Indemnity After Settlement In California

"Equitable indemnity, like subrogation, is not available to a volunteer. It extends to those who pay in performance of a legal duty in order to protect their own rights or interests. . . . However, one acting in good faith in making payment under a reasonable belief that it is necessary to his protection is entitled to indemnity or subrogation, even though it develops that he in fact had no interest to protect. . . ." (Aetna Life & Cas. Co. v. Ford Motor Co. (1975) 50 Cal. App. 3d 49, 52-53 [122 Cal. Rptr. 852], citations omitted; accord, Mullin Lumber Co. v. Chandler (1986) 185 Cal. App. 3d 1127, 1133 [230 Cal. Rptr. 122].) It is well established that the right to indemnity flows from payment of a joint legal obligation on another's behalf. ( Civ. Code, 1432; Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994) 8 Cal. 4th 100, 114 [32 Cal. Rptr. 2d 263, 876 P.2d 1062]; Children's Hospital v. Sedgwick (1996) 45 Cal. App. 4th 1780, 1787 [53 Cal. Rptr. 2d 725]; GEM Developers v. Hallcraft Homes of San Diego, Inc. (1989) 213 Cal. App. 3d 419, 430-431 [261 Cal. Rptr. 626]; Woodward-Gizienski & Associates v. Geotechnical Exploration, Inc. (1989) 208 Cal. App. 3d 64, 68-69 [255 Cal. Rptr. 800].) Before the enactment of Proposition 51, a defendant who settled the plaintiff's entire claim was entitled to seek indemnification from concurrent tortfeasors for its payment of their joint obligation to the plaintiff. (See Evangelatos v. Superior Court (1988) 44 Cal. 3d 1188, 1197-1198 [246 Cal. Rptr. 629, 753 P.2d 585]; 6 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, 1095, pp. 507-509; id. (1999 supp.) p. 270.) Now, however, joint liability is restricted to economic damages, and the right to seek indemnity after settlement is correspondingly limited. (Cf. Aetna Health Plans of Cal., Inc. v. Yucaipa-Calimesa Joint Unified School Dist. (1999) 72 Cal. App. 4th 1175, 1193-1194 [85 Cal. Rptr. 2d 672] [no cross-complaint for indemnity could be maintained by nonsettling tortfeasor against concurrent tortfeasor, where damages sought by plaintiff were purely noneconomic].) "As so construed, a defendant would still be able to settle the plaintiff's entire claim and then seek indemnity from other tortfeasors without first having to determine what part of the settlement represents noneconomic damages. Such a construction advances all of the public policy considerations underlying multiparty tort litigation: (1) maximization of recovery to the injured party; (2) encouragement of settlement; (3) equitable apportionment of liability among all those responsible for the loss. the plaintiff receives quick and complete relief, and there is an ultimate fair apportionment of responsibility. Further, there is no violation of the purpose of Proposition 51, as no tortfeasor will be required to ultimately pay more than its comparative share of plaintiff's noneconomic damages." (5 Levy et al., Cal. Torts (1999) Settling Multiparty Actions, 74.21[2][b][ii], pp. 74-72.1 to 74-72.2, italics in original, fn. omitted.)