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Fairbanks North Star Borough v. Kandik Construction et al (12/27/91), 823 P 2d 632
Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
corrections may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
FAIRBANKS NORTH STAR BOROUGH, )
) Supreme Court No. S-2772
) Trial Court No.
) 4FA-84-2496 Civil
) OPINION ON REHEARING
KANDIK CONSTRUCTION, INC. AND )
ASSOCIATES, KANDIK CONSTRUCTION, )
INC., and ROEN DESIGN ASSOCIATES, )
Appellees. ) [No. 3792 - December 27,
Appeal from the Superior Court of the
State of Alaska, Fourth Judicial District,
Mary E. Greene and John Bosshard III, Judges.
Appearances: Ronald E. Noel, Joseph S.
Slusser, Hughes, Thorsness, Gantz, Powell &
Brundin, Fairbanks, for Appellee Roen Design
Associates. R. Everett Harris, Kevin M.
Morford, Jensen, Harris & Roth, Anchorage,
and Mark Andrews, Assistant Borough Attorney,
Fairbanks, for Appellant.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
MATTHEWS, Justice, with whom RABINOWITZ, Chief
Justice, joins, dissenting.
We rendered our decision in the predecessor to this
appeal on March 2, 1990. Fairbanks North Star Borough v. Kandik
Construction, Inc., 795 P.2d 793 (Alaska 1990). Following the
announcement of our decision, Roen Design Associates, one of the
appellees, filed a petition for rehearing.1 We now vacate part
IV of our earlier opinion. We also remand for a new trial on the
question of Roen's liability for indemnity to its cross-defendant
in the case.
Roen contracted to prepare plans for the roads of a
subdivision for the Fairbanks North Star Borough. Id. at 796.
The Borough awarded Kandik Construction Inc. & Associates the
contract for construction of the roads. Id. After essentially
completing the road work, Kandik sued both Roen and the Borough.
Id. at 796 & n.1.
Against the Borough, Kandik initially asserted three
causes of action, all sounding in contract: breach of express
warranty, breach of implied warranty, and breach of the covenant
of good faith and fair dealing. Id. at 796 & n.2. Kandik later
amended its complaint to assert against the Borough a cause of
action for "business destruction"damages. Id. at 796, 801-03.
The latter claim apparently sounded in tort.2 Id. at 801-03.
Kandik also asserted against Roen a tort claim for professional
malpractice. Id. at 796.
In response, the Borough asserted claims against Kandik
and a cross-claim against its co-defendant Roen. In its initial
cross-claim, filed on July 18, 1985, the Borough purported to
assert three claims against Roen: a claim of negligence, a claim
of breach of contract, and a claim for indemnity. This pleading,
however, was soon withdrawn. In a letter dated July 29, 1985,
the Borough's attorney requested that the superior court clerk
remove from the court file the "erroneously filed"initial cross-
claim complaint, and on August 19, 1985, the Borough was
permitted to file a new cross-claim against Roen. The new
complaint contained only one rather ambiguous claim for either
express contractual or, in the alternative, for "common-law"
Before trial, Kandik's tort claim against Roen was
settled. Id. at 796. Roen next obtained summary judgment in its
favor on the Borough's cross-claim for indemnity. Id. at 796
n.3. The Borough appealed, and in Fairbanks North Star Borough
v. Roen Design Assocs., 727 P.2d 758, 760 (Alaska 1986), we
agreed with the superior court that the express indemnity provi
sion in the Borough-Roen contract did not cover the sort of
economic damages at issue in the dispute. We also concluded,
however, that the Borough had asserted a claim for "common-law
indemnity" against Roen, which the superior court had not
addressed. Id. We thus reversed the court's grant of summary
judgment and remanded the case for trial on the common-law
indemnity claim. Id. at 761-62.
The Borough's common-law indemnity cross-claim against
Roen was one issue in a complicated jury trial that mainly
featured Kandik's claims against the Borough. Ultimately, the
jury awarded $402,440 to Kandik for the Borough's breach of the
construction contract. Kandik, 795 P.2d at 797 n.4. The jury
also awarded $165,000 for business destruction losses. Id. And,
finally, the jury found that Roen was not required to indemnify
the Borough under principles of common-law indemnity. Id. at
The Borough appealed and, in the decision now on
rehearing, we reversed and remanded for a new trial on several
issues.4 Id. at 804. As to the jury verdict denying indemnity
to the Borough, we found the claim redundant in light of what we
perceived to be the Borough's alternative cross-claims against
Roen for tort and breach of contract. Id. We thus declined to
address the validity of the jury's indemnity verdict. Id. We
also concluded that the trial court had not properly instructed
the jury on all three of the claims we perceived the Borough to
have tried against Roen. Id. Consequently, we ordered a new
trial for the Borough "on the question whether Roen is liable to
the Borough under a theory of tort or contract." Id.
