International Harvester Co. v. TRW, Inc.

CO., INTERNATIONAL HARVESTER corporation,

Delaware

Plaintiff-Respondent,

v.

TRW, INC., Corporation, an Ohio

Defendant-Appellant, Company, Oil

Universal Products Corporation,

Delaware Defendant.

No. 14282.

Supreme Court Idaho.

Feb. Smith, Quane Quane,

Jeremiah A. Hull, Boise, defendant-appel- & for Howard lant. Moffatt, Thomas, W.

John Barrett Blanton, Chartered, Boise, Barrett & for plaintiff-respondent. DENIAL

ON OF PETITION FOR REHEARING BAKES, Justice. indemnity brought is an

This by plaintiff respondent Har- International (IHC), against appel- vester Co. defendant TRW, (TRW), lant Inc. port and defendant findings Uni- the that the Farmers were (UOP). versal Oil Products Co. Interna- entitled to recover on the theories of strict tional Harvester seeks damages liability negligence, to recover and 97 Idaho at paid to Ronald and Catherine Farmer in 553 P.2d at 1310. judgment satisfaction of a upon entered a IHC satisfied the and in verdict the per- Farmers’ favor for present filed the TRW and sonal property damage and result- UOP, seeking indemnity for the amount of ing single-vehicle from a involving accident satisfied, judgment, it the Farmer which a truck tractor manufactured Interna- along attorney fees and costs incurred with tional Harvester. This Court affirmed the present In facts action. addition to

judgment entered in the lower court stated, already allegations in IHC’s com- Farmer v. International Harvester plaint in this action include: that TRW (1976), herein- designed, a manufactured and sold to IHC after referred ‍​​​​​‌‌‌‌​​​‌‌‌​​‌​‌​‌‌​​‌‌​‌​‌​​​‌‌​‌‌‌‌​‌​‌‌‌‌‍to as Farmer. The facts steering gear mechanism which was sealed surrounding the accident are recounted in on the truck installed without modification opinion. that IHC; tractor manufactured that UOP complaint designed,

The amended filed manufactured and sold to IHC a alleged air-suspension Farmers that certain truck seat which was truck tractor manufactured IHC con- installed without modification on the truck tained a defective box on the tractor and manufactured assembled IHC; column and a defective seat mechanism. that it was determined in Farmer complaint products The amended also that that TRW defective; negligently installed failed to test and UOP were that IHC had inspect components. or The vicariously Farmers been found liable and was fault; and, recovery upon their claim for based theo- not itself at that TRW and UOP negligence, warranty, findings. ries of breach of bound those The com- were liability. plaint strict Letters and con- that and UOP admissions further TRW of sale respective tained record establish that IHC breached their contracts notice, gave defense, IHC; tendered the and de- with that TRW UOP breached TRW, implied particu- manded indemnification from of fitness for a warranties manufacturer were purpose; of the box sold lar and that TRW and UOP tractors, in their strictly IHC for installation in its truck liable to IHC for defects UOP, products and from the manufacturer of and for failure to warn thereof. air-suspension truck seat installed summary judg- TRW filed a motion for truck tractors.1 Both TRW UOP re- 16, 1977, and IHC sub- ment on Novembеr fused the defense. partial motion for sequently filed cross In summary judgment against

