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Jerry Bailey v. Safeway

September 15, 2011


Trial Court: Alameda County Superior Court Trial Judge: Hon. Patrick J. Zika (Alameda County Super. Ct. No. RG09446116)

The opinion of the court was delivered by: Ruvolo, P. J.




After appellant Jerry Bailey (Bailey) suffered an eye injury when a bottle of Cook's Champagne exploded as he was erecting a sales display in one of respondent Safeway, Inc.'s (Safeway) stores, Bailey sued the manufacturer of the champagne bottle, Saint-Gobain Containers, Inc. (Saint-Gobain), for strict liability design defect under the consumer expectation theory; Bailey also sued Safeway under that same theory and for negligence. Bailey settled with Saint-Gobain and others for $1 million plus an assignment of Saint-Gobain's equitable indemnity rights against Safeway. After the settlement was confirmed, the case went to trial only against Safeway. The jury found that Safeway was not negligent, but that it was liable under the separate strict liability design defect cause of action.

Thereafter, Bailey filed a separate complaint for equitable indemnity against Safeway as Saint-Gobain's assignee. The trial court sustained Safeway's demurrer without leave to amend, and Bailey has appealed the resultant judgment of dismissal.

Upon de novo review, we first conclude that, as an assignee of Saint-Gobain, Bailey is precluded under the doctrine of collateral estoppel from relitigating Safeway's negligence, and he is bound by the jury's determination on this issue. Based on that conclusion, we further hold that the manufacturer of a product found to be defectively designed cannot seek equitable indemnity against a retailer whose fault is based only on that same product liability theory.

Consequently, and after concluding that there was no abuse of discretion in failing to grant leave to amend, we affirm the judgment.


Factual and Procedural History

On December 28, 2006, Bailey suffered an eye injury after a champagne bottle exploded while he was constructing a display of Cook's Champagne bottles at a Safeway store. Bailey filed a complaint against the bottle manufacturer Saint-Gobain, Safeway, and other related parties. Saint-Gobain then filed a cross-complaint against all defendants, including Safeway, alleging claims for implied indemnification, equitable indemnification, comparative indemnification, declaratory relief, and negligent spoliation of evidence. Subsequently, Saint-Gobain stipulated to dismiss its cause of action for negligent spoliation of evidence against Safeway.*fn1

On October 22, 2008, Bailey settled with Saint-Gobain and all other defendants except Safeway for $1 million, plus an assignment of any and all equitable indemnity rights Saint-Gobain had against Safeway.*fn2 A motion for good faith settlement was made by Saint-Gobain pursuant to Code of Civil Procedure section 877.6, which was opposed by Safeway. In its motion, Saint-Gobain stated its understanding that, if the settlement were approved, Bailey intended to proceed against Safeway for negligence based on acts or omissions "that are separate and distinct from those related to the cause of the bottle exploding."

During the good faith settlement hearing, there was much discussion as to whether the settlement was unfair because Safeway was being abandoned by the manufacturer to defend a product designed and manufactured by Saint-Gobain. In response to a direct question by the court, Bailey's counsel denied that Bailey would limit his claim against Safeway at trial to negligence.*fn3

On October 27, 2008, the court approved the settlement as being made in good faith. Saint-Gobain then dismissed its cross-complaint against all defendants.

The case between Bailey and Safeway went to trial, and on November 10, 2008, the jury found that the Cook's Champagne bottle that Safeway supplied to Bailey was defectively designed under the consumer expectations theory of products liability, and that this defect caused damages in the amount of $718,915.78. The jury also found that neither Safeway nor Saint-Gobain were negligent or "at fault." On January 14, 2009, Bailey and Safeway stipulated that the jury verdict ought to be modified to reflect that Safeway was 100 percent responsible for Bailey's injuries and damages under the consumer expectations theory of strict liability design defect. The trial court thereafter entered judgment in favor of Safeway because "the amount of the settlement with all of the other defendants exceed[ed] the amount [awarded to Bailey by] the special verdict."

On April 9, 2009, Bailey filed a separate lawsuit seeking equitable indemnity against Safeway, alleging that he had been assigned Saint-Gobain's indemnity rights as part of the settlement. With respect to liability, Bailey alleged only that because Safeway litigated Saint-Gobain's liability under the consumer expectation theory and was found to be 100 percent at fault, Safeway was collaterally estopped from denying legal responsibility and from re-litigating its degree of fault. On May 20, 2009, Safeway demurred on the grounds that Bailey failed to allege essential elements establishing a claim for ...

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