Court Opinion

ID: 9525830
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:08:28.664234+00
Date Added: 2024-06-11T13:17:07.856144
License: Public Domain

JUSTICE RAKOWSKI, dissenting: For the reasons which follow, I respectfully dissent from the majority holding that Kerschner and Karlin are entitled to maintain a third-party action based on implied quasi-contractual indemnity. In a line of carefully drafted post-Contribution Act opinions, our supreme court has considered the continued viability of implied indemnity as a method of third-party recovery. The rule from these cases is consistent and crystal clear: a party who is culpable, negligent, or factually at fault is not entitled to quasi-contractual indemnification. In Allison v. Shell Oil Co., 113 Ill. 2d 26 (1986), our supreme court noted that active-passive indemnity "perpetuates a theory of fault repudiated in Alois [v. Ribar, 85 Ill. 2d 1 (1981)]: that one party was ultimately responsible for any injury, and that courts were charged with employing legal doctrine in a game of pin the tail on the donkey.” Allison, 113 Ill. 2d at 34. The court pointed out that since the adoption of "comparative negligence and the principles of apportioning rather than affixing liability,” there is no longer a need for implied indemnity based upon an active-passive distinction. Allison, 113 Ill. 2d at 34. As a result, "[a]ctive-passive indemnity is no longer a viable doctrine for shifting the entire cost of tortious conduct from one tortfeasor to another.” Allison, 113 Ill. 2d at 35. The Allison court limited its holding to situations where liability is based on fault or negligence and declined to address whether a tortfeasor whose liability is vicariously imposed may shift liability entirely to the party actually at fault. Allison, 113 Ill. 2d at 35. However, following Allison, in Frazer v. A.F. Munsterman, Inc., 123 Ill. 2d 245 (1988), the court noted that indemnification may arise from contract or from situations in which a promise to indemnify can be implied from the relationship among tortfeasors. "The fundamental premise for [indemnification] is that the indemnitee, although without fault in fact, has been subjected to liability solely because of the legal relationship with the plaintiff or a nondelegable duty arising out of common or statutory law.” Frazer, 123 Ill. 2d at 255. In Thatcher o. Commonwealth Edison Co., 123 Ill. 2d 275 (1988), decided the same day as Frazer, the court held that although implied indemnity was not abolished by the Contribution Act, the action "cannot be maintained where the one seeking indemnity was negligent or otherwise at fault in causing the loss.” Thatcher, 123 Ill. 2d at 278. In Dixon o. Chicago & North Western Transportation Co., 151 Ill. 2d 108 (1992), the court reaffirmed its holding in Frazer and Thatcher that implied indemnity in a defective products case is available only where the party seeking indemnity was not negligent or otherwise at fault. Dixon, 151 Ill. 2d at 120-21. In Dixon, the plaintiff was a passenger in a Jeep driven by a coworker in the course of their employment. The Jeep went out of control and crashed. The plaintiff then sued his employer under the Federal Employers’ Liability Act (45 U.S.C. § 51 et seq. (1988)), the driver in negligence, and the Jeep defendants in strict products liability. The employer and driver asserted a third-party action against the Jeep defendants. In denying implied indemnity, the court held the scope of implied indemnity in a defective products case is limited to those situations where the indemnitee was not at fault in causing the loss. Dixon, 151 Ill. 2d at 119. "Where the party seeking indemnity was not at fault, it can rightfully seek to shift its entire liability to the truly responsible party. However, if the party seeking indemnity is found to have been at fault in causing the injury, fairness dictates that it not be allowed to shift the entire loss to other parties.” Dixon, 151 Ill. 2d at 119. Consequently, because the driver’s liability to the plaintiff was based on negligence, the driver was barred from seeking indemnity. Likewise, because the employer’s liability was vicarious, the driver’s negligence would be charged to the employer, thereby precluding the employer from seeking implied indemnity from the Jeep defendants. Dixon, 151 Ill. 2d at 121-22. In American National Bank & Trust Co. v. Columbus-Cuneo-Cabrini Medical Center, 154 Ill. 2d 347 (1992), the court held the Contribution Act did not abolish actions for implied indemnity in vicarious liability situations. American National Bank & Trust Co., 154 Ill. 2d at 348. In reaching this conclusion, the court noted the distinction between active-passive and quasi-contractual indemnity. On the one hand, the premise supporting implied indemnity in a quasi-contractual context "recognizes that the law may impose upon a blameless party liability derivatively through another’s conduct.” American National Bank & Trust Co., 154 Ill. 2d at 351. In cases of vicarious liability, only the agent is at fault in fact, while the principal is blameless for the plaintiff’s injuries. American National Bank & Trust Co., 154 Ill. 2d at 354. Thus, "reason may exist to continue to recognize the viability of implied indemnity where a principal is vicariously liable for the conduct of an agent or for the nondelegable acts of an independent contractor.” American National Bank & Trust Co., 154 Ill. 2d at 351. On the other hand, the Contribution Act is premised on fault-based considerations and is thus "theoretically 'ill-suited to the task of addressing’ quasi-contractual relationships.” American National Bank & Trust Co., 154 Ill. 2d at 353-54, quoting Kandaras & Kelley, New Developments in the Illinois Law of Contribution Among Joint Tortfeasors, 23 Loy. U. Chi. L.J. 407, 448 (1992). In the case sub judice, Kerschner and Karlin are charged with actual wrongdoing for the wrongful termination of the partnership, breaches of fiduciary obligations, and tortious interference with contractual relations. Kerschner and Karlin are not susceptible to liability solely because of a legal relationship, nondelegable duty, or vicarious liability scheme. One cannot reasonably say that a person so charged is blameless, not culpable, or not factually at fault. The fact that Kerschner and Karlin relied on the attorney’s advice in acting as they did may suggest a malpractice claim. However, it does not render their actions any less culpable with respect to Weiss. Put another way, Kerschner and Karlin are subject to liability for their own actual conduct, rather than for the actions of their attorney. Dixon is directly on point. Kerschner and Karlin are barred from seeking implied indemnity because they are charged with actual wrongdoing. To allow a third-party action here amounts to a resurrection of active-passive indemnity and a legal "game of pin the tail on the donkey.” See Allison, 113 Ill. 2d at 34. Finally, the majority’s reliance on Faier v. Ambrose & Cushing, P.C., 154 Ill. 2d 384 (1993), is without merit. There, the majority specifically held the relationship was vicarious. Although Justice Harrison’s dissent disputed a vicarious relationship, this finding is the linchpin of the majority’s holding. In sum, because Kerschner and Karlin have not set forth a proper claim for contractual implied indemnification, subrogation, breach of warranty, or some form of derivative liability, they are not entitled to maintain a third-party action pursuant to section 2 — 406 of the Illinois Code of Civil Procedure. Accordingly, I would affirm the finding of the circuit court.