Dow Corning Corp. v. Hair Replacement Centers Inc.
Opinion of the Court
MEMORANDUM
Hair Replacement Centers, Inc. (“HRC”) appeals the district court’s grant of summary judgment to Dow Corning Corporation (“DCC”), which held that DCC was not required to equitably indemnify HRC for the portion of HRC’s tort settlement attributable to non-economic damages. We affirm.
Under California law, HRC is entitled to equitable indemnity if it had “a reasonable belief’ that settlement was necessary, “even though it develops that [it] in fact had no interest to protect.” Aetna Life & Casualty Co. v. Ford Motor Co., 50 Cal.App.3d 49, 122 Cal.Rptr. 852, 854 (1975). HRC need not prove its own liability, Mullin Lumber Co. v. Chandler, 185 Cal.App.3d 1127, 230 Cal.Rptr. 122 (1986), but indemnity is unavailable if HRC “faced neither actual, potential nor reasonably apparent liability,” Aetna, 122 Cal.Rptr. at 855. The question is whether HRC might have been held hable for DCC’s liability under either strict liability or negligence.
As a matter of California law, HRC could not have been held liable under strict liability. California “[c]ourts have not extended the doctrine of strict liability to transactions whose primary objective is obtaining services. [They] have also declined to apply strict liability where the transaction’s service aspect predominates and any product sale is merely incidental
Similarly, HRC was not exposed to liability for non-economic damages arising from DCC’s alleged negligence. California law provides that: “In any action for personal injuiy, property damage, or wrongful death, based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint.” Cal. Civ.Code § 1431.2(a) (West Supp. 2006). As the California Court of Appeal held in Union Pacific Corp. v. Wengert, 79 Cal.App.4th 1444, 95 Cal.Rptr.2d 68, 71 (2000): “joint liability is restricted to economic damages, and the right to seek indemnity after settlement is correspondingly limited.” Because of section 1431.2(a), settling parties
could never be held liable for ... non-economic damages insofar as they were caused by [the non-settling party’s] negligence. Therefore, they could not have reasonably believed they were protecting their own interests when they purported to settle all the [injured party’s] claims.
Since HRC was never at risk for being held liable for DCC’s liability for non-economic damages, under either strict liability or negligence theories, HRC’s equitable indemnity claim against DCC for such damages fails.
AFFIRMED.
This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
Reference
- Full Case Name
- In re DOW CORNING CORPORATION. Dow Corning Corporation v. Hair Replacement Centers Inc.
- Status
- Published