No. 14659
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
JOSEPH CORDIER and JO CORDIER,
husband and wife,
Plaintiff,
-vs-
STETSON-ROSS, INC., a Washington
Corporation,
Defendant.
and
STETSON-ROSS, INC., a Washington
Corporation,
Defendant and Third-Party Plaintiff,
-vs-
CHAMPION INTERNATIONAL CORPORATION,
a corporation,
Third-Party Defendant.
ORIGINAL PROCEEDING:
Counsel of Record:
For Plaintff:
Williams Law Firm, Missoula, Montana
Richard Ranney argued, Missoula, Montana
For Respondent:
Garlington, Lohn and Robinson, Missoula, Montana
Larry Riley argued, Missoula, Montana
McClelland Law Office, Missoula, Montana
Goldman Law Firm, Missoula, Montana
Submitted: June 14, 1979
Decided:
flOV 2 8 im-
Filed:. j u i Y 1979
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
The Hon. Russell E. Smith, United States District Judge
for the District of Montana, has certified to us for decision
three questions, the adjudication of which by the Montana
Supreme Court would materially advance ultimate termination of
federal litigation:
"1. Does a third party, sued by an injured employee,
have any right to indemnity or contribution from a
negligent employer if the employer and the employee
are covered by the Montana Workers' Compensation Act?
"2. If the third party has a right in indemnity or
contribution against the employer, may the employer
insist that the total verdict, of which he must pay
all or part, be reduced by the compensation payments?
"3. If the employer is not liable by way of
indemnity or contribution to a third party, may he,
even though himself negligent, recover from the
third person through the employee under the sub-
rogation rights created by law? In short, is there
a conflict between R.C.M. 1947, S92-204.2,
and R.C.M. 1947, 858-607.2?"
The plaintiff in the federal court action, Joseph
Cordier, was an employee of Champion International Corporation
(hereafter Champion.) He was injured in an industrial
accident which was covered under the Montana Workers' Compen-
sation law and received compensation. Cordier has now brought
against Stetson-Ross, Inc. an action under section 92-204.1,
R.C.M. 1947, now section 39-71-412, MCA. In his complaint
in the federal court, Cordier claimed that he was injured
as the result of the negligence of Stetson-Ross, Inc. in
connection with machinery sold by Stetson-Ross, Inc. to
Champion. Joseph Cordier is joined in his suit against Stetson-
Ross, Inc., by his wife, who as a co-plaintiff seeks damages for
loss of consortium.
Stetson-Ross, Inc. answered the complaint of Joseph
Cordier and Jo Cordier by way of general denial, by alleging
affirmative defenses of contributory negligence and assumption
of risk, and by alleging that the negligence of Champion in
failing to properly instruct Cordier in the operation of the
gang saw, in failing to maintain the saw and equipment
properly, and in failing to provide adequate safety procedures,
proximately caused the plaintiff's accident.
Stetson-Ross, Inc. in the same federal action also
filed a third-party complaint against Champion alleging
again in essence that Champion failed properly to supervise,
instruct, and warn its employees as to the operation of the
gang saw, failed to set up and install the saw properly and
to maintain it, and failed to carry out and enforce safety
procedures with respect to the operation of the gang saw. In
its third-party complaint Stetson-Ross, Inc. prays for
judgment against Champion either for the full amount of
plaintiff's damages by way of indemnity or for a proportional
amount, based on the percentages of negligence attributable
to Champion and to Stetson-Ross, Inc.
Stetson-Ross, Inc.'s claim is therefore based on (1)
indemnity, or (2) contribution under our comparative negligence
statute.
We look first at the contribution issue. In Consolidated
Freightways Corporation of Delaware v. June Osier and Margaret
Collins (1979), Mont. I P.2d , 36 St.Rep.
1810, we held that except in those cases covered by our
comparative negligence statute, there is no substantive right
to contribution between joint tortfeasors under Montana law.
