This case concerns the grounds for common-law indemnity.
Solomon did water/sewer construction on Hatch’s property. The work caused run-off that damaged the property of a neighbor, who sued them both. Settlement talks ensued; the statute of limitations ran but talks continued. Hatch settled the case. Hatch then brought this action against Solomon for indemnity. The parties filed cross-motions for summary judgment; the trial court gave judgment for Hatch and against Solomon. Solomon appeals.
The Court of Appeals affirms. Solomon’s argument was that since the statute had run Hatch hadn’t satisfied a common obligation. The court distinguishes to different situations: where one pays a common obligation that should have been paid by the other and where one pays a common obligation created by the fault of the other. Under the Restatement, in the second situation – which applies here – one who justifiably believes himself under a duty to pay the underlying claim can get indemnity even if the other party had a defense to it. Hatch maintained that a duty still existed because the case could have been re-filed and pulling out of the settlement would have triggered further litigation; Solomon didn’t dispute that and so the court accepts it (though, reading between the lines, seems to realize that it’s a bit dubious).
Solomon also argued that Hatch can’t get indemnity because it, too, was at fault: it didn’t get the required ADEQ approval for the work and so was negligent per se. But while failure to get the permit might be “but for” causation the only proximate cause of the damage was Solomon’s sloppy work. Hatch’s failure to get approval didn’t cause that (which is what the court means although at one point it phrases things, if not backwards, at least a trifle sideways).
We omit one or two minor arguments that were strictly fact-related.