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AVCP Regional Housing Authority v. R.A. Vranckaert Co., Inc. (5/17/2002) sp-5573
AVCP Regional Housing Authority v. R.A. Vranckaert Co., Inc. (5/17/2002) sp-5573
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
AVCP REGIONAL HOUSING )
AUTHORITY, ) Supreme Court No. S-9872
)
Appellant, ) Superior Court No.
) 3AN-99-11339 CI
v. )
) O P I N I O N
R.A. VRANCKAERT COMPANY, )
INC.; KUUKPIK CORPORATION; ) [No. 5573 - May 17, 2002]
and R.A. VRANCKAERT )
COMPANY, INC./KUUKPIK )
CORPORATION JOINT VENTURE, )
)
Appellees. )
________________________________)
)
R.A. VRANCKAERT COMPANY, )
INC.; KUUKPIK CORPORATION; ) Supreme Court No. S-9893
and R.A. VRANCKAERT )
COMPANY, INC./KUUKPIK ) Superior Court No.
CORPORATION JOINT VENTURE, ) 4BE-99-00058 CI
)
Petitioners, )
)
v. )
)
AVCP REGIONAL HOUSING )
AUTHORITY, )
)
Respondent. )
________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Karen L. Hunt, Judge.
Petition for Review from the Superior Court
of the State of Alaska, Fourth Judicial
District, Bethel, Niesje J. Steinkruger,
Judge.
Appearances: Tracy L. Knutson, Sisson &
Knutson, P.C., Anchorage, for Appellant and
Respondent. Roger F. Holmes, Biss & Holmes,
Anchorage, for Appellees and Petitioners.
Before: Fabe, Chief Justice, Eastaugh,
Bryner, and Carpeneti, Justices. [Matthews,
Justice, not participating.]
FABE, Chief Justice.
I. INTRODUCTION
Two groups of tenants, the Nilsson plaintiffs and the
Engler plaintiffs, sued their landlord, the Association of
Village Council Presidents Regional Housing Authority (AVCP), for
injuries caused by exposure to carbon monoxide emissions from
their gas ranges. The contractor, R.A. Vranckaert Company, had
forgotten to convert the stoves from natural gas to propane
before turning the housing project over to AVCP.
After settling with the Nilsson plaintiffs, AVCP moved
to amend its third-party complaint against Vranckaert to include
a claim of equitable indemnity. Superior Court Judge Dale O.
Curda denied the motion and dismissed AVCP from the action.
Rather than appealing, AVCP filed a new action against Vranckaert
asserting various indemnity claims. Based on Judge Curdas order,
Superior Court Judge Karen L. Hunt ruled that these claims were
barred by the doctrine of res judicata.
The Engler plaintiffs then sued both AVCP and
Vranckaert. AVCP asserted the same indemnity claims in its third-
party complaint against Vranckaert. Superior Court Judge Niesje
J. Steinkruger granted Vranckaert summary judgment on the claims
of express contractual indemnity and passive negligence, but
denied summary judgment on the claims of implied contractual
indemnity, breach of contract, and negligence.
We affirm the decisions of Judge Steinkruger and Judge
Hunt granting summary judgment in Vranckaerts favor on AVCPs
claim of passive negligence. We also affirm Judge Steinkrugers
decision granting summary judgment in Vranckaerts favor on AVCP's
claim of express contractual indemnity. But we reverse Judge
Steinkrugers decision on AVCPs claim of implied contractual
indemnity because Vranckaert is entitled to judgment as a matter
of law on that claim. In addition, to the extent that the breach
of contract and negligence claims seek implied contractual
indemnification for amounts that AVCP paid in settlement to the
two groups of plaintiffs or for AVCPs defense costs in that
litigation, we conclude that Vranckaert is entitled to judgment
in its favor.
II. FACTS AND PROCEEDINGS
In 1991 Vranckaert installed gas kitchen ranges in
twelve apartments under a contract with AVCP to construct new low-
income housing units in Bethel. For purposes of this proceeding,
Vranckaert admits that its workers failed to properly fit the
stoves for propane gas. Beginning in August 1992, tenants made
numerous complaints to AVCP about the stoves and ovens not
working properly. Between May 1994 and September 1997 AVCP
received thirty-five service requests from ten apartments
relating to problems with the stoves and ovens. AVCP generally
responded to these complaints by repairing the stove or oven in
question.
