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Kimball International, Inc. v. Northfield Metal Products

October 24, 2000

KIMBALL INTERNATIONAL, INC.,
PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
V.
NORTHFIELD METAL PRODUCTS, AS SUCCESSOR IN INTEREST TO FAULTLESS METAL PRODUCTS,
DEFENDANT-RESPONDENT/CROSS-APPELLANT.



Before Judges Skillman, Wecker and Lesemann.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 12, 2000

On appeal from Superior Court of New Jersey, Law Division, Middlesex County.

Plaintiff Kimball International, Inc. (Kimball) manufactures office chairs. Defendant Northfield Metal Products (Northfield) is the successor in interest of a company that supplied a component part for Kimball's chairs described as a control mechanism.

On February 24, 1994, Reginald Baker was injured at the premises of his employer, Sea Land Services, Inc. (Sea Land), as a result of the collapse of a Kimball chair. Baker subsequently brought suit against Kimball.

Baker retained an engineering expert, Norman Goldstein, who provided a report which concluded that the chair collapsed because two "forward tabs" in the control mechanism broke and that the "tabs should not have failed." Kimball retained an engineering expert, Joseph R. Petrella, who provided a report which concluded that "the chair occupied by Mr. Baker at the time of his accident was structurally impaired by either misuse or improper maintenance . . . and not as a consequence of a design or construction inadequacy."

Baker learned during discovery that Northfield was the supplier of the alleged defective component part of the Kimball chair. Consequently, Baker moved to file an amended complaint adding Northfield as a defendant in his action. Kimball joined in the motion. The trial court denied the motion because a trial date was imminent, but it preserved the right of both Baker and Kimball to bring a separate action against Northfield.

Shortly thereafter, Kimball filed this action against Northfield. Kimball's three count complaint included claims for contribution and indemnification.

Subsequently, Baker and Kimball settled the underlying personal injury action for $250,000. In addition, Kimball agreed to assign Baker a partial interest in the action it had filed against Northfield. The agreement provided that Baker would be entitled to the first $15,000 of any recovery against Northfield plus 50% of the balance. Baker was also given the right to control the prosecution of the action.

After a period for discovery, Northfield filed a motion for summary judgment, arguing among other things that the settlement agreement between Baker and Kimball had extinguished Kimball's claims for contribution and indemnification. Northfield also argued that Kimball's action should be dismissed because Kimball had failed to preserve the alleged defective chair that caused Baker's injuries.

The trial court granted the part of Northfield's motion which sought dismissal of Kimball's contribution claim, but denied the motion in all other respects.

Northfield subsequently filed a second motion for summary judgment. In support of this motion, Northfield argued that Kimball was precluded by the doctrine of judicial estoppel from presenting evidence that the component part of the chair supplied by Northfield was defective because Kimball had taken the position in the Baker personal injury action that the chair was not defective. Northfield also argued that Kimball's complaint should be dismissed because the part of the settlement agreement between Baker and Kimball which assigned Baker a partial interest in Kimball's claim against Northfield was "void as against public policy." In addition, Northfield argued that Kimball's claim for contractual indemnification should be dismissed because there was no evidence to support the claim.

The trial court concluded in a written opinion that the assignment to Baker of a partial interest in Kimball's claim against Northfield does not violate public policy. The court also concluded that Kimball has a viable claim for contractual indemnification. However, the court held that Kimball was barred by the doctrine of judicial estoppel from presenting evidence that the component part supplied by Northfield was defective because it had taken a contrary position in defending Baker's personal injury action. Accordingly, the court granted Northfield's motion for summary judgment.

Kimball appeals from the summary judgment, arguing that the doctrine of judicial estoppel does not preclude it from pursuing a claim for indemnification against Northfield simply because it took the position in defending the Baker personal injury action that neither its chair nor Northfield's component part were defective. Kimball does not appeal from the part of the first summary judgment order which dismissed its contribution claim.

Northfield has filed a cross appeal, under which it presents alternative arguments in support of the summary judgment in its favor. *fn1 Northfield argues that the assignment to Baker of a partial interest in Kimball's indemnification action was invalid and thus the action must be dismissed. Northfield also argues that Kimball cannot maintain a claim for contractual indemnification, and that ...


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