Eclectic Investmetn, LLC v. Patterson

No. 10 March 19, 2015 25
IN THE SUPREME COURT OF THE
STATE OF OREGON
ECLECTIC INVESTMENT, LLC,
Plaintiff,
v.
Richard PATTERSON, et al.,
Defendant.
JACKSON COUNTY,
Cross-Claim Plaintiff-Appellant,
Petitioner on Review,
v.
Byron McALLISTER, Jr.,
dba Greater Crater Construction Company,
Cross-Claim Defendant-Respondent,
Respondent on Review.
(CC 07019L3; CA A150458; SC S062247)
En Banc
On review from the Court of Appeals.*
Argued and submitted November 6, 2014.
Michael Jewett, Michael Jewett, P.C., Ashland, argued
the cause and filed the brief for petitioner on review.
James A. Wallan, Hornecker Cowling, LLP, Medford,
argued the cause and filed the brief for respondent on review.
WALTERS, J.
The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.
______________
*  Appeal from Jackson County Circuit Court, Daniel L. Harris, Judge. 261
Or App 457, 323 P3d 473 (2014).
26 Eclectic Investment, LLC v. Patterson
The county, a defendant in a negligence action, sought common-law indem-
nity from a co-defendant. The trial court denied the common-law indemnity
claim, and the Court of Appeals affirmed the trial court’s decision. Held: (1)
In cases in which Oregon comparative negligence statutes apply, common-law
indemnity is not necessary or justified; (2) Because the trial court applied the
Oregon comparative negligence statutes to allocate fault among the parties in the
underlying negligence case, and because the jury found plaintiff to be more than
50 percent at fault, the county was neither potentially nor actually liable for the
co-defendant’s conduct. Therefore, the trial court correctly denied the county’s
common-law indemnity claim.
The decision of the Court of Appeals and the judgment of the circuit court
are affirmed.
Cite as 357 Or 25 (2015) 27
WALTERS, J.
Jackson County (the county) is a defendant in this
negligence action, in which plaintiff sought damages for
damage to its real property. As an affirmative defense, the
county alleged that plaintiff was negligent and was itself
responsible for the damages that it had suffered. The county
also filed a cross-claim against a codefendant (the contrac-
tor) seeking common-law indemnity. Plaintiff’s negligence
claim was tried to a jury, which found that plaintiff was
more than 50 percent at fault. Therefore, under ORS 31.600,
neither the county nor the contractor were liable to plain-
tiff. Nevertheless, the county had incurred costs in defend-
ing against plaintiff’s claim, and it pursued its cross-claim
for indemnity to collect those costs from the contractor. The
trial court denied the county’s indemnity claim, the county
appealed, and the Court of Appeals affirmed. Eclectic
Investment, LLC v. Patterson, 261 Or App 457, 323 P3d 473
(2014). For the reasons that follow, we also affirm.
The following facts are uncontested. Plaintiff, a
property owner, hired the contractor to enlarge plaintiff’s
parking lot by excavating a slope above the parking lot. The
contractor did not apply for an excavation permit before per-
forming its work, as required by county ordinances. However,
the contractor later applied for the necessary permit, which
the county denied because it lacked sufficient detail. The con-
tractor re-applied, and the county issued a preliminary per-
mit. The county conducted an inspection and noted erosion
problems with the slope and concerns about its soil compo-
sition and the adequacy of a retaining wall. As a result, the
county withheld final approval. After another inspection of
the construction site, the county granted final approval. The
county did not require the contractor to make any change to
the slope, which had a steep 1:1 grade. Roughly a year after
the excavation, a rainstorm caused topsoil to wash off the
slope onto plaintiff’s parking lot and into a building, damag-
ing plaintiff’s property.