In TRW. the Farmer trial the returned a verdict, special finding against on memorandum decision and order filed on IHC the- 14, 1978, negligence, ruled that implied July ories of breach of war- the district court liability, awarding warranty claims were ranty and strict breach $250,000. Judgment applicable Farmers the sum of barred statute of limita- damages granted summary judgment was accord- tions and for and costs entered affirming ap- In on favor of TRW on those clаims. The district ingly. granted summary judg- peal, partial determined that the trial court then this Court submitting of ment in court erred in the theories favor its claim for implied warranty jury, indemnity upon negligence express and based and strict non-prejudicial liability, determining the errors were that TRW was bound but sup- by sufficient evidence to entered in since there was Farmer. apparent Why named as de- ed TRW and UOP were not IHC is not the record. implead- in Farmer or fendants of a buyer is sued breach TRW’s motions for reconsideration “Wherе obligation for which warranty or other partial summary judgment denied. over is answerable his seller partial summary judgment July notice “(a) give his seller written may 14, 1978, incorporated into court’s If the notice states litigation. 30, 1981, final tendered on June come in and defend may the seller which district court awarded IHC not do so he will that if the seller does recovery against indemnity TRW for by him his any against in action bound judgment the amount of the in Farmer.2 com- of fact buyer by determination judgment pursuant was certified to (2) unless litigations, thеn mon to the two 54(b), appeal 1.R.C.P. and this followed.3 receipt of the the seller after seasonable is so notice does come in and defend he I bound.” Appellant initially challenges TRW Altec, 860 Corp., Inc. v. 399 F.2d See FWD preclusive district effect which the (5th Cir.1968); Smith Radio Communica- judgment, court attributed to the Farmer Ltd., tions, Equipment, Challenger Inc. v. in arguing that the district court erred (1974): gener- 270 see Or. determining that TRW was bound Comment, to Products ally, Voucher Liabil- judgment. Respondent IHC asserts three 2-607(5)(a), of 29 ity: The Mechanics UCC grounds under which TRW is bound § (1976). 493 I.C. 28-2- Ark.L.Rev. (1) judgment: statutory “vouching § 607(5)(a) adoption 2- is a verbatim § (2) 28-2-607(5)(a); in” under I.C. 607(5)(a) Code, of the Uniform Commercial in”; (3) “vouching common law and collat generally recognized is as a codifica- estoppel. eral In its memorandum decision tion of the law doctrine of “vouch- common 14, 1978, July the district court did not in,” ing whereby judgment a is conclusive specify the basis on which it bound to TRW against person is as a third who liable over Farmer, judgment in but determined debtor the third where simply deny IHC’s motion person given oppor- notice and an “[t]o [for has been judgment] summary pro Accord, would result tunity defend. to United Pacific (9th cedural absurdity. 117 Meyer, IHC would be 305 F.2d Ins. Co. v. Cir.1962); forced to prosecuting continue this v. Hallack and Howard Bedal (9th Cir.1955). Co., reality nothing when in there is 226 F.2d 526 left for it Lumber (Second) Judgments Restatement prosecute. right to Its See to recover [IHC’s] § (1982). against either TRW or UOP or both is prior judgment.”4 established Al undisputed It is that TRW received no- though binding the district court’s basis for against in a tice of the action letter uncertain, prior judgment TRW to the is against from that described the action agree respondent we with IHC that TRW is it, steering gear identified TRW’s as a sub- bound entered ject litigation requested TRW’s § legal engineering to the extent authorized I.C. 28-2- assistance at a confer- 607(5)(a), provides: preparation ence in of the defense which 30, 1981, Additionally, partial summary judgment against in- the June UOP. Al- 2. partial summary judgment corporated though second party, UOP remained an active later IHC, granted awarding been in favor of filing that had complaint, an answеr to IHC’s no decision attorney fees incurred in de- IHC its costs fending summary judgment on this motion for con- is Farmer, appealing denying but record, party tained in the and UOP to is not a attorney present request for fees in the appeal. this interest on the action. The court also awarded to recov- amounts IHC was found to be entitled 4.Although the section district court entitled this er. Estoppel,” of its did not decision “Collateral it estoppel or mention the elements of collateral Subsequent entry tо the trial court’s of sum- theory purport rely specifically on that mary judgment in favor of IHC TRW on judgment. binding TRW to the Farmer indemnity, the issue of IHC filed a motion for Additionally, lawsuit. the record contains issues essential to indemnity claim letter sent April IHC to TRW on unresolved, TRW remain preclud- 1973, in which IHC notified TRW that the ing entry summary judgment on the original plaintiffs alleged that the accident issue of indemnity. Uniroyal, See Inc. v. was caused defects in the Chambers Gasket & Manufacturing TRW, supplied by mechanism tendered the supra. TRW, defense of the аction to in- Factual issues resolved formed TRW accept that if it failed action, Farmer and common to this defense, tender of it would be bound thereby binding TRW, include the caus- subsequent litigation against in- TRW for es of action ‍​​​​​‌‌‌‌​​​‌‌‌​​‌​‌​‌‌​​‌‌​‌​‌​​​‌‌​‌‌‌‌​‌​‌‌‌‌‍original plain- under which the demnification the determination of facts recover, tiffs were entitled to the fact that common to litigations. the two A similar original plaintiffs injured, and the letter Thus, was sent to UOP. com- damages amount of and that the