Opinion ID: 2049897
Heading Depth: 1
Heading Rank: 2

Heading: Farm Bureau's claim against Olson.

Text: Although Farm Bureau's complaint sought indemnity against Olson, the insurer also argued for contribution in the court below. In this appeal it pursues the theory that the Milbank proceeds were applied on the $58,500 judgment according to the degree of negligence of each defendant and calculates that Olson's share was $6,250 or 25 percent of the $25,000 limit. The $8,375 balance of $14,625 (25 percent of $58,500) is the amount Farm Bureau seeks in contribution as subrogee of its insureds on whose behalf it paid a total of $33,500 in the main action. Olson's response below was that his $25,000 Milbank Policy covered his own negligence liability in full before it applied to that of Duckwitz and Nelson as additional insureds. Any further liability to Farm Bureau for contribution or indemnity, he argues, would be cancelled by his own right to indemnity from them as negligent bailees of his truck. The trial court agreed that they had breached a duty to Olson of reasonable care and accurate disclosure and had substantially and directly caused his liability. For his indemnity argument, Olson mistakenly relies upon two of the rules permitting indemnity which we adopted in Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 373, 104 N.W.2d 843, 848 (1960): (3) Where the one seeking indemnity has incurred liability because of a breach of duty owed to him by the one sought to be charged. (4) Where the one seeking indemnity has incurred liability merely because of failure, even though negligent, to discover or prevent the misconduct of the one sought to be charged. (Footnotes omitted.) We distinguished those rules precisely on the basis of culpable negligence on the part of the claimant in Tolbert v. Gerber Industries, Inc., 255 N.W.2d 362, 366 (Minn. 1977). Rule 3 remained intact with the others because the claimant in those situations would not be culpably negligent, but Rule 4 was eliminated in favor of contribution because some degree of personal fault would be involved. In Olson's case we cannot ignore the jury's verdict of 25 percent active rather than vicarious negligence. It necessarily precludes indemnity, a shift of the entire loss. Olson did not pursue his original claim for contribution either in the trial court or here, although he argued that his own insurance policy at least paid all of his judgment and he should not be required to pay for the liability of another defendant. In the absence of any allegation that he paid more than his share, a claim for contribution is inappropriate and under our decision today it has no basis in any event. Judge Kennedy correctly determined that the primary $25,000 coverage by Milbank, Olson's insurer, was equally divided among the insureds, Olson, Duckwitz, and Nelson, in the absence of any agreement or authority to divide it otherwise. The Milbank policy paid approximately $8,333 toward Olson's $14,625 judgment, leaving a balance of $6,292 which was paid by Farm Bureau. With no valid claim for indemnity or contribution, Olson's cross-claim against Nelson and his third party action against Duckwitz and Will were properly dismissed. This did not cancel Farm Bureau's claim against Olson for indemnity or contribution. As insurer of Will, Duckwitz, and Nelson, all jointly and severally liable to the decedent's estate, Farm Bureau was required to pay the balance of their liability (or $33,500) after the Milbank payments. But it was also entitled, as subrogee of its insureds, to recover in contribution from Olson that portion of the $33,500 it paid on his behalf, namely $6,292. To that extent the decision of the trial court is reversed. Affirmed in part, reversed in part.