The opinion of the court was delivered by: ZAVATT
This diversity action arises out of an accident in Union Station, Washington, D.C., that occurred on January 15, 1953 when a train operated by The Pennsylvania Railroad Company (Penn), unable to slow down as it approached the station, plowed through the bumping block, causing personal injury and property damage to passengers, station and whatever was in its path. Arthur Yanick, a passenger on the ill-fated train, brought suit against Penn, the operator of the train, and The New York, New Haven & Hartford Railroad Company (New Haven), the owner of the car in which he was riding. Penn cross-claimed against New Haven and also impleaded Pullman Incorporated (Pullman), the manufacturer of the New Haven car. Before trial of the Yanick claim, the third-party aspects including this cross-claim were severed. At the Yanick trial the plaintiff discontinued as against New Haven. Penn admitted liability and after some evidence was taken on the quantum of damages the case was settled for $ 50,000. Judgment was entered for this amount which has been paid by Penn.
There are now before me the third-party aspects that were severed and also mutual cross-claims between New Haven and Pullman. During the course of extensive pre-trial conferences Pullman has moved for summary judgment on Penn's claims against it for both indemnity and contribution. New Haven has joined in these motions. However, since the issues are the same and since Pullman pulled the laboring oar on these motions I will discuss the issues as if raised by Pullman solely.
Pullman makes two arguments on each of Penn's two claims, i.e. for indemnity and contribution. The first indemnity argument is: (1) The right of a defendant to implead a third-party defendant turns on whether the defendant sought to be impleaded is or may be liable to him. Rule 14(a), F.R.Civ.P., 28 U.S.C.A.; Cf. N.Y. Civil Practice Act, § 193-a.
(2) To determine whether there may be such liability we look to the controlling substantive law.
(3) Under that law an active tort-feasor has no right of common-law indemnity.
(4) On a pre-trial motion the characterization of the nature of a defendant's tort feasance as found in the original plaintiff's complaint is controlling.
(5) The complaint of Yanick characterizes Penn as an active tort-feasor.
(6) Therefore, Penn. has no right of indemnity from Pullman and Pullman should be awarded summary judgment on that claim.
Pullman's basic proposition is mumber (4). It is an accurate reflection of the recent New York case of Putvin v. Buffalo Electric Co., 1959, 5 N.Y.2d 447, 186 N.Y.S.2d 15, 158 N.E.2d 691, and it follows that, other distinguishing factors aside, if this case were tried in the New York courts, Pullman's motion would be granted. But, of course, the case is not being so tried and the issue is whether a federal court sitting in New York must apply the rule just referred to. The ground rules are simple enough. This court will apply its own rules as to procedure and New York's rules as to substance, and a rule is substantive if it has an outcome determining effect. See Guaranty Trust Co. of New York v. York, 1945, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079. We must, therefore, look to see what effect New York attaches to a refusal to entertain third-party suits when active negligence is alleged in the original complaint. Pullman does not argue that a New York court's refusal forever bars the claim of the third-party plaintiff. That this is not the effect of the New York rule is made clear from the Putvin case itself. See 5 N.Y.2d at pages 459-460, 186 N.Y.S.2d at pages 24-25, 158 N.E.2d at pages 697-698. The logic of the rule seems to be that, if the plaintiff pegs his case to active negligence in his complaint, that is the proof he will offer at the trial. If the plaintiff can sustain his burden, the defendant will have no right to indemnity and a third-party should not be burdened with defending a premature suit. (Alternatively, if the plaintiff should lose there would likewise be no need for a third-party action.)
There is something to be said for this view though it tends to limit the instances in which impleader is permitted. But it is clearly a 'procedural' statement as opposed to a substantive one as those terms have already been defined. When a New York court determines the right of a defendant to implead a third-party on the basis of the allegations of the complaint, it does not pass upon the ultimate substantive rights of the defendant against that third party. It merely determines whether any such rights may be asserted in the pending action. It is dealing with a matter of procedure and specifically the timing of the assertion of the defendant's claims against the third party. This is the primary consideration when a defendant in a case pending in a New York State court moves to assert a claim over against a third person who may be liable to him.