In its answer in the federal court to the complaint of
co-plaintiffs Joseph Cordier and Jo Cordier, Stetson-Ross,
Inc. alleges that the contributory negligence of Joseph
Cordier was the proximate cause of the injuries for which he
claims damages. This allegation brings into play the
provisions of section 27-1-702, MCA, our comparative negligence
statute. Under that statute, if the plaintiff were negligent
but in an amount not greater than the negligence of Stetson-
ROSS, Inc., any damages allowed are required to be diminished
in the proportion that the amount of negligence is attributable
to the person recovering. However, we further held in
Consolidated Freightways, supra, that the right of contribution
granted in section 27-1-703, MCA, applicable to comparative
negligence cases, does not apply or give a riqht to one
tortfeasor to bring into the action another alleged tortfeasor
by means of third-party practice. We said:
"We further hold that even in comparative
negligence cases, the right of contribution
granted in section 27-1-703, MCA, applies
only to defendants against whom judgment
has been recovered by the plaintiff. The
terms of the statute itself appear to
command that result. It speaks of contribution
in paragraph (1) where
"'recovery is allowed against more than one
party', and in paragraph (2)
"provides what occurs if contribution cannot
be obtained 'from a party liable for contribution.'
"That language is not an invitation to engage in
third party practice under Rule 14, M0nt.R.Civ.P.
One reason is that Rule 14 is a procedural rule,
and is not intended to alter, expand or abridge
substantive rights. Moore's Federal Practice
Sec. 14.03[1]. There was no substantive right
to contribution in 1975 or 1977, when the com-
parative negligence statutes were adopted in Montana.
Another reason is that there is no indication of
legislative intent, unless legislative intent can be
found by implication, to change the substantive rule
against contribution among joint tortfeasors."
Consolidated Freightways (1979), Mont . I
P.2d , 36 St.Rep. 1810, 1813.
Consolidated Freightways teaches that contribution in
Montana between joint tortfeasors is allowed only in comparative
negligence cases, and then only as to tortfeasors actually sued
by the plaintiff. The reasons are fully set forth in that opinion.
The question certified to us by Judge Smith however in
effect asks us to assume that there are no other roadblocks to
Stetson-Ross, Inc.'s claim to contribution but the provisions
of the Montana Workers' Compensation Act. In that light, we are
brought immediately to consider the effect of section 92-204.1,
R.C.M. 1947, now section 39-71-411,-412, MCA. The pertinent language
of the past and present sections are:
"For all employments covered under the Workers'
Compensation Act. .
. the provisions of the act are
exclusive . . . [aln employer is not subject to
any liability whatever for the death or personal
injury to any employees covered by the . . . Act.
The Workers' Compensation Act binds the employee
himself, and in case of death binds his
personal representative and all persons having
any right or claim to compensation for his
injury or death, as well as the employer and
the servants and employees of such employer,. . .
The right to compensation, and medical benefits
as provided by this act is not affected by the
fact that the injury,. .
. or death is caused
by the negligence of a third party other than
the employer, or the servants or employees of
the employer.. . . Whenever such event ...
is caused by the act or omission of some persons
or corporations other than his employer . . . the
employee ...
shall, in addition to the right
to receive compensation under this act, have a
right to prosecute any cause of action he may
have for damages against such persons or corpora-
tions.. .
."
The following section 92-204.2, R.C.M. 1947, now section
39-71-414, MCA provides that if the injured worker sues a
third party for his injuries, as here, the employer is
subrogated either for the full amount of benefits or an
amount up to 50 percent of the compensation benefits paid to
the employee out of any recovery made by the injured employee
from the responsible third party.
We are commanded by the legislature to construe the
Workers' Compensation Act liberally, section 39-71-104, MCA,
in favor of the claimant, Grief v. Industrial Accident Fund
(1939), 108 Mont. 519, 526, 93 P.2d 961, 963. It is plainly
the intent of the Act that if an employee is injured in the
course of his employment, through the negligence of one
other than his employer or his employer's servants, the
injured employee may sue, recover and keep the full amount
of his common law recovery from the responsible third party,
plus one-half of his costs or 50 percent of the benefits he
received from the employer under the Act. The amount kept by
the employee depends on whether the employer agrees to share
costs. This intent is important as we shall later show.
Note again that under section 92-204.1, R.C.M. 1947,
now section 39-71-411, MCA, the "employer is not subject to
any liability whatever" (emphasis added) to an injured
employee except under the Act. A majority of states in compensation
cases hold that there is no right of contribution vested in
a third party, responsible for the injuries the employee
received, against the employer who may also have been concurrently
negligent to bring about the injuries. This result is
reached for a variety of reasons as discussed by 2A Larson,
Workmen's Compensation Law, 876.21, et seq.
