Law School Case Brief
Price v. Ctb, Inc. - 168 F. Supp. 2d 1299 (M.D. Ala. 2001)
Under the concept of implied contractual indemnity, Alabama courts recognize that a manufacturer of a product has impliedly agreed to indemnify the seller when (1) the seller is without fault, (2) the manufacturer is responsible, and (3) the seller has been required to pay a monetary judgment.
Plaintiff filed a third party complaint against defendant, alleging breach of warranty, violation of the Alabama Extended Manufacturer's Liability Doctrine, and common law indemnity. The claims were based on alleged defective design of nails used in construction of chicken houses. Defendant argued that it was improperly impleaded under Fed. R. Civ. P. 14 or that the complaint was barred by the equitable doctrine of laches. Defendant argued that propriety of application of Rule 14 depended on the existence of a right to indemnity under substantive law.
May a defendant to a defective construction claim implead a third party manufacturer for the materials used in the construction?
The court found the equitable doctrine of implied contractual indemnity provided plaintiff a cause of action against defendant. The court noted that whether plaintiff would be able to recover depended on plaintiff's being "without fault," which was irrelevant for purposes of the instant motion. The court also found that plaintiff's claim was not barred by the doctrine of laches. Defendant failed to show detriment caused to it by plaintiff's failure to properly implead it until almost one year after the original suit was filed. Further, the doctrine did not apply absent indicia of plaintiff's culpability.
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