim for indemnity against Simpson is that its own negligence was merely passive whereas Simpson's negligence was  active. This claim must fail because the conduct of IPS was itself active negligence: 45 It was (the power company's) duty to construct, locate and guard its high voltage transmission lines in such a manner as not to be dangerous to the public and those, to its knowledge, working near and about them, and this duty could not be shifted to (a construction worker). Its failure to properly discharge this duty    constituted, in our judgment, active and not passive negligence. 46 Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 324-25, 144 N.W.2d at 309, quoting Public Service Electric and Gas Co. v. Waldroup, 38 N.J.Super. 419, 119 A.2d 172, 181 (1955). Cf. Cronk v. Iowa Power and Light Co., supra, 258 Iowa at 611-12, 138 N.W.2d at 847-48. 47 IPS further contends that Simpson breached an independent duty to IPS not to come in contact with the transmission wire and that indemnity should be awarded on the basis of this breach. IPS did not, however, submit any evidence of any duty owed to it by Simpson other than the general duty of reasonable care owed all members of the public. A breach of such a duty is insufficient to establish entitlement to indemnification under Iowa law. See Iowa Power and Light Co. v. Abild Construction Co., supra, 259 Iowa at 326-27, 144 N.W.2d at 310-11. 48 The District Court therefore properly denied the claim of indemnity against Simpson. B. 49 The evidence did show, as we hold here, that the negligence of Simpson was a proximate cause of the injury. In the absence of a defense under Section 85.20, therefore, Simpson has a common liability with IPS resulting from his concurrent negligence. The District Court thus erred in denying contribution from Simpson to IPS. Sioux City 50 IPS additionally contends that the District Court erred in holding that Sioux City was entitled to contractual indemnity from IPS for its liability to the Hysells. 51 At the time of the accident, a franchise agreement existed between IPS and Sioux City by which IPS was granted the right to supply electricity and natural gas to residents of the city. This agreement provides in part: 52 (IPS) shall be liable for and shall indemnify the said City for any loss of damage occasioned to persons or property which may occur through any excavation, structure, or device of any kind, made, placed or permitted to exist by the said grantee in any street, alley or public ground within the City of Sioux City, Iowa. 53 The District Court concluded that this provision enabled Sioux City to recover indemnity from IPS. 54 Under Iowa law, a party may contract for indemnity from the consequences of its own negligence. Northern Natural Gas Co. v. Roth Packing Co., 323 F.2d 922, 927-29 (8th Cir. 1963); Mayhew v. Iowa-Illinois Telephone Co., supra, 279 F.Supp. at 404; Fire Association of Philadelphia v. Allis Chalmers Manufacturing Co., 129 F.Supp. 335, 350-52 (N.D.Iowa 1955). If a contractual provision for indemnity is present, liability is controlled by this provision, and not by the issue of whether the tortious conduct of the respective parties was active or passive, primary or secondary. Northern Natural Gas Co. v. Roth Packing Co., supra, 323 F.2d at 929. See Becker v. Black and Veatch Consulting Engineers, 509 F.2d 42, 45 (8th Cir. 1974). 55 The indemnity clause expresses the right of Sioux City to indemnity from IPS in a clear and unequivocal manner. IPS contends, however, that the clause is insufficiently specific because it fails to state explicitly that IPS will be required to indemnify the City for damages resulting from the tortious conduct of the City. 56 Under Iowa law, a contract need not expressly specify that it will operate to indemnify a party for its own negligence if the clear intent of the language is to provide such indemnification. Northern Natural Gas Co. v. Roth Packing Co., supra, 323 F.2d at 925-27; Epley v. S. Patti Construction Co.,228 F.Supp. 1, 3 (N.D.Iowa 1964), rev'd on other grounds sub nom. Carstens Plumbing & Heating Co. v. Epley, 342 F.2d 830 (8th Cir. 1965). See Weik v. Ace Rents, Inc., 249 Iowa 510, 514-15, 87 N.W.2d 314, 317-18 (1958). Moreover, we are not presented here with a situation in which the liability resulted solely from the tortious conduct of the indemnitee. Thus, the language of the indemnity clause must be assessed on the basis of whether it was intended to apply in situations where the City was concurrently negligent. 57 The clause contains the IPS agreement to indemnify the City for any liability caused by the structures or devices of IPS. The District Court found, and we affirm this finding here, that the negligent construction and maintenance of the transmission wires by IPS was a proximate cause of the injury to the Hysells. Under the indemnity clause of the contract, this means that the City should be indemnified, regardless of its own tortious conduct. To limit the applicability of the provision to those cases only in which IPS was the sole party negligent would be to construe the language as meaningless, since even without the provision IPS would be liable to Sioux City for any costs it would be required to pay because of the sole negligence of IPS. As stated in Epley v. S. Patti Construction Co., supra, 228 F.Supp. at 4: If it was not intended to cover the situation where (the indemnitee) was concurrently negligent, then the contract in this respect would be reduced to being almost meaningless. See Northern Natural Gas Co. v. Roth Packing Co., supra, 323 F.2d at 926-27; Mayhew v. Iowa-Illinois Telephone Co., supra, 279 F.Supp. at 404. 58 The District Court thus did not err in finding that Sioux City was contractually entitled to indemnification from IPS. 6 IV.