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Dodge City Implement, Inc. v. Board of County Commissioners of the County of Barber

August 24, 2007

DODGE CITY IMPLEMENT, INC. AND JUSTIN L. SLATTERY, APPELLANTS,
v.
THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF BARBER, AND THE MOORE TOWNSHIP, BARBER COUNTY, KANSAS, APPELLEES.



Appeal from Barber District Court; ROBERT J. SCHMISSEUR, judge.

SYLLABUS BY THE COURT

1. A defendant seeking to minimize its liability in a comparative fault situation not involving a chain of distribution or similar commercial relationship must do so by comparing the fault of other defendants pursuant to K.S.A. 60-258a in order to reduce its own share of liability and damages. If the defendant chooses to settle and obtain release of common liabilities involving other parties whom the plaintiff did not sue, the defendant does not have an action for comparative implied indemnity or post-settlement contribution for damages caused by other tortfeasors.

2. Under the facts of this case, the district court properly dismissed the plaintiff's claims of negligence and negligence per se pursuant to K.S.A. 2006 Supp. 12-105b where the plaintiff's notice of claim failed to indicate the name and address of the claimant or the claimant's attorney, the nature and extent of the injury claimed, or the amount of monetary damages sought.

The opinion of the court was delivered by: Caplinger, J.

Affirmed.

Before MCANANY, P.J., GREEN and CAPLINGER, JJ.

This action emanated from the collision of a freight train owned by Burlington Northern and Santa Fe Railway Company (BNSF) and a truck owned by Dodge City Implement, Inc. (DCI) and driven by Justin Slattery. BNSF filed an action in federal court for damages sustained to its engine, train and cargo during the collision. After BNSF eventually settled its claims with DCI, DCI brought a new action in Barber County District Court against Moore Township and the Board of County Commissioners ofthe County of Barber (Barber County) seeking recovery under theories of negligence, implied indemnity, and comparative implied indemnity, based upon alleged negligence in the construction and maintenance of the railroad grade crossing. DCI appeals from the district court's dismissal of its petition for failure to state a claim and failure to provide notice to Moore Township and Barber County pursuant to K.S.A. 2006 Supp. 12-105b.

Factual and Procedural Background

The facts of this case are undisputed. On September 8, 2003, a freight train operated by BNSF struck a truck owned by DCI and driven by its employee, Justin Slattery, at a railroad grade crossing in Moore Township in Barber County. The train derailed causing extensive damage to the engine, train, and cargo, as well as damage to DCI's truck and cargo, and personal injuries to Slattery.

On February 4, 2004, BNSF filed a complaint against DCI and Slattery in the United States District Court for the District of Kansas. Moore Township and Barber County were never joined as defendants in this federal action.

In April 2004, DCI paid BNSF $3 million in full settlement of all claims arising from the accident. The payment represented settlement "of all of [BNSF]'s damages against all parties and persons." However, DCI and Slattery expressly reserved "the right to make a claim against or sue Barber County, Kansas, and/or any person or entity, other than [BNSF] . . . for comparative implied indemnity and any other cause of action that may exist under Kansas law." The next day, BNSF dismissed with prejudice its claims against DCI and Slattery in federal court.

On June 6, 2005, DCI and Slattery filed a petition for damages against Barber County in Barber County District Court; they later added Moore Township as a defendant. DCI and Slattery sought recovery in the amount of $3,092,313.34, representing reimbursement in the amount of the settlement with BNSF as well as their own personal damages. DCI and Slattery asserted claims based on negligence, negligence per se, implied indemnity, and comparative implied indemnity arising out of the negligent construction and maintenance of the grade crossing. Prior to commencing this action, DCI and Slattery sent both Moore Township and Barber County notice of a potential claim purporting to comply with the notice provisions of K.S.A. 2006 Supp. 12-105b.

Both Moore Township and Barber County filed motions to dismiss DCI's petition for failure to state a claim, arguing DCI's claim for comparative implied indemnity was unavailable because neither Moore Township nor Barber County was joined as a defendant in the federal action filed by BNSF. They also argued DCI failed to substantially comply with the notice provisions of K.S.A. 2006 Supp. 12-105b.

Following a hearing, the district dismissed with prejudice all of the claims of DCI and Slattery. The district court reasoned DCI could not maintain its comparative implied indemnity claim because neither Moore Township nor Barber County was named as a defendant or joined in the underlying lawsuit pursuant to K.S.A. 60-258a. Further, the court concluded DCI and Slattery could not maintain an action for negligence or negligence per se because they failed to indicate the amount of monetary damages sought and thus did not substantially comply with the notice provisions of K.S.A. 2006 Supp. 12-105b.

DCI timely appeals the district court's rulings granting the motions to dismiss.