In October and November 1995 several tenants from
different apartments called the Bethel Fire Department
complaining of nausea and headaches and reporting gas odors and
sounding carbon monoxide alarms. The fire department directed
AVCP to repair the gas leaks on November 22, 1995, after it found
excessive carbon monoxide levels in several apartments. AVCPs
executive director, Don Fancher, agreed to install proper gas
orifices in the stoves and carbon monoxide detectors in each
apartment by the following day.
On December 1, 1995, after receiving additional calls
regarding possible gas leaks from tenants, the fire chief wrote a
second letter to Fancher, stating that the fire department had
received three calls from the same apartment reporting unsafe
carbon monoxide levels and had heard no word from AVCP regarding
replacement of the orifices. It is unclear when or if AVCP
replaced the orifices. Through 1997 tenants continued to report
strong propane odors, problems with the operation of their
stoves, and sounding carbon monoxide alarms.
Tenants known as the Nilsson plaintiffs sued AVCP,
claiming injury as a result of exposure to carbon monoxide. AVCP
then filed a third-party complaint against Vranckaert, alleging
that Vranckaert had negligently installed propane stoves and
seeking equitable apportionment of damages. AVCP settled with
the Nilsson plaintiffs after mediation. The Nilsson plaintiffs
were granted leave to amend their complaint to assert a direct
cause of action against Vranckaert after they discovered that
Vranckaert had insurance coverage. Vranckaert subsequently
settled with the Nilsson plaintiffs.
AVCP then sought to amend its third-party complaint
against Vranckaert to include a claim of equitable indemnity.
Judge Dale O. Curda denied AVCPs motion to amend and dismissed
AVCP from the Nilsson suit, reasoning that as Alaska does not
recognize non-contractual indemnity . . . , AVCP-RHA has not
asserted a viable cause of action. Tort Reform focuses on a
relative allocation of the fault between the alleged tortfeasors.
(Internal citations omitted.) Relying on Carriere v. Cominco
Alaska, Inc.,1 Judge Curda determined that a cause of action for
implied indemnity does not exist under Alaska law.
Rather than appeal Judge Curdas decision, AVCP filed a
new lawsuit against Vranckaert. AVCP asserted claims of express
contractual indemnity, implied contractual indemnity, indemnity
for passive negligence, breach of contract, and negligence.
Vranckaert moved for summary judgment. Judge Karen L. Hunt
granted the motion on the ground that the new claims were barred
by res judicata because Judge Curda had already decided the same
indemnity claims. She reasoned:
Although the present complaint gives more
detail about the underlying circumstances,
the events alleged by AVCP in this case are
the same events plead by AVCP in its third-
party complaint in the consolidated [Nilsson]
cases. . . . [A] mere change in the legal
theory asserted as a ground for recovery will
not avoid the preclusive effect of [the]
judgment.[2]
AVCP appeals that decision.
We consolidated AVCPs appeal in the Nilsson case3 with
Vranckaerts petition for review in the Engler case,4 which arose
out of the following facts. A second group of tenants, the
Engler plaintiffs, sued AVCP and Vranckaert after the Nilsson
plaintiffs had settled their claims. The Engler plaintiffs
asserted the same claims that the Nilsson plaintiffs had
asserted: negligence, breach of contract, failure to maintain fit
premises, strict liability, and breach of the implied warranty of
habitability.
AVCP filed a third-party complaint and cross-claim
against Vranckaert, asserting claims of express and implied
contractual indemnity, indemnity for passive negligence, breach
of contract, and negligence. These claims were identical to
those which Judge Hunt ruled were barred by res judicata because
of Judge Curdas decision. Vranckaert settled with the Engler
plaintiffs, and they released Vranckaert from liability. The
Engler plaintiffs released AVCP from liability only to the extent
that AVCP-RHA may be vicariously liable for the actions of
Vranckaert and its partners. AVCP subsequently settled with the
Engler plaintiffs.
Vranckaert then filed a motion for summary judgment.
