The opinion of the court was delivered by: KRAM
MEMORANDUM OPINION AND ORDER
SHIRLEY WOHL, KRAM, U.S.D.J.
The above-captioned action is before this Court upon the motion of third-party defendants to dismiss the third-party actions against them pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. For the reasons stated below the motions are hereby granted in part and denied in part.
The main action, as well as the third-party actions emanate from a complicated tax shelter scheme involving plaintiffs' purchase and the subsequent lease back to end users of certain word processing equipment and software. The defendants include Turnkey Information Processing, Inc. and various entities associated with the sale of the tax shelters (Turnkey companies), various officers and directors of Turnkey, the law firm of Todtman, Epstein, Young & Goldstein and various partners of the law firm (third-party plaintiffs). The plaintiffs variously allege that some or all of the equipment and software purportedly sold to them in fact never existed or was materially different from the equipment described to them, that the value of such equipment and software that did exist was lower than originally represented to them, that such equipment and software was not actually leased to end users, and that, as a result, the tax benefits which they were led to believe they would realize never materialized. Plaintiffs allege violations of Section 10(b) of the Securities and Exchange Act of 1934, breach of fidicuary duties, fraud, recklessness, negligence and violation of the Federal anti-racketeering laws.Plaintiffs charge that defendants, third-party plaintiffs, misrepresented the nature and value of the equipment in the offering memoranda prepared by third-party plaintiffs, and that they should be held liable for failing to investigate and correct such misinformation.
Third-party defendants, Schlesinger & Slavet, P.C., the Estate of Howard P. Schlesinger, Seidman & Seidman and Joseph Klausner, are the accountants who audited the financial statements of the Turnkey companies for the fiscal years ending December 31, 1979 and 1980 and March 31, 1981 and 1982. Third-party plaintiffs have commenced their action seeking indemnification and contribution from third-party defendants "for misleading them by the clean opinions which they repeatedly gave to their clients' financial statements year after year." (Third-party plaintiffs' Memorandum in Opposition to the Dismissal Motions, at 4).
The right to indemnification may arise out of an express agreement of indemnification, or it may be implied by law in favor of one who is held liable solely by imputation of law because of his relation to the actual wrongdoer. Rogers v. Dorchester Assoc., 32 N.Y.2d 553, 347 N.Y.S.2d 22, 300 N.E.2d 403 (1973); Margolin v. New York Life Ins. Co., 32 N.Y.2d 149, 344 N.Y.S.2d 336, 297 N.E.2d 80 (1973); Malette v. Loblaws, Inc., 61 A.D.2d 1054, 402 N.Y.S.2d 474, 477 (1978).
In this case third-party plaintiffs claim that, under the principle of primary versus secondary liability, they are entitled to full indemnity, implied by law, against a third person even if they are found guilty of negligence, as long as the nature of the third person's wrong is more culpable.In support of this proposition, third-party plaintiffs rely upon Dole v. Dow Chemical Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972). However, Dole and subsequent cases interpreting Dole make it clear that indemnity is allowed where the party seeking indemnity was not personally at fault and did not actually contribute to the injury, but was held liable to the plaintiff only vicariously. Tokio Marine and Fire Ins. Co. v. McDonnell Douglas Corp., 465 F. Supp. 790 (S.D.N.Y. 1978), aff'd, 617 F.2d 936 (2d Cir. 1980). Furthermore, Dole recast the terminology categorizing primary and secondary liability. The party who is primarily liable is the one who should pay ultimately for his actual fault. The one who must pay because of first instance liability to third parties, but who ought to be able to recover from one guilty of actual fault, is secondarily liable. Kelly v. Diesel Construction Division, 35 N.Y.2d 1, 7, 358 N.Y.S.2d 685, 690, 315 N.E.2d 751 (1974).
In this case, third-party plaintiffs are not being held vicariously responsible solely by imputation of law because of their relation to the third-party defendants. Rather, the claims asserted against the third-party plaintiffs are based upon their own acts or omissions. Consequently, third-party plaintiffs are not entitled to indemnification. Instead, according to the principles enunciated in Dole, what third-party plaintiffs have stated, at most, is a basis for an apportionment of responsibility among the parties. Therefore, third-party plaintiffs' claims for indemnification are DISMISSED.
The third-party plaintiffs seek contribution on plaintiffs' common law claims of negligence, gross negligence, recklessness, breach of fiduciary duty and fraud and under federal law for violation of Section 10(b) of the Securitites and Exchange Act of 1934.
The New York law of contribution, codified in CPLR 1401, provides that
two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought.
The legislative report of the Judicial Conference made it clear that CPLR 1401 expanded the right of contribution to include not only joint tort feasors, but also "concurrent," "successive and independent," "alternative" and "intentional" tort feasors. (Twelfth Annual Report of the Judicial ...