La Fountain v. SEARS, ROEBUCK AND CO.
680 F. Supp. 251, 6 U.C.C. Rep. Serv. 2d (West) 1091, 1988 U.S. Dist. LEXIS 2338 (1988)
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Rule of Law:
A seller held liable for breach of implied warranty due to a defective product is entitled to common-law indemnification from the product's manufacturer, even if the manufacturer was not found negligent, because the seller's liability arises by operation of law rather than its own active fault.
Facts:
- Plaintiffs purchased a hammock, which included chains and 'J' hooks for installation, from retailer Sears Roebuck and Co.
- Klapat Industries Inc. had supplied the hammock set to Sears.
- Hindley Manufacturing Company manufactured the 'J' hooks and sold them to Klapat.
- On July 20, 1985, plaintiff Alex La Fountain installed the hammock by inserting the 'J' hooks into two trees.
- While the plaintiffs were lying in the hammock, one of the 'J' hooks allegedly opened, causing the chain to slip out.
- The hammock fell, and the plaintiffs suffered injuries as a result.
Procedural Posture:
- Plaintiffs filed suit in district court against Sears (retailer), Klapat (supplier), and Hindley (manufacturer) for negligence and breach of warranty.
- Defendants Sears and Klapat filed crossclaims against Hindley, seeking indemnification.
- At the close of proofs, the court granted a directed verdict in favor of Sears and Klapat on the plaintiffs' negligence claim.
- The court also granted a directed verdict for all defendants on the plaintiffs' express warranty claim.
- The case went to a jury on the remaining claims, which found Hindley was not negligent.
- The jury found in favor of the plaintiffs against all three defendants on the claim of breach of implied warranty and awarded a judgment of $161,000.
- Following the verdict, cross-plaintiffs Sears and Klapat moved for a directed verdict on their indemnification claim against Hindley.
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Issue:
Is a seller, held liable for breach of implied warranty solely due to its role in the chain of distribution, entitled to common-law indemnification from the manufacturer of the defective product, even when the manufacturer was also found not to be negligent?
Opinions:
Majority - Duggan, District Judge.
Yes. A seller whose liability for a defective product arises by operation of law is entitled to indemnification from the manufacturer. The court distinguished between liability based on negligence, which focuses on a defendant's unreasonable conduct, and liability for breach of implied warranty, which focuses on the fitness of the product itself. The jury's verdict established that the 'J' hook was a 'defective product' because it was not reasonably fit for its intended use. Sears' and Klapat's liability was imposed by law simply because they were in the chain of distribution; they were free from any 'active fault' as the court had already directed a verdict in their favor on the negligence claim. Common-law indemnity is an equitable principle that allows a party held vicariously liable to seek restitution from the party whose wrongful act—in this case, manufacturing the defective product—caused the liability. Therefore, Hindley, as the manufacturer of the defective hook, must indemnify Sears and Klapat.
Analysis:
This opinion clarifies the application of common-law indemnification in product liability cases, reinforcing the critical distinction between negligence and breach of implied warranty theories. The decision establishes that manufacturing a defective product is a sufficient 'wrongful act' to trigger an indemnification obligation, even without a finding of negligence. This provides a clear path for retailers and distributors, who are held liable by operation of law, to shift the ultimate financial responsibility back up the supply chain to the manufacturer who created the defect. It solidifies the principle that liability follows the party most responsible for the product's condition.
