OR Case Update: Common-Law Indemnity for Negligence (Probably) Obsolete

From the desk of Smith Freed Eberhard: Although comparative fault and common-law indemnity have coexisted in Oregon since 1971, the Supreme Court has stated that common-law indemnity is not compatible with comparative negligence when both are plead simultaneously. In many instances, negligence claims trigger the pleading of third party claims that include both statutory contribution and common-law indemnity. If common-law indemnity is abolished for these types of actions, it will certainly simplify some aspects of third-party practice.

Claims Pointer: The Oregon Supreme Court held in this case that one defendant cannot recover from another for common-law indemnity when a jury had allocated fault such that the defendant seeking indemnity is not liable to the plaintiff in the first place. The most interesting part of this case is that the opinion states without reservation that common-law indemnity in negligence actions has been superseded by Oregon’s comparative fault system. This was not a conclusion that the court needed to make to resolve the issues in this case. Whether lower courts rely on this case as precedent remains to be seen. We anticipate that this case will generate increased motion practice where indemnity is involved. We will keep you updated on future cases and suggest that you use it to your advantage when possible.

Eclectic Investment, LLC v. Patterson, 357 Or 25 (2015).

Eclectic Investment, LLC hired a general contractor to expand its parking lot. In order to enlarge the parking lot, the contractor needed to remove dirt from the adjacent hillside. Neither the contractor nor Eclectic applied for necessary excavation permits before beginning work. The contractor later applied for a permit, which Jackson County (the County) denied. The contractor reapplied and the County granted a provisional permit pending final approval. After a site visit, county inspectors were concerned that the planned retaining wall would not adequately hold back the...

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