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Mccaffrey v. Ill. Central Gulf R.r. Co.

OPINION FILED APRIL 9, 1979.

ROBERT D. MCCAFFREY, PLAINTIFF,

v.

ILLINOIS CENTRAL GULF RAILROAD COMPANY, DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLEE. — (OUTBOARD MARINE CORPORATION, THIRD-PARTY DEFENDANT-APPELLANT.)



APPEAL from the Circuit Court of Madison County; the Hon. JOHN GITCHOFF, Judge, presiding.

MR. PRESIDING JUSTICE GEORGE J. MORAN DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 11, 1979.

Third-party defendant, Outboard Marine Corporation, appeals from a judgment of the circuit court of Madison County entered upon a jury verdict finding it liable to third-party plaintiff Illinois Central Gulf Railroad Company. The jury returned a verdict finding for the plaintiff, Robert McCaffrey, against his employer, defendant railroad, on an F.E.L.A. (Federal Employers' Liability Act, 45 U.S.C. § 51 et seq. (1970)) count and assessed damages at $1.5 million. It further found third-party defendant liable to third-party plaintiff under a theory of indemnity based upon strict liability in tort. Plaintiff and his employer subsequently entered into a compromise settlement, and the railroad's appeal was dismissed.

The accident giving rise to plaintiff's cause of action occurred on July 15, 1972, while plaintiff was riding a three-wheeled Cushman scooter manufactured by Outboard Marine Corporation, hereinafter referred to as OMC, and furnished him by his employer, Illinois Central Gulf Railroad, hereinafter referred to as the railroad. Plaintiff, a machine inspector, testified that as he was traveling across the railroad facility at McComb, Mississippi, in the course of his duties, he heard a "whoof" sound and noticed a flame on his left trouser leg. While attempting to extinguish the flame with his left hand, he slid to the right of the seat whereupon the vehicle overturned pinning him beneath. At that moment gasoline poured from the filler spout, ignited and spread over his body. There were no other witnesses to the accident. Plaintiff's brother and a co-worker, Robert Carroll, responded to plaintiff's cries for help and were able to extinguish the flames within one or two minutes. As a result of the accident plaintiff suffered second- and third-degree burns over 60% of his body.

On December 18, 1974, plaintiff instituted suit against the railroad pursuant to the Federal Employers' Liability Act. In his complaint he alleged that his employer had been negligent in failing to provide him with a safe place to work, in failing to provide equipment in proper working order, in failing to inspect the equipment, in failing to warn of the equipment's faulty condition, in failing to maintain the equipment in proper working order and in failing to adopt equipment upkeep and repair practices. On August 14, 1975, plaintiff amended his complaint by naming OMC a co-defendant in a court premised on strict products liability. On November 14, 1975, the railroad filed a counterclaim seeking indemnity from OMC on a theory of active/passive negligence. Thereafter, the court on OMC's motion dismissed plaintiff's amended complaint because the applicable statute of limitations had expired. The railroad then filed a third-party complaint against OMC, the gravamen of which was that OMC's strict liability for a product it placed in the stream of commerce constituted active negligence while the railroad's F.E.L.A. liability was technical only, thus constituting passive negligence.

Several developments occurred on December 6, 1976, the morning this case was originally scheduled for trial. Plaintiff requested and was granted leave to strike the various negligence allegations in its amended complaint and to insert therefor the following allegation:

"Failed to provide plaintiff with reasonably safe equipment with which to do his work in that the motor scooter provided him was defective in design in one or more respects."

The railroad promptly admitted liability under this count and amended its third-party action by deleting any mention of active/passive negligence and substituting indemnity based upon pure strict liability as its new theory of recovery. On the railroad's motion, the court entered an order in limine precluding OMC from eliciting testimony that, inter alia, plaintiff or the railroad had been negligent and that prior to the accident rags or paper cups had been used on the filler spout. Counsel for OMC requested that the amended third-party complaint be dismissed as untimely filed and as constituting unfair surprise, that the indemnity action be severed from the primary F.E.L.A. suit or that the case be continued to allow adequate time for preparation of a defense to the railroad's new theory of liability. The court postponed the trial for one week.

