S.F. Exam'r Div. v. Sweat

ELKINGTON, J. San Francisco Examiner Division, Hearst Publishing Company, Inc. (Examiner), cross-complainant below, appeals from an order granting a motion for summary judgment and from the judgment entered thereupon in favor of William Sweat (Sweat) and Eldorado Insurance Exchange, respondents here and cross-defendants below.1

The uncontested facts may be briefly summarized. Sweat was engaged as a route manager for the Examiner, a daily [495]newspaper. In the course of his duties, which required him to distribute the Examiner’s newspapers, he employed newsboys to whom he delivered bundles of papers. Sweat caused the newsboys to be covered by workmen’s compensation insurance with respondent Eldorado Insurance Exchange as his insurance carrier.

The Examiner bundled some newspapers with heavy wire and, on the morning of September 5, 1960, delivered the papers to a point where they were picked up by Sweat. Some of these papers were subsequently delivered by Sweat to the home of one James Deal (Deal), a newsboy in the employ of Sweat. The wires binding the bundles of papers had been cut by Sweat and left with the papers at a dark place in Deal’s driveway. In the early morning hours when Deal came to pick up his papers the severed wires could not be seen. As a result Deal was seriously injured when one of the loose wires struck him in the eye as he was attempting to lift a bundle of newspapers.

Deal recovered judgment against the Examiner in the net amount of $29,416.59 ($35,000 reduced by the amount of workmen’s compensation paid) which judgment is now final and has been satisfied by the Examiner. The basis of recovery, as found by the court below in that action, was that Sweat was acting as agent of the Examiner and, as such, was acting within the course and scope of his employment in the circumstances of the injury to Deal; and that the Examiner was liable to Deal solely by virtue of the doctrine of respondeat superior and, thereunder, solely by virtue of the negligence of Sweat.

The Examiner by its cross-complaint unsuccessfully sought indemnity against Sweat in the amount of Deal’s judgment. The court below denied the claim for indemnification on the basis that such recovery was barred by the provisions of Labor Code section 3864.

Labor Code section 3864 provides: “If an action as provided in this chapter prosecuted by the employee, the employer, or both jointly against the third person results in judgment against such third person, or settlement by such third person, the employer shall have no liability to reimburse or hold such third person harmless on such judgment or settlement in absence of a written agreement so to do executed prior to the injury.”2 The Examiner admittedly had no written agreement of indemnification with Sweat.