According to Roen, we erred by not directly addressing
the jury's indemnity verdict and by ordering a new trial on
Roen's tort and contract liability to the Borough. We granted
Roen's petition for rehearing to determine whether we did so err.
We did not address the indemnity verdict in this case
specifically, because we found the indemnity claim redundant in
light of the tort and contract claims we believed were brought by
the Borough against Roen. Consequently, the threshold question
is whether any tort and contract claims by the Borough against
Roen properly should have gone to the jury. If so, then our
original decision may stand. If not, then we must consider the
jury's original verdict on the Borough's indemnity claim against
Roen first argues that a new trial on tort and contract
claims would be improper because the Borough never pled cross-
claims against it for tort or breach of contract. Rather, the
only claim that the Borough pled against Roen was an indemnity
claim. After close review of the record, we agree that the
Borough did not plead actions in tort or contract against Roen.
The only effective complaint the Borough filed contained the
cross-claim against Roen for indemnity. We also note that the
Borough does not actually contend that it ever effectively pled
any action against Roen except one for indemnity.
The Borough, however, argues that we need not alter our
original decision on its entitlement to a new trial on tort and
contract claims against Roen because such claims actually were
tried in the court below. The Borough asserts two partially
overlapping rationales for reaching such a conclusion. The
Borough offers the theoretical argument that a trial on "common-
law indemnity" in this case per force included a trial on
underlying claims of Roen's negligence and breach of contract.
The Borough also offers the practical argument that it presented
evidence of Roen's negligence and breach of contract to the jury,
that Roen consented to trial on those issues, and that we now may
treat the Borough's pleadings as amended to conform to the
evidence presented at trial.
The Borough's theoretical argument ignores the very
nature of the action for implied (or "common-law") indemnity.
Under modern rules of pleading, a defendant may -- and often does
-- join an action for implied indemnity with the action that
threatens to inflict the very loss for which the defendant seeks
indemnity. See, e.g., Alaska R. Civ. P. 13 & 14. Traditionally,
however, courts did not permit such joinder of claims and
parties, because implied indemnity is a distinct cause of action,5
which technically does not accrue until the indemnitee actually
pays the money judgment for which it seeks indemnity. Larson
Mach., Inc. v. Wallace, 600 S.W.2d 1, 13 (Ark. 1980); Rieger v.
Frankstram Realties, Inc., 68 N.Y.S.2d 243, 245-46 (N.Y. Sup.
1946). Modern courts relax the requirement of actual payment of
judgment and permit joinder of implied indemnity claims with the
actions that may give rise to a right of indemnity, but those
courts clearly treat the indemnity claim as sui generis. E.g.,
Dole v. Dow Chem. Co., 282 N.E.2d 288, 294 (N.Y. 1972); Rieger,
68 N.Y.S.2d at 246; see also Holzhauser v. Container Corp. of
America, 93 F.R.D. 837, 838-39 (W.D. Ark. 1982) (offering
reconciliation of traditional accrual of action rule for
indemnity with modern rule permitting impleader). Modern rules
of pleading thus aim to reduce the multiplicity of actions, but
not by conflating causes of action. The Borough's indemnity
claim was not some legal marsupial whose hidden tort and contract
offspring suddenly came of age during trial. Rather, it was a
discreet, independent claim in its own right. As a result, only
if the Borough has shown that it tried equally discreet tort and
contract claims entirely independent of the indemnity claim would
it be entitled to a new trial on such claims. The Borough has
not made such a showing.
Admittedly, the issue of Roen's professional negligence
was an element of the Borough's implied indemnity claim. In
particular, the indemnity claim -- both as formulated in the
Borough's own proposed but rejected jury instruction and as
formulated in the instruction actually given to the jury --
required a finding that Roen had failed to exercise reasonable
care in its preparation of the plans. As a result, the first
element of the indemnity action and the first element of a
negligence action are identical. The subsequent elements of the
two actions, however, do not coincide.