As relevant here, plaintiff alleged that the contrac-
tor had been negligent in its excavation of the slope and that
the county had been negligent in approving that excavation
28 Eclectic Investment, LLC v. Patterson
without requiring the contractor to make the slope safe.1
Plaintiff alleged that, as a result of defendants’ negligence,
the slope had collapsed and damaged plaintiff’s property.
The county and the contractor both denied negligence. The
county also alleged, as an affirmative defense, that plain-
tiff had been negligent in failing to apply for proper per-
mits before beginning excavation and for failing to consult
an engineer about the excavation. The county asked that
plaintiff’s damages be allocated in accordance with ORS
31.610, which apportions damages based on the compara-
tive fault of all parties.2 The county also filed a cross-claim
for common-law indemnity against the contractor, alleging
that “[the county’s] negligence, if any, was passive and sec-
ondary as compared to the primary and active negligence of
[the contractor],” and therefore that the contractor should
indemnify the county. The county and the contractor agreed
to sever the indemnity claim from the negligence claim for
later determination by the trial court.
At trial on plaintiff’s negligence claim, the county
requested that the jury answer special questions pursuant
1
Plaintiff also named two neighboring property owners as defendants, alleg-
ing that their negligence in maintaining their properties had contributed to the
erosion. Those defendants are not parties to the indemnity claim at issue here,
and we do not discuss them further.
2
ORS 31.610 provides, in part:
“(1)  Except as otherwise provided in this section, in any civil action aris-
ing out of bodily injury, death or property damage, including claims for emo-
tional injury or distress, loss of care, comfort, companionship and society,
and loss of consortium, the liability of each defendant for damages awarded
to plaintiff shall be several only and shall not be joint.
“(2) In any action described in subsection (1) of this section, the court
shall determine the award of damages to each claimant in accordance with
the percentages of fault determined by the trier of fact under ORS 31.605
and shall enter judgment against each party determined to be liable. The
court shall enter a judgment in favor of the plaintiff against any third party
defendant who is found to be liable in any degree, even if the plaintiff did not
make a direct claim against the third party defendant. The several liability
of each defendant and third party defendant shall be set out separately in
the judgment, based on the percentages of fault determined by the trier of
fact under ORS 31.605. The court shall calculate and state in the judgment a
monetary amount reflecting the share of the obligation of each person speci-
fied in ORS 31.600(2). Each person’s share of the obligation shall be equal to
the total amount of the damages found by the trier of fact, with no reduction
for amounts paid in settlement of the claim or by way of contribution, multi-
plied by the percentage of fault determined for the person by the trier of fact
under ORS 31.605.”
Cite as 357 Or 25 (2015) 29
to ORS 31.605.3 The jury found that plaintiff had been more
than 50 percent at fault, the county had been 7 percent at
fault, and the contractor had been 4 percent at fault. Because
ORS 31.600 provides that a claimant may not recover if the
claimant’s fault is greater than the combined fault of the
other parties, the trial court entered judgment in favor of
defendants.4
The county and the contractor then agreed to arbi-
trate the county’s common-law indemnity claim. The county
neither owed nor had paid any obligation to plaintiff, but it
nevertheless sought to collect from the contractor the legal
fees and costs that it had incurred in defending against
plaintiff’s negligence claim. The arbitrator found against
the county, and the county appealed the arbitrator’s decision
to the trial court.
The case was tried to the court on stipulated facts.
The county argued that it was entitled to indemnity under
this court’s decision in Astoria v. Astoria & Columbia River R.
Co., 67 Or 538, 548, 136 P. 645 (1913), and that Astoria
stands for the proposition that a party that is “actively”
3
ORS 31.605 provides, in part:
“(1)  When requested by any party the trier of fact shall answer special
questions indicating:
“(a)  The amount of damages to which a party seeking recovery would be
entitled, assuming that party not to be at fault.
“(b)  The degree of fault of each person specified in ORS 31.600(2). The
degree of each person’s fault so determined shall be expressed as a percent-
age of the total fault attributable to all persons considered by the trier of fact
pursuant to ORS 31.600.”
