A defendant against whom a plaintiff has obtained a judgment sometimes seeks indemnification from another person or business, attempting to pass the entire liability on the judgment to that other party. In the absence of an express contractual right to indemnity, or a special relationship justifying between the parties, only a tort-based, so-called “common law” indemnity is allowed. (For a more general discussion of the three types of indemnity, click here).
However, that tort-based indemnification usually requires that the party seeking indemnification be entirely fault free and liable to the plaintiff only vicariously or derivatively (as where an employer had no involvement in the torts of its employee but is liable solely due to the agency relationship). But what if the party seeking indemnity, although slightly at fault, is far less at fault than the person from whom indemnification is sought? Is such a person barred from receiving indemnity despite the great disparity in fault?
Although the answer is not entirely free from doubt, it appears that, in very rare circumstances, the Massachusetts courts will grant tort-based indemnification to a party who has some fault, where that party’s fault is insignificant, compared to the fault of the party from whom indemnification is sought.
In Rathbun v. Western Massachusetts Electric Co., 395 Mass. 361 (1985), the Court noted that in rare circumstances, a party at fault can obtain tort-based indemnification. The Court stated:
The general rule is that a person who negligently causes injury to a third person is not entitled to indemnification from another person who also negligently caused that injury. Indemnification has been permitted, however, where the person seeking indemnification did not join in the negligent act of another but was exposed to liability because of that negligent act. Sometimes the successful indemnitee in such a situation is said to have been only “constructively” rather than “actually” negligent or to have been “derivatively” or “vicariously” liable rather than “directly” liable. These are distinctions that characterize the result in a case but hardly assist in reaching that result. Only in exceptional cases, however, has indemnity been allowed to one who was not free from fault….
The number of instances in which this court has allowed indemnity to a negligent indemnitee is small…. Probably no instructive general rule can be stated as to when indemnity will or will not be allowed to a negligent person…. In those cases in which indemnity has been allowed to a negligent indemnitee, the indemnitee’s negligence has been insignificant in relation to that of the indemnitor.
Id. at 364. (Emphasis added, footnote references omitted). See also Economy Engineering Co. v. Commonwealth, 413 Mass. 791, 794 (1992) (“This is not one of those rare cases where the fault of one joint tortfeasor (the Commonwealth) is so slight as to grant it rights of indemnity against another joint tortfeasor.”); Ford v. Flaherty, 364 Mass. 382, 385 (1973) (“In a few cases indemnity has been allowed to persons who were not free of fault, but the facts and reasoning of those exceptional cases are not apposite here.”); American Ins. Co. v. Siena Const. Corp., 2007 WL 3317801, *5 n.7 (Mass. Super. 9/28/07) (“Only in rare instances, none of which exist here, has indemnity been allowed to one who is not free from fault”); Davis v. 575 Worcester Road, LLC, 2007 WL 5086368 (Mass. Super. 5/16/07) (“In rare cases where the fault of one joint tortfeasor is so slight as compared with another, common law rights of indemnity against another joint tortfeasor may be granted.”); Commonwealth v. JEMS of New England, Inc., 2002 WL 1839253, *3 (Mass. Super. 7/25/02); Demers v. Levine, 2001 WL 170994, *2 (Mass. Super. 1/31/01); Araujo v. Woods Hole, Martha’s Vineyard, Nantucket Steamship Authority, 693 F.2d 1, 3 (1st Cir. 1982); Alexander, Nicholas, “Developments in Indemnity Law: Express, Implied Contractual, Tort-Based and Statutory”, 79 Mass. L. Rev. 50, 57 (1994).
In Knapik v. American Title Ins. Co., 1994 WL 878795, *2 (Mass. Super. 10/5/94), the Court stated:
To establish a claim for tort-based indemnity, Elander must be able to satisfy one of two recognized tests: the “vicarious and derivative” test or the “differing degree of fault” test….
The differing degree of fault test allows indemnity between tortfeasors if the indemnitee can both present a prima facie claim of liability against the indemnitor (usually judicially determined) and demonstrate a virtual lack of culpability by the indemnitee. See id. at 57. Although this test does not require a preexisting relationship between Carolina and Elander, the allegations in Elander’s third-party complaint do not satisfy either prong of this test.
1994 WL 878795, *2. (Emphasis added).
In Homart, the Court stated:
The general rule for tort-based indemnification is that indemnity is permitted where one party does not join in the negligent act but is exposed to derivative or vicarious liability for the wrongful act of another…. Courts have indicated, however, that in rare cases, the fault of one joint tortfeasor may be so slight as to grant it rights of indemnity against another joint tortfeasor….
Homart alleges that it had no involvement in or responsibility for the deposit of the asbestos-laced debris at Ternberry Estates, but that Ternberry knowingly purchased and utilized said debris as landfill at a financial profit. While the circumstances under which a negligent party may recover indemnification from a joint tortfeasor are indeed rare, this Court cannot say beyond doubt, based solely on the pleadings, that Homart is not entitled to relief under such a theory. Accordingly, Homart’s motion to dismiss Count XX of the second amended third-party complaint must be denied.
1997 WL 124103, *5-6. (Emphasis added).
In his article, Alexander explains,
The vicarious and derivative test is not the only tort-based indemnity test created by Hollywood Barbeque. Over the years, Hollywood Barbeque has also been frequently cited as authority for allowing tort-based indemnity between tortfeasors. The case stands for the proposition that under certain circumstances a remotely responsible tortfeasor can claim indemnity from a predominantly responsible tortfeasor.
