In Oregon, a factor in any common law indemnity claim is the evaluation of, as between the two parties, which party’s negligence was active and primary versus passive and secondary. How that test or factor is applied to any particular set of facts, however, varies on a case by case basis. A recent decision by the Oregon Court of Appeals concluded that primary and secondary liability are relevant considerations, but are not always dispositive.
The case, Eclectic Investment, LLC v. Patterson, 261 Or app 457 (2014), involved a suit by one company against an excavation company, a municipal county, and two private individuals. The excavation company had performed excavation on the plaintiff’s property after receiving a permit from the county. The property later suffered damage allegedly from the excavation.
As between the parties, the jury allocated fault as follows: 55 percent to the plaintiff, 7 percent to the county, 4 percent to the excavator, and 34 percent to the private individuals. The county sought to obtain indemnity from the excavator on the basis that the county’s role was passive and secondary and the excavator’s was active and primary. The Court of Appeals rejected a purely formulaic application of the active versus passive dichotomy and instead concluded that the dichotomy was “relevant but not dispositive. . . .” The Court explained that “the question appears ultimately to be one of equity . . . whether the defendant should have discharged the obligation rather than the plaintiff.” Under the facts of this case, the Court concluded, as a matter of equity the county was not entitled to indemnity from the excavator given relatively similar fault as determined by the jury.
Link to opinion