Since the question as to when to allow or disallow impleader (so that all possible issues may be determined in one action) is procedural, we are not bound by New York State procedure and may look to federal procedure on this point. The federal view of the function of Rule 14, Rules of Civil Procedure, is 'to dispose of the problem in one litigation to save expenses and avoid delay.' See Stahlberg v. Hannifin Corp., D.C.N.D.N.Y.1957, 157 F.Supp. 290, 293; see generally 3 Moore, Federal Practice 412 (2d ed. 1948). In Stahlberg Judge Brennan sustained a third-party complaint in a case presenting facts similar to ours against an attack similar to the one made by Pullman. He reasoned that under the liberal federal attitude, which does not limit the plaintiff to the precise allegations of the complaint, the plaintiff might introduce upon the trial evidence of passive negligence and, therefore, that the allegations of the complaint should not take precedence over the policy of Rule 14 which is to litigate in one action as many issues as possible.
It remains to be said that in at least two cases federal courts sitting in this state have dismissed complaints in reliance on Putvin. See Suarez v. United States, D.C.S.D.N.Y.1960, 186 F.Supp. 43; Rando v. Luckenbach S.S. Co., D.C.E.D.N.Y.1960, 181 F.Supp. 440. The Suarez case is perhaps distinguishable because there the facts were simple and it was probable that the defendant was either actively negligent or it was not negligent at all and in either case its cross-complaint would serve no purpose. Rando is more like the case at bar in that the facts are complicated and while active negligence was alleged in the complaint it was at least possible that there was a basis in the facts to support a recovery based on passive negligence. Judge Rayfiel relied heavily on Judge Moore's opinion in Guarnieri v. Kewanee-Ross Corp., 2 Cir., 1959, 263 F.2d 413, 421, modified 2 Cir., 270 F.2d 575. There Judge Moore said: 'Under New York law * * * (the third-party plaintiff) cannot recover against (the third-party defendant) on the theory of indemnity by operation of law or on any theory of passive-active negligence. In fact, had (the third-party defendant) moved to dismiss on the third-party complaint under the (New York) decisions * * * the motion should have been granted.' 263 F.2d at pages 421-422. The Guarnieri case reached the court after trial and it is not clear whether Judge Moore was saying that the dismissal would have been proper on a pre-trial motion or after trial. That the latter is more probable appears from Judge Moore's dissent in Luckenbach S.S. Co. v. H. Muehlstein & Co., 2 Cir., 1960, 280 F.2d 755, which arose as an appeal from Judge Rayfiel's dismissal of the third-party complaint in Rando. The court dismissed the appeal as presenting a non-final order. (The court had earlier refused to hear the case as an interlocutory appeal on Judge Rayfiel's certification.) Against this background Judge Moore said: 'In my opinion the interests of orderly and expeditious trial procedure would best be served by having all issues before the court on the trial so that an appropriate judgment could then be entered upon the facts and verdict resulting therefrom.' 280 F.2d at page 759.
Of course, the present motions are made after the disposition of Yanick's claims and so, perhaps, different criteria should be used in assaying Pullman's motions. This brings us to Pullman's second point on its motion to dismiss Penn.'s claim for indemnity. Pullman argues that the judgment for Yanick and against Penn conclusively establishes the allegations in Yanick's complaint that his injuries were caused by the active negligence of Penn. Undoubtedly, the Yanick judgment has some res judicata effect. For example Yanick's 'cause of action' is merged in the judgment. But we would not know without reference to the complaint whether the cause of action so merged arose from a train accident occurring in 1953 or from, say, breach of contract of 1948. Thus even a settled case has a res judicata effect for which reference to a complaint may be important. But it is a far different thing to say, as Pullman does, that the specific allegations, the particular facts that constitute the claim, of a settled case have been determined adversely to the defendant. The policy considerations here are too clear to warrant extensive discussion.
Pullman also argues that the case was not settled. True, as a matter of form, the trial judge directed a verdict for the plaintiff but this followed a conference between the parties which resulted in the settlement figure which the judge thereupon directed. Liability had been conceded before the plaintiff opened to the jury. Furthermore, Pullman in one of its affidavits, ...