Kentucky is no stranger to indemnity claims, but how does a Kentucky court reconcile the conflict between the state apportionment statute and the common law principle of implied equitable indemnity? Equally important, how can one defend against such a claim if the apportionment statute does not protect you? Attorney Sky Smith of Rendigs, Fry, Kiely & Dennis LLP examines this issue and the "case within a case" strategy for defending against implied indemnity claims in Kentucky.  Mr. Smith writes:

“Under Kentucky law, common law indemnity remains available to one exposed to liability because of the wrongful acts of another with whom which he is not in pari delicto.  To state a cause of action for indemnity in Kentucky, a party must be able to prove the following elements:  1) he is subject to liability, but 2) he is exposed to such liability as a result of the actions of another person and that 3) the other person should as a matter of public policy in law or equity be required to make good the party's loss.

“Successful implied indemnity actions fall into two categories: (1) Where the party claiming indemnity has not been guilty of any fault, except technically, or constructively, as where an innocent master was held to respond for the tort of his servant acting within the scope of his employment; or (2) where both parties have been at fault, but not in the same fault, towards the party injured, and the fault of the party from whom indemnity is claimed was the primary and efficient cause of the injury (passive negligence v. active negligence distinction).

“KRS Section 411.182 provides that courts are required to instruct the jury to apportion liability to the parties of the case, including plaintiffs, defendants, and third-party defendants, and to parties who have settled or otherwise bought their peace by an agreement described in subsection 4 [of the statute]. Barnes v. OwensCorning Fiberglas Corp., 201 F.3d 815, 823 (6th Circuit 2000).  . . .

“The enactment of KRS 411.182 would logically make implied indemnity claims obsolete under Kentucky law, right? Wrong. Interestingly enough, the dissent in the Kentucky Supreme Court case of Degener v. Hall Contracting Corporation makes this very case:  ‘In this century, Kentucky tort law requires tortious parties to pay for their share of the plaintiff's damages, and only their share of the plaintiff's damages. Equitable implied indemnity is very much an anachronism, and KRS 411.182 properly rendered it extinct.’

“Yet despite a very lengthy, and well reasoned dissent, the majority in Degener took (in this author’s view) the altogether nonsensical approach that the common law right of indemnity exists distinct and apart from any rights of apportionment under KRS 411.182 (apportionment statute). Therefore, a party who is apportioned fault, may nevertheless maintain an implied indemnity action against other apportioned parties if he can prove that his negligence was passive and the others negligence was active and primary.”

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