The Borough's indemnity action was one for implied
contractual indemnity, which rests on the principle that a
contract to perform a service contains a three-part implied
promise: 1) the indemnitor will perform the service in a proper
manner, or 2) the indemnitor will discharge foreseeable damages
resulting from improper performance, unless 3) the indemnitee's
own participation in causing the damages precludes recovery.
See, e.g., Great Western Furniture Co. v. Porter Corp., 48 Cal.
Rptr. 76, 86 (Cal. App. 1965). Thus, if Roen negligently pre
pared plans, and those plans themselves caused the Borough to
incur liability to Kandik, then the Borough rightly sought
indemnity from Roen. Accord Zontelli & Sons v. City of Nashwauk,
373 N.W.2d 744, 755 (Minn. 1985); Miller v. Melaney, 560 P.2d
902, 905 (Mont. 1977). Such indemnification recovery, however,
if obtained, would flow from a completely different source than
would the damages recoverable in a negligence action against
Roen, because the focus of causation is completely different for
each of the two actions.
In an implied contractual indemnity action by the
Borough against Roen, the causation element of the action re
quires the jury to determine whether Roen's negligence caused
harm to Kandik.6 E.g., Zontelli, 373 N.W.2d at 755. In a
professional negligence action by the Borough against Roen, the
causation element of the action requires the jury to determine
whether Roen's negligence caused harm to the Borough. See Thomas
v. Cleary, 768 P.2d 1090, 1092 (Alaska 1989); see also Restate
ment (Second) of Torts 281(a) & 430 (1965); W. Keeton, D.
Dobbs, R. Keeton & D. Owen, Prosser & Keeton on The Law of Torts
30, at 164-65 (5th ed. 1984). Facts constituting the two types
of legal cause are not necessarily identical; neither are the
damages that would flow from the two types of legal cause. The
Borough had the burden of proving every element of the negligence
cause of action that it now argues actually was tried before the
jury. See Restatement (Second) of Torts 328A & 433B (1965).
The Borough, however, does not even attempt to show that it ever
litigated the elements of causation and damages for a negligence
action against Roen. Additionally, we find no hint in the record
that the Borough litigated those issues.
In sum, the Borough neither pled nor tried a negligence
cause of action against Roen. We thus vacate our original
decision as to the Borough's entitlement upon remand to a new
trial on a negligence claim against Roen.
The Borough's argument that it somehow, in the course
of trying its indemnity claim, tried a breach of contract action
independent of the indemnity claim similarly fails. Prior to
trial the Borough attempted to amend its cross-claim against Roen
to include a claim of breach of "express and implied warranties
of specifications/design adequacy." The superior court denied
the motion to amend the cross-claim, holding that Alaska law
recognizes no warranty for professional services. The Borough
has not appealed that denial, and the Borough has not offered any
other basis for finding a breach of any contractual promise other
than the implied promise for indemnity.7 As explained, that
promise for indemnity can give rise only to a claim for
indemnity. Accord Bay Development Ltd. v. Superior Court, 791
P.2d 290, 303 n.13 (Cal. 1990); see also Dole, 282 N.E.2d at 294.
The Borough neither pled a discreet action in contract
nor litigated issues of breach of contract independent of those
inherent in its indemnity claim. We thus vacate our original
decision as to the Borough's entitlement upon remand to a new
trial on a nonindemnity breach of contract claim against Roen.
In our original decision, we did not reach the merits
of the Borough's appeal of the verdict that denied it recovery
against Roen. Kandik, 795 P.2d at 803-04. Because we now have
vacated our original decision on the Borough's cross-claim
against Roen, we turn to the merits of the original appeal of the
jury's indemnity verdict.
In the present case, after trial of all issues, the
court instructed the jury on the law of indemnity, and the jury
returned a special verdict holding that the Borough was not
entitled to recover from Roen, under an indemnity theory, any of
the damages the Borough owed to Kandik. The question before us
here is whether the trial court's instruction regarding indemnity
was a proper statement of the law, or, if not, whether the
improper instruction prejudiced the Borough's substantial rights.
Alaska R. Civ. P. 61; Grimes v. Haslett, 641 P.2d 813, 818
We reach the question of error in the instructions on
indemnity in this case despite the possibility that the Borough
did not properly object to the faults in the instructions. See
Alaska R. Civ. P. 51(a). As we explained in City of Nome v.
