Willie v. Amerada Hess Corp.Willie v. Amerada Hess Corp.
MEMORANDUM OPINION
(February 28, 2017)
THIS MATTER is before the Court on a motion filed by Defendant/Third-Party Plaintiff Litwin Corporation to dismiss the counterclaims Shell Oil Company, a Third-Party Defendant, asserted in its answer to Litwin’s third-party complaint. Litwin sued Shell and other third-party defendants for contribution and indemnification and Shell counterclaimed for the same relief (contribution and indemnification) and set-off. Ten years later, Litwin moved to dismiss Shell’s counterclaims. Shell opposed. Because trial is slated for next month, the Court issued an order, granting and denying Litwin’s motion in part. This opinion now follows to provide the basis for the Court’s decision.
Terence
Each of the defendants appeared and answered Mr. Willie’s complaint. In its answer, Litwin denied liability and admitted none of the facts Mr. Willie alleged. Litwin also asserted affirmative defenses, one of which was that “[t]he product(s) alleged by plaintiff to have been supplied by Defendant Litwin was neither dangerous nor defective, and it was of merchantable quality and fit and safe for its intended use.” (Litwin’s Ans. 9, ¶ 32, filed Mar. 21, 2006.) The same day, March 21, 2006, Litwin filed a cross-claim
In its third-party complaint, Litwin expressly incorporated Mr. Willie’s allegations (see Litwin’s Am. Third-Party Compl. ¶ 9, filed Apr. 19, 2006), and alleged that all of the third-party defendants, including Shell, “were . . . millers, manufacturers, contractors, installers, purveyors, suppliers, and distributors of asbestos, catalyst, silica or other harmful and hazardous toxic dusts or substances that Plaintiff claims he was exposed to on St. Croix.” Id. ¶ 11. Litwin further alleged that the third-party defendants “manufactured or supplied defective or unreasonably dangerous . . . asbestos, catalyst or silica products to the Refinery” and, “[a]s a result . . . Third-Party Plaintiff and Third-Party Defendants may both be liable to the Plaintiff.” Id. ¶ 13.
In answering Litwin’s third-party complaint, Shell admitted “that on various occasions it has supplied catalyst to the . .. refinery located on St. Croix” and “supplied catalyst to HOVIC for use in HOVIC’s refinery.” (Shell’s Ans. & Countercl. ¶¶ 11, 13, filed July 31, 2006 (“Ans. & Countercl.”).) But Shell denied Litwin’s claim that it manufactured or supplied defective, harmful, or toxic substances. See id. ¶ 13. Among other affirmative defenses, Shell alleged that Litwin’s third-party action is
barred, in whole or in part, by the unforeseeable misuse and abuse of the products, if any, by the Plaintiff and others under the circumstances then and there existing, and the failure of the Third-Party Plaintiff to prohibit such use, which misuse and abuse directly and proximately caused and contributed to Plaintiff’s ... damages, if any.
Id. at 6. Shell also contended that Litwin “is barred from recovery against Shell... because any product or material supplied by Shell... was done so pursuant to the specification and order of HOVIC and/or Third-Party Plaintiff’ Litwin. Id. at 7. Shell also counterclaimed that it was Litwin who “designed, wrote specifications, placed orders, installed, constructed, maintained and otherwise used or caused others to use toxic substances... at the HOVIC refinery.” Id. at 10, ¶ 3. Litwin further “had the affirmative duty to warn and instruct Plaintiff... and others, including Shell, in the use of such products.” Id. at 10-11, ¶ 3. Shell “was unware of’ any defect in its products during “all times relevant to Plaintiff’s Complaint.” Id. at 11, ¶ 8. Furthermore, “Litwin is... under a duty to Shell to protect Shell... from the harm and damage caused by the actions of Litwin.” Id. ¶ 10.
Mr. Willie passed away on January 13, 2007. A year later, on February 5, 2008, his former attorney filed a petition with the Probate Division of the Superior Court to have Mr. Willie’s wife, Albina Willie, appointed as personal representative of her husband’s estate. The Clerk’s Office docketed the petition, captioned as In re: Petition for Appointment of Albina Willie as Personal Representative of the Estate of Terrence [sic] Willie, opened a miscellaneous probate matter, numbered SX-08-MP-004, and assigned it to the judge in the Family Division. Two days later, the court granted Mrs. Willie’s petition. The Clerk’s Office entered the order on February 8, 2008, and then closed the miscellaneous probate matter.
Six weeks later, on March 25, 2008, Mr. Willie’s former attorney filed a motion in this case to substitute Albina Willie and have her continue the lawsuit. The Superior Court judge to whom this case was assigned at the time granted the motion by order entered June 10, 2008.
Nearly a year and a half after Mrs. Willie’s substitution, she and UOP filed a stipulation on December 2,2009, agreeing to dismiss her husband’s claims against UOP with prejudice. The court approved the stipulation by order dated December 7,2009 and entered December 8, 2009. For approximately five more years, between the end of2009 and the beginning of 2015, nothing further was filed in this matter according to the case file and the docket, except for a few notices that discovery was being demanded or produced. But the case file also contains a copy of an order the Administrative Judge, the Honorable Harold W.L. Willocks, issued in another case, Rupert Williams v. Amerada Hess Corporation, et ai, case number SX-06-CV-190. In that order, dated June 10, 2014 and entered June 12, 2014, the Administrative Judge noted that approximately fifty cases — all filed in 2006 against the same or mostly the same defendants, and all alleging injuries from workplace exposure to asbestos at the St. Croix oil re*35 finery (hereinafter “Williams cases”) — were pending in the Superior Court, but, as of June 2014, still remained assigned at random to the judges in the Jury Trial Division. However, because counsel for these cases believed they could create a master case themselves and consolidate some of the cases under the master case, it led to internal confusion and delay “as judges and secretaries as well as court clerks and law clerks spent much time trying to determine which cases certain incorrectly-captioned filings belonged to, when an order creating a master case and docket was entered, and if not entered, why the parties were proceeding as though a master docket had been created.” The Administrative Judge then ordered that all of the Williams cases, not already assigned to him, be reassigned to him pending further review and consideration.
Six months later, the Administrative Judge caused a miscellaneous civil matter to be opened under the caption In re: Complex Litigation Cases Pending in the District of St. Croix, case number SX-15-MC-003. Within this miscellaneous matter, the Administrative Judge began holding hearings with counsel for parties in all complex, mass tort cases pending in the St. Croix Division to discuss options for moving the complex cases forward. Concerning this case, the Administrative Judge caused a master case to be opened under the caption In re: Refinery Workers Toxic Tort Litigation, case number SX-15-CV-198, and then ordered the Williams cases (including this case) along with a few 2008 [and 2011] cases ... consolidated and reassigned to the Honorable Douglas A. Brady. Subsequently, however, the Administrative Judge, with the consent of the undersigned and the approval of the Presiding Judge, decided upon a category of cases in which the plaintiff was an estate or had died while his case was pending in the Superior Court. . . [for reassignment to] the undersigned judge as the Family Division judge. . . . [T]he Administrative Judge unconsolidated this case from the Refinery Workers master case and then reassigned it, among other cases, to the undersigned judge.... Since reassignment, additional discovery notices have been filed as well as two stipulations dismissing certain claims with prejudice.
(Order 2-3, entered Aug. 23,2016 (quoting Order 6, entered June 12,2014, Williams v. Amerada Hess Corp., et al., SX-06-CV-190 (copy docketed in Willie on June 16, 2016)).) See also In re: Alumina Dust Claims, SX-09
In light of this background, this Court, in its August 23, 2016 Order, made the following findings:
First, concerning the plaintiff, his claims still remain pending against Hess, HO VIC, and Litwin. Mr. Willie’s claims against UOP were previously dismissed.... Next, Litwin dismissed its counterclaim against UOPby stipulation filed July 22,2016. However, UOP’s counterclaim against Litwin still remains pending. Therefore, UOP remains a party to this case. Litwin’s third-party complaint remains pending against CBIC, Shell, IMC, and Riggers and the counterclaims [that] Shell, IMC, and Riggers asserted against Litwin .... Concerning Litwin’s claims against CSMC and A.P. Green, however, the Court cannot tell from its review whether these claims are still pending. Neither party has appeared nor has proof of service been filed as to these two third-party defendants. Lastly, the Court notes that a group of plaintiff [s], on March 29,2016, filed a stipulation under the caption Gabriel Alexander, et al. v. Hess Oil Virgin Islands Corporation, et al., but with the case number assigned to the Refinery Workers master case. However, because Mr. Willie’s case number was listed within the stipulation, the Clerk’s Office docketed the stipulation in this matter and added a copy to the case file. The stipulation is between the plaintiffs (including Mrs. Willie) and IMC and purportedly agrees to a dismissal with prejudice of the plaintiffs’ claims against IMC. The concern, however, is that IMC was brought into this case by Litwin. And, while a plaintiff might be able to assert a claim against a third-party defendant, cf. Fed. R. Civ. P. 14(a)(3), there is no record here that Mr. Willie before his death, or Mrs. Willie after his death, asserted any claim he might have had against IMC. So, in other words, it appears that the March 29, 2016 stipulation may be a nullity as to Mrs. Willie and IMC. If so, the stipulation can simply be dismissed as moot. However, given the confusion articulated by the Administrative Judge in his June 12, 2014 order in Williams, and the consolidation of this case under Refinery Workers and then its removal, it is conceivable that filings might have been misplaced or misdocketed.
Id. at 3-4 (paragraph breaks omitted).
Mrs. Willie and IMC responded on August 29, 2016 and represented that her husband never asserted a claim against IMC.
In the interim, on August 31, 2016, Litwin filed its motion to dismiss Shell’s counterclaims. After receiving additional time, Shell filed its response on December 14, 2016. To date, Litwin has not filed a reply. By order entered February 16, 2017, the Court granted and denied Litwin’s motion in part. This opinion follows to explain the basis for that decision.