Issues on Appeal

DCI makes two distinct arguments on appeal. First, with respect to its claim of comparative implied indemnity, DCI argues the district court erred in finding DCI was prohibited by controlling Kansas precedent from seeking reimbursement from Barber County and Moore Township for its claim emanating from DCI's voluntary settlement with BNSF.

Second, DCI argues the district court erred in dismissing its action for individual injuries and damages, which amounted to the remaining $92,313.34 of the overall prayer. DCI claims the district court erroneously interpreted K.S.A. 12-105b in finding this claim for direct damages was barred by DCI's failure to substantially comply with that statute.

Standard of Review

In reviewing a district court's grant of a motion to dismiss for failure to state a claim, we must accept the facts alleged by plaintiff as true, along with any inferences that can be reasonably drawn therefrom. We must then decide whether those facts and inferences state a claim based on plaintiff's theory or any other possible theory. Jones v. State, 279 Kan. 364, 366, 109 P.3d 1166 (2005). However, when a motion to dismiss raises an issue concerning the legal sufficiency of a claim and the district court receives and considers matters outside the pleadings, as it did here, the motion is treated as one for summary judgment and disposed of according to K.S.A. 60-256. Davidson v. Denning, 259 Kan. 659, Syl. ¶ 1, 914 P.2d 936 (1996).

Where there is no factual dispute, our review of an order regarding summary judgment is de novo. Roy v. Young, 278 Kan. 244, 247, 93 P.3d 712 (2004).

Dismissal of Comparative Implied Indemnity Claim

First, we must determine whether the district court appropriately concluded that DCI's voluntary settlement of all BNSF's claims relating to the grade crossing accident prohibited DCI from then seeking to collect payment on a theory of "comparative implied indemnity" from Barber County and Moore Township, neither of which were parties to the federal court action, and neither of which participated in the settlement. In resolving this issue, we will closely analyze several cases decided by our Supreme Court: Kennedy v. City of Sawyer, 228 Kan. 439, 618 P.2d 788 (1980); Ellis v. Union Pacific R.R. Co., 231 Kan. 182, 643 P.2d 158 (1982); and Teepak, Inc. v. Learned, 237 Kan. 320, 321, 699 P.2d 35 (1985).

Kennedy v. City of Sawyer

In urging us to find the district court erred, DCI relies primarily upon Kennedy, 228 Kan. 439. There, the plaintiffs brought claims against the city and a city councilman after the plaintiff's cattle died of eating weeds sprayed with herbicide by the councilman on behalf of the city. The city filed a third-party petition pursuant to K.S.A. 60-214(a) for indemnity against the manufacturer of the herbicide, who in turn filed a claim for indemnity under the same statute against the packager of the herbicide. 228 Kan. at 442. The plaintiffs, however, never sought relief from the manufacturer or packager. The district court granted the third-party defendants' motions for summary judgment, and the plaintiffs appealed. While the appeal was pending, the city settled the entire claim with the plaintiffs and obtained a release of all other potentially responsible parties. 228 Kan. at 444-45.

The Supreme Court in Kennedy reversed the dismissal and allowed the city's indemnity action as "a form of comparative implied indemnity." 228 Kan. 440, Syl. ¶ 9. The court held:

"We conclude that now is the proper time under the facts of this case to adopt a form of comparative implied indemnity between joint tortfeasors. When, as here, a settlement for plaintiffs' entire injuries or damages has been made by one tortfeasor during the pendency of a comparative negligence action and a release of all liability has been given by plaintiffs to all who may have contributed to said damages, apportionment of responsibility can then be pursued in the action among the tortfeasors." 228 Kan. 440, Syl. ¶ 9.

DCI suggests the facts of this case mirror those in Kennedy. It points out that BNSF and DCI reached a settlement for BNSF's entire damages, and BNSF released all parties from liability. DCI then proceeded in a separate action against the "tortfeasors" who contributed to BNSF's damages, i.e., Barber County and Moore Township, for apportionment of responsibility.

Ellis v. Union Pacific R.R. Co.

Barber County and Moore Township respond that this case is not controlled by Kennedy, but rather by Ellis v. Union Pacific R.R. Co., 231 Kan. 182, wherein they assert the Kansas Supreme Court expressly disapproved application of Kennedy to circumstances similar to those in this case.

The facts in Ellis are very similar to those here. In Ellis, the plaintiff sued the railroad for damages arising out of a collision between the plaintiff's vehicle and a train. 231 Kan. at 183. Pursuant to K.S.A. 60-258a(c), the railroad joined several governmental entities, including two townships and a county, but the plaintiff did not assert any claims against these entities. The railroad then settled the case with the plaintiff and obtained an agreement from the plaintiff that included a release of the governmental entities and a promise by plaintiff to cooperate with the railroad in the prosecution of any claim for indemnity or contribution. After approval of the settlement, the railroad attempted to pursue a claim in the same action for comparative implied indemnity against the ...


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