plied with requirements established satisfied IHC. 46 See Am.Jur.2d § 28-2-607(5)(a). I.C. TRW declined the § Judgments (1969).6 However, 561 sever- defense of the Farmer action tendered to it factual specifically al issues were not ad- IHC, and, by pursuant to the terms of I.C. by dressed jury, the most im- § 28-2-607(5)(a), by “any TRW is bound portant purposes appeal being for of this determinations of fact common to” Farmer whether allegedly steering defective and the case at bar.5 See Parker v. Maul- by manufactured TRW caused some din, (Ala.1977); 353 Uniroyal, So.2d 1375 injuries or all of origi- suffered Inc. v. Chambers Gasket Manufac- plaintiffs nal in Farmer. Also not ad- Co., 508, turing Ind.App. 177 380 N.E.2d dressed was whether some or all of the (1978); Co., 571 CGM Valve Inc. v. Gulf- injuries proximately (Tex. Corp., stream Steel 596 S.W.2d 161 allegedly defective seat manufactured Civ.App.1980). generally, See 46 Am. important UOP. Another factual issue not § Judgments 561; Jur.2d 3 Frumer & addressed was whether IHC was itself § Friedman, 44.05(2). Liability, Products guilty negligence, of by merely other than failing inspect, proximately which II caused the pre- which could determination, however, This does not re- indemnity7 clude or limit claimed IHC. appeal. genuinе solve this There exist is- complaint, In their amended the Farmer sues of material fact as to what was actual- Farmer, plaintiffs alleged ly precluded determined in which that the truck manufac- entry the trial tured IHC had been summary judg- court’s manufactured and mechanism; against necessary steering ment TRW. It is to iso- sold “with a defective further, late the common issues of fact determined on the seat mechanism [and] to ascertain defectively factual driver’s side was manufac- remand, negligent, 5. Our conclusion that TRW is bound 7.On if IHC is be found to litiga- determinations of fact common to the negligence precludes indemnity, and if such 28-2-607(5)(a) tions under § I.C. makes it un- may contribu- nevertheless be entitled to necessary applicability to address the of the tion under terms “Where § of I.C. 6-803. "vouching doctrines of common law in" and is, joint pari tortfeasors are in delecto—that estoppel. collateral chargeable where each is with active or affirma- injury negligence contributing tive authority 6. One has stated that in unusual reсovery which is entitled to was had—neither involving warranty cases breach of claims will other, indemnity although may from the there be more than two issues common to the Indem- entitled to contribution. 41 Am.Jur.2d i.e., litigations, goods two whether the were de- nity pp. Valley § 710-711. See also Sun middleman, fective at the time of resale Airlines, Corp., Avco-Lycoming v. 411 Inc. and whether the middleman was liable to the (D.Idaho 1976) F.Supp. (comparative neg- 598 person Barton, Degnen harmed the defect. See & ligence/fault applies involving to cases strict Vouching Quality Warranty: To Case Code, liability). Law and Commercial 51 Cal.L.Rev. (1963). 484 Court, argued that tured;” in fact and, accident the ment to this at the time of the [plaintiff] up- “collapse[d] seat and threw to establish was insufficient evidence cab, as ward the steel beams affirming truck. In specific defects plaintiff of which the suffered result IHC, this entered injuries____” complaint The also prove need not plaintiff Court held that a “constructed, and in- assembled proof specific cаrry his burden of defect component way parts” stalled the in such a liability claim. Farmer v. Inti. on a strict trial, as to cause the accident. At 742, 747, 553 P.2d Harvester plaintiffs presented direct evidence that (1976). prima We stated that a steering gear both the may “by direct or case be established facie air-suspension manufac- TRW and seat circumstantial evidence of a malfunction tured The UOP were defective. product and the absence evidence was instructed that the had al- evidenсe abnormal use and the absence of leged: secondary causes which reasonable “That the truck had been manufactured liability of the defendant.” would eliminate steering and sold mecha- with defective Id. nism and a defective seat mechanism on district court in this action truck; the driver’s side of the recognized specific that no determination “That defective allegedly was made in Farmer whether proximate mechanism was the cause of allegedly de defective or the involving an accident the truck which had caused air-suspension fective seat occurred on or about March 1971 on Highway 97 In its memorandum de plaintiffs’ injuries. about five miles north of Goldendale, 14,1978, Washington plaintiff while court July cision dated the district truck; driving Ronald K. Parmer was the stated: alleged “That the defective seat broke jury the undoubtedly is correct that “It along loose and contributed with the al- the in does not reveal verdict ] [Farmer leged steering defective mechanism to liability jury’s imposition of basis for the proximately injuries plain- cause the could have on IHC. When tiff, Ronald K. Parmer.” theory and more than one been based on product “That the manufacturer ‍​​​​​‌‌‌‌​​​‌‌‌​​‌​‌​‌‌​​‌‌​‌​‌​​​‌‌​‌‌‌‌​‌​‌‌‌‌‍of a theory the record does not reveal which that is reasonably danger- certain to be upon, factual it was in fact based the made, ous if negligently duty has underlying the determinations exercise design, reasonable care in the ordinarily binding subsequent in are not manufacture, testing inspection of litigation. ... any componеnt parts made another so prior not mean that the “But this does product may safely that the in used judicata has no res effect at purpose manner and for a for which it very least all. At the the verdict made.” was liability indicates that on imposed deliberation, jury