4
ORS 31.600 provides, in part:
“(1)  Contributory negligence shall not bar recovery in an action by any
person or the legal representative of the person to recover damages for death
or injury to person or property if the fault attributable to the claimant was
not greater than the combined fault of all persons specified in subsection (2)
of this section, but any damages allowed shall be diminished in the propor-
tion to the percentage of fault attributable to the claimant. This section is not
intended to create or abolish any defense.
“(2) The trier of fact shall compare the fault of the claimant with the
fault of any party against whom recovery is sought, the fault of third party
defendants who are liable in tort to the claimant, and the fault of any person
with whom the claimant has settled. The failure of a claimant to make a
direct claim against a third party defendant does not affect the requirement
that the fault of the third party defendant be considered by the trier of fact
under this subsection.”
30 Eclectic Investment, LLC v. Patterson
negligent must indemnify a party whose negligence is
merely “passive.” In response to that argument, the trial
court remarked that the county “was not completely passive
because it inspected the excavation twice.” However, court
also went on to consider more broadly, whether, in equity, the
contractor rather than the county “should have discharged
the obligation.” (Emphasis in original). With regard to that
question, the court observed that the Restatement (Second)
of Torts, § 886B (1979), provides that indemnity should be
granted where “[t]he indemnitor created a dangerous con-
dition of land or chattels as a result of which both were lia-
ble to the third person, and the indemnitee innocently or
negligently failed to discover the defect.” The court viewed
the Restatement as favoring the county’s position, but also
considered the county’s position to be at odds with the fact
that “the jury found [the contractor] to be the least at fault
of the parties.” After considering that “important factor,”
the court reached two conclusions: first, that plaintiff’s
claim against the county was based on the county’s indepen-
dent negligence, not on vicarious liability, and, second, that
“[t]he direct fault of the two parties involved in this indem-
nity action is relatively equal.” The trial court therefore
denied the county’s indemnity claim.
The county appealed, arguing that the trial court
had erred in failing to apply the rule articulated in Astoria,
67 Or at 548. The Court of Appeals disagreed and affirmed
the decision of the trial court. Eclectic, 261 Or App at 465.
Relying on cases decided after Astoria, the court concluded
that the applicable legal standard is broader than that stated
in Astoria. Id at 463. As the Court of Appeals explained it,
although the distinction between active and passive negli-
gence is one factor that a trial court may consider in deter-
mining whether indemnity is appropriate, the ultimate
question is whether, in equity, and under the totality of the
circumstances, the indemnitor rather than the indemnitee
“ ‘should have discharged the obligation.’ ” Id. (quoting the
trial court’s decision) (emphasis in original). The Court of
Appeals decided that the trial court had correctly applied
that legal standard and that its conclusions were supported
by substantial evidence. Id. at 464-65. Moreover, the Court
of Appeals reasoned, even if Astoria alone were controlling,
Cite as 357 Or 25 (2015) 31
this case is distinguishable. Id. at 465. Unlike the govern-
mental entity in Astoria, the county in this case was aware
of the offending condition before it gave its approval. Id.
The county filed a petition for review, which we
allowed. In this court, the county argues that the correct
legal standard is set out in Astoria—that a passive tortfea-
sor may recover in indemnity from an active tortfeasor—
and that the trial court erred in considering the jury’s allo-
cation of fault as a factor in deciding that the county was not
entitled to indemnity. The contractor responds that, to the
extent that Astoria requires that indemnity be determined
based on whether a party’s negligence was active or passive,
it should be overruled. We begin therefore with a discus-
sion of the legal standard that governs the county’s claim
for indemnity and an analysis of the extent to which a jury’s
allocation of fault is a factor in that determination.
