Court Opinion

ID: 9513535
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:37:23.291398+00
Date Added: 2024-06-11T09:05:53.962470
License: Public Domain

MARING, Justice,
dissenting.
[¶ 68] I respectfully dissent from part IIA and B and part III.
[¶ 69] Praus’ amended complaint alleged Brown was vicariously liable as the employer of Mack and was itself negligent in failing to properly evaluate and monitor the construction site and in failing to make sure trucks it leased were equipped with functional reverse signal alarms. On October 31, 1997, Brown moved for summary judgment. On December 17, 1997, the trial court granted Brown’s motion for summary judgment. The trial court concluded it was unrefuted that Mack was an independent contractor; that Mack was not an employee of Cape or Brown; that there was no evidence Brown had any control over Mack or supervised or inspected any part of Mack’s work; that Brown was not vicariously liable for the negligence of Mack; and that Brown owed no duty to Praus. The court further found Praus’ claims were “meritless and border[ed] on bad faith” entitling Brown to reasonable attorney fees and costs incurred in its defense of the claim. Praus, thereafter, facing Rule 11, N.D.R.Civ.P., sanctions, voluntarily dismissed her complaint against Brown. The trial court noted in its grant of summary judgment that Cape’s cross-claim against Brown for indemnification was not dismissed.
[¶ 70] In 1987, our Legislature enacted comparative fault. See 1987 N.D. Sess. Laws ch. 404. The effect of the enactment of the comparative “fault” provisions of N.D.C.C. ch. 32-03.2 “was to significantly revise tort liability in this state to shift the focus from traditional doctrines to the singular, inclusive concept of fault.” Stewart v. Ryan, 520 N.W.2d 39, 45 (N.D.1994) (citations omitted). “Section 32-03.2-02, N.D.C.C., clearly replaced the concept of joint and several liability with several allocation of damages among tortfeasors in proportion to the fault of those who contributed to an injury.” Id. After the enactment of N.D.C.C. § 32-03.2-02, there is no joint liability among tortfeasors, absent *257a claim of concerted action, and a sued tortfeasor cannot maintain a third-party claim for contribution against a tortfeasor not sued by an injured party. Target Stores v. Automated Maintenance Services, Inc., 492 N.W.2d 899, 902 (N.D.1992). Therefore, any liability of Brown or of Cape is several, not joint, because no concerted action is alleged.
[¶ 71] Cape, however, claims it is entitled to indemnification from Brown for any fault allocated to Cape. It bases this claim on a contractual indemnification clause which states:
Subcontractor agrees to indemnify and hold Contractor harmless for, of and from, any loss Contractor may sustain by reason of Subcontractor’s failure to comply with said laws, rules and regulations in connection with the design, manufacture and/or construction of machinery, accessories, parts and/or other goods and materials used on the above-named project. Subcontractor further agrees to indemnify and hold Contractor harmless for, of and from any loss Contractor may sustain by reason of subcontractor’s failure to comply with any other federal, state and local laws, ordinances, and regulations issued with respect to occupational safety and health and applying to the above-named project.
[¶ 72] Construction of a contract is a question of law for a court. Vanderhoof v. Gravel Products, Inc., 404 N.W.2d 485, 491 (N.D.1987). “It is almost universally held that an indemnity agreement will not be interpreted to indemnify a party against the consequences of his own negligence unless that construction is very clearly intended.” Bridston v. Dover Corp., 352 N.W.2d 194, 196 (N.D.1984).
[¶ 73] A review of the indemnification and hold harmless clause in Brown’s subcontract agreement with Cape reveals that it does not require indemnification for Cape’s own negligence, but only for Brown’s “failure to comply with said laws, rules and regulations in connection with the design, ... or machinery, accessories, parts and/or ... used on the above-named project ...” or Brown’s “failure to comply with any other federal, state and local laws, ... with respect to occupational safety and health and applying to the above-named project.” The trial court having granted summary judgment to Brown concluded as a matter of law Brown’s percentage of fault was zero. The only fault attributable to Cape was its own independent fault, and the indemnification agreement does not cover damages caused by Cape’s own acts of negligence.
[¶ 74] In the cases in which our Court has concluded an indemnification provision includes the negligent acts of the indemni-tee, the indemnification provision has contained language requiring the indemnitor to carry liability insurance with specified minimum limits and to name the other party as an additional insured. Rupp v. American Crystal Sugar Co., 465 N.W.2d 614, 617 (N.D.1991); Bridston, 352 N.W.2d at 197.