STANDARD OF REVIEW
The Court must first address a point neither party raised in their motion papers; to wit, the standard of review applicable here. When one person files a claim against another, the opposing party must respond to the pleading either by filing an answer or a motion. When a party answers another party’s pleading, but then moves to dismiss that pleading for failure to state a claim for relief, courts construe the motion to dismiss as a motion for judgment on the pleadings. See Rennie v. Hess Oil V.I. Corp.,
If an opposing party cannot prepare an adequate response, because the facts alleged in support of the claim are deficient or too vague, then the party moves for a more definite pleading. See SUPER. Ct. R. 31 (“Upon application by any party on notice, the court may order the filing and serving of a more certain and definite pleading. Rule 12(e) of the Federal Rules of Civil Procedure shall govern such applications.”); see also Fed. R. Civ. P. 12(e) (“If a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, the party may move for a more definite statement before interposing a responsive pleadings. The motion shall point out the defects complained of and the details desired.”);
Courts construe a motion to dismiss, brought after the pleading has been answered, as a motion for judgment on the pleadings because the opposing party has already answered and cannot now challenge the sufficiency (or plausibility) of the claim asserted. Cf. Matthews v. Peters,
By moving for judgment on the pleadings, the moving party says to the court that the claim itself fails, not because the facts alleged in support are inadequate or deficient, but because the cause of action is not viable. That is, either the claim is not recognized under existing law, e.g., because no one could prevail on such a claim, cf. Matthew v. Herman,
A motion for judgment on the pleadings should ... be granted . . . [when] the moving party has established that there is no material issue of fact to resolve, and that it is entitled to judgment in its favor as a matter of law. As with a... motion [to dismiss], th[e Superior] Court views the facts alleged in the pleadings and the inferences to be drawn from those facts in the light most favorable to the plaintiff.... [However,] the trial court... [is] foreclosed from considering evidence from any source outside of the pleadings and the exhibits attached to the pleadings in determining whether... to grant a motion for judgment on the pleadings.
Benjamin,
In its answer to Litwin’s third-party complaint, Shell asserted “contribution, indemnity, and set-off’ as a counterclaim. Litwin responded by filing an answer. Thus, Litwin’s motion to dismiss, filed ten years later, is really a motion for judgment on the pleadings.
RELEVANT LAW
Before turning to the merits of Litwin’s motion, the Court must first decide what counterclaims Shell asserted, what law governs those claims, and lastly what standard of review applies. Cf. Joseph v. Bureau of Corr,
Rule 34 of the Rules of the Superior Court provides that “[a] 11 claims in the nature of recoupment, set-off, cross-action, or any other claim for relief, except a complaint or a third-party complaint, shall be asserted in an answer as a counterclaim, and not otherwise, and shall be served and filed within the time limited for answering.” Shell complied with Rule 34 by asserting in its answer what it labeled as a “counterclaim” for “contribution, indemnification, and set off’ against Litwin. (Ans. & Countercl. 12.) Yet, Shell also asserted its “contribution, indemnity and
Contribution, Indemnification, and Set-Off
In its motion, Litwin correctly points out that Virgin Islands precedent “has not fleshed out” Superior Court Rule 34 or how “the cause of action for set-off’ should be construed or defined. (Litwin’s Mot. to Dismiss Countercl. 5, filed Aug. 31, 2016 (“Mot.”).) Litwin then asserts, incorrectly, that “[t]he Superior Court has adopted the Restatement (Third) of Torts — Apportionment of Liability Sections 22 and 23 for the law of indemnity and contribution, respectively.” Id. at 4 (emphasis added) (citing Jacobs v. Roberts, ST-14-CV-193,
As the parties’ arguments show, before turning to the merits, the Court must first determine whether Virgin Islands common law should recognize contribution, indemnification, and set-off as claims for relief and if so what common law rules should apply.
Contribution and Indemnification Generally
The disagreement between Shell and Litwin regarding what law applies to common law contribution and common law indemnification claims — and the changes in the law over years in the Virgin Islands well before Banks — is best understood if viewed against the broader, historical backdrop. Historically, at common law, contribution was not allowed. “At common law, there was no right of contribution among tortfeasors. The ancient basis ... is the policy that the law should deny assistance to tortfeasors in adjusting losses among themselves because they are wrongdoers and the law should not aid wrongdoers.” Tech-Bilt, Inc. v. Woodward-Clyde & Assocs,
Because “the vast majority of American jurisdictions adhered to the common-law rule that no contribution could be had among joint tortfeasors,” Lentz v. Freeman Assocs. Caribbean, Inc.,
Unlike contribution, indemnification was recognized at common law. “The right to indemnity ... is a common law equitable remedy that shifts the entire responsibility for damages from a party who, without any fault, has been required to pay because of a legal relationship to the party at fault.” City of Wilkes-Barre v. Kaminski Bros., Inc.,
Since at common law joint or concurrent tortfeasors had no right as against each other to secure contribution... courts fashioned an analogous rule of obtaining restitution on the theory of indemnity or exoneration in purely tort and non-contractual situations but only under certain exceptional and limited circumstances. They applied the rule in such cases as when one joint tortfeasor was passively negligent while the other was guilty of active negligence, when one’s negligence was secondary as compared to the primary negligence of the other, or when, upon contrasting the respective degree of culpability of wrongdoers, one appeared as the principal wrongdoer as against the other whose negligence was less culpable. By judicial fiction a promise or obligation to indemnify was raised as a matter of law in terms of quasi contract on the part of the tortfeasor who was actively or primarily negligent or whose negligence was greater in degree of culpability in*47 favor of the other tortfeasor who was only passively or secondarily negligent or whose negligence was of lesser magnitude.
Roberts,
Indemnification differs in one significant way from contribution: “there is no right to indemnity between joint tortfeasors.” 41 Am. Jur. 2d Indemnity § 21 (2005). In other words, if a jury were to find two defendants jointly and severally liable for the plaintiff’s injuries, then one defendant’s claim against the other for common law indemnification would fail because the jury, necessarily, would have found that both defendants had “actively participated in the wrongdoing.” Id. § 22.
The principles governing contribution and indemnity are similar both in origin and in character. In modern law these principles comprise the subject that is treated under the general title of restitution. The principles of restitution are derived from the old common-law actions of general assumpsit and those which we now call quasi-contract and from the equitable principles of unjust enrichment. The basis of the right to restitution is the belief that men should restore what comes to them by mistake or at another’s expense, and that it is unfair to retain a benefit or advantage which should belong to another.... Although both contribution and indemnity rest upon this common concept, they are significantly different....
Contribution is the remedy securing the right of one who has discharged more than his fair share of a common liability or burden to recover from another who is also liable the proportionate share which the other should pay or bear. Contribution rests upon principles of equity. Indemnity is the remedy securing the right of a person to recover reimbursement from another for the discharge of a liability which, as between himself and the other, should have been discharged by the other. Indemnity is generally said to rest upon contract, either express or implied. However, there are numerous exceptions and situations in which a contract is implied by law, and contract, therefore, seems to furnish too narrow a basis. In the modern view, principles of equity furnish a more satisfactory basis for indemnity.
Contribution and indemnity are variant remedies used when required by judicial ideas of fairness to secure restitution. Although similar in nature and origin and having a common basis in equitable principles,*48 they differ in the kind and measure of relief provided. Contribution requires the parties to share the liability or burden, whereas indemnity requires one party to reimburse the other entirely. Differing thus in their effect, these remedies are properly applicable in different situations. Contribution is appropriate where there is a common liability among the parties, whereas indemnity is appropriate where one party has a primary or greater liability or duty which justly requires him to bear the whole of the burden as between the parties.
Hendrickson v. Minnesota Power & Light Co.,
With this background in mind, the Court begins its analysis of common law contribution and common law indemnification in the Virgin Islands and around the country.
Common Law Contribution
1. Virgin Islands Precedent
Although contribution did not exist, historically, at common law — thus, asserting a claim for common law contribution is somewhat of a misnomer — contribution was recognized in the Virgin Islands under our common law. In Gomes, the United States Court of Appeals for the Third Circuit, sitting as the de facto court of last resort for the Territory, concluded
[a]fter extended consideration... that there is no compelling reason to defer or deny applying what we deem arule of reasoned fairness. There is no longer a legitimate place in our system, if, indeed, there ever was, for a rule of law which places the full burden of restitution upon one who is only in part responsible for a plaintiff s loss. Such a philosophy stems from a more ancient day which more easily intermingled penal and compensatory considerations.
[w]here recovery is allowed against more than one defendant, the trier of fact shall apportion, in dollars and cents, the amount awarded against each defendant. Liability of defendants to plaintiff shall be joint and several but, for contribution between defendants, each defendant shall be liable for that proportion of the verdict as the trier of fact has apportioned against such defendant....
5 V.I.C. § 1451(d).
In a decision issued shortly thereafter, in 1977, the District Court explained the background to the Virgin Islands comparative negligence statute and its impact on contribution claims under Virgin Islands law. See Lentz,
Prior to the passage of contribution statutes, the vast majority of American jurisdictions adhered to the common-law rule that no contribution could be had among joint tortfeasors. Plaintiff was entitled to recover in full against any of the jointly liable defendants, and upon execution by plaintiff, the discharging tortfeasor had no recourse*50 whatsoever against the remaining defendants for contribution regardless of their degree of fault. The obvious inequities of such a result, particularly in situations where two or more defendants were unintentionally responsible for plaintiff’s injuries, led to the passage of statutes authorizing various modes of contribution among joint tortfeasors, or to the recognition of a right to contribution, without a statute, in the majority of American jurisdictions. The Virgin Islands legislature, on February 15, 1973, enacted such a statute, providing that contribution among joint tortfeasors be effected per findings by the trier of fact of the proportionate liability of each of several defendants found jointly liable to a plaintiff.