Clearly defined guidelines stating the extent of the disparity of fault necessary to satisfy the test do not exist. However, prevailing indemnitees present (1) a prima facie claim of liability against the indemnitor, usually judicially determined and (2) a near absence of any culpability on the part of the indemnitee….
Unlike vicarious and derivative type tort-based indemnity, the disparity of fault type does not require a preexisting relationship between putative indemnitor and indemnitee. ….
(Emphasis added, footnote omitted).
It should be noted that some Massachusetts courts have questioned the continued vitality of the differing degree of fault basis for common law indemnity. Fraco Products, LTD v. Bostonian Masonry Corp., 84 Mass. App. Ct. 296 (2013). See also Cartagena, 2002 WL 1283669, *3-4. In Fraco, the Appeals Court stated:
Citing Rathbun v. Western Mass. Elec. Co., 395 Mass. 361, 479 N.E.2d 1383 (1985), Fraco argues in the alternative that further fact finding is necessary because if its own negligence (if any) were determined to be de minimis as compared to that of Bostonian, Fraco would be entitled to common-law indemnification under a “differing degree of fault” theory. In Rathbun, the Supreme Judicial Court noted that in rare exceptions, indemnification has been allowed to a joint tortfeasor….
Fraco contends that under the aforementioned language in Rathbun, Fraco would be entitled to common-law indemnification from Bostonian if Fraco’s fault is relatively insignificant in relation to that of Bostonian. Even assuming the continuing vitality of the differing degree of fault theory—an assumption which can be fairly questioned—we are unpersuaded by Fraco’s argument. Although the Supreme Judicial Court has adverted to the differing degree of fault theory in two modern decisions, see Rathbun, supra and Economy Engr. Co. v. Commonwealth, supra, in neither case was indemnification allowed. Moreover, a review of the cases cited in Rathbun reveals only one case, more than a century ago—before the existence of statutory contribution and workers’ compensation—in which the court allowed indemnification to one of two joint tortfeasors based on differing degrees of fault. See Boston Woven Hose & Rubber Co. v. Kendall, 178 Mass. 232, 236–237, 59 N.E. 657 (1901). Further, as the court indicated in Rathbun, indemnification between joint tortfeasors based on relative fault would seem functionally indistinguishable from contribution based on degree of fault, an approach the Legislature expressly precluded in G.L. c. 231B, § 2(a )…. Similarly, allowing for recovery based on differing degrees of fault in cases where, as here, the third-party defendant-employer has already paid workers’ compensation (a circumstance not considered in Rathbun or Economy Engr. Co.) would conflict with the policy behind the exclusivity provision of the workers’ compensation statute, G.L. c. 152, § 23. Accordingly, the trial judge correctly entered summary judgment on behalf of Bostonian, denying Fraco’s request for common-law indemnification.
84 Mass. App. Ct. at 304-05. (Emphasis added). The Court in Cartagena v. Lotus Development Corp., 2002 WL 1283669, *3-4 (Mass. Super. 6/3/02), also questioned whether the vitality of the degree of fault ground for common law indemnity, but felt bound by precedent to deny the indemnitor’s motion for partial summary judgment. The Court stated,
A review of the cases cited in Rathbun reveals only one case in which the Court allowed indemnification to one of two joint tortfeasors, both of whom had been held liable for negligence, based on differing degrees of fault. See Boston Woven Hose and Rubber Company v. Kendall, 178 Mass. 232, 236-237 (1901). The facts there were remarkably similar to those presented here, considered in the light most favorable to Lotus, although the statutory context was significantly different, in that neither worker’s compensation nor statutory contribution yet existed.
Thus, although the Supreme Judicial Court has acknowledged the existence of the theory on which the plaintiff relies in at least two modern decisions, Rathbun and Economy Engineering Co. v. Commonwealth, 413 Mass. at 794, it appears to have actually applied that theory to approve an award of indemnification only once, a full century ago, before the existence of statutory contribution. In light of this history, one could fairly question the continued viability of the theory.
Nevertheless, based on the quoted language in Rathbun, at least two Superior Court decisions have denied pre-trail motions seeking dismissal of indemnification claims asserted on a theory of differing degrees of fault. See Commonwealth v. Homart Development Co., No. 95-2280B, 1997 WL 124103 (Mass.Super.Ct.1997) (Doerfer, J.); Knapik v. American Title Insurance Co., No. 922088, 1994 WL 878795 (Mass.Super.Ct.1994) (Butler, J.). This Court is obliged to do the same. It is not the role of this Court to declare moribund a doctrine that the Supreme Judicial Court appears to consider still in existence, albeit only for exceptional cases. Nor, on the record presented at this stage, can the Court determine that the facts developed at trial could not prove this case to be exceptional in some manner not presently apparent, such that the doctrine might have proper application.
2002 WL 1283669, *3-4. (Emphasis added).
Based on the forgoing, it appears that despite doubts expressed by some courts, the Supreme Judicial Court decisions in Rathbun, Economy and Ford remain good law and that common law indemnity based on differing degrees of fault remains a viable argument. A claim for indemnification should, therefore, be considered by a defendant who is only minimally at fault, where another defendant was significantly more to blame.