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Schrier v. Indiana Harbor Belt R.r. Co.

OPINION FILED MARCH 25, 1980.

PETER F. SCHRIER, PLAINTIFF,

v.

INDIANA HARBOR BELT RAILROAD COMPANY, DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT. — (INLAND STEEL COMPANY, THIRD-PARTY DEFENDANT-APPELLEE.)



APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR A. SULLIVAN, Judge, presiding.

MR. JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT:

Plaintiff, Peter F. Schrier, brought an action in the circuit court of Cook County under the Federal Employers' Liability Act (45 U.S.C. § 51 et seq. (1976)) (hereinafter referred to as FELA) against defendant, Indiana Harbor Belt Railroad Company (hereinafter referred to as Railroad), to recover damages for injuries he allegedly sustained when he tripped over debris in the plant yard of Inland Steel Company (hereinafter referred to as Inland) while engaged in switching operations for the Railroad.

In accordance with section 25(2) of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 25(2)), Railroad filed a third-party complaint against Inland seeking indemnity. Inland filed a motion to dismiss the third-party action on the ground that Railroad was seeking indemnity on an active-passive theory of indemnity, which theory was not recognized in Indiana, the place where the accident occurred. The trial court granted Inland's motion, finding the third-party complaint substantially insufficient at law under section 45 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 45). Because Railroad elected to stand on its third-party complaint, the trial court dismissed the complaint with prejudice and without leave to amend. Railroad appeals the dismissal of its third-party complaint on the basis that Illinois law, which recognizes the active-passive theory of indemnity, governs the validity of its third-party complaint, and, in the alternative, that even if Indiana law governs, its third-party complaint states a valid cause of action for indemnity.

I.

• 1 It is well established that a railroad's right to recover indemnity or contribution from a third party for liability incurred under FELA depends entirely upon State law. (Brenham v. Southern Pacific Co. (W.D. La. 1971), 328 F. Supp. 119, 123, aff'd (5th Cir. 1972), 469 F.2d 1095, cert. denied (1972), 409 U.S. 1061, 34 L.Ed.2d 513, 93 S.Ct. 560, and cases cited therein.) We first consider whether Illinois or Indiana law governs the validity of the third-party complaint.

Our supreme court in Ingersoll v. Klein (1970), 46 Ill.2d 42, 262 N.E.2d 593, adopted a most significant relationship test for determining which State's law governs in a multistate tort case. The court stated, "* * * the local law of the State where the injury occurred should determine the rights and liabilities of the parties, unless Illinois has a more significant relationship with the occurrence and with the parties, * * *." (Ingersoll, at 45.) This court in Jackson v. Miller-Davis Co. (1976), 44 Ill. App.3d 611, 358 N.E.2d 328, applied the test adopted in Ingersoll to decide whether a third-party complaint filed in the Illinois court seeking indemnity on the theory of active-passive negligence stated a cause of action when the accident occurred in Indiana, which State does not recognize a distinction between active and passive negligence. This is precisely the issue presented in the instant case.

• 2 Here, the injured plaintiff is an Indiana resident, employed by Railroad, an Indiana corporation. *fn1 The conduct causing the injury and the injury occurred at Inland's plant which is located in Indiana. Illinois is the forum State, and one of Railroad's lines runs into Chicago where Railroad maintains an office. Under the criteria set forth in Ingersoll, Indiana rather than Illinois has the more significant relationship with the parties and the occurrence. Indiana law applies.

II.

Thus the question becomes whether, under Indiana law, the third-party complaint states a valid cause of action for indemnity. Under Indiana law, the right to indemnity results from an express contract or one implied in law. (15 Indiana Law Encyclopedia, Indemnity §§ 2, 5 (1959).) Parties may, by means of an express contract, lawfully bind themselves to indemnify against future acts of negligence, whether the negligence indemnified against be that of the indemnitor or his agents or that of the indemnitee or his agents. (McClish v. Niagara Machine & Tool Works (S.D. Ind. 1967), 266 F. Supp. 987, 989.) In the absence of such an express contract, Indiana follows the general rule that there can be no contribution or indemnity as between joint tortfeasors. (McClish v. Niagara Machine & Tool Works.) However, certain exceptions to this rule exist under which the right to indemnity will be implied.

The court in McClish gave three examples of such exceptions: (1) derivative liability, where a principal or employer is found negligent under the doctrine of respondeat superior only because of some negligent act of his agent or employee, the right to indemnity being founded on the separate duty of the agent or employee to the principal or employer to use due care in the performance of his duties; (2) constructive liability, where one becomes constructively liable to a third person by operation of some special statute or rule of law which imposes upon him a non-delegable duty, but who is otherwise without fault, that person being entitled to indemnity from the one who directly caused the harm; and (3) a merchant is entitled to indemnity from the supplier of a defective product which does harm to an ultimate purchaser or user based on the supplier's implied warranty of merchantability to the merchant unless the merchant knew or should have known of the defect before reselling the product. The court stated:

"It is our view of the Indiana law of indemnity that the right to indemnity may be implied at common law only in favor of one whose liability to a third person is solely derivate or constructive, and only as against one who has by his wrongful act caused such derivate or constructive liability to be imposed upon the indemnitee. If the rule is thus stated, confusion based upon `active/passive,' `omission/commission' or `primary/secondary' concepts should disappear." (McClish, at 991.)

This view was reiterated and adopted by the Indiana Court of Appeals in Indiana State Highway Com. v. Thomas (1976), ___ Ind. App. ___, 346 N.E.2d 252, 259.

Railroad claims a right to indemnity from Inland under the second example stated above. It argues that if it is liable to the plaintiff, its culpability is constructive, founded solely on its non-delegable duty under FELA to provide its employees with a safe place to work, and alleges that plaintiff's injuries were caused solely by the negligent acts of Inland and not by any acts on its part.

• 3, 4 FELA imposes upon an employer railroad a non-delegable duty to provide its employees with a safe place to work even when they are required to go onto premises of a third party over which the railroad has no control. (Shenker v. Baltimore & Ohio Railroad Co. (1963), 374 U.S. 1, 7, 10 L.Ed.2d 709, 83 S.Ct. 1667.) This duty includes a responsibility to inspect the third party's property for hazards and to take precautions to protect the employee from possible defects, which duty is separate and distinct from any negligence that may be attributable to the third party. (Shenker v. Baltimore & Ohio Railroad Co.; Carter v. Union R.R. Co. (3d Cir. 1971), 438 F.2d 208, 211.) However, the Act does not make the railroad an insurer of its employees' safety. (Inman v. Baltimore & Ohio Railroad Co. (1959), 361 U.S. 138, 4 L.Ed.2d 198, 80 S.Ct. 242.) In order to recover under the Act, a railroad employee must show that he was injured as a proximate result of an accident which occurred in the course of his employment by the railroad and due to the railroad's negligence. (Pyzynski v. Pennsylvania Central Transportation Co. (W.D.N.Y. 1977), 438 F. Supp. 1044, 1047.) A showing ...


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