Common-law indemnity is a judicially crafted rem-
edy that allows parties to avoid the harsh results of the
traditional common-law rule that “joint wrongdoers stand-
ing in pari delicto cannot compel contribution.” Astoria, 67
Or at 547. As a result, under that common-law rule, joint
tortfeasors were jointly liable for the full amount of a plain-
tiff’s damages regardless of their respective degrees of fault.
Common-law indemnity provided a means to shift the loss
to the responsibly party:
“[A] person who, without personal fault, has become
subject to tort liability for the unauthorized and wrongful
conduct of another, is entitled to indemnity from the other
for expenditures properly made in the discharge of such lia-
bility. When allowed to one joint tortfeasor against another,
indemnity operates as an exception to the common-law rule
denying contribution among joint tortfeasors. Indemnity
involves shifting the entire loss to the primarily respon-
sible tortfeasor; contribution permits the loss to be appor-
tioned among those jointly responsible.”
Kenneth J. Sherk, Common Law Indemnity Among Joint
Tortfeasors, 7 Ariz L Rev 59, 59-60 (1965) (internal citations
omitted); see also Prosser and Keeton on the Law of Torts § 50,
336 (W. Page Keeton ed., 5th ed 1984) (describing “common
law rule that there can be no contribution among those who
are regarded as ‘joint tortfeasors’ ”).
32 Eclectic Investment, LLC v. Patterson
In Kennedy v. Colt, 216 Or 647, 653, 339 P2d 450
(1959), this court explained the principles underlying
common-law indemnity as follows:
“ ‘If the parties are not equally criminal, the principal
delinquent may be held responsible to his codelinquent for
damages incurred by their joint offense. * * * [W]here the
offense is merely malum prohibitum, and is in no respect
immoral, it is not against the policy of the law to inquire
into the relative delinquency of the parties, and to admin-
ister justice between them, although both parties are
wrongdoers.’ ”
(Quoting Lowell v. Boston & L. R. Corp., 40 Mass 24, 23
Pick 24 (1839).) Applying those principles to circumstances
in which more than one tortfeasor is responsible for harm,
courts have determined whether the character of one party’s
wrong was such that, as between the tortfeasors, that party
should pay the entirety of the damages awarded. Courts
have shifted responsibility for damages from one tortfeasor
to the other based on a qualitative, equitable determination
of the nature of the parties’ negligence:
“In explaining their reasons for granting indemnity * * *
courts have often resorted to complicated, and somewhat
confusing, word formulae. The indemnitee’s fault or negli-
gence has been characterized as ‘constructive,’ ‘secondary’
or ‘passive,’ and the fault or negligence of the indemnitor
as ‘actual,’ ‘primary’ or ‘active.’ The principle which has
achieved the greatest currency is that a tortfeasor who is
guilty of passive negligence only is entitled to indemnity
against a tortfeasor who was guilty of active negligence.
Concurrently negligent tortfeasors have often seized upon
such judicial terminology in order to portray their negli-
gent acts as amounting to no more than ‘passive’ negli-
gence. And, as might be expected, courts have occasionally
employed the terminology to ‘bend’ the law somewhat and
award indemnity to a tortfeasor whose actual negligent act
has concurred with that of another to produce harm to a
third person.”
Sherk, 7 Ariz L Rev at 64 (internal citations omitted).
In this case, the county relies on Astoria, 67 Or at
547, for the principle that common-law indemnity is avail-
able to a joint tortfeasor whose negligence was “passive” in
comparison to the “active” negligence of another tortfeasor.
Cite as 357 Or 25 (2015) 33
In Astoria, the city of Astoria had permitted a railroad com-
pany to build tracks on the city’s streets and required that
it lay the tracks evenly with the grade of the elevated street.
Id. at 539-40. The railroad company failed to comply with
that requirement, and the plaintiff was injured as a result.