After returned a ver- steering IHC either because of box in finding dict favor of the or because of the of seat or because liability, on of strict theories both.” negli- implied warranty, and breach of The district court addition- failed to nоte an verdict, however, gence. does not re- verdict, possible al basis for that jury’s liability jury flect based IHC’s being independent liability based on injuries finding plaintiffs’ on a that were installation and/or faulty IHC’s (1) steering gear by: manufactured judge inspect. failure to The trial test and TRW; (2) manufactured the seat trial, denying in original in the Farmer (3) compo- UOP; installation of the Harvester’s mo- defendant International inspect; nents; (4) failure to test and notwithstanding (5) tions for foregoing or some combination trial, plain- new stated: “On appeal judg- of the Farmer verdict and factors. On 1128 theory negligence,

tiffs’ of ample mechanism; there is steering (2) defective evidence that defendant International Har- steering TRW; (3) provided by box Company vester did not exercise reason- provided by defective seat UOP. able in testing inspection care Viewing the evidence in the record in a steering appeal mechanisms.” On light TRW, most favorable to as we must case, original specifically we held summary judgment, Iwasa, Holmes v. thаt there sup- was substantial evidence to (1983), 657 P.2d 476 it can- port independent this claim for failure to not be said as a matter of law that inspect by test and stating: allegedly defective manufac- allegation “Insofar as the appellants tured TRW was the plain- cause of the negligent were duty their [IHC] injuries tiffs’ Construing Farmer. inspection testing and the instruction TRW, record in jury favor of in Farm- thereon, based we hold that such issues er could reasonably have concluded that properly submitted jury____” plaintiffs’ IHC was liable for injuries either 97 Idaho at 553 P.2d at 1315. allegedly because of the defective seat argues that the could not have UOP and installed found as a factual matter that IHC’s al- IHC’s truck independent or leged faulty installation indepen- was an negligence installing, assembling contributing dent or cause of the accident inspecting mechanism.8 It put since Farmers on no direct evidence speculate is not this Court’s role to as to relevant to the installation assembly or which of these causes the found to steering cоmponents. However, support the verdict. Genuine issues of ma- proof held we that direct of that specific terial fact exist as to the cause or specific defect or other defect was plaintiffs’ Farmer, causes unnecessary, “[p]roof and that of malfunc- precluding the summary issuance of a proof defect”; tion is circumstantial of a judgment against Cox, TRW.9 Reis v. further, “[tjestimony of the user or (1982). Idaho operator of product as to the circum- disposition Our of this issue makes dis- stances of the event is sufficient to estab- cussion of other issues appellant lish raised malfunction.” 97 Idaho at Thus, unnecessary. summary judgment The en- P.2d at 1312. under the Farmer rule, Mr. tered the district is testimony Farmer’s of the court reversed and steer- ing proceed- malfunction was sufficient circumstan- cause ‍​​​​​‌‌‌‌​​​‌‌‌​​‌​‌​‌‌​​‌‌​‌​‌​​​‌‌​‌‌‌‌​‌​‌‌‌‌‍remanded for further proof tial support allegation to ings. appellant. that a Costs to defect existed in steering the truck’s result- ing construction, from assembly and DONALDSON, C.J., BISTLINE, J., and component