In ruling on AVCPs third-party complaint and cross-claim against
Vranckaert in the Engler suit, Judge Niesje J. Steinkruger
reached a different conclusion than Judge Hunt on the question of
whether summary judgment should be granted on AVCPs indemnity
claims. Relying on the doctrine of collateral estoppel rather
than res judicata, Judge Steinkruger concluded that Judge Curdas
decision did not bar the express and implied contractual
indemnity claims. She reasoned that these claims are not
identical to equitable indemnity because express and implied
contractual indemnity require proof of a contract, whereas
equitable indemnity does not. However, just as Judge Hunt had
concluded, Judge Steinkruger ruled that the passive negligence
claim was barred because it is the same claim as the equitable
indemnity claim brought in the Nilsson case, albeit [under] a
different name.
Although Judge Steinkruger found that Judge Curdas
decision did not preclude AVCPs express contractual indemnity
claim, she ruled that Vranckaert was entitled to judgment as a
matter of law on that claim. Judge Steinkruger denied summary
judgment on the claims of implied contractual indemnity, breach
of contract, and negligence.
The decisions of Judges Steinkruger and Hunt thus
conflict on the issue of whether AVCPs claims of express and
implied contractual indemnity, breach of contract, and negligence
are barred by Judge Curdas decision. Judge Steinkruger permitted
AVCPs claims of implied contractual indemnity, breach of
contract, and negligence to go forward, in contrast to Judge
Hunts decision that all of AVCPs indemnity claims were barred by
Judge Curdas decision. We granted Vranckaerts petition for
review of Judge Steinkrugers ruling and consolidated it with
AVCPs appeal from Judge Hunts decision.
III. DISCUSSION
A. Standard of Review
The issues before us are (1) whether the doctrines of
res judicata or collateral estoppel bar any of AVCPs claims; and
(2) whether judgment as a matter of law is otherwise proper on
any of AVCPs claims. We review a grant or denial of summary
judgment de novo.5 A moving party is entitled to summary
judgment if no genuine issue of material fact exists and the
movant is entitled to judgment as a matter of law.6 We are not
bound by the reasoning articulated by the superior court and can
affirm a grant of summary judgment on alternative grounds,
including grounds not advanced by the superior court or the
parties.7 The applicability of estoppel principles to a
particular set of facts is a legal question over which we
exercise independent review.8
B. The Doctrines of Res Judicata and Collateral Estoppel
Bar AVCPs Claim of Passive Negligence.
Judge Hunt ruled that AVCPs five indemnity claims were
barred by the doctrine of res judicata because Judge Curda had
already decided the same claims. We have held that [u]nder the
doctrine of res judicata, a judgment in a prior action operates
as a bar to a subsequent action if (1) the prior judgment was a
final judgment on the merits, (2) a court of competent
jurisdiction rendered the prior judgment, and (3) the same cause
of action and same parties or their privies were involved in both
suits.9
Judge Steinkruger held that the doctrine of collateral
estoppel did not bar AVCPs express and implied contractual
indemnity claims but did bar AVCPs passive negligence claim.
Collateral estoppel or issue preclusion bars the relitigation of
an issue where:
(1) the party against whom the preclusion is
employed was a party to or in privity with a
party to the first action; (2) the issue
precluded from relitigation is identical to
the issue decided in the first action; (3)
the issue was resolved in the first action by
a final judgment on the merits; and (4) the
determination of the issue was essential to
the final judgment.[10]
Both doctrines are founded upon the principle that
parties ought not to be permitted to litigate the same issue more
than once and that when a right or fact has been judicially
determined by a court of competent jurisdiction or an opportunity
for such trial has been given, the judgment of the court, so long
as it remains unreversed, should be conclusive upon the parties.11
The earlier judgment in question here is Judge Curdas decision in
the Bethel trial court denying AVCPs motion to amend its
complaint to assert an equitable indemnity claim against
Vranckaert.
The parties do not dispute that the Bethel trial court
is a court of competent jurisdiction, nor do they question
whether Judge Curdas involuntary dismissal of AVCP is a final
judgment. The crux of the dispute before us is whether the
causes of action or issues before Judges Steinkruger and Hunt had
already been litigated before Judge Curda.
