USLAW-Magazine_FallWinter2018

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