Court Opinion

ID: 9774102
Source: CourtListenerOpinion
Date Created: 2023-08-29 18:08:40.563817+00
Date Added: 2024-06-11T07:32:01.957617
License: Public Domain

David Newbern, Justice, concurring. The Chancellor found that Billy Ivy was negligent in not seeing to it that, after the Odoms and Nicholson and Allbright had agreed to new terms, the offer and acceptance document was not revised. Ivy was also found negligent in accepting Nicholson’s recommendation, and passing it on to the Odoms, that the Odoms did not need independent counsel for the complex real estate transaction. The Chancellor concluded the injury to the Odoms resulting from Ivy’s negligence would not have occurred if Nicholson had not misrepresented to Ivy that Nicholson and Allbright remained personal guarantors of the obligation to the Odoms of the note to them from Popeye Corporation. It was on this basis that the Chancellor held that, despite Ivy’s negligence, Ivy was entitled to be indemnified by Nicholson for the entire damages to be paid to the Odoms. Nicholson argues the elements of the tort of deceit have not been satisfied. If we pursue the matter in the way he suggests, we will raise the question whether a chancellor should ever try an intentional tort claim as an “incident” to another matter of which the chancellor has jurisdiction. We need not do so. We should be dealing here with the law of indemnity rather than the law of deceit. The question is not whether the elements of deceit were satisfied. The question is whether indemnity was proper. By way of an obiter dictum this Court stated in Larson Machine, Inc. v. Wallace, 268 Ark. 192, 213-14, 600 S.W.2d 1, 12 (1980): It has been appropriately stated that the doctrine of indemnity is based upon the equitable principles of restitution which permit one who is compelled to pay money, which injustice ought to be paid by another, to recover the sums so paid unless the payor is barred by the wrongful nature of his own conduct. Although the Chancellor could have found that Nicholson’s conduct in this case fit the elements of deceit, it was only necessary that it be shown, as a matter of equity, that Nicholson’s misrepresentations were such that he should reimburse Ivy for the amount that Ivy was found to owe the Odoms. It is not necessary to find that Nicholson committed a tort to require equitable restitution from him to Ivy; however, a case in which restitution of one tortfeasor by another was discussed presents a good analogy. A survey of Arkansas indemnity law, was provided by the United States Court of Appeals for the Eighth Circuit in Merrill Lynch v. First Nat. Bank of Little Rock, 774 F.2d 909, 918 (1985). The discussion of the matter of indemnity between tortfeasors was as follows: The third type of indemnity case is characterized by breaches of different duties owed by the tortfeasors to the injured party. Product-liability actions and defective-premises cases give us most of the case law in this area. In the typical case of this kind the supplier of a defective product is found liable to the injured consumer (on a strict-liability or warranty theory) but is allowed indemnity from the manufacturer of the product apparently on the ground that that manufacturer’s negligence in producing a defective product is more direct and palpable that the supplier’s failure to discover the defect. As in the case of imputed liability, the justification for indemnity disappears if the supplier was himself proximately at fault for failing to inform the consumer of a known defect. Harrell Motors, Inc. v. Flattery, 272 Ark. 105, 612 S.W.2d 727 (1981) [Footnote omitted, emphasis in original.] While it might be troublesome to some scholars of the law of indemnity that an equitable remedy transfers liability from one tortfeasor to another, leaving one of them with no liability whatever, the analogy to the manufacturer-seller is apt. If Ivy had been found to have known the legal documents prepared by Nicholson and his law firm were contrary to Nicholson’s assurances, then presumably total indemnity would not have been proper. Here, however, Ivy was relying on Nicholson’s legal expertise to effect Ivy’s understanding of the deal as well as that of the parties. While I concur in the result reached by the Court, I do so on the basis that indemnity by way of equitable restitution was proper rather than on the basis that Nicholson was guilty of the tort of deceit.