[¶ 75] Here, the indemnification agreement unambiguously provides indemnity only for the acts of Brown and not for Cape’s own acts and the trial court held as a matter of law there were no facts establishing Brown was at fault for the damages sustained by Praus. Because Brown had zero fault as a matter of law, Cape could not sustain a loss as a result of Brown’s negligent acts.
[¶ 76] In addition, in denying Cape’s motion for summary judgment, the trial court noted the general rule is that an employer is not liable for the acts or omissions of an independent contractor, but the doctrine of retained control “creates a separate basis of liability for the employer’s *258failure to exercise retained control with reasonable care.” Pechtl v. Conoco, Inc., 1997 ND 161, ¶ 11, 567 N.W.2d 813. It was undisputed Cape had a contract with the State of North Dakota to perform work on a federal aid construction project, which required Cape to retain control. The trial court concluded Cape did have control over the project and the amount of control and the amount of negligence was a question for the jury. Cape remained in this case because of evidence of its own acts of negligence. Under our comparative fault statute, Cape was severally hable for those acts.
[¶ 77] It was error for the trial court to permit Brown to participate in the tort action once Brown was determined to have zero fault. Praus argued to the trial court that the only issue left for Brown was whether Brown must indemnify Cape for Cape’s fault and that was a question of law. There were no claims left between Brown and Praus or Brown and Cape requiring trial of factual issues. Brown’s only interest in the case would be to defend Cape from liability. The trial court gave Brown two peremptory challenges and allowed Brown to cross-examine all of Praus’ witnesses when its interests were not adverse to Cape and only aimed at making certain Cape was not found at fault. This was prejudicial to Praus and an abuse of discretion of the trial court.
[¶ 78] Edling was brought into this case by Cape on a third-party complaint. By virtue of the exclusive remedy provisions of the workers compensation statutes, an employer is immune from a suit by an employee and cannot be sued for contribution by a third-party tortfeasor. Barsness v. General Diesel and Equipment Co., Inc., 422 N.W.2d 819, 822 (N.D.1988); Smith v. Vestal, 494 N.W.2d 370, 373 (N.D.1992). We have recognized there are exceptions to the exclusive remedy rule, and one such exception “occurs when the employer enters into an express contract of indemnification between itself and the third-party tortfeasor.” Smith, 494 N.W.2d at 375. In this case, Cape and Edling entered into an express indemnification contract which stated:
12. It is expressly understood and agreed that the SUBCONTRACTOR [Edling Electric Co.] will indemnify and hold harmless the CONTRACTOR [James Cape and Sons, Inc.] for all loss, damage, claim or injury from any act or omission of the SUBCONTRACTOR, their employees or agents for any injuries or damages, real or personal, sustained by their employees or agents.
26.... Subcontractor agrees to indemnify and hold Contractor [James Cape and Sons, Inc.] harmless for, of and from, any loss Contractor may sustain by reason of Subcontractor’s failure to comply with said laws, rules and regulations in connection with the design, manufacture and/or construction of machinery, accessories, parts and/or other goods and materials used on the above-named project. Subcontractor further agrees to indemnify and hold Contractor harmless for, of and from any loss Contractor may sustain by reason of Subcontractor’s failure to comply with any other federal, state and local laws, ordinances, and regulations issued with respect to occupational safety and health and applying to the above-named project.
This indemnification and hold harmless provision is subject to the same analysis as the provision between Cape and Brown. It, also, unambiguously requires indemnification only for Edling’s negligent acts and not for Cape’s own negligent acts.
[¶ 79] Under comparative negligence, our Court concluded, where both an employer and a third-party tortfeasor negligently cause an employee’s injuries, liabili*259ty will be imposed on the third party and the employer, and the plaintiff-employee’s recovery against a third-party tortfeasor will not be reduced by the percentage of negligence attributable to the plaintiffs employer because it is contrary to the doctrine of joint liability. Layman v. Braunschweigische Maschinenbauanstalt, 343 N.W.2d 334, 350 (N.D.1983). However, after the enactment of comparative fault and the abolishment of joint liability, the plaintiff can no longer recover from the third party the damages represented by the percentage of fault attributed to the employer. N.D.C.C. § 32-03.2-02 (“each party is liable only for the amount of damages attributable to the percentage of fault of that party, ... ”).
[¶ 80] Consequently, Cape could not incur any loss by reason of Edling’s fault, because whatever percentage the jury allocated to Edling could not be recovered by Praus from Cape. Any percentage of fault allocated to Cape would be for Cape’s own independent acts.
[¶ 81] Edling was in this case only because of Cape’s claim of indemnification based on the express agreement. Edling and Cape, however, did not have any adverse interests. Edling was immune from liability because of the workers compensation exclusive remedy and Cape had no liability for any allocation of fault to Edling. Edling had no liability under the indemnification agreement for the independent acts of negligence of Cape. Edling’s only interest was not adverse to Cape and clearly was to make certain Cape was not found at fault.