Third-party defendant OMC contends on appeal that the indemnity action based on principles of pure strict liability was not maintainable, that the court improperly restricted evidence of its defenses of assumption of risk and misuse of the product through the order in limine, various evidentiary rulings and the refusal of certain instructions, and that the railroad should be estopped from seeking indemnity because of its apparent collusion with the plaintiff prior to trial. OMC's other contentions of error shall be discussed only insofar as they have bearing on our discussion or might arise on retrial of the case.

It is true, as OMC asserts, that although arising in the context of a railroad employee's claim for damages under the F.E.L.A., and although partaking of product liability principles, this action is and has been an action seeking common law indemnity. The trial court proceedings thus involved two separate and distinct actions — the F.E.L.A. action by McCaffrey against the railroad and the railroad's action for indemnity against appellant OMC. As previously noted, the railroad amended its action for indemnity shortly before trial, substituting strict products liability for active/passive negligence. Throughout the trial the railroad predicated its entire theory of recovery on strict products-liability principles. In this appeal OMC contends for the first time that the railroad's indemnity action must proceed under ordinary equitable principles of active/passive negligence. Citing Buehler v. Whalen (1977), 70 Ill.2d 51, 374 N.E.2d 460, OMC contends that the railroad's recovery must be based on the qualitatively greater degree of negligent conduct on the part of OMC and that direct and active negligence on the railroad's part precludes recovery. Since the trial court barred the introduction of any matter relating to the railroad's negligence, OMC argues that the error pervaded the entire trial, requiring reversal.

Recognition of indemnity based on strict liability principles finds support in the facts of Suvada v. White Motor Co. (1965), 32 Ill.2d 612, 210 N.E.2d 182. Suvada involved an action for indemnity brought by the purchasers of a reconditioned tractor trailer unit for sums they paid in settlement of property damage and personal injury claims resulting from an accident caused by a defective brake. Establishing strict products liability in this State, the supreme court upheld the indemnification action in spite of the fact that the plaintiffs had been injured only to the extent of sustaining financial loss as a result of the defective brake. A similar result was reached in Texaco, Inc. v. McGrew Lumber Co. (1969), 117 Ill. App.2d 351, 254 N.E.2d 584.

In Liberty Mutual Insurance Co. v. Williams Machine & Tool Co. (1975), 62 Ill.2d 77, 338 N.E.2d 857, the assembler of a product, having settled strict liability actions for personal injuries brought against it, filed an indemnity action against the producer of a defective component part. There the defendant argued that since the compensation of a consumer injured by a defective product was not involved in that litigation, the two manufacturers should simply be treated as joint tortfeasors, with no indemnity allowed unless one's negligence was passive and the other's active. Recognizing upstream indemnification in the manufacturer-distributor-seller chain, the court placed the assembler in the place of the consumer and the defendant producer into the place of the assembler in order to shift the full economic loss to the producer:

"In our judgment, the rule we are adopting is a logical and necessary extension of the principles enunciated in Suvada and Williams. It does not impose an undue burden on defendant and those similarly situated, for it is they who originated the defective product. Nor does it make them absolute insurers of the safety of their products. Plaintiffs in such indemnity actions must still prove the necessary elements of a strict liability action — that the product contained a defective condition which existed at the time it left defendant's control, rendering the product unreasonably dangerous and proximately causing the injury resulting in plaintiff's liability to the injured party. And while proof of an indemnitee's negligence will not serve to bar a strict liability indemnity claim, proof that he misused the product or assumed the risk of the defect will be an effective bar to recovery." 62 Ill.2d 77, 84-85.

• 1 Nor do we believe that the manufacturer-assembler relationship existing between the plaintiff and defendant in Liberty Mutual serves as a proper basis for distinguishing it from the facts in this case. The public policy reasons for the adoption of strict liability enunciated by our supreme court in Suvada were that the economic loss suffered by the user or consumer should be borne by those who created the risk and reaped the profit by placing the product in the stream of commerce. Allowing the railroad in this ...


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