Ailak, 570 P.2d 162, 171 (Alaska 1977), "[j]ury instructions
which set forth an entirely erroneous standard of liability" may
be considered to create "a high likelihood that the jury followed
an erroneous theory resulting in a miscarriage of justice." We
have concluded that the central instruction on indemnity in this
case did set forth an entirely erroneous standard of liability
for implied contractual indemnity and that the error in the
instruction almost certainly resulted in a miscarriage of
justice. Such a miscarriage of justice warrants review of a
plainly erroneous jury instruction, even if the party asserting
error has not properly objected to the error in the trial court.
In the broadest sense, the obligation of indemnity is
the obligation resting on one party to make good a loss or damage
another has incurred. Bay Development, 791 P.2d at 299. A
traditional rule of indemnity, however, is that an indemnitee is
not entitled to recover if the indemnitee has actively
participated in the wrongful acts that caused the damage. Great
Western Furniture, 48 Cal. Rptr. at 86; Chirco Constr. Co. v.
Stewart Title & Trust of Tucson, 629 P.2d 1023, 1024-25 (Ariz.
App. 1981); Coca-Cola Bottling Co.-Goshen v. Vendo Co., 455
N.E.2d 370, 373 (Ind. App. 1983). A few jurisdictions have
abrogated the traditional rule in favor of a partial or
comparative fault system of indemnity.8 See, e.g., Bay
Development, 791 P.2d at 300 n.10 (California); Dole, 282 N.E.2d
at 292 (New York). Alaska has not. In Alaska, a version of the
traditional rule still applies to indemnity actions. In
particular, we repeatedly have held that an indemnitee jointly
liable in tort with the indemnitor may recover implied
noncontractual indemnity only if the indemnitee is not in any
degree also jointly at fault.9 Koehring Mfg. v. Earthmovers of
Fairbanks, 763 P.2d 499, 503-04 (Alaska 1988); D.G. Shelter
Products v. Moduline Industries, 684 P.2d 839, 841-42 (Alaska
1984); Vertecs Corp. v. Reichhold Chemicals, Inc., 661 P.2d 619,
621-26 (Alaska 1983). We previously have not had occasion to
state that a version of this rule also applies to actions for
implied contractual indemnity. It does. Consequently, the rules
of implied contractual indemnity, as applicable in this case, may
be summarized as follows: The Borough may recover from Roen in
indemnity insofar as Roen's negligence caused the Borough to pay
breach of contract damages10 or tort damages11 to Kandik, unless
the Borough also was itself at fault in causing the particular
damages for which it sought to be indemnified.12
A jury instruction enunciating these principles would
accurately explain the way in which an indemnitee's own fault may
affect the availability of recovery in an action for implied
contractual indemnity. The central instruction that the trial
court gave to the jury on the law of indemnity13 not only failed
to enunciate these principles, it actually misstated them in a
way that inevitably prejudiced the Borough. First, the
instruction repeatedly told the jury that the Borough sought
indemnity from Roen for all of the damages that the Borough must
pay to Kandik. Second, the instruction told the jury that if any
part of Kandik's damage was caused by the Borough's negligence or
breach of its contract with Kandik, then the Borough could not
recover indemnity from Roen.
One must recall that Kandik asserted four claims
against the Borough. The court in effect instructed the jury
that if it found the Borough liable for any of the four claims,
then the Borough could not recover in indemnity the damages that
flowed from any of the other claims. This instruction was a
deleterious misinterpretation of the requirement that an
indemnitee be fault free.14 As explained, if the jury could
determine that Roen's negligence alone caused the Borough to
incur liability for damages on any individual claim that Kandik
brought against it, then the jury could have awarded the Borough
indemnity for that amount. The Borough's tort or contract
liability to Kandik for damages that flowed from other claims, if
plainly divisible, would not be relevant to an equally divisible
and meritorious indemnity claim.
We VACATE part IV of our opinion in Fairbanks North
Star Borough v. Kandik Construction, Inc., 795 P.2d 793 (Alaska
1990) and REMAND for a new trial, consistent with this opinion,
on the question whether Roen is liable to the Borough under a
theory of implied contractual indemnity.
MATTHEWS, Justice, with whom RABINOWITZ, Chief Justice,
A rule of comparative fault should govern this case
under which the Borough may obtain partial indemnity from Roen if
Roen's negligence and the Borough's fault jointly caused the
Borough to suffer liability to Kandik. In such case the jury
should apportion liability between the Borough and Roen according
to their relative degrees of fault.