One reason given to deny contribution is that an employer
under such a statute as section 39-71-411, MCA, cannot be jointly
liable to the employee; therefore, the employer is not a joint
tortfeasor. Larson, supra, 876.21, p. 14-298. Another is that
in those states which have adopted the Uniform Contribution Between
Joint Tortfeasors Act, as amended, both parties must be liable
to the employee, and compensation statutes usually free the
employer from liability to his injured employee. Another is that
-6-
the claim of the employee against the employer is solely for
statutory benefits, while his claim against the third party
is for damages; therefore, there is no common liability
between the employer and the responsible third party.
Cases which have adopted the minority rule that contribution
from an employer is allowable under compensation acts, do so
for reasons not pertinent or applicable to the case at bar.
For example, contribution for one-half of the benefits was
allowed by the United States Supreme Court in Weyerhaeuser
Steamship Company v. United States (1963), 372 U.S. 597, 83
S.Ct. 926, 10 L.Ed.2d 1, even though the Federal Employees
Compensation Act, which covered the employer was indicated as
the exclusive remedy against the employer. However, the
Supreme Court was led to this result by the traditional
admiralty rule dividing all damages equally in cases of "mutual
fault" between vessels. Yet, in United Airlines, Inc. v.
Wiener (9th Cir. 1964), 335 F.2d 379, the Ninth Circuit
Court of Appeals distinguished Weyerhaeuser and refused
employer contribution to a third party where the indemnitor
(employer) was not liable to the injured employee.
It is our opinion that the broad provisions of section
92-204.1, R.C.M. 1947, now section 39-71-411, MCA, require us to
hold that the provisions of the Workers' Compensation Act
are exclusive as to the liability of the employer for damages
sustained by the injured employee whether they are sought by
the employee directly, or by a third party under contribution.
Our statute rules out "any liability whatever" even before
it goes on to state that the employee and those under him
are limited to such recovery as the Act allows against the
employer. The language "any liability whatever" would be
surplusage unless it is read to mean liability not only to
the employee and those claiming under him, but also any
other party attempting to claim liability against the employer
-7-
for the same incident. In fact, this case provides an
example: the spouse of Cordier has also sued Stetson-Ross,
Inc. for her loss of consortium arising out of the industrial
accident. Such an action by the spouse against the employer
is barred by the same section of the Act, section 92-204.1,
R.C.M. 1947, now section 39-71-411, MCA. To allow Stetson-Ross,
Inc. to claim indemnity from the employer for the spouse's
damages would accomplish indirectly what could not be done
directly by a spouse.
On full consideration, we deem the wise course is to hold
that the language of section 39-71-411, MCA, means what it
says when it excludes "any liability whatever" as to a
covered employer, and to follow the majority rule. Therefore,
even if the question certified to us involves a case of
comparative negligence, as between Cordier and Stetson-Ross, Inc.,
prevail
the provisions of section 39-71-411, and and a third party
may not claim contribution from a covered employer for
damages for the injuries an employee receives in the course
of his employment. Any claim of Stetson-Ross, Inc. against
Champion for contribution in this case is therefore barred.
This applies also to any claim for contribution as to the
spouse's loss of consortium.
We also hold that the same reasoning applies to Stetson-
Ross, Inc.'s claim for indemnity against Champion. However,
because indemnity is an all-or-nothing proposition, and
proceeds from a different legal basis than contribution, we
are required to give it some special discussion.
In Consolidated Freightways, supra, we held that in
Montana there is no right between multiple tortfeasors who
are in pari delicto to indemnity as a matter of substantive
law. In so doing we affirmed the holdings in American Home
Assur. Co. v. Cessna Aircraft Co. (10th Cir. 1977), 551
F.2d 804, 808, and Panasuk v. Seaton (D. Mont. 19681, 277
F.Supp. 979. We did approve in Consolidated Freightways the
right of a third party to indemnity when the parties were not
in pari delicto, where the injury results from the negligence
of one party as primary and where the other party is not
negligent, or his negligence is remote, passive and secondary
but he is nevertheless exposed to liability by the negligence
of the first party. Such situations were exemplified in
Great Northern Railway Company v. United States (D. Mont.