Id. at 540. The plaintiff sued the city, asserting that the city
had negligently failed to maintain its streets in a safe con-
dition, and prevailed. Id. at 542. The city then sued the rail-
road for indemnification. Id. This court affirmed the trial
court’s judgment for the city. Id. at 51. The court looked to
the complaint that the plaintiff had filed against the city
and explained that the plaintiff had alleged that the city’s
negligence was “passive” while the negligence of the railroad
was “active”:
“From a résumé of the salient features of the declara-
tion, it plainly appears that the active negligence charged
is against the railroad company, while passive negligence
only is laid at the feet of the municipality. All that is urged
against the city is its failure properly to care for the safety of
the traveling public[.] * * * [T]hat situation does not render
the parties equally delinquent. The efficient and primary
cause of the accident was the negligence of the company,
while the subsequent negligence of the city in not enforcing
obedience to the terms of the ordinance was constructive
rather than actual.”
Id. at 548.
In subsequent decisions, this court has looked
askance at the distinction between “passive” and “active”
negligence as a means of determining whether one of two
tortfeasors ought to pay the whole of an award of damages.
See, e.g., Gen. Ins. Co. of Am. v. P. S. Lord Mech. Contractors,
258 Or 332, 336, 482 P2d 709 (1971) (“The words ‘passive’
versus ‘active’ and ‘secondary’ versus ‘primary’ are not suf-
ficiently precise to provide clear guidelines for this area.”).
Nonetheless, this court has continued to use that distinction:
“In an action for indemnity, the claimant must plead
and prove that (1) he has discharged a legal obligation owed
to a third party; (2) the defendant was also liable to the
third party; and (3) as between the claimant and the defen-
dant, the obligation ought to be discharged by the latter.
The last requirement means that, although the claimant
34 Eclectic Investment, LLC v. Patterson
must have been legally liable to the injured third party,
his liability must have been ‘secondary’ or his fault merely
‘passive,’ while that of the defendant must have been ‘active’
or ‘primary.’ ”
Fulton Ins. Co. v. White Motor Corp., 261 Or 206, 210, 493
P2d 138 (1972) (internal citations omitted).
In this case, the parties cite Fulton and focus on the
third element of an indemnity action as described in that
case and applied in Astoria. The county argues that, under
Astoria, its negligence was merely passive and, therefore, the
contractor ought to pay the fees and costs that the county
incurred in defending against plaintiff’s negligence claim.
The contractor, in turn, argues that the county’s negligence
in approving the excavation was active. Significantly, how-
ever, neither party addresses the Fulton requirement that
the party seeking indemnity from a joint tortfeasor estab-
lish that both tortfeasors were subject to liability to a third
party. Fulton, 261 Or at 210.5
5
Both parties cite Fulton, 261 Or 206, but neither discusses the first two
elements of an indemnity claim as described in that case, id. at 210. This court
has decided only one case since Fulton that could be understood as raising a
question about those elements. In Kamyr, Inc. v. Boise Cascade Corp., 268 Or 130,
519 P2d 1031 (1974), the court affirmed the trial court’s denial of Kamyr’s claim
for indemnity against Boise, a codefendant in a negligence action. Kamyr had
prevailed in the underlying action and therefore could not establish that it either
had, or had discharged, an obligation to the plaintiff. However, in affirming the
judgment for Boise, the court did not rely on that fact. Instead, the court reasoned
that Boise was entitled to prevail because Kamyr had failed to prove that, as
between Kamyr and Boise, it was Boise that would have been primarily liable to
the plaintiff in the underlying case. Id. at 134.