In Kaatz v. State, 540 P.2d 1037 (Alaska 1975), we
rejected the rule of contributory negligence in favor of
comparative negligence. Contributory negligence, like the rule
adopted by the majority today, is an all or nothing rule. Any
fault on the part of the claimant will bar any recovery against
another party even though the claimant's fault might be
relatively slight, while the fault of the other party is great.
What we said in Kaatz about contributory negligence seems equally
applicable to the all or nothing rule adopted by the majority in
the present opinion:
[T]he doctrine is inequitable in its
operation because it fails to distribute
responsibility in proportion to fault. . . .
The basic objection to the doctrine --
grounded in the primal concept that in a
system in which liability is based on fault,
the extent of fault should govern the extent
of liability -- remains irresistible to
reason and all intelligent notions of
Id. at 1048 (quoting Li v. Yellow Cab Co., 532 P.2d 1226, 1230-31
The hardship of the doctrine . . .
is readily apparent. It places upon one
party the entire burden of a loss for which
two are, by hypothesis, responsible. The
negligence of the defendant has played no
less a part in causing the damage; the
plaintiff's deviation from the community
standard of conduct may even be relatively
slight, and the defendant's more extreme;
. . . .
Id. at 1048 (quoting W. Prosser, Handbook on the Law of Torts
433 (4th ed. 1971)).
The rule that any degree of fault bars all recovery is
an anachronism. Comparative negligence has been in effect in
this state since the Kaatz decision. No special problems have
been encountered. In the context of joint tortfeasors, the all
or nothing common law rule which forbade one joint tortfeasor
from obtaining contribution from another was abolished by statute
in 1970 with the enactment of the Alaska Uniform Contribution
Among Joint Tortfeasors Act. AS 09.16.010-.060 (repealed eff.
3/5/89). Although under this act joint tortfeasors share equally
in the common liability rather than according to the comparative
fault of each, this system was nonetheless clearly preferable to
the all or nothing common law rule.15 Under current law, joint
tortfeasors are liable for that percentage of total damages which
accords to the percentage of fault of each. AS 09.17.080(d).
The rule that partial fault of a party precludes all loss
shifting has thus been clearly rejected by this court and by the
Alaska Legislature in the context of tort law. To announce such
a rule in the closely related area of implied contracts is to
ignore the legal developments of the last two decades.
We have recognized that in certain cases, especially
those involving the performance of professional services,
identical claims may reasonably be said to arise both in tort and
in implied contract. Lee Houston & Associates, Ltd. v. Racine,
806 P.2d 848, 853-54 (Alaska 1991). "`This court should avoid
applications of the law which lead to different substantive
results based upon distinctions having their source solely in the
niceties of pleading and not in the underlying realities.'" Id.
at 853 (quoting Higa v. Mirikitani, 517 P.2d 1, 4-5 (Haw. 1973)).
It is therefore appropriate, so far as is possible, to apply
rules of law to implied contractual indemnity claims which are
similar to those applied to indemnity claims sounding in tort.
If one accepts the conclusion that implied contract
claims seeking to shift all or part of a loss to another
wrongdoer should be treated similarly to tort claims having the
same objective, it is immediately apparent that loss shifting pro
portional to fault should be allowed under current law because
currently a tortfeasor may not suffer a loss which is dispropor
tionate to its fault. AS 09.17.080(d). In my view, loss
shifting proportional to fault should also apply to cases, such
as the present one, which arose when the Alaska Uniform
Contribution Among Joint Tortfeasors Act was in effect, because,
as noted, loss shifting proportional to fault is closer to the
statutory contribution remedy than no loss shifting at all.
The rule that there can be no partial non-statutory
indemnity between concurrently negligent tortfeasors was adopted
by this court in Vertecs Corp. v. Reichhold Chemicals, Inc., 661
P.2d 619, 626 (Alaska 1983).16 It was largely based on the
rationale that since the contribution act allowed a partial loss-
shifting remedy among joint tortfeasors, any other partial loss-
shifting remedy would necessarily conflict with the statutory
remedy. This rationale, however, does not apply to partial
indemnity claims based on implied contracts since the contri
bution act has never applied to implied contract cases. The
majority opinion's reliance on the Vertecs rule is thus difficult
to justify. To repeat, the Vertecs rule barred partial non-
statutory loss shifting in tort cases because there was a partial
statutory loss-shifting remedy. There has never been a partial
statutory loss-shifting remedy in implied contract cases, and
therefore the rationale of the Vertecs rule does not apply to
In summary, where two parties are at fault and are
responsible for an indivisible loss, any rule that provides that
one of them must bear the entire loss without the opportunity to
shift part of the loss to the other is manifestly unjust. What
should happen is that the loss should be shared in proportion to
the fault of each party. In accord with this, the trial court
should be directed on remand to instruct the jury to apportion
the damages which the Borough must pay between the Borough and
Roen according to the comparative degree of fault of each.