1960), 187 F.Supp. 690, 693 and Crosby v. ~illingsDeaconess
Hospital (1967), 149 Mont. 314, 426 P.2d 217. As we said in
Fletcher v. City of Helena (1973), 163 Mont. 337, 346, 517
"Indemnification requires the would-be indemnitee
be free from any active negligence contributing
to the injury causing accident."
But even if Stetson-Ross, Inc.'s indemnity claim were
otherwise allowable under Montana law, the exclusivity of
the Workers' Compensation Act would still operate to bar
that claim of indemnity against the employer Champion. That
is the majority rule in these matters, which we choose to
follow.
Larson, supra, section 76.44, points out that a
leading case for the majority rule is that of Slattery v.
Marra Bros. (2d Cir. 1951), 186 F.2d 134, 138, authored by
Judge Learned Hand. In that case, Marra Brothers, as defendant,
had charged that Spencer Company was liable because of the
primary fault and neglect of Spencer Company, and this
primary fault entitled Marra Brothers not to contribution
but to full indemnity. The District Court dismissed this claim
and Judge Hand affirming for the Court of Appeals, said:
.
". . We are therefore to assume that Slattery's
contract of employment with the Spencer Company
was a 'surrender . . .
. of . . any other method,
form or amount of compensation' for any injuries
which he might receive 'in the course of his employ-
ment'; and the Spencer Company was under no liability
to him of any kind. Therefore, the right of Marra
Bros. Inc., to indemnity from the Spencer Company
cannot rest upon any liability of that company
to Slattery; and, if it exists at all, it is
hard to see how it can arise in the absence
of some legal transaction between the two corporations,
other than that of joint tortfeasors: . . .
". . . However that may be, we shall assume that,
when the indemnitor and indemnitee are both liable
to the injured person, it is the law of New Jersey
that, regardless of any other relation between them,
the difference in gravity of their faults may be
great enough to throw the whole loss upon one. We
cannot, however, agree that that result is rationally
possible except upon the assumption that both parties
are liable to the same person for the joint wrong.
If so, when one of the two is not so liable, the
right of the other to indemnity must be found in
rights and liabilities arising out of some other
legal transaction between the two.. . .
". .. So far as we can see therefore there is
nobody of sure authority for saying that differences
in the degrees of fault between two tortfeasors will
without more strip one of them, if he is an employer,
of the protection of a compensation act; and we
are at a loss to see any tenable principle which
can support such a result. . ."186 F.2d at 138,
139.
Montana has previously ruled on the difference created by
"some other legal transaction between the two." In
DeShaw v. Johnson (1970), 155 Mont. 355, 472 P.2d 298, we
permitted a claim of indemnity against an employer even though
the injury occurred under the Workers' Compensation Act, because
there existed between the indemnitor and indemnitee a written
save-harmless agreement. We saw there on the part of the employer
an obligation separate and apart from any obligation owed
through the injury to the employee.
In Holly Sugar Corp. v. Union Supply Co. (Colo. 1977),
572 P.2d 148, employee Pust proceeded against Union on
various products liability theories. Union responded by
joining employer Holly as a third party defendant, seeking
indemnity for any liability which Union might incur. The
Colorado Supreme Court, in examining the situation, determined
that the Montana compensation statutes and the Colorado
statutes were similar with respect to the exclusivity provision,
and that since there was no guidance under then existing
Montana law, it would assume that Montana would hold as
Colorado had, that the Colorado act prohibited a common law
indemnity action by a third party against an employer in a
compensation-covered case. Following this decision, Judge
William D. Murray decided in Ambo v. Duff-Norton Company v.
Jelco, Inc., (No. C\I-77-41-BU, D. Mont. 19781, 35 St.Rep. 660,
that this Court would hold that an employer who had paid an
employee under the Montana Workers' Compensation Act was
immune from any third party indemnity claim arising out of
the same incident.
Larson, supra, in discussing injuries from the use of
products purchased from a manufacturer, poses the question
and result logically enough:
". . . But when a purchaser buys a product, does
he make an implied contract with the manufacturer
to use the goods in such a way as not to bring
liability upon the manufacturer? This would be
stretching the concept of contract out of all
relation to reality. The court's approach to
the matter assumed that the employer's duty to
the manufacturer, if any, would have to be
one based on its relative negligence, and on
that basis could not survive the exclusive-
liability clause.. . ." 2A Larson, Workman's
Com~ensationLaw. S76.44. D. 14-402.