In reaching that conclusion, the court distinguished the “language” in another
case, U. S. Fire Ins. Co. v. Chrysler Motors Corp., 264 Or 362, 366, 505 P2d 1137
(1973), which stated that our cases consistently had “required the claimant in
an indemnity action to show that he has discharged a legal obligation to a third
party.” In Kamyr, the court said that the “language” in Kamyr was contrary to
the “language” in U.S. Fire, but was not contrary to the holding in U.S. Fire that
a party seeking indemnity must plead and prove that the other tortfeasor had
“primary liability.” 268 Or at 133 n 1. We do not read Kamyr as eliminating the
Fulton requirement that, to be entitled to indemnity, both the indemnitee and
the indemnitor must be subject to joint liability to a third party. In Kamyr, the
court did not overrule U.S. Fire or Fulton and apparently viewed Kamyr’s claim
against Boise as a tort claim for negligent injury, not solely as a claim for indem-
nity. Id. at 136. The court so described Kamyr’s claim and concluded that it was
unavailing because “there is no basis upon which to find that [Boise’s] negligence
was the legal cause of [Kamyr’s] financial injury.” Id. at 137. A special concur-
rence suggested that the majority’s entire discussion of indemnity was inapposite
for that reason. Id. at 141 (McAllister, J., concurring).
Cite as 357 Or 25 (2015) 35
There is good reason why both tortfeasors must
be subject to liability to a third party as a precondition
to a common-law indemnity claim. As explained by the
Restatement (Third) of Restitution (2013), the Restatement
(Third) of Torts: Apportionment of Liability (2010), and
George E. Palmer, Law of Restitution (1978; supp 2014), the
theory underlying both indemnity and contribution is that
of restitution for unjust enrichment. One tortfeasor is enti-
tled to restitution from another if the tortfeasor seeking
indemnity has provided a benefit to the other tortfeasor:
“ ‘Indemnity, a form of restitution, is founded on equitable
principles; it is allowed where one person has discharged
an obligation that another should bear; it places the final
responsibility where equity would lay the ultimate bur-
den.’ ” Reporter’s Note, Restatement (Third) of Restitution
§ 23 comment a (quoting Hunt v. Ernzen, 252 NW2d 445,
447-48 (Iowa 1977)). Thus, if two tortfeasors are subject
to liability, and one discharges that liability although in
equity the other should have done so, then the discharg-
ing tortfeasor may recover restitution—in the form of
indemnity—from the tortfeasor who should have fulfilled
that responsibility. Without potential liability to a third
party, the latter tortfeasor receives no benefit from the
former and cannot be required to repay what it did not
receive. As noted in the Restatement (Third) of Restitution,
the determination of “primary” and “secondary” liability
requires an underlying “allocation of the common liability
as between claimant and defendant, whereby their joint
obligation to a third person is assigned to the defendant
inter se.” Id. at § 23 comment b. Accordingly, a claim for
indemnity presumes that both tortfeasors are subject to
joint liability for a plaintiff’s damages.
The problem in this case, although neither
party identifies it, is that Oregon law no longer provides
for joint liability of multiple tortfeasors. Instead, since
Astoria and Fulton, the Oregon Legislative Assembly
has instituted a system of comparative fault in which
(1) the trier of fact allocates fault and responsibility for pay-
ment of damages between the parties; and (2) each tort-
feasor is liable for damages attributable to only its own
36 Eclectic Investment, LLC v. Patterson
negligence.6 ORS 31.610(1) provides that “in any civil action
* * * the liability of each defendant for damages awarded to
plaintiff shall be several only and shall not be joint.” ORS
31.610(2) states that damages shall be awarded “in accor-
dance with the percentages of fault determined by the trier
of fact under ORS 31.605.” ORS 31.600(2) requires that the
trier of fact “compare the fault of the claimant with the fault
of any party against whom recovery is sought, the fault of
third party defendants who are liable in tort to the claim-
ant, and the fault of any person with whom the claimant has
settled.” And ORS 31.605(1)(b) provides that, on request of
any party, the trier of fact shall specify the “degree of fault of
each person” and express that degree of fault “as a percent-
age of the total fault attributable to all persons considered
by the trier of fact.” Those statutes set out a comprehensive
system for allocating fault between the parties and distrib-
uting liability for damages severally in accordance with that
allocation.