1. Alaska Rule of Appellate Procedure 506(b) requires
filing of a petition for rehearing within 10 days of date of
notice of an opinion in a case.
2. In Kandik, we ordered the trial court upon remand
to clarify its instruction to the jury on the business
destruction claim. Kandik, 795 P.2d at 802-03.
3. The new cross-claim did not amend the initial
claim. Rather, the new cross-claim displaced the initial claim.
The initial, inoperative cross-claim, however, remained in the
case file and became part of the record on appeal, while the
letter that withdrew the initial claim did not enter the case
file, nor did it become part of the record on appeal.
4. In addition to the indemnity-related remand, this
court held that the trial court had improperly instructed the
jury on the measurement of contract damages. Kandik, 795 P.2d at
799-800. This court also held that the trial court had failed to
explain to the jury the nature of the "business destruction"
theory of liability. Id. at 801-03.
5. The specific type of implied indemnity at issue in
this case is implied contractual indemnity: the Borough's right
to indemnity rises, if at all, as a result of its contractual
relationship with Roen. Some courts have found that implied
contractual indemnity rises under principles of restitution or
quasi-contract. E.g., Owings v. Ros, 497 P.2d 1183, 1190 (Or.
1972). Other courts hold that the implied promise must inhere in
the contract between the parties, and that, therefore, implied
contractual indemnity actually constitutes an action for breach
of contract. E.g., Great American Insurance Co. v. Evans, 269 F.
Supp. 151, 154-56 (N.D. Cal. 1967) (citing an influential line of
cases that began with Ryan Stevedoring Co. v. Pan-Atlantic S.S.
Corp., 350 U.S. 124 (1956)). Other courts find the source of
implied contractual indemnity in principles of equity. E.g.,
Zontelli & Sons v. City of Nashwauk, 373 N.W.2d 744, 755 (Minn.
1985). Still other courts, faced with the question of whether
indemnity actions require trial by jury, have found implied
contractual indemnity a peculiar hybrid of legal and equitable
principles. See, e.g., Tokio Marine & Fire Ins. Co. v. McDonnell
Douglas Corp., 465 F. Supp. 790, 794 (S.D.N.Y. 1978) (indemnity
is essentially equitable question but right to indemnity is a
jury question); Midwest Fertilizer Co. v. Ag-Chem Equip. Co., 510
N.E.2d 232, 233-35 (Ind. App. 1987) (indemnity may be equitable
in nature for other purposes and yet not for determining right to
jury trial). We do not find it necessary to examine these
distinctions in detail in the present case. First, the
availability of indemnity as a result of the parties' contractual
relationship is not in dispute. Rather, the main legal dispute
here is over what effect the Borough's own actions or inactions
should have on its right to recover from Roen in indemnity.
Second, the subsidiary legal dispute here over whether trial of
an indemnity claim per force includes full trial of other claims
in tort or contract would reach the same resolution no matter
which of the various theories we deemed the source of an action
for implied contractual indemnity.
6. The Borough's own proposed jury instruction on its
claims against Roen required the jury to determine that Roen's
negligence caused Kandik's damages. See Kandik, 795 P.2d at 803.
7. The Borough's own citations to the record further
undercut its argument that Roen consented to trial of breach of
contract issues independent of the indemnity claim. For example,
the Borough's counsel began his opening statement to the jury
with a general assertion that the Borough intended to prove that
"Roen breached its contract with the Borough." Roen objected to
that argument, and the court then carefully instructed the jury
on the particular type of breach of contract inherent in the
indemnity claim. As the Borough itself points out, from that
moment, on its counsel kept all argument on the question of
Roen's negligence and breach of promise confined to the theoreti
cal limits of the indemnity claim.