Stetson-Ross, Inc. relies on a contrary result reached
by the New York Court of Appeals in Dole v. Dow Chemical
Company (1972), 30 N.Y.2d 143, 282 N.E.2d 288, 331 N.Y.S.
382, and upon Westchester Lighting Co. v. Westchester Co.
S. E. Corp. (1938), 278 N.Y. 175, 15 N.E.2d 567, 5 N.Y.S.2d. In
Westchester, however, as Judge Learned Hand had pointed out
in his opinion we have quoted previously (186 F.2d at 138), the
liability of the indemnitor was actually founded upon a
breach of tort duty by the indemnitor to the indemnitee.
in
--
The decision /Dole is not logically explainable although
Larson states that the result itself may have been a fair
compromise. Nevertheless, its logic is described by Larson
as "superficial". Section 76.44, at 14-405.
Once again, the very broad wording of the exclusivity
clause in our Workers' Compensation Act is a factor in our
decision. The language "any liability whatever" necessarily
includes a noncontractual indemnity claim where the liability
of the putative indemnitor arises out of an incident covered
by Workers' Compensation-covered injuries.
As to the second question certified by Judge Smith to
us, since we hold that in this case there is no right of
indemnity or contribution against the employer, we do not
need to consider whether the employer may insist that the
total verdict against him be reduced by the compensation
payments. We reserve our decision on that point to such
time as we may be faced with a claim based upon contractual
indemnity or on some legal obligation not based on a joint
tortfeasor relationship.
The third problem certified to us by the federal court
poses the problem of a negligent employer, not liable by way
of indemnity or contribution to a third party, nevertheless
recovering from the third party through the employee under
subrogation rights created by law. The federal judge asks
if there is a conflict between section 92-204.2, R.C.M.
1947, now section 39-71-414, MCA, and section 58-607.2,
R.C.M. 1947, now section 27-1-703, MCA.
We limit this discussion to the facts of this case,
where an employee is suing a third party on tort liability
for an incident covered by the Workers' Compensation Act.
Section 39-71-414, MCA, is the statute providing sub-
rogation to an employer who has paid compensation and benefits
to the employee under the Act. Section 27-1-703, MCA, is
the contribution statute applicable in a comparative negligence
case when recovery is allowed against more than one party.
This question was posed and certified to us by the
federal court before we entered our opinion in Consolidated
Freightways, supra. Therefore the Federal District Court did
not have before it at the time the question was certified
the discussion set forth in Consolidated Freightways, which
is pertinent to the question of conflict between such statutes.
We said in Consolidated Freightways that the right of
contribution granted in section 27-1-703, MCA, applies only
to defendants against whom judgment has been recovered by
the plaintiff. As we have already demonstrated in the
foregoing discussion, it is not possible in Montana for an
employer who has paid Workers' Compensation benefits to an
employee to be liable as a joint tortfeasor either for
indemnity or for contribution to a third party found responsible
for the employees injuries. Section 27-1-703, MCA, provides
a right of contribution only as to defendants against whom
judgment has been recovered by a plaintiff in a comparative
negligence case. Under Consolidated Freightways, contribution
accrues only between defendants who have actually been sued
by the plaintiff. Outside the comparative negligence action,
there is no right of contribution, and an unsued tortfeasor
is not liable in contribution to a tortfeasor against whom
recovery has been allowed in a comparative negligence case.
Since section 27-1-703, MCA, cannot give rise to liability
against an employer, there can be no conflict between it and
section 39-71-414, MCA, the subrogation statute in the
Workers' Compensation Act. This result indicates at least
some wisdom in the position we took as to unsued tortfeasors
in Consolidated Freightways.
Even though there is no conflict between section 27-1-
703, MCA, and section 39-71-414, MCA, nevertheless, the
question certified to us poses the problem of the fairness
of a "negligent employer" profiting from the employee's
suit by getting reimbursement for the compensation expenditures
through subrogation.