Vranckaert argues that all five indemnity claims
asserted by AVCP are barred by the doctrine of res judicata
because they arise out of the same transaction as the equitable
indemnity claim.12 Vranckaert maintains that AVCPs pleadings in
Nilsson indicate that AVCP did not limit itself to claims of
legal indemnity. Rather, Vranckaert argues, AVCPs motion to
amend to include an equitable indemnity claim also contemplated
claims of express and implied contractual indemnity, and Judge
Curda ruled on those claims. Therefore, Vranckaert concludes,
AVCPs contract-based indemnity claims are barred by res judicata.
We conclude that Judge Curda issued a final decision
only on the merits of AVCPs equitable indemnity claim. In ruling
that equitable indemnity is not a viable cause of action, Judge
Curda distinguished the cases cited by AVCP in support of the
viability of its equitable indemnity claim as relying on contract
theory and equitable apportionment. Judge Curda quoted Benner v.
Wichman, in which this court held that despite our rejection of
equitable indemnity in Vertecs, we certainly did not reject
contractual indemnity.13 Judge Curdas citation of contractual
indemnity cases to distinguish the equitable indemnity claim does
not amount to a decision on the merits of the contract-based
indemnity claims. We interpret Judge Curdas decision as merely
noting that while contractual indemnity may constitute a viable
cause of action in Alaska, equitable indemnity cannot. AVCPs use
of the more general term indemnity in its pleadings does not
alter our conclusion that Judge Curda ruled only on the merits of
the equitable indemnity cause of action.
Judge Steinkruger was correct in concluding that AVCPs
passive negligence claim was adjudicated by Judge Curda. She
reasoned:
Since the claim for indemnity for passive
negligence is the same claim as the equitable
indemnity claim brought in the Nilsson case,
albeit [under] a different name, the doctrine
of collateral estoppel should bar this claim,
because the claim was disposed of on its
merits in a court of competent jurisdiction.
And counsel for AVCP conceded at oral argument before this court
that AVCPs passive negligence claim was the same as the equitable
indemnity claim that Judge Curda dismissed.
We also agree with Judge Steinkruger that AVCPs express
and implied contractual indemnity claims are not collaterally
estopped because they do not require relitigation of an issue
identical to those issues resolved by Judge Curda. Express and
implied contractual indemnity claims require proof of a contract
to indemnify, whereas equitable indemnity is based on concepts of
equity.14 Having concluded that only AVCPs equitable indemnity
and passive negligence claims were adjudicated by Judge Curda, we
now turn to an examination of whether summary judgment is proper
on the other four claims on any basis other than collateral
estoppel or res judicata.15
C. Vranckaert Is Entitled to Judgment as a Matter of Law
on AVCPs Claims of Express Contractual Indemnity,
Implied Contractual Indemnity, Breach of Contract, and
Negligence.
1. Express contractual indemnity
Judge Steinkruger granted Vranckaert summary judgment
on AVCPs claim of express contractual indemnity. Judge
Steinkruger reasoned that the contract for the construction of
the Bethel housing units between AVCP and Vranckaert does not
unequivocally provide that Vranckaert agreed to indemnify AVCP
for AVCPs own negligence:
[Paragraph 26 of the contract between
Vranckaert and AVCP] does not indicate, as
AVCP asserts, that Vranckaert agreed to
indemnify AVCP for AVCPs own negligence. . .
.
AVCP nonetheless asserts that there is
still a genuine issue of material fact as to
its negligence against the plaintiffs, and
that it is likely a jury would allocate 100%
of the fault to Vranckaert. While this may
be a potential outcome, it does not change
the fact that Vranckaert already settled with
the plaintiffs for its negligence. Nor does
it change the fact that AVCP has been
released from vicarious liability for
Vranckaerts actions.
We agree that Vranckaert is entitled to judgment on this claim as
a matter of law.
In a construction contract, the unambiguous language of
an indemnity clause as reasonably construed should be given
effect.16 Where, as here, there is no dispute about the
surrounding circumstances of the contract, interpretation of the
language of an indemnity clause is a question of law and
appropriate to determine on summary judgment.17 Paragraph 26 of
the contract between Vranckaert and AVCP provides that the
Contractor, Vranckaert, shall be responsible for all damages to
persons or property that occur as a result of its fault or
negligence in connection with the prosecution of the work . . . .