8. At least one jurisdiction did not modify its law of
indemnity to accommodate principles of comparative negligence or
contribution, but rather abolished implied noncontractual
indemnity as between co-tortfeasors as no longer a viable
doctrine in light of the availability of other cost-shifting
doctrines. See Allison v. Shell Oil Co., 495 N.E.2d 496, 501
(Ill. 1986). The Illinois courts, however, have continued to
recognize implied contractual indemnity. E.g., Carrillo v. Jam
Products, Ltd., 527 N.E.2d 964, 967 (Ill. App. 1988).
9. Common settings in which tortfeasors are jointly
liable but not jointly at fault are where one is only liable by
operation of vicarious or strict liability. E.g., D.G. Shelter
Products v. Moduline Industries, 684 P.2d 839, 841 (Alaska 1984)
("an innocent party in the chain of commerce, having only passed
on an already defective product, . . . would be entitled to
indemnity"); Austin v. Fulton Insurance Co., 498 P.2d 702, 705
10. Accord Zontelli, 373 N.W.2d at 755; Chirco Constr.,
629 P.2d at 1025; Considine Co. v. Shadle, Hunt & Hagar, 232 Cal.
Rptr. 250, 256 (Cal. App. 1986); Carrillo, 527 N.E.2d at 967.
11. Accord San Francisco Unified School Dist. v.
California Bldg. Co., 328 P.2d 785, 789-94 (Cal. 1958); Owings v.
Ros, 497 P.2d 1183, 1185-88 (Or. 1972).
12. Accord Great Western Furniture, 48 Cal. Rptr. at
86; Chirco Constr., 629 P.2d at 1025; United of Omaha Life Ins.
Co. v. Nob Hill Assocs., 450 So. 2d 536, 539 (Fla. App. 1984);
see also Coca-Cola Bottling Co.-Goshen, 455 N.E.2d at 373.
13. Instruction No. 31 stated:
If by following the preceding
instructions, you have determined that the
Borough is liable to Kandik for damages, you
must determine whether Roen Design is liable
to the Borough. The Borough claims that Roen
design is liable to the Borough for any
damages which you have found that the Borough
must pay to Kandik.
In order to find that the Borough
is entitled to recover from Roen Design the
damages which the Borough must pay to Kandik,
you must decide that it is more likely than
not that all of the following three things
1) That Roen Design was
professionally negligent in any failure by
Roen to communicate to the Borough and Kandik
its use of approximations in development of
its cross sections and mass diagrams; or any
failure by Roen to compute volumes of waste
disposal area; or any failure by Roen to
communicate to the Borough engineer its
position as to the use of additional disposal
2) That all of the damages
suffered by Kandik were legally caused by
Roen's professional negligence; and
3) That for all of the damages
suffered by Kandik which the Borough seeks to
recover from Roen, it is more likely than not
that the following two things are both true:
a) that the damage
to Kandik was not legally caused by
an affirmative act of negligence by
the Borough; and
b) that the damage
to Kandik was not legally caused by
the Borough's failure to perform
its duties in connection with the
contract between the Borough and
14. We note that Kandik's claim that the Borough
breached the covenant of good faith and fair dealing necessarily
implied that the Borough participated in causing any harm by that
breach. In other words, breach by bad faith or unfair dealing
always implicates the contracting party's actions or inactions,
which may be unfair or in bad faith because they are dishonest,
evasive, interfering, willfully insufficient, or otherwise
wrongful. Restatement (Second) of Contracts 205, comments a-e
(1981). It would not be possible for a party to breach the
covenant of good faith and fair dealing and also be fault free
for purposes of an indemnity action on the specific damages that
flow from that breach.
15. "`This act would distribute the burden of responsibility
equitably among those who are jointly liable and thus avoid the
injustice often resulting under the common law.'" House
Judiciary Committee Report, 1970 House Journal 437 (quoting the
National Conference's prefatory note to the Uniform Contribution
Among Tortfeasors Act). "[S]haring equally, furnished a rough
approximation of a just result. For example, it was certainly
preferable when two joint tort-feasors were liable, for them to
share equally in paying the damages, than for one to go free
simply because the plaintiff elected to recover from the other."
Arctic Structures, Inc. v. Wedmore, 605 P.2d 426, 441 (Alaska
1979) (Boochever, C. J., dissenting).
Vertecs has since been followed in other tort cases. Koehring
Mfg. v. Earthmovers of Fairbanks, 763 P.2d 499, 503-04 (Alaska
1988); D.G. Shelter Prods. v. Moduline Indus., 684 P.2d 839, 842