A claim for common-law indemnity is not consistent
with that system. As explained, courts originally recognized
claims for common-law indemnity to provide a more equi-
table apportionment of damages than was possible under
a traditional regime that did not allow contribution among
tortfeasors. See W. Page Keeton, Contribution and Indemnity
Among Tortfeasors, 1969 Ins Coun J 630, 630 (1969) (“The
twin rights of contribution and indemnity exist only to take
the sting out of the common[-]law rules * * *. Historically,
neither the common[-]law courts nor legislative bodies were
sympathetic with the wrongdoer.”). However, “[w]hen joint
and several liability is abolished, a contribution rule becomes
nugatory.” Henry Woods & Beth Deere, Comparative Fault
§ 13:5, 240 (3d ed 1996, supp 2013). As a result, “[i]ndem-
nity between tortfeasors based on ‘active-passive negligence’
or ‘primary-secondary liability’ has now generally yielded
to a percentage comparison of fault.” Id. § 13:11 at 254-55.
The Restatement (Third) of Torts: Apportionment of Liability
6
In 1971, the Oregon Legislative Assembly enacted the original compara-
tive negligence statute, former ORS 18.470, renumbered as ORS 31.600. Or Laws
1971, ch 668, § 1. In 1975 and 1987, the legislature amended the comparative
negligence statutes, Or Laws 1975, ch 599, § 1; Or Laws 1987, ch 774, § 7, and
in 1995, it eliminated joint liability and provided that a defendant was liable for
only its own negligence, Or Laws 1995, ch 696, § 3.
Cite as 357 Or 25 (2015) 37
§ 22 specifically disavows the Second Restatement’s provi-
sion for indemnity in cases in which “the indemnitor was
‘actively’ negligent and the indemnitee was ‘passively’ neg-
ligent * * * [or] the indemnitee was ‘secondarily’ liable and
the indemnitor was ‘primarily’ liable.” The Reporter’s Note
explains that those “doctrines were developed before com-
parative responsibility” and as such “are inconsistent with
the goals of comparative responsibility.” Id.; accord Prosser
and Keeton § 51 at 344 (“Changes in the law of contribu-
tion and comparative fault may materially alter the context
and the equities, thus causing courts to reconsider rules of
indemnity. * * * Adoption of comparative fault may be seen
as creating another option—allocating loss according to
percentages.”).
Consequently, “a clear majority [of decisions from
comparative negligence jurisdictions] have held that the
statutory adoption of a comparative negligence scheme
effectively abrogates the theory of indemnity based on the
active/passive negligence dichotomy.” Gomez v. Am. Elec.
Power Serv. Corp., 726 F2d 649, 652 (10th Cir 1984) (cit-
ing decisions from six jurisdictions); see, e.g., Pachowitz v.
Milwaukee & Suburban Transp. Corp., 56 Wis2d 383, 386-
87, 202 NW2d 268 (1972) (rejecting the distinction between
active and passive negligence in a comparative negligence
statutory scheme); see also B & B Auto Supply, Sand Pit,
& Trucking Co. v. Cent. Freight Lines, Inc., 603 S.W.2d 814,
816-17 (Tex 1980) (following Pachowitz and explaining that
“there is no longer any basis for requiring one tortfeasor to
indemnify another tortfeasor when both have been found
negligent and assessed a percentage of fault by the jury”).
The Supreme Court of Kansas has stated bluntly that
“[c]omparative liability, with its superior mechanism for
allocating responsibility, renders the all or nothing theory
of implied indemnity an anachronism.” Kennedy v. City of
Sawyer, 228 Kan 439, 459-60, 618 P2d 788 (1980).7
7
The exception to those lines of cases appears in the context of strict liabil-
ity. Courts are reluctant to permit apportionment of damages in cases in which
one party’s liability results from the manufacture of an unreasonably dangerous
product. In general, “[t]he manufacturer of a defective product is subject to the
ultimate liability in indemnity and may not seek indemnity from subsequent par-
ticipants in the distributive chain.” Woods and Deere, Comparative Fault, §13:12
at 268.