[¶ 82] The trial court granted Edling two peremptories and permitted Edling to fully participate in the cross-examination of Praus’ witnesses when there was no claim between Praus and Edling and no adverse interest between Cape and Edling.
[¶ 83] In summary, because we have abolished joint liability and there is no claim of concerted action, and there is no vicarious liability, the only indemnification available to Cape is for the independent acts of Cape. Therefore, there is no adverse interest between Cape and Brown or Cape and Edling on any factual issue. None of these parties would want Cape found at fault. The result was that three parties spoke at trial for Cape’s position. Although I am of the opinion there are no indemnification agreements for Cape’s own negligent acts, even if the agreements were construed to provide such, it does not change the fact there is no adverse interest to entitle Brown or Edling to participate in this trial. The only adverse interest between those parties was a question of law.
[¶ 84] Praus argues it was an abuse of discretion resulting in prejudice for the trial court to deny severance and grant defendants additional peremptory challenges when the only issue between the defendants was a question of law.
[¶ 85] Cape, in its return in opposition to Praus’ motion to sever the indemnity claims, argued, because the case was governed by comparative fault and the jury would decide the “fault” of Edling and Brown, severance was not proper. On January 7, 1999, the trial court entered an order denying Praus’ motion to sever the indemnity claims brought by Cape against Edling and Brown. The trial court agreed with the argument of Cape that “[comparative fault requires that the jury be allowed to consider fault of all parties and non-parties, depending upon the evidence presented” and “[t]he Rules of Civil Procedure are intended and designed to facilitate the resolution of all claims arising from a single incident in a single trial.”
[¶ 86] However, the only party whose fault was of any consequence to Cape, *260Brown, and Edling was Cape’s fault. Brown’s and Edling’s participation in the defense of Cape at trial was not justified under comparative fault or the indemnification agreements. In addition, even assuming arguendo Brown could be liable under the indemnification agreement to Cape for Cape’s failure to comply with an OSHA regulation, there would have had to have been a second trial to determine what percentage of Cape’s liability was attributed to Brown’s failure to comply with OSHA, because the verdict form submitted to the jury did not answer that indemnification claim.
[¶ 87] Our Court has said “[a] trial court abuses its discretion when it acts arbitrarily, unconscionably, unreasonably, or when it misinterprets or misapplies the law.” Cline v. Cline, 1998 ND App 11, ¶ 7, 585 N.W.2d 145. We have explained “a trial court acts in an arbitrary, unconscionable, or unreasonable manner when the exercise of discretion is not the product of a rational mental process by which the facts of record and law relied upon are stated and are considered together for the purpose of achieving a reasoned and reasonable determination.” Id. The trial court’s stated basis for denying severance of the indemnity claims that “comparative fault requires the jury be allowed to consider fault of all parties and non-parties, depending upon the evidence presented” was not “a reasoned and reasonable determination” based upon the undisputed facts in the record, the indemnification agreements, and the law of comparative fault, several liability and workers compensation as an exclusive remedy. In fact, there is no analysis of why Brown and Edling would have any right under comparative fault, several liability, workers compensation law or the indemnification agreements to participate in the factual determination of the fault of Cape.
[¶ 88] As the majority opinion points out in 8 Moore’s, at § 42.10[4][a] p. 42-17, the authors state that for courts considering consolidation “ ‘the benefits of efficiency can never be purchased at the cost of fairness.’ Courts have employed a balancing test to determine whether consolidation serves the interests of justice. In weighing the interests ... courts have found fairness must be paramount.” (Citation omitted.) The participation of Brown and Edling gave Cape an unfair advantage over Praus at trial.
[¶ 89] The trial court abused its discretion when it refused to sever the indemnification claims, which only involved a question of law.
[¶ 90] In addition, the trial court granted additional peremptory challenges to Cape, Mack, Edling and Brown. The result was that the trial court granted Praus six peremptory challenges and the defendants a total of eleven peremptory challenges. This allowed the defendants almost a two-to-one advantage in the selection of the jury. The majority correctly states that under Rule 47(b), N.D.R.Civ.P., if a side consists of more than one party, that side is entitled to a total of four peremptory challenges and only “[i]f parties on a side have essentially adverse or antagonistic interests” may the trial court grant the parties on that side additional peremptory challenges.
[¶ 91] As previously set forth, there was not a claim between Praus and Edling nor an adverse interest between Cape and Edling. Brown’s interests also were not adverse to Cape. The only adverse issue was a question of law.
