by Andrew A. Beerworth, Esq.
Sellers Beware:
Vermont Retailers Have Limited Recourse Against Manufacturers
of Defective Products after Heco v. Foster Motors
Introduction
In most U.S. jurisdictions, one who is liable for negligence generally has a right
to seek contribution from a tortfeasor who
was also at fault for the plaintiff’s injury.,
Contribution allows a defendant to recoup
the amount of any settlement or judgment
that exceeds that defendant’s comparative
share of responsibility. This equitable sharing of the loss among defendants is separate and distinct from the right of indemnity, which allows a defendant to shift the
entire liability for the loss to the indemnitor.
For well over a century the Vermont Supreme Court has enforced a categorical rule
against contribution as a matter of common
law and, although most states have statutes modeled on the Uniform Contribution
Among Tortfeasors Act (UCATA), Vermont’s
General Assembly has not seen fit to supplant the common law with a statutory right
of contribution. The Court has, however,
historically recognized a right of implied
indemnity as an exception to the no-contribution rule. Under the implied indemnity doctrine, a defendant (indemnitee) who
was negligent in failing to discover an unreasonably dangerous condition or defect,
but who did not actually create the condition or defect, may shift the entire liability to the “primarily responsible” party (indemnitor) who did create the injury-causing
hazard. In this way, implied indemnity mitigates the harsh effects of a common law
rule that often forces “singled out” defendants to pay more than their fair share of a
judgment or settlement.
In product defect cases, implied indemnity allows a seller to seek indemnity from the
manufacturer even where the injured party alleges that the seller is independently
negligent for having failed to discover the
defect. In Heco v. Foster Motors, the Vermont Supreme Court inexplicably abandoned this longstanding principle and held
that sellers who are “independently culpable” (i.e., negligent) in any degree are
barred from seeking indemnity for injuries caused by defective products.1 Under
Heco, only “innocent” sellers—those who
are not themselves negligent but are merely vicariously liable for the manufacturer’s
wrongdoing based exclusively on their status as sellers of the product—are entitled
to indemnity. In the absence of clarification
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