Opinion ID: 1631232
Heading Depth: 3
Heading Rank: 2

Heading: Whether the Entry of Summary Judgment was Proper

Text: ¶ 34. In this state, the origins of indemnity are as follows: An obligation to indemnify may arise from a contractual relation, from an implied contractual relation, or out of liability imposed by law. When one person is required to pay money which another person in all fairness should pay, then the former may recover indemnity from the latter in the amount which he paid, provided the person making the payment has not conducted himself in a wrongful manner so as to bar his recovery. Bush v. City of Laurel, 215 So.2d 256, 259 (Miss.1968) (citing 42 C.J.S. § 20 (1944)). ¶ 35. Hartford asserts Halliburton's liability arises from an implied contractual relationship. We have previously stated that the two critical prerequisites of noncontractual implied indemnity in Mississippi are: (1) The damages which the claimant seeks to shift are imposed upon him as a result of some legal obligation to the injured person; and (2) it must appear that the claimant did not actively or affirmatively participate in the wrong. Home Ins. Co. v. Atlas Tank Mfg. Co., 230 So.2d 549, 551 (Miss.1970) (citing Bush v. City of Laurel, 215 So.2d 256 (Miss.1968); Southwest Miss. Elec. Power Ass'n v. Harragill, 254 Miss. 460, 182 So.2d 220 (1966)). ¶ 36. The settlements paid by Hartford were voluntary, and consequently, summary judgment was properly entered against it. In order for Hartford to prevail on its indemnity claim, it must allege and prove that (1) it was legally liable to an injured third party, (2) it paid under compulsion, and (3) the amount it paid was reasonable. Certain Underwriters at Lloyd's of London v. Knostman, 783 So.2d 694 ¶ 10 (Miss.2001)(citing Keys v. Rehab. Ctrs., Inc., 574 So.2d 579, 584 (Miss.1990)). ¶ 37. This Court finds that Hartford has failed to establish evidence that it paid under compulsion of law. Hartford alleges its original complaint complies with our requirements for notice pleading, and that it states a claim for indemnity. However, the original complaint only states that Hartford's insured, Tomlinson, contracted with Halliburton and that Halliburton breached the contract by performing negligently. It additionally states that Hartford is entitled to recover the payments it made from Halliburton. Yet, nowhere in this complaint does Hartford set forth its own basis of liability. Hartford asserted in later pleadings and in its amended complaint (which was ultimately denied in the trial court), and asserts now in this Court, that it settled the claims filed against its insureds because of potential liability arising from the theories of strict liability, vicarious liability, nuisance, and trespass. However, the United States District Court for the Northern District of Mississippi rendered an Erie -guess as to how we would decide this issue in Maryland Casualty Co. v. R.H. Lake Agency, Inc., 331 F.Supp. 574 (N.D.Miss.1971). Maryland Casualty claimed that it would be able to proved at trial that it might or could be liable to its insureds. The court rejected potential liability as a sufficient basis for recovery and stated: In order to recover from defendant on the theory of indemnity it is encumbent upon plaintiff to show that plaintiff was legally liable to [the plaintiffs with which it settled] ... Plaintiff cannot recover under this legal principle on the theory that plaintiff might have been liable to [those with whom it settled] if plaintiff had not settled with [them] (emphasis added). Id. at 579 (citing 41 Am.Jur.2d, Indemnity, § 33). However, it is important to note that in Maryland Casualty, the court already had the benefit of certain jury determinations. Maryland Casualty asserted that its agent had issued a trip accident and baggage insurance policy to Ingram in direct violation of Maryland Casualty's policies. While this policy was effective, Ingram was shot through both legs and, consequently, lost both of his feet. Maryland Casualty settled with Ingram and then sought indemnity from its agent. The trial court submitted interrogatories to the jury. The jury answered these interrogatories by finding that Ingram's shooting was not accidental. The necessary result of the jury's finding was that Ingram's injuries were not covered by the policy because they were not accidental. ¶ 38. We cited to Maryland Casualty with approval in Keys v. Rehabilitation Ctrs., Inc., 574 So.2d 579 (Miss.1990). In Keys, the indemnity claim arose from a contract between a close corporation and a former shareholder, Keys. The corporation settled a wrongful death claim pending against it and then sued Keys for his pro rata share. The wrongful death claim settled without a trial; consequently, there was no adjudication of fault. The corporation sued Keys after he refused its demands to indemnify it according to the indemnity agreement. This claim proceeded to trial. The jury found that Keys was liable to the corporation under the indemnity