-13-
Subrogation provisions in Workers' Compensation Acts
vary from state to state and with each quirk and special
provision to be found therein, it may safely be said that
there are almost 50 different approaches to the right of
subrogation among the various states. We must look at the
subrogation rights provided by the Montana Act from the
viewpoint that the employer has accepted liability without
fault to the employee; that the employee's recovery against
the employer is limited to the benefits under the Act; that
the employer has given up its common law defenses if it does
not come under the Act; and that the special provisions of
the Act with respect to subrogation are designed to provide
an incentive to the employee to seek reimbursement for his
damages from a responsible party so that the employer may be
reimbursed in whole or in part out of any recovery made by
the employee.
The statutory scheme is evident. The employer or his
insurer is granted a right of subrogation for all compensation
and benefits paid under the Workers' Compensation Act.
Section 39-71-414, MCA. This right is a "first lien" on the
claim, judgment, or recovery of the employee. Section 39-
71-414, MCA. If the employer at the employee's request
agrees to pay a part of the costs of the action, the employer's
first lien allows recovery for all of the benefits paid
under the Act by the employer or his insurer. If the employer
or the insurer does not elect to participate in the costs
of the employee's action, then the insurer or the employer
waives 50 percent of its subrogation rights, and that portion
of the benefits may be kept by the employee over and above
his recovery from the responsible party. Section 39-71-413,
MCA, states that the employee, "in addition to the right to
receive compensation" has a right to prosecute any cause of
action he may have for damages against the persons or corporations
causing the injury.
-14-
It is the intent and purpose of the Workers' Compensation
Act that the right of action against a responsible third party
belongs - - employee.
to the Consequently, iti5 uniformly held
that the employer's contributory negligence may not be used
as a defense in an action by the injured employee against
the responsible party. See Froysland v. Leef Bros., Inc.
(1972), 293 Minn. 201, 197 N.W.2d 656.
Therefore, under the Montana scheme, the negligence, if
any, of the employer (but not of the employee himself) never
becomes an issue in the injured employee's action against a
responsible third party. His right to recover damages is determined
without reference to his employer's negligence. If contributory
negligence is involved, it is only the contributory negligence
of the injured employee himself which serves to reduce his right
of recovery under comparative negligence. Under the statutory
scheme in Montana, the negligence of the employer or of the
employee's fellow servants does not serve to reduce the
recovery to which the injured employee is entitled.
Under section 39-71-414, MCA, the employer is not a
necessary party to the injured employee's action. The
employer has only a "first lien" upon any recovery made by the
employee.
While this may result in a "negligent" employer profiting
through subrogation, the employee's cause of action cannot
be split. In choosing between two possible injustices,
allowing a negligent employer to profit, or reducing the
recovery allowed to an injured employee, the Montana legis-
lature has opted in favor of the employee by providing him
full recovery.
Any reduction of the employer's right to subrogation by
virtue of the employer's negligence would have to be found
within the four corners of the Workers' Compensation Act.
There is no such provision, and we cannot provide one.
We agree with Larson's comment on the matter:
". ..
On the other hand, it is admittedly rather
an odd spectacle to see a negligent employer reimbursing
himself at the expense of a third party; and
several courts have barred the employer's
recovery on these facts. There is, however,
one oversight in most of the latter cases:
They have a tendency to speak of the 'employer's'
negligence when what they really mean is the
negligence of some co-employee of the injured
employee. Once this is held firmly in mind,
the picture changes in two ways. First, one's
moral indignation evaporates, since one no
longer has the prospect of a personally guilty
plaintiff claiming damages. Second, it becomes
even legally inaccurate to speak of the 'employer's'
negligence in such circumstances, since the
employer who assumes compensation coverage is
in law not liable for the negligent harms wrought
by one employee upon another. It is incorrect
to say that the negligence of a co-employee is
the employer's negligence, when the injured
person is also an employee; the principle of
vicarious liability simply does not apply .
- -
.
."
2A Larson, workmanis compensation Law, 5
75.23, p. 14-269 to 14-272.
Stetson-Ross, Inc. points to the California case of
Associated Const. v. Workers' Compensation (1978), 150
Cal.Rptr. 888, 587 P.2d 684, as a case supporting their
position that we should reduce the subrogation recovery
rights of an employer who has been negligent. While that
case is authority for what Stetson-Ross, Inc. contends, an
examination of the background of the California cases leading
up to this result will demonstrate why the adoption of
Associated Const. holding would be unwise here.