installation of the parts. There- concur. fore, possible there were three causes SHEPARD, Justice, with whom HUNT- which alone or in combination could LEY, concurs, Justice, dissenting. have formed a factual jury’s basis for the (1) verdict. Those three The improp- majority causes are result obtained to- installation, er assembly inspection guts and day absurdity totally is an and allowing jury The in Farmer had that the to determine which of the suspension acts, combination, singly air seat was defective and had or in However, injuries. thrown him the steel plaintiff’s roof of the cab. IHC had no injuries sought recovery The he had might for includ- incentive to do so since such an effort concussion, ed a cerebral skull laceration and finding by jury have resulted in a factual neurological damage. severe independently that IHC was rather than vicari- ously negligent, risking thus claim complete indemnity against 9. We note that it was TRW and UOP. within the control of IHC Having opportu- chosen not to avail itself at the initial Farmer trial to have these factual of the fаct, nity specific findings to obtain these issues determined. IHC could have named defendants, party prejudice by being required TRW and UOP as third or IHC cannot now claim special litigate could have submitted a form to verdict the unresolved factual issues. only given unit is parts and the entire by the nent “vouching in” established concept of in the State of as the alle- driving law and statute test Insofar common a brief decision, the encour- By negli- Idaho. its Court gation appellants that were [IHC] products in a ages рutative defendant testing duty inspection gent their participate liability action to refuse to when ... such based thereon and the instruction properly in and thereafter com- vouched jury submitted to properly issues were plain that the trial in which he refused to by correct instructions.” participate improperly con- was somehow held in Farmer that “the We further ducted, findings jury that of the were jury permit the sufficient evidence was sufficiently specific, not detailed or respondent’s to determine whether The that is not bound the result. more proximately caused or rendered decision then enables such a recalcitrant design and con- by reason of the serious putative require defendant to that a second jury The seat. struction of the driver’s impaneled to somehow discern issue.” properly instructed on or, findings jury’s of the first basis Id., 97 Idaho at We 553 P.2d at 1315. alternative, retry the entire cause. Such at at 553 P.2d explained, 97 Idaho judicial a foolish waste of re- is not to ex- expert 1314: “An witness testified sоurces, places unnecessary an bur- but it steering of the mechanism amination parties participated in the den on the who damage gear box that the by requiring participate them to concluded first action are, trial, impact of the prior in a second the results of which to the final occurred them, judicata. crash, portion as to foreordained and res and that a truck frac- would not have gear box mechanism states, genu- majority The “There exist faulty materi- tured unless it cоntained of material fact as to what was ine issues al____” undisputed stated, “It is Farmer____” . We I actually determined way steering malfunctioned some submit that such statement demonstrates operation and during course of normal II of incomprehensibility of Part reason- of evidence of there is an absence majority opinion and hence of its result. for which defend- secondary causes explain able majority The does not undertake to Id., responsible.” ants-appellants were not how а second will determine those fact,” i.e., “genuine issues of material 553 P.2d at 1315. 97 Idaho at Farm- actually “what was determined Hence, to state that simply it incorrect is er.” not before those factual issues were majority suggests fac- that “several by the jury. specifically addressed specifically tual issues were not addressed those issues were before Clearly, all of by the jury.” Among fac- those very expert extensive jury on the basis are, the defective tors evidence, both the trial testimony TRW causеd some it the actual had before jury and this Court injury by original or all of the suffered clearly which the damaged gear box inju- or all of the plaintiffs; whether some truck the Farmer to had caused concluded proximately by the seat ries were run off the road. UOP; and whether argument is not crux of TRW’s The real than guilty negligence other itself was proper- were not before that the issues products. inspect failure to Our mere proper instruc- ly submitted Har- in Farmer v. International decision tions, jury did not re- rather but Co., 742, 750-751, 553 P.2d vester sufficiently specific verdict as to a turn (1976), 1306, made clear 1314-1315 that of culpability, vis a vis ratio of and the driver’s “the box argu- The answer to that and UOP. TRW purchased as com- at issue herein are seat if had availed ment is that TRW UOP from Harvester plete units International opportunity offered to themselves Har- suppliers. International independent action, they in the participate visually inspects compo- such vester could special have demanded such a ver- respond nitоr should request to a Having dict. opportunity had such an assistance If indemnitee. it, rejecting TRW should not now be heard give fails to this assistance at time complain. to greatest when importance, it is of it is As stated Court fair that he Sys- Litton should abide the result tems, Service, Inc. Ltd., v. Shaw’s Sales & may of the trial. The fact that it 119 Ariz. 579 P.2d (Ct.App. 50-51 respond inconvenient to him to at the 1978): time when the indemnitee is sued does “Appellant presents following change equities not of the situa- question for review: tion, primary duty because of his to ‘Is a manufacturer liable to indemni- satisfy the claim of the ‍​​​​​‌‌‌‌​​​‌‌‌​​‌​‌​‌‌​​‌‌​‌​‌​​​‌‌​‌‌‌‌​‌​‌‌‌‌‍creditor or the fy a distributor on based injured person; permits if he the mat- solely on strict liability in tort where ter to result in an action his should be the manufacturer timely notified responsibility to see that it does of the action appear but refused to improper judgment.’ not result in an ’ ” defend? § 107 at 513.”