Where contribution is based upon findings of comparative fault, as in this jurisdiction, or on a pro-rata formula pertaining solely to the total judgment award and the number of defendants liable thereon, plaintiff’s right to proceed against any one of the defendants for satisfaction in full has remained undisturbed. Indeed, the local statute specifically provides that comparative fault determinations do not affect the joint and several liability of each defendant to plaintiff, for the entire judgment amount. Accordingly, where one of several defendants found jointly liable to plaintiff is insolvent, or otherwise without sufficient funds to remit the entire judgment amount or its adjudged share of monetary liability, plaintiff may nonetheless execute against any of the remaining defendants for the entire judgment. The inability of any one of several defendants to contribute to the satisfaction of a judgment is of no consequence from the purview of plaintiff, for as long as one defendant is capable of effecting satisfaction in full, plaintiff may so recover. Each defendant is as responsible to plaintiff for the whole of his injury as if it were the sole causal factor. The relative degrees of fault of the defendants, as well as their relative financial capabilities, become germane solely within the ambit of actions for contribution.
Lentz,
The next case after Lentz to consider contribution claims was Dublin v. Virgin Islands Telephone Corporation,
Contribution was at issue again a year later in Brooks v. Jackson, Civ. No. 87-1978,
contribution among joint tortfeasors is to be determined by the trier of fact. Thus, cross-claims for contribution based on a tort theory, unlike cross-claims based on contractual indemnity, are superfluous. . ..
. . . [T]he better practice would be not to allow a cross-claim for contribution where comparison of negligence on the theory of joint liability will be submitted to a fact-finder. The presence of the cross-claim serves only to confuse the jury and is likely to be prejudicial to the two battling defendants. Instead, the preferable procedure is for the Court to order contribution on motion by one co-defendant after joint liability to the plaintiff is determined on the merits. In this manner, the presentation of the case is simplified and the interests of co-defendants are protected. In effect, since the judgment on contribution is included in the final judgment of the Court, there is no need for a separate suit for contribution ....
Id. at *1-2 (quotation marks and citations omitted). The court construed Shillingford’s motion to dismiss as a motion to strike “redundant matter” from Brooks’s answer and granted it. Id. at *3.
Because Brooks had caused an “increasing incidence of stomach tissue disintegration among attorneys,” the court later modified its holding in Martin v. Frett,
Ruling on the motion, the court concluded “that the distinctions between noncontractual indemnification and contribution are irrelevant to the issue of their continued vitality under comparative negligence,” id., and found that both indemnification and contribution should be treated alike. See id. (“The identical reasoning applies to cross-claims for indemnification not premised on contracts since they also merge into comparative negligence. In fact, RESTATEMENT (SECOND) OF TORTS §§ 886(A), cmt. 1, 886(B), cmt. 1 (1979) predicts exactly that result.” (internal citations omitted)). The court acknowledged that Hosking and Carib Gas were correct, “that indemnity and contribution are mutually inconsistent in the sense that indemnity shifts the entire loss from one tortfeasor to another while contribution only shifts a proportionate share.” Id. at 481-82 (citation omitted). But the court rejected the distinction, finding that it did
not alter the basic fact that both theories are methods of allocating fault which can be subsumed within the comparative negligence doctrine. In effect, an added claim for indemnification is redundant since a jury operating under comparative negligence can as easily allocate fault between two alleged tortfeasors 100% and 0% as it can 50% apiece.
Id. at 482. Martin then modified
the holding of Brooks v. Jackson because of the concerns the decision has raised among attorneys.... [T]o achieve the twin goals of avoiding confusion to juries and prejudice to cross-claiming defendants from the appearance of fighting between themselves, we concluded that cross-claims for contribution should be striken [sic]. We reasoned that the jury ’ s function of allocating fault could be fulfilled within the more*54 simplified auspices of the comparative negligence doctrine. We envisioned that after a judgment was entered, whatever claims for contribution might arise could then be filed by defense counsel.
Unfortunately, this decision has generated confusion among attorneys because of fear that they might subsequently forget to follow up on their motions for contribution. Moreover, the result in Brooks bothered attorneys for the cross-claims were stricken not because they were invalid, but solely for the sake of convenience. The Court now perceives an available method which will accomplish its original goals .... Accordingly, from this point onward cross-claims for contribution and, as established by the case at bar, cross-claims for non-contractual indemnity will not be stricken. Instead, the goals of avoiding confusion of jurors and prejudice to cross-claiming defendants will be achieved by prohibiting reference to cross-claims for contribution or non-contractual indemnification during argument, testimony or jury instructions. This solution should satisfy all concerned.
Id. After Martin came Beloit Power Systems, Inc. v. Hess Oil Virgin Islands Corporation,
The Beloit cases concerned “which party must either ultimately bear the entire burden of paying a sizeable civil judgment entered against the plaintiff in . . . Norwilton Murray v. Beloit Power Systems, Inc. ... or at least of sharing the load with plaintiff Beloit Power Systems, Inc.” Beloit II,
At issue in Beloit I was a motion HOVIC filed for judgment on the pleadings. See
The court noted that “Gomes does not specifically address the issue of contribution among non-defendants: the parties in that case were fellow defendants.” Id. at 320. So the question became, “whether the use of the word ‘defendant’ in § 1451(d) limits contribution to fellow defendants.” Id. Beloit I found that it did not. Rejecting HOVIC’s strict construction argument, the court found that “the proposition that statutes in derogation of the common law should be construed strictly does not. . . apply here, since [section] 1451 is a codification of the judicially created comparative negligence scheme of Gomes .... [Section] 1451 ratifies the judicial rule which Gomes fashioned.” Id. at 321; see also id. at 320 (“5 V.I.C. § 1451 is the codification of that comparative negligence system.” (citing Verge v. Ford Motor Co.,
Rather than encompassing the field of contribution, this statute on its face speaks of a particular situation and the form of apportionment appropriate to that situation. This Court does not interpret this statute as exclusionary regarding contribution. That is, by mentioning one form of contribution § 1451(d) does not thereby exclude all other forms. If that were the aim of the legislature, it could have made itself clear.
Beloit I,
*56 [a] tortfeasor who is not joined in a suit still may have an incentive to settle with a plaintiff if he knows that he may later be found liable in a second suit. The possibility of collusion is minimized if a defendant is not put to the choice of either impleading a tortfeasor in the original suit or losing any chance at contribution. A defendant is vulnerable to being “whipsawed” when he impleads another party; plaintiff and third party defendant could combine in pointing the finger at defendant. The opportunity to bring a second action for contribution allows defendant to make the tactical decision whether or not the advantages to a unified trial will be outweighed by possibilities of collusion. Finally, the equitable consideration of spreading loss according to fault encourages the broadest possible contribution procedure.
... The goal of § 1451 generally is to modify the harsh consequences of common law rules. It would be anomalous to acknowledge the liberalizing substantive thrust of this statute and simultaneously interpret it restrictively from a procedural viewpoint.
Id. at 325-26 (citation omitted). Finding no bar to separate actions for contribution, Beloit I denied HOVIC’s motion for judgment on the pleadings. Id. at 327.
Undeterred, HOVIC took another approach in Beloit II, moving for summary judgment based on the affirmative defense that Beloit had been “collaterally estopped from retrying the issues of negligence and fault which were decided in Murray’s original suit against Beloit.”
At no time was the issue of whether negligence on the part of HOVIC contributed to Norwilton Murray’s injuries raised. The question before the jury was who, as between Norwilton Murray and Beloit, was*57 responsible for Murray’s injuries. HOVIC’s negligence could have been before the jury had Beloit impleaded HOVIC under Rule 14 of the Federal Rules of Civil Procedure. However, Rule 14 is not mandatory.
Id. at 531. The court denied HOVIC’s motion, concluding that Beloit’s contribution claim against HOVIC not be resolved on summary judgment. Id.
After Beloit came Manbodh. See generally In re: Kelvin Manbodh Asbestos Litig. Series, Master Case No. 324/1997,
At issue in Manbodh 1 was a motion filed by third-party defendants Fluor Daniel, Fluor Engineers & Constructors, Inc., and Fluor Corporation (collectively “Fluor,” see
Another motion to dismiss was at issue in Manbodh II three years later. Rubber & Gasket Company of Puerto Rico, a third-party defendant, moved to dismiss HOVIC’s third-party complaint, inter alia, for lack of personal jurisdiction.
HOVIC’s common law contribution claims — as well as the same claims by Litwin as a third-party plaintiff — were at issue again in Manbodh III,
At the heart of the parties’ dispute is the identification of the governing law for common law contribution and indemnification. Relying on their interpretation of title 1, section 4 of the Virgin Islands Code, TPDs [or third-party defendants] argue that the Restatement (Third) of Torts: Apportionment of Liability, the most recent Restatement approved by the American Law Institute, governs both common law indemnification and contribution. HO VIC and Litwin counter that the Restatements do not apply to common law contribution, because there is local law to the contrary, namely, Gomes . . . and section 1451(d) of title 5 of the Virgin Islands Code, as interpreted by Beloit I*59 .... Additionally, HO VIC and Litwin argue that the adoption of the provisions of the Restatement (Second) of Torts by Dublin ... precludes the application of the Restatement (Third): Apportionment of Liability to common law indemnification actions. According to HO VIC and Litwin, continued reliance on Dublin is justified because the Restatement (Second) constitutes the prevailing common law of the United States. Since the Motions for Summary Judgment hinge on whether HO VIC and Litwin need to establish the discharge of the TPDs’ liability, this section shall identify the applicable substantive law.
Id. at 384-85 (footnote and citations omitted).
