Dzemila Heco, Kenan Heco and Emir Heco v. Foster Motors, Midstate Dodge, LLC and Johnson Controls, Inc.

Summary

The Vermont Supreme Court affirmed judgment for Johnson Controls, Inc. on Midstate Dodge, LLC’s cross-claim for equitable indemnification arising from a personal-injury settlement. The court held that Midstate could not obtain indemnity because the settlement discharged potential vicarious liability attributable not only to Johnson Controls but also to Chrysler, and Midstate therefore could not compel Johnson Controls to reimburse the settlement. The court affirmed on an alternative rationale from that relied upon by the trial court.

Holdings

1. Midstate could not recover equitable indemnity from Johnson Controls because equitable indemnity is available only when the indemnitee's liability is vicariously derivative of the indemnitor's conduct and the indemnitee is not independently culpable. Midstate's settlement discharged potential vicarious liability arising from Chrysler's conduct as well as JCI's conduct, so Midstate could not compel JCI to reimburse the settlement.
2. The court did not decide whether an indemnitee invoking common-law equitable indemnity must extinguish the indemnitor's liability to the plaintiff, because the judgment could be affirmed on the narrower ground that Midstate was independently culpable or potentially liable for conduct attributable to Chrysler.

Questions Presented

1. Whether Midstate could obtain common-law equitable indemnification from Johnson Controls after settling claims that included alleged liability arising from Chrysler's conduct as well as Johnson Controls' conduct.
2. Whether an indemnitee seeking equitable indemnity must extinguish the indemnitor's liability to the injured plaintiff before recovering indemnity.

Disposition

affirmed