38 Eclectic Investment, LLC v. Patterson
In this case, although neither party has argued
that Oregon’s comparative fault system eliminates the need
for judicially created indemnity in situations such as this
one—in which a defendant is liable, if at all, for only the
damages that resulted from its own negligence—we cannot
avoid the issue that that system now presents. Common-law
indemnity is a judicially created claim intended to equitably
allocate liability among joint tortfeasors. We cannot respond
to the parties’ request that we reconsider the principles that
underlie such a claim and determine whether a jury’s allo-
cation of fault should be a factor in a court’s analysis with-
out also considering the fact that the Oregon Legislative
Assembly has created a system of comparative negligence
that fully addresses the problem that common-law indem-
nity was crafted to solve.
We agree with the reasoning of the authorities that
we have cited: The doctrine of common-law indemnity was
developed before comparative responsibility and is incon-
sistent with its framework. In cases in which the Oregon
comparative negligence statutes apply and in which jurors
allocate fault—and thereby responsibility—for payment of
damages between tortfeasors, and each tortfeasor’s liability
is several only, a judicially created means of allocating fault
and responsibility is not necessary or justified.8
In this case, the Oregon comparative negligence
statues apply. Under ORS 31.610(1), the county was not sub-
ject to potential liability for the conduct of the contractor;
the county’s potential liability was for only its own conduct.
Therefore, although both the county and the contractor
could have been liable to plaintiff, their liability would have
been several only, not joint. Furthermore, the county asked
that the jury answer special questions under ORS 31.605
and allocate the degree of fault of each party. The jury found
plaintiff to be more than 50 percent at fault, and, conse-
quently, neither the county nor the contractor was liable to
plaintiff. As a result, the county was neither potentially nor
8
Our holding extends only to cases in which the Oregon comparative neg-
ligence statutes apply. Our decision in this case does not affect other types of
indemnity claims, such as claims based on contractual agreements. See generally,
Waggoner v. Oregon Auto. Ins. Co., 270 Or 93, 97, 526 P2d 578 (1974) (discussing
indemnity action based upon contractual agreement).
Cite as 357 Or 25 (2015) 39
actually liable to plaintiff for the conduct of the contractor.
In that circumstance, the trial court correctly denied the
county’s claim for common-law indemnity.9
The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.
9
We do not decide whether a prevailing defendant may be permitted to recover
its costs of defense from another tortfeasor on a theory other than common-law
indemnity. Although this court has not expressly addressed the question, other
jurisdictions have permitted tort claims to recover such costs in limited circum-
stances. See Restatement (Second) of Torts § 914 (1979) (“One who through the
tort of another has been required to act in the protection of his interests by bring-
ing or defending an action against a third person is entitled to recover reasonable
compensation for loss of time, attorney fees and other expenditures thereby suf-
fered or incurred in the earlier action.”); see generally, Rocky Mountain Festivals,
Inc. v. Parsons Corp., 242 P3d 1067, 1071 (Colo 2010) (acknowledging that “the
litigation costs incurred by a party in separate litigation may sometimes be an
appropriate measure of compensatory damages against another party”); Taylor
v. S. Pac. Transp. Co., 130 Ariz 516, 523, 637 P2d 726 (1981) (permitting plaintiff
to recover costs and expenses of litigation necessary to protect his interest where
wrongful act of defendant involved plaintiff in litigation). However, such actions
do not lie unless the third party action that the plaintiff was required to defend
against existed only because of the tort of the defendant. Restatement § 914 com-
ment b.
Here, the county’s cross-claim was not a tort claim against the contractor
alleging that the contractor had committed a tort that required the county to
protect its interests by defending a claim brought by plaintiff or that plaintiff’s
claim against the county existed only because of the tort of the contractor. Rather,
plaintiff alleged that the county was liable for its own negligence.