As to HO VIC and Litwin’s contribution claims, Manbodh III observed that
[i]n the years since Gomes, neither the Third Circuit Court of Appeals nor the Appellate Division [of the District Court of the Virgin Islands] has specifically endorsed either the Restatement (Second) of Torts ... or the Restatement (Third) of Torts: Apportionment of Liability .... Several District Court and Territorial Court opinions, however, cite approvingly to the Restatement (Second) of Torts provisions. While these decisions are neither binding nor dispositive ... the analysis in Beloit I of section 1451(d), as it relates to contribution, is particularly instructive.
Id. at 386-87 (footnote omitted). Manbodh III agreed with Beloit I that it would be “ ‘anomalous’ ” to allow contribution under Virgin Islands law between defendants in the same action, but prohibit it in a subsequent action. Id. at 387 (quoting Beloit 7,
“The requirement of a discharge, central to the instant motions, was not at issue in either Gomes or Beloit 7,” the court explained. Id. at 389. Moreover, courts applying Virgin Islands law did not have to apply the
The court in Manbodh III then proceed to conduct “[a] searching inquiry . . . because the Restatements (Third) of Torts: Apportionment of Liability sections 1 through 26, the Restatement (Second) of Torts sections 876 through 886B, and the Restatement (First) of Restitution sections 76 through 102 offer different approaches to the apportionment of liability.” Id. at 392. The court rejected the restitution restatement because “its prohibition of contribution among joint tortfeasors ... no longer represents the majority rule” and because the portions that “continue to be generally accepted and sound” had been adopted by the second and third restatements of torts. Id. (citations omitted).
A brief comparison of the two versions of the Restatement of Torts is critical for deciding which one more accurately summarizes the current majority rule. With contribution, the Restatement (Second) of Torts indicates that a plaintiff seeking contribution must establish both its own and the defendant’s liability to the injured party. The RESTATEMENT (Second) of Torts also primarily advocates, as the previous majority rule, the division of contribution along pro-rata lines. Finally, under this Restatement the partial settlement of an injured party’s claim by a plaintiff will not provide grounds for contribution against a defendant, even if the plaintiff has settled for more than plaintiff’s respective share.
The Restatement (Third) of Torts : Apportionment of Liability takes opposite positions with respect to these matters. A settling plaintiff does not need to prove that it would have been liable to the injured party to assert a claim for contribution. In addition, in recognition of the predominant change to comparative fault, the division of tort liability under the Restatement (Third) of Torts is now achieved through comparative fault percentages, the current majority*61 position. This approach is consistent with section 1451 of title 5 of the Virgin Islands Code. Contribution causes of action under the Restatement (Third) of Torts are also not limited to claims that discharge the entire liability; such an action may arise for any amount a plaintiff pays above its percentage share. Finally, in an area unsettled as of the promulgation of the Restatement (Second) of Torts, under the Restatement (THIRD) a tortfeasor that settles before final judgment is not liable for contribution. This premise, found in the Restatement (Third), is consistent with the reasoning contained in Gomes.
Id. at 392-93 (citations omitted). Manbodh III concluded that the “Restatement (Third) represents the current majority substantive law” and therefore should apply in the Virgin Islands pursuant to section 4 of title 1 of the Virgin Islands Code. Id. at 394.
Finally, Manbodh IV concerned a motion HOVIC filed as third-party plaintiff for additional time to effect service on a third-party defendant, Viacom, Inc.
After the Manbodh decisions, the few courts that questioned what law governed common law contribution claims largely followed Manbodh III. See, e.g., Am. Int’l Ins. Co. ofP.R. v. Lampe GMBH,
This decisional law of the Virgin Islands, having adopted, construed and reevaluated contribution over the years is a significant factor in deciding whether to continue recognizing contribution as a claim.
2. Position Taken by Other Jurisdictions On Common Law Contribution
As discussed above, courts by and large rejected contribution claims between multiple tortfeasors at common law. But not all courts. In addition to the Virgin Islands, courts in the District of Columbia, Illinois, Iowa, Louisiana, Maine, Minnesota, Nebraska, Pennsylvania, Tennessee, and Wisconsin recognized contribution by common law. See Nw. Airlines,
However, by the end of the last century, the majority of state legislatures had recognized contribution by statute. See id. (citing jurisdictions that adopted the Uniform Contribution Among Tortfeasors
As of 2000, when the Restatement (Third) of Torts was approved, seven jurisdictions had adopted the original Uniform Contribution Among Tortfeasors Act proposed in 1939: Arkansas, Delaware, Hawai’i, Maryland, New Mexico, Pennsylvania, Rhode Island, and South Dakota. See Restatement (Third) of Torts: Apportionment of Liability § 23 rptr note cmt. a (2000). Twelve jurisdictions adopted the 1955 revised Uniform Contribution Among Tortfeasors Act: Arizona, Colorado, Florida, Guam, Massachusetts, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, and Tennessee. See id.; see also Newby v. Gov’t,
Ordinarily, a Banks analysis is limited to decisions construing and applying common law, not statutory law. See Malloy v. Reyes, 61 VI. 163, 111 (2014); accord Slack v. Slack,
Alaska, for example, initially rejected common law (or equitable) indemnity in favor of contribution, so long as the person claiming contribution had paid more than its “pro rata” share. Ogle v. Craig Taylor Equip. Co.,161 P2d 722,725-26 (Alaska 1988) (“First, the claimant must be a tortfeasor. Second, the contribution defendant must be a tortfeasor. Third, they must be jointly and severally liable in tort for the same injury. Fourth, the claimant must have paid more than its pro rata share of the
West Virginia and Texas, for example, recognize contribution claims, but only for persons who have not settled with the injured party. See Grant Thornton, LLP v. Kutak Rock, LLP,
By contrast, Connecticut, prior to “October 1,1986 ... followed the rules of joint and several liability with no right to contribution among joint tortfeasors at common law. After October 1, 1986, the legislature enacted tort reform to replace the rule of joint and several liability with a system of apportioned liability, which held tortfeasors liable for damages proportionate to their individual fault as determined by a fact finder.” Miller v. Castro, case no. NNHCV156053967S,
The right of contribution arises only after: (1) the claimant has gone to final judgment, (2) the claimant has failed to collect on one or more liable defendants after making good faith effort to do so, (3) the claimant has moved to open the judgment within one year after it becomes final for purposes of reallocation, (4) a reallocation is made by the court, and (5) a defendant is actually required to pay an amount in excess of his share of the original judgment.
Id. (quotation marks and citations omitted).
Distilling current law on contribution to a few key principles is particularly difficult because of the different approaches other jurisdictions
Given the diversity of positions in other jurisdictions, it is hard to draw meaningful insights .... At the risk of overgeneralization, there appears to be a growing trend away from bright-line, all-or-nothing rules and towards concepts of relative fault and the allocation of responsibility among parties, including parties who have committed intentional torts. This trend includes movement towards permitting joint tortfeasors who have acted with a more culpable state of mind than negligence to seek contribution, although jurisdictions that permit contribution for intentional torts appear still to be in the minority.
In re: Rural/Metro Corp.,
The majority of jurisdictions (albeit most by statute) recognize contribution claims. This factor is significant in the Court’s analysis.
3. Soundest Rule for the Virgin Islands
Contribution was first recognized as a right in the Virgin Islands over fifty years ago. See Gomes,
Understandably, given the unyielding way in which courts in the Virgin Islands viewed the restatement mandate in the past, the various approaches offered by the restatements, as later adopted by courts applying Virgin Islands law, have become woven into Virgin Islands law on contribution. But, as the discussion above reveals, no particular rule has become so engrained in the Virgin Islands as to make abandoning such precedent unwise now. Cf. Connor,
While no specific approach to assessing contribution has come to be relied on in the Virgin Islands, litigants have come to rely on the different ways that contribution can be asserted. Lentz, Brooks, and Martin recognized that a defendant could demand or assert contribution against a co-defendant in the same action. In fact, Brooks and Martin went so far as to find claims between defendants for contribution “superfluous,”
It certainly would be sound to continue the requirement that a defendant, before filing a separate or subsequent action for contribution against a nonparty, must have first borne “the full burden” while being
Nevertheless, the Court does find the reasoning of Brooks and Martin persuasive, to the extent that some claims for contribution are superfluous under certain circumstances. Brooks and Martin concerned cross-claims for contribution between defendants, whereas this case concerns a counterclaim for contribution but not by one third-party defendant against another third-party defendant. Rather, Shell’s counterclaim is against the third-party plaintiff. Similar to Brooks and Martin, this Court finds a counterclaim for contribution by a third-party defendant and against a third-party plaintiff within a third-party action for contribution, superfluous.
Contributory negligence raises a question about the actions of the plaintiff in contributing to his own injuries. Contribution, by analogy, raises a question about the actions of the parties in the case, or the actions of nonparties, who may have some responsibility for the plaintiff’s injuries. A third-party defendant may be able to cross-claim for contribution against a third-party co-defendant. Cfi Brooks,
Common Law Indemnification
1. Virgin Islands Precedent
As with contribution, courts in the Virgin Islands have also recognized claims for common law indemnification for some time. See, e.g., Frederick v. Hess Oil V.I. Corp,
The court in Dublin began its discussion of common law indemnification by acknowledging that the Third Circuit had recognized contribution in Gomes, but had not had occasion since then to consider the “right to indemnity among joint tortfeasors.”
Relying on the Restatement (First) of Restitution as well as a 1972 tentative draft of section 886B of the Restatement (Second) of Torts, Dublin held “that a right to contribution or indemnity against a joint tortfeasor exists in the Virgin Islands.” Id. at 227. Although the court did
Barry Allaire had rented a house on St. Croix from Philip M. Childs. Id. at 291; see also Allaire v. U.S. Trust Co.,
In ruling on the motion, the court in Continental first observed that “[a] claim for noncontractual indemnity is recognized by the Restatement of Restitution (1937),” specifically section 86. Id.
