Defendant, International Harvester Company, appeals from a district court order dismissing with prejudice its third-party claim against Marvin Stamness, employer of plaintiff. Reversed and remanded but without prejudice.
Plaintiff, John Haney, brought this action to recover damages suffered by him in a one-vehicle (truck) accident on April 5, 1969, in Grant County, claiming defendant was negligent in the manufacture, design, and assembly of the truck. He also claimed breach of warranty as well as strict liability for an alleged defect in the vehicle at the time of manufacture. The truck plaintiff was operating was owned by Marvin Stamness, plaintiff's employer at the time the accident occurred. The truck apparently went out of control and left the road.
Defendant filed a third-party complaint against Marvin Stamness, the Douglas County Co-op, and George Torgerson, d.b.a. West Side Machine Shop. Stamness counterclaimed against International Harvester for damages to the truck. The gist of International Harvester's claim against Stamness is that, if any defect existed, it was caused to exist by him and that, if any warranty was breached, such breach was by him. The trial court dismissed the claim against Stamness on the grounds that any liability of Stamness is exclusively under the provisions of the Workmen's Compensation Act, citing Minn.St. 176.061, subd. 10.
The sole issue is whether the third-party action against plaintiff's employer should have been dismissed where plaintiff-employee, who has received workmen's compensation benefits, has sued defendant for common-law negligence and defendant has brought the employer in as a third-party defendant for contribution or indemnification and where the employer has counterclaimed against defendant.
Minn.St. 176.061, subd. 10, provides:
This statute has no application in the instant case because it was not effective until September 1, 1969. Cooper v. Watson, 290 Minn. 362, 187 N.W.2d 689 (1971). The accident took place on April 5, 1969. The language contained in § 176.061, subd. 10, before 1969 was part of § 176.061, subd. 2, but at that time, as at the present, subd. 4 limited subd. 2 to certain situations not applicable here. Thus, in this case no specific statute actually controls the rights of International Harvester to proceed against the employer.
Thus, under the rationale of Hendrickson, it appears that neither contribution nor indemnity are applicable in this case. Indemnity should not apply because the defendant's situation does not fit any of the five situations spelled out in Hendrickson, and contribution should not apply because there is no common liability between employer Stamness and International Harvester.
International Harvester argues that Hendrickson and all other Minnesota cases with issues similar to those in the instant case arose prior to the adoption of the doctrine of comparative negligence. Minn.St. 604.01. As a part of its argument, it points out that the former inflexible contributory negligence rule might give rise to inequities if the employer is subjected to the remedies of contribution or indemnification, whereas the comparative negligence rule would preclude these inequities. It also contends that fairness and equity require that it should be liable, if at all, under the comparative negligence rule and that the liability to Haney should be apportioned between it and Stamness according to the percentage of negligence of each.
International Harvester also points out that other states, even absent the comparative negligence rule, have not followed the rule of Minnesota but have permitted contribution or indemnity from the employer in situations nearly identical to those of the instant case. In this connection, their brief cites a number of foreign decisions: Witt v. Jackson, 57 Cal.2d 57, 17 Cal.Rptr. 369, 366 P.2d 641 (1961); Tate v. Superior Court of Los Angeles County, 213 Cal.App.2d 238, 28 Cal.Rptr. 548 (1963); Liberty Mutual Ins. Co. v. Adams, 91 Idaho 151, 417 P.2d 417 (1966); Miller v. DeWitt, 37 Ill.2d 273, 226 N.E.2d 630 (1967). In Witt the court pointed out (57 Cal.2d 70, 17 Cal.Rptr. 376, 366 P.2d 648):
In Miller v. DeWitt, supra, the Illinois court allowed a passively negligent third party to seek indemnification from an actively negligent employer.
Based on these foreign cases, International Harvester argues that an employer whose negligence contributed to the employee's injuries should not be permitted to recoup all of the workmen's compensation payments. The difficulty with this argument is that it is contrary to the basic principles of indemnity and contribution as expressed or implied in a number of this court's cases.
However, the net result of all of our decisions in this area is that an obvious injustice may be done to a third-party tortfeasor in cases similar to the instant case. Assume, for the sake of argument, that of the negligence involved in a given case 90 percent is attributable to the employer and only 10 percent to the third-party tortfeasor and none to the employee. Under the rationale of our present cases, the third-party tortfeasor could be held liable for 100 percent of all damages the employee recovers and the employer could recoup all payments made to the employee under the workmen's compensation laws.
