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eBook details

• Title: Volz v. Coleman Co.
• Author : Arizona Court of Appeals
• Release Date : January 02, 1986
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 53 KB

Description

In a situation unique to indemnification law, some courts have held that a showing of potential liability is sufficient where the indemnitor has received notice and an opportunity to defend. Parfait v. Jahncke Service, Inc., 484 F.2d 296 (5th Cir.1973), cert. denied, 415 U.S. 957, 94 S.Ct. 1485, 39 L.Ed.2d 572 (1974). Industrial Indemnity seeks to extend that authority to this case. For several reasons we hold that it cannot. First, we believe the prior opinion, the law of this case, contemplated a trial on the merits when it observed that Horace Mann had no duty to defend the initial action and that it would be anomalous to bind it by that action. That language is inconsistent with Parfait and with the notion, adopted in Arizona, of being bound in indemnity by an earlier judgment if tendered the defense of that action. Foremost-McKesson Corp. v. Allied Chemical Co., 140 Ariz. 108, 680 P.2d 818 (App.1983). Second, we have been cited no authority for applying indemnification principles to the law of equitable contribution. What authority there is points the other way. See Royal Globe Ins. Co. v. Aetna Ins. Co., 82 Ill.App.3d 1003, 38 Ill.Dec. 449, 403 N.E.2d 680 (1980); Carolina Casualty Ins. Co. v. Oregon Automobile Ins. Co., 242 Or. 407, 408 P.2d 198 (1965). Third, even if indemnification principles were applied there was no duty to defend in this case because of the conflict of interest between Industrial Indemnity and Horace Mann. It was in Horace Manns interest to assert that the sole negligence was the Districts in permitting the use of trampolines and thus the only applicable insurance was that of Industrial Indemnity. It was in Industrial Indemnitys interest to argue that the sole negligence was that of the coaches so that it could reduce its liability by seeking contribution from Horace Mann. In these circumstances, a properly notified indemnitor need not defend and is free to contest the basis of its liability in a subsequent action. Restatement (Second) of Judgments § 57 (1982). Accordingly, this case must be remanded for a trial of the issue of the liability of the coaches.

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