The underlying principle of this type of implied immunity among tortfeasors is that a tortfeasor whose negligence may be characterized as “passive” should not be compelled to pay damages that ought to have been paid by another wrongdoer whose negligence can be labeled as “active” or “primary.” “Accordingly, it is generally held that a person, who, without fault on his part, has been compelled to pay damages is entitled to recover indemnity where... the plaintiff is only technically or constructively liable to the injured part, or where his liability was based on a legal or contractual relationship with the defendant.”
Id. at 292 (quoting 41 Am. Jur. 2d Indemnity § 20 (1968)). Common law indemnification is not available for “losses for which the defendant-indemnitor is clearly not liable and/or which the plaintiff-indemnitee has mistakenly or improperly paid,” the court reasoned. Id. But indemnification is available even though a party may have settled: “ ‘The fact of voluntary payment does not negative the right to indemnity, since a person confronted with an obligation that he cannot legally resist is not obligated to wait to be sued and to lose a reasonable opportunity for compromise. ’ ” Id. (quoting 41 Am. Jur. 2d Indemnity § 33 (1968)). “Because the two co-defendants in the Allaire action were never drawn into such a direct controversy — by way of cross-claims or otherwise — none of the issues arising ... [in] the present lawsuit were decided or even litigated,” the court concluded. Id. at 294. In other words, determining between Mr. Childs and Mr. McDonald, i.e., between the homeowner and the architect, who was actively negligent and who was passively negligent did not occur in Allaire. So, the court denied the estate’s motion to dismiss.
The next case after Continental to discuss common law indemnification was Manbodh I. As noted in the previous section, Manbodh I concerned a motion filed by a third-party defendant, Fluor, to dismiss HOVIC’s third-party complaint for failure to state a claim. See
A person who, without fault on his part, has been compelled to pay damages is entitled to recover indemnity where, as between the parties in the indemnity action, the defendant is primarily liable while the plaintiff is only secondarily liable, that is, where the plaintiff is only technically or constructively liable to the injured party, or where his liability was based on a legal or contractual relationship with the defendant.
Id. at *5-6 (citation omitted). The court further observed that “[b]oth the Restatement of Restitution and the Restatement (Second) of Torts recognize a right to indemnification from a joint tortfeasor.” Id. at *6 (citing Dublin,
Similarly, in denying Rubber & Gasket (“R & G”) Company’s motion to dismiss, the court in Manbodh II, noted that HOVIC had asserted its contractual indemnification and common law indemnification claims “in the alternative” and explained that HOVIC’s common law indemnification claim “arises from HOVIC’s purported passive liability for the exposure of the First-Party Plaintiffs to toxic substances.”
R & G assumes, without basis, that HOVIC may not have a strict liability theory and that an absence of negligence will have some relevance to its motion to dismiss. Given that the Plaintiffs brought strict products liability claims against HOVIC and that those claims were settled, an absence of negligence by R & G will not shield it from*76 liability in at least a common law indemnification setting, where R & G may be liable notwithstanding any absence of negligence. Thus, there are facts where, if they are true as pled, HOVIC would have a cause of action.
Id. at 292 n.44 (emphasis added).
Common law indemnification was again at issue in Manbodh III,
In its analysis, the court in Manbodh III first acknowledged that the Restatement (First) of Restitution could apply, but then rejected it, apparently only because it no longer reflected the majority position on contribution. See id. at 392 (citing In re: Kelvin Manbodh Asbestos Litig. Series,
The Restatement (Third) of Torts reflects the recent trend in limiting common law indemnification to situations where the plaintiff is not negligent. Previously, under the Restatement (Second) of*77 TORTS, a negligent plaintiff could recover from a more negligent defendant in indemnification because such a result was necessary to soften the harshness of the rule of pro-rata contribution. As a result of the trend towards comparative fault, indemnification is not permissible under the Restatement (Third) of Torts where both parties are actively negligent, though one, perhaps, to a lesser degree... .
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In sum, while both the Restatement (Second) and the Restatement (Third) contain more modern approaches to common law contribution and indemnification, the Restatement (Third) represents the current majority substantive law. In the Restatement (Third), the drafters promote the interests of both flexibility and judicial economy by supplying security for settlors. Additionally, the Restatement (Third) abandons the perversion of indemnification dictated by the Restatement (Second)’s allegiance to pro-rata contribution, previously allowing for indemnity when the plaintiff was negligent, though comparatively less so than the defendant. Finally, the Restatement (THIRD) framework is also specifically tailored for application with comparative fault statutes, a majority position, as the indemnification discussion illustrates. For all of these reasons, and in an effort to establish the best total set of rules by bridging the gaps in substantive tort law, this Court acknowledges the current majority rule and adopts the provisions of the Restatement (Third) of Torts: Apportionment OF Liability, Topic 3 for the substantive requirements for common law contribution and indemnification.
Id. at 393-94 (citations omitted).
As with contribution, following the Manbodh decisions, the few courts who have questioned what law governs common law indemnification have largely followed Manbodh III and applied the Restatement (Third) OF Torts. See, e.g., Am. Int’l Ins. Co.,
Courts applying Virgin Islands law have consistently recognized common law indemnification. This factor has significant weight for purposes of this Banks analysis.
2. Position Taken by Other Jurisdictions on Common Law Indemnification
As can be expected, considering that the United States at present comprises fifty States, five Territories, and the District of Columbia, different approaches to common law indemnification, like contribution, have arisen around the country.
Colorado and Oregon, for example, allowed common law indemnification at one time, but now do not.
Arkansas, the District of Columbia, Florida, New York, and Mississippi, for example, restrict common law indemnification to certain “special” or “legal” relationships. See, e.g., Larson Machine, Inc. v. Wallace,
Other jurisdictions, such as Connecticut, Idaho, and Mississippi focus not on the relationship (or in Mississippi not solely on the relationship), but rather on who was actively negligent versus who was passively negligent. See, e.g., ATC P’ship v. Coats N. Am. Consol., Inc.,
Because, historically, indemnity concerned “the right of complete reimbursement to one party who has been compelled by law to pay what the other party should pay,” Howard Univ.,
Clearly, the overwhelming majority of jurisdictions recognize common law indemnification claims. This factor weighs in favor of continuing to recognize such claims in the Virgin Islands.
3. Soundest Rule for the Virgin Islands
What is clear from the parties’ arguments — and from the state of the law around the country, including the Virgin Islands — is that the distinction between common law indemnification and common law contribution has become blurred. It is in part for this reason that this Court is not comfortable following the Restatement (Third) of Torts. As the reporter’s notes to Section 22 makes clear:
Comment e changes the rule in Restatement Second, Torts § 886B. Section 886B sometimes provided for indemnity in favor of a negligent indemnitee. Subsection 886B(d) provided for indemnity if the indemnitor supplied a defective chattel or performed defective work upon land or buildings as a result of which both the indemnitee and indemnitor were liable to the third person, and the indemnitee innocently or negligently failed to discover the defect. There is support elsewhere for a negligent party being able to obtain indemnity. One situation is when the indemnitor was actively negligent and the*83 indemnitee was passively negligent. These doctrines were developed before comparative responsibility. They avoided the harsh effect of pro rata contribution when one of the tortfeasors was substantially more culpable than the other. They are inconsistent with the goals of comparative responsibility.
Restatement (Third) of Torts: Apportionment of Liability § 22 rptr notes to cmt (e) (2000) (first and third emphasis added) (quotation marks, citations, and paragraph breaks omitted)).
The American Law Institute, in promulgating revisions to its restatements of the law, has begun, not only to restate the law, but also to revise the law. See Martinez v. Colombian Emeralds, Inc.,
Connor's, command is especially apt here because neither Manbodh III, nor Section 22 of the Restatement (Third) of Torts: Apportionment OF LIABILITY, has gained widespread acceptance in the Virgin Islands. Of the cases that have relied on Manbodh III, the majority have cited it in support of courts being able to consider “items of unquestioned authenticity that are referred to in the challenged pleading and are integral to the pleader’s claim for relief’ when ruling on a motion to dismiss. Manbodh III,
Litwin contends that, because Manbodh III adopted the Restatement (Third), that decision has become “local common law,” so “reliance upon . . . [the] comments and authorities within . . . [that Restatement] is proper in order to define, clarify, or expand upon the provisions.” (Mot. 4.) Yet, as Shell correctly points out, Manbodh is just persuasive. (See Opp’n 3.) Both parties in their motion papers touch on a key difference between the Restatement (Second) and the Restatement (Third). Section 22 of the Restatement (Third) is “couched in contingent terms, allowing for claims to be asserted prior to judgment or satisfaction . . . employing
To resolve the question raised here, it is helpful to understand what is not at issue. Unlike in Continental, this is not a separate action for indemnification. Litwin did not file a lawsuit against Shell as a first-party plaintiff, nor has Shell filed a lawsuit against Litwin. Furthermore, Mr. Willie has only settled with UOP to date. Thus, Litwin’s motion, unlike Manbodh III, does not concern whether the party seeking indemnification (Shell) has settled and discharged the liability of the other party (Litwin). Rather, none of the first-party defendants or the third-party defendants have been found liable (at least not yet) by the jury for causing harm to Mr. Willie. Should this matter proceed to trial, each party will present its case and the jury will apportion liability, if any. See 5 V.I.C. § 1451(d). What is at issue here, then, is whether Shell, a third-party defendant, can assert a claim for common law indemnification against Litwin, a third-party plaintiff.