agreement. Keys' argument before this Court was that even if the indemnity agreement was enforceable, he was still not liable because the corporation failed to prove that it paid under compulsion. We said: Under the rules of [our prior] cases, predicate to recovering indemnity from the Keyses, [plaintiff] was obligated to prove that it was liable for the [wrongful] death. On the other hand, indemnifying parties such as the Keyses have no right to insist that their indemnitee endure the hazards of trial by jury as a condition for enforcing the indemnity agreement. [citations omitted] Absent some contractual provision to the contrary [plaintiff] was entitled to use its own good judgment and effect such settlement of the wrongful death claim as it deemed prudent, provided only that when proceeding to enforce the indemnity agreement that it prove that it was indeed liable to the [wrongful death] survivors and that the amount it paid in settlement was reasonable. An indemnitee such as [plaintiff] cannot simply settle, and then send the indemnitor his share of the bill. It must, in the words of our rule, prove that it paid under compulsion and no case more perceptively illustrates this point than Maryland Casualty Co. v. R.H. Lake Agency, Inc. Id. at 584, 585. We held it was error for the underlying issue of the corporation's liability not to have been submitted to the jury along with the indemnity agreement issue, and the record was insufficient for us to imply such liability although substantial evidence existed. Consequently, we reversed and remanded. ¶ 39. We very recently addressed a case almost identical to the case sub judice, which action arose from the same well blowout at issue here. In Certain Underwriters at Lloyd's of London v. Knostman, 783 So.2d 694 (Miss.2001), Tomlinson (Hartford's insured) was the defendant. Pursuant to a contract with Tomlinson, Texas Snubbing performed certain activities in conjunction with the drilling of the well. After the well blowout, Texas Snubbing was one of the named defendants, along with Tomlinson, Halliburton, Dan Pierce, and others. Texas Snubbing settled the claims against it prior to any adjudication of fault. Texas Snubbing, in turn, sued Tomlinson for indemnity. The trial judge granted Tomlinson's motion for summary judgment. We affirmed. ¶ 40. This Court, relying on Keys, supra, held that Texas Snubbing's payments were voluntary. Texas Snubbing presented arguments similar to the ones now presented by Hartford. Texas Snubbing asserted that it would have been able to prove that it was legally liable to the injured party and that it paid under compulsion at trial. Id. at ¶ 12. We rejected this argument due to the Texas Snubbing president's consistent denial of liability or any wrongdoing associated with the blowout in previous depositions and court proceedings. Id. The scenario in the case now before us is identical. ¶ 41. Hartford has consistently denied any wrongdoing on its part. The furthest departure Hartford makes from this denial is to assert potential liability. As discussed above, this is simply not sufficient. As Hartford was the plaintiff, it was encumbent on Hartford to present something, anything, to at a minimum, create a genuine issue of material fact. It failed to do so. ¶ 42. Even if this Court determines that Hartford's settlements were made under compulsion of law and not with the status of a volunteer, we find that summary judgment is still appropriate against Hartford because it failed to meet its burden of proof. Clearly, Hartford realized that it would carry the burden of proving the elements of indemnity at trial. At the hearing on the motion, counsel for Hartford told the trial judge, We attached a whole bunch of cases, the cases that are legion in Mississippi about whether you are entitled to common law indemnity or not. But you can't just say it. I understand we have to prove it. ... (emphasis added). ¶ 43. Because Halliburton would not carry the burden of proof at trial, it sufficiently fulfilled its burden of persuasion by demonstrating or `showing or pointing out to the court that Hartford had settled claims which alleged both active and passive negligence. Consequently, the burden then shifted to Hartford, as it would carry the burden of proof at trial, to offer evidence to rebut Halliburton's claim. We have repeatedly stated that the party against whom a motion for summary judgment is made may not rest upon allegations or denials in her pleadings. Fruchter, 522 So.2d at 198. Allegations or denials, without more, are insufficient to create an issue of fact sufficient to avoid summary judgment. Id. The burden is on the party opposing the motion to by affidavit or otherwise set forth specific facts showing that there are indeed genuine issues for trial. Id. at 199. Hartford has not done this. Even more, Hartford has never refuted Halliburton's assertion that it settled claims of both active and passive negligence. ¶ 44. Consequently, this Court finds summary judgment is proper against Hartford.