Can joint tortfeasors seek contribution after settling with plaintiffs? National Service Industries, Inc. v. B.W. Norton Mfg. Co, Inc. Explained

In National Service Industries, Inc. v. B.W. Norton Mfg. Co, Inc., the Utah Court of Appeals addressed whether a tortfeasor can pursue contribution or indemnity claims against joint tortfeasors after settling with the plaintiff. The answer is a definitive no under Utah’s Liability Reform Act.

Background and Facts

Sherman Packer was injured when pressurized degreaser soap struck his eye. He sued both NSI (who sold the product) and Norton (who manufactured the container). During the litigation, Norton obtained summary judgment against Packer, with the court finding Norton bore no liability. NSI lacked standing to oppose Norton’s motion because it failed to file a cross-claim. NSI subsequently settled with Packer and then filed a separate action against Norton seeking contribution, reimbursement, and implied indemnity.

Key Legal Issues

The central question was whether NSI could bring a separate action against Norton to recover a portion of the settlement amount based on Norton’s alleged proportion of fault. Norton argued that such claims were essentially contribution claims prohibited by the Utah Liability Reform Act.

Court’s Analysis and Holding

The court affirmed summary judgment for Norton, holding that the Liability Reform Act’s prohibition on contribution claims prevents any separate action seeking to redistribute loss based on fault allocation. The Act abolished joint and several liability, making defendants liable only for their proportion of fault. This eliminated the need for contribution suits, as no party can be held liable beyond their degree of fault.

Importantly, the court refused to allow parties to circumvent the contribution ban by relabeling claims as “reimbursement” or “implied indemnity.” The substance, not the label, determines whether an action seeks impermissible contribution.

Practice Implications

This decision establishes that apportionment cross-claims between joint tortfeasors are effectively mandatory in the underlying action. Failure to file such cross-claims waives the right to seek contribution later. Practitioners defending joint tortfeasors must file cross-claims against co-defendants to preserve apportionment rights and maintain standing to oppose summary judgment motions by other defendants.