This Court believes that the soundest rule for the Virgin Islands is to continue recognizing claims for common law indemnification. As with contribution, Virgin Islands courts have allowed common law indemnity claims to be pursued within an existing action as a counterclaim or a third-party complaint like in Manbodh and Continental, or in a subsequent action, as in Freeman Caribbean Associates. The Court also agrees that before a party can prevail on, but not plead, a common law indemnification claim, there must have been a determination that the person who initially brought suit (in this case, Mr. Willie) was in fact injured. “A prerequisite to recovery based on equitable indemnification is the initial determination that the negligence of another person caused the damage. Without that determination, neither the negligent actor nor the
The Court agrees with Litwin that common law indemnification is a derivative claim, meaning it derives from some other cause of action. {See Mot. 4 (“[Contribution and indemnity are considered to be contingent or ‘derivative actions.’ ”) The Court also agrees with both parties that a claim for common law indemnification can be asserted after a party has been found liable in a separate action, see Continental,
As with contribution, Virgin Islands courts have allowed common law indemnification claims to be asserted in the same action through a third-party complaint, as in Dublin and Manbodh, or in a separate action, as in Continental. But Litwin is simply incorrect that
[a] prerequisite to Litwin’s indemnification of Shell is that Shell be found liable to Terence Willie. That cannot happen here. It cannot happen since Terence Willie hasn’t sued Shell. Whatever happens at trial in this case, in no universe will there be a verdict for the Plaintiff against Shell because the Plaintiff did not sue Shell.
(Mot. 6.) Litwin brought Shell into this action by filing a third-party complaint for contribution. In essence, Litwin said to the court, to Mr. Willie, and to the other defendants that it might not be the only one allegedly at fault, that others may bear some of the blame for Mr. Willie’s injuries. While a judg
In this vein, the Court agrees with the other courts that have concluded that conceptualizing indemnification in terms of “both parties [being] . . . actively negligent, though one, perhaps, to a lesser degree,” Manbodh III,
Rather than perpetuate any confusion that may be lingering after Banks and Connor by adopting one restatement section or provision over another, the Court will instead state what law it believes should apply here. This is an important point Litwin and Shell fail to appreciate because, in arguing their positions, Litwin and Shell frame the question as which restatement provision is the soundest to adopt. However, as the
Understandably, courts have tried to conceptualize indemnification in terms of active versus passive liability, or primary versus secondary or vicarious liability. But those terms are misleading for many reasons. Before an action for indemnification can arise, someone must have been injured and either settled out of court, or sued and then settled, or sued and prevailed at trial. As the number of persons potentially at fault increases, or the number defendants named in a lawsuit increases, the possible outcomes between the injured party and each wrong-doer increases exponentially. In this case, for example, Mr. Willie sued Hess, HOVIC, Litwin, and UOR Litwin, believing that others may be partially
To illustrate the concerns that arise when the focus is not on the relationship, but rather on how negligent Shell and Litwin each were, assume, arguendo, that Shell lacked sufficient minimum contacts with the Virgin Islands and prevailed on a motion to dismiss for lack of personal jurisdiction. Assume further that Mr. Willie prevailed at trial against Litwin. It would not follow that Shell was not at fault. Shell’s portion of the liability (if any) was not before the jury. Yet Litwin was found liable. Under Section 22 of the Restatement Third, “a vicariously liable person can obtain indemnity from the person whose negligence was imputed only if the vicariously liable person is not independently liable.” Restatement (Third) of Torts: Apportionment of Liability § 22 rptr. note cmt. e (emphasis added). Consequently, to determine if Litwin was independently liable — rather than passively, secondarily, or vicariously liable, and, notwithstanding, that a jury already found Litwin liable — the factfinder (whether a jury or a judge) in this hypothetical Litwin-Shell lawsuit will have to re-determine Litwin’s role in causing Mr. Willie’s injuries. That is, the jury or the judge will hear similar (if not the same) evidence and make another determination, but only as between Shell and Litwin. Cf. id. rptr note cmt. c (“Some issues ... may already have been adjudicated in the suit between the plaintiff and the indemnitee, and the indemnitee may be bound. This Section does not address the preclusive effect of issues adjudicated in the earlier suit. That issue is governed by the applicable law of judgments.”). The Supreme Court of New Hampshire discussed similar concerns in Morrissette v. Sears, Roebuck & Co.,
While a prejudgment payment in settlement does not extinguish a right of indemnity, the third-party plaintiff must show that the settlement*90 was made under legal compulsion, rather than as a mere volunteer, for indemnity is not available for payment voluntarily made. The parties agree that third-party plaintiff, Morrissette, must make some showing that she settled under a legal compulsion. The conflict surrounds the scope of her burden in this area. Sears argues that she must prove actual liability on her part... in effect forcing her to try out the case of the original plaintiff_Morrissette argues that she need only show probable liability. The problem has been considered with varying results. Some courts support Sears’ view.... Some cases adopt a less precise statement that one voluntarily paying a claim should be required to show that he was legally liable for it. Other cases say that the third-party plaintiff must establish potential liability but need not prove the case against himself. If a third-party plaintiff is not to be discouraged from making a settlement his burden in an action for indemnity must not be too great. He would in effect be forced to proceed to trial against the original plaintiff... and would find settlement to little advantage. On the other hand, equitable considerations require that the third-party defendant have a reasonable opportunity to show that the third-party plaintiff was not liable to the original plaintiff but paid the claim as a volunteer (quotation marks, citations, and paragraph breaks omitted).
Even if Litwin did not prevail in this hypothetical separate action against Shell, judicial resources would still have been expended (not to mention costs and attorney’s fees) by re-litigating at least some of the facts that would have already been determined in Estate of Willie v. Hess. And if Mr. Willie’s estate settles with the remaining first-party defendants, rather than proceed to trial, his case would still have to be tried (at least in some sense), if only in the Litwin-Shell indemnification action because the factfinder would have to determine first that Mr. Willie was injured, then that Litwin’s actions were not the cause of Mr. Willie’s injuries, and further that it was really Shell, just through Litwin (and not some other intervening or contributing factor), who caused Mr. Willie’s injuries. Only at that point would Shell would be required to indemnify Litwin. Requiring that Shell file a separate lawsuit against Litwin is unnecessary.
Courts issue decisions in cases, not for the ages, but for the parties. Cf. Huffman v. Appalachian Power Co.,
All of the special or legal relationships that could be recognized under Virgin Islands law is not for this Court to determine here.
Indemnity claims stemming from products liability actions can be divided into “upstream” and “downstream” claims. “Upstream” indemnity refers to shifting liability to a manufacturer or previous user of the product, while indemnity “downstream” is a shift to a subsequent user or handler. Classic “upstream” claims would be those of a dealer held strictly liable who sought to recover all his liability from the manufacturer of the product, or an assembler who sought to lay the blame on the producer of a component part. “Downstream” is, of course, the reverse, e.g., a manufacturer shifting liability to a dealer or subsequent*94 user. Because strict liability is based in part on the policy goal of distributing the economic burden of injuries to the party who has profited the most from the product and therefore can best bear the burden, shifting all the liability “upstream” through indemnity has generally been more favored than efforts to shift it all “downstream.”
De Ancla v. Midland-Ross Corp.,
Here, the manufacturer (Shell) is seeking indemnification from a purchaser or supplier (Litwin) of its products. Virgin Islands courts have not addressed whether common law indemnification should be recognized downstream. A few courts have.
While indemnification may not be “obtainable in strict liability cases as against the user” and “cannot be the basis, in strict liability actions, for a third party complaint seeking to shift liability.” Kuziw v. Lake Engineering Co.,
Set-Off at Common Law
The last area to address is set off. In its motion, Litwin contends that “local caselaw [sic] has not fleshed out” the law regarding set-off and Superior Court Rule 34 “does not define the cause of action.” (Mot. 5.) Quoting a historical treatise, Litwin suggests that Virgin Islands law should hold that a “ ‘[s]et-off signifies the subtraction or taking away of one demand from another opposite or cross demand, so as to distinguish the smaller demand and reduce the greater by the amount of the less; or, if the opposite demands are equal, to extinguish both.’ ” Id. (quoting Thomas W. Waterman, A Treatise on the Law of Set-Off, Recoupment, and Counter Claim 1 (2d ed. 1872)). Consequently, if “set-off is defined as a defendant’s counter-demand against the plaintiff, arising out of a transaction independent of the plaintiff’s claim .... [i]nherent, then, in such a cause of action is the existence of the debt which is due to the counter-claimant from some other transaction between the parties.” Id.
1. Virgin Islands Precedent on Set-Off
One of the earliest reported decisions in the Virgin Islands concerned set-off. See Stafford v. Palidore,
Set-off next appeared in a 1951 decision issued by the District Court. See Stoner v. Bellows,
Scattered references to set-off reoccur throughout a few later cases. See, e.g., Gilbert v. Gibbs,
In recent years, courts applying Virgin Islands law have not discussed set-off in any depth. Litigants have continued to request or demand set-off and courts have continued to offset the amounts awarded. Cf. Mathes v. Century Alumina Co., LLLP, Civ. No. 05-0062,
As set-off has been recognized for almost a century in the Virgin Islands, this factor has significant weight.
2. Position of Other Jurisdictions on Setoff
Historically, many courts held that set-off was not available in actions at law, only in suits in equity, unless otherwise permitted by statute. See, e.g., Copperthite Pie Corp. v. Whitehurst,
Nonetheless, in many instances, it was in fact legislatures — state and territorial, including the Virgin Islands — that allowed set-off. See Code of Laws for Mun. of St. Thomas & St. Jan [sic], tit. Ill, ch. 86, § 3 (1921) (“A party whom a judgment is giving in a Police court may, upon three days’ notice to the adverse party, apply to the Judge of such court to have
Where the right to demand set-off was left to the courts, the majority held that the right may be asserted in all cases. Accord Walker v. Farmers Ins. Exch.,
However, set-off is not a cause of action per se, but rather a defense or a cross-demand that cannot arise from the same issues being litigated in the case at bar. See, e.g., M.N.C. Corp. v. Mt. Lebanon Med. Ctr., Inc.,
3. Soundest Rule for the Virgin Islands
Litwin is correct, that Virgin Islands courts have not “fleshed out” the extent of Superior Court Rule 34 or “define[d] the cause of action for set-off.” (Mot. 5.) But Litwin is not correct to the extent it contends that the rule creates a right of set-off. Rule 34 governs the procedure by which a defendant (or, as here, a third-party defendant) can demand or request a set-off in its answer. A rule of procedure cannot create a substantive right.
