Corvus Energy Ltd. v. 1169997 Ontario, Ltd.
878 F.3d 1144
| 9th Cir. | 2017Background
- Foss Maritime contracted with Corvus to design, build, and install a hybrid battery power system for the tug CAMPBELL FOSS; Foss separately hired AKA to integrate Corvus’s system with the vessel’s diesel system.
- A battery module fire occurred onboard on August 20, 2012; investigation attributed fault to both Corvus and AKA (plus Coast Guard involvement in investigation).
- Foss sued Corvus in admiralty for property damage; Corvus impleaded AKA and Foss amended to add AKA as a co-defendant.
- Foss and AKA settled, with Foss expressly releasing all claims against Corvus “for liabilities arising from the actions or inaction of [AKA].”
- Corvus later settled with Foss; Corvus then pursued third-party claims against AKA for contribution and indemnity, and AKA moved for summary judgment to dismiss those claims.
- The district court granted summary judgment for AKA; the Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Corvus) | Defendant's Argument (AKA) | Held |
|---|---|---|---|
| Whether Corvus may pursue indemnity/contribution after settling with plaintiff | Corvus argued it is entitled to tort indemnity because AKA was wholly or primarily at fault; Corvus could still be liable under contract or strict liability even if not at fault | AKA argued settlement and plaintiff’s release bar Corvus from seeking indemnity/contribution; allowing suit would undermine settlement policy | Court held Corvus cannot pursue indemnity/contribution after settling with Foss where no factfinder determined fault and Foss released related claims |
| Whether maritime proportionate-fault scheme permits indemnity claims by settling or nonsettling co‑defendants | Corvus claimed indemnity is available when one co‑defendant is essentially responsible | AKA relied on AmClyde and proportionate-fault principles to argue such claims are barred to promote settlement and judicial economy | Court applied AmClyde reasoning: proportionate-share approach bars disturbing settling party’s release and discourages collateral suits |
| Whether strict liability or contract theories allow recovery despite fault apportionment | Corvus asserted it might still be liable on non-fault theories and thus can seek indemnity | AKA argued maritime law apportions damages by fault, and Corvus’s theoretical liability does not override settlement protections | Court rejected Corvus’s theory; proportionate fault governs and settlement forecloses indemnity claim |
| Whether public policy/equities favor allowing Corvus’s claim | Corvus argued equities support its right to indemnity | AKA argued permitting the claim would dissuade settlements and invite ancillary litigation | Court held equities favor enforcing settlement and finality; allowing suit would undermine settlement promotion |
Key Cases Cited
- McDermott, Inc. v. AmClyde, 511 U.S. 202 (1994) (proportionate‑fault approach bars contribution suits against settling defendants; promotes settlement and judicial economy)
- United States v. Reliable Transfer Co., 421 U.S. 397 (1975) (maritime damages apportioned by proportionate fault)
- Pan‑Alaska Fisheries v. Marine Const. & Design Co., 565 F.2d 1129 (9th Cir. 1977) (apportionment of strict liability damages by fault in personal injury context)
- Evanow v. M/V Neptune, 163 F.3d 1108 (9th Cir. 1998) (distinguished; involved salvage contract allocating damages rather than proportionate‑fault adjudication)