If equity is the basic underlying principle of the remedies of contribution and indemnity, should not one or the other of these remedies be afforded the third-party tortfeasor at least to the extent that the employer may not recoup the workmen's compensation benefits paid by him? Should these remedies be given to third-party tortfeasors only in the event of a great disparity in the degree of fault? It
We have been unable to find any reported decisions which confront the precise issue involved here—i. e., a due process violation because a third-party tortfeasor's right to indemnity is abrogated by the workmen's compensation laws. However, there have been other instances which are instructive on this issue in which common-law rights of action have been extinguished by statutory changes.
In New York Central R. Co. v. White, 243 U.S. 188, 37 S.Ct. 247, 61 L.Ed. 667 (1917), the Supreme Court upheld New York's Workmen's Compensation Act as not violating due process. The court held that due process was not violated because the common-law rights of action between employer and employee for negligence had been replaced by a reasonable substitute. While the court was able to dispose of the due process question on this basis, there is some interesting dictum. The court noted that due process may be violated if a state —
A similar challenge on the basis of due process was made to the Massachusetts no-fault insurance laws in Pinnick v. Cleary, Mass., 271 N.E.2d 592 (1971). The court held that due process was not violated since the no-fault statute (1) provided a reasonable substitute for preexisting common-law rights, and (2) had a rational relation to a legitimate legislative objective. However, the court, as in White, was not forced to face the more difficult question of whether a common-law right of action can be abrogated without providing a reasonable substitute.
In other cases common-law rights of action have been extinguished without providing a substitute. In all these cases the courts have held that due process was not violated because the legislature was pursuing a permissible objective. In Silver v. Silver, 280 U.S. 117, 50 S.Ct. 57, 74 L.Ed. 221 (1929), the Supreme Court upheld a "guest statute." The "permissible legislative object" was found in preventing vexatious litigation occasioned by passengers carried gratuitously in automobiles. In Hanfgarn v. Mark, 274 N.Y. 22, 8 N.E.2d 47 (1937), a statute abolishing actions for alienation of affections and criminal conversation was upheld. The court, after finding that these actions were based on
While there are additional cases such as the two discussed immediately above, they are not further illustrative of the point. The point which emerges is that a common-law right of action may be abrogated without providing a reasonable substitute if a permissible legislative objective is pursued. In the cases which have arisen involving such abrogated rights of action, it has been determined that the legislative objective has been to prevent vexatious litigation.
Applying these principles to the instant case, it would appear that no legitimate objective is fostered by an interpretation of the workmen's compensation laws to prevent indemnification to a third-party tortfeasor from a negligent employer. With this in mind, there may be a due process violation when the third-party tortfeasor's right to indemnity is extinguished by the workmen's compensation laws without providing him a reasonable substitute for his right. Without a determination of the comparative negligence of the parties involved, however, this may not be an appropriate case in which to determine if due process has been denied to International Harvester. A due process argument, however, may lend some support to carving out another area permitting indemnification. This court should possibly reconsider granting indemnification where there is great disparity in the degree of fault of the parties.
This court commented in Hendrickson (258 Minn. 373, 104 N.W.2d 848):
This case involves strict liability; breach of warranty, express or implied, with or without privity; and comparative negligence, all of which are in a developing field of the law. Dippel v. Sciano, 37 Wis.2d 443, 155 N.W.2d 55 (1967). It also involves equitable remedies which by their very nature are constantly being changed to right otherwise unrightable wrongs. When we also are concerned with the question of due process, we hesitate to decide the important issues presented by this case without a factual setting. The trial court's order for summary judgment under the then prior decisions of this court was certainly appropriate. However, because of the questions posed, we would prefer to have a trial which would give us a complete factual setting. The trial should include a determination of the percentage of negligence as between employee Haney, employer Stamness, and International Harvester. Presumably, this determination would be made anyway because of the claim made by Stamness for damages to his truck. Various defenses may be available to defend against a prima facie case of strict liability. See concurring opinion of Mr. Justice Rogosheske in Magnuson v. Rupp Mfg., Inc., 285 Minn. 32, 171 N.W.2d 201 (1969). Thus, the trial court should pass upon all issues raised in the new trial, including all of the issues discussed in this
The order of the district court dismissing the third-party action by International Harvester Company against Stamness is hereby reversed but without prejudice to a renewal of a motion for a similar order after the trial of all issues presented and after a factual determination as directed herein.
Reversed and remanded.
MacLAUGHLIN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.