[¶ 92] The trial court’s erroneous analysis of the severance issue appears to have led to its erroneous grant of additional peremptory challenges. Whether the two abuses of discretion by the trial court cumulatively are harmless error or reversible *261error is the next step in the proper analysis of this case. There appears to be a split of authority in the various state jurisdictions whether peremptory allocation error must be accompanied by actual prejudice.3 Anno., Effect of allowing excessive number of peremptory challenges, 95 A.L.R.2d 957 (1964 & Supps.1993 & 2001). I am persuaded by those jurisdictions that conclude such error is reversible as a matter of law. Id. at § 4[a], The Utah Supreme Court’s analysis is instructive:
To avoid favoring one side of a lawsuit over another, a trial judge must carefully appraise the degree of adverseness among co-parties and determine whether that adverseness truly warrants giving that side more challenges than the other.
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When, however, a cross-claim is merely a derivative of the original action, such as a cross-claim for indemnification or contribution, a “substantial controversy” does not exist for the purposes of Rule 47.
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A side that has additional peremptory challenges has the opportunity to shape the jury to its advantage.... Requiring a party to show prejudice in such circumstances is to require the impossible. “To show actual prejudice, the complaining litigant would be required to discover the unknowable and to reconstruct what might have been and never was, a jury properly constituted after running the gauntlet of challenge[s] performed in accordance with the prescribed rule of the game.” Blades v. DaFoe, 704 P.2d 317, 322 (Colo.1985) (quoting Kentucky Farm Bureau Mut. Ins. Co. v. Cook, 590 S.W.2d 875, 877 (Ky.1979)). Accordingly, we hold that it was prejudicial error for the trial court to grant UDOT and Salt Lake County six peremptory challenges.
Randle v. Allen, 862 P.2d 1329, 1333-34 (Utah 1993).
[¶ 93] The Supreme Court of Nebraska quoting the Supreme Court of Kentucky explained:
As long as [peremptory challenges are] part of the trial process ... we believe that their proper allocation between litigants is a substantial right which so pervades the process that its erroneous application requires reversal as a matter of law if the issue is properly preserved by the adversely affected litigant. Kentucky Farm Bur. Mut. Ins. Co. v. Cook, 590 S.W.2d 875, 877 (Ky.1979).
Gestring v. Mary Lanning Mem’l Hosp., 259 Neb. 905, 613 N.W.2d 440, 450 (2000). See also Koustas Realty v. Regency Square P’ship, 724 P.2d 97, 99 (Colo.App.1986) (granting excess peremptory challenges is reversible error even if no prejudice results); Davenport v. Ephraim McDowell Mem’l Hosp., 769 S.W.2d 56, 59 (Ky.App.1988) (granting two non-antagonistic defendants six peremptory strikes is reversible error as a matter of law); King v. Special Res. Mgmt., 256 Mont. 367, 846 P.2d 1038, 1042 (1993) (showing of prejudice is not required when additional peremptory challenges are improperly granted); Moore v. Jenkins, 304 S.C. 544, 405 S.E.2d 833, 835 (1991) (holding that allowing multiple defendants each to exercise a full set of peremptory strikes while aceord-*262mg only one set of strikes to plaintiff is prejudice as a matter of law); Carrier v. Pro-Tech Restoration, 944 P.2d 346, 353-54 (Utah 1997) (presuming trial court’s erroneous allocation of peremptory challenges results in prejudice as a matter of law); Wardell v. McMillan, 844 P.2d 1052, 1059 (Wyo.1992) (stating erroneous failure to grant additional peremptory challenge for alternate juror constitutes reversible error even without a showing the jury actually prejudiced the ease). This position is consistent with our conclusion that it is prejudicial error for litigants to be required to use peremptory challenges to remove jurors who should have been removed for cause. Sand v. Queen City Packing Co., 108 N.W.2d 448, 453-54 (N.D.1961).
[¶ 94] I conclude the trial court abused its discretion in failing to sever the indemnification claims and granting additional peremptory challenges causing prejudice to Praus’ right to a fair trial. I would reverse and remand for a new trial with the indemnification claims, if any exist, severed.
[¶ 95] VANDE WALLE, C.J., concurs.

. Justice Neumann concludes in his special concurrence that the majority rule seems to be that some showing of prejudice is required. I respectfully disagree. Justice Neumann quotes from the annotation, Effect of allowing excessive number of peremptory challenges, 95 A.L.R.2d 957, 963, which was compiled in 1964 and which is admittedly based on ”[t]he numerical weight of authority.” I would suggest the modern trend is reflected in recent cases, which have more persuasive rationales.