Ford Motor Co. v. Robert J. Poeschl, Inc.

California Court of Appeal Nov 30, 1971 No. 12471Published

Before: Friedman

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Holding. A manufacturer that produces a defective product and fails to provide direct notice of a known defect to the consumer cannot shift the entire loss to a dealer or leasing agency through implied indemnity. Because the manufacturer's failure to act constitutes primary fault, it is not entitled to indemnification under California's all-or-nothing common law rule.

Issues

Whether a manufacturer may recover via implied indemnity from a dealer for settlement costs arising from a product defect when the manufacturer failed to notify the consumer directly of a recall.
Whether the manufacturer's failure to provide direct notice of a known defect constitutes primary fault that precludes a claim for implied indemnity.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Ford's production of the defective car, coupled with its failure to attempt direct notice to the customer, breached a direct obligation it owed the latter.”

“Ford had a "last clear chance" to avert injury and failed to use it. Its fault is primary, not secondary, and not imputed to it as a consequence of the dealer's or leasing agency's fault.”

“Under California law to date, indemnification is an all-or-nothing proposition. Thus the law leaves these parties where it finds them, denying any indemnity to the originator of the accident-producing factors.”

21 Cal.App.3d 694 (1971) 98 Cal. Rptr. 702 FORD MOTOR COMPANY, Plaintiff and Appellant,

ROBERT J. POESCHL, INC., et al., Defendants and Respondents.

Docket No. 12471. Court of Appeals of California, Third District.

November 30, 1971. [696] COUNSEL

McGregor, Bullen & McKone and George W. Bullen for Plaintiff and Appellant.

Hardy, Erich & Brown and Russell G. Porter for Defendants and Respondents.

OPINION

FRIEDMAN, Acting P.J.

Through this indemnification suit Ford Motor Company seeks to shift the cost of a personal injury settlement to the dealer and the leasing agency who placed an allegedly unsafe automobile in the hands of the customer.

Gist of Ford's complaint is that it sent to its dealers a notice requesting the recall of certain 1964 Thunderbird automobiles (designated by number) in order to have the rear brake light serviced; that, despite the recall notice, one of the listed Thunderbirds leased to a customer by defendants was involved in an accident allegedly caused by the very brake light defect described in the recall notice; that Ford paid $72,000 to settle litigation instituted by the injured parties against Ford, the dealer and the leasing agency; that the latter two parties refused to contribute to the settlement.

(1a) The trial court held that Ford's second amended complaint failed to state a claim for relief and sustained a general demurrer without leave to amend. Ford has appealed from the ensuing judgment.

The parties entered into no contract to indemnify. Ford's claim is thus hinged to the principle of implied indemnity, which permits one of two tortfeasors to shift the entire loss to the other when, without active fault on the claimant's part, he has been compelled by reason of some legal obligation to pay damages occasioned by the immediate fault of the other. As a rough rule of thumb, the decisions allowing indemnity speak of the "passive" fault of the claimant as compared with the "active" fault of the indemnitor. Standing alone, the passive-active fault criterion is too vague to serve as a decisional guide. The standard most frequently applied by the California appellate courts is one drawn from an opinion of the Pennsylvania Supreme Court in Builders Supply Co. v. McCabe, 366 Pa. 322, 325-326 [77 A.2d 368, 24 A.L.R.2d 319]: "The right of indemnity rests upon a difference between the primary and secondary liability of two persons each of whom is made responsible by the law to an injured party.... The difference between primary and secondary liability is not based on a difference in

Ford Motor Co. v. Robert J. Poeschl, Inc.

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OPINION

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