But the right of set-off has been recognized for nearly a century in the Virgin Islands, first by statute for claims under $200.00. See Banks,
That set-off was initially permitted in our courts by statute, not precedent, is cause for concern. But “the repeal of a rule which modifies the common law operates to reinstate the common law rule, absent contrary legislative intent.” Taylor v. State,
Continuing to recognize this right is proper. Allowing set-offs can reduce costs, fees, and judicial resources, rather than requiring parties to enforce multiple judgments. Allowing a judgment entered in one case to be offset and satisfied by a judgment entered in another case, so long as the debt is between the same parties, is sound. Cf. Anepac, Ltd. v. Barge “Great Sound" Official No. 356237,
DISCUSSION
Litwin argues that Shell has no contribution or indemnity claim against Litwin. (See Mot. 5, 7.) According to Litwin, before it could be required to indemnify Shell, “Shell [must] be found liable to Terence Willie.” Id. at 6. But that “cannot happen since Terrence Willie hasn’t sued Shell.” Id.
Whatever happens at trial in this case, in no universe will there be a verdict for the Plaintiff against Shell because the Plaintiff did not sue Shell. It makes no difference whether the indemnification is based in contract or in the common law. No liability to Plaintiff — no possibility of indemnification. Shell has failed to assert a cogent case for indemnification.
Id. Litwin’s argument “is the same for contribution as it is for indemnity.” Id. at 7. “Both causes of action can only exist where two parties either are or may be liable for the same harm.” Id. Litwin acknowledges that “there may be a finding based upon Litwin’s third-party complaint that Shell harmed Terence Willie, [but] the liability there is to Litwin — not to the Plaintiff.” Id.
Lastly, Litwin also rejects Shell’s demand for set-off.
Set-off requires the existence of some independent debt — something which Litwin owes to Shell outside of the Terence Willie claim. If Litwin does owe anything to Shell, Shell has failed to plead what exactly that debt is or where it comes from.. . . Twombly and Iqbal, as adopted by the Virgin Islands Supreme Court, require that a pleading provide requisite specificity as to its grounds. Shell must identify the debt which is the cause of the claimed set-off and they [sic] have not.
Id. at 7-8.
Shell, in turn, rejects each of Litwin’s arguments. “Litwin and Mr. Willie[’s estate] have either reached a settlement ... or are in the process of reaching a settlement.” (Opp’n 4.) Thus, “Shell is entitled to a set-off should Litwin continue to pursue third party claims against Shell.
[i]f this matter went to trial on Mr. Willie’s first party claims against Litwin, Litwin could argue that Shell’s products caused Mr. Willie’s injuries. In turn, a jury could find that several alleged “empty chair” tortfeasors, including Shell are proximately or actually liable for all or part of Mr. Willie’s alleged injuries. This is precisely the circumstance that supports a counter claim for contribution and indemnity. Without such a counterclaim, Shell does not have an adequate procedural mechanism to seek an apportionment of damages, or to mitigate damages against Litwin’s third-party Complaint.
Id. at 4 (citing James v. Antilles Gas Corp.,43 V.I. 37,47 (Terr. Ct. 2000)). In a final, parting shot, Shell argues that, since “Litwin has apparently conceded that... Shell’s not liable for any of Mr. Willie’s alleged injuries .... then both Litwin’s third party Complaint and Shell’s Counterclaim must be dismissed with prejudice.” Id. at 4-5.
1. Contribution
The soundest rule for the Virgin Islands is to continue to recognize a claim for common law contribution. Common law contribution may be asserted (1) by a party in a tort or personal injury action, (2) against a co-party or a nonparty, (3) if the co-party or nonparty is or may be liable (4) for the same injury or damages as the plaintiff has sued for. A claim for common law contribution need not have matured before it can be asserted as a counterclaim (including cross-claims, see Super. Ct. R. 34) or by third-party complaint. However, contribution cannot be asserted by a third-party defendant against a third-party plaintiff, if the first-party plaintiff has not also asserted his own claims against that third-party defendant.
Litwin is correct in that, Shell and Litwin are not co-parties here insofar as any judgment entered in favor of Mr. Willie and against Shell. Mr. Willie alleges that Litwin (as well as Hess, HOVIC, and UOP) collectively caused him harm by causing him to be exposed to asbestos and other toxic substances. By filing a third-party complaint, Litwin, in essence, said that others may be at fault too, namely Shell, CBIC, IMC, and Riggers. Litwin brought these nonparties into this litigation on a
Shell’s portion of liability, if any, like all of the other parties’ liability — including Mr. Willie’s own liability, if any (see, e.g., Litwin’s Ans. 8, ¶ 28 (asserting contribution negligence as an affirmative defense)) — will be apportioned by the jury. Assuming, arguendo, that the jury were to find Hess, HOVIC, and Shell each to be twenty percent at fault, Litwin and UOP ten percent at fault, and IMC, Riggers, CBIC, and Mr. Willie five percent at fault — Litwin’s portion of the liability would be forty-five percent because Mr. Willie did not assert his claims against any of the third-party defendants. In other words, Shell’s twenty percent as well as the fifteen percent apportioned collectively against CBIC, Riggers, and IMC — again, speaking hypothetically — would have to be paid to Litwin, to be paid in turn to Mr. Willie. But if Litwin had not brought the third-party defendants into this action, Litwin’s own liability might have been apportioned at forty-five percent.
Liability in the Virgin Islands is joint and several among multiple defendants, including third-party defendants. See 5 V.I.C. § 1451(d). Further assuming, arguendo, that Litwin, as third-party plaintiff, were to recover one-hundred percent of the third-party defendants’ collective liability from Shell, Shell in turn would have a claim for contribution from the other third-party defendants. And if Shell had asserted a cross-claim against IMC, Riggers, and CBIC, it might be able to recover on that cross-claim. But Shell did not assert any claims against its third-party co-defendants. In fact, none of the third-party defendants asserted claims against each other. Instead, they all counterclaimed against Litwin for the same relief that Litwin asserted against them: contribution and indemnification. Since Mr. Willie did not assert his own claims against any third-party defendant, “the liability there is to Litwin — not to the Plaintiff.” (Mot. 7.) If Mr. Willie had asserted his claims against Shell, then Shell’s counterclaim for contribution from Litwin may have been viable. But here, both parties cannot obtain contribution from each other. Accordingly, the Court finds that Shell’s counterclaim for contribution against Litwin fails as a matter of law. Judgment of dismissal must be entered in favor of Litwin and against Shell on Shell’s counterclaim for contribution.
The soundest rule for the Virgin Islands is to continue recognizing a claim for common law indemnification. As with contribution, courts in the Virgin Islands have allowed common law indemnification claims to be asserted in the same action through a third-party complaint and in a separate or subsequent action. However, because no particular rule has come to be relied on by courts applying Virgin Islands common law — and because the approaches taken by other jurisdictions across the country vary — this Court believes that the better approach is not to adopt a section of the restatements. Cf. Antilles School, 64 VI. at 409 n.1. Instead, the better approach is to simply state the rule for this jurisdiction.
Common law indemnification concerns the avoidance of liability. That is, all (not a portion) of one’s liability for harming or injuring another is passed on to a third person. Equity and fairness demand that equitable or common law indemnification be limited to a legal or special relationship between the person seeking indemnification (indemnitee) and the person who would be required to indemnify the other (indemnitor). To state a claim for common law indemnification, the indemnitee must allege that (1) it has been or may be sued (2) for damages, (3) proximately caused by the indemnitor’s actions or inactions, and (4) but for the relationship between the indemnitee and the indemnitor, the indemnitee would not have been sued or found liable.
When ruling on a motion for judgment on the pleadings, like a motion to dismiss for failure to state a claim, the court must assume the truth of all well-pleaded allegations. See Rennie,
These allegations, all of which Litwin denies, state a claim for indemnification under the common law. It may be rare that a purchase or a supplier of a product can prevail on a claim for indemnify against the manufacturer. More often than not, it is the manufacturer who must indemnity the supplier. Here, Litwin’s motion seeks only to test whether Shell’s counterclaim for common law indemnification is plausible. Given the absence of any controlling or even persuasive precedent on the question of whether, under Virgin Islands law, a manufacturer can assert a claim for common law indemnification against a supplier or user of its products, the Court prefers to err on the side of caution and allow the claim to proceed. Cf. Abdallah v. Abdallah,
3. Set-Off
Lastly, the Court concludes that the soundest rule for the Virgin Islands is to continue to recognize the right to assert or demand a set-off. But Litwin is correct that Shell failed to state a claim or cross-demand for set-off. “Shell must identify the debt which is the cause of the claimed set-off and they have not.” (Mot 8.)
In its counterclaim, Shell asserted — without any factual support — that “Shell is entitled to . . . set off against Litwin the amount of any claims ultimately against Shell.” (Ans. & Countercl. 11, ¶ 12.) In opposition to Litwin’s motion, Shell states that “Litwin and Mr. Willie have either reached a settlement agreement, or are in the process of reaching a settlement agreement.” (Opp’n 4.) “Litwin, however, cannot have it both ways,” Shell argues. If “Litwin continue[s] to pursue third-party clams against Shell,” then “Shell is entitled to a set-off.” Id. This is not a demand for set-off at common law.
