This action for indemnification and counsel fees follows the settlement at trial of a strict liability action against a distributor and two manufacturers. The distributor seeks indemnification and counsel fees from the manufacturers; however, independent claims of negligence were made against the distributor in the original action. The novel issue presented by these cross-motions for summary judgment is whether independent good-faith claims against a distributor bar an indemnification claim where, because of the intervening settlement of all claims, the validity of the independent claims was never adjudicated.
Plaintiff, Central Motor Parts Corporation (hereinafter referred to as "Central"), is a distributor of automotive supplies. In addition to various other products and equipment, Central distributes automotive paint products manufactured by defendants, E.I. duPont de Nemours and Company (hereinafter referred to as "duPont") and Inmont Corporation (hereinafter referred to as "Inmont"). Central, duPont and Inmont were codefendants in a prior products liability action entitled Paul Myatovich and Georgina Myatovich v. E.I. duPont de Nemours and Company, Inmont Corporation, Central Motor Parts Corporation, et als. (hereinafter referred to as "the Myatovich action").
Paul Myatovich was employed by Collex Collision, an auto body shop, to spray paint vehicles. Myatovich routinely used spray paints and related paint products which were manufactured by duPont and Inmont. Central and another defendant, Midstate Automotive Supply Company distributed these products. To prevent the inhalation of paint fumes, Myatovich routinely wore a type of protective face mask which was sold to Collex Collision by Central. These masks were not manufactured by duPont or Inmont.
Over the years, Myatovich manifested symptoms which indicated that his body had ingested the spray paint. Myatovich
exhibited increasing signs of illness and, ultimately, suffered a heart attack and various motor and neurological dysfunctions. He and his wife, Georgina Myatovich, instituted an action alleging claims of strict liability and negligence against the manufacturers and distributors of the automotive paints he used while working at Collex. Additionally, the complaint asserted independent allegations against Central based on, among other causes of action, its failure to warn of the hazards associated with the use of the spray paints and its negligent distribution of protective face masks which were not suitable for their intended use. As noted, these masks were manufactured by a third-party not a party to this action.
Just prior to the commencement of the Myatovich trial, a settlement was reached between Myatovich and duPont and Inmont. Central declined to participate in the settlement. When the settlement was placed on the record, counsel for Myatovich announced his intention to proceed against Central on independent claims of negligence and strict liability. Shortly thereafter, and before jury selection, Central settled with Myatovich.
In placing the settlement on the record, Central reserved its right to proceed on its cross-claims for indemnification from duPont and Inmont. It is these claims which constitute the basis for the action currently before this Court. Central seeks indemnification from duPont and Inmont for all payments made in settlement of the Myatovich action and for all counsel fees incurred in the defense of that action.
negligent manufacturer provides relief to the non-negligent retailer/distributor who, by action of law, is forced to share the burden of liability regardless of a lack of wrongdoing.
The liability of a non-negligent party is often referred to as vicarious or secondary liability. Vicarious liability, in the context of indemnification, has been defined as requiring one party to demonstrate that they are completely without fault rather than showing a lesser degree of fault in relation to the fault of another party. Arcell v. Ashland Chemical Co. Inc., 152 N.J. Super. 471, 489, 378 A.2d 53 (Law Div.1977). Consequently, in products liability actions, indemnification is denied to a distributor/retailer whose active wrongdoing contributed to the alleged injuries. Promaulayko v. Johns Manville Sales Corp., supra, 116 N.J. at 512, 562 A.2d 202; Cartel Capital Corp. v. Fireco of N.J., supra at 566, 410 A.2d 674.
While New Jersey recognizes the right to indemnification for monies paid in settlement, the scope of this right remains undefined. In Popkin Brothers, Inc. v. Volk's Tire Co., 20 N.J.Misc. 1, 23 A.2d 162 (Sup.Ct.1941), a truck fleet owner sought indemnification from a tire company for its settlement with a pedestrian who was injured when one of the truck's tires malfunctioned. Pursuant to an agreement with the truck fleet owner, the tire company ...