Does Common Law Contribution and Indemnity Still Exist?

In turn, District Owners sued the designers and builders of the parking deck and retaining wall and brought them into the lawsuit as third party defendants. District Owners alleged that if it was liable for Mr. Corbett’s injuries, then the designers and builders of the parking deck and retaining wall should also be held liable under theories of liability known as common law indemnity and common law apportionment.

The third party defendants then filed motions to dismiss and argued that Georgia’s 2005 apportionment statute, O.C.G.A. § 51-12-33 barred District Owners’ claims. The trial court agreed and granted the dismissal of the builders and designers of the parking deck. District Owners appealed that decision to the Georgia Court of Appeals. We represent a defendant who was not involved in the appeal.

The Court of Appeals explained that since the enactment of the 2005 apportionment statute, Georgia law only recognizes two forms of indemnity: 1) contractual indemnity and 2) vicarious liability.  Contractual indemnity arises when one party has agreed to pay a judgment against another party. Vicarious liability arises from a principal-agent relationship recognized by the law, such as employer-employee relationships. The Court of Appeals held that because District Owners did not allege either of these forms of indemnity, it could not recover against the third party defendants under common law indemnity.

The Court of Appeals also held that the apportionment statute barred District Owners’ claim for common law apportionment. Based on a close reading of the apportionment statute and prior cases interpreting that statute, the Court found that the legislature intended to eliminate common law apportionment and, instead, allow the jury to assign percentages of fault to parties and nonparties. District Owners has indicated that it intends to petition the Georgia Supreme Court for review of the decision.

Interestingly, the Court of Appeals called into question a prior 2010 opinion, Murray v. Patel, 304 Ga. App. 253 (2010). In that case, the Court of Appeals reversed after the trial court dismissed a third party complaint for contribution.  The court in Murray held that there was “no authority in support of the argument” that O.C.G.A. § 51-12-33 had abolished contribution claims. The District Owners Court stated that it was “dubious as to the extent of Murray’s continuing precedential value” on account of the Georgia Supreme Court’s more recent holding that “O.C.G.A. § 51-12-33 supplanted claims for common law contribution and apportionment.”

In spite of the District Owners decision, the state of the law for suits involving multiple tortfeasors and third party actions is still somewhat unsettled, especially in light of the case of Zurich Amer. Ins. Co. v. Heard, an opinion released just a few months ago. In that case, the Court of Appeals stated that the right of contribution between multiple defendants is only eliminated after the trier of fact, usually the jury, apportions damages between the parties. Even though the Zurich opinion appears to give the defendant the option of settling with the plaintiff and then going after the other defendants for contribution, this most recent District Owners case raises some questions about that strategy.

However, the District Owners decision appears to make it clear that a defendant headed for trial who wants another party to step into its shoes for purposes of a judgment will need to have a contractual agreement for indemnity or some basis for asserting vicarious liability. Otherwise, a defendant has the option to file a notice of non-party fault prior to trial and convince the jury to apportion fault to the non-party.

Please let us know if we can answer any questions or if you would like a copy of this opinion.

David Sawyer and Michael Rust

About the Author

Michael Rust graduated from Emory University in 1980 and Emory University School of Law in 1983 where he was Notes and Comments editor of the Emory Law Journal (Law Review). Since that time, he has maintained an active trial practice in the state of Georgia both in State and Federal Courts. Mr. Rust teaches litigation as part of Emory University School of Law’s annual Trial Practice Program. He has received AV rating from Martindale Hubble, the highest rating afforded to lawyers by their peers.