JEFFERSON CITY, Missouri - (Legal Newsline) - The Supreme Court of Missouri reversed the trial court's dismissal of a crane manufacturer's petition for third-party contribution from the maker of the steel used in the part of the crane that failed and caused an accident.
Judge Laura Denvir Stith wrote the Jan. 29 opinion of the Court. The vote was 5-0 with two members not participating.
"In January 2006, the boom on a construction crane that was owned and operated by Jacobsmeyer-Mauldin Construction Company fell and landed on a building at Washington University, damaging both the building and the crane," the opinion states.
"A subsequent investigation concluded that the accident was caused by the failure of the crane's main lift cylinder. Grove U.S. LLC designed, manufactured and sold the crane, allegedly using the steel or steel cylinder provided by U.S. Steel. Grove is a subsidiary of Manitowoc.
"At the time of the accident, Jacobsmeyer was insured by Travelers Property Casualty Company of America. Travelers paid Jacobsmeyer's insurance claims associated with the accident and reached a settlement agreement with Grove under which Grove agreed to pay Jacobsmeyer and Travelers (hereinafter referred to collectively as "Jacobsmeyer") for a majority of their remaining losses associated with the accident.
After Grove failed to make the payments agreed to under the settlement, Jacobsmeyer sued both Grove and its parent company, Manitowoc, for breach of the settlement agreement.
Manitowoc answered, denying liability, and in January 2010 filed a third-party petition asserting claims for contribution and/or indemnity against U.S. Steel. Manitowoc argued that U.S. Steel's predecessor-in-interest, Lonestar Steel, provided the faulty steel cylinder for the crane.
"Manitowoc asserted in the petition that if the trier of fact found it liable to Jacobsmeyer, then Manitowoc was entitled to contribution or indemnity from U.S. Steel because any damages caused by the accident resulted from U.S. Steel's fault in providing defective materials for the crane," the opinion says.
The trial court dismissed Manitowoc's third-party petition with prejudice after U.S. Steel filed a motion to dismiss the petition, arguing that Manitowoc failed to satisfy pleading requirements because it did not admit its own liability as a joint tortfeasor in the third-party petition.
Manitowoc appealed and after the Court of Appeals issued an opinion, the Supreme Court granted transfer.
"Manitowoc argues that the trial court erred in dismissing its petition with prejudice and asserts that a third-party plaintiff is not required to admit fault in its third-party petition. Manitowoc asserts that Rule 55.10 permitted it to deny liability in its answer while also pleading in its third-party petition that if it is liable to Jacobsmeyer, then third-party defendant U.S. Steel is liable to Manitowoc," the opinion says.
"Manitowoc alternatively asserts that even if dismissal were proper, the dismissal should have been without prejudice.
"U.S. Steel argues that Manitowoc was required by Rule 52.11(a), governing third-party practice, to admit its own fault, that its failure to do so should be considered either a jurisdictional error or a ruling against the merits of the third-party petition, and that, therefore, dismissal should be with prejudice.
"First," wrote Stith, "nothing in Rule 52.11 suggests that inadequacies of a third-party pleading constitute a jurisdictional defect or that a failure to follow its requirements should be treated as ruling on the merits of the third-party claim . . . Second, an admission of fault is not required in a third-party petition.
"U.S. Steel nonetheless argues that court of appeals cases have read into third-party practice a requirement that a third-party plaintiff seeking contribution from an alleged joint tortfeasor must admit its fault to the plaintiff to seek contribution from a third-party defendant ..." citing court of appeals cases.
"As U.S. Steel acknowledges, Stephenson and Mid-Continent are court of appeals opinions. They do not bind this Court, which never has addressed the issue whether a third-party plaintiff must admit its own fault to seek contribution from a joint tortfeasor.
"[A] third-party plaintiff is not required to admit its fault in its third-party petition. The third-party plaintiff instead can deny liability in its answer to the plaintiff's claim and plead in its third-party petition that, if it is liable to the plaintiff, then the third-party defendant is liable to the third-party plaintiff, exactly as required by the language of Rule 52.11.
"The trial court erred in dismissing Manitowoc's third-party petition with prejudice. A dismissal for failure to comply with procedural rules is not a dismissal for lack of jurisdiction nor a ruling on the merits of the underlying claim.
"Further, this Court finds that a party seeking contribution or indemnity need not admit its own fault in its third-party petition but rather can deny liability in its answer to the plaintiff's petition and assert in its third-party petition that if it is liable to the plaintiff, then the third-party defendant is liable to it. The judgment is reversed, and the case is remanded."
With the trial court's order dismissing the petition being reversed, the case will go back to the Circuit Court of St. Louis County for further proceedings.