First of all, California has no comparative negligence
statute. The contributory negligence of a plaintiff in the
slightest degree operated to defeat a plaintiff's claim in
California until Li v. Yellow Cab Co. (1975), 119 Cal.Rptr.
858, 532 P.2d 1226. -
In Li, the California Supreme Court
abolished the rule of contributory negligence, and adopted a
rule of "pure" comparative negligence, thereby abolishing
the doctrines of last clear chance, and assumption of risk
(as a variant of contributory negligence) which were subsumed
under the general process of assessing liability in proportion
to the negligence between the parties.
By "pure" comparative negligence, the California Supreme
Court meant that the negligence, if any, of a plaintiff would
be assessed by the trier of fact, and any reward recoverable
by the plaintiff would be proportionally reduced by the amount
of his negligence. Thus, in theory, a plaintiff, guilty of
negligence in any percentage as a causative factor in bringing
about his injuries could nevertheless recover an amount diminished
by the percentage that his negligence bore to the total amount
of the damages he sustained.
Before - a statutory development existed with respect
Li,
to joint tortfeasors. The California legislature had adopted
in 1957 provisions whereby joint tortfeasors were given a
right of contribution, prorata as against other joint tortfeasors
against whom a judgment had been rendered. The joint and
several liability of each tortfeasor to the plaintiff was
kept in force. Civil Code, sections875, 876. As late as
1977, the California courts were holding that as a condition
to contribution, the money judgment had to be rendered
jointly against two or more defendants in the same action.
Sanders v. Atchison, Topeka, and Sante Fe Railway Company
(1977), 135 Cal.Rptr. 555. The statutes further protected
releases, or covenants not to sue, by providing that if one
tortfeasor settled with the plaintiff, that amount of settlement
reduced the plaintiff's claim against the other tortfeasors,
but the settling tortfeasor was not liable for any greater
amount under contribution than was paid under the agreement
of release or covenant not to sue. Civil Code, section 877.
- involved one plaintiff and one defendant.
Li The
problem of multiple tortfeasors was not handled until the
case of American Motorcycle Ass'n v. Superior Court (1978),
146 Cal.Rptr. 182, 578 P.2d 899. There the California
court, again in the absence of legislative action, made
several departures from its established law. First it held
that the adoption of comparative negligence in - did not
Li
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abolish the rule of joint and several liability as between
joint tortfeasors. Therefore, each tortfeasor whose negligence
was a proximate cause of an indivisible injury received by
a plaintiff was liable for the full amount of the plaintiff's
recovery, irrespective of the comparative or proportional
negligence of that individual tortfeasor as to the other tort-
feasors or as to the plaintiff.
Next, it abolished the "equitable indemnity" rule of
recovery (to be compared with our rule under Crosby v.
Billings Deaconess Hospital (1967), 149 Mont. 314, 426 P.2d
217) and held that partial indemnity, as a species of contribution,
was to be considered in assessing the overall comparative
negligence as between the joint tortfeasors. This development
the court called an evolving common law right of comparative
indemnity. 578 P.2d at 902. Finally, it determined that a
named defendant was authorized to file a cross-complaint
against any other person whether sued or unsued, as to whom
the named defendant sought to obtain total or partial indemnity.
This latter development was, of course an abrupt departure
from the provisions of Civil Code sections 875 and 876,
which limited the right of contribution to sued tortfeasors
against whom a judgment had been recovered.
Even while the California Supreme Court was taking this
course in American Motorcycle Ass'n, with respect to bringing
in unnamed defendants, it recognized that there would be a
number of significant exceptions to the rule, one of which
it listed as employers under the Workers' Compensation Act.
Note 9, 578 P.2d at 917 of the court's opinion indicates
that because of the provisions of the Labor Code, section
3864, which was its exclusivity provision, a concurrently
negligent employer could not be sued.
Notwithstanding the statement in the footnote in American
Motorcycle Ass'n, supra, nevertheless, when the California
Code came to consider the case of Associated Const., supra
587 P.2d at 683, it then decided that comparative fault
among joint tortfeasors was applicable - - - employer in
as to an
spite of the exclusivity clause of the Workers' Compensation
Act. In that case, the Court takes a further broad step:
not only could a court decide the comparative fault of the
employer and any concurrently negligent tortfeasor, but if the
matter were before the administrative board, handling Workers'
Compensation cases, the problem of such comparative fault could
be determined by that Board.
