Equitable Indemnity Only Available to One Without Fault

In Martha M. Fountain and Curtis Fountain v. Fred's, Inc. and Wildevco,
LLC v. Tippins-Polk Construction, Inc. and Rhoad's Excavating Services,
LLC, of whom Tippins-Polk Construction, Inc. is the Petitioner,
Appellate Case No. 2020-000651, Opinion No. 28086, 436 S.C. 40, 871
S.E.2d 166, Supreme Court of South Carolina (Filed March 2, 2022)
established the requirements for obtaining equitable indemnity.

FACTS

Respondent Fred's was a Tennessee corporation that operated a chain of
discount general merchandise stores in several states, including South
Carolina.

In April 2005, Wildevco entered into a contract with general contractor
Tippins-Polk for the construction of the Fred's store and adjoining
strip center. The construction contract between Wildevco and
Tippins-Polk included drawings prepared by an architect, as well as site
plans prepared by an engineer. The contract specifically stated that
Tippins-Polk was responsible for "All Site Work," including "[g]rading,
concrete curbing, utilities & paving [p]er site plans."

Wildevco provided Tippins-Polk with two sets of construction
drawings—the architectural drawings, which established the design
elements including the sidewalk surrounding the store, and the site
plans, which controlled the grading, elevations, pavement, and
underground utilities.
If an inspection had taken place, it would have been visible to the
naked eye that an elevation change in the sidewalk existed and was not
painted yellow.

Five years after the Fred's store opened, Ms. Fountain hit her head and
hand on the glass door and fell to her knees. I

The case was set for a date certain trial in March 2016. On the eve of
trial, Wildevco and Fred's settled with the Fountains for $290,000, with
Wildevco paying $250,000 and Fred's paying $40,000.

The general theory of the third-party claim was that Tippins-Polk
deviated from the site plans and improperly constructed the entrance
curbing, which was the sole proximate cause of Ms. Fountain's injuries.
As to the relevant elements of equitable indemnification, the trial
court found a special relationship existed between Fred's and
Tippins-Polk.

EQUITABLE INDEMNIFICATION

South Carolina has long recognized the principle of equitable
indemnification.  Indemnity is that form of compensation in which a
first party is liable to pay a second party for a loss or damage the
second party incurs to a third party.

Tippins-Polk argued that it was error to affirm the finding that
Wildevco and Fred's were without fault.

Special Relationship

As a matter of equity, a party is entitled to indemnity if the relation
between the parties is such that either in law or in equity there is an
obligation on one party to indemnify the other, as where one person is
exposed to liability by the wrongful act of another in which he does not
join. The trial court and court of appeals found the connection between

Without Fault

Since there was no evidence in the record that either Fred's or Wildevco
warned of or attempted to remedy the trip hazard identified by their
own safety expert, despite the condition existing for almost five years
before the accident occurred. In sum, Fred's and Wildevco failed to
establish they were without fault in the Fountains’ premises liability
action.

Because the Supreme Court found Respondents failed to establish they
were without fault in the underlying action, the trial court verdict was
reversed.

ZALMA OPINION

(c) 2023 Barry Zalma & ClaimSchool, Inc.


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