(Emphasis added.) This provision merely states that Vranckaert
will be responsible for its own fault or negligence, not that it
will indemnify AVCP if AVCP acts negligently.18 Because its fault
or negligence qualified Vranckaerts undertaking, the clause
cannot be read to cover AVCPs negligence. We affirm Judge
Steinkrugers order granting summary judgment to Vranckaert on the
express indemnity claim.
2. Implied contractual indemnity
AVCP also alleges that Vranckaert failed in its implied
duty under the contract to perform the construction contract in a
non-negligent manner. In Fairbanks North Star Borough v. Kandik
Construction & Associates, we concluded that an action for
implied contractual indemnity rests on the principle that a
contract to perform a service contains an 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 indemnitees own participation
in causing the damages precludes recovery.19 Implied contractual
indemnity is grounded on the principle that the indemnitors
agreement to perform a contract necessarily implies an obligation
to perform in a proper manner and to discharge foreseeable
damages resulting to the plaintiff as a result of its breach.20
It is not based on equitable considerations.21
In Vertecs Corp. v. Reichhold Chemicals, a case that
predates the current several liability statute,22 we held that
Alaska does not recognize a cause of action for implied indemnity
between concurrently negligent tortfeasors.23 We rejected
Vertecss argument that the common law would allow indemnity in
any situation wherein one tortfeasors conduct was not as
blameworthy as anothers and it would be just and fair as between
the parties that the entire loss fall upon the indemnitor.24 We
determined that adoption of Vertecss position would impose on
courts the difficult task of determining what cases justify
implied indemnity among concurrently negligent tortfeasors, would
undermine the modern tort law goal of having each tortfeasor pay
for the damages attributable to its own tortious acts, would
discourage settlement, and would be judicially inefficient.25 The
same public policy considerations dictate our conclusion that
AVCP may not recover on a theory of implied contractual indemnity
from Vranckaert; the plaintiffs had fault-based claims pending
against AVCP, and AVCPs settlement was to resolve a dispute about
its own negligence rather than to extinguish Vranckaerts
liability.
Section 22 of the Restatement (Third) of Torts:
Apportionment of Liability (1999) supports our conclusion. It
requires the indemnitee to extinguish the liability of the
indemnitor, by settlement or judgment, to collect indemnity.
Section 22 provides:
(a) When two or more persons are or may be
liable for the same harm and one of them
discharges the liability of another in whole
or in part by settlement or discharge of
judgment, the person discharging the
liability is entitled to recover indemnity in
the amount paid to the plaintiff, plus
reasonable legal expenses, if:
(1) the indemnitor has agreed by
contract to indemnify the indemnitee, or
(2) the indemnitee
(i) was not liable except
vicariously for the tort of the
indemnitor or
(ii) was not liable except as a
seller of a product supplied to the
indemnitee by the indemnitor and
the indemnitee was not
independently culpable.
(Emphasis added.) Comment b to section 22 explains:
[A]n indemnitee must extinguish the liability
of the indemnitor to collect indemnity. The
indemnitee may do so either by a settlement
with the plaintiff that by its terms or by
application of law discharges the indemnitor
from liability or by satisfaction of judgment
that by operation of law discharges the
indemnitor from liability.
(Emphasis added.)
