USLAW-Magazine_FallWinter2018
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U S L A W www.uslaw.org 3 1<br />
demnitor and the indemnitee.<br />
The third element seems at first look to<br />
be the easiest to satisfy. However, case law<br />
contains several examples of instances<br />
where relationships are too attenuated to be<br />
considered "special." Consider the case of<br />
a defendant car that rear ends the plaintiff<br />
car only because the defendant car was<br />
struck first by a tractor trailer behind it.<br />
The plaintiff car has a viable personal injury<br />
claim against the defendant car but the defendant<br />
car may not seek equitable indemnification<br />
from the tractor trailer due to the<br />
absence of a special relationship. Of<br />
course, the defendant car may have defenses<br />
it presents in the case brought by the<br />
plaintiff car, and it may also have personal<br />
injury and property damage claims against<br />
the tractor trailer for its own damages, but<br />
no right to indemnity exists.<br />
WHOSE CASE AM I ARGUING?<br />
One of the difficulties associated with<br />
trying the indemnity case is living within the<br />
evidentiary confines you may have created<br />
while defending against the first party plaintiff’s<br />
claim. At times, you may feel as if you<br />
are talking out of both sides of your mouth.<br />
As a primary defendant, your defense strategy<br />
involves highlighting the plaintiff’s failure<br />
to satisfy the elements of the causes of<br />
action which have been pled. You may also<br />
raise certain affirmative defenses that further<br />
assist in dismantling the plaintiff’s case.<br />
Once you settle a case as the primary<br />
defendant and then pursue an indemnitor<br />
in a third-party claim or severed cross-claim,<br />
the well-crafted defense record you established<br />
to chisel away the plaintiff’s claim<br />
may now return to haunt you. As a thirdparty<br />
plaintiff or cross-claimant, you will<br />
now be required to “stand in the shoes” of<br />
the plaintiff and prove your case against the<br />
third-party defendant. Because an essential<br />
element of equitable indemnity is proving<br />
that an act of the third-party defendant<br />
(rather than your own) caused injury to the<br />
plaintiff, you are essentially arguing the<br />
plaintiff’s case you just recently resisted.<br />
While alternative argument/pleading<br />
is certainly appropriate in the indemnity<br />
context, your witnesses’ deposition testimony<br />
from the plaintiff’s case may include<br />
prior inconsistent statements which may be<br />
used to impeach any contradictory statements<br />
made in the prosecution of the thirdparty<br />
claim. Experts may be forced to take<br />
contrary positions and so it may be necessary<br />
to retain new experts for the third-party<br />
case to make the plaintiff’s case. Suddenly,<br />
your most favorable witnesses may be those<br />
whom the plaintiff would have called had<br />
her case gone to trial. (In a contribution action,<br />
you may even need to call as a witness<br />
the plaintiff’s attorney to establish that the<br />
settlement was not excessive.)<br />
BENCH OR JURY<br />
Whether the indemnity case should be<br />
tried before a judge only or a jury is a nuanced<br />
inquiry. If the indemnity claim is<br />
based on a contractual indemnity provision,<br />
factual questions may exist which need to<br />
be established by a jury. There may be questions<br />
concerning whether certain contingencies<br />
within the provision are met (e.g. if<br />
indemnity is permitted except in the case of<br />
the indemnitee’s own negligence and the<br />
jury is needed to determine if the indemnitee<br />
was negligent). Of course, the parties<br />
can certainly waive their right(s) to a jury<br />
trial and allow the judge to conduct a bench<br />
trial.<br />
Equitable indemnity cases are more<br />
complicated. The very reference to equity<br />
suggests that the matter should be handled<br />
entirely by the judge. However, certain factual<br />
questions, including the question of<br />
whether the indemnitee has successfully<br />
proved the plaintiff’s negligence claim, may<br />
warrant jury involvement in some jurisdictions.<br />
Perhaps the business versus business<br />
paradigm typically seen in indemnity cases<br />
is the practical reason these often dry disputes<br />
are heard exclusively by the bench.<br />
PRESENTATION OF THE CASE<br />
If the parties agree — or the court orders<br />
— that the case is one in which no<br />
questions of fact exist or one that should be<br />
heard exclusively by a judge, the indemnitee<br />
will probably begin with a short opening<br />
statement, shorter and more technical than<br />
that which would have typically been provided<br />
to the jury. The indemnitor will then<br />
respond with an opening of its own.<br />
The indemnitee then begins the presentation<br />
of witnesses. While a jury trial involves<br />
the presentation of live witnesses,<br />
except in the cases of medical providers or<br />
unavailability, this is less necessary in a<br />
bench trial. The litigation of the plaintiff’s<br />
claim has likely yielded a number of deposition<br />
transcripts, which might be brought<br />
to court for the trial of the indemnity case.<br />
With advance approval from the judge, the<br />
parties might agree to present witnesses entirely<br />
by deposition. Indeed, because the<br />
judge’s decision will eventually come in the<br />
form of a lengthy, reasoned order with findings<br />
of fact and conclusions of law, she may<br />
appreciate the collection of transcripts to<br />
review later in chambers while drafting her<br />
order. Of course, if a witness whose testimony<br />
is necessary at trial was never deposed,<br />
live testimony may be the only<br />
available option.<br />
The civil rules do not prohibit a motion<br />
for judgment as a matter of law (JMOL<br />
or “directed verdict”) in a bench trial. For<br />
this reason and for appellate purposes, the<br />
indemnitor may wish to make the motion at<br />
the close of the indemnitee’s case in chief.<br />
It is unlikely that this motion will be granted<br />
for the same reason the court should not<br />
decide a motion for summary judgment<br />
until both sides have presented arguments.<br />
Because indemnity claims are uniquely<br />
weighted toward the law, the judge is likely<br />
to hear all sides before issuing JMOL.<br />
Mid-trial motions will be followed by<br />
the indemnitor’s presentation of witnesses<br />
for its case in chief. Again, for appellate<br />
purposes the indemnitee should renew its<br />
motion for JMOL and the indemnitor may<br />
make a similar motion. Especially if depositions<br />
are presented and the judge has not<br />
had time to review the transcripts, these motions<br />
will likely be denied. At this point,<br />
both sides may also choose to make brief<br />
closing arguments.<br />
CONCLUSION<br />
As the exposure in personal injury litigation<br />
increases due to health care costs, expert<br />
involvement, and other elements,<br />
claims managers have looked for risk transfer<br />
opportunities to soften the impact of settlement<br />
figures, attorney's fees and costs.<br />
Indemnity cross-claims and third-party<br />
claims continue to serve as a viable vehicle<br />
for this risk transfer.<br />
Mark Barrow is a founding<br />
member of Sweeny, Wingate<br />
& Barrow, P.A. and a former<br />
board member of<br />
<strong>USLAW</strong>. For 30 years, he<br />
has tried cases throughout<br />
South Carolina’s state and<br />
federal courts and has argued<br />
before the state appellate courts and the<br />
Fourth Circuit Court of Appeals. He maintains<br />
a diverse litigation practice.<br />
Ryan Holt joined Sweeny,<br />
Wingate & Barrow, P.A.<br />
after a clerkship on South<br />
Carolina's circuit court.<br />
He has tried cases in state<br />
and federal court and argued<br />
before the State's court<br />
of appeals. He practices<br />
mostly in the area of retail claims and has represented<br />
grocery stores, hotels, restaurants, shopping<br />
centers and other retailers.