forth the and must contention on the Restatement [sic] Smith, Shaw “Litton ^[******] Shaw is bound Judgments, rights indemnify claims that pendency of an indemnitee Litton. § of the action having It bаses its which sets (Second) notified v. Hillwood been As was more the defense of the New York case had very good position “We do not think that Hillwood was in (6th Cir.1962): skillfully Manufacturing pungently handled to question stated in Hessler 302 F.2d lawyers employed by They reputa- Hessler. an indemnitor judgment. per- after § part attorneys. tinent ble There was no 107 states: claim of fraud, collusion or part bad faith on their ‘In an action for indemnity between persons If Hillwood was of two who the view that it stand such relation each other that оne of them has a could defend the case better with its own duty of indemnifying upon the other lawyers, it full opportunity had to do so claim person, a third if the third very difficult, but declined. It is not person has obtained a valid lost, a case has been tried and after separate on this claim in a wisdom, using post ex facto find (Em- with someone else’s work.” fault (a) indemnitee, both are bound phasis supplied.) as to the existence and extent of the subject The accident which is the of both indemnitee, liability of the if thе indem- Farmer and this action occurred in 1971. gave nitee to the indemnitor reason- place The trial of the action took in 1974 notice of requested able the action and competent was well tried able and him participate to defend it or to counsel, degree speci- albeit not with the § defense, ...’ 107 at 511. ficity suggests and detail which TRW now The rationale for the above rule is con- necessary. to be The decision of this Court tained Comment c to the above section аffirming the trial court was ren- of the Restatement. When there has require, dered 1976. To as does the been reasonable notice of the action and majority, parties return to court request participate defend or retry difficulty stale facts with the defense, the comment states: finding proof many and witnesses after so by hypothesis since '... his is the ulti- is, mind, obscene, years my an abuse of liability, mate it is fair that the indem- judicial process, and a nitee should disservice to that be able to throw off the justice. burden of the trial and that the indem- which we call

Case Details

Case Name: International Harvester Co. v. TRW, Inc.

Court Name: Idaho Supreme Court

Date Published: Feb 25, 1985

Citation: 695 P.2d 1262

Docket Number: 14282

Court Abbreviation: Idaho