The theory behind these provisions is that the
indemnitee has provided a benefit to the indemnitor by fully
discharging the indemnitors liability, making restitution
appropriate.26 Such a benefit is conferred only if the indemnitee
guarantees that the indemnitor is protected from further claims
by the plaintiffs that the indemnitor is liable.27 To hold that a
party must indemnify another while the party is still liable to
the plaintiffs would lead to the unjust result that the
indemnitor could face double liability.28 It would also eliminate
any incentive for parties to settle since settlement would not
limit the indemnitors exposure.29 The Restatement (Third) of
Torts: Apportionment of Liability 22 and Comment b are
consistent with AS 09.17.080, which provides for the
apportionment of a damages award against a party according to the
factfinders allocation of that partys fault.30
We conclude that AVCPs implied contractual indemnity
claim must fail under our reasoning in Vertecs and under the
Restatement (Third) of Torts 22. To recover damages from
Vranckaert on an implied contractual indemnity theory, AVCP must
not itself have been liable, except vicariously, to the
plaintiffs and must have obtained from the plaintiffs a release
of liability for all direct claims that the plaintiffs had
against Vranckaert. AVCP did not pay the Engler plaintiffs to
settle the Engler plaintiffs claims against Vranckaert. Indeed,
the record indicates that the Engler plaintiffs had already
settled with Vranckaert and had released AVCP from any vicarious
liability claims it was asserting. In their settlement agreement
with Vranckaert, the Engler plaintiffs expressly reserved all
claims which have been made or which may in the future be made
against [AVCP]. Only fault-based claims remained against AVCP at
the time AVCP settled with the Engler plaintiffs. Therefore, the
AVCP settlement included, at least in part, payment in
consideration for the plaintiffs release of claims relating to
AVCPs own negligence.
Neither did AVCPs settlement with the Nilsson
plaintiffs effect a settlement of the claims the Nilsson
plaintiffs had against Vranckaert. The settlement agreement
makes no mention of Vranckaert. The agreement clearly indicates
that its purpose is to settle direct claims asserted by the
plaintiffs against AVCP as a landlord: Despite numerous tenant
complaints and repeated warnings from the Bethel Fire Department,
AVCP-RHA unreasonably and without justification failed to correct
this problem in a timely manner. And even if AVCP had paid
damages to the Nilsson plaintiffs for injuries caused by
Vranckaert, AVCP failed to obtain a release of Vranckaerts
liability from the Nilsson plaintiffs.
Without a release of liability, Vranckaert was left
exposed to pay directly to the plaintiffs its own share of the
damages. Indeed, Vranckaert did subsequently settle with the
Nilsson plaintiffs. If we were to conclude that Vranckaert must
indemnify AVCP, Vranckaert would pay twice for the same injuries
to the same plaintiffs. Because AVCP failed to obtain a release
of liability for Vranckaert and because AVCPs settlements with
both groups of plaintiffs only discharged AVCPs own share of
fault, AVCP is not entitled to implied contractual indemnity.
3. Negligence and breach of contract
AVCP argues that its negligence and breach of contract
claims against Vranckaert are not precluded because they were not
resolved by Judge Curda and are independent of its indemnity
claims. Vranckaert responds that these two causes of action are
indemnity claims in disguise. Therefore, Vranckaert maintains,
the claims are subject to dismissal on summary judgment.
A review of AVCPs third-party complaint and its cross-
claim against Vranckaert in the Engler suit reveals that AVCP
apparently seeks damages only in the amount that it paid in
settlement to the plaintiffs and for the fees and costs it
incurred in defending against the Nilsson plaintiffs claims.
AVCPs prayer for relief in its cross-claim states in full:
1. For indemnification from defendants
Vranckaert/Kuukpik for any damages awarded to
plaintiffs against AVCP-RHA;
2. For indemnification from defendants
Vranckaert/Kuukpik for any settlement amount
paid to plaintiffs as a result of plaintiffs
claims against AVCP-RHA;
3. For indemnification from defendants
Vranckaert/Kuukpik for all fees and costs
incurred by AVCP-RHA in defending against
plaintiffs claims; and
4. For such other and further relief
as the court deems just and equitable.
Similarly, in its complaint against Vranckaert after AVCP was
dismissed from the Nilsson suit, AVCP prays only [f]or
indemnification from defendants for the $850,000.00 settlement
amount paid to the Nilsson plaintiffs as a result of the Nilsson
plaintiffs claims against AVCP-RHA and for indemnification for
all fees and costs incurred by AVCP-RHA in defending against the
Nilsson plaintiffs claims.