However, some courts hold that set-off is not a claim for relief, but rather a cross-demand. See id. (“Technically speaking, a set-off is a counter demand which the defendant holds against the plaintiff arising out of a transaction extrinsic to the plaintiff’s cause of action.” (emphasis added) (footnote omitted)); but see id. at 8 (“A set-off is a mutual independent claim which still continues to exist as such, and one which the parties did not intend should be appropriated to the satisfaction of an existing demand, but that each should have mutual causes of action; and of course mutual actions, if they pleased, against each other.” (emphasis added) (footnote omitted)). Since claims are dismissed and demands are stricken, cf. FED. R. Civ. P. 12(b)(6) & 12(f), the Court construed Litwin’s motion to dismiss as a motion to strike Shell’s demand for set-off. Accord Obabueki v. IBM,
For the reasons stated above, the soundest rule for the Virgin Islands is to continue to recognize common law indemnification and common law contribution as claims for relief. Likewise, continuing to recognize the right to assert or demand a set-off is also sound.
However, because a third-party defendant cannot assert a contribution claim against a third-party plaintiff in a third-party action for contribution where there is no risk that the third-party defendant will have liability to anyone other than the third-party plaintiff, the Court granted Litwin’s motion (construed as a motion for judgment on the pleadings) as to Shell’s counterclaim for contribution. Mr. Willie did not assert his claims against Shell and none of Shell’s third-party co-defendants counterclaimed against Shell for contribution. Therefore, Shell has failed to state a plausible counterclaim for contribution against Litwin.
Similarly, the Court also granted Litwin’s motion to dismiss (construed as a motion to strike) as to Shell’s counter-demand/claim for set-off. Shell failed to identify any debt or mutual obligation in its answer and counterclaim between it and Litwin. Set-off requires the existence of a mutual debt between the same parties but from another transaction unrelated to the action before the court. Consequently, Shell’s set-off demand fails. Accordingly, the Court ordered Shell’s demand for set-off stricken.
Lastly, the Court denied Litwin’s motion to dismiss (again construed as a motion for judgment on the pleading) as,to Shell’s counterclaim for common law indemnification. Shell alleged sufficient facts in its answer and counterclaim regarding its relationship with Litwin, Litwin’s knowledge of its products, Litwin’s knowledge that others may have misused its products, and Litwin’s duty to protect Shell from liability. Given the absence of controlling precedent on downstream liability between manufacturers and suppliers of goods and products, and erring on the side of caution, the Court finds that Shell has plausibly stated a common law indemnification claim. Accordingly, the Court denied Litwin’s motion and allowed Shell’s counterclaim to proceed. Whether Shell can prove, ultimately, that a manufacturer should be indemnified by a supplier or purchaser under Virgin Islands common law must still be determined.
Notes
Also spelled as Terrence or Terrance in some filings.
Pursuant to Superior Court Rule 34, all “cross-actions” are referred to as counterclaims.
The August 29,2016 Response also clarified that Terence is the correct spelling of Mr. Willie’s first name. The Court later ordered the caption amended.
The Court recognizes that some of the parties have settled out of court since the February 16, 2017 Order was entered, but prior to the issuance of this Opinion. Notwithstanding this change, the Court will refer to the posture of the case as it was when the Order issued because that Order explicitly referenced that an opinion would be forthcoming, and because the purpose of an opinion is to allow the court to explain the rationale behind its ruling. Cf. Brown v. People,
Both the Supreme Court and other judges in the Superior Court have expressed concerns regarding the “open-ended” and “revolving-door” way in which the Rules of the Superior Court have been construed, such that any amendment or revision to the federal rules are applied in local cases automatically and uncritically. See, e.g., Vanterpool v. Gov't of the V.I.,
In its opposition, Shell argues that Litwin’s motion “filed... over a decade later,” as Shell filed its counterclaims in July 2006, should be “dismissed as untimely.” (Shell’s Opp’n to Litwin’s Mot. to Dismiss 2, filed Dec. 14,2016.) Shell points to Rule 12(a)(1)(B) and notes that Litwin had twenty-one days to “ ‘serve an answer to a counterclaim.’ ” Id. (quoting Fed. R. Civ. R 12(a)(1)(B)). Assuming Rule 12(a)(1)(B) applies in the Superior Court through Rule 7, but cf. Vanterpool v. Gov’t of the V.I.,
“[A] ‘shotgun pleading’... is defined as ‘a complaint that, in each count, incorporates all the preceding paragraphs... making it virtually impossible to know which allegations of fact are intended to support which claim(s) for relief.’ ” Henry v. HOVENSA, LLC, SX-15-CV-568,
Such persuasive precedent may be entitled to a status higher than “merely persuasive,” (Opp’n 2), perhaps even “great respect,” Banks,
Shell’s “shotgun-pled” counterclaim also raises another concern, whether contract law or general common law applies. Courts have recognized that indemnification claims can arise from an indemnification agreement and from the common law. See, e.g., In re: Kelvin Manboclh Asbestos Litig. Series,
Translated from Latin to English: “In a case of equal or mutual fault the position of the defending party is the better one.” Bateman Eichler, Hill Richards, Inc. v. Berner, 412 U.S. 299, 306,
The court also considered, sita sponte, that VITELCO may have been seeking contribution as an alternative to indemnification. Dublin,
Although the issue in Dublin was whether the Government could be sued for indemnification or contribution as a third-party defendant, the analysis in Dublin regarding contribution would extend to private persons as well since “the Government, pursuant to 33 V.I.C. § 3408, has consented to have its liability determined as ‘if a private person.’ ” Dublin,
“HOVIC’s third-party claims and cross-claims and Litwin’s third-party claims were severed from the first-party matters in October 2002. After claims between HOVIC, Litwin and First-Party Plaintiffs were settled in January 2003, subsequent motions to amend by HOVIC and Litwin, impleading previously named and additional defendants in all remaining first-party cases, were granted in October2004. In all, some eighty-seven additional companies... were brought into this litigation as third-party defendants.”
See also Pagenkopfv. Chatham Elec., Inc.,
Although Gomes was also reported in volume 6 of the Virgin Islands Reports, on pages 163 to 166, the portion of the opinion that adopted contribution for the Virgin Islands was not. It only appears in the version reported in the Federal Reporter, perhaps because the issue was addressed on petition for rehearing. See
The mandate of Banks, as extended and refined in later cases, concerns not only “blind reliance on the Restatements,” Connor,
While Virgin Islands judges (and, presumably, all courts applying Virgin Islands law) now have the power to shape our common law, it is not clear that such authority permits a court to reject a right or a cause of action previously recognized in controlling precedent that was not “wholly based on a belief that application of the Restatements or the majority rule was mandatory pursuant to 1 V.I.C. § 4 as in effect prior to this Court’s ruling in Banks.” Connor,
This may not have been the case in the District Court. Contra Fed. R. Civ. P. 13(a)(1) (“A pleading must state as a counterclaim any claim that—at the time of its service—the pleader has against an opposing party.” (emphasis added)). Some courts have held that contribution claims are not mature until judgment is entered or a settlement is reached. See, e.g., Stahl v. Ohio River Co.,
But note that Martin had determined that indemnification and contribution should proceed the same way at trial. See
See, e.g., Premier Members Fed. Credit Union v. Block,
See Aividson v. Buchar, ST-16-CV-410,
Inconsistencies within the different Manbodh decisions somewhat undermine their persuasive value concerning indemnification. Manbodh I applied the Restatement (First) of Restitution. See
The rationale for § 886B(1) was that the indemnitee provided a benefit to the indemnitor, so the indemnitee was entitled to restitution. See Restatement Second, Torts § 886B(1) and Comment c. This was true only if the indemnitee provided the indemnitor with protection from liability. That rationale has not been affected by comparative responsibility. It would still be unfair under the basic principles of restitution to make a person pay noncontractual indemnity while he was still liable to the plaintiff.
Restatement (Third) of Torts: Apportionment of Liability § 22 cmt b (2000) (emphasis added).
Cf. VanSlambrouckv. Economy Baler Co.,
Courts have also recognized that purchasers may have to duty to
give notice of an alleged breach of an implied warranty to his seller within a reasonable time after he discovers, or should have discovered, the breach lest his claim be barred from any remedy. The notice requirement serves to provide a seller an opportunity to cure a defect and minimize damages, protect his ability to investigate a breach and gather evidence, and to encourage negotiation and settlement. In the context of an action involving personal injury, it also informs the seller of a need to make changes in its product to avoid future injuries.
Maldonado v. Creative Working Concepts,
Both St. Croix and St. Thomas/St. John were governed by separate councils (Colonial Councils until approximately 1936 and Municipal Councils until approximately 1955) until the two municipalities were merged into a unicameral legislature that governed the entire Territory following the 1954 amendments to the Organic Act for the Virgin Islands. The ordinance at issue in Stafford was passed on December 24,1918 by the Colonial Council of St. Croix. Even though the annotations in the Virgin Islands Code purportedly show that the December 24,1918 Ordinance was carried forward into what later became Section 441 of Title 4 of the Virgin Islands Code, none of the editions of the code available in the Superior Court on St. Croix at present refer to Section 441 providing attorneys authority to impose a lien on their clients’ judgments. Thus, the ordinance had to have been repealed. Cf. 1 V.I.C. §5.
Recoupment and set-off differ in that recoupment permits the opposing party (typically a defendant against the plaintiff) to assert a claim if it arose out of the same transaction at issue in the plaintiffs case, while set-off requires that the two transactions be unrelated. See, e.g., Pacific Concrete Fed. Credit Union v. Kauanoe,
See V.I. Code Ann., Tit. 5 App’x IV, p. 261 (1982 ed.) (historical note) (“An Order of the District Court of the Virgin Islands, dated April 27,1981, provide[d]... All references to the Municipal Courts in the title, captions or text of the Rules Governing the Municipal Courts shall be changed to read the Territorial Courts.” (quotation marks and brackets omitted)).
See In re: Order Amend. Rules of Terr. Ct. of the V.I., Mise. No. 30/2005,
Infect, the first reported case in the Virgin Islands, Jorgensen v. Cien,