From the foregoing, it should be apparent that this is
not the time for Montana to follow the lead of California or
indeed of New York (see Dole v. Dow Chemical Company (N.Y.
1972), 282 N.E.2d 288) to adopt the broad judicial jumps that
have occurred there without the springboard of legislation.
Several distinctions that apply to Montana come to mind.
First, our comparative negligence statute is a "fifty percent
statute" in that the plaintiff recovers if his negligence is
not greater than the negligence of the person against whom
recovery is sought. Section 58-607.1, R.C.M. 1947, now
section 27-1-702, MCA. Moreover, if the plaintiff under
Montana's comparative negligence statute sues more than one
defendant, he may not recover against any such defendant as
to whom plaintiff's negligence is greater. This is significantly
different from California's "pure" comparative negligence system.
As an example, in California, if a plaintiff is thirty
percent negligent, one defendant sixty percent negligent, and
another ten percent negligent, under the California rule of
pure comparative negligence and joint and several liability,
the plaintiff who is thirty percent negligent may recover
seventy percent of his damages both against the sixty percent
negligent defendant and the ten percent negligent defendant.
In California it is the rule that the plaintiff's comparative
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negligence is weighed against the combined negligence of
the defendants, whereas in Montana, under section 58-607.1,
R.C.M. 1947, now section 27-1-702, MCA, (we have not speci-
fically held this yet) it appears that the ten percent
negligent defendant would not be liable for any amount to
the plaintiff.
California justifies its departures from established
rules and statutes as a part of the evolution of the common
-
law (Li, supra, 532 P.2d at 1238), a euphemism for the
adoption of uncommon law. In any event, the result in
Workers' Compensation cases has been to inject the concept
of fault of the employer into its decisions, regardless of
the exclusivity clause.
What California has really done through these decisions,
is to open the door for liability insurers to scurry around
for prospective cross defendants with whom to divide the
risk. Third party practice now is one of the factors clogging
the progress of litigation in the courts, even in Montana
with our limited indemnity doctrine. The resulting burden
on a plaintiff is enormous. Perhaps in California, where a
plaintiff with as much as ninety percent of the blame for
his injuries may yet in theory recover something, the cause
is worthwhile; but in Montana, under our "fifty percent"
statute, the cost could be disastrous. While our trial
courts have power to bifurcate issues and causes, and thus
confine the proceedings, still trial courts are nearly powerless
to control the paper blizzard that ensues when the professional
discoverers go to work under our liberal discovery procedures.
When unnamed defendants are brought into the action by other
tortfeasors, the plaintiff is on his mettle to attend all
the depositions and other discovery, or else face a possible
summary judgment against him. We think the "time-worn"
rules are also time-proved. For now, the wiser course for
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is
us/to follow the traditional tenets of tort law, leaving
it to the legislature to chart new concepts, whether of
evolution or devolution.
Accordingly, we reject the idea that an employer can
be called to account for his negligence in determining his
subrogation rights in Workers' Compensation cases.
We therefore answer the questions certified to us as
follows :
1. Does a third party, sued by an injured employee
have any right to indemnity or contribution from
a negligent employer if the employer and the
employee are covered by the Montana Workers'
Compensation Act? Answer: No, unless it arises
out of some other legal transaction between
employer and third party.
2. If the third party has a right in indemnity
or contribution against the employer, may the
employer insist that the total verdict, of
which he must pay all or part, be reduced by
the compensation payments? Answer: Not
applicable.
3. If the employer is not liable by way of
indemnity or contribution to a third party, may
he, even though himself negligent recover from
the third person through the employee under the
subrogation rights created by law? Answer: Yes.
In short, is there a conflict between section
92-204.2, R.C.M. 1947, and section 58-607.2,
R.C.M. 1947? Answer: No.
Justice
We Concur:
a Chief Justice
(Ci,
---- --__-______________------
Justices
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Mr. Chief Justice Frank I. Haswell, specially concurring:
I concur in the answers of the majority to the
certified questions, but not in all the discussion, reasoning
and statements in the foregoing opinion.
Chief Justice
I concur with Chief Justice
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