In its opposition to Vranckaerts motion for summary
judgment, AVCP alleged that Vranckaert breached both the
contractual standard of care and duty to indemnify AVCP for
damages resulting from Vranckaerts negligent performance of the
contract. To the extent that the claims for breach of contract
and negligence seek to recover from Vranckaert the amount that
AVCP paid in settlement to the Nilsson or Engler plaintiffs or
the fees or costs incurred in defending these lawsuits, the
claims are not permitted.31 As discussed above, under our
reasoning in Vertecs and under the Restatement (Third) of Torts:
Apportionment of Liability 22, AVCPs breach of contract and
negligence claims must fail because they are, in essence, implied
contractual indemnity claims and AVCP failed to demonstrate that
it was without fault and that it settled the claims against
Vranckaert and obtained from the plaintiffs a release of
Vranckaerts liability.
IV. CONCLUSION
We AFFIRM the rulings of Judge Steinkruger and Judge
Hunt that AVCPs claim of passive negligence is precluded because
it is the same claim as the claim of equitable indemnity. We
also AFFIRM Judge Steinkrugers ruling that Vranckaert was
entitled to judgment as a matter of law on AVCPs claim of express
contractual indemnity. Because AVCPs claim of implied
contractual indemnity must fail as a matter of law, we REVERSE
Judge Steinkrugers decision denying summary judgment to
Vranckaert on that claim. Finally, to the extent that AVCPs
remaining claims of negligence and breach of contract seek
damages in the amount that AVCP paid in settlement to the two
groups of plaintiffs or its costs and fees in defending the two
suits by the plaintiffs, these claims are, in essence, implied
contractual indemnity claims. AVCP failed to obtain from the
plaintiffs a release of Vranckaerts liability as part of the
settlement and failed to show that it was not itself at fault.
Therefore, we REVERSE Judge Steinkrugers decision as to the
negligence and breach of contract claims and conclude that
Vranckaert was entitled to judgment as a matter of law. Although
we disagree with Judge Hunt that Judge Curda adjudicated AVCPs
indemnity claims, for the foregoing reasons we AFFIRM Judge Hunts
order granting Vranckaert summary judgment on all five indemnity
claims.
_______________________________
1 823 F. Supp. 680, 688 (D. Alaska 1993).
2 Quoting Donnelly v. Eklutna, Inc., 973 P.2d 87, 91
(Alaska 1999).
3 AVCP Regional Housing Authority v. R.A. Vranckaert Co.,
Supreme Court Case No. S-09872, Superior Court Case No. 3AN-99-
11339 CI.
4 R.A. Vranckaert Co. v. AVCP Regional Housing Authority,
Supreme Court Case No. S-09893, Superior Court Case No. 4BE-99-
0058 CI.
5 United Airlines, Inc. v. Good Taste, Inc., 982 P.2d
1259, 1262 (Alaska 1999); Jackinsky v. Jackinsky, 894 P.2d 650,
654 (Alaska 1995).
6 Alaska R. Civ. P. 56(c); see also Jackinsky, 894 P.2d
at 654.
7 Hoffman Constr. Co. of Alaska v. U.S. Fabrication &
Erection, Inc., 32 P.3d 346, 351 (Alaska 2001).
8 Powers v. United Servs. Auto. Assn, 6 P.3d 294, 297
(Alaska 2000).
9 White v. State, Dept of Natural Res., 14 P.3d 956, 959
(Alaska 2000).
10 Powers, 6 P.3d at 297.
11 Campion v. State, Dept of Cmty. & Regl Affairs, 876
P.2d 1096, 1101 (Alaska 1994) (internal citation omitted).
12 The five indemnity claims that AVCP asserts are:
implied contractual indemnity, express contractual indemnity,
indemnity for passive negligence, breach of contract, and
negligence.
13 874 P.2d 949, 956 (Alaska 1994) (citing Vertecs Corp.
v. Reichhold Chems., Inc., 661 P.2d 619, 625-26 (Alaska 1983)).
14 See Fairbanks N. Star Borough v. Kandik Constr., Inc. &
Assocs., 823 P.2d 632, 636 (Alaska 1991) (holding that implied
contractual indemnity . . . rests on the principle that a
contract to perform a service contains a three-part implied
promise); Heritage v. Pioneer Brokerage & Sales, Inc., 604 P.2d
1059, 1067 (Alaska 1979) (describing express contractual
indemnity as a duty to indemnify [that] arises under contract).
15 The parties dispute whether AVCP was required to bring
all of its indemnity claims when it moved to amend its third-
party complaint in Nilsson. Because we conclude that Vranckaert
is entitled to judgment as a matter of law on AVCPs indemnity
claims, we need not reach this issue.
16 C.J.M. Constr., Inc. v. Chandler Plumbing & Heating,
Inc., 708 P.2d 60 (Alaska 1985); Manson-Osberg Co. v. State, 552
P.2d 654, 659 (Alaska 1976); see also Burgess Constr. Co. v.
State, 614 P.2d 1380 (Alaska 1980).
17 See C.J.M. Constr., 708 P.2d at 63; Earthmovers of
Fairbanks, Inc. v. State, 644 P.2d 238, 239 (Alaska 1982).
18 See City & Borough of Juneau v. Alaska Elec. Light &
Power Co., 622 P.2d 954, 956 (Alaska 1981) (holding that where
the scope of the indemnity requirement is modified by the phrase
resulting from negligence on the part of the [indemnitor], the
phrase cannot reasonably be construed as intending that the
indemnitor indemnify the indemnitee for the indemnitees own
negligence).
19 823 P.2d 632, 636 (Alaska 1991).
20 Fairbanks N. Star Borough v. Kandik Constr., Inc. &
Assocs., 795 P.2d 793, 804 (Alaska 1990) (citing Bear Creek
Planning Commn v. Title Ins. & Trust Co., 211 Cal. Rptr. 172, 178
(Cal. App. 1985)).
21 Id. (quoting Bear Creek Planning Commn, 211 Cal. Rptr.
at 180).
22 AS 09.17.080.
23 661 P.2d 619, 626 (Alaska 1983), superseded on other
grounds by statute as stated in Benner v. Wichman, 874 P.2d 949,
956 (Alaska 1994) (holding that the 1987 ballot initiative did
away with one category of claims contribution. It did not
purport to abolish all claims between defendants and potential
third-party defendants. For example, despite our rejection of
equitable indemnity in Vertecs, we certainly did not reject
contractual indemnity.).
24 Id. at 621.
25 Id. at 624-25.
26 Restatement (Third) of Torts: Apportionment of
Liability 22 Reporters Note cmt. b (1999).
27 Id.
28 Id.
29 Vertecs, 661 P.2d at 625.
30 AS 09.17.080 on [a]pportionment of damages provides:
(a) In all actions involving fault of
more than one person, including third-party
defendants and persons who have settled or
otherwise been released, the court, unless
otherwise agreed by all parties, shall
instruct the jury to answer special
interrogatories or, if there is no jury,
shall make findings, indicating
(1) the amount of damages each claimant
would be entitled to recover if contributory
fault is disregarded; and
(2) the percentage of the total fault
that is allocated to each claimant,
defendant, third-party defendant, person who
has been released from liability, or other
person responsible for the damages unless the
person was identified as a potentially
responsible person, the person is not a
person protected from a civil action under AS
09.10.055, and the parties had a sufficient
opportunity to join that person in the action
but chose not to; . . .
. . . .
(b) In determining the percentages of
fault, the trier of fact shall consider both
the nature of the conduct of each person at
fault, and the extent of the causal relation
between the conduct and the damages claimed.
(c) The court shall determine the award
of damages to each claimant in accordance
with the findings and enter judgment against
each party liable. The court also shall
determine and state in the judgment each
partys equitable share of the obligation to
each claimant in accordance with the
respective percentages of fault as determined
under (a) of this section. Except as provided
under AS 23.30.015(g), an assessment of a
percentage of fault against a person who is
not a party may only be used as a measure for
accurately determining the percentages of
fault of a named party. Assessment of a
percentage of fault against a person who is
not a party does not subject that person to
civil liability in that action and may not be
used as evidence of civil liability in
another action.
(d) The court shall enter judgment
against each party liable on the basis of
several liability in accordance with that
partys percentage of fault.
31 At oral argument before us, counsel for AVCP asserted
that its negligence and breach of contract claims were also
designed to recover damages for AVCPs impugned reputation, the
repair work on the stoves, and the cost of replacing the stoves.
The merits of these potential direct claims are not before us.
