Definition of “Nonparty” – a post ten years in the making

According to my blog metrics, one of my most persistent source of visits is, somewhat oddly, a post I wrote in 2009 entitled “HB 1318 – Definition of ‘nonparty’ in civil litigation.” As I explained then:

I am a little worried that I do not immediately grasp the significance of Rep. Lawson’s proposed legislation in HB 1318 which changes the definition of “nonparty” in civil litigation. A “nonparty” usually refers to someone involved in an incident that caused damage to someone but who has not been named as a party in the lawsuit. Typically, a victim will sue a tortfeasor for damage caused by that person. The tortfeasor will respond, in part, by saying, “hey, it’s not my fault, it’s Nonparty’s fault.” The victim then has an opportunity (usually) to bring the nonparty into the litigation, but if the nonparty is not named as a party, the nonparty can still be an “empty chair” at trial to whom a jury can assign some or all of the fault. (The nonparty would not be liable to the victim for the jury’s decision in this regard, rather the damage attributable to the nonparty would be money the victim could not recover from the tortfeasor who was named as a defendant.)

In any case, Rep. Lawson’s legislation would change the definition of nonparty from

A person who caused or contributed to cause the alleged injury, death, or damage to property who has not been joined in the action as a defendant.

to

a person who may be liable to the claimant, in whole or in part, for the damage claimed, but who has not been joined in the action as a defendant. The term does not include an employer of a claimant.

 

Today, the Court of Appeals wrote an opinion in the case of NIPSCO v. Josh’s Lawn and Snow. Josh’s was doing some landscaping, didn’t call before they dug, and punctured the gas line. However, before that happened, another contractor, Ziese had done some grading that removed sixteen to eighteen inches of soil, leaving only about two inches above the gas line. When NIPSCO sued Josh’s for the damage done to the pipe (plus, inevitably — attorney’s fees), Josh’s named Ziese as a nonparty. NIPSCO objected that Ziese didn’t owe a legal duty to NIPSCO to leave any particular amount of soil above the pipe and, absent a legal duty, couldn’t be a nonparty to whom fault could be attributed. The trial court didn’t buy the argument and, while finding Josh’s at fault and liable to NIPSCO, found that Josh’s was only 10% at fault and Ziese was 90% at fault, leaving Josh’s only responsible for 10% of the damages.

On appeal, the Court of Appeals notes that NIPSCO “does not argue on appeal that the small claims court should have assessed different percentages of liability to Ziese and Josh’s.” So, basically, on appeal it was going to live and die by whether a person had to have a legal duty — and, therefore potential liability to the Plaintiff — before it could be named as a nonparty. This brings us back to Rep. Lawson’s proposed legislation in 2009. In determining that legal duty and potential liability were not necessary for a person to be named as a nonparty, the Court of Appeals relied on a change to the definition that took place back in 1995. Rep. Lawson was essentially trying to revert the definition back to its old definition. The Court of Appeals explained:

[T]he small claims court was not required to find that Ziese had a legal duty of care toward NIPSCO in order to attribute  fault to Ziese. In Bulldog Battery Corporation v. Pica Investments, Inc., 736 N.E.2d 333, 336 (Ind. Ct. App. 2000), property owner Pica Investments sued neighbor Bulldog Battery for negligence when Bulldog’s property improvements led to increased runoff and flooding of Pica’s property. Bulldog asserted a nonparty defense that the negligent designs of its architect contributed to Pica’s damages. Id. at 337. Pica argued that Bulldog could not name its architect as a nonparty defendant because, pursuant to caselaw, an architect owed no duty to third parties such as Pica absent contractual privity or a design that was so negligent as to create an imminently dangerous condition. Id. In reversing the trial court’s grant of summary judgment to Pica on Bulldog’s nonparty defense, the court noted that until 1995, the comparative fault statute defined a nonparty as “‘a person who is, or may be[,] liable to the claimant in part or in whole for the damages claimed but who has not been joined in the action as a defendant by the claimant.” Id. (quoting I.C. § 34-4-33-2(a), emphasis in opinion). The statute was subsequently amended to define a nonparty as “‘a person who caused or contributed to cause the alleged injury, death, or damage to property but who has not been joined in the action as a defendant.’” Id. at 338 (quoting I.C. § 34-6-2-88, emphasis in opinion). Drawing on the change of statutory definition, the court rejected Pica’s argument that “‘[i]n naming a person as a nonparty, it is implicit that some legal duty must exist as to the plaintiff.’” Id. The court found that the amendment to the definition of ‘nonparty’ specifically excluded the concept of liability to focus instead on causation. Id. Thus, the court concluded that “whether or not the nonparty may be liable to the plaintiff is no longer a consideration.” Id.

The upshot is that a person who is at fault but who is, nevertheless, not potentially liable to the plaintiff can be named as a nonparty, relieving the named defendant of liability for those damages that were not the defendant’s fault